-----------------------------------





                            WILMINGTON TRUST COMPANY,
                      not in its individual capacity except
                     as otherwise expressly provided herein,
                           but solely as owner trustee
                                    (Lessor)


                                     - and -


                         WESTERN PACIFIC AIRLINES, INC.

                                    (Lessee)


                      -----------------------------------

                                 LEASE AGREEMENT
                                 - relating to -
                           One Boeing 737-300 Aircraft
                         Manufacturer's Serial No: 28871
                            Registration Mark: N966WP
                     -------------------------------------














<PAGE>




                                     

                                    CONTENTS


CLAUSE                                                                    PAGE


       1.  DEFINITIONS and INTERPRETATION..................................  1
           1.1   Definitions...............................................  1
           1.2   Interpretation............................................ 21

       2.  REPRESENTATIONS AND WARRANTIES.................................. 22
           2.1   Lessee's Representations and Warranties................... 22
           2.2   Lessee's further Representations and Warranties........... 23
           2.3   Repetition................................................ 24
           2.4   Lessor's  and  Trust  Company's   Representations   and
                 Warranties................................................ 24
           2.5   Repetition................................................ 26

       3.  CONDITIONS PRECEDENT............................................ 26
           3.1   Documentary Conditions Precedent.......................... 26
           3.2   Other Conditions Precedent................................ 28
           3.3   Waiver.................................................... 28
           3.4   Lessee's Conditions Precedent............................. 29
           3.5   Waiver.................................................... 29

       4.  COMMENCEMENT.................................................... 30
           4.1   Leasing................................................... 30
           4.2   Delivery.................................................. 30
           4.3   Condition on Delivery..................................... 30
           4.4   (intentionally left blank)................................ 30
           4.5   Indemnity................................................. 30
           4.6   Acceptance and Risk....................................... 31
           4.7   Delayed Delivery.......................................... 31
           4.8   Options................................................... 32

       5.  PAYMENTS........................................................ 32
           5.1   Aircraft Commitment Fee................................... 32
           5.2   Rental Periods............................................ 33
           5.3   Rent...................................................... 33
           5.4   Supplemental Rent......................................... 34
           5.5   Payments.................................................. 34
           5.6   Gross-up.................................................. 35
           5.7   Taxation.................................................. 35
           5.8   Value Added Tax........................................... 36
           5.9   Information............................................... 37

<PAGE>

           5.10  Taxation of Indemnity Payments............................ 37
           5.11  Default Interest.......................................... 38
           5.12  Contest................................................... 38
           5.13  Absolute.................................................. 39
           5.14  Lessor's Moneys........................................... 40
           5.15  Letter of Credit.......................................... 41
           5.16  Verification.............................................. 42

       6.  MANUFACTURER'S WARRANTIES....................................... 43
           6.1   Assignment................................................ 43
           6.2   Proceeds.................................................. 43
           6.3   Parts..................................................... 44
           6.4   Agreement................................................. 44

       7.  LESSOR'S COVENANTS and DISCLAIMERS.............................. 44
           7.1   Quiet Enjoyment........................................... 44
           7.2   Maintenance Contribution ................................. 45
           7.3   The Lessor's Obligations Following Expiry Date............ 46
           7.4   Exclusion................................................. 47
           7.5   Lessee's Waiver........................................... 48
           7.6   Lessee's Confirmation..................................... 48

       8.  LESSEE'S COVENANTS.............................................. 49
           8.1   Duration.................................................. 49
           8.2   Information............................................... 49
           8.3   Lawful and Safe Operation................................. 50
           8.4   Taxes and other outgoings................................. 52
           8.5   Sub-Leasing............................................... 52
           8.6   Inspection................................................ 54
           8.7   Protection of Title....................................... 55
           8.8   General................................................... 57
           8.9   Records................................................... 57
           8.10  Registration and Filings.................................. 58
           8.11  Maintenance and Repair.................................... 58
           8.12  Removal of Engines and Parts.............................. 60
           8.13  Installation of Engines and Parts ........................ 60
           8.14  Non-Installed Engines and Parts........................... 61
           8.15  Pooling of Engines and Parts.............................. 62
           8.16  Equipment  Changes;   Non-Severable  Modifications  and
                 Severable Modifications................................... 63
           8.17  Title to Engines and Parts ............................... 64

       9.  INSURANCE ...................................................... 64
           9.1   Insurances................................................ 64

<PAGE>

           9.2   Requirements.............................................. 65
           9.3   Change.................................................... 65
           9.4   Insurance Covenants....................................... 66
           9.5   Failure to Insure......................................... 68
           9.6   Continuing Indemnity...................................... 68
           9.7   Application of Insurance Proceeds......................... 68

       10. INDEMNITY....................................................... 69
           10.1  General................................................... 69
           10.2  Duration.................................................. 73

       11. EVENTS OF LOSS.................................................. 73
           11.1  Total Loss................................................ 73
           11.2  Requisition............................................... 74
           11.3  Application of Payments from  Governmental  Authorities
                 in Respect of Event of Loss............................... 75

       12. RETURN OF AIRCRAFT.............................................. 75
           12.1  Redelivery................................................ 75
           12.2  Final Inspection ......................................... 76
           12.3  Non-Compliance............................................ 77
           12.4  Obligation to Return the Aircraft......................... 77
           12.5  APU Adjustment............................................ 78
           12.6  Documentation............................................. 78
           12.7  Acknowledgement........................................... 78
           12.8  Maintenance Programme..................................... 78
           12.9  Fuel...................................................... 79
           12.10 Storage................................................... 79

       13. DEFAULT  ....................................................... 79
           13.1  Events.................................................... 79
           13.2  Rights.................................................... 82
           13.3  Deregistration............................................ 83
           13.4  Default Payments.......................................... 83
           13.5  Exercise of Remedies...................................... 85

       14. ASSIGNMENT and TRANSFER......................................... 85
           14.1  No assignment by Lessee................................... 85
           14.2  Assignment................................................ 85
           14.3  No increased liability.................................... 86
           14.4  Right to grant mortgage................................... 86

       15. ILLEGALITY...................................................... 86
<PAGE>

       16. MISCELLANEOUS................................................... 86
           16.1  Waivers, Remedies Cumulative.............................. 86
           16.2  Delegation................................................ 87
           16.3  Certificates.............................................. 87
           16.4  Appropriation............................................. 87
           16.5  Currency Indemnity........................................ 87
           16.6  Set-off................................................... 88
           16.7  Severability.............................................. 88
           16.8  Remedy.................................................... 88
           16.9  Expenses.................................................. 89
           16.10 Time of Essence........................................... 89
           16.11 Notices................................................... 89
           16.12 Law and Jurisdiction...................................... 91
           16.13 Sole and Entire Agreement................................. 93
           16.14 Indemnities............................................... 93
           16.15 Cost of Lessee's Work..................................... 93
           16.16 Counterparts.............................................. 93
           16.17 English Language.......................................... 93
           16.18 Confidentiality........................................... 94
           16.19 Geneva Convention......................................... 94
           16.20 Civil Reserve Air Fleet Program........................... 94
           16.21 Section 1110.............................................. 95
           16.22 Article 2-A of the UCC.................................... 95



<PAGE>


                                    SCHEDULES


1.     Aircraft Specification
2.     Certificate of Acceptance
3.     Operating Condition at Redelivery
4.     Insurance Requirements
5.     Acknowledgments in Connection with Financing
6.     Forms of Legal Opinions
7.     Form of Letter of Credit

8.     Engine Life-Limited Parts

9.     Form of Monthly Status Report

10.    Approved Jurisdictions for Sub-Leasing

12.    Letter of Quiet Enjoyment


<PAGE>






THIS LEASE AGREEMENT is made the     day of June 1997

BETWEEN:  WILMINGTON TRUST COMPANY,  a banking  corporation  organized under the
laws of the State of Delaware whose chief executive  office is located at Rodney
Square North, 1100 North Market Street, Wilmington,  Delaware 19890-0001, not in
its individual  capacity  except as otherwise  expressly  provided  herein,  but
solely as owner trustee (the "OWNER TRUSTEE"), as lessor (the "LESSOR")

and

WESTERN  PACIFIC  AIRLINES,  INC.,  a  company  incorporated  under  the laws of
Delaware  whose  principal  address  is at 2864 S.  Circle  Drive,  Suite  1100,
Colorado Springs, CO 80906, as lessee (the "LESSEE").

WHEREAS:

NBB  Stream  Lease  Co.,  Ltd.  has leased  the  Aircraft  to  Sunrock  Aircraft
Corporation  Limited  which,  pursuant to the head lease  assignment  (the "Head
Lease  Assignment"),  has assigned its rights but not its obligations  under the
Head Lease (as defined below) to Wilmington Trust Company,  as the Owner Trustee
and the Lessor  under this  Agreement.  The Lessee has  requested  the Lessor to
lease  the  Aircraft  to  the  Lessee  which  the  Lessor  has  agreed  to do in
consideration of, and subject to, the covenants,  terms and conditions contained
in this Agreement.

NOW IT IS HEREBY AGREED as follows:

1.    DEFINITIONS AND INTERPRETATION

1.1   DEFINITIONS

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

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

      AFTER-TAX BASIS               a basis  whereby any payment  required to be
                                    made on such basis shall,  if necessary,  be
                                    supplemented  by a further  payment  so that
                                    the  aggregate  of the two  payments,  after


                                       1
<PAGE>

                                    deduction  of all Taxes  resulting  from the
                                    receipt (actual or  constructive) or accrual
                                    of such  payments,  and  after  taking  into
                                    account all related Tax savings  (whether by
                                    relief,  deduction,   credit  or  otherwise)
                                    actually   realised  as  a  result  of  such
                                    payments,  shall be equal to the  payment so
                                    required.

      AGREED APPRAISER              a reputable aircraft appraisal  organization
                                    of  recognized  expertise  in the  field  of
                                    valuation  of   commercial   passenger   jet
                                    aircraft  (including,   without  limitation,
                                    Avitas, Avmark Inc., Avmark Services Limited
                                    and  Airclaims  Limited)  which is  mutually
                                    acceptable  to the  Lessor  and the  Lessee;
                                    provided  that if the  Lessor and the Lessee
                                    are unable to agree  upon such an  appraiser
                                    within five (5) Business Days after the need
                                    for such  appraiser  arises,  the Lessor and
                                    the  Lessee   shall  each  appoint  such  an
                                    appraiser   and   the  two   appraisers   so
                                    appointed   shall   select   a  third   such
                                    appraiser   which   shall   be  the   Agreed
                                    Appraiser;  and  provided  further  that  if
                                    either  party  hereto  fails to  appoint  an
                                    appraiser  as  provided  above,  the  Agreed
                                    Appraiser  shall be the appraiser  appointed
                                    by the other party.

      AGREED MAINTENANCE PERFORMER (i) the  Lessee or (ii) any other  reputable
                                    maintenance  facility  certified  by the FAA
                                    for  the  relevant  work on  Boeing  737-300
                                    aircraft  or  engines  such as the  Engines,
                                    which is then under contract with the Lessee
                                    to  perform   comparable   work  on  similar
                                    aircraft or engines in the  Lessee's  fleet;
                                    provided that any such maintenance  facility
                                    located  outside the United  States has been
                                    approved   in  writing  in  advance  by  the
                                    Lessor, such approval not to be unreasonably
                                    withheld or delayed; or (iii) with the prior
                                    written   approval  of  the   Lessor,   such
                                    approval not to be unreasonably  withheld or
                                    delayed,  any  other  maintenance  or repair
                                    facility.

      AGREED MAINTENANCE PROGRAMME   the Maintenance  Programme for the Lessee's
                                     fleet of Boeing 737-300  aircraft  approved
                                     in  writing  by  the  Lessor  prior  to the


                                       2
<PAGE>

                                     Delivery Date, as subsequently amended from
                                     time  to  time  by  the  Lessee   with  all
                                     required  approvals  of the  FAA;  provided
                                     that any amendment or  modification of such
                                     Maintenance  Programme  effecting  a change
                                     from a programme based on block maintenance
                                     to  a   programme   not   based   on  block
                                     maintenance  which is not  required  by the
                                     FAA or the Manufacturer,  shall require the
                                     prior written approval of the Lessor,  such
                                     approval not to be unreasonably withheld or
                                     delayed.

      AGREED VALUE                  as of any date means the  applicable  amount
                                    set  forth in  Letter  Agreement  No. 1 with
                                    respect to such date.

      AIRCRAFT                      the aircraft described in Part 1 of Schedule
                                    1, (which term  includes,  where the context
                                    admits, a separate reference to all Engines,
                                    Parts and the Aircraft Documents.

      AIRCRAFT DOCUMENTS            the documents,  data and records  identified
                                    in Part 2 of  Schedule 1 and all  additions,
                                    renewals,  revisions and  replacements  from
                                    time to time  made in  accordance  with this
                                    Agreement.

      AIRCRAFT SALE AGREEMENT       the  Aircraft  Sale  Agreement as defined in
                                    the Purchase Agreement Assignment.

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

      APU                           the  auxiliary  power unit  installed on the
                                    Aircraft  on  the   Delivery   Date  or  any
                                    replacement  auxiliary  power unit which may
                                    be substituted  therefor in accordance  with
                                    this Agreement.

      ASSIGNMENT                    any  present  or  future  assignment  by the
                                    Lessor  in  favour of the Bank of all or any
                                    portion of the  Lessor's  rights,  title and
                                    interest  in the  Aircraft  and  under  this
                                    Agreement as security for its obligations.

      AVIATION AUTHORITY            the FAA or, if the State of  Registration is
                                    not then the United  States of America,  the


                                       3
<PAGE>

                                    authority  and/or  Government  Entity and/or
                                    agency which, under the laws of the State of
                                    Registration,  from  time to  time:  (a) has
                                    control or supervision of Civil Aviation; or
                                    (b)  has  jurisdiction  over   registration,
                                    airworthiness or operation of the Aircraft.

       BANK(S)                      such  financial  institution(s)  which  from
                                    time to time  finance the  Aircraft  for the
                                    Lessor or the Head  Lessor  and/or for whose
                                    benefit  security  over, or rights  relating
                                    to, the  Aircraft  and/or this  Agreement is
                                    granted by the Lessor or the Head  Lessor or
                                    at their request, as applicable.

      BENEFICIAL OWNER              Sunrock  Aircraft   Corporation  Limited,  a
                                    company   incorporated  under  the  laws  of
                                    Ireland  whose  registered  office  is at 1,
                                    Earlsfort  Centre,  Hatch Street,  Dublin 2,
                                    Republic of Ireland,  its successors and/or,
                                    to  the  extent  permitted  hereunder,   its
                                    assignees,  as  beneficial  owner  under the
                                    Trust Agreement.

      BLOCK HOUR                    each  hour or part of any hour  (rounded  to
                                    one decimal place)  elapsing from the moment
                                    the  chocks are  removed  from the wheels of
                                    the Aircraft until the chocks are next again
                                    returned to the wheels.

      BOEING                        The Boeing Company,  a Delaware  corporation
                                    with its principal office in Seattle,  State
                                    of Washington, USA.

      BSC                           Boeing  Sales  Corporation,   a  corporation
                                    incorporated  under  the laws of the  United
                                    States Territory of Guam, with its principal
                                    office in Seattle, State of Washington, USA.

      BUSINESS DAY                  a day (other  than a Saturday  or Sunday) on
                                    which  banks  are open for  business  in New
                                    York and Denver.

      CERTIFICATE OF ACCEPTANCE     a  certificate  in the form of Schedule 2 to
                                    be  completed  and executed by the Lessee on
                                    Delivery.

                                       4
<PAGE>

      CIVIL RESERVE AIR FLEET PROGRAM                 the  Civil   Reserve   Air
                                    Fleet  Program  administered  by the  United
                                    States  government and  authorized  under 10
                                    U.S.C.  Sec.  9511, et seq., as amended,  or
                                    any  substantially   similar  or  substitute
                                    program of the United States Government.

      COMMITMENT FEE                means  such  sums  as  shall  be paid by the
                                    Lessee to the Lessor  pursuant to Clause 5.1
                                    in the amounts,  and at the times, set forth
                                    in Letter Agreement No. 1.

      CYCLE                         one take-off and landing of the Aircraft.

      DAMAGE NOTIFICATION THRESHOLD $[  ]*

      DEFAULT                       any Event of  Default  and any  event  which
                                    with the  giving  of notice or lapse of time
                                    would constitute an Event of Default.

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

      DELIVERY DATE                 the date on which Delivery takes place.

      DELIVERY LOCATION             Seattle, State of Washington, U.S.A.

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

      ENGINE                        whether or not installed on the Aircraft:

                                     (a) each of the CFM International CFM56-3C1
                                         engines   specified  by  manufacturer's
                                         serial  numbers in the  Certificate  of
                                         Acceptance to be executed by the Lessee
                                         upon Delivery; or

                                     (b) any engine which has replaced an engine
                                         referred to in clause (a) above,  title
                                         to which has or should  have  passed to
                                         the Holder of Legal Title in accordance
                                         with Clause
                                         8.17(a);

                                       5
<PAGE>

                                    

                                    and in each case  includes  all  modules and
                                    Parts  from  time  to time  belonging  to or
                                    installed  in that engine but  excludes  any
                                    engine  replaced in  accordance  with Clause
                                    8.13(a), title to which has, or should have,
                                    passed  to the  Lessee  in  accordance  with
                                    Clause 8.17(c).

      ENGINE LLP                    those life-limited Engine Parts specified in
                                    Schedule 8.

      ENGINE LOSS                   the occurrence of any of the events referred
                                    to in the  definition of "Total  Loss",  but
                                    with the  references  therein to  "Airframe"
                                    being construed as references to an Engine.

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

      EVENT OF DEFAULT              shall have the meaning  specified in any one
                                    or more provisions of Clause 13.1.

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

      EXPIRY DATE                   the   day    preceding    the    numerically
                                    corresponding   day  96  months   after  the
                                    Delivery  Date  or if  earlier  the  date on
                                    which:

                                       6
<PAGE>

                                     (a) the Aircraft has been  redelivered in
                                         accordance with this Agreement; or

                                     (b) the Lessor  receives  the Agreed  Value
                                         following a Total Loss.

      FAA                           the Federal Aviation  Administration  of the
                                    United  States of America and any  successor
                                    thereof.

      FAR                           the  Federal  Aviation  Regulations  for the
                                    time  being  in  force,  issued  by the  FAA
                                    pursuant to Subtitle  VII of Title 49 of the
                                    United States Code  published in Title 14 of
                                    the Code of Federal Regulations.

      FAIR MARKET VALUE             means the value of the  Aircraft  in Dollars
                                    (free of any lease,  sub-lease,  conditional
                                    sale agreement,  option,  mortgage,  charge,
                                    lien  or  other  encumbrance)  payable  by a
                                    willing  buyer  to a  willing  seller  on an
                                    "arm's length"  basis,  as determined at the
                                    relevant  time on a "desk  top" basis by the
                                    Agreed Appraiser.

      FINANCIAL INDEBTEDNESS        any   indebtedness   in   excess  of  $[  ]*
                                    principal amount in respect of:

                                     (a) moneys borrowed;

                                     (b) any  liquidated   liability  under  any
                                         debenture,   bond,  note,  loan  stock,
                                         acceptance  credit,  documentary credit
                                         or other security;

                                     (c) the  acquisition  cost of any  asset to
                                         the extent  payable  more than 120 days
                                         after  the  time  of   acquisition   or
                                         possession; or

                                     (d) the  capitalised  value  (determined in
                                         accordance  with  GAAP) of  obligations
                                         under finance leases; or

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

                                       7
<PAGE>

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

      GAAP                          United States generally accepted  accounting
                                    principles consistently applied as in effect
                                    from time to time,  which shall  include the
                                    official   interpretations  thereof  by  the
                                    Financial Accounting Standards Board.

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

                                     (b) any instrumentality, board, commission,
                                         court,  or   agency  of  any   thereof,
                                         however   constituted   whose  actions,
                                         rules or regulations  have the force of
                                         law; and

                                     (c) any   association,   organization,   or
                                         institution  controlled  by  any of the
                                         above   whose    actions,    rules   or
                                         regulations  shall  have  the  force of
                                         law.

      HABITUAL BASE                 the United States of America or,  subject to
                                    the prior written consent of the Lessor, any
                                    other  country  or  countries  in which  the
                                    Aircraft  is for the time  being  habitually
                                    based.

      HEAD LEASE                    the lease agreement relating to the Aircraft
                                    between  the Head  Lessor,  as  lessor,  and
                                    Sunrock  Aircraft  Corporation  Limited,  as
                                    lessee,  as long so it  remains in force and
                                    effect.

      HEAD LESSEE                   Sunrock  Aircraft  Corporation  Limited,  as
                                    lessee, so long as it remains a lessee under
                                    the Head Lease.

      HEAD LESSOR                   NBB Stream Lease Co.,  Ltd.,  as lessor,  so
                                    long as it  remains a lessor  under the Head
                                    Lease.

      HOLDER OF  LEGAL  TITLE       the  Lessor or the Head  Lessor,  whoever is
                                    the  holder of legal  title to the  Aircraft


                                       8
<PAGE>

                                    and/or  any  Engine  and/or  any Part at the
                                    applicable time, as advised by the Lessor to
                                    the Lessee in writing.

      INDEMNITEES                   each of the Head  Lessor,  the Head  Lessee,
                                    the Beneficial  Owner,  the Banks, the Trust
                                    Company  and the  Lessor  including,  any of
                                    their  respective  successors  and permitted
                                    assigns  (and,  in the  case of a  permitted
                                    assign that is a  partnership,  the partners
                                    of such  partnership),  and any  combination
                                    thereof and their  respective  shareholders,
                                    Subsidiaries,     Affiliates,     directors,
                                    officers, agents and employees.

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

      LESSEE'S INTEREST             subject to the  application  of Clause 11.3,
                                    that portion of the  compensation  paid by a
                                    Government   Entity  in  connection  with  a
                                    requisition  of the Aircraft,  provided that
                                    such  requisition has not been caused by any
                                    action or omission of the Lessee (other than
                                    pursuant  to the  Civil  Reserve  Air  Fleet
                                    Program),  constituting  an  Event  of  Loss
                                    hereunder  equal to the  excess,  if any, of
                                    (i) an amount  equal to the  present  value,
                                    discounted  at a rate  equal  to the rate in
                                    effect    for   United    States    Treasury
                                    obligations with a term most nearly equal to
                                    the  remaining  Lease  Term,  of fair market
                                    rentals,     determined    by    independent
                                    appraisal,  for the Aircraft for the balance
                                    of  the   Lease   Term   from  the  date  of
                                    requisition  minus (ii) the  present  value,
                                    discounted at the same U.S.  Treasury  rate,
                                    of the future rent  payments  due under this
                                    Agreement  for the balance of the Lease Term
                                    from the date of the  requisition;  provided
                                    that,  for  purposes  of   determining   the
                                    remaining  Term and the  balance of the Term
                                    under this definition, the options set forth
                                    in Clause 4.8 hereof shall be deemed to have
                                    been exercised.

      LESSEE                        as defined in the introductory  paragraph of
                                    this Agreement.

                                       9
<PAGE>

      LESSOR                        as defined in the introductory  paragraph of
                                    this Agreement.

      LESSOR LIEN                    (a) any   lien,   encumbrance  or  security
                                         interest  whatever  from  time to  time
                                         created  by  or  arising   through  the
                                         Beneficial  Owner  or  the  Lessor   in
                                         connection   with   the   financing  or
                                         refinancing of the Aircraft;

                                     (b) any other lien, encumbrance or security
                                         interest  in  respect  of the  Aircraft
                                         which  results  from acts or  omissions
                                         of, or claims  against,  the Beneficial
                                         Owner   or   the   Lessor   (or   their
                                         respective  successors  or assigns) not
                                         related   to  the   operation   of  the
                                         Aircraft     or    the     transactions
                                         contemplated by or permitted under this
                                         Agreement or resulting from affirmative
                                         acts  of the  Beneficial  Owner  or the
                                         Lessor not  permitted  without  consent
                                         (which consent has not been granted) by
                                         the Lessee or that is in  violation  of
                                         any term of this Agreement or any other
                                         agreement    executed   in   connection
                                         herewith; and

                                     (c) liens in  respect of the  Aircraft  for
                                         Lessor Taxes.

      LESSOR TAXES                   (a) Taxes  imposed as  a  direct  result of
                                         activities    of   the    Lessor,   the
                                         Beneficial   Owner    or    any   other
                                         Indemnitee  (or  any  transferee of the
                                         Lessor,  the Beneficial  Owner  or  any
                                         other  Indemnitee   of  any   ownership
                                         interest or Security   Interest  in the
                                         Aircraft)    in    the     jurisdiction
                                         imposing  the Tax  (including,  without
                                         limitation,   activities   such   as  a
                                         permanent   establishment   or    doing
                                         business in such jurisdiction) that are
                                         unrelated  to   the  Lessor's  dealings
                                         with the Lessee or to  the transactions
                                         contemplated  by  this Agreement  or to
                                         the  operation of the Aircraft  by  the
                                         Lessee  other  than  such   Taxes  that
                                         would not have been imposed but for the
                                         Lessee's or any  Permitted  Sublessee's
                                         use, storage, delivery  or    operation
                                         of  the  Aircraft in such  jurisdiction


                                       10
<PAGE>

                                         or the making  of  any  payments  under
                                         this  Agreement or  related  agreements
                                         from or through such jurisdiction;

                                     (b) Taxes imposed on the income, profits or
                                         gains of the  Lessor or the  Beneficial
                                         Owner (including,  without  limitation,
                                         minimum taxes and  alternative  minimum
                                         taxes)  by  any  Government  Entity  in
                                         Ireland,  or on any  Indemnitee  in any
                                         other jurisdiction where the Indemnitee
                                         is  liable  to such  Taxes by reason of
                                         its   activities   unrelated   to   the
                                         transactions   contemplated   by   this
                                         Agreement,  but only to the extent that
                                         such Taxes  would have been  imposed in
                                         the   absence   of   the   transactions
                                         contemplated by this Agreement;

                                     (c) Taxes   imposed  with  respect  to  any
                                         period  commencing  or event  occurring
                                         before  the date of this  Agreement  or
                                         after the Expiry Date (other than Taxes
                                         imposed  with  respect  to the  receipt
                                         after the Expiry  Date of an amount due
                                         from the Lessee under this Agreement);

                                     (d) Taxes imposed as a direct result of the
                                         Lessor's, the Beneficial Owner's or any
                                         other   Indemnitee's   sale  or   other
                                         disposition  of  any  interest  in  the
                                         Aircraft,    unless    such   sale   or
                                         disposition results in whole or in part
                                         from an  Event  of  Default  which  has
                                         occurred and is continuing;

                                     (e) Taxes  on,  or  with   respect  to  any
                                         trustee    fees,     commissions     or
                                         compensation  received by Lessor in its
                                         capacity  as owner  trustee  under  the
                                         Trust Agreement;

                                     (f) Taxes  imposed  against a transferee or
                                         assignee  of  any   Indemnitee  to  the
                                         extent of the excess of such Taxes over
                                         the  amount  thereof  which  would have
                                         been  imposed had there not been such a
                                         transfer or assignment;

                                       11
<PAGE>

                                     (g) Taxes to the  extent the same would not
                                         have been  imposed  but for the failure
                                         by the Lessor,  the Beneficial Owner or
                                         any other  Indemnitee  to  provide  the
                                         Lessee such  certification with respect
                                         to matters such as its citizenship, tax
                                         status and address, or information of a
                                         similar nature,  in each case, in or on
                                         the appropriate form (collectively,  an
                                         "Eligibility  Certification")  as shall
                                         enable  it to claim a  reduced  rate of
                                         Tax or exemption from Tax for which the
                                         Indemnitee is eligible and which may be
                                         claimed  by  the   Indemnitee   without
                                         material  prejudice  to  its  reporting
                                         position    with    respect    to   any
                                         unindemnified  Tax;  provided  that, in
                                         the    case    of    an     Eligibility
                                         Certification requirement arising after
                                         the Delivery  Date (i) by reason of the
                                         expiration  of  a  previously  provided
                                         Eligibility  Certification,  (ii)  in a
                                         jurisdiction in which the Indemnitee is
                                         not  otherwise  subject  to  Tax as the
                                         result of  operations  or  transactions
                                         unrelated  to  this  Agreement  or  the
                                         transactions   contemplated  hereby  or
                                         (iii) arising as the result of a change
                                         in  applicable  Tax law (other  than in
                                         the country in which the Indemnitee, as
                                         applicable,  is  organized  or has  its
                                         principal   place  of  business),   the
                                         Lessee has requested  such  Eligibility
                                         Certification in writing;

                                     (h) Except  as  provided  in  Clause  5.12,
                                         Taxes  that  are  being   contested  in
                                         accordance  with Clause 5.12 during the
                                         pendency of such contest;

                                     (i) to   the   extent   that   such   Taxes
                                         constitute interest, fines or penalties
                                         if such  interest,  fines or  penalties
                                         result from the failure to file or late
                                         filing of any tax return by the Lessor,
                                         the  Beneficial   Owner  or  any  other
                                         Indemnitee  other than any such  return
                                         which the Lessee is required  hereunder
                                         to   provide   to   the   Lessor,   the
                                         Beneficial    Owner   or   any    other
                                         Indemnitee and which the Lessee has not
                                         provided in reasonably  sufficient time
                                         for such  return to be timely  filed or
                                         has not provided  notice to the Lessor,
                                         the  Beneficial   Owner  or  any  other
                                         Indemnitee,  as the case may be, of the
                                         required filing date.

                                       12
<PAGE>

      LETTER AGREEMENT NO. 1        means that certain  Letter  Agreement  No. 1
                                    between the Lessor and the Lessee,  relating
                                    to the Aircraft, and dated as of the date of
                                    this Agreement.

      LETTER OF CREDIT              an  irrevocable  standby  letter of  credit,
                                    substantially   in  the   form  set  out  in
                                    Schedule   7  or   otherwise   in  form  and
                                    substance satisfactory to the Lessor, issued
                                    in  favour  of the  Lessor  by a bank in the
                                    United States  reasonably  acceptable to the
                                    Lessor,  in the face  amount as  provided in
                                    Clause 5.1 hereof.

      LETTER OF QUIET ENJOYMENT     an  executed  letter  of  quiet   enjoyment,
                                    substantially   in  the   form  set  out  in
                                    Schedule  11,  provided  to  the  Lessee  by
                                    Sunrock  Aircraft  Corporation  Limited,  as
                                    Beneficial  Owner  (and any  successors  and
                                    assigns  of  Sunrock  Aircraft   Corporation
                                    Limited  other  than  the  Banks  and  other
                                    security assigns).

      LIBOR                         in respect of any day, the  arithmetic  mean
                                    (rounded  up to the  nearest  1-16th) of the
                                    annual   rates  of  interest   published  or
                                    reported  by Reuters  Limited  (through  its
                                    Reuter Monitor  Service,  the "Screen"),  by
                                    reference to the Screen page "LIBOR" (or any
                                    successor  to such  page) at or about  11.00
                                    a.m.  (London time) on that day (or, if such
                                    day is not a Business  Day, the  immediately
                                    preceding   Business   Day),  as  being  the
                                    interest  rates offered for Dollar  deposits
                                    in an  amount  equal  (or  closest)  to  the
                                    amount in question and for a duration  equal
                                    to the period in question (or for  whichever
                                    period appearing on the Screen is closest to
                                    that  period).  If, on the date in question,
                                    the Screen page "LIBO" (or any  successor to
                                    such  page)  is not  available  or does  not
                                    display  rates  for  the  required   period,
                                    "LIBOR"   shall  be  the   arithmetic   mean
                                    (rounded-up   to  the  nearest  two  decimal
                                    places) of the respective  rates notified to
                                    the  Lessor  by the  Reference  Banks as the
                                    rates at which  the  Reference  Banks  offer
                                    deposits in Dollars to leading  banks in the
                                    London  Interbank  Market at or about  11.00
                                    a.m.  (London  time) on the date in question
                                    for an  amount  equal  (or  closest)  to the
                                    amount in question and for a duration  equal
                                    (or closest) to the period in question.

                                       13
<PAGE>

      MAINTENANCE PROGRAMME         an Aviation Authority  approved  maintenance
                                    programme  for  the  Aircraft   encompassing
                                    scheduled   maintenance   (including   block
                                    maintenance),       condition      monitored
                                    maintenance, and/or on-condition maintenance
                                    of  Airframe,  Engines and Parts,  including
                                    but  not  limited  to,  servicing,  testing,
                                    preventative      maintenance,      repairs,
                                    structural   inspections,   system   checks,
                                    overhauls,  approved modifications,  service
                                    bulletins, engineering orders, airworthiness
                                    directives,  corrosion control,  inspections
                                    and treatments.

      MAJOR CHECKS                  any C-Check,  multiple  C-Check,  structural
                                    C-7 Check or annual heavy  maintenance visit
                                    or  segment  thereof  suggested  for  Boeing
                                    737-300   aircraft   by   the   Manufacturer
                                    (however  denominated)  as  set  out  in the
                                    Agreed Maintenance Programme.

      MANUFACTURER                  Boeing  except  where the context  otherwise
                                    requires,  in  which  case it  shall  be the
                                    manufacturer of the specific Engine or Part,
                                    as the case may be.

      MINIMUM LIABILITY COVERAGE    $[ ]* on each occurrence.

      NET INCOME                    "net  income   (loss),"  as   determined  in
                                    accordance with GAAP.

      NET WORTH                     "net  worth," as  determined  in  accordance
                                    with GAAP.

      NON-SEVERABLE MODIFICATION    any modification,  alteration or improvement
                                    of  or  to  the  Aircraft  which  is  not  a
                                    Severable  Modification  and  which  is  not
                                    required to be  incorporated in the Aircraft
                                    by the FAA or the terms of this Agreement.

                                       14
<PAGE>

      OWNER TRUSTEE                 Wilmington   Trust   Company,   not  in  its
                                    individual  capacity,  but  solely  as owner
                                    trustee under the Trust Agreement.

      PART                          whether or not installed on the Aircraft:

                                     (a) any component,  furnishing or equipment
                                         (other   than   a   complete    Engine)
                                         installed  in  or  furnished  with  the
                                         Aircraft at Delivery; and

                                     (b) any  other  component,   furnishing  or
                                         equipment (other than a complete Engine
                                         or  engine)  title  to  which  has,  or
                                         should  have,  passed to the  Holder of
                                         Legal Title pursuant to Clause 8.17(a),

                                     but,  in the  case of both  clause  (a) and
                                     clause (b),  excluding any such items title
                                     to which has, or should have, passed to the
                                     Lessee pursuant to Clause 8.17(c).

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

                                     (b) any  lien  of  a  repairer,   mechanic,
                                         carrier, hangarkeeper, unpaid seller or
                                         other   similar  lien  arising  in  the
                                         ordinary   course  of  business  or  by
                                         operation   of   law  in   respect   of
                                         obligations  which are not  overdue  or
                                         are being  contested  in good  faith by
                                         appropriate proceedings;

                                     (c) any leasehold  interest,  interest of a
                                         conditional   sale   vendor,   security
                                         interest  or  license  as to which  the
                                         Lessor has provided its express consent
                                         with respect to and affecting  only any
                                         Severable Modification installed on the
                                         Aircraft  in  accordance   with  Clause
                                         8.16(c);

                                       15
<PAGE>

                                    but  only  if (in the  case of each  (a) and
                                    (b)): (i) so long as adequate  reserves have
                                    been established by the Lessee in accordance
                                    with GAAP with respect to such liens for the
                                    payment  of the  Taxes or  obligations;  and
                                    (ii)  such  proceedings,  or  the  continued
                                    existence  of the lien,  do not give rise to
                                    the  likelihood  of the sale,  forfeiture or
                                    other loss of the  Aircraft or any  interest
                                    therein  or of  criminal  liability  on  the
                                    Lessor, or any Bank; and

                                     (d) any Lessor Lien.

      PERMITTED TRANSFEREE          a financially  sound (determined at the time
                                    of the  transfer)  person  or  entity  which
                                    shall  not  operate  an  airline,  or  be an
                                    Affiliate of an airline,  competing with the
                                    Lessee and which meets one of the  following
                                    criteria:   (i)  has  at  the  time  of  the
                                    transfer  a  minimum  Net  Worth of not less
                                    than $[ ]*, or (ii) if such transferee's Net
                                    Worth is less than $[ ]* but at least $[ ]*,
                                    the  Beneficial  Owner  guarantees  for  the
                                    benefit   of   the   Lessee   the   Lessor's
                                    obligations to pay the Commitment Fee as set
                                    forth in Clauses  5.1,  7.3 and  11.1(a) and
                                    the maintenance  contributions  as set forth
                                    in Clause 7.2, or (iii) such other person or
                                    entity to which the  Lessee  shall  consent,
                                    such consent not to be unreasonably withheld
                                    or delayed.

      PURCHASE AGREEMENT            the  Purchase  Agreement  as  defined in the
                                    Purchase Agreement Assignment.

      PURCHASE AGREEMENT ASSIGNMENT the  agreement  relating  to  the  Aircraft,
                                    dated July 1, 1997,  among Boeing,  BSC, the
                                    Beneficial Owner and the Lessee.

      REDELIVERY LOCATION           at a commercial airport chosen by the Lessor
                                    on the Lessee's  then  prevailing  scheduled
                                    network. The technical acceptance will occur
                                    at the Lessee's home base or at the facility
                                    of the Approved Maintenance Provider.

      REFERENCE BANKS               Barclays Bank PLC, Societe Generale, Bankers
                                    Trust and National Westminster Bank PLC (or,
                                    in the  absence of any such bank,  any other
                                    reputable bank selected by the Lessor).

                                       16
<PAGE>

      RELATED RELEVANT PERIOD       in  relation  to  any  Rental  Period,   the
                                    Relevant  Period  in which  the first day of
                                    that Rental Period falls.

      RELEVANT PERIOD               each period  ascertained in accordance  with
                                    Clause 5.3.

      RENT                          all amounts payable pursuant to Clause 5.3

      RENTAL PERIOD                 each period  ascertained in accordance  with
                                    Clause 5.2.

      RENT DATE                     the first day of each Rental Period.

      SCHEDULED DELIVERY DATE       July 2, 1997.

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

      SEVERABLE MODIFICATION        any modification,  alteration or improvement
                                    of or to the  Aircraft  (including,  without
                                    limitation,  severable components or systems
                                    installed  on or  affixed  to  the  Airframe
                                    which (A) is not required to be incorporated
                                    in the  Aircraft  by the FAA or the terms of
                                    this  Agreement,  (B) at the time  made does
                                    not diminish the value,  utility,  condition
                                    or  airworthiness  of the Aircraft below its
                                    value,  utility,  condition or airworthiness
                                    immediately    before   such   modification,
                                    alteration or  improvement  is made, and (C)
                                    is  removable  from  the  Aircraft   without
                                    causing damage to the Aircraft  (unless such
                                    damage is  promptly  repaired)  and  without
                                    diminishing the value, utility, condition or
                                    airworthiness  which the Aircraft would have
                                    had  at  such  time  if  the   modification,
                                    alteration or improvement had not been made.

      SIGNIFICANT DEFAULT            (a) any Default  which with  the giving  of
                                         notice or  the passage  of  time  would
                                         constitute  an  Event  of   Default
                                         specified in  paragraphs  (a), (b), (g)
                                         or (h) of Clause 13.1; or

                                       17
<PAGE>

                                     (b) the  Lessee  shall  be   materially  in
                                         default of its  maintenance  and repair
                                         obligations under Clause 8.11;

                                     (c) the  Lessee  shall  be  operating   the
                                         Aircraft  in  violation  of  applicable
                                         law;

                                     (d) the  Lessee  shall  be  subleasing  the
                                         Aircraft to a sublessee  which is not a
                                         sublessee  permitted under the terms of
                                         this Agreement; or

                                     (e) the  Lessee  shall be in default of any
                                         other material  provision  hereof which
                                         causes the Lessor to reasonably  and in
                                         good faith deem itself insecure.

      STATE OF INCORPORATION        the State of Delaware.

      STATE OF REGISTRATION         the United States of America.

      SUBSIDIARY                     (a) in   relation  to   any   reference  to
                                         accounts,  any  company  whose accounts
                                         are  consolidated   with  the  accounts
                                         of   the   Lessee  in  accordance  with
                                         GAAP; and

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

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

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

      SUPPLEMENTAL RENT             all amounts payable under Clause 5.4(a).

      TAXES                         any  and  all  present  and  future   taxes,
                                    levies,  imposts,  duties or  charges in the
                                    nature  of  taxes,   whatever  and  wherever


                                       18
<PAGE>

                                    imposed,  including  customs  duties,  value
                                    added  taxes or similar  taxes and any gross
                                    or  net  income,   gross  or  net  receipts,
                                    minimum,    alternative   minimum,    excess
                                    profits,   accumulated   earnings,   capital
                                    gains, doing business, franchise,  transfer,
                                    sales, use,  business,  occupation,  excise,
                                    personal property  (tangible or intangible),
                                    stamp or other  tax or duty  imposed  by any
                                    national  (domestic  or  foreign),  state or
                                    local taxing or fiscal  authority or agency,
                                    together  with any  penalties,  additions to
                                    tax, fines or interest thereon;

      TERM                          the period  commencing  on the Delivery Date
                                    and ending on the Expiry Date.

      TOTAL LOSS                    with respect to the Airframe:

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

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

                                     (c) (i) the  requisition of title,  or (ii)
                                         other compulsory acquisition,  capture,
                                         seizure,  deprivation,  confiscation or
                                         detention   for  any   reason   of  the
                                         Airframe by the government of the State
                                         of   Registration  or  other  competent
                                         authority (whether de jure or de facto)
                                         for  a   period   in   excess   of  120
                                         consecutive    days,    but   excluding
                                         requisition   for  use  or   hire   not
                                         involving requisition of title; or

                                     (d) (i)     the     hi-jacking,      theft,
                                         condemnation,  confiscation, seizure or
                                         (ii) requisition for use or hire of the
                                         Airframe  (other  than  by the  federal


                                       19
<PAGE>

                                         government   of  the  United   States),
                                         which,  in the case of each  clause (i)
                                         and (ii)  above,  deprives  any  person
                                         permitted  by  this  Agreement  to have
                                         possession  and/or use of the  Airframe
                                         of its  possession  and/or use for more
                                         than  120  consecutive  days  or  (iii)
                                         requisition  for  use  or  hire  by the
                                         federal   government   of  the   United
                                         States,  extending  beyond  the  Expiry
                                         Date.

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

                                     (b) in  the  case  of  any  of  the  events
                                         described in  sub-paragraph  (a) of the
                                         definition  of "Total Loss" (other than
                                         an actual total loss), whichever is the
                                         earlier  of (i) 60 days  after the date
                                         on which  notice  claiming  such  total
                                         loss is given to the relevant insurers,
                                         and (ii) the date on which such loss is
                                         admitted   or    compromised   by   the
                                         insurers;

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

                                     (d) in  the  case  of  any  of  the  events
                                         described in  sub-paragraph  (c) of the
                                         definition   of  "Total   Loss",   with
                                         respect to a requisition of title,  the
                                         date on which the relevant  requisition
                                         of title occurs, or with respect to any
                                         other compulsory acquisition,  capture,
                                         seizure,  deprivation,  confiscation or
                                         detention     described     in     such
                                         sub-paragraph,  the  expiry  of the 120
                                         consecutive  day period  referred to in
                                         such sub-paragraph;

                                     (e) in  the  case  of  any  of  the  events
                                         described in  sub-paragraph  (d) of the
                                         definition  of "Total  Loss",  (A) with
                                         respect   to   clauses   (i)  and  (ii)
                                         thereof,  the  expiry of the  period of


                                       20
<PAGE>

                                         120   consecutive   days  or  (B)  with
                                         respect to clause  (iii)  thereof,  the
                                         Expiry Date;
                                   
                                    and,  in each case,  the Total Loss shall be
                                    deemed to have  occurred  at noon  Greenwich
                                    Mean Time on such date.

      TRUST AGREEMENT               the  Trust  Agreement  dated as of June ___,
                                    1997 between  Sunrock  Aircraft  Corporation
                                    Limited, as Beneficial Owner, and Wilmington
                                    Trust Company, as Owner Trustee.

      TRUST COMPANY                 Wilmington Trust Company,  in its individual
                                    capacity.

1.2   INTERPRETATION

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

          (i) each of "THE LESSOR," "THE  BENEFICIAL  OWNER," "THE HEAD LESSOR,"
              "THE HEAD  LESSEE" or "THE  LESSEE" or any other  person  includes
              without   prejudice  to  the  provisions  of  this  Agreement  any
              successor in title to it and any permitted assignee;

          (ii)a "PERSON"  includes,  without  limitation,  an individual,  firm,
              partnership,  company,  corporation,  unincorporated  body  or any
              Government   Entity  and  shall  also  include  their   respective
              successors and assignees;

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

          (iv)any document shall include that document as amended,  novated or
              supplemented;

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

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

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

                                       21
<PAGE>

      (b) For the  purposes of Clauses 7.4 and 7.5,  "THE  LESSOR"  includes the
          Lessor, the Beneficial Owner and the Head Lessor.

2.    REPRESENTATIONS AND WARRANTIES

2.1   LESSEE'S REPRESENTATIONS AND WARRANTIES

      The Lessee  represents  and  warrants to the Lessor as of the date of this
      Agreement that:

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

      (b) POWER AND AUTHORITY:  the Lessee has the corporate power to enter into
          and perform, and has taken all necessary corporate action to authorize
          the entry into,  performance  and delivery of, this  Agreement and the
          transactions contemplated by this Agreement;

      (c) LEGAL VALIDITY:  This Agreement  constitutes the Lessee's legal, valid
          and binding obligation;

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

          (i) conflict with any existing laws binding on the Lessee; or

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

          (iii)conflict  with or result in default  under any document  which is
              binding  upon the Lessee or any of its  assets,  nor result in the
              creation of any Security Interest over any of its assets;

      (e) AUTHORIZATION:   All  authorizations,   consents,   registrations  and
          notifications  required in  connection  with the Lessee's  entry into,
          performance,  validity and enforceability  against the Lessee of, this
          Agreement and the  transactions  contemplated by this Agreement,  have
          been (or will on or before the  Delivery  Date have been)  obtained or
          effected (as  appropriate) and are (or will on their being obtained or
          effected be) in full force and effect;

                                       22
<PAGE>

      (f) NO IMMUNITY:

          (i) the Lessee is subject to civil  commercial law with respect to its
              obligations under this Agreement; and

          (ii)neither  the Lessee nor any of its assets is entitled to any right
              of sovereign  immunity and the entry into and  performance of this
              Agreement by the Lessee  constitute  private and commercial  acts;
              and

      (g) ACCOUNTS:  the audited  accounts  of the  Lessee,  and, if required by
          GAAP,  the  audited  consolidated  accounts  of  the  Lessee  and  its
          Subsidiaries and Affiliates most recently delivered to the Lessor:

          (i) have been prepared in accordance  with GAAP  consistently  applied
              (except as otherwise disclosed therein); and

          (ii)fairly represent in accordance with such accounting principles the
              consolidated  financial  condition of the Lessee as at the date to
              which they were drawn up.

2.2   LESSEE'S FURTHER REPRESENTATIONS AND WARRANTIES

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

      (a) NO DEFAULT:

          (i) no Default has occurred and is continuing or would result from the
              entry into or performance of this Agreement; and

          (ii)no other event has occurred and is  continuing  which  constitutes
              (or with the giving of  notice,  lapse of time,  determination  of
              materiality or the fulfillment of any other  applicable  condition
              or any combination of the foregoing,  would reasonably be expected
              to  constitute)  a material  default  under any document  which is
              binding on the Lessee or any assets of the Lessee;

      (b) REGISTRATION:  Except for the  registration  of the  Aircraft  and the
          filing  of this  Agreement  with  the FAA and the  filing  of  Uniform
          Commercial Code financing  statements in the State of Colorado,  it is
          not necessary under the laws of the State of Incorporation,  the State
          of  Registration  or the  State of  Colorado  in order to  ensure  the
          validity,  effectiveness  and  enforceability  of this Agreement or to
          establish, perfect or protect the property rights of the Lessor in the
          Aircraft  or any  Engine  or Part  that  this  Agreement  or any other
          instrument  relating thereto be filed,  registered or recorded or that


                                       23
<PAGE>

          any other  action be taken  or,  if any such  filings,  registrations,
          recordings or other actions are necessary or advisable,  the same have
          been effected or will have been effected on or before Delivery;

      (c) LITIGATION: no litigation,  arbitration or administrative  proceedings
          are pending, or to its knowledge,  threatened against the Lessee which
          would  reasonably be expected to have a material  adverse  effect upon
          its  financial  condition  or  business  or its ability to perform its
          obligations under this Agreement;

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

      (e) MATERIAL ADVERSE CHANGE:  there has been no material adverse change in
          the  financial  condition  of the  Lessee  since the date to which the
          accounts  most  recently  provided  to the  Lessor  on or prior to the
          Delivery Date were drawn up;

      (f) TAXES:  the  Lessee  has  filed  all  necessary  returns  and made all
          payments  shown due  thereon  to the tax  authorities  in the State of
          Incorporation, the State of Registration and the State of Colorado and
          is not  required  by law to deduct any Taxes from any  payments  under
          this Agreement  (other than those the Lessee is diligently  contesting
          in good  faith and for  which  the  Lessee  has  established  adequate
          reserves in accordance with GAAP; and

      (g) INFORMATION:  the  financial  and other  information  furnished by the
          Lessee in connection  with this  Agreement is true and accurate in all
          material respects.

2.3   REPETITION

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

2.4   LESSOR'S AND TRUST COMPANY'S REPRESENTATIONS AND WARRANTIES

      The Trust Company  represents and warrants to the Lessee as of the date of
      this Agreement that:

      (a) STATUS: the Trust Company is a banking  corporation duly organized and
          validly  existing  under the laws of the State of Delaware and has the
          corporate  power to own its assets and carry on its  business as it is
          now being conducted;

                                       24
<PAGE>

      (b) POWER AND  AUTHORITY:  the Trust  Company has the  corporate  power to
          enter into and perform,  and has taken all necessary  corporate action
          to  authorize  the entry  into,  performance  and  delivery  of,  this
          Agreement and the transactions contemplated by this Agreement.

      (c) LEGAL  VALIDITY:  This  Agreement,  to the extent  entered into by the
          Trust  Company,  constitutes  the  Trust  Company's  legal,  valid and
          binding obligation.

      (d) NON-CONFLICT:  The entry into and performance by the Trust Company of,
          and the  transactions  contemplated by, this Agreement do not and will
          not:

          (i) conflict  with  any  existing  laws of the  State of  Delaware  or
              federal laws of the United States of America governing the banking
              and trust powers of the Trust Company; or

          (ii)conflict  with   the   constitutional   documents  of   the  Trust
              Company; or

          (iii)  conflict  with any  document  which is  binding  upon the Trust
              Company or any of its assets.

      (e) AUTHORIZATION:  So far  as  concerns  the  obligations  of  the  Trust
          Company, all authorizations, consents, registrations and notifications
          required  under the laws of the State of Delaware in  connection  with
          the  Trust   Company's   entry   into,   performance,   validity   and
          enforceability  against  the Trust  Company  of, and the  transactions
          contemplated  by, this  Agreement  by the Trust  Company have been (or
          will on or before the  Delivery  Date have been)  obtained or effected
          (as  appropriate) and are (or will on their being obtained or effected
          be) in full force and effect.

      The Lessor  represents  and  warrants to the Lessee as of the date of this
      Agreement that:

      (1) LEGAL VALIDITY:  This Agreement  constitutes the Lessor's legal, valid
          and binding obligation.

      (2) NO IMMUNITY:

          (i) the Lessor is subject to civil  commercial law with respect to its
              obligations under this Agreement; and

          (ii)neither  the Lessor nor any of its assets is entitled to any right
              of sovereign  immunity and the entry into and  performance of this
              Agreement by the Lessor constitute private and commercial acts.

                                       25
<PAGE>

2.5   REPETITION

      The  representations  and  warranties  in  Clause  2.4  will  survive  the
      execution of this Agreement.  The representations and warranties contained
      in Clause 2.4 will be deemed to be repeated by the Lessor on the  Delivery
      Date with reference to the facts and circumstances then existing.

3.    CONDITIONS PRECEDENT

3.1   DOCUMENTARY CONDITIONS PRECEDENT

      The  Lessor's  obligation  to deliver  and lease the  Aircraft  under this
      Agreement  is subject to the  receipt  or waiver of the  following  by the
      Lessor on or before the  Delivery  Date in form and  substance  reasonably
      satisfactory to the Lessor:

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

      (b) RESOLUTIONS:  a copy of a resolution  of the board of directors of the
          Lessee approving the terms of, and the  transactions  contemplated by,
          this  Agreement,  resolving  that it enter  into this  Agreement,  and
          authorizing  one or more officers or  representatives  to execute this
          Agreement and accept delivery of the Aircraft on its behalf;

      (c) OPINION: an opinion or opinions,  substantially in the form set out in
          Schedule 6, Part 1, issued on the Delivery  Date by Smith,  Gambrell &
          Russell,  LLP and/or other legal counsel reasonably  acceptable to the
          Lessor;

      (d) ASSISTANT   GENERAL   COUNSEL   OPINION:   an  opinion  or   opinions,
          substantially in the form set out in Schedule 6, Part 2, issued on the
          Delivery  Date by the Assistant  General  Counsel of the Lessee and/or
          other legal counsel reasonably acceptable to the Lessor;

      (e) FAA  OPINION:  an opinion  of  Daugherty,  Fowler & Peregrin  or other
          counsel  reasonably  acceptable  to  the  Lessor  who  are  recognized
          specialists  with  regard  to  FAA  registration  matters  in  a  form
          acceptable  to the Lessor  acting  reasonably as to the due filing for
          recordation of this Agreement;

      (f) APPROVALS:  evidence  of the  issue  of  each  governmental  approval,
          license and consent  required of the Lessee for the performance by the
          Lessee of any of its obligations hereunder;

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

                                       26
<PAGE>

      (h) PROCESS  AGENT:  a letter from the process  agent  appointed  by the
          Lessee in this Agreement accepting that appointment;

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

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

          (ii)certifying that each copy document specified in this Clause 3.1 is
              correct, complete and in full force and effect;

      (j) INSURANCES:   (x)  certificates  of  insurance  (and,  if  applicable,
          reinsurance),   (y)  brokers'   undertakings  and  (z)  if  reasonably
          requested  by the Lessor,  other  evidence  (other than any  insurance
          policy or portion or extract  thereof or any copy of any  thereof  and
          other than any  information  that would  violate  any  confidentiality
          agreement  or  undertaking   between  the  Lessee  and  the  insurers)
          reasonably  satisfactory  to the Lessor  that the Lessee is taking the
          required  steps to ensure due  compliance  with the provisions of this
          Agreement as to insurances with effect on and after Delivery;

      (k) ACKNOWLEDGEMENT:  an acknowledgement in the form set out in Part 2  of
          Schedule 5 relating to the notice of  assignment set out in Part 1  of
          that Schedule

      (l) ACCOUNTS:  the latest available accounts of the Lessee as described in
          Clause 8.2(b)(i) and (ii);

      (m) MAINTENANCE  PROGRAMME:  receipt by the Lessor of such information and
          documents  relating  to the  Maintenance  Programme  as the Lessor may
          reasonably  require,  and the Lessor having agreed to the  Maintenance
          Programme on or prior to the Delivery Date;

      (n) LETTER  OF  CREDIT:  receipt  by Lessor of the  Letter of  Credit,  if
          applicable pursuant to Clause 5.1 hereof, duly executed by the issuing
          bank; and

      (o) FINANCING STATEMENTS: evidence that on the Delivery Date any financing
          statements  reasonably requested by the Lessor have been duly filed in
          the State of Colorado and that all filings, registrations,  recordings
          and other  actions  have been or will be taken which are  necessary or
          advisable to ensure the validity,  effectiveness and enforceability of
          this Agreement and to protect the property rights of the Lessor in the
          Aircraft, any Engine or any Part;

      (p) GENERAL:  such other  documents as the Lessor may  reasonably  request
          provided that such documents do not deprive the Lessee of any right or
          privilege  hereunder or impose on the Lessee any  additional  material
          obligation.

                                       27
<PAGE>

3.2   OTHER CONDITIONS PRECEDENT

      The  obligation of the Lessor to deliver and lease the Aircraft under this
      Agreement is also subject to the  satisfaction  or waiver of the following
      additional conditions precedent:

      (a) that the  conditions  precedent to the  obligation  of the  Beneficial
          Owner to (i) purchase the Aircraft  from Boeing and/or BSC pursuant to
          the Purchase  Agreement and the Purchase  Agreement  Assignment  shall
          have been  satisfied  or  waived,  and  Boeing  and/or  BSC shall have
          tendered the Aircraft to the Beneficial  Owner in accordance  with the
          Purchase  Agreement  and the Purchase  Agreement  Assignment  and (ii)
          accept  delivery of the Aircraft  under the Head Lease shall have been
          satisfied or waived;

      (b) that the  representations  and  warranties of the Lessee under Clauses
          2.1 and 2.2 are true and  correct  and  would be true and  correct  if
          repeated on the Delivery Date;

      (c) that no Default  shall have occurred and be continuing or would result
          from the leasing of the Aircraft to the Lessee  under this  Agreement;
          and

      (d) there has been no material  adverse change in the financial  condition
          of the  Lessee  since the date to which  the  accounts  most  recently
          provided to the Lessor on or prior to the Delivery Date were drawn up;

      (e) that  the  Aircraft  shall  be in the  condition  required  under  the
          Purchase  Agreement  and that the  Beneficial  Owner  shall have had a
          reasonable  opportunity  to inspect the Aircraft prior to the Delivery
          Date to satisfy itself that the Aircraft is in such condition; and

      (f) that all payments due to the Lessor  under this  Agreement  before the
          Delivery Date shall have been received by the Lessor.

3.3   WAIVER

      The  conditions  specified in Clauses 3.1 and 3.2 are for the sole benefit
      of the Lessor  and the  Beneficial  Owner,  as the case may be, and may be
      waived or deferred in whole or in part and with or without  conditions  by
      the  Lessor  and  the  Beneficial  Owner,  respectively.  If any of  those
      conditions are not satisfied on or before  Delivery and the Lessor (in its
      absolute  discretion)  nonetheless  agrees to deliver the  Aircraft to the
      Lessee,  the Lessee will ensure that those conditions are fulfilled within
      15 days  after the  Delivery  Date and the Lessor may treat as an Event of
      Default the failure of the Lessee to do so.


                                       28
<PAGE>

3.4   LESSEE'S CONDITIONS PRECEDENT

      Lessee's  obligation to Lease the Aircraft under this  Agreement  shall be
      subject to satisfaction or waiver of the following conditions precedent:

      (a) the Beneficial Owner shall have purchased the Aircraft pursuant to the
          Purchase Agreement and the Purchase Agreement Assignment;

      (b) The Aircraft  shall be  registered  in the Lessor's name in the United
          States;

      (c) The Aircraft shall be in the same condition and  configuration as when
          delivered to the Beneficial Owner under the Purchase Agreement and the
          Purchase  Agreement  Assignment  and will be in such a condition as to
          permit  immediate  operation by the Lessee in the United  States under
          FAR Part 121;

      (d) The  representations and warranties set out in Clause 2.4 are true and
          correct  and would be true and  correct if  repeated  on the  Delivery
          Date;

      (e) The  Lessee  shall  have  received  a letter  from the  process  agent
          appointed by the  Beneficial  Owner in this  Agreement  accepting that
          appointment;

      (f) The Lessee  shall  have  received  a  Letter of Quiet  Enjoyment  from
          Sunrock Aircraft Corporation Limited, as Beneficial Owner;

      (g) The Lessor shall have approved the Maintenance  Programme on or before
          the Delivery Date; and

      (h) The Lessee  shall have  received  such other  documents  as the Lessee
          shall  reasonably  request provided that such documents do not deprive
          the Lessor of any right or privilege hereunder or impose on the Lessor
          any additional material obligation.

3.5   WAIVER

      The  conditions  specified  in Clause 3.4 are for the sole  benefit of the
      Lessee  and may be  waived  or  deferred  in  whole or in part and with or
      without  conditions  by the  Lessee.  If any of those  conditions  are not
      satisfied  on  or  before   Delivery  and  the  Lessee  (in  its  absolute
      discretion) nonetheless agrees to accept delivery of the Aircraft from the
      Lessor,  the Lessor will ensure that those conditions are fulfilled within
      15 days after the Delivery.



                                       29
<PAGE>


4.    COMMENCEMENT

4.1   LEASING

      The Lessor will lease the  Aircraft to the Lessee and the Lessee will take
      the Aircraft on lease in accordance  with this  Agreement for the duration
      of the Term.

4.2   DELIVERY

      The Aircraft  will be delivered to and accepted by the Lessee,  as lessee,
      (in a new  condition as delivered by Boeing  and/or BSC to the  Beneficial
      Owner under the Purchase Agreement and the Purchase Agreement  Assignment,
      at the Delivery Location,  or such other location as may be agreed, on the
      Scheduled  Delivery  Date  (subject to Clause 4.7) or on such other day as
      may be agreed.

4.3   CONDITION ON DELIVERY

      When the Aircraft is presented by the Lessor for  acceptance by the Lessee
      under this Agreement:

      (a) it shall  comply in all  respects  with the  specification  set out in
          Schedule 1 or, if different, the Purchase Agreement;

      (b) it  shall  have  been  issued  with a  current  valid  Certificate  of
          Airworthiness issued by the FAA; and

      (c) it shall be in such a condition as  to  permit immediate  operation by
          the  Lessee  in   the  United  States  under   U.S.  Federal  Aviation
          Regulation Part 121.

4.4   (INTENTIONALLY LEFT BLANK)

4.5   INDEMNITY

      (a) The Lessee will indemnify and hold harmless the  Indemnitees  from and
          against all Claims (as  defined in Clause 10)  arising  from the death
          of, or injury to, any  observer or any employee or agent of the Lessee
          in connection with any inspection of the Aircraft  pursuant to (i) the
          Purchase Agreement and/or the Purchase  Agreement  Assignment and (ii)
          the Head Lease and the Aircraft Sale Agreement  (which  inspection and
          delivery  procedures  will be the same as those provided for under the
          Purchase Agreement and the Purchase Agreement Assignment).

      (b) The Lessor or the Beneficial Owner, as the case may be, will indemnify
          and hold  harmless  the Lessee from and against all Claims (as defined
          in Clause 10) arising from the death of, or injury to, any observer or
          any  employee  or  agent  of the  Lessor  or the  Beneficial  Owner in


                                       30
<PAGE>

          connection  with any  inspection  of the Aircraft  pursuant to (i) the
          Purchase Agreement and/or the Purchase  Agreement  Assignment and (ii)
          the Head Lease and the Aircraft Sale Agreement  (which  inspection and
          delivery  procedures  will be the same as those provided for under the
          Purchase Agreement and the Purchase Agreement Assignment).

4.6   ACCEPTANCE AND RISK

      (a) When the  conditions  precedent  set  forth in  Clause  3.4 have  been
          satisfied  in full or waived by the Lessee and the Lessor has tendered
          the Aircraft to the Lessee in compliance with the conditions set forth
          in Clause 4.3,  the Lessee shall  immediately  sign and deliver to the
          Lessor  the   Certificate  of  Acceptance.   Delivery  of  the  signed
          Certificate  of Acceptance to the Lessor shall  constitute  conclusive
          evidence for all purposes  that the Aircraft has been  accepted by the
          Lessee for all purposes of this Agreement.

      (b) After acceptance by the Lessee, the Aircraft and every Part will be in
          every  respect at the sole risk of the Lessee,  who will bear all risk
          of loss,  theft,  damage or destruction to the Aircraft from any cause
          whatsoever.

4.7   DELAYED DELIVERY

      If owing to:

      (a) any seller,  manufacturer  or  maintenance  performer  of the Aircraft
          delaying in the  delivery  of, or failing to deliver,  the Aircraft to
          the Lessor for any reason  (other  than  because of any default of the
          Beneficial  Owner  in the  performance  of its  obligations  under  an
          agreement  with that seller,  manufacturer  or  maintenance  performer
          (including,  without  limitation,  the Purchase  Agreement  and/or the
          Purchase Agreement  Assignment) unless the default arises from any act
          or omission of the Lessee  whether or not in  circumstances  entitling
          that seller,  manufacturer or maintenance  performer to terminate that
          agreement); or

      (b) any Excusable  Delay the Lessor delays in the delivery of, or fails to
          deliver, the Aircraft under this Agreement:

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

          (ii)the Lessee will not be entitled to terminate  this Agreement or to
              reject the Aircraft when  tendered for delivery by the Lessor,  on
              the grounds of any such delay;  provided that this Agreement shall
              automatically  terminate  upon  the  termination  of the  Purchase
              Agreement prior to the Delivery Date and the Lessee shall have the


                                       31
<PAGE>

              right to terminate  this  Agreement  upon the  termination  of the
              Purchase Agreement Assignment by the Beneficial Owner.

4.8   OPTIONS

      (a) Notwithstanding  the other  provisions of this  Agreement,  the Lessor
          hereby grants the Lessee the option (the "EXTENSION OPTION") to extend
          the Term for a period of  twenty-four  (24)  months  (the  "PERIOD  OF
          EXTENSION") provided that:

          (i) the Lessee shall give the Lessor  notice in writing not later than
              the date  eighteen  (18)  months  prior to the  Expiry  Date  (the
              "LESSEE  EXTENSION  NOTICE") of the Lessee's  election to exercise
              the option,  which Lessee Extension Notice,  once given,  shall be
              irrevocable; and

          (ii)no Significant Default or Event of Default shall have occurred and
              be  continuing  on the date that the  Lessee  Extension  Notice is
              given or on the day before the Period of Extension commences.

      (b) In the event the Lessee does not exercise the Lessee Extension Option,
          the Lessor  shall have the option (the "LESSOR  EXTENSION  OPTION") to
          extend the Term for a period of  twenty-four  (24) months (the "PERIOD
          OF EXTENSION"),  provided that the Lessor shall give the Lessee notice
          in writing not later than the date  twelve  (12)  months  prior to the
          Expiry Date (the "LESSOR  EXTENSION  NOTICE") of the Lessor's election
          to exercise the option,  which Lessor  Extension  Notice,  once given,
          shall be irrevocable;

      Upon the exercise of the Lessee  Extension  Option or the Lessor Extension
      Option,  all  references  in this  Agreement  to the Expiry  Date shall be
      deemed to refer to the last day of the Period of  Extension  and all other
      terms and  conditions  of this  Agreement  shall  remain in full force and
      effect.

5.    PAYMENTS

5.1   AIRCRAFT COMMITMENT FEE

      Lessee  shall pay to the  Lessor a  Commitment  Fee in the  amount  and in
      accordance with the schedule set forth in Letter Agreement No. 1:

      The  Commitment  Fee shall be returned to the Lessee  five  Business  Days
      following the Expiry Date, but not before the Lessee shall have completely
      performed all of its  obligations  then due under this  Agreement.  If the
      Commitment  Fee is in the  form of  cash,  interest  shall  accrue  on the
      Commitment  Fee at six months (6 months)  LIBOR  minus 1.00 % and shall be
      payable to the Lessee together with the Commitment Fee unless any Event of


                                       32
<PAGE>

      Default  occurs  and is  continuing  at such  time,  in which  case,  such
      interest  shall be paid to the Lessee at such time as all amounts then due
      from the Lessee to the Lessor hereunder shall have been paid in full.

      At the Lessor's option, payment of the Commitment Fee may take the form of
      the  provision  by the Lessee to the Lessor of a Letter of Credit,  and in
      such case,  the Lessor  agrees to exchange such Letter of Credit for a new
      Letter  of  Credit  in an  appropriately  reduced  amount  if and when the
      Commitment  Fee is reduced as provided in this Clause 5.1;  provided  that
      the Lessee shall have the right to maintain the Commitment Fee in the form
      of cash, subject to the conditions set forth in Clause 5.15(a).

5.2   RENTAL PERIODS

      The first  Rental  Period  shall  commence on the  Delivery  Date and each
      subsequent  Rental Period shall  commence on the date  succeeding the last
      day of the previous  Rental  Period.  Each Rental  Period shall end on the
      date  immediately   preceding  the  day  in  the  next  month  numerically
      corresponding to the first day of such Rental Period except that:

      (a) if there is no such  numerically  corresponding  day in that month, it
          shall end on the last day of that month; and

      (b) if a Rental Period would  otherwise  overrun the Expiry Date, it shall
          end on the Expiry Date.

5.3   RENT

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

      (b) AMOUNT:  The Rent  payable in respect of each  Rental  Period  will be
          calculated as set forth in Letter Agreement No. 1.

      (c) RELEVANT  PERIODS:  The Term will be divided into  successive  periods
          ("RELEVANT  PERIODS"),  the first of which will begin on the  Delivery
          Date  and  end on  the  date  immediately  preceding  the  numerically
          corresponding  day in the 6th calendar  month after the Delivery Date.
          Each  succeeding  Relevant  Period  shall be of six  months (6 months)
          duration  commencing  on  the  date  succeeding  the  last  day of the
          preceding  Relevant  Period,  save that if any  Relevant  Period would
          otherwise  end on a day which is not a  Business  Day,  that  Relevant
          Period shall end on the immediately preceding Business Day.


                                       33
<PAGE>


5.4   SUPPLEMENTAL RENT

      (a) AMOUNT:  the Lessee will also pay to the Lessor  Supplemental  Rent in
          relation to each Rental Period (including  without limitation the last
          Rental  Period of the Term) on the 15th day  following the end of that
          Rental Period:

          (i) in respect of the  Airframe,  the  applicable  amount set forth in
              Letter  Agreement No. 1 for each Flight Hour flown by the Aircraft
              during that Rental Period ("AIRFRAME SUPPLEMENTAL Rent"); and

          (ii)in  respect of each  Engine,  the  applicable  amount set forth in
              Letter  Agreement  No. 1 for each  Flight  Hour  operated  by that
              Engine during that Rental Period ("ENGINE SUPPLEMENTAL RENT"); and

          (iii) in respect of each  Engine's  LLPs,  the  applicable  amount set
              forth in Letter  Agreement No. 1 for each Flight Cycle operated by
              the Engine on which the  Engine  LLP's are  installed  (taken as a
              whole in  relation  to that  Engine)  during  that  Rental  Period
              ("ENGINE LLP SUPPLEMENTAL RENT"); and

          (iv)in respect of the Landing Gear, the applicable amount set forth in
              Letter  Agreement  No.  1 for each  Flight  Hour  operated  by the
              Landing Gear during that Rental Period ("LANDING GEAR SUPPLEMENTAL
              RENT").

      (b) ADJUSTMENT:  On each  anniversary of the Delivery Date, the Lessor and
          the Lessee  shall  adjust the amount of the  Supplemental  Rent as set
          forth in Letter Agreement No. 1.

5.5   PAYMENTS
      (a) All payments by the Lessee to the Lessor under this  Agreement will be
          made for value on the due date,  for the full  amount  due, in Dollars
          and in same day funds,  settled  through the New York  Clearing  House
          System or such other funds as may for the time being be customary  for
          the settlement in New York City of  international  payments in Dollars
          by telegraphic transfer to the following account:

          (i) Morgan  Guaranty  Trust  Company,  23  Wall Street,  New York,  NY
              10260-0023,  for   the  account  of  the  Bank of  Ireland,  Group
              Treasury,  Dublin  (Account  No:  65919429),   to  be  credited to
              Sunrock  Aircraft  Corporation  Limited (Account No: 1422592); and

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

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<PAGE>


5.6   GROSS-UP

      (a) All payments by the Lessee under or in connection  with this Agreement
          will be made without  set-off or  counterclaim,  free and clear of and
          without deduction or withholding for or on account of all Taxes.

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

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

5.7   TAXATION

      (a) The Lessee will on demand pay and indemnify  each  Indemnitee  against
          all Taxes (other than Lessor Taxes) levied or imposed  against or upon
          the Indemnitee or the Lessee or on any payments to such  Indemnitee or
          imposed  against the Aircraft,  any Engine or any Part and relating to
          or  attributable  to the Lessee,  this Agreement or the Aircraft,  any
          Engine or any Part  directly  or  indirectly  in  connection  with the
          importation,   exportation,   registration,   abandonment,  ownership,
          leasing,  sub-leasing,  pooling, purchase, delivery,  possession, use,
          operation,  repair, condition,  maintenance,  modification,  overhaul,
          transportation,  landing, storage, presence,  transfer of title, other
          disposition  or  redelivery of the Aircraft or any part thereof or any
          rent,  receipts,  insurance proceeds,  income or other amounts arising
          therefrom or otherwise with respect to the  transactions  contemplated
          hereby and the performance by the parties under this Agreement and the
          related operative documents.

      (b) If an  Indemnitee  shall  actually  realize any Tax savings (by way of
          refund,  deduction or credit) in respect of any amount with respect to
          which the Lessee  shall  have made a payment  (or  increased  payment)
          pursuant to Clause 5.6,  5.10 or 8.4, or shall have  indemnified  such
          Indemnitee  pursuant  to  sub-clause  (a) above,  and such Tax savings
          shall not have been taken into account  previously in calculating  any
          indemnity  payment made by the Lessee,  then such Indemnitee shall pay
          to the Lessee the amount of such Tax savings  (together  with,  in the
          case of a refund, any interest received thereon) PROVIDED HOWEVER that


                                       35
<PAGE>

          such Indemnitee shall not be obliged to make any payment to the Lessee
          pursuant to this  sub-clause  (b) to the extent that the amount of any
          Tax savings in respect of which such payment is to be made (other than
          any portion thereof comprising  interest on a refund) would exceed the
          aggregate  amount  of all prior  payments  made by the  Lessee  to, on
          behalf  of, or as  indemnification  of,  such  Indemnitee  under  this
          Agreement  for  Taxes  less the  amount  of all  prior  payments  made
          pursuant  to this  sub-clause  (b) in respect of such Tax  savings and
          PROVIDED  FURTHER that should any Tax savings with respect to which an
          Indemnitee   shall  have  made  a  payment   under  this   Clause  5.7
          subsequently  be disallowed or reduced,  the Lessee shall,  on demand,
          refund such amount together with interest at LIBOR from the date which
          is the  later of the date of  disallowance  or the  date  payment  was
          demanded.  Such  Indemnitee  shall have the right to  arrange  its Tax
          affairs in whatever manner it sees fit;  provided that each Indemnitee
          shall act in good faith to claim any  refund,  deduction  or credit to
          which it is entitled and which,  if allowed by the  applicable  taxing
          authority,  would result in a required payment from such Indemnitee to
          the  Lessee  or a  reduction  in  the  amount  of a  payment  to  such
          Indemnitee from the Lessee under this Clause 5 and would not adversely
          affect such Indemnitee. Except to the extent provided in Clause 5.9 or
          Clause  5.16,  the  Lessee  shall  not have the right to  require  any
          Indemnitee to disclose its Tax filing information.

      (c) The Lessee shall hold each  Indemnitee  harmless on an After Tax Basis
          for any  Taxes  that  result  in whole or in part from any acts of the
          Lessee or a permitted user under Clauses 8.15 and 8.16.

      (d) The  Provisions of this Clause 5.7 and Clauses 5.8, 5.9,  5.10,  5.12,
          5.16,  8.15 and 8.16 shall survive the  termination  of this Agreement
          and the related operative documents,  and shall continue in full force
          and effect beyond the Expiry Date.

5.8   VALUE ADDED TAX

      (a) For the purposes of this sub-clause:

          (i) "VAT"  means  value  added  tax and any  sales  or  turnover  tax,
              imposition or levy of a like nature (other than Lessor Taxes);

          (ii)"SUPPLY" includes anything on which VAT is chargeable.

      (b) The Lessee  will pay to the Lessor or the Trust  Company,  as the case
          may be, the amount of any VAT  chargeable in respect of any supply for
          VAT purposes under this Agreement.

      (c) Each amount  stated as payable by the Lessee  under this  Agreement is
          exclusive  of VAT (if any) and is,  accordingly,  to be construed as a
          reference to that amount plus any VAT in respect of it.

                                       36
<PAGE>




5.9   INFORMATION  If the  Lessee is  required  by any  applicable  law,  by the
      Lessor,  the Trust Company or the Beneficial  Owner or by any third party,
      to deliver any report or return in connection  with any Taxes,  the Lessee
      will duly  complete the same and, in  particular,  will not state or imply
      therein  that the Lessee is not  exclusively  responsible  for the use and
      operation  of the  Aircraft  and for the Taxes  (other than Lessor  Taxes)
      arising  therefrom  or take any  position  inconsistent  with the Lessor's
      status as the owner of the  Aircraft for the United  States tax  purposes,
      and the Lessee will, on reasonable request, supply a copy of the report or
      return to the Lessor,  the Trust Company or the Beneficial  Owner,  as the
      case may be. The Lessor,  the Trust Company and the Beneficial Owner shall
      provide to the Lessee such information  within their possession or control
      as is  reasonably  requested  by the Lessee and  necessary  for the proper
      completion  of any such report or return and the Lessee  shall  (except to
      the extent  incorporated  in such report or return,  or  necessary  to the
      verification  process described in Clause 5.16 or otherwise as the Lessor,
      the Trust  Company  or the  Beneficial  Owner,  as the case may be,  shall
      expressly  permit in writing after the Lessee's  request  setting forth in
      detail  the  reasons  disclosure  is  otherwise  necessary)  keep all such
      information strictly confidential.

5.10  TAXATION OF INDEMNITY PAYMENTS

      (a) If and to the extent  that any sums  payable to an  Indemnitee  by the
          Lessee under this Agreement by way of indemnity are  insufficient,  by
          reason  of any  Taxes  payable  in  respect  of  those  sums,  for the
          Indemnitee  to discharge the  corresponding  liability to the relevant
          third party  (including any taxation  authority),  or to reimburse the
          Indemnitee for the cost incurred by it to a third party (including any
          taxation  authority),  in each case after  taking into account any Tax
          benefits actually  realized by the Indemnitee  (whether in the form of
          credits,   deductions   or  otherwise)  as  a  result  of  the  matter
          indemnified against, the Lessee will pay to the Indemnitee such sum as
          will,  after the tax  liability  has been fully  satisfied,  leave the
          Indemnitee  with the same  amount as it would  have been  entitled  to
          receive in the absence of that  liability,  together  with interest on
          the amount of the deficit at the Default Rate in respect of the period
          commencing on the date on which the payment of taxation is due (or, if
          later,  the date the Lessee receives notice from the Indemnitee of the
          amount of such deficit) until payment by the Lessee.

      (b) If  and  to  the  extent  that  any  sums  constituting  (directly  or
          indirectly)  an indemnity to an  Indemnitee  but paid by the Lessee to
          any person  other than the  Indemnitee  are  treated as taxable in the
          hands of the  Indemnitee,  the Lessee will pay to the Indemnitee  such
          sum as will, after the tax liability  (computed by taking into account
          any Tax benefits actually  realised by the Indemnitee  (whether in the
          form of credits,  deductions  or otherwise) as a result of the payment
          to  such  other  person)  has  been  fully  satisfied,  indemnify  the
          Indemnitee to the same extent as it would have been indemnified in the


                                       37
<PAGE>

          absence  of such  liability,  together  with  interest  on the  amount
          payable  by the  Lessee  under  this  sub-clause  (b) at: (i) LIBOR in
          respect of the period  commencing  on the date on which the payment of
          taxation is due through and  including the date which is five (5) days
          after demand for such payment by the  Indemnitee  and (ii) the Default
          Rate thereafter until payment by the Lessee.

5.11  DEFAULT INTEREST

      If the Lessee or any Indemnitee  fails to pay the other any amount payable
      under this Agreement on the due date, such  non-performing  party will pay
      on demand from time to time to the party entitled to such payment interest
      (both before and after  judgment) on the amount,  from the due date to the
      day of payment  in full,  at the rate of one month  Dollar  LIBOR plus 300
      basis points (the "DEFAULT RATE").

      All such interest will be compounded  monthly and  calculated on the basis
      of the actual number of days elapsed and on a 365 day year.

5.12  CONTEST

      If a claim is made  against  any  Indemnitee  for any  Taxes for which the
      Indemnitee intends to seek indemnification hereunder, the Indemnitee shall
      promptly  notify the  Lessee.  If  requested  by the Lessee in writing and
      provided that no Event of Default is then continuing, the Indemnitee shall
      at the expense of the Lessee  (including  without  limitation,  all costs,
      expenses,  losses, legal and accounting fees and disbursements incurred by
      the Indemnitee reasonably allocable to such contest) in good faith contest
      or, at the Lessee's  request,  if permitted by applicable  law, permit the
      Lessee to contest (and in such case, provide all reasonable cooperation to
      the Lessee)  the  validity,  applicability  or amount of such Taxes by (A)
      resisting  payment  thereof  if  practicable,  (B)  paying  the same under
      protest,  if protest is necessary  and proper,  or (C) if payment be made,
      using  reasonable  efforts  to  obtain a refund  thereof,  in  appropriate
      administrative and judicial proceedings (including, without limitation, by
      pursuit of available  appeals if requested by the Lessee and if the Lessee
      provides the Indemnitee with an opinion of outside counsel (at the expense
      of the Lessee)  that such appeal has a realistic  possibility  of success;
      provided that no appeal shall be required to be taken to the United States
      Supreme  Court).  In any case in which the Indemnitee  shall  determine to
      pursue the contest by payment of the Tax, the Lessee shall advance,  on an
      interest  free basis and at no net after tax cost to the  Indemnitee,  the
      amount of the Tax and any interest, penalties or additions to Tax required
      to be paid as a precondition to such contest. The Indemnitee shall consult
      with the Lessee in good faith  regarding  the  manner of  contesting  such
      claim and shall keep the Lessee reasonably informed regarding the progress
      of such contest and shall not release,  settle,  compromise or abandon the
      contest of the Tax without the consent of the Lessee,  such consent not to


                                       38
<PAGE>

      be  unreasonably  withheld or delayed.  If the  Indemnitee  shall obtain a
      refund of or be entitled to a credit  against  other  liability for all or
      any part of such Taxes paid by the Lessee,  the  Indemnitee  shall pay the
      Lessee the amount of such  refund  attributable  to such Taxes paid by the
      Lessee,  after  deducting any costs and expenses that were incurred by the
      Indemnitee in connection therewith; provided that such amount shall not be
      payable  before such time as the Lessee  shall have made all  payments and
      indemnities then due to the Indemnitee  hereunder.  If in addition to such
      refund the Indemnitee shall receive an amount representing interest on the
      amount of such refund,  the Lessee shall be paid that  proportion  of such
      interest which is fairly attributable to Taxes paid by the Lessee prior to
      the receipt of such  refund;  provided,  however,  that no amount shall be
      payable under this or the preceding sentence during any period in which an
      Event  of  Default  has  occurred  and is  continuing.  If the  Indemnitee
      receives an award of attorneys' fees in a contest for which the Lessee has
      paid an allocable  portion of the contest  expenses,  the Indemnitee shall
      pay to the Lessee the same  proportion  of the amount of such award as the
      amount of  attorneys'  fees paid or  reimbursed by the Lessee bears to the
      total amount of the attorneys' fees actually incurred by the Indemnitee in
      conducting such contest.

      Notwithstanding  the  foregoing,  neither the Lessor nor the Trust Company
      shall be  required  to contest a Tax if the  action to be taken  creates a
      material  danger of sale,  forfeiture,  loss or  creation of a lien on the
      Aircraft,  the Airframe,  any Engine or any Part or on the Lessor (or Head
      Lessee's)  interest  therein,  and shall not be  obligated to continue the
      contest  of any Tax if (i) the  Lessee  has  failed to pay,  as and to the
      extent provided above, the expenses of such contest incurred by the Lessor
      or (ii) an Event of Default has  occurred and is then  continuing,  unless
      such  contest is being  conducted  as a claim for refund or the Lessee has
      provided  security for the  contested Tax  liability  satisfactory  to the
      Lessor or the Trust Company, as the case may be.

      Notwithstanding  the  foregoing,  neither the Lessor nor the Trust Company
      will be  required  to  contest  the  imposition  of any Taxes and shall be
      permitted to settle or compromise  any claim without the Lessee's  consent
      if the Lessor or the Trust  Company,  as the case may be, (i) shall  waive
      its right to indemnity  under  Clauses 5.6, 5.7, 5.10 and 8.4 with respect
      to such Taxes (and any directly related claim and any claim the outcome of
      which is  determined  based upon the outcome of such claim) and (ii) shall
      pay to the Lessee any amount  previously  paid or  advanced  by the Lessee
      pursuant to this Clause 5.12 with  respect to such Tax other than,  in the
      case of a contest  conducted by means of payment of the Tax, the amount of
      the Tax.

5.13  ABSOLUTE

      The Lessee's  obligations under this Agreement,  including its obligations
      to pay Rent and Agreed Value, are, subject to the Lessor's compliance with
      its covenant of quiet  enjoyment as  specifically  set forth in Clause 7.1
      hereof and the Beneficial  Owner's compliance with its undertakings as set
      forth in the letter of Quiet Enjoyment  delivered to the Lessee,  absolute
      and unconditional  irrespective of any contingency whatever including (but
      not limited to):

                                       39
<PAGE>

      (a) any right of set-off, counterclaim, recoupment, defence or other right
          which either party to this Agreement may have against the other;

      (b) any unavailability of the Aircraft for any reason,  including, but not
          limited to, a  requisition  of the  Aircraft  for any  prohibition  or
          interruption of or interference with or other restriction  against the
          Lessee's use, operation or possession of the Aircraft;

      (c) any lack or invalidity of title or any other defect in title (provided
          always that such lack or  invalidity of title or other defect does not
          result  in  the  Lessee  being  deprived  of  its  possession  of  the
          Aircraft),  airworthiness,  merchantability,  fitness for any purpose,
          condition,  design, or operation of any kind or nature of the Aircraft
          for any particular use or trade, or for  registration or documentation
          under the laws of any  relevant  jurisdiction,  or any  Total  Loss in
          respect of or any damage to the Aircraft;

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

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

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

      PROVIDED  ALWAYS that this Clause 5.13 shall be without  prejudice  to the
      Lessee's right to claim damages and/or other relief from the courts in the
      event of any breach by the Lessor of its obligations under this Agreement,
      or in the event that,  as a result of any lack or  invalidity  of title to
      the  Aircraft  on the part of the  Holder of Legal  Title,  the  Lessee is
      deprived of its possession of the Aircraft.

5.14  LESSOR'S MONEYS

      (a) It is intended by the Lessor and the Lessee  that the  Commitment  Fee
          payable  by the Lessee to the  Lessor  pursuant  to Clause 5.1 and the
          Supplemental  Rent are  amounts  paid by the  Lessee to the  Lessor in
          consideration  for the Lessor  removing the Aircraft  from the market,
          the use of the  Aircraft  by the  Lessee and the  satisfaction  of the
          Lessor's  obligations  under this Agreement and that, once paid, those
          moneys,  as well as any  interest  earned  thereon  or other  proceeds
          thereof,  irrevocably and unconditionally shall be the property of the
          Lessor,  and the Lessor may  commingle  with its other funds all funds
          paid by the Lessee under  Clause 5.1 and this Clause.  Notwithstanding
          that stated intent, if and to the extent that those moneys or any part
          thereof,  under any applicable law or otherwise,  are determined to be


                                       40
<PAGE>

          security  deposits or otherwise the property of the Lessee or if it is
          so  determined  those moneys are a debt owed to the Lessee or that the
          Lessee  shall  have  any  interest  in  those  moneys  (the  "LESSOR'S
          MONEYS"),  the parties agree that  subclauses  (b) and (c) below shall
          apply.

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

      (c) If a  Significant  Default or an Event of Default has  occurred and is
          continuing the Lessor may  immediately or at any time  thereafter,  so
          long as such  Significant  Default or Event of Default is  continuing,
          without prior notice to the Lessee:

          (i) set-off all or any part of the Lessee's  Liabilities  then due and
              owing  against  the  liabilities  of the  Lessor in respect of the
              Lessor's Moneys; or

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

5.15  LETTER OF CREDIT

      (a) If an Event of  Default  occurs and for as long as it  continues,  the
          Lessor may (but shall not be obliged  to) call on the Letter of Credit
          and use or apply the proceeds in or towards  satisfaction  of any sums
          due and payable to the Lessor under this  Agreement  or to  compensate
          the Lessor for any sums  which it  advances  or expends as a result of
          any such Event of Default. Notwithstanding any such use or application
          by the Lessor, the Lessee shall remain in default under this Agreement
          until the full amount owed by the Lessee,  including  interest accrued
          thereon  pursuant to Clause 5.11,  shall have been paid to the Lessor,
          subject  to the  conditions  set  forth in the  immediately  following
          paragraph,  as a cash  portion  of the  Commitment  Fee or the  Lessee
          procures the issue of a new Letter of Credit  acceptable to the Lessor
          for an amount  equal to the amount so used or applied  and pays to the
          Lessor an amount  equal to the  excess,  if any,  of (i) the amount so
          advanced  or  expended by the Lessor  plus  interest  accrued  thereon


                                       41
<PAGE>

          pursuant  to Clause  5.11 over (ii) the amount of the Letter of Credit
          proceeds drawn by the Lessor and so used or applied.

          Notwithstanding the foregoing, if, and to the extent that, the form of
          a new  Letter  of  Credit  procured  or  proposed  by  the  Lessee  in
          accordance  with this Agreement  (using its best efforts and acting in
          good  faith  to  procure  a new  Letter  of  Credit  to  the  Lessor's
          satisfaction),  is deemed  unsatisfactory  by the  Lessor,  the Lessee
          shall  have the right to pay the  equivalent  amount to the  Lessor in
          cash as a cash portion of the Commitment Fee.

      (b) The Letter of Credit  applicable  at the Expiry  Date shall not expire
          until 45 days after the scheduled Expiry Date.

      (c) The  Letter  of  Credit  shall be  returned  to the  Lessee  within 20
          Business Days of:

          (i) redelivery of the Aircraft to the Lessor in the condition required
              by Clause 12 of, and Schedule 3 to, this Agreement; or

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

          in either  case,  at such  later  time that the Lessee has paid to the
          Lessor all amounts which are then outstanding or will be payable under
          this  Agreement,  PROVIDED ALWAYS that the Lessor shall not be obliged
          to return the Letter of Credit if and for so long as, at the  relevant
          time, an Event of Default shall have occurred and be continuing  under
          Clause 13.1(g) or (h).

5.16  VERIFICATION

      At the Lessee's request,  the computation of any amount owed by the Lessee
      or any amount owed to the Lessee  pursuant to Clause 5 or Clause 10 hereof
      shall be verified and certified by an independent  public  accounting firm
      selected by the Lessor and  reasonably  satisfactory  to the Lessee (which
      shall be a firm other than one typically employed by the Lessor respecting
      its tax matters and other than the firm originally preparing or previously
      reviewing the  computation  subject to  verification).  Such  verification
      shall be binding on both the Lessee and the Lessor absent  manifest error.
      The  costs  of  such  verification  (including  the  fee  of  such  public
      accounting  firm) shall be borne by the Lessee  unless  such  verification
      shall result in an adjustment in the Lessee's  favor of the greater of (i)
      5% or more of the payment as computed by the Lessor, and (ii) the costs of
      such verification in which case the costs shall be paid by the Lessor. The
      Lessor and the Lessee  shall  provide to such public  accounting  firm all
      information within its possession or control that is reasonably  necessary
      for  such  verification  and such  firm  shall  keep all such  information


                                       42
<PAGE>

      strictly  confidential,  and shall not  provide  either  the Lessor or the
      Lessee  access to any  information  provided by the other to such firm for
      purposes of such verification.

6.    MANUFACTURER'S WARRANTIES

6.1   ASSIGNMENT

      Notwithstanding this Agreement,  except as provided in this Clause 6.1 and
      Clause  6.2,  the  Lessor  will  remain  entitled  to the  benefit of each
      warranty,  express or implied,  and any unexpired  customer and/or product
      support given or provided in respect of the  Aircraft,  any Engine or Part
      by any  manufacturer,  vendor,  maintenance  performer,  subcontractor  or
      supplier.  Unless a Significant  Default or an Event of Default shall have
      occurred and be  continuing,  the Lessor hereby  assigns to the Lessee and
      authorizes  the  Lessee to  exercise  such  rights as the  Lessor may have
      thereunder  and the  Lessee  agrees to  diligently  pursue,  to the extent
      deemed  commercially  reasonable,  any such claim which  arises at its own
      cost.  The Lessee will notify the Lessor  promptly upon becoming  aware of
      any such claim.  The Lessor will provide such  assistance to the Lessee in
      making a claim  under  any such  warranties  or  customer  and/or  product
      support as the Lessee may  reasonably  request,  and, if  requested by the
      Lessee and at the  Lessee's  expense,  will pursue a claim in its own name
      where  the   relevant   manufacturer,   vendor,   maintenance   performer,
      subcontractor or supplier has refused to acknowledge the Lessee's right to
      pursue that claim. Where the Lessee has exercised its option not to pursue
      a claim on the basis that it is not  commercially  reasonable,  the Lessee
      shall, at no out-of-pocket  expense to the Lessee,  provide the Lessor all
      information and technical support as reasonably requested by the Lessor in
      order for the Lessor to pursue such claim at its own expense.

6.2   PROCEEDS

      The  Lessee  covenants  and  agrees to apply any  proceeds  of any  claims
      assigned  to the  Lessee by the  Lessor  under  Clause  6.1 to remedy  the
      defect,  if any,  in the  Aircraft,  any Engine or any Part giving rise to
      such claim if and to the extent  that such  defect  has not  already  been
      remedied.  So long as no  Significant  Default  or  Event of  Default  has
      occurred and is  continuing  and this  Agreement has not  terminated,  the
      Lessor agrees to cooperate  with the Lessee to cause any proceeds from any
      rights  assigned by the Lessor to the Lessee  under  Clause 6.1 to be paid
      directly to the Lessee,  and, if any such proceeds are nonetheless paid to
      the  Lessor,  the Lessor  agrees to remit  promptly  such  proceeds to the
      Lessee. However, upon the occurrence of an Event of Default or termination
      of this Agreement, whichever occurs earlier, the Lessor may immediately:

      (a) retain any such  proceeds  previously  paid to the Lessor  which would
          have been  remitted  to the Lessee  under this  Clause 6.2 absent such
          Event of Default; and

                                       43
<PAGE>

      (b) seek to cause any  proceeds  of any  pending  claims to be paid to the
          Lessor, rather than to the Lessee; and

      (c) seek  recovery  from  the  Lessee  the  proceeds  of any  such  claims
          previously paid to the Lessee to the extent that such claims relate to
          any  defect  in the  Aircraft,  any  Engine  or any part not fully and
          completely  rectified  by the Lessee  before  such Event of Default or
          termination.

      Provided,  however,  that if payment of any such proceeds to the Lessee is
      withheld due to one or more Events of Default, such proceeds shall be paid
      or remitted to the Lessee after all Events of Default are cured.

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

6.4   AGREEMENT

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

      (a) pay the proceeds of any claim  thereunder  to the Lessor to the extent
          such  proceeds  would not be payable to the Lessee  pursuant to Clause
          6.2 and, pending such payment, will hold the claim and the proceeds on
          trust for the Lessor; and

      (b) the Lessee will take all such steps as are necessary at the end of the
          Term to ensure the  benefit  of any of those  warranties  or  customer
          and/or  product  support  which  have not  expired  are  vested in the
          Lessor.

7.    LESSOR'S COVENANTS AND DISCLAIMERS

7.1   QUIET ENJOYMENT

      The  Lessor  covenants  that  neither  the Lessor nor any person or entity
      lawfully  claiming by or through the Lessor will  interfere with the quiet
      use,  possession  and  enjoyment  of the  Aircraft  by the  Lessee  or the
      exercise by the Lessee in  accordance  with this  Agreement  of its rights


                                       44
<PAGE>

      with respect to the Aircraft and all rents,  revenues,  profits and income
      therefrom;  provided,  however,  that the  exercise  by the  Lessor of its
      rights in  accordance  with this  Agreement  will not  constitute  such an
      interference.

7.2   MAINTENANCE CONTRIBUTION

      Provided no  Significant  Default or Event of Default has  occurred and is
      continuing (but in such case, at such time as such Significant  Default or
      Event of Default  is no longer  continuing),  the  Lessor  will pay to the
      Lessee, by way of contribution to the cost of maintenance of the Aircraft,
      within 14 days after  submission by the Lessee to the Lessor of an invoice
      and  supporting   documentation  reasonably  satisfactory  to  the  Lessor
      evidencing:

      (a) with respect to the Airframe, the completion,  in accordance with this
          Agreement,  of  those  items  of  maintenance   characterized  by  the
          manufacturer's  maintenance  planning  document  as  "Structural  C-7"
          Check, as defined by the Agreed Maintenance Programme, (or equivalent)
          (but not including  repairs  arising as the result of  operational  or
          maintenance  mishandling or accidental damage),  the lesser of (i) the
          amount  of that  invoice  and (ii) an  amount  equal to the  aggregate
          amount of Airframe  Supplemental Rent paid under this Agreement,  LESS
          the  aggregate  amount  previously  paid  by  the  Lessor  under  this
          sub-clause (a);

      (b) with respect to any Engine,  the performance,  in accordance with this
          Agreement,  of all shop visits  requiring an off-wing  teardown and/or
          disassembly  and resulting in the  refurbishment  and  restoration  of
          operating  performance  and/or the  replacement of Engine LLP's (other
          than (aa) the  repairs of foreign  object  damage or damage  resulting
          from operational or from maintenance  mishandling except to the extent
          such  overhaul  or  replacement   results  in  the   refurbishment  or
          "betterment"   of  the  Engine  and/or  (bb)  removal,   installation,
          maintenance and repair of QEC (Quick Engine Change) kits),  the lesser
          of (i) the  amount of that  invoice  and (ii) an  amount  equal to the
          aggregate amount of Engine  Supplemental  Rent paid in respect of that
          Engine under this Agreement, LESS the aggregate amount previously paid
          in respect of that Engine by the Lessor under this sub-clause (b); and

      (c) with respect to any Engine LLP's, the performance,  in accordance with
          this Agreement,  of all work on such Engine LLP's,  including overhaul
          or  replacement  (other than overhaul or replacement of foreign object
          damage or operational or maintenance  mishandling except to the extent
          such  overhaul  or  replacement   results  in  the   refurbishment  or
          "betterment"  of the  Engine),  the  lesser of (i) the  amount of that
          invoice and (ii) an amount equal to the aggregate amount of Engine LLP
          Supplemental  Rent paid  under  this  Agreement  (in  respect  of such
          Engine),  LESS the aggregate amount  previously paid in respect of the


                                       45
<PAGE>

          overhaul or  replacement  of Engine  LLP's by the Lessor in respect of
          such Engine under this sub-clause (c);

      (d) with respect to the Landing Gear, the  performance in accordance  with
          this  Agreement,  of all work on the  Landing  Gear in the  nature  of
          overhaul and requiring removal and disassembly  (other than the repair
          of  damage  arising  as  the  result  of  operational  or  maintenance
          mishandling or accident), the lesser of (i) the amount of that invoice
          and (ii) an  amount  equal to the  aggregate  amount of  Landing  Gear
          Supplemental Rent paid under this Agreement, LESS the aggregate amount
          previously paid by the Lessor under this sub-clause (d); and

      (e) with respect to the cost of incorporation of airworthiness directives,
          the  contributions  pursuant to the formula and in accordance with the
          terms as set forth in Letter Agreement No. 1.

      Notwithstanding  the above provisions of this Clause 7.2, the Lessee shall
      not be entitled to receive any such  contributions  in respect of the cost
      of  the   incorporation   of   airworthiness   directives   and  mandatory
      modifications to the extent paid by insurance or a warranty claim.

7.3   THE LESSOR'S OBLIGATIONS FOLLOWING EXPIRY DATE

      So long as no Significant  Default or Event of Default has occurred and is
      continuing, within 3 Business Days of:

      (a) redelivery of the  Aircraft to  the  Lessor in  accordance with and in
          the condition required by this Agreement; or

      (b) payment to the Lessor of the Agreed Value following a Total Loss after
          Delivery,

      the Lessor will pay to the Lessee:

          (i) by way of (A) rebate of the  Commitment Fee that is in the form of
              cash,  an amount equal to the sums paid by the Lessee  pursuant to
              Clause 5.1 (and not  otherwise  applied by the Lessor  pursuant to
              Clause 5.14(c) plus interest  accrued  thereon  pursuant to Clause
              5.1) or (B) if the  Commitment  Fee is in the form of a Letter  of
              Credit,  returning the Letter of Credit,  net of any amounts drawn
              pursuant to Clause 5.14(c);

          (ii)the amount of any Rent  received in respect of any period  falling
              after the date of  redelivery  of the  Aircraft  or payment of the
              Agreed Value, as the case may be; and

                                       46
<PAGE>

          (iii) in the case of a Total Loss only, by way of further contribution
              to the cost of maintenance of the Aircraft, an amount equal to the
              amount by which the aggregate amount of Supplemental  Rent paid by
              the Lessee  exceeds the aggregate  amount paid by the Lessor under
              Clause 7.2 (other than paragraph (e) thereof).

      (c) anything in this  Agreement  to the contrary  notwithstanding,  in the
          event that any amount  otherwise  payable to the Lessee is retained by
          the Lessor as the result of the occurrence of a Significant Default or
          an Event of Default hereunder, the Lessor shall pay such amount to the
          Lessee at such time as such Significant Default or Event of Default is
          no longer continuing and, in the event that the Significant Default or
          the Event of Default  giving rise to the Lessor's right to retain such
          amount  constitutes  a default  in the  payment  of money  owed by the
          Lessee to the  Lessor  and the  aggregate  amount so  retained  by the
          Lessor (the "Retained  Amount")  equals or exceeds the amount which is
          the subject of such payment default (the "Default Amount"), the Lessor
          shall deduct from the  Retained  Amount an amount equal to the Default
          Amount (and such deduction shall  constitute  payment by the Lessee of
          the  payment  obligations  which  is the  subject  of the  Significant
          Default or the Event of Default)  and shall pay over to the Lessee the
          amount, if any, equal to the balance of the Retained Amount.

7.4   EXCLUSION  EXCEPT AS PROVIDED IN CLAUSE 4.3,  THE AIRCRAFT IS TO BE LEASED
      AND  DELIVERED  HEREUNDER  "AS IS,  WHERE IS" AND THE  LESSEE  AGREES  AND
      ACKNOWLEDGES THAT, SAVE AS EXPRESSLY STATED IN THIS AGREEMENT,  THE LESSOR
      WILL HAVE NO LIABILITY IN RELATION TO, AND THE LESSOR HAS NOT AND WILL NOT
      BE  DEEMED  TO HAVE MADE OR GIVEN  (WHETHER  BY  VIRTUE OF HAVING  DONE OR
      FAILED TO DO ANY ACT,  OR HAVING  ACQUIRED OR FAILED TO ACQUIRE ANY STATUS
      UNDER OR IN  RELATION  TO THIS  AGREEMENT  AND THE  RELATED  DOCUMENTS  OR
      OTHERWISE),  ANY WARRANTIES OR REPRESENTATIONS,  EXPRESS OR IMPLIED,  WITH
      RESPECT TO THE AIRCRAFT, INCLUDING BUT NOT LIMITED TO:

      (a) THE TITLE, AIRWORTHINESS,  COMPLIANCE WITH SPECIFICATIONS,  OPERATION,
          MERCHANTABILITY,  FREEDOM FROM CLAIMS OF  INTERFERENCE OR INFRINGEMENT
          OR THE  LIKE,  FITNESS  FOR  ANY  PARTICULAR  USE OR  PURPOSE,  VALUE,
          DURABILITY, CONDITION, OR DESIGN, OR AS TO THE QUALITY OF THE MATERIAL
          OR WORKMANSHIP, THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT
          DISCOVERABLE,   OR  AS  TO  ANY  OTHER   REPRESENTATION   OR  WARRANTY


                                       47
<PAGE>

          WHATSOEVER, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED WARRANTY ARISING
          FROM A COURSE  OF  PERFORMANCE  OR  DEALING  OR USAGE OF  TRADE)  WITH
          RESPECT TO THE AIRCRAFT, ANY ENGINE OR ANY PART; OR

      (b) ANY OBLIGATION,  LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, WHETHER OR
          NOT ARISING FROM  LESSOR'S  NEGLIGENCE,  ACTUAL OR IMPUTED,  OR STRICT
          LIABILITY OR OTHERWISE, FOR:

          (i) ANY  LIABILITY,  LOSS OR DAMAGE  (INCLUDING  ANY  LIABILITY OF THE
              LESSEE TO ANY THIRD PARTY) CAUSED OR ALLEGED TO BE CAUSED DIRECTLY
              OR INDIRECTLY  BY THE AIRCRAFT OR ANY ENGINE OR BY ANY  INADEQUACY
              THEREOF OR DEFICIENCY OR DEFECT THEREIN;

          (ii)THE USE, OPERATION,  OR PERFORMANCE OF  THE AIRCRAFT  OR ANY RISKS
              RELATING THERETO;

          (iii)ANY INTERRUPTION  OF  SERVICE, LOSS  OF  BUSINESS OR  ANTICIPATED
              ANTICIPATED PROFITS OR CONSEQUENTIAL DAMAGES;

          (iv)THE   DELIVERY,   OPERATION,   SERVICING,   MAINTENANCE,   REPAIR,
              IMPROVEMENT  OR  REPLACEMENT  OF  THE AIRCRAFT,  ANY ENGINE OR ANY
              PART; OR

          (v) ANY OTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES.

7.5   LESSEE'S WAIVER

      THE LESSEE HEREBY WAIVES, AS BETWEEN ITSELF AND THE LESSOR, ALL ITS RIGHTS
      IN RESPECT OF ANY WARRANTY OR REPRESENTATION,  EXPRESS OR IMPLIED,  ON THE
      PART OF THE  LESSOR  AND ALL  CLAIMS  AGAINST  THE  LESSOR  HOWSOEVER  AND
      WHENEVER  ARISING AT ANY TIME IN RESPECT OF OR OUT OF THE OPERATION OF THE
      AIRCRAFT EXCEPT TO THE EXTENT ARISING UNDER WARRANTIES OR  REPRESENTATIONS
      IN CLAUSE  2.4 OR  ARISING  UNDER ANY  MANUFACTURER'S  WARRANTY,  CUSTOMER
      SUPPORT  AGREEMENT  OR PRODUCT  SUPPORT  AGREEMENT  DESCRIBED  IN CLAUSE 6
      HEREOF.

7.6   LESSEE'S CONFIRMATION

      LESSEE  CONFIRMS THAT  IT IS FULLY  AWARE OF THE PROVISIONS OF CLAUSES 7.4
      AND  7.5  AND  ACKNOWLEDGES  THAT   RENT  AND  OTHER  AMOUNTS   HAVE  BEEN
      CALCULATED NOTWITHSTANDING ITS PROVISIONS.

                                       48
<PAGE>

8.    LESSEE'S COVENANTS

8.1   DURATION

      The undertakings in this Clause and in Clause 12 will:

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

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

8.2   INFORMATION

      The Lessee will:

      (a) notify  the Lessor  forthwith  of the  occurrence  of any  Significant
          Default or Event of Default;

      (b) furnish to the Lessor on a confidential basis:

          (i) upon request,  the unaudited  consolidated  management accounts of
              the  Lessee  (comprising  a  balance  sheet  and  profit  and loss
              statement)   prepared  for  the  most  recent  previous  financial
              quarter;

          (ii)as soon as  available  but not in any  event  later  than 120 days
              after  the  last day of each  financial  year of the  Lessee,  its
              audited  consolidated balance sheet as of such day and its audited
              consolidated profit and loss statement for the year ending on such
              day;

          (iii) at  the  same  time  as it is  issued  to  the  shareholders  or
              creditors of the Lessee,  a copy of each notice or circular issued
              to the Lessee's  shareholders or creditors as a group with respect
              to the  Lessee's  financial  condition or the taking of any action
              which may  reasonably  be expected  to  materially  and  adversely
              affect the Lessee's ability to perform its obligations  hereunder;
              and

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

      (c) keep the Lessor  informed as to current  serial numbers of the Engines
          and any engine installed on the Aircraft;

                                       49
<PAGE>

      (d) promptly  furnish to the Lessor all information  which the Lessor from
          time to time reasonably requests regarding the Aircraft, any Engine or
          any  Part,  its  use,  location  and  condition   including,   without
          limitation,  the hours  available on the Aircraft and any Engine until
          the next scheduled check,  inspection,  overhaul or shop visit, as the
          case may be;

      (e) within 20 days  after the end of any  Rental  Period,  furnish  to the
          Lessor,  evidence reasonably  satisfactory to the Lessor of payment of
          all Taxes  (other than Lessor  Taxes) due during that or any  previous
          Rental  Period,  and promptly  upon  receipt from a taxing  authority,
          forward to the Lessor or the Beneficial Owner notice of any assessment
          or proposed assessment of any Lessor Tax;

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

      (g) provide the Lessor  within 15 days after the end of each Rental Period
          with a monthly  report on the Aircraft and each Engine in the form set
          out in Schedule 9 or such other form as the Lessor  may,  from time to
          time, reasonably require;

      (h) give the Lessor not less than 60 days'  written  notice as to the time
          and location of all Major Checks;

      (i) promptly notify the Lessor of:

          (i) any loss, theft, damage or destruction to the Aircraft, any Engine
              or any Part, or any modification to the Aircraft if the reasonably
              expected cost may exceed the Damage Notification Threshold; and

          (ii)any claim or other  occurrence  likely to give rise to a  material
              recovery under the public liability  Insurances and details of any
              negotiations with the insurance brokers over any such claim.

8.3   LAWFUL AND SAFE OPERATION

      The Lessee shall (and shall cause any Permitted Sublessee to):

      (a) comply  with the law for the time  being  in force in any  country  or
          jurisdiction  which  is  applicable  to  the  Aircraft  or,  so far as
          concerns the use and operation of the  Aircraft,  an owner or operator
          thereof;

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

                                       50
<PAGE>

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

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

      (e) not knowingly use the Aircraft for the carriage of:

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

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

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

          (iv)any illegal item or substance;

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

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

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

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

          (iii)any  Government  Entity   having  jurisdiction  over  the  Lessor


                                       51
<PAGE>

              Lessor, the Banks or the Aircraft;

      (h) not operate or locate,  or permit any Permitted  Sub-Lessee to operate
          or locate,  the Aircraft or any Engine,  or suffer the Airframe or any
          Engine to be operated or located in, to or from Japan;

      (i) obtain and maintain in full force all certificates,  licenses, permits
          and authorizations  required for the use and operation of the Aircraft
          for the time being,  and for the making of payments  required  by, and
          the compliance by the Lessee with its other  obligations  under,  this
          Agreement.

8.4   TAXES AND OTHER OUTGOINGS

      The Lessee will promptly pay:

      (a) all  license and  registration  fees,  Taxes and other  amounts of any
          nature  imposed by any  Government  Entity  (other than Lessor  Taxes)
          which are imposed on the Lessee or for which the Lessee is responsible
          under this Agreement with respect to the Aircraft,  including, without
          limitation, the purchase,  ownership,  delivery, leasing,  possession,
          use, operation, return, sale or other disposition of the Aircraft; and

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

      except to the extent that such payment is being contested in good faith by
      appropriate  proceedings,  in respect of which adequate reserves have been
      established by the Lessee in accordance with GAAP and non-payment of which
      does not give  rise to the  likelihood  of the  Aircraft  or any  interest
      therein being seized,  condemned,  sold, forfeited or otherwise lost or of
      criminal  liability  or  unindemnified   liability  on  the  part  of  any
      Indemnitee.

8.5   SUB-LEASING
      (a)  Subject  to  sub-clauses  (b) and (c)  below,  the  Lessee  will not,
           without the prior written  consent of the Lessor (which consent shall
           not be unreasonably  withheld or delayed),  sub-lease  (other than in
           the form of a "wet lease") or otherwise  part with  possession of the
           Aircraft,  the  Engines or any Part  except  that the Lessee may part
           with possession:

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

                                       52
<PAGE>

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

      (b)  The Lessor shall not withhold its consent to a proposed  sub-lease of
           the Aircraft provided the following conditions are satisfied:

           (i)  no Event of Default shall have occurred and be continuing;

           (ii) the  proposed  sub-lessee  (the  "PERMITTED  SUB-LESSEE")  is  a
                reputable,  duly licensed and certificated  operator of aircraft
                of the  same  type  as the  Aircraft  and  is  incorporated  and
                resident in one of the jurisdictions specified in Schedule 10;

           (iii)the terms of the proposed sub-lease (the "PERMITTED  Sub-Lease")
                shall,  when taken together with this Agreement,  allow for full
                compliance with the Lessee's obligations hereunder;

           (iv) during the term of the  Permitted  Sub-Lease,  the Lessee  shall
                remain   primarily   liable  for  the  performance  of  all  its
                obligations under this Agreement;

           (v)  the term of the  Permitted  Sub-Lease  shall not  extend,  or be
                capable of being extended, beyond the scheduled Expiry Date;

           (vi) the  Permitted   Sub-Lease   shall  be  expressly   subject  and
                subordinate  to this  Agreement  and the  rights  of the  Lessor
                hereunder;

           (vii)the  Permitted  Sub-Lease  shall  not  be  amended  without  the
                Lessor's   prior  written   consent  (such  consent  not  to  be
                unreasonably withheld);

                                       53
<PAGE>

           (viii) prior to delivery of the Aircraft to the Permitted Sub-Lessee,
                the Lessee  shall  execute  and deliver to the Lessor a security
                assignment of the benefit of the Permitted Sub-Lease in form and
                substance  reasonably  satisfactory to the Lessor, shall deliver
                notice of such assignment to the Permitted Sub-Lessee, and shall
                procure that the Permitted  Sub-Lessee  acknowledges such notice
                to the Lessor  (which  such  acknowledgment  shall  contain  the
                Permitted  Sub-Lessee's  confirmation  of the matters set out in
                sub-clauses (vi) and (vii) above). Any such security  assignment
                shall  provide  that the  Lessee  as the  sub-lessor  under  the
                Permitted Sub-Lease, shall be entitled to receive and retain the
                rentals  paid by the  Permitted  Sub-Lessee  unless and until an
                Event of Default  occurs under this  Agreement;  provided  that,
                during the continuation of an Event of Default, the Lessor shall
                have the right,  but not the obligation,  to receive the rentals
                paid by the  Permitted  Sub-Lessee  and to  apply  such  rentals
                toward the  obligations  of the Lessee then due  hereunder;  and
                provided  further that at such time as no Event of Default shall
                be continuing hereunder, the Lessor shall pay over to the Lessee
                that portion of such  rentals  received by the Lessor and not so
                applied by the Lessor toward such obligations of the Lessee.

           (ix) in the event that,  pursuant  to the  Permitted  Sub-Lease,  the
                Aircraft  is to be  de-registered  from  the  national  aircraft
                register in the State of Registration,  the Permitted Sub-Lessee
                shall have  provided  the Lessor and the Lessee with a valid and
                irrevocable power of attorney  authorizing the Lessor and/or the
                Lessee to  de-register  the Aircraft from the national  aircraft
                register  of the new  State of  registration  in the  event of a
                termination  of the Permitted  Sub-Lease as a  consequence  of a
                default on the part of the Permitted Sub-Lessee;

           (x)  the  Lessor  shall  have  received  a legal  opinion  reasonably
                satisfactory  to it in all respects from a reputable  counsel in
                the   jurisdiction   in  which  the   Permitted   Sub-Lessee  is
                incorporated and resident and (if different) in the new State of
                registration. Such opinion shall be substantially in the form of
                Schedule 6, mutatis mutandis;

           (xi) all  costs  and  expenses  reasonably  incurred  by  the  Lessor
                (including  the cost of obtaining  the legal opinion or opinions
                referred  to in  sub-clause  (x) above) in  connection  with the
                Permitted  Sub-Lease,  whether  or not  the  Lessor  grants  its
                consent, shall be paid or provided for by the Lessee;

           (xii)the  Lessor  shall  receive  a  true  and  correct  copy of  the
                Permitted Sub-Lease; and

           (xiii) both the  Permitted  Sub-Lease  and the  Permitted  Sub-Lessee
                shall  satisfy the  requirements  set forth in Clause 9.2 of the
                Head Lease.

      (c)  The  Lessor's  consent  shall not be  required  in relation to a "wet
           lease" or charter of the Aircraft (whereby operational control of the
           Aircraft remains with the Lessee at all times), provided the Aircraft
           remains  registered on the national aircraft register of the State of
           Registration.

8.6   INSPECTION

      (a)  The Lessor and any  person  designated  by  the Lessor to  the Lessee
           in  writing (including,  without limitation, the  Head Lessor and the
           Banks,  but other  than an  airline  competing  with the Lessee or an
           Affiliate  of  such an airline or an  employee or  representative  of
           either  thereof)  may  at any  time  visit,  inspect  and  survey the
           Aircraft  Documents,  the Aircraft,  any  Engine or  any Part and for
           such   purpose  take  such  other  action  as  set  forth  in  Letter
           Agreement  No.  1.  Except  as set  forth in  this  clause,  any such


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<PAGE>

           inspection  of the  Aircraft,  any  Engine  or  any Part  shall be a
           visual,  walk-around  inspection which  shall not include opening any
           panels,  bays  or  the  like  or  any  disassembly  or  removal  of
           components  which  are not then  opened,  disassembled  or removed in
           the course of  the Lessee's  maintenance of the  Aircraft at the time
           of such inspection.

      (b)  The Lessor shall bear its own costs and expenses in  connection  with
           any such visit,  inspection or survey unless the visit, inspection or
           survey occurs while a Significant  Default or an Event of Default has
           occurred is then  continuing,  in which case such costs and  expenses
           shall be paid by the Lessee on demand.

      (c) The Lessor will:

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

           (ii) not exercise such right other than on  reasonable  notice and so
                as not to disrupt  unreasonably  the  maintenance  or commercial
                operation of the Aircraft.

8.7   PROTECTION OF TITLE

      The Lessee shall:

      (a)  not do or  knowingly  permit  to be done or omit or knowingly  permit
           to be omitted to  be done any  act or thing  which  might  reasonably
           be expected  to  jeopardize  the rights,  title  and  interest of the
           Holder of Legal  Title as owner of and title  holder  to the Aircraft
           and   lessor   under  this   Agreement  or  under   the  Head  Lease,
           respectively,  or  assignee of  this  Agreement  or of the Head Lease
           or the rights of any assignee of the  benefit of  the  Aircraft  hull
           Insurances  or  the   validity,  enforceability  or  priority  of the
           Assignment;

      (b)  on all occasions  when the  ownership of the Aircraft,  any Engine or
           any Part is relevant,  inform  applicable third parties that title is
           held by the Holder of Legal Title;

      (c)  not at any time:

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

                                       55
<PAGE>

           (ii) pledge the credit of the Lessor, the Head Lessor, the Beneficial
                Owner or the Banks;

      (d)  ensure  that there is always  affixed,  and not removed or in any way
           obscured,  a fireproof  plate (having  dimensions of not less than 10
           cm. x 7 cm.) in a reasonably  prominent  position on the Aircraft and
           on each Engine stating:

           "This  Aircraft/Engine is leased by Wilmington Trust Company,  not in
           its individual  capacity but solely as Owner Trustee (for the benefit
           of Sunrock Aircraft  Corporation  Limited),  as Lessor,  which is the
           registered owner thereof on the U.S. FAA Aircraft Registry, and which
           has leased the Aircraft/Engine to Western Pacific Airlines,  Inc., as
           Lessee,  and may not be flown by any other  person  without the prior
           written consent of the Owner Trustee and Sunrock Aircraft Corporation
           Limited.  Title to this  Aircraft/Engine  is held by NBB Stream Lease
           Co., Ltd.";

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

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

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

      (h)  pay and  discharge or  cause to be paid and  discharged  when due and
           payable or  establish  adequate  reserves in  accordance with GAAP by
           way of  security or  otherwise  for  all debts,  damages,  claims and
           liabilities  which  have given or may  reasonably be expected to give
           rise  to a Security  Interest over  or affecting  the  Aircraft,  any
           Engine or any  Part except to the  extent  that such debts,  damages,
           claims and  liabilities,  in respect of which  adequate reserves have
           been  established  by the Lessee in accordance  with  GAAP, are being
           contested in good  faith by appropriate  proceedings  and  nonpayment
           of which  does not  give rise to the  likelihood  of the  Aircraft or
           any interest  therein being  seized,  condemned,  sold,  forfeited or
           otherwise lost or of  criminal liability or  unindemnified  liability
           on the part of any Indemnitee; and

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

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<PAGE>

8.8   GENERAL

      The Lessee shall:

      (a)  not make any substantial  change in the type of the business in which
           it is engaged,  will preserve its corporate  existence (other than in
           connection with a solvent reconstruction the terms of which have been
           approved by the Lessor, such approval not to be unreasonably withheld
           or delayed),  and will endeavor to conduct its business in an orderly
           and efficient manner;

      (b)  maintain all rights, privileges,  licenses and franchises material to
           its  status  or  activities  set  forth in  clause  (a)  above and to
           performing its obligations under this Agreement;

      (c)  not,  without  giving  the Lessor 30 days  prior  written  notice (in
           accordance with this Agreement), change its executive office (as such
           is defined in Article 9 of the Uniform  Commercial  Code as in effect
           in the State of  Colorado)  from 2864 S.  Circle  Drive,  Suite 1100,
           Colorado Springs, CO 80906, to another state;

      (d)  remain a  certificated  air carrier and  maintain its status so as to
           entitle the Lessor to the benefits of a lessor under  Section 1110 of
           Title 11 of the United States Code or any analogous statute;

      (e)  remain a "citizen of the United  States" as defined in Section  40102
           of Title 49 of the United States Code; and

      (f)  ensure that no change will occur in the Habitual Base of the Aircraft
           without the prior written consent of the Lessor.

8.9   RECORDS

      The Lessee shall:

      (a)  procure that  accurate,  complete and current  records of all flights
           made by, and all maintenance carried out on, the Aircraft (including,
           in relation to each Engine and Part  subsequently  installed,  before
           the  installation)  are kept;  and keep the records in such manner as
           the Aviation  Authority  may from time to time  require.  The records
           will form part of the Aircraft Documents; and

      (b)  procure access to a revision service in respect of, and will maintain
           with  appropriate  revisions  in  English,  all  Aircraft  Documents,
           records,  logs,  and  other  materials  required  in  respect  of the
           Aircraft by applicable laws and in accordance  with customary  United
           States airline practice.

                                       57
<PAGE>

8.10  REGISTRATION AND FILINGS

      The Lessee shall:

      (a)  maintain the registration of the Aircraft with the Aviation Authority
           reflecting  (so far as permitted by  applicable  law) the interest of
           the  Lessor  and not do or  suffer  to be  done  anything  which  may
           reasonably be expected to affect adversely that registration;

      (b)  do such reasonable acts and things  (including,  without  limitation,
           making any filing or registration with the Aviation  Authority or any
           other  Government  Entity) and executing and delivering all documents
           (including,  without limitation,  any amendment of this Agreement) as
           may be reasonably requested by the Lessor:

           (i)  at the Lessor's expense  following any change or proposed change
                in the  ownership  or financing of the Aircraft or in the manner
                of securing the Lessor's obligations to the Banks; or

           (ii) at  the  Lessee's  expense  following  any  modification  of the
                Aircraft, any Engine or any Part or the permanent replacement of
                any Engine or Part in accordance with this  Agreement,  so as to
                ensure that the rights of the Lessor under this Agreement  apply
                with the same effect as before; or

           (iii)to establish, maintain, preserve, perfect and protect the rights
                in the Aircraft of the Lessor under this Agreement and the Banks
                or other  assignees  in the  Assignment,  provided  that no such
                action need be taken by the Lessee pursuant to this provision if
                such action would adversely affect any of its material rights or
                privileges or materially increase its obligations or liabilities
                hereunder,  and shall not  knowingly  take any action that would
                prejudice  the rights of the Head Lessor in the  Aircraft  under
                the Head Lease.

8.11  MAINTENANCE AND REPAIR

      The Lessee shall:

      (a)  keep the Aircraft in good repair and condition;

      (b)  not change the Agreed  Maintenance  Programme  or the schedule of the
           Agreed  Programme except in accordance with the rules and regulations
           of the FAA;

      (c)  maintain  the  Aircraft  in  accordance  with the Agreed  Maintenance
           Programme  through the Agreed  Maintenance  Performer and perform (at
           the  respective   intervals   provided  in  the  Agreed   Maintenance
           Programme) all Major Checks;

                                       58
<PAGE>

      (d)  maintain  the  Aircraft  in  accordance  with FAR Part 121 and/or any
           other  applicable  rules and  regulations  of the FAA,  except to the
           extent  that they  conflict  with the rules  and  regulations  of the
           Aviation Authority;

      (e)  comply with all mandatory  inspection and modification  requirements,
           airworthiness  directives and similar requirements  applicable to the
           Aircraft, any Engine or Part having a compliance date during the Term
           or, in the case of  airworthiness  directives,  within 180 days after
           the Expiry Date and which are required by the FAA.

      (f)  comply with  any service  bulletin issued by the Manufacturer  if and
           to the extent  that (i) the  Lessee has  decided to  comply with such
           service  bulletin  with  respect to  substantially  all of the Boeing
           737-300  aircraft  in its  fleet and has  commenced  such  compliance
           with  respect  to  other such  aircraft and (ii) after the Lessee has
           reached  such  decision  and  before  the Expiry  Date,  the Aircraft
           undergoes the  applicable  check  or  maintenance  procedure at which
           compliance  with  such service  bulletin is  normally  effected  with
           respect to the Lessee's other Boeing 737-300 aircraft.

      (g)  comply with all  applicable  laws and  applicable  regulations of the
           Aviation  Authority and other aviation  authorities with jurisdiction
           over the Lessee or the  Aircraft,  any Engine or Part  regardless  of
           upon whom  such  requirements  are  imposed  and which  relate to the
           maintenance,  condition,  use or operation of the Aircraft or require
           any modification or alteration to the Aircraft, any Engine or Part;

      (h)  maintain in good standing a current  certificate of airworthiness (in
           the  appropriate  category  for the nature of the  operations  of the
           Aircraft) for the Aircraft  issued by the Aviation  Authority  except
           when the Aircraft is undergoing  maintenance,  modification or repair
           required or  permitted by this  Agreement  and will from time to time
           provide to the Lessor a copy on request;

      (i)  if required by the Aviation Authority with respect to the maintenance
           functions  which the Lessee is itself  performing  on the Aircraft or
           any Engine, maintain a current certification as to maintenance issued
           by or on behalf of the Aviation  Authority in respect of the Aircraft
           and will from time to time provide to the Lessor a copy on request;

      (j)  maintain  the Engines with respect to overhaul  build  standards  and
           disc  replacements  at a level  which is not  inferior  to the  level
           applied  by the Lessee in  relation  to the  engines in the  Lessee's
           fleet generally which are of the same type as the Engines; and

                                       59
<PAGE>

      (k)  subject to Clause  11.1(c),  procure promptly  the replacement of any
           Engine or  Part which  has become  time,  cycle or calendar  expired,
           lost,  stolen,   seized,  confiscated,   destroyed,   damaged  beyond
           repair,  unserviceable or permanently  rendered  unfit  for use, with
           an engine or  part  complying  with the conditions set out  in Clause
           8.13(a).  The  Lessee shall ensure  that any such replacement  engine
           or  part has  attached to it a  current  "serviceability  tag" issued
           by  the  manufacturer  or supplier  or  overhaul  agency,  indicating
           that the engine  or part is new, serviceable  or overhauled,  and the
           Lessee shall retain all such tags.

8.12  REMOVAL OF ENGINES AND PARTS

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

      (a)  if replaced as permitted by and in accordance  with this Agreement;
           or

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

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

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

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

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

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

8.13  INSTALLATION OF ENGINES AND PARTS

      The Lessee will:

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

           (i)  in the case of an engine,  it is an engine of the same model as,
                or an improved or  advanced  version of the Engine it  replaces,
                which  is  in  the  same  or  better  operating  condition,  has
                substantially  similar  hours/cycles  available  until  the next
                scheduled checks, inspections, overhauls and shop visits and has
                the same or greater value and utility as the replaced Engine;

                                       60
<PAGE>

           (ii) in the case of a part, it is in as good operating condition,  is
                of the same or a more  advanced  make and model and has a value,
                utility and remaining  useful life,  and at least the equivalent
                or   better    modification    status   and   service   bulletin
                accomplishment status, as the replaced Part;

           (iii)in each case,  it has become and  remains  the  property  of the
                Holder  of Legal  Title  free  from  Security  Interests  and on
                installation  on the  Aircraft  will,  without  further  act, be
                subject to this Agreement; and

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

      (b)  if no  Significant  Default or  Event  of Default has occurred  which
           is  continuing,  be  entitled  to  install any  engine or part on the
           Aircraft  by  way of  replacement   notwithstanding   Clause  8.13(a)
           provided   that as  soon as  practicable  after  installation  of the
           same on  the  Aircraft  but, in any  event,  no later than the Expiry
           Date,  the Lessee  removes  any such  engine or part and  replaces it
           with the Engine or Part  replaced by  it or by an  engine or part, as
           the case may be, complying with Clause 8.13(a).

      Lessor agrees, and will at the request of Lessee acknowledge in writing to
      the owner of any installed engine, that it will recognize the interests of
      such  owner and any  lessor in the  installed  engine and will not seek to
      exercise any rights whatsoever in relation to it.

8.14  NON-INSTALLED ENGINES AND PARTS

      The Lessee will:

      (a)  ensure that any Engine or Part which is not installed on the Aircraft
           (or any other aircraft as permitted by this  Agreement) is, except as
           permitted  by and in  accordance  with this  Agreement,  properly and
           safely stored, and kept free from Security Interests;

      (b)  notify the Lessor  whenever  any Engine is removed  from the Aircraft
           and,  from time to time,  on request  procure that any person to whom
           possession  of an  Engine is given  acknowledges  in  writing  to the
           Lessor, in form and substance reasonably  satisfactory to the Lessor,
           that it will  respect  the title and  interest of the Holder of Legal
           Title to and in the Engine and will not seek to  exercise  any rights
           whatsoever in relation to it;

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<PAGE>

      (c)  (notwithstanding   any  other  provision  in  this   Agreement),   be
           permitted, if no Significant Default or Event of Default has occurred
           and is continuing,  to install any Engine or Part on an aircraft,  or
           in the case of a Part, an engine:

           (i)  owned  and   operated   by   the  Lessee   free  from   Security
                Interests; or

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

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

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

           (1)  the  terms of any such  lease,  conditional  sale  agreement  or
                Security  Interest will not have the effect of  prejudicing  the
                title and  interest  of the Holder of Legal Title to and in that
                Engine or Part or the interests of the Banks in respect  thereof
                under the Assignment; and

           (2)  as provided in Section 8 of Letter  Agreement  No. 1, the lessor
                under  such  lease,  the  seller  under  such  conditional  sale
                agreement or the holder of such Security  Interest,  as the case
                may be,  has  confirmed  that  it will  respect  the  title  and
                interest  of the  Holder of Legal  Title and the Banks to and in
                that  Engine or Part and that it will not seek to  exercise  any
                rights whatever in relation thereto.

8.15  POOLING OF ENGINES AND PARTS

      The  Lessee  will not enter  into nor  permit  any  pooling  agreement  or
      arrangement  in respect  of an Engine or Part  without  the prior  written
      consent of the Lessor, such consent not to be unreasonably withheld in any
      case  where an Engine or Part is  leased,  let on hire or  otherwise  made
      available  by the Lessee.  So long as no  Significant  Default or Event of
      Default has occurred and is continuing,  the Lessee may lease, let or hire
      or charter or otherwise part with  possession of (i) any Engine so long as
      such Engine is transferred to such Engine's  manufacturer or (ii) Part (in
      the case of each clause (i) and (ii) above,  on terms  conferring  no more
      than a contractual right in personam against the Lessee and not a right in
      rem against such Part) pursuant to a pooling or interchange arrangement to
      which the Lessee is a party; and:

      (a)  (A) with respect to an Engine,  the other party to which is an Engine
           manufacturer and (B) with respect to Part, the other parties to which
           are reputable,  solvent  commercial air carriers or the manufacturers


                                       62
<PAGE>

           or suppliers of Part (or other reputable, solvent organizations whose
           business  includes the  administration  of and  participation in such
           pooling agreements or arrangements); and

      (b)  which does not contemplate the transfer of title to the pooled Engine
           or Part (or if title to the Engine is transferred, it will be treated
           as a Total Loss); and

      (c)  either  provides  that the Lessor (or the Banks,  as the case may be)
           will be sole  loss  payee in  respect  of any loss or  damage  to the
           Engine or Part,  or  provides  for  Holder of Legal  Title to acquire
           title to a substitute  engine or part  satisfying  the conditions set
           out in Clause 8.13(a) if the Engine or Part is destroyed.

8.16  EQUIPMENT   CHANGES;   NON-SEVERABLE   MODIFICATIONS   AND   SEVERABLE
      MODIFICATIONS

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

           (i)  is  permitted  by and in  accordance   with  this  Agreement  or
                required by the Aviation Authority, or

           (ii) has the prior written consent of the Lessor (which consent shall
                state  whether or not the  Equipment  Change needs to be removed
                and the  Aircraft  restored to the prior  condition on or before
                the Expiry Date).

      (b)  The Lessee will not, without the prior written consent of the Lessor,
           make any Non-Severable Modification to the Aircraft, such consent not
           to be  unreasonably  withheld  or  delayed.  Any  such  Non-Severable
           Modification  shall, upon  incorporation in the Aircraft,  become the
           property of the Holder of Legal Title.

      (c)  Notwithstanding  Clause  8.16(a) above,  the Lessee  may at any time,
           and from time to time,  without  the prior  consent of the Lessor, so
           long as  no  Significant  Default or Event of  Default  has  occurred
           and   is   continuing,   install   on  the  Aircraft  any   Severable
           Modification.   Title  to  any  such   Severable  Modification  shall
           remain  in  the  Lessee  and shall not be  conveyed  to the Lessor as
           the   result  of  its  installation  in  the  Aircraft.  Provided  no
           Significant  Default or Event  of Default shall  have occurred and be
           continuing,  the Lessee may  remove any such  Severable  Modification
           at any time,  provided  that, in connection  with  such removal,  the
           Lessee  restores  the  Aircraft in  to the  condition  it  would have
           been in had  the  installation  of such  Severable  Modification  not
           occurred.  Any  such  Severable  Modification  which  is not  removed
           from the  Aircraft  prior to  its  return  to  the  Lessor  hereunder
           shall,  subject to  such rights as  any third party may have,  become
           the property of the Holder of Legal Title.

                                       63
<PAGE>

      For the avoidance of doubt (i) no Equipment Change, whether in the form of
      Severable  Modification or  Non-Severable  Modification,  may diminish the
      value,  utility,  condition or  airworthiness of the Aircraft and (ii) any
      Severable  Modification  to which title is not vested in the Lessee  shall
      require the Lessor's consent, such consent not to be unreasonably withheld
      or delayed.

8.17  TITLE TO ENGINES AND PARTS

      (a)  Title to al   engines and  parts  installed on the Aircraft,  whether
           by way of  replacement,  as the result of an  Equipment Change (other
           than  Severable  Modification) or  otherwise  (except those installed
           pursuant  to Clauses 8.13(b),  8.14(c), 8.15 or 8.16 (in  relation to
           parts which are  leased to the  Lessee))  will on   installation,  be
           conveyed  to the  Holder of Legal  Title  subject  to this  Agreement
           free  and clear of  all  Security  Interests.  The Lessee will at its
           own  expense  take all  such  steps  and  execute,  and  procure  the
           execution  of, all  such  instruments  as the Lessor  or Head Lessor,
           as the case  may be,  may reasonably  request and which are necessary
           to ensure   that  title  to any such  Engine or Part so passes to the
           Holder  of Legal Title  according  to all   applicable  laws.  At any
           time when   requested by the Holder of  Legal Title,  the Lessee will
           provide,  at   the  Lessee's  expense,   evidence  to   the  Lessor's
           reasonable  satisfaction  (including the  provision, if  required, to
           the Lessor of  one of more legal  opinions)  that title has so passed
           to the Holder of Legal Title;

      (b)  The Lessor may  require  the  Lessee to remove any  Equipment  Change
           (other than  Non-Severable  Modification) and to restore the Aircraft
           to its condition prior to that Equipment Change, except as the Lessor
           expressly  stated  otherwise in its prior written consent pursuant to
           Clause 8.16(a)(ii);

      (c)  Except as  referred to  in Clause 8.16(b),  any Engine or Part at any
           time  removed  from  the  Aircraft  will  remain the  property of the
           Holder  of  Legal  Title  until  a  replacement   has   been  made in
           accordance with this  Agreement and until title to  that  replacement
           has passed,  according  to  applicable  laws, to  the Holder of Legal
           Title  subject to  this  Agreement  free of  all  Security  Interests
           whereupon  title  to   the   Engine  or  Part,   will,   provided  no
           Significant  Default  or   Event  of  Default   has  occurred  and is
           continuing,  pass to the  Lessee  free of Lessor  Liens and  in  such
           event the  Holder of  Legal  Title  will  provide,  at  the  Lessee's
           expense,  evidence to  the   Lessee's  reasonable  satisfaction  that
           title has so passed to the Lessee.

9.    INSURANCE

9.1   INSURANCES

      The Lessee, at its expense,  will maintain in full force and effect during
      the  Term,  and  thereafter  as  expressly  required  in  this  Agreement,


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      insurances  in respect of the  Aircraft in form and  substance  reasonably
      satisfactory to the Lessor (the  "INSURANCES"  which expression  includes,
      where the context so admits,  any relevant  re-insurance(s))  through such
      brokers  and with such  insurers  and having  such  deductibles  and being
      subject to such exclusions as may be approved by the Lessor, such approval
      not to be unreasonably withheld, it being understood that (i) the Lessee's
      brokers and  insurers  will be deemed  satisfactory  to the Lessor if such
      brokers and  insurers  are of  recognized  responsibility  and good repute
      specializing  in  aviation  insurances  in the  World  Aviation  Insurance
      Markets (as defined  below) at the time and (ii) the Lessee's  insurances,
      including  deductibles  and  exclusions,  will be deemed  satisfactory  to
      Lessor if  consistent  with  insurances  maintained  with  respect  to air
      carriers of a similar  size as Lessee and  operating  similar  aircraft on
      similar routes as Lessee at the time of any such approval.  The Insurances
      will be effected either:

      (a)  on a direct basis with insurers of recognized  standing who regularly
           participate  in aviation  insurances  in the London,  United  States,
           European,  Japanese or other leading international  insurance markets
           and  led  by  reputable  underwriter(s)  ("World  Aviation  Insurance
           Markets"); or

      (b)  with  a  single   insurer  or  group  of   insurers  specializing  in
           aviation  insurances  in the  World Aviation Insurance Markets who do
           not  retain   the  risk  but  effect  substantial   reinsurance  with
           reinsurers  in  the World  Aviation  Insurance  Markets  and  through
           brokers    each   of   recognized    responsibility    and   standing
           specializing   in   aviation   insurances  in   the  World   Aviation
           Insurance  Markets  for  a  percentage  of  all  risks  insured  (the
           "Reinsurances").

9.2   REQUIREMENTS

      The  requirements  with regard to the  Insurances are as specified in this
      Clause and in Part 1 of Schedule 4. The Lessor  acting  reasonably  and in
      consultation  with  Lessee,  may from time to time  stipulate  such  other
      requirements  for the  Insurances  as may be  necessary to ensure that the
      scope  and  level of  cover  is  maintained  in  accordance  with the then
      prevailing  industry  practice in the World Aviation  Insurance Markets in
      relation  to  aircraft  of the same type as the  Aircraft  in  relation to
      United  States  airlines  of similar  standing  to the  Lessee;  provided,
      however, that any such further requirements shall be of the type generally
      available in such markets at commercially  reasonable rates. If the Lessor
      determines that the Agreed Value shall be adjusted in accordance with this
      Agreement,  the Lessor  may,  upon prior  written  notice to the Lessee at
      least 30 days prior to the expiry of the  respective  Insurances,  require
      the Lessee to renew the Insurances reflecting the Agreed Value so adjusted
      in accordance with this Agreement.

9.3   CHANGE

      If at any time, the Lessor decides,  on reasonable  grounds, to revoke its
      approval of any  insurer,  reinsurers,  Insurances  or  Reinsurances,  the


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      Lessor  shall  notify the  Lessee  accordingly  and the Lessor  and/or its
      brokers  will then  consult in good faith with the Lessee and the Lessee's
      brokers (as for the time being approved by the Lessor) with regard to such
      proposed  revocation.  If,  following  the  consultation,  the  Lessor  is
      satisfied  that  changes  should be made,  the Lessee will then arrange or
      procure the arrangement of alternative  cover  reasonably  satisfactory to
      the Lessor. For purposes of this Clause 9.3,  "reasonable grounds" for the
      Lessor's  decision  hereunder  shall  include any similar  decision  under
      similar  conditions by the Head Lessor or the Security Trustee (as defined
      in the Head Lease) under Clause 13.11 of the Head Lease.

9.4   INSURANCE COVENANTS

      The Lessee shall:

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

           (i)  the Aircraft is not in danger of detention or forfeiture;

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

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

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

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

           (i)  invalidates   or  is  reasonably  expected   to  invalidate  the
                Insurances; or

           (ii) renders or is reasonably expected to render void or voidable the
                whole or any part of any of the Insurances; or

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

      (d)  not take  out  without the  prior  written  consent of the Lessor any
           insurance  or  reinsurance  in  respect  of the  Aircraft  other than


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           those required under this Agreement,  if  such  other insurance would
           prejudice  the   Lessor's  or  any  other  Indemnitee's  rights  with
           respect to  the Insurances.  The Lessor  agrees that,  subject to the
           foregoing,  the  Lessee   may  maintain   additional  hull  or  other
           insurance in relation to  the Aircraft,  Engines or  Parts thereof or
           insurance  in  excess  of  the  amounts  required  to  be  maintained
           hereunder.  Insurance  proceeds  arising out  of such other or excess
           insurance shall be paid solely to the Lessee.

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

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

           (ii) telexed  confirmation  of  completion  of renewal  prior to each
                expiry date;

           (iii)certificates of insurance (and where appropriate certificates of
                reinsurance), and broker's (and any reinsurance brokers') letter
                of undertaking  substantially in the form set out in Parts 2 and
                3 of Schedule 4,  detailing  the  coverage  and  confirming  the
                insurers'  (and  any  reinsurers')  agreement  to the  specified
                insurance  requirements  of this  Agreement  within 7 days after
                each renewal date;

      (f)  on request  and  subject  to clause (j) below,  provide to the Lessor
           copies of documents evidencing the Insurances;

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

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

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

      (j)  provide any  other  insurance and  reinsurance  related  information,
           or  assistance,  in  respect  of  the   Insurances  as the Lessor may
           reasonably  request,  provided  always  that  the  provision  thereof
           would  not violate  any  confidentiality  undertaking  of the  Lessee
           with  such  insurers  and that  the Lessor  shall not  disclose  such
           information to any third  parties  other than the  Beneficial  Owner,
           the  Banks,  the  Head  Lessor  and  their  respective   professional
           advisors  or as  may be  required  by  applicable  law, in each  case
           obtaining such  undertakings  and  taking such  precautions  as shall
           be commercially  reasonable  under  the  circumstances to protect the
           confidentiality  of  such   information.  The  Lessee  shall  not  be
           required to provide  any actual  insurance  policy  hereunder  unless


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           the insurers  decline  coverage  and a good  faith dispute  exists in
           respect  thereof  with  the Lessor  in which  event the Lessee  shall
           provide such  portions of  such policies  bearing on such coverage or
           dispute as the Lessor may reasonably request.

9.5   FAILURE TO INSURE

      If the Lessee  fails to  maintain  the  Insurances  in  compliance  in all
      material  respects with this Agreement,  each of the  Indemnitees  will be
      entitled  but not bound  (without  prejudice  to any  other  rights of the
      Lessor under this Agreement,  but after such  consultation with the Lessee
      as shall be reasonable under the circumstances):

      (a)  to pay  the   premiums  due or  to  effect  and  maintain  insurances
           satisfactory  to it or  otherwise   remedy  the  Lessee's  failure in
           such manner (including,  without  limitation,  to effect and maintain
           similar  insurance  cover through  an "owners'  interest"  policy) as
           it reasonably  considers  appropriate.  Such  sums as shall have been
           reasonably  so  expended  by it  will  upon   written  demand  become
           immediately  due and  payable  by  the Lessee to the Lessor  together
           with  interest  thereon   at  the  Default  Rate,  from  the  date of
           expenditure  by it up to  the  date of  reimbursement  by the  Lessee
           (before and after any judgment);

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

9.6   CONTINUING INDEMNITY

      The Lessor or the Trust  Company may  require the Lessee to effect  and/or
      maintain  public  liability  insurance  under the  Lessee's  normal  fleet
      policies  after the Expiry Date with  respect to its  liability  under the
      indemnities  in Clause 10 for such  period as the  Lessor  may  reasonably
      require (but in any event not more than 2 years)  which  provides for each
      Indemnitee  to be named as  additional  insured.  The Lessee's  obligation
      under this Clause 9.6 shall not be  affected  by the Lessee  ceasing to be
      lessee of the Aircraft and/or any of the  Indemnitees  ceasing to have any
      interest in respect of the Aircraft.

9.7   APPLICATION OF INSURANCE PROCEEDS

      As between the Lessor and the Lessee:

      (a)  all  insurance  payments  received  as the  result  of a  Total  Loss
           occurring  during  the Term will be paid to the  Lessor up to but not
           exceeding the Agreed Value;

      (b)  all  insurance  proceeds  in  respect  of any  damage  or loss to the
           Aircraft,  any  Engine or any  Part  occurring  during  the  Term not
           constituting  a  Total  Loss  and  equal or in  excess  of $[ ]* will


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           be paid to the  Lessor and applied  in payment (or to  reimburse  the
           Lessee) for repairs or replacement  property  upon the  repairs being
           made or replacement  being  effected to  the reasonable  satisfaction
           of  the  Lessor  in   accordance  with  this   Agreement.   Insurance
           proceeds  in  amounts   below  $[ ]* may  be  paid   by  the  insurer
           directly to  the Lessee.  Any balance  remaining  after completion of
           repairs and/or replacement may be retained by the Lessee;

      (c)  all  insurance  proceeds  in respect of third party  liability  will,
           except to the  extent  paid by the  insurers  to the  relevant  third
           party,  be paid to the Lessor to be paid directly in  satisfaction of
           the  relevant  liability  or to the  Lessee in  reimbursement  of any
           payment so made;

      (d)  notwithstanding Clauses 9.7(b) and (c), if at the time of the payment
           of any such insurance  proceeds a Significant  Default or an Event of
           Default has occurred and is continuing all such proceeds will be paid
           to or  retained  by the  Lessor to be applied  toward  payment of any
           amounts  which is or will become  payable by the Lessee in such order
           as the Lessor sees fit or as the Lessor may elect.

10.   INDEMNITY

10.1  GENERAL

      The Lessee agrees to defend,  indemnify and hold harmless the  Indemnitees
      on an  After-Tax-Basis  from and against any and all claims,  proceedings,
      losses, liabilities, suits, judgments, costs, expenses, penalties or fines
      (each a "Claim"):

      (a)  which  may  at  any   time  be  suffered  or  incurred   directly  or
           indirectly  as  a  result  of  or  connected  with  the  manufacture,
           design,    airworthiness,    merchantability,    fitness   for   use,
           possession,    delivery,   performance,    management,     ownership,
           registration,    deregistration,  control,   maintenance,  condition,
           service,  repair,   overhaul,  import,  export, leasing,  subleasing,
           pooling,  use,  operation or  return of  the Aircraft,  any Engine or
           Part (either  in the air or on  the ground)  whether or not the Claim
           may be  attributable  to any  defect  in the Aircraft,  any Engine or
           any Part or to its design, testing or use or otherwise;

      (b)  which arise out of any act or  omission  which  invalidates  or which
           renders voidable any of the Insurances;

      (c)  which may at any time be suffered or incurred as a consequence of any
           design,  article or material in the Aircraft,  any Engine or any Part
           or its  operation  or use  constituting  an  infringement  of patent,
           copyright,  trademark,  design or other proprietary right or a breach
           of any obligation of confidentiality owed to any person;

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<PAGE>

      (d)  the  Lessee's  breach of any of its  representations,  warranties  or
           covenants  hereunder  or  any  other  Event  of  Default  under  this
           Agreement

      but excluding any Claim to the extent (and only to the extent that):

           (aa) it  arises  as  a  result  of  the  wilful  misconduct  or gross
                negligence of such  Indemnitee;

           (bb) it arises as a result of a material  breach by the Lessor of any
                of its  obligations  under  this  Agreement  or  the  Beneficial
                Owner's  breach  of its  covenants  under  its  Letter  of Quiet
                Enjoyment  (which did not result  from a breach by the Lessee of
                any of  its  representations,  warranties,  covenants  or  other
                obligations hereunder);

           (cc) it  constitutes  a Lessor  Tax or  constitutes or results solely
                from a Lessor Lien;

           (dd) it is  attributable  to an event occurring after the Expiry Date
                following  the  redelivery  of the Aircraft by the Lessee to the
                Lessor in full  compliance with the terms and conditions of this
                Agreement  (including  without  limitation,   in  the  condition
                required or  permitted  by the terms of this  Agreement,  to the
                extent  that  such  Claim  is  solely   attributable   to  acts,
                omissions,  events or circumstances (which are not the result of
                acts  or  omissions  of  the  Lessee,  its  employees,   agents,
                contractors  or other  representatives)  which  occur after such
                redelivery;

            (ee)it is the subject matter of another indemnity  provision of this
                Agreement or consists of a cost or expense imposed on the Lessor
                or the  Beneficial  Owner by the terms  hereof or is incurred by
                the Lessor or the  Beneficial  Owner or any other  Indemnitee in
                performing its express obligations hereunder;

           (ff) it  consists  of  costs,   fees  or  expenses   related  to  the
                negotiation,  preparation  or execution of this Agreement or any
                other document executed in connection herewith;

           (gg) it  consists  of  costs,  fees or  expenses  arising  out of the
                acquisition  or transfer by the Lessor or any  Indemnitee of any
                interest  in the  Aircraft  or this  Agreement  except  any such
                transfer in connection  with the exercise of remedies  hereunder
                in  accordance  with the terms of Clause 13.2  hereof  after the
                occurrence  of  an  Event  of  Default  or  as  a  result  of  a
                replacement of a Part or an Engine pursuant to the terms hereof;

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<PAGE>

           (hh) it arises out  of or  results from acts of any Indemnitee  prior
                to the Delivery Date;

           (ii) it  relates  to the  costs,  fees  and any  other  out-of-pocket
                expenses   incurred  in  connection   with  the   establishment,
                maintenance or  restructuring  of or charges to the financing or
                refinancing  of the  Aircraft,  any  Engine  or any  Part by any
                Indemnitee  (including without  limitation,  the Head Lessee) or
                the  creation or  maintenance  of the trust  estate  established
                under the Trust Agreement  (including,  without limitation,  any
                fees payable to the Owner Trustee).

      The following  shall apply to all claims for  indemnity  under this Clause
      10.1:

           (i)  If any  Indemnitee  has  actual  knowledge  of any  Claim hereby
                indemnified   against  it  shall  give  prompt   written  notice
                thereof to  the Lessee;  provided,  however, that the failure of
                an  Indemnitee  to  give  such  notice  shall  not  relieve  the
                Lessee  of  its  obligations  hereunder,  except  to the  extent
                that such  failure  impairs  the Lessee's  ability to contest or
                to  participate  in  the contest  of such Claim in any  material
                respect or materially increases the amount of such Claim.

           (ii) Each  claim  against  an  Indemnitee  by  a  third  party  which
                constitutes  a  Claim  shall,  if  reasonably  requested  by the
                Lessee,  be  contested  by  the  Indemnitee  in  good  faith  by
                appropriate   proceedings,   provided   that  the  Lessee  shall
                indemnify   such   Indemnitee  in  respect  of  any   reasonable
                out-of-pocket  fees, costs or expenses actually incurred by such
                Indemnitee  in  conducting  such  contest  and the amount of any
                interest or  penalties or any other losses which are required to
                be paid  as a  direct  result  of  contesting  such  Claim,  and
                provided further that such contest  proceedings would not result
                in the likelihood of the seizure, condemnation, sale, forfeiture
                or other  loss of the  Aircraft  or any  interest  therein or of
                criminal  liability  or  unindemnified  liability on the part of
                such  Indemnitee.   The  Lessee  shall  be  entitled  to  assume
                responsibility  for and  control of the  defense of any Claim in
                respect of which any  Indemnitee  (other than the Head Lessor or
                any  Bank)  makes a  claim  against  the  Lessee  for  indemnity
                pursuant  to this  Clause  10.1,  provided  that  (i) the  legal
                counsel  retained by the Lessee for such  purpose is  reasonably
                acceptable to such  Indemnitee  and (ii) the Lessee pursues such
                contest  diligently  and in good faith and, upon the  reasonable
                request  of  such  Indemnitee,  provides  such  Indemnitee  with
                reasonable  details of the status of the  contest  and copies of
                all legal  briefs,  court  filings  and,  subject to  applicable
                considerations of legal privilege,  counsel's memoranda relevant
                to such contest. In the event that (1) an Event of Default shall
                have  occurred  and be  continuing  or (2) the  Lessee  fails to


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                comply with the foregoing  requirements in any material respect,
                the  applicable  Indemnitee  may,  if such  Event of  Default or
                failure, as the case may be, continues after such Indemnitee has
                given  the  Lessee  a  reasonable   opportunity  to  effect  the
                applicable level of compliance,  reassume responsibility for and
                control of the relevant contest,  which, in such  circumstances,
                such Indemnitee  agrees to pursue  diligently and in good faith.
                To the  extent  the  Lessee  is  entitled  to  defend  any Claim
                hereunder, the Indemnitee shall cooperate in good faith with the
                Lessee  and may  participate  (with  its own  counsel,  if it so
                desires) at such Indemnitee's sole cost and expense.

           (iii)Each Indemnitee shall supply the Lessee with such information as
                the Lessee shall reasonably  request to defend or participate in
                any proceeding permitted by this Clause 10.1.

           (iv) No Indemnitee  shall enter into a settlement or other compromise
                or consent to a judgment  with respect to any Claim  without the
                prior written consent of the Lessee,  which consent shall not be
                unreasonably withheld or delayed,  unless such Indemnitee waives
                its rights with  respect to such Claims  under this Clause 10.1;
                provided  that the payment of an amount to which a Claim relates
                when  legally  compelled  to  do so by a  Government  Entity  of
                competent  jurisdiction  after  which a request for a refund (if
                not  prohibited by law) of such amount is diligently  pursued by
                appropriate  procedures  in  accordance  with the  terms of this
                Clause 10.1 will not be considered a  settlement,  compromise or
                consent to judgment requiring the Lessee's prior consent.

           (v)  In the event  the  Lessee shall be  obligated  to indemnify  any
                Indemnitee  pursuant to  this  Clause  10.1,  the  Lessee  shall
                (provided no Event of Default  shall  have occurred  and then be
                continuing)   be    subrogated   (without   warranty    by   the
                Indemnitee)  to the  rights of  such  Indemnitee  in  respect of
                the matter  as to which  the indemnity  was paid (except  rights
                under such  Indemnitee's  own  insurance  policies or under  the
                indemnification   provisions  of  the Head  Lease  or any  other
                documents  or agreements  relating  to the Aircraft  between the
                Head  Lessor  and  the  Banks)  and  may  pursue the same at the
                Lessee's  expense.  If any  Indemnitee  shall  obtain a recovery
                of all or any part of any  amount  which  the Lessee  shall have
                paid  to such  Indemnitee  or for which  the  Lessee  shall have
                reimbursed  such  Indemnitee  pursuant to this Clause 10.1, such
                Indemnitee  shall   promptly  (or  if  such  Indemnitee  is  the
                Lessor,  at such time as no  Event of Default may have  occurred
                is then  continuing)  pay or  cause to be  paid to the Lessee an
                amount  equal  to such  recovery  (but  only  up to  the  amount
                previously paid by the Lessee to such Indemnitee).

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10.2  DURATION

      The  indemnities  contained in this  Agreement will continue in full force
      after the Expiry Date.

11.   EVENTS OF LOSS

11.1  TOTAL LOSS

      (a)  PRE-DELIVERY:  If a  Total  Loss  occurs  prior  to   Delivery,  this
           Agreement  will  immediately   terminate  and,  except  as  expressly
           stated in  this  Agreement,  neither  party  will  have  any  further
           obligation  or  liability   under  this  Agreement  other   than  the
           obligation  of  the Lessor to  return to the Lessee  that  portion of
           the  Commitment  Fee  that has been  paid to the  Lessor,  if paid in
           cash, or to return the  Letter of Credit,  if the  Commitment  Fee is
           in the form of a Letter of Credit.

      (b)  POST-DELIVERY:  If a Total  Loss occurs  after  Delivery,  the Lessee
           will pay  the Agreed Value (minus  all  insurance  proceeds  received
           by the Lessor  or paid  to a third  party  pursuant  to the  Lessor's
           instruction   in  respect  of such  Total  Loss) to  the Lessor on or
           prior to the  earlier  of (i) ninety  (90) days  after the Total Loss
           Date and (ii) the  date of receipt of insurance   proceeds in respect
           of that  Total Loss (the  "SETTLEMENT  DATE") unless  the Aircraft is
           restored  to  the Lessor or the  Lessee  within  that  period (or, in
           the  case  of a   Total  Loss  coming  within   paragraph  (c) of the
           definition  of  Total Loss and  involving the loss of the Lessor's or
           the Head  Lessor's,  as the  case may be, title  to the Aircraft,  if
           both the Aircraft  and  title  thereto are  restored to the Holder of
           Legal Title or, in the  case of the  Aircraft,  to the  Lessee).  The
           receipt by the  Lessor of the  insurance  proceeds  in respect of the
           Total  Loss  shall,  to the  extent of such  proceeds,  discharge  or
           partially  discharge  the  Lessee  from  its  obligation  to  pay the
           Agreed  Value to  the Lessor  pursuant  to  this  sub-clause  (b). In
           the event  that the Lessor  received  insurance proceeds with respect
           to such  Event of Loss (or  such  proceeds  were paid as  directed by
           the  Lessor)  after  the  Lessee  has  paid the  Agreed  Value to the
           Lessor,  the Lessor  shall pay or cause to be paid  to the Lessee the
           amount of  such  insurance  proceeds  (less any  amounts which are or
           will  become due  to the  Lessor  from  the  Lessee  hereunder)  plus
           monthly  interest  at  the  rate  equal  to  LIBOR  from  the date of
           receipt  of  such  insurance  proceeds by the Lessor (or by the party
           to  whom such  proceeds  are  paid as  directed by the Lessor) to the
           date such  insurance  proceeds are paid over  to the Lessee.  In the
           event that the insurance  proceeds are paid initially  to the Lessee
           and not to the Lessor,  the  amount, if any, by which  such insurance
           proceeds  together  with other  amounts,  if any, paid  by the Lessee
           to the  Lessor with  respect to  the Lessee's  obligation  to pay the
           Agreed  Value, or any  portion  thereof,  exceed the Agreed Value may
           be  retained  by  the  Lessee,  otherwise  the  Lessee  shall pay the


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           Agreed Value to  the Lessor not later  than the  Settlement  Date. In
           the event  that  the Lessee  pays  the Agreed  Value to the Lessor in
           accordance  with  this  sub-clause  (b), the  Lessor  shall  promptly
           assign to  the Lessee  its rights  under  the  Insurances  to receive
           the insurance  proceeds in  respect of the Total  Loss (to the extent
           that  such  proceeds  shall  not  have  been  paid  to  the  Lessee).
           Subject  to the  rights  of any  insurers  and  reinsurers  or  other
           third  party,  upon  payment in full to the Lessor of that amount and
           all  other  amounts  which are or will  become  payable to the Lessor
           under   this  Agreement,   the  Lessor   will,  without  recourse  or
           warranty  (except  as to  the  absence of Lessor  Liens),  convey and
           transfer,  or cause  to be conveyed  and  transferred,  to the Lessee
           by instrument in  form and substance  reasonably  satisfactory to the
           Lessee full  legal and  beneficial  title to  the Aircraft and to any
           Engines or Parts not  installed  when the  Total Loss  occurred,  all
           on an "as-is  where is" basis,  and  will,  at the Lessee's  expense,
           execute and  deliver,  or cause to be  executed and  delivered,  such
           bills of  sale and  other  documents  and  instruments  as the Lessee
           may  reasonably   request  to  evidence  (on  the  public  record  or
           otherwise)  the   transfer  and   conveyance  of  such  title  to the
           Aircraft and  such  Engines and Parts to  the Lessee,  free and clear
           of all rights of the Lessor and any Lessor Liens.

      (c)  ENGINE  LOSS:  Upon the  occurrence  of  an Engine  Loss  (including,
            for the   avoidance  of  doubt,  at   time  when the  Engine  is not
           installed  on the Airframe) in  circumstances  in which there has not
           also  occurred  a  Total  Loss,  the  Lessee  shall  give  the Lessor
           written  notice  promptly upon  becoming aware of the same  and shall
           within  days  after  the  Engine  Loss  Date,  convey  or cause to be
           conveyed  to  the  Holder  of  Legal  Title as  replacement  for such
           Engine,  title,  free  and  clear  of all  Security  Interests,  to a
           replacement  engine complying with  the conditions  set out in Clause
           8.13(a).  The Lessee shall, at  the time of such  conveyance,  comply
           in all respects  with Clause  8.17(a) so that the replacement  engine
           becomes an  Engine,  whereupon  the leasing  of the  replaced  Engine
           the  subject   of the  Engine  Loss  shall  cease  and  title to such
           replaced   Engine shall  (subject to any  salvage rights of insurers)
           be  conveyed  to  the  Lessee  pursuant  to  Clause  8.17(c).  If the
           Lessor  receives  any  insurance   proceeds  relating  to such Engine
           Loss,  the   Lessor  shall   promptly  remit  such  proceeds  to  the
           Lessee.  No   Engine  Loss  with  respect  to  any  Engine  which  is
           replaced in  accordance  with the  provisions of  this Clause 11.1(c)
           shall  result  in  any  increase  or  decrease  in Rent or the Agreed
           Value.

11.2  REQUISITION

      During any requisition for use or hire of the Aircraft, any Engine or Part
      which does not constitute a Total Loss:

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

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      (b)  so long as no Significant  Default  or Event of Default  has occurred
           and is continuing,  the Lessee will  be entitled to  any hire paid by
           the  requisitioning  authority  in  respect  of the Term.  The Lessee
           will,   as  soon   as   practicable   after   the  end  of  any  such
           requisition,  cause  the  Aircraft  to  be  put  into  the  condition
           required  by  this  Agreement.  The Lessor   will be  entitled to all
           compensation  payable by the  requisitioning  authority in respect of
           any  change in  the  structure,  state or  condition  of the Aircraft
           arising  during  the  period of  requisition,  and the  Lessor  will
           apply such  compensation  in  reimbursing the  Lessee for the cost of
           complying  with its  obligations  under this  Agreement in respect of
           any such change,  but  so that, if any  Significant  Default or Event
           of Default has  occurred   and  is  continuing,  the Lessor may apply
           the  compensation  or hire in  or towards  settlement of any  amounts
           then due and owing by the Lessee under this Agreement.

11.3  APPLICATION  OF  PAYMENTS  FROM  GOVERNMENTAL  AUTHORITIES  IN  RESPECT OF
      EVENT OF LOSS.

      Any payments  (other than  insurance  covered by Clause 9) received at any
      time by the  Lessor  or the  Lessee  from any  Government  Entity or other
      person with  respect to an Event of Loss with  respect to the  Aircraft or
      any Engine will be applied as follows:

      (a)  if  such  payments  are  received  with   respect to an Event of Loss
           relating   to the  Airframe  or the  Airframe  and  the  Engines  or
           engines  installed on such Airframe,   (A) so much of such payment as
           shall not  exceed the Agreed  Value  due under Clause  11.1(b)  shall
           be  applied (i) in  reduction of the Lessee's  obligation to pay such
           amount,  if  not  already  paid by the Lessee,  or (ii) if the Agreed
           Value is  already  paid by the Lessee  to the  Lessor,  to  reimburse
           the Lessee for its  payment of such  amount, and (B) the balance,  if
           any,  of  such   payment  remaining  thereafter  to  the  extent  not
           exceeding the Lessee's  Interest  shall  be paid to  the Lessee,  and
           (C) the balance, if any, of such  payment  remaining  thereafter will
           be paid over to or retained by the Beneficial Owner; and

      (b)  if such  payments  are  received  with  respect  to an  Engine  under
           circumstances  contemplated by Clause 11.1(c), such payments shall be
           paid over to, or retained  by, the Lessee,  provided  that the Lessee
           shall have  fully  performed  or  concurrently  therewith  will fully
           perform the requirements of Clause 11.1(c).

12.   RETURN OF AIRCRAFT

12.1  REDELIVERY

      On the Expiry Date or  termination  of the leasing of the  Aircraft  under
      this Agreement,  the Lessee will, unless a Total Loss has occurred, at its
      expense,  redeliver  the Aircraft and Aircraft  Documents to the Lessor at
      the Redelivery Location or such other airport as is mutually acceptable to
      the parties  hereto,  in a condition  complying  with Schedule 3, free and
      clear of all Security  Interests  and  Permitted  Liens (other than Lessor


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      Liens), in a condition  qualifying for immediate issuance of a Certificate
      of   Airworthiness   by  the  FAA  and  complying  with  the   operational
      requirements of FAR Part 121, or as otherwise agreed by the Lessor and the
      Lessee.

12.2  FINAL INSPECTION

      During the 15 days  immediately  prior to redelivery of the Aircraft,  the
      Lessee  will make the  Aircraft  available  to the Lessor  for  inspection
      ("FINAL INSPECTION") in order to verify that the condition of the Aircraft
      complies with this Agreement.  The Final Inspection will be long enough to
      permit the Lessor to inspect:

      (a)  the Aircraft Documents;

      (b)  the Aircraft and uninstalled Parts; and

      (c)  the Engines, including without limitation (i) at the Lessee's cost, a
           video-taped  borescope  inspection  of (A) the low  pressure and high
           pressure compressors and (B) the turbine area, all performed,  at the
           Lessor's option, by engine  manufacturer,  (ii) at the Lessee's cost,
           an engine  condition  run of each  Engine,  and (iii)  magnetic  chip
           inspection.

      At  the   Lessor's   request,   the  Lessee   shall  permit  the  Lessor's
      representatives  reasonable  access to the Aircraft.  Notwithstanding  the
      preceding sentence, the Lessor shall not open any panels, bays or the like
      or  disassemble  any  components   which  are  not  otherwise   opened  or
      disassembled  or removed in the course of the Lessee's  maintenance of the
      Aircraft  unless  the  Lessor has  reasonable  cause to  believe  that the
      relevant  portion of the  Aircraft or component  may not be in  compliance
      with the return conditions as set forth in Schedule 3 hereof.  The cost of
      opening,  inspecting  and  closing  any such  areas  shall be borne by the
      Lessor  unless  such  action  reveals  any  discrepancies  from the return
      conditions  required  by this  Clause 12 and  Schedule 3 in which case the
      cost of opening,  inspecting and closing any such areas and the correcting
      such discrepancies shall be borne by the Lessee.

      The Lessor shall also be  entitled,  as part of the Final  Inspection,  to
      require  the  Lessee  to  perform  a 2 hour  demonstration  flight  at the
      Lessee's cost (with the Lessor's  representatives as on-board  observers).
      In the event that a defect is discovered during such demonstration  flight
      and the Boeing test flight guide requires an in-flight verification of the
      correction  of such  defect,  the Lessee will,  at the  Lessee's  expense,
      perform an additional  demonstration flight (or flights, as applicable) to
      the extent  required for the sole purpose of verifying  the  correction of
      such defect.

      On redelivery, the Lessee will comply with Clause 8.17(b) hereof.

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      The Lessee shall  indemnify  and hold  harmless the  Indemnitees  from and
      against any and all liabilities,  damages and losses  (including costs and
      expenses  incidental  thereto) arising by reason of death or injury to any
      observer  or  employee  of the  Lessee,  arising  out  of,  or in any  way
      connected  with such  demonstration  flight  and Final  Inspection  of the
      Aircraft.

      The Lessor shall  indemnify  and hold harmless the Lessee from and against
      any and all liabilities,  damages and losses (including costs and expenses
      incidental  thereto) arising by reason of death or injury to any observer,
      representative  or employee of the Lessor or any  Indemnitee,  arising out
      of,  or  in  any  connected  with  such  demonstration  flight  and  Final
      Inspection of the Aircraft.

12.3  NON-COMPLIANCE

      To the extent that, at the time of Final Inspection,  the condition of the
      Aircraft  does not comply  with this  Agreement,  the  Lessee  will at the
      Lessee's option:

      (a)  immediately  rectify  the  non-compliance  and,  to  the  extent  the
           non-compliance  extends  beyond  the  Expiry  Date,  the Term will be
           automatically  extended and this Agreement will remain in force until
           the non-compliance has been rectified; or

      (b)  redeliver the Aircraft to the Lessor and  indemnify  the Lessor,  and
           provided  that the Lessor  shall have  security  for that  indemnity,
           against the cost of putting the Aircraft into the condition  required
           by   this   Agreement,    provided   that,    notwithstanding    such
           non-compliance,  the Aircraft is in such  condition as to allow it to
           be immediately placed into commercial passenger service.

      Notwithstanding  the  Lessee's  election of the option set forth in clause
      (a)  above,  if the Lessor so directs  the Lessee in  writing,  the Lessee
      shall  redeliver  the  Aircraft  to the  Lessor and  indemnify  the Lessor
      against the cost of putting the Aircraft  into the  condition  required by
      this  Agreement,  in which  case the Term of this  Agreement  shall not be
      extended as provided in such clause (a).

12.4  OBLIGATION TO RETURN THE AIRCRAFT

      Except  with  respect to the  return of the  Aircraft  pursuant  to Clause
      12.3(b) and as otherwise  provided in Clause  12.3,  the failure to return
      the  Aircraft  at the Expiry  Date in full  compliance  with Clause 12 and
      Schedule 3 of this Agreement, for any reason, shall result in an extension
      of the Term,  and this  Agreement  remaining  in full  force  and  effect,
      including the Lessee's  obligation to pay Rent (which the Lessee shall pay
      on a per diem basis weekly in arrears); provided, however, that the Lessee
      shall not operate,  or permit others to operate  (except during any period


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      described  in the  definition  of Total  Loss in which  possession  of the
      Aircraft  is held by a third  party) the  Aircraft  after the Expiry  Date
      except for testing and acceptance  flights  pursuant to Clause 12.2 hereof
      and a ferry flight to the Redelivery  Location and shall  promptly  return
      the Aircraft to the Lessor after such non-compliance is rectified.  Except
      as expressly set forth in this Agreement,  the Lessee has no right to keep
      the Aircraft beyond the Expiry Date.

12.5  APU ADJUSTMENT

      APU shall be adjusted as set forth in Letter Agreement No. 1.

12.6  DOCUMENTATION

      Upon redelivery the Lessee shall reasonably  assist and cooperate with the
      Lessor, to the extent reasonably requested by the Lessor, in obtaining all
      documents  necessary  to  export  the  Aircraft  from  the  Habitual  Base
      (including,  without limitation, a valid and subsisting export license for
      the  Aircraft)  and  required  in relation  to the  deregistration  of the
      Aircraft with the Aviation Authority.

12.7  ACKNOWLEDGEMENT

      Upon  redelivery  of the  Aircraft  by the  Lessee  to the  Lessor  at the
      Redelivery  Location  in  accordance  with  and in  compliance  with  this
      Agreement,  the  Lessor  will  deliver  to the  Lessee  an  acknowledgment
      confirming  that the Lessee has  redelivered the Aircraft to the Lessor in
      accordance with this Agreement.

12.8  MAINTENANCE PROGRAMME

      (a)  Prior to the Expiry Date and upon the  Lessor's  request,  the Lessee
           will provide the Lessor or its agent reasonable  access to the Agreed
           Maintenance  Programme and the Aircraft  Documents solely in order to
           facilitate the Aircraft's  integration into any subsequent operator's
           fleet;

      (b)  The Lessee will,  if requested by the Lessor to do so, upon return of
           the Aircraft deliver to the Lessor a current and complete copy of the
           Agreed Maintenance Programme.

      (c)  The  Lessor  agrees  that  it will   not  disclose,  and will use its
           reasonable  efforts to ensure  that no other  person  receiving  such
           Maintenance  Programme  from or through  the  Lessor  discloses,  the
           contents  of  the  Agreed   Maintenance  Programme  to any  person or
           entity  except  to  the  extent  necessary  to monitor  the  Lessee's
           compliance  with  this  Agreement  and/or  to bridge the  maintenance
           programme  for the  Aircraft from  the Agreed  Maintenance  Programme
           to another programme after the Expiry Date.

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12.9  FUEL

      Upon redelivery of the Aircraft to the Lessor,  an adjustment will be made
      in respect of fuel on board at  Delivery  and the Expiry Date at the price
      then prevailing at the Redelivery Location.

12.10 STORAGE

      If  the  Lessor  so  requests,  and  subject  to the  availability  of the
      requisite space, the Lessee shall, at the Lessor's expense, park and store
      the  Aircraft  at the  Redelivery  Location  on behalf of the Lessor for a
      period not exceeding 120 days from the Expiry Date. During that period the
      Aircraft  shall be at the  Lessor's  risk  (save as to any loss or  damage
      caused by the Lessee's wilful misconduct or recklessness),  but the Lessee
      shall continue to maintain and insure the Aircraft in accordance  with the
      maintenance  and insurance  provisions of this  Agreement.  All reasonable
      storage, maintenance and insurance costs incurred by the Lessee (excluding
      any profit element  accruing to the Lessee)  pursuant to this Clause 12.10
      shall be reimbursed by the Lessor promptly upon presentation of supporting
      invoices and/or receipts.

13.   DEFAULT

13.1  EVENTS

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

      (a)  NON-PAYMENT:  the Lessee  fails to pay any Rent or Agreed Value under
           this Agreement within 5 Business Days of the due date for payment or,
           in the case of other sums  payable  to the Lessor or any  Indemnitee,
           within 10 Business Days of demand; or

      (b)  INSURANCE:  the  Lessee  fails to  obtain or  maintain  in full force
           and effect any  insurance  required  under the provisions of Clause 9
           or shall  operate the Aircraft  outside  the scope of or in violation
           of the terms  of the insurance or, if  applicable,  the United States
           government   indemnity  coverage  required   to  be  maintained  with
           respect  to  such  Aircraft;  provided   that,  in the event that any
           such   insurance   is   cancelled   or   terminated   or  notice   of
           cancellation  is  given  in  respect  of  any  such  insurance,  such
           insurance is not replaced  by insurance  complying  with Clause 9 and
           Schedule  4 at least  10 days  prior to  the  effective  date of such
           cancellation or termination date; or

      (c)  BREACH:  the Lessee  fails  to comply  with  any other  provision  of
           this Agreement  provided,  however,  that  if such failure is capable
           of remedy  and  the  Lessee  is  diligently  proceeding  to cure such
           failure by  appropriate  means, (A) the  failure continues for thirty


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           (30) days  after  notice  from  the Lessor  to the Lessee and (B) if,
           in the  reasonable  opinion  of the  Lessor,  any such default is not
           capable of being  cured  or  remedied  within  the said  thirty  (30)
           days  (notwithstanding   diligent  efforts  of  the  Lessee),  but is
           capable of being  cured or  remedied  within  sixty  (60) days,  such
           default is not  cured or  remedied  within   additional  thirty  (30)
           days after such initial thirty (30) day period; or

      (d)  REPRESENTATION:  any representation or warranty made (or deemed to be
           repeated)  by the Lessee in this  Agreement is or proves to have been
           incorrect in any material respect when made or deemed to be repeated;
           or

      (e)  CROSS  DEFAULT:  any  default  or event of default  occurs  under any
           Financial  Indebtedness  or any aircraft  lease of the Lessee and, in
           consequence  thereof,  the  holder  of  such  Financial  Indebtedness
           accelerates  such  indebtedness or enforces the security  therefor or
           the  lessor  under  such  aircraft  lease  terminates  such  lease or
           exercises its remedies thereunder.

      (f)  APPROVALS:  any  consent,  authorization,   license,  certificate  or
           approval of or  registration  with or  declaration  to any Government
           Entity of or by the Lessee in order to perform its obligations  under
           this  Agreement is not granted or is revoked or terminated or expires
           and is not  replaced or  reinstated  in full force and effect  within
           thirty (30) days thereof; or

      (g)  INSOLVENCY:

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

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

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      (h)  BANKRUPTCY AND SIMILAR PROCEEDINGS:

           (i)  the Lessee consents to the appointment of a custodian, receiver,
                trustee or liquidator of itself or all or any  substantial  part
                of the Lessee's property or the Lessee's consolidated  property;
                or

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

           (iii)the  Lessee  files  a  voluntary  petition  in  bankruptcy  or a
                voluntary petition seeking  reorganization in a proceeding under
                11 U.S.C.  ss.ss.  101 et seq.  or under any other laws  dealing
                with   bankruptcy,   insolvency,   moratorium,   winding-up   of
                corporations or creditors' rights generally, as now or hereafter
                in effect,  (any or all of which are hereinafter  referred to as
                "Bankruptcy   Laws"),   or  an  answer  admitting  the  material
                allegations  of a petition  filed against the Lessee in any such
                proceeding,  or the  Lessee  by  voluntary  petition,  answer or
                consent  seeks relief  under the  provisions  of any  Bankruptcy
                Laws; or

           (iv) an order, judgment or decree is entered by any court appointing,
                without  the  consent  of the  Lessee,  a  custodian,  receiver,
                trustee  or  liquidator  of  the  Lessee,   or  of  all  or  any
                substantial  part  of the  Lessee's  property  or  the  Lessee's
                consolidated property is to be sequestered,  and any such order,
                judgment or decree of  appointment or  sequestration  remains in
                effect,  undismissed,  unstayed or unvacated  for a period of 90
                days after the date of entry thereof or at any time an order for
                relief is granted; or

           (v)  an  involuntary  petition  against the  Lessee  in a  proceeding
                under the  Bankruptcy  Laws is  filed and  is not  withdrawn  or
                dismissed  within 90 days  thereafter  or any  time an order for
                relief  is  granted   in  such  proceeding,  or  if,  under  the
                provisions of  any Law  providing  for  reorganization  or which
                may apply to  the Lessee,  any court  of competent  jurisdiction
                assumes  jurisdiction  over,  or  custody  or  control  of,  the
                Lessee  or of all  or any  substantial   part  of  the  Lessee's
                property,  or  the  Lessee's  consolidated   property  and  such
                jurisdiction,   custody    or   control   remains   in   effect,
                unrelinquished,  unstayed  or  unterminated  for a  period of 90
                days  or at  any time an order  for  relief is  granted  in such
                proceeding; or

           (vi) any step (including  petition,  proposal or convening a meeting)
                is taken by the  Lessee  with a view to a  composition,  general
                assignment  for the  benefit of  creditors  or workout  with its
                creditors  generally,  or  the  reorganization,  rehabilitation,
                administration,  liquidation,  or dissolution of the Lessee,  or
                any corporate action (including,  without limitation,  any board
                of  directors or  shareholder  action) is taken by the Lessee in
                furtherance of any of the foregoing,  whether or not the same is
                fully effected or accomplished.

      (i)  SUSPENSION OF BUSINESS: the Lessee suspends or ceases or threatens in
           writing to suspend  or cease to carry on its  business  such that the
           ability  of the  Lessee to  perform  its  obligations  hereunder  may
           reasonably be expected to be materially adversely affected; or

      (j)  DISPOSAL:  the Lessee disposes,  conveys or transfers or threatens in
           writing to dispose,  convey or transfer of all or a substantial  part
           of its  assets,  other than for the  purpose of a  reconstruction  or


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           amalgamation the terms of which have received the previous consent in
           writing  of the  Lessor  and such  disposition  would have a material
           adverse   effect  on  the  ability  of  the  Lessee  to  perform  its
           obligations hereunder; or

      (k)  RIGHTS:  the existence,  validity,  enforceability or priority of the
           rights of the Lessor as owner and  lessor in respect of the  Aircraft
           or the rights of the Banks as  assignee of this  Agreement  under the
           Assignment are challenged by the Lessee or any other person  claiming
           by or through the Lessee without appropriate cause; or

      (l)  DELIVERY:  the Lessee fails to accept  delivery of the Aircraft  when
           validly  tendered  pursuant to this Agreement by the Lessor at a time
           when the Lessee is  obligated  to accept the  Aircraft in  accordance
           with the terms hereof; or

      (m)  LETTER OF  CREDIT:  the  Letter of  Credit (i) ceases  for any reason
           to be in full force and effect,  or (ii) is  not renewed  or replaced
           at least 15 Business  Days  prior to its  expiry (so that the renewal
           or   replacement  becomes   effective   immediately   following  such
           expiry) or (iii) in  the event  such  Letter of  Credit is drawn upon
           by the Lessor  prior  to its  expiration,  such  Letter  of Credit is
           not (x)  reinstated  by the  Lessee to  its  original sum within five
           (5)  days  of  written  notice  by  the  Lessor,  or (y)  subject  to
           5.15(a),  replaced  by  a  cash  deposit  from   the  Lessee  in  the
           required amount of such Letter of Credit.

13.2  RIGHTS

      If an Event of Default  occurs,  the Lessor may at its option (and without
      prejudice to any of its other rights  under this  Agreement),  at any time
      thereafter:

      (a)  treat such event as a repudiation  by the Lessee of  its  obligations
           under this Agreement  and/or by  notice to the  Lessee with immediate
           effect   terminate   the  letting  of   the   Aircraft  (but  without
           prejudice  to the  continuing  obligations  of  the Lessee under this
           Agreement),   whereupon   all  rights   of  the  Lessee   under  this
           Agreement,  including,  without  limitation,  the Lessee's  rights to
           possession  and use  of the Aircraft  (other than for the purposes of
           redelivery  of the Aircraft  to or as directed by the Lessor),  shall
           cease; and/or

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

      (c)  either:

           (i)  take  possession of the  Aircraft,  for which purpose the Lessor
                may enter  any premises  belonging  to or in the  occupation  of
                or under  the  control of  the Lessee  (for  which  purpose  the


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                Lessee  hereby  grants to  the Lessor  an  irrevocable  license)
                where the  Aircraft  may  be located,  or cause  the Aircraft to
                be redelivered  to the  Lessor at the  Redelivery   Location (or
                such  other  location  as  the  Lessor  may  require),  and  the
                Lessor is  hereby   irrevocably  authorized  and   empowered  to
                direct  pilots  of  the  Lessee  or  other  pilots  to  fly  the
                Aircraft  to  that  airport  and  will have all the  powers  and
                authorizations necessary for taking such action; or

           (ii) by serving notice,  require the Lessee to redeliver the Aircraft
                to the Lessor at the Redelivery Location (or such other location
                as the Lessor may require).

13.3  DEREGISTRATION

      If an Event of Default occurs,  the Lessor may sell or otherwise deal with
      the Aircraft as if this Agreement had never been made and the Lessee will,
      at the  request  of the  Lessor,  take all steps  necessary  to effect (if
      applicable) deregistration of the Aircraft and its export from the country
      where the  Aircraft  is for the time being  situated  and any other  steps
      necessary  to enable  the  Aircraft  to be  redelivered  to the  Lessor in
      accordance with this Agreement.

13.4  DEFAULT PAYMENTS

      If an Event of Default  occurs,  the Lessee will  indemnify  the Lessor on
      demand against any loss, damage,  expense,  cost or liability,  including,
      without  limitation,  all reasonable  attorneys'  fees and  disbursements,
      which the Lessor may sustain or incur  directly or indirectly as a result,
      including but not limited to:

           (i)  any  loss of  profit  suffered  by  the  Lessor  because  of the
                Lessor's  inability  to   place  the   Aircraft  on  lease  with
                another  lessee on terms as  favourable  to  the Lessor  as this
                Agreement  or  because  whatever  use,  if  any,  to  which  the
                Lessor  is able  to put the  Aircraft  upon  its  return  to the
                Lessor,  is  not  as   profitable  (calculated  on an  After-Tax
                Basis) to the  Lessor as  this  Agreement  would  have  been but
                for such Default or non-delivery;

           (ii) whether  or not  the  Lessor  shall  have  exercised,  or  shall
                thereafter at any time exercise,  any of its rights under Clause
                13.2 hereof with respect to all or any part of the Aircraft, the
                Lessor,  by written  notice to the Lessee  specifying  a payment
                date  not  earlier  than  ten  (10)  days  from the date of such
                notice,  may demand that the Lessee pay to the  Lessor,  and the
                Lessee shall pay to the Lessor, on the payment date specified in
                such notice, as liquidated damages for loss of a bargain and not
                as a  penalty,  in lieu of the  installments  of Rent due on the
                Aircraft,   Airframe,   Engines  or  Part  thereof  for  periods
                commencing  on or  after  the  payment  date  specified  in such
                notice,  any  unpaid  Rent due for  periods  prior to the period
                commencing  with the payment  date  specified in such notice and


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                other amounts owing under this  Agreement  (prorated in the case
                of Rent on a daily  basis),  including  interest  thereon at the
                Default Rate from the original date due under this  Agreement to
                and  including the payment date  specified in such notice,  plus
                the amount equal to the excess,  if any, of the present value of
                the  aggregate  of the  remaining  installments  of Rent for the
                remainder of the Term (determined without reference to any right
                of the Lessor to terminate the leasing of the Aircraft,  whether
                or not such right is  exercised)  over the present  value of the
                fair market  rental value of the Aircraft,  Airframe,  Engine or
                Part thereof, for the remainder of such Term, using in each case
                a  discount  rate of the  amount of  interest  then paid on U.S.
                Treasury bills of similar maturity;

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

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

           (v)  any loss, cost, expense  or liability  sustained or  incurred by
                or on behalf of  the Lessor,  together with  interest thereon at
                the  Default  Rate  from  the  date  such  cost  or  expense  is
                incurred  by  the   Lessor  until  the   date  of  reimbursement
                thereof by the  Lessee,  owing  to such  Event of  Default,  the
                exercise  of  remedies  hereunder  or  the  Lessee's  failure to
                redeliver  the  Aircraft  on the date,  at the  place and in the
                condition required by this Agreement.

      For the avoidance of doubt, the provisions of Clause 5.10(a) will apply to
      any sums payable by the Lessee pursuant to this Clause 13.4.

      For the purpose of Clause 13.4(ii)  above,  the "fair market rental value"
      of the  Aircraft,  the  Airframe,  any Engine or Part thereof shall be the
      rental value,  net of all costs and expenses of  recovering  the Aircraft,
      the Airframe or any Engine or Part thereon and  restoring its condition to
      the  condition  required  hereunder,  which  would be obtained in an arm's
      length transaction between informed and willing lessee and an informed and
      willing  lessor,  based  upon the actual  condition  and  location  of the
      Aircraft,  Airframe  or any Engine or Part  thereof,  which value shall be
      determined  by a  reputable  firm of aircraft  appraisers  selected by the
      Lessor,  the  Head  Lessor  or the  Beneficial  Owner.  The  cost  of such
      appraisal shall be borne by the Lessee.

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13.5  EXERCISE OF REMEDIES

      Except as otherwise  expressly set forth herein,  no remedy referred to in
      Clause 13 is intended to be exclusive, but each shall be cumulative and in
      addition to any other remedy  referred to above or otherwise  available to
      the Lessor at law or in equity.  The  exercise or beginning of exercise by
      the  Lessor of any one or more of such  remedies  shall not  preclude  the
      simultaneous  or later  exercise  by the  Lessor of any or all such  other
      remedies.  No  express  or  implied  waiver by the  Lessor of any Event of
      Default  hereunder  shall in any way be or be construed to be, a waiver of
      any future or subsequent Event of Default.

      The  Lessor's  rights and the Lessee's  obligations  under Clause 13 shall
      survive the Expiry Date.

14.   ASSIGNMENT AND TRANSFER

14.1  NO ASSIGNMENT BY LESSEE

      The  Lessee  will not  assign or  create  or permit to exist any  Security
      Interest  over any of its rights  under this  Agreement  without the prior
      written consent of the Lessor.

14.2  ASSIGNMENT

      The Lessor may assign all or any of its rights,  title and interest  under
      this Agreement and in the Aircraft but in the case of an assignment (other
      than by way of security)  only to any Permitted  Transferee  provided that
      the  assignment or any act required of the Lessee in connection  therewith
      will not result in any  material  respect  (i) in the  deprivation  of any
      material  rights or  privileges  of the Lessee or (ii) an  increase of the
      Lessee's  obligations.  The  Lessor  will,  however,  in  the  case  of an
      assignment  (other  than by way of  security)  have no further  obligation
      under this Agreement with respect to periods  following such assignment of
      all its rights,  title and interest  under this  Agreement and will remain
      entitled to the benefit of each indemnity  under this Agreement  provided,
      in any such event, the Permitted Transferee assumes in writing in form and
      substance   reasonably   satisfactory  to  the  Lessee  all  the  Lessor's
      obligations  under  this  Agreement  including,  without  limitation,  all
      obligations  with  respect to acts and events  which  occur  prior to such
      assignment and will agree not to interfere,  except as otherwise permitted
      by this  Agreement,  with the quiet use,  possession  and enjoyment of the
      Aircraft  by  the  Lessee  or the  exercise  by the  Lessee  of its  right
      hereunder.

      The Lessee will, at the Lessor's cost, comply with all reasonable requests
      of the Lessor,  its successors and assigns in respect of the  consummation
      of any such assignment.  The Lessor will promptly notify the Lessee of any


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      proposed assignment and, as a condition thereto,  shall obtain the written
      consent of the Lessee,  such  consent not to be  unreasonably  withheld or
      delayed, to any proposed assignment (other than by way of security) to any
      successor other than a Permitted Transferee.

14.3  NO INCREASED LIABILITY

      Any assignment or transfer by the Lessor  pursuant to Clause 14.2 shall be
      subject to the  condition  that the tax risk  exposure of the Lessee shall
      not, as a consequence of such  assignment or transfer,  be greater than it
      would have been in the absence of such assignment or transfer.

14.4  RIGHT TO GRANT MORTGAGE

      The Lessee shall co-operate with the Banks, the Lessor and the Head Lessor
      in taking or receiving a legal  mortgage or other  security  interest over
      the Aircraft or an assignment of the Lessor's  interest in the  Insurances
      or other  interest  of the Lessor in favour of the Banks as  security  and
      provide a written confirmation of its consent thereto, in each case, at no
      cost to the Lessee,  as may  reasonably be required in order to facilitate
      the  financing of the  acquisition  of the  Aircraft,  including,  without
      limitation,  the registration  and/or other perfection  and/or priority of
      such  mortgage  or  other   security   interest  and  shall  execute  such
      agreements, at no cost to the Lessee, as the Lessor or the Head Lessor may
      reasonably require for the purposes of effecting all necessary  amendments
      to this Agreement (including,  without limitation, Clauses 8, 9 and 10 and
      Schedule 4) subject,  in each case, to the same  limitations  set forth in
      Clause 14.3.

15.   ILLEGALITY

      If it is or becomes  unlawful in any relevant  jurisdiction for the Lessor
      or the Lessee to give effect to any of its material obligations under this
      Agreement or to continue this  Agreement,  the Lessor will consult in good
      faith with the Lessee as to any steps which may reasonably be taken (at no
      cost to the Lessor in the case of  illegality  with respect to the Lessee,
      and at no cost to the Lessee in the case of  illegality  of the Lessor) to
      restructure  the transaction in order to avoid such  unlawfulness.  In the
      event  that no such  steps  can  reasonably  be taken,  the  Lessor or the
      Lessee, as applicable,  may, by notice in writing to the other,  terminate
      the  leasing of the  Aircraft  under this  Agreement  and the Lessee  will
      forthwith  redeliver the Aircraft to the Lessor in accordance  with Clause
      12.

16.   MISCELLANEOUS

16.1  WAIVERS, REMEDIES CUMULATIVE

      The rights of either party under this Agreement:

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<PAGE>

      (a)  may be exercised as often as necessary;

      (b)  are  cumulative  and not  exclusive of that party's  rights under any
           law; and

      (c) may be waived only in writing and specifically.

      Delay in exercising or  non-exercise  of any such right is not a waiver of
      that right.

16.2  DELEGATION

      The Lessor may  delegate  to any person or persons  (other than an airline
      competing with the Lessee,  an Affiliate of such an airline or an employee
      or representative  of either thereof) all or any of the trusts,  powers or
      discretions  vested in it by these presents and any such delegation may be
      made upon such  terms  and  conditions  and  subject  to such  regulations
      (including  power to sub-delegate) to a person eligible to be delegated by
      the Lessor as the Lessor in its reasonable discretion thinks fit.

16.3  CERTIFICATES

      Any certificate or  determination by the Lessor as to any rate of interest
      or as to any other  amount  payable  under  this  Agreement  will,  at the
      request of the Lessee be subject to  verification  in accordance  with the
      procedures set forth in Clause 5.16.

16.4  APPROPRIATION

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

16.5  CURRENCY INDEMNITY

      (a)  If the Lessor receives an amount in respect of the Lessee's liability
           under this  Agreement or if such liability is converted into a claim,
           proof,  judgment or order in a currency  other than the currency (the
           "CONTRACTUAL  CURRENCY")  in which  the  amount  is  expressed  to be
           payable under this Agreement:

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

           (ii) if the amount  received by the Lessor,  when  converted into the
                contractual  currency (at the market rate at which the Lessor is
                able on the relevant date to purchase the  contractual  currency
                in London or, at its option,  New York with that other currency)
                is less than the amount owed in the  contractual  currency,  the


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<PAGE>

                Lessee will, forthwith on demand, pay to the Lessor an amount in
                the contractual currency equal to the deficit; and

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

      (b)  The Lessor hereby agrees to indemnify  the Lessee  mutatis  mutandis,
           with respect to the matters set forth above in Clause 16.5(a).

      (c)  The Lessee and the  Lessor  each  waives any right it may have in any
           jurisdiction  to pay any amount  under this  Agreement  in a currency
           other than that in which it is expressed to be payable.

16.6  SET-OFF

      The  Lessor may set off any  matured,  liquidated  obligation  owed by the
      Lessee  under this  Agreement  or under any other  agreement  between  the
      Lessor (or any  affiliate  or  associate of the Lessor) and the Lessee (to
      the extent  beneficially  owned by the Lessor) against any obligation owed
      by the  Lessor  to the  Lessee,  regardless  of the  place of  payment  or
      currency. If the obligations are in different  currencies,  the Lessor may
      convert  either  obligation  at the market rate of exchange  available  in
      London,  or at its option,  New York for the purpose of such set-off.  The
      Lessor  will not be  obliged to pay any  amounts to the Lessee  under this
      Agreement  so long as any sums  which are then due from the  Lessee  under
      this Agreement remain unpaid and any such amounts which would otherwise be
      due will  fall due only if and  when the  Lessee  has paid all such  sums,
      except to the extent the Lessor  otherwise agrees or sets off such amounts
      against such payment pursuant to the foregoing.

16.7  SEVERABILITY

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

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

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

16.8  REMEDY

      If the Lessee fails to comply with any  provision of this  Agreement,  the
      Lessor may,  without being in any way obliged to do so or responsible  for
      so doing and without  prejudice  to the ability of the Lessor to treat the
      non-compliance  as a Default or an Event of Default,  effect compliance on


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      behalf of the Lessee  after such  notice to, and  consultation  with,  the
      Lessee as is  reasonable  under the  circumstances,  whereupon  the Lessee
      shall become  liable to pay  immediately  any sums  expended by the Lessor
      together with all costs and expenses (including legal costs) in connection
      therewith.

16.9  EXPENSES

      (a)  The  Lessor  and   the  Lessee  shall  each   bear  their  respective
           expenses   (including    legal,   professional   and    out-of-pocket
           expenses)  incurred or payable  in connection  with the  negotiation,
           preparation  and  execution of  this  Agreement;  provided,  however,
           that Lessee  shall  be  responsible  for  all costs  associated  with
           filing this Agreement  with FAA and filing  UCC financing  statements
           in  the  State  of  Colorado,  including  (but  not  limited  to) the
           provision   of   legal  opinions,  tax   advice,   stamp  duties  and
           registrations; and

      (b)  The Lessee will pay to the Lessor on demand all  expenses  (including
           legal,  survey and other costs)  payable or incurred by the Lessor as
           the direct result of the Lessor's  exercise of remedies in accordance
           with this Agreement.

16.10 TIME OF ESSENCE

      The time  stipulated  in this  Agreement  for all payments  payable by the
      Lessee  to the  Lessor  and by  the  Lessor  to the  Lessee  and  for  the
      performance of the Lessee's and the Lessor's other  obligations under this
      Agreement will be of the essence of this Agreement.

16.11 NOTICES

      (a)  All notices  and other  communications  given under or in  connection
           with this Agreement shall be in writing  (including telex,  facsimile
           or similar writing) and shall be deemed to have been received

           (i)  in the case of a telex,  at the time such  telex is  transmitted
                (provided it is  transmitted on a Business Day to the country of
                receipt  between  09.00  and  17.30  hours  (local  time) in the
                country of receipt)  and, if  transmitted  later,  then at 09.00
                hours  (local  time)  in the  country  of  receipt)  on the next
                succeeding Business Day) to the telex number specified in Clause
                16.11(b) and the corresponding answerback received,

           (ii) in the case of a facsimile, at the time of receipt by the sender
                of a  transmission  report  indicating  that  all  pages  of the
                facsimile  transmission  were properly  transmitted  (unless the
                recipient  notifies the sender  promptly,  or if received  after
                17.30 hours (local time) in the country of receipt), by no later


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                than  10.00  hours  the   following   Business   Day,  that  the
                transmission was incomplete and/or illegible,  in which case the
                facsimile  shall be deemed to have been  received at the time of
                receipt by the sender of a further clear transmission  report on
                retransmitting the facsimile,  provided the transmitted document
                is also  then  immediately  sent by  recorded  delivery  post or
                delivered  by  hand to the  recipient),  PROVIDED  the  relevant
                facsimile  transmission (or retransmission,  as the case may be)
                was  transmitted  to the  country of  receipt on a Business  Day
                between  09.00 and 17.30  hours  (local  time) of the country of
                receipt).  If it was transmitted  later, then it shall be deemed
                to have  been  received  at  09.00  hours  (local  time)  on the
                succeeding Business Day; and

           (iii)in any other  case, when  delivered to the address  specified in
                Clause 16.11(b).

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

          (i)  if to the Lessor, to it at:

               Wilmington Trust Company
               Rodney Square North
               1100 North Market Street
               Wilmington, Delaware 19890-0001

               Attention:  Corporate Trust Administration
               Facsimile No:  (302) 651-8882
               Telex No:  835437
               Answerback:  WILM-TR
               Telephone:  (302) 651-1000

          with a copy to:

               Sunrock Aircraft Corporation Limited
               Russell House, Russell Court
               Harcourt Street
               Dublin 2
               Republic of Ireland

               Attention:  Chief Financial Officer
               Facsimile No:  (353-1) 478-5415
               Telex No:  32316 SACL EI

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<PAGE>

          (ii) if to the Lessee, to it at:

               Western Pacific Airlines
               2864 S. Circle Drive, Suite 1100
               Colorado Springs, CO 80906

               Attention:  Chief Financial Officer
               Facsimile No:  (719) 527-7480

          or to such other  address,  facsimile  number or telex number as shall
          have been  notified by one party to the other in the manner set out in
          this Clause 16.11.

16.12 LAW AND JURISDICTION

      (a) THIS  AGREEMENT  HAS BEEN  DELIVERED  IN NEW YORK  AND  SHALL,  IN ALL
          RESPECTS,   INCLUDING  ALL  MATTERS  OF  CONSTRUCTION,   VALIDITY  AND
          PERFORMANCE,  BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH NEW YORK
          LAW WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES CONTAINED
          THEREIN.

      (b) For the benefit of the Lessor,  the Lessee agrees, and for the benefit
          of the Lessee,  the Lessor and the  Beneficial  Owner agree,  that the
          United States  District  Court for the District Court for the Southern
          District of New York (the "AGREED COURT") is to have the non-exclusive
          jurisdiction  to settle any claims or disputes in connection with this
          Agreement and  irrevocably  submits to the  jurisdiction of the Agreed
          Court in connection with this Agreement.

      (c) Without prejudice to any other mode of service:

          (i)  each  of  the  Lessee  and  the  Beneficial   Owner  appoints  CT
               Corporation in New York presently at 1633 Broadway, New York, New
               York  10019  as its  respective  agent  for  service  of  process
               relating to any proceedings before the Agreed Court in connection
               with this  Agreement  and agrees to maintain the process agent in
               New York;

          (ii) each of the  Beneficial  Owner and the Lessee agrees that failure
               by its respective process agent to notify it of the process shall
               not invalidate the proceedings concerned;

          (iii)each of the Lessor,  Beneficial  Owner and Lessee consents to the
               service of process  relating to any such  proceedings  by prepaid
               posting of a copy of the process to its respective  process agent
               at the address identified in sub-clause (c)(i).

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<PAGE>

      (d) The Lessor, Beneficial Owner and the Lessee:

          (i)  waive  objection  to the Agreed Court on grounds of the laying of
               venue,  inconvenient forum or otherwise as regards proceedings in
               connection with this Agreement;

          (ii) agree that a judgment or order of the Agreed Court in  connection
               with this  Agreement is  conclusive  and binding on it and may be
               enforced  against it in the courts of any other  jurisdiction  by
               suit on the judgment or otherwise as permitted by applicable law,
               a certified or true copy of which shall be conclusive evidence of
               the facts and of the amount of any  indebtedness  or liability of
               the Lessee or the Lessor;

      (e) Nothing in this clause limits the right of the Lessor or the Lessee to
          bring proceedings against the other in connection with this Agreement:

          (i)  in any other court of competent jurisdiction; or

          (ii) concurrently in more than one jurisdiction;

      (f) The  Lessor,  Beneficial  Owner and the Lessee  each  irrevocably  and
          unconditionally:

          (i)  agree that, if any other party brings legal  proceedings  against
               it or its assets in relation to this Agreement,  no immunity from
               such legal  proceedings  (which will be deemed to include without
               limitation, suit, attachment prior to judgment, other attachment,
               the obtaining of judgment,  execution or other  enforcement) will
               be  claimed  by or on behalf of  itself  or with  respect  to its
               assets;

          (ii) waives any such right of immunity  which it or its assets now has
               or may in the future acquire;

          (iii)consents  generally  in  respect of any such  proceedings  to the
               giving of any relief or the issue of any  process  in  connection
               with such proceedings including,  without limitation, the making,
               enforcement   or  execution   against  any  property   whatsoever
               (irrespective  of its  use or  intended  use)  of  any  order  or
               judgment which may be made or given in such proceedings.

      (g) EACH  OF  THE   LESSEE   AND  THE  LESSOR   HEREBY   IRREVOCABLY   AND
          UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS TO A JURY TRIAL OF ANY CLAIM
          OR CAUSE OF ACTION  BETWEEN  THEM BASED UPON OR  ARISING,  DIRECTLY OR
          INDIRECTLY,  OUT OF  THIS  AGREEMENT  OR  ANY  DEALINGS  BETWEEN  THEM
          RELATING  TO  THE  SUBJECT  MATTER  OF THE  TRANSACTIONS  CONTEMPLATED


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          THEREBY  OF  THE   LESSOR/LESSEE   RELATIONSHIP   BEING   ESTABLISHED,
          including, without limitation, contract claims, tort claims, breach of
          duty claims and other common law and statutory claims.  The Lessor and
          the Lessee  represent and warrant that each knowingly and  voluntarily
          waives its jury trial rights  following  consultation  with such legal
          counsel.  THIS WAIVER IS  IRREVOCABLE,  AND THIS WAIVER SHALL APPLY TO
          ANY SUBSEQUENT AMENDMENTS,  RENEWALS,  SUPPLEMENTS OR MODIFICATIONS TO
          THIS AGREEMENT AND THE RELATING DOCUMENTS.

16.13 SOLE AND ENTIRE AGREEMENT

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

16.14 INDEMNITIES

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

16.15 COST OF LESSEE'S WORK

      Whenever the Lessee itself performs work on the Aircraft (whether pursuant
      to Clauses 7.2,  8.11(e) or otherwise)  and is entitled,  pursuant to this
      Agreement,  to receive reimbursement from the Lessor of all or part of the
      cost of  performing  such  work,  the  Lessee  agrees  that it will  claim
      reimbursement  of the actual  cost to it of  carrying  out the work at its
      then prevailing fully burdened cost (provided always that such actual cost
      is reasonable  when compared with the cost typically  charged for carrying
      out the same or substantially the same work by similar  organisations) and
      not at the rate or rates charged by it at the time for the same or similar
      work undertaken for third parties.

16.16 COUNTERPARTS

      This  Agreement  may be  executed  in  counterparts  each  of  which  will
      constitute one and the same document.

16.17 ENGLISH LANGUAGE

      All  notices to be given  under this  Agreement  will be in  English.  All
      documents  delivered pursuant to this Agreement will be in English,  or if
      not in English, will be accompanied by a certified English translation. If


                                       93
<PAGE>

      there is any  inconsistency  between the English version of this Agreement
      and any version in any other language, the English version will prevail.

16.18 CONFIDENTIALITY

      Neither the Lessor nor the Lessee shall, without the other's prior written
      consent,  communicate  or  disclose  the  terms of this  Agreement  or any
      information or documents  furnished  pursuant to this Agreement (except to
      the extent that the same are within the public  domain) to any third party
      (other than their respective external legal advisers,  auditors, insurance
      brokers and/or underwriters, the Airframe and/or Engine manufacturers, the
      Head  Lessor and the  Banks)  PROVIDED  HOWEVER  that  disclosure  will be
      permitted, to the extent required:

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

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

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

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

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

16.19 GENEVA CONVENTION

      To the extent  permitted by any  applicable  law, if and when the State of
      Registration shall ratify the Convention on the International  Recognition
      of Rights in Aircraft signed at Geneva, Switzerland, on June 19, 1948, the
      Lessee  shall,  at its own cost,  do any and all things  necessary  in the
      State of  Registration  to perfect  recognition of the rights of the Title
      Holder by every signatory state which has ratified such Convention.

16.20 CIVIL RESERVE AIR FLEET PROGRAM

      So long as no Significant  Default or Event of Default has occurred and is
      continuing, the Lessee may subject the Aircraft, the Airframe or an Engine
      to the Civil  Reserve Air Fleet  Program and  transfer  possession  of the
      Airframe or an Engine to the United  States  government,  or any agency or
      instrumentality  thereof,  pursuant to the Civil Reserve Air Fleet Program
      so long as (i) the Lessee shall promptly notify the Lessor upon subjecting
      the  Airframe  or an Engine to the Civil  Reserve  Air Fleet  Program  and
      provide the Lessor with a name and address of the appropriate  contracting


                                       94
<PAGE>

      officer  representative  for the  Military  Airlift  Command of the United
      States Air Force,  (ii) the Lessee shall promptly notify the Lessor of any
      such transfer and (iii) the period of such transfer does not extend beyond
      the end of the  Term.  Except as  expressly  provided  herein,  all of the
      Lessee's  obligations  under this Agreement  shall continue and the Lessee
      shall remain  primarily  liable for the performance of all of the terms of
      this  Agreement  to the same extent as if the  Aircraft  had never  become
      subject to such Civil Reserve Air Fleet Program.

16.21 SECTION 1110

      The Lessee  acknowledges  that the Lessor would not have entered into this
      Agreement  unless it had  available  to it the  benefits of a lessor under
      Section 1110 of Title 11 of the United States Code.  The Lessee  covenants
      and agrees with the Lessor that to better ensure the  availability of such
      benefits,  the Lessee shall  support any motion,  petition or  application
      filed by the Lessor with any bankruptcy court having jurisdiction over the
      Lessee,  whereby the Lessor seeks  recovery of  possession of the Aircraft
      under said Section 1110 and shall not in any way oppose such action by the
      Lessor unless the Lessee shall have complied with the requirements of said
      Section  1110 to be  fulfilled in order to entitle the Lessee to continued
      use and  possession of the Aircraft  hereunder.  In the event said Section
      1110 is amended,  or if it is repealed  and another  statute is enacted in
      lieu thereof,  the Lessor and the Lessee agree to amend this Agreement and
      take such other action not inconsistent  with this Agreement as the Lessor
      reasonably  deems  necessary  so as to afford to the Lessor the rights and
      benefits as such amended or  substituted  statute  confers upon owners and
      lessors of aircraft similarly situated to the Lessor.

16.22 ARTICLE 2-A OF THE UCC

      The  parties  hereto  agree  that this  Agreement  as  extended,  amended,
      modified, renewed or supplemented, shall be governed by Article 2-A of the
      Uniform Commercial Code of New York.

           [The remainder of this page is intentionally left blank]



                                       95
<PAGE>







                                   

IN WITNESS  whereof the parties  hereto have executed this Agreement on the date
shown at the beginning of this Agreement.


SIGNED on behalf of
WILMINGTON TRUST COMPANY, not in its individual  capacity,  except to the extent
expressly set forth herein, but solely as Owner Trustee

By:    _____________________________________

Name:  _____________________________________

Title: _____________________________________


SIGNED on behalf of
WESTERN PACIFIC AIRLINES, INC.

By:    _____________________________________

Name:  _____________________________________

Title: _____________________________________



                                       96
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                                   SCHEDULE 1

                                     PART 1

                             AIRCRAFT SPECIFICATIONS

AIRCRAFT

Aircraft  will  be  defined  in  accordance  with  Boeing  Detail  Specification
D6-38604-28.

AIRFRAME

Manufacturer                              BOEING
Model:                                    737-33R
Registration Number:                      N966WP
Serial Number:                            28871
Date of Manufacture:                      July 2, 1997
Production/Line Number:                   PR044/2900

ENGINES

Manufacturer:                             CFM International, Inc.
Model Number:                             CFM56-3C-1
Serial Numbers:                           858-578/858-574

AUXILIARY POWER UNIT (APU)

Manufacturer:                             ALLIED SIGNAL
Model Number:                             85-129H
Serial Number:                            P-100807

LANDING GEAR

Nose Gear Part Number:                    65-46200-80
Serial Number:                            T5611P2900
Left Main Gear Part Number:               65-46100-79
Serial Number:                            MC05795P2900
Right Main Gear Number:                   65-46100-79
Serial Number:                            MC05798P2900



                                       97
<PAGE>



AVIONICS


DESCRIPTION                 MANUFACTURER         PART NUMBER             QTY
Cockpit Voice Recorder      Fairchild            S100-0080-00            1
VHF Transceiver             Collins              822-0323-002            3
SELCAL Decoder              Motorola             NA138-714B              1
Dig. Flt Control Computer   Honeywell            4051600-914             2
Dig. Flt Data Recorder      Allied Signal        980-4700-001            1
Dig. Flt Data Acq. Unit     Teledyne             2233000-45              1
Dig. Air Data Computer      Smiths               501FAD1-1               2
Heads Up Guidance Comp.     Flight Dynamics      1500-0470-006           1
Flt Mgmt Computer           Smiths               171497-05-01            1
Marker Beacon Receiver      Collins              522-5996-011            2
Weather Radar Transceiver   Collins              622-5132-630            1
Radio Altimeter             Collins              622-3890-021            2
Grnd Prox Warn Computer     Allied Signal        965-0648-009            1
VOR/ILS Transceiver         Collins              622-3257-001            2
D.M.E. Transceiver          Collins              622-2921-006            2
A.D.F. Receiver             Collins              777-1492-005            2
ATC (Mode S) Transponder    Collins              622-7878-201            2
TCAS Computer               Rockwell             622-8971-020            1
Inertial Reference Unit     Honeywell            HG1050AE09              2






                                       98
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SAFETY EQUIPMENT/FURNISHINGS

DESCRIPTION                 MANUFACTURER         PART NO. or LOCATION       QTY

First Class Seats           n/a
Business Class Seats        n/a
Tourist Class Seats         BE Aerospace                                    136
Lavatories/Locations        n/a                  (1) Fwd/(2) Aft            3
Galleys/Locations           Driessen             G1, G2 (Fwd) G4B (Aft)     3
Life Rafts                  n/a

Crew Life Vests             Air Cruisers         D21344-101                 10
Escape Slides (Fwd)         Air Cruisers         61620-468                  2
Escape Slides (Aft)         Air Cruisers         61620-469                  2
PBE Smoke Hood              Puritan              119003                     4
Flashlights                 DME                  P2-07-001-10               6
First Aid Kits              DME                  S6-01-0005-30              3
BCF Fire Extinguisher       Kidde                898052                     3
H2O Fire Extinguisher       Kidde                892480                     1
Hand Megaphone              ACR                  ACRE/M1A                   2
Port. Oxygen Cylinders      Scott                5500C1ABF23A               5
Fire Axe                                                                    1
Smoke Goggles                                                               4
Fire Resistant Gloves                                                       4



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LOOSE EQUIPMENT

CARGO NETS                    (1) SET


FLYAWAY KIT

Thrust Reverser Lockout Kit               (1)
Towing Eyebolt Assy                       (2)
Landing Gear Lock Pins (Main)             (2)
Landing Gear Lock Pins (Nose)             (1)
Steering Valve Lock Pin                   (1)

C Duct Pump (Part Number C-78005-1)
PMC Rig Pin (Part Number C-76001-2)








                                    

                                      100
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                                   SCHEDULE 1

                                     PART 2

                               AIRCRAFT DOCUMENTS


MANUALS

Maintenance Manual                  Microfilm [3]        Hard Copy [1]

Wiring Diagrams                     Microfilm [3]        Hard Copy [1]

Illustrated Parts Catalog           Microfilm [3]        Hard Copy [1]

Systems Schematics                  Microfilm [3]        Hard Copy [1]

Weight & Balance Manual             Microfilm [-]        Hard Copy [2]

Operations Manual                   Microfilm [-]        Hard Copy [2]

Flight Manual                       Microfilm [-]        Hard Copy [2]

Galley Manual                       Microfilm [-]        Hard Copy [1]

Seat Manual                         Microfilm [-]        Hard Copy [1]

Quick Reference Handbook            Microfilm [ ]        Hard Copy [2]

Structural Repair Manual            Microfilm [3]        Hard Copy [1]

Overhaul Manual                     Microfilm [2]        Hard Copy [-]

Performance Engineer's Manual       Microfilm [  ]       Hard Copy [2]

Detail Specification                Microfilm [  ]       Hard Copy [2]





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<PAGE>




TECHNICAL RECORDS

Certificate of Airworthiness
Aircraft Registration Certificate
Sanitation Certificate
Weight & Balance Report
Aircraft Readiness Log (ARL)
Engine Log Book (2 ea)
APU Log Book
Landing Gear Status Log
Statement of Airworthiness Directives
Miscellaneous Brochure
Fuel Calibration Brochure
Rigging Brochure
Engine Delivery Brochure (including LLP's and AD's)
APV Delivery documentation





                                      102
<PAGE>




                                   SCHEDULE 2


                            CERTIFICATE OF ACCEPTANCE



      This Certificate of Acceptance is delivered,  on the date set out below by
      Western  Pacific  Airlines,  Inc.  (the  "LESSEE"),  to  Wilmington  Trust
      Company, not in its individual capacity,  but solely as Owner Trustee (the
      "LESSOR"),  pursuant to the Aircraft Lease  Agreement dated June ___, 1997
      between the Lessor and the Lessee (the "AGREEMENT"). The capitalised terms
      used in this Certificate shall have the meaning given to such terms in the
      Agreement.


1.    DETAILS OF ACCEPTANCE

      The  Lessee  hereby  confirms  to the  Lessor  that the  Lessee has at ___
      o'clock on this ____ day of July 1997,  at  _______________,  accepted the
      following, in accordance with the provisions of the Agreement:

      (a) Boeing 737-300 airframe, Manufacturer's Serial No. 28871;

      (b) CFM  International,  Inc. CFM56-3C1  Engines,  bearing  Manufacturer's
          Serial Nos. 858-578 and 858-574;  each of which Engines is 750 or more
          rated takeoff horsepower;

      (c) Fuel Status:  Pounds ________

      (d) Safety and  Loose  Equipment  as  specified  in Schedule 1 - Part 1 of
          the Agreement.

      (e) Aircraft  Documents   as  specified  in  Schedule  1 -  Part 2 of  the
          Agreement.

2.    CONFIRMATION

      The Lessee  confirms  to the Lessor that as at the time  indicated  above,
      being the time of Delivery:

      (a) the  representations  and   warranties  of  the  Lessee  contained  in
          Clause 2 are hereby repeated;

      (b) the Aircraft is insured as required by the Agreement;

      (c) the Lessee  confirms  that there have been affixed to the Aircraft and
          the Engines the fireproof notices required by the Agreement;




                                      103
<PAGE>





                                   



                                    
      (d) the Lessee's authorised  technical experts have inspected the Aircraft
          to ensure the Aircraft conforms to the Lessee's requirements.


SIGNED on behalf of
WESTERN PACIFIC AIRLINES, INC.

By:    ............................................

Name:  ............................................

Title: ............................................



                                      104
<PAGE>



                                   SCHEDULE 3

                        OPERATING CONDITION AT REDELIVERY


      On the Expiry Date the Aircraft,  subject to fair wear and tear generally,
      will be in the condition set out below.



1.    GENERAL CONDITION

      The Aircraft shall:

      (a) be clean by airline standards;

      (b) have  installed the full  complement  of engines and other  equipment,
          parts and accessories and loose equipment  (including one complete set
          of removable  catering trolleys,  standard  containers and drawers and
          trays) as is normally  installed  in the  Aircraft,  and shall be in a
          condition suitable for immediate operation in commercial service;

      (c) have existing seat configuration;

      (d) have a Maximum Take Off Weight (MTOW) of 138,500 lbs

      (e) have in existence a valid certificate of airworthiness (or if required
          by the Lessor,  a valid  export  certificate  of  airworthiness)  with
          respect to the Aircraft issued by the Aviation Authority;

      (f) comply with the manufacturer's original specifications;

      (g) have undergone,  immediately  prior to redelivery,  the next scheduled
          "C"  Check and  lower  multiple  check  required  under  the  Approved
          Maintenance  Programme  so that all Airframe  inspections  falling due
          within  the  next  following   3,200  Flight  Hours  of  operation  in
          accordance with the Manufacturer's Maintenance Planning Document, have
          been accomplished;

      (h) have had  accomplished  all outstanding  airworthiness  directives and
          mandatory  orders  affecting that model of Aircraft  issued by the FAA
          which,  if the Aircraft were registered with the FAA, would have to be
          complied  with  during  the Term or within  180 days  after the Expiry
          Date;

      (i) all changes  (whether  by way of  modification,  repair or  otherwise)
          carried out to the Aircraft subsequent to the Delivery Date shall have
          been  carried  out in  accordance  with all FAA  requirements  and any
          repairs shall be classified as permanent by the FAA;

                                      105
<PAGE>


      (j) have  installed all  applicable  Vendor's and  manufacturer's  service
          bulletin  kits  received  free  of  charge  by  the  Lessee  that  are
          appropriate  for the Aircraft and to the extent not  installed,  those
          kits will be furnished free of charge to the Lessor;

      (k) Lessee's  external  livery shall be fully stripped down reasonably and
          repainted in such external livery as advised by the Lessor;

      (l) have no  installed  life-limited  Parts  which shall have a total time
          since new greater  than 120% that of the Airframe  provided  that with
          respect to all  installed  life limited  Parts taken as a group,  they
          shall have on  average a total time since new no greater  than that of
          the Airframe; and

2.    PARTS

      (a) Each  life-limited Part shall have not less than 3,000 Flight Hours of
          life remaining to the next scheduled  removal,  in accordance with the
          Agreed Maintenance Programme;

      (b) Each  calendar-limited  Part will have not less than twelve months (12
          months) life  remaining to its next  scheduled  removal in  accordance
          with the Agreed Maintenance Programme or 100% of its life if such life
          is less than twelve months (12 months); and

      (c) Each "on-condition" and "condition monitored" Part will be serviceable
          in accordance with the Aviation Authority prescribed parameters.

3.    ENGINES

      Each engine  installed on the Aircraft  shall be an Engine and (if not the
      engine  installed at Delivery)  shall be accompanied by all  documentation
      not  previously  provided  by the  Lessee to the  Lessor as the Lessor may
      require to evidence that title  thereto has been properly  conveyed to the
      Holder of Legal Title in accordance with Clause 8.17(a) and will:

      (a) have  not  less  than  3,000  Flight  Hours or  Cycles  expected  life
          remaining  (whichever is applicable  and the more limiting  factor) to
          the next complete  major overhaul or  refurbishment  of its compressor
          and turbine  sections.  The expected life remaining will be determined
          by  reference  to  the  average  number  of  Flight  Hours  or  Cycles
          (whichever is applicable  and the more  limiting  factor)  between the
          overhaul of engines for the last twelve  months (12 months)  operation
          of B737-300 in the Lessee's fleet.

                                      106
<PAGE>


      (b) have  no  defect  which  reduces  the   remaining   life  pursuant  to
          Manufacturer's  or airworthiness  requirements  until overhaul to less
          than 3,000 Flight Hours or Cycles;

      (c) have no less than 3,000 Flight Hours (or Cycles) life remaining of any
          hard time limited part; and

      (d) have a full power assurance check to be carried out in accordance with
          the Lessee's  Maintenance  Programme and any required  remedial action
          shall be undertaken.

4.    LANDING GEAR

      (a) The  installed  main  and  nose  landing  gear  components  and  their
          associated  actuators and parts will be cleared of all inspections for
          3,000 Flight Hours or Cycles  (whichever is the more limiting  factor)
          of operation.

      (b) The landing  tyres and brakes will have 50% of the wear,  as specified
          by the  manufacturer  as  serviceable  limits,  remaining  until  next
          removal.

      (c) The  landing  gear and wheel  wells  will be clean,  free of leaks and
          repaired as necessary.

5.    AUXILIARY POWER UNIT (APU)

      The APU shall be no more than 500 Flight Hours since its last overhaul.

6.    FUSELAGE, WINDOWS AND DOORS

      (a) The fuselage will not contain any dents,  corrosion or abrasions which
          exceed the prescribed  parameters under the Manufacturer's  structural
          repair  manual and shall be free of scab patches and loose,  pulled or
          missing rivets;

      (b) The windows  will not contain any  delamination,  blemishes or crazing
          which  exceed  the  prescribed  parameters  under  the  Manufacturer's
          maintenance manual and will be properly sealed; and

      (c) The doors will be free  moving,  correctly  rigged and be fitted  with
          serviceable seals.

7.    WINGS AND EMPENNAGE

      (a) Leading edges will not contain any damage which exceeds the prescribed
          parameters under the Manufacturer's structural repair manual;

                                      107
<PAGE>


      (b) Control surfaces will be waxed and polished;

      (c) Unpainted cowlings and fairings will be polished; and

      (d) Wings will be free of fuel leaks.

8.    INTERIOR

      (a) Interior  will be fully  serviceable  and as at delivery  otherwise as
          mutually agreed between the parties;

      (b) Emergency  equipment  shall meet FAA standard and have a calendar life
          with a minimum of 1 year or 100% of its total approved life, whichever
          is less, remaining;

      (c) Curtains,  carpets  and seat covers will be clean and free from stains
          and worn out  (threadbare)  areas,  and will meet FAR fire  resistance
          regulations.

      (d) Seats and panels will meet FAR fire resistance  regulations  which are
          effective at redelivery  and will be serviceable in good condition and
          repaired as necessary; and

      (e) All decals shall be clean, secure and legible.

9.    COCKPIT

      (a) Fairing  panels  shall be free of  stains  and  cracks,  will be clean
          secure and repainted as necessary;

      (b) Floor coverings will be clean and effectively sealed;

      (c) Seat covers will be in good condition,  clean and free of stains,  and
          will  meet FAR fire  resistance  regulations  which are  effective  at
          redelivery; and

      (d) Seats will be  serviceable,  in good  condition and will meet FAR fire
          resistance  regulations  which are effective at redelivery and will be
          repainted as necessary.

10.   CARGO COMPARTMENTS

      (a) Panels will be in good condition and effectively sealed; and

      (b) Nets will be in good condition.

                                      108
<PAGE>


11.   FLY-AWAY KIT

      The  fly-away  kit will be complete as delivered in the detail spec of the
      Aircraft.

12.   CORROSION

      (a) The  Aircraft  will have been  inspected  and treated  with respect to
          corrosion as defined in the Agreed Maintenance Programme;

      (b) The entire fuselage will be substantially free from corrosion and will
          be adequately treated and an approved corrosion  prevention  programme
          will be in operation; and

      (c) Fuel tanks will be free from  contamination  and  corrosion and a tank
          treatment programme will be in operation.




                                      109
<PAGE>



                                   SCHEDULE 4

                                     PART 1

                             INSURANCE REQUIREMENTS


1. The Insurances required to be maintained are as follows:

      (a) HULL "ALL  RISKS" of Loss or Damage  whilst  flying  and on the ground
          with  respect  to  the  Aircraft  for  the  Agreed  Value  and  with a
          deductible as shall be customary for United States airlines  similarly
          situated with Lessee but in any event not exceeding $[ ]*,  subject to
          any aggregate limit stipulated in such insurance;  provided,  however,
          that the Lessee insures for any deductible in excess of $[ ]*.

      (b) HULL WAR AND ALLIED PERILS, covering those risks excluded by AVN48B or
          its  equivalent  from the Hull 'All  Risks'  Policy to the extent such
          coverage is available from World Aviation Insurance Markets, including
          confiscation  and  requisition by the State of  Registration,  for the
          Agreed Value;

      (c) "ALL RISKS" PROPERTY  INSURANCE  (INCLUDING WAR AND ALLIED RISK except
          when on the  ground  or in  transit  other  than by air or sea) on all
          Engines  on an  "agreed  value"  basis and on Parts,  on a "repair  or
          replace  basis",  in each case when not  installed on the Aircraft (to
          the extent not covered under the Aircraft hull insurances described in
          paragraphs  (a) and (b)  above),  including  Engine  test and  running
          risks, on an agreed value basis in the case of the Engines;

      (d) AIRCRAFT  THIRD  PARTY,  BODILY  INJURY/PROPERTY  DAMAGE,   PASSENGER,
          BAGGAGE,  CARGO AND MAIL AND AIRLINE  GENERAL  THIRD PARTY  (INCLUDING
          PRODUCTS)   LEGAL  LIABILITY  for  a  combined  single  limit  (Bodily
          Injury/Property  Damage)  of an  amount  not  less  than  the  Minimum
          Liability Coverage for the time being in respect of any one occurrence
          (but, in respect of products liability, this limit may be an aggregate
          limit for any and all  losses  occurring  during the  currency  of the
          policy,  and in respect of liability  arising out of certain offences,
          the limit  (within  the said  combined  single  limit) may be $[ ]* in
          respect of any one offense and in the aggregate); War and Allied Risks
          are also to be  covered  under the  Policy to the  extent  customarily
          available in the World Aviation Insurance Markets.

2.    All required hull and spares insurance  (specified in (1)(a),  (b) and (c)
      above), so far as it relates to the Aircraft, will:

                                      110
<PAGE>


      (a) include the Lessor, the Trust Company, the Head Lessor, the Beneficial
          Owner and the Banks, and their respective  successors and assigns,  as
          additional assureds;

      (b) provide  that any loss  equal or in  excess  of $[ ]* will be  settled
          jointly  with the Lessor and the  Lessee and any claim  which  becomes
          payable  on the basis of a Total  Loss shall be paid in Dollars to the
          Lessor up to the Agreed Value as sole loss payee; with any other claim
          below $[ ]* to be  settled  by  Lessee  and  being  payable  as may be
          necessary for the repair of the damage to which it relates;

      (c) if separate Hull "All Risks" and "War Risks"  insurances are arranged,
          include a 50/50 provision in the terms of Lloyd's  endorsement AVS.103
          or its equivalent;

      (d) if required  under the Head Lease,  confirm  that the Insurers are not
          entitled to replace the Aircraft in the event of a Total Loss;

      (e) include a notice and/or acknowledgement of assignment (relating to the
          assignment  of the  Lessor's  interest in the  Insurances  to the Head
          Lessor or the Banks, as applicable) in a form reasonably acceptable to
          the Lessor; and

      (f) provide that insurance proceeds in excess of the Agreed Value shall be
          settled with and payable to the Lessee.

3. All required liability insurances (specified in (1)(d) above) will:

      (a) include the Lessor, the Trust Company,  the Beneficial Owner, the Head
          Lessor and the Banks and their  respective  successors and assigns and
          their  respective  shareholders,  subsidiaries,  directors,  officers,
          agents,  employees and  indemnitees  as additional  assureds for their
          respective rights and interests, warranted (each as to itself only) no
          operational  interest;  but the  coverage  provided  will not  include
          claims arising out of their legal liability as manufacturer,  repairer
          or servicing agent;

      (b) include a severability of interest clause,  in the terms of clause 2.1
          of the Lloyd's endorsement AVN 67B or its equivalent;

      (c) contain a  provision  confirming  that the policy is  primary  without
          right of contribution  and that the liability of the insurers will not
          be affected by any other insurance of which the Lessor, the Beneficial
          Owner, the Head Lessor, the Banks or the Lessee have the benefit.

      (d) accept and insure the indemnity  provisions  of this  Agreement to the
          extent of the risks covered by the relevant policy or policies.

                                      111
<PAGE>



4.    All Insurances will:

      (a) be in accordance  with normal industry  practice of persons  operating
          similar aircraft in similar circumstances;

      (b) operate on a worldwide  basis as is customarily  available  subject to
          such limitations and exclusions as may be notified to the Lessor;

      (c) acknowledge  that the insurers are aware that title to the Aircraft is
          held by the Holder of Legal Title and the  Aircraft is subject to this
          Agreement and the Head Lease,  and that the Lessor's  interests in the
          Insurances  are  subject  to a  security  assignment  in favour of the
          Banks, if applicable;

      (d) provide that,  in relation to the interests of each of the  additional
          assureds,  the  Insurances  will  not be  invalidated  by  any  act or
          omission of any other person or party which results in a breach of any
          terms  conditions  or warranty  of the  policy/ies  PROVIDED  THAT the
          additional  assured so  protected  has not caused,  contributed  to or
          knowingly condoned such act or omission;

      (e) provide  that the  Insurers  will waive any rights of recourse  and/or
          subrogation  against  the  additional  assureds,  (subject  to  and in
          accordance with clause 3.5 of the Lloyd's  endorsement AVN 67B) or its
          equivalent;

      (f) provide  that  the  additional  assured  will  have no  obligation  or
          responsibility  for the payment of any premiums (but reserve the right
          to pay the  same  should  any of them  elect  to do so) and  that  the
          Insurers will waive any right of set-off or  counterclaim  against the
          respective  additional assureds other than for outstanding premiums in
          respect of the Aircraft, any Engine or Part;

      (g) provide that,  except in the case of any provision for Cancellation or
          Automatic  Termination  specified in the  Policy/ies  or  Endorsements
          thereof,  the Insurance can only be cancelled or materially altered in
          a manner  adverse  to the  additional  assureds  by giving at least 30
          days'  written  notice to the  Lessor,  the Head Lessor and the Banks,
          except  in the  case  of  radioactive  contamination  as  per  Lloyd's
          endorsement  AVN 38A or its  equivalent,  for  which  7 days'  written
          notice (or such lesser period as is or may be customarily available in
          respect thereof) will be given;

      (h) if  required  under the Head Lease (with  respect to the Head  Lessor)
          contain a provision entitling the Lessor to initiate a claim under any
          policy, if so desired; and

      (i) provide cover  denominated in Dollars and any other  covenances  which
          the Lessor may reasonably require in relation to liability insurance.

                                      112
<PAGE>


5. Reinsurances will:

      (a) be on the  same  terms  as  the  Insurances  and  will  include  the
          provisions of this Schedule;

      (b) provide that, notwithstanding any bankruptcy, insolvency, liquidation,
          dissolution or similar proceedings of or affecting the reinsured,  the
          reinsurers' liability will be to make such payment thereunder as would
          have  fallen  due under the  relevant  policy  of  reinsurance  if the
          reinsured  had  (immediately   before  such  bankruptcy,   insolvency,
          liquidation,   dissolution  or  similar  proceedings)  discharged  its
          obligations in full under the original  insurance  policies in respect
          of which the then relevant  policy of  reinsurance  has been effected;
          and

      (c) contain a  "cut-through"  clause in the following  form (or such other
          form as is satisfactory  to the Lessor),  subject to the provisions of
          such clause not contravening any law of the State of Incorporation:

                "The  Reinsurers  and the  Reinsured  hereby agree that,  in the
                event of any claim arising under the  Reinsurances in respect of
                a total loss or other  claim  where,  as  provided  by the Lease
                Agreement  dated  ,  1997  and  made  between  Wilmington  Trust
                Company,  as lessor,  and Western  Pacific  Airlines,  Inc.,  as
                lessee,  such  claim is to be paid to the  person  named as sole
                loss payee under the primary insurances, the Reinsurers will, in
                lieu of payment to the Reinsured, its successors in interest and
                assigns,  pay to the person  named as sole loss payee  under the
                primary insurances effected by the Reinsured that portion of any
                loss for which the Reinsurers  would  otherwise be liable to pay
                the Reinsured  (subject to proof of loss),  it being  understood
                and agreed that any such payment by the Reinsurers  will (to the
                extent  of  such  payment)  fully   discharge  and  release  the
                Reinsurers  from any and all  further  liability  in  connection
                therewith".



                                      113
<PAGE>



                                     PART 2

                          FORM OF BROKER'S UNDERTAKING

             [Broker's Letter Issued by Marsh & McLennan Attached]



                                      114
<PAGE>



                                     PART 3

                          FORM OF INSURANCE CERTIFICATE

              [Certificate Issued by Marsh & McLennan Attached]



                                      115
<PAGE>


                           

                                  
                                   SCHEDULE 5

                 ACKNOWLEDGEMENTS IN CONNECTION WITH FINANCING


                                     PART 1


                              NOTICE OF ASSIGNMENT



FROM: _____________________________________

TO:       _____________________________________


                                Date

Dear Sirs,

We hereby give you notice that by an Assignment dated _____________,  19___ (the
"ASSIGNMENT")      between      us      and      _______________________      of
_________________________  (the  "ASSIGNEE")  we  have  assigned  absolutely  to
Assignee  all  our  right,  title  and  interest  in and to the  Aircraft  Lease
Agreement  dated June ___, 1997 (the "LEASE")  between  ourselves and yourselves
relating to one Boeing 737-300 aircraft with manufacturer's  serial number 28871
together with the installed ______________ engines (the "AIRCRAFT").

Accordingly,  all  moneys  which may be  payable  by you  under the Lease  shall
continue to be paid to the bank account  specified in the Lease unless and until
the Assignee  otherwise  directs,  whereupon you are  authorised and required to
comply with the Assignee's directions.

This  notice and the  instructions  herein  contained  are  irrevocable.  Please
acknowledge   receipt  of  this  notice  to  the   Assignee   on  the   enclosed
Acknowledgement.  You are hereby authorised to assume the obligations  expressed
to be assumed by you  thereunder  to the effect  that,  so far as the same would
otherwise be incompatible therewith, your obligations to us under the Lease will
be modified accordingly.

Yours faithfully,



For and on behalf of

---------------------------------------



                                      116
<PAGE>



                                     PART 2

                                 ACKNOWLEDGEMENT




FROM:  ________________________________________

TO:    ________________________________________
                                                     Date_____________________


Dear Sirs,

We acknowledge receipt of a Notice of Assignment dated ____________________ (the
"ASSIGNMENT  NOTICE")  relating  to an  assignment  (the  "ASSIGNMENT")  between
_________________  (the  "ASSIGNOR")  and you. We  acknowledge  that we will not
challenge the effectiveness of the Assignment to confer on you all rights, title
and interest of the Assignor under the Aircraft Lease  Agreement dated June ___,
1997  between  Assignor  and  ourselves  (the  "LEASE") in respect of one Boeing
737-300  aircraft  with  manufacturer's  serial  number 28871  together with the
installed __________________ engines.

In consideration of payment to us of $1 and the issue to us of a quiet enjoyment
letter, receipt of which we hereby acknowledge, we hereby agree as follows:

If you issue to us a notice (a the "LESSOR DEFAULT  NOTICE") that your rights as
assignee  under the  Assignment  have become  exercisable we agree that we shall
thereafter:

(a)    pay to you at such  account as you may  nominate  all  rentals  and other
       amounts from time to time payable by us under the Lease;

(b)    perform,   observe  and  comply  with  all  our  other  undertakings  and
       obligations under the Lease in your favour and for your benefit as if you
       were named as the Lessor therein instead of the Assignor; and

(c)    if you so request,  enter into a lease with you or your  nominee,  on the
       same terms  (mutatis  mutandis) as the Lease,  provided that the Lease is
       thereby terminated.

If the  Assignor  is in breach of any of its  obligations,  express or  implied,
under the Lease,  or if any event  occurs  which would  permit us to  terminate,
cancel or surrender the Lease we will:

(a)    promptly upon  becoming  aware of it, give you notice of such breach or
       event;

                                      117
<PAGE>


(b)    accept as adequate remedy for any such breach  performance by you of such
       obligations  within 7 days of our written  notice to you,  provided  that
       such  performance  by you fully  compensates  the Lessee for any damages,
       costs and  expenses  suffered  or incurred by the Lessee as the result of
       such breach; and

(c)    if you so request,  enter into a lease with you or your  nominee on terms
       identical  to the Lease,  mutatis  mutandis,  provided  that the Lease is
       hereby terminated.

We agree  that  after  issue by you of any Lessor  Default  Notice,  we will not
recognise the exercise by the Assignor of any of its rights and powers under the
Lease unless and until requested to do so by you.

We agree that you will have the  benefit  of Clause 10 of the Lease  (Indemnity)
and  agree  that we are  bound by the  terms of such  clause  for your  benefit,
provided that you agree that you are also bound by the terms of such clause,  in
each case, as though the same were set out herein in full, mutatis mutandis.

Yours faithfully,



For and on behalf of

--------------------------------------



                                      118
<PAGE>



                                   SCHEDULE 6

                                     PART 1

                              FORM OF LEGAL OPINION

                      [Smith, Gambrell's Opinion Attached]




                                      119
<PAGE>



                                   SCHEDULE 6

                                     PART 2

         FORM OF LEGAL OPINION OF ASSISTANT GENERAL COUNSEL OF LESSEE

                [Assistant General Counsel's Opinion Attached]




                                      120
<PAGE>



                                   SCHEDULE 7

                            FORM OF LETTER OF CREDIT]



TO:    WILMINGTON TRUST COMPANY,
       not in its individual capacity,
       but solely as Owner Trustee
       Rodney Square North
       1100 North Market Street
       Wilmington, Delaware 19890-0001




DATE:  _____________________



                            STANDBY LETTER OF CREDIT

At the request of Western Pacific  Airlines,  Inc. (the "LESSEE") for account of
same we hereby establish this irrevocable  Standby Letter of Credit to authorise
you to draw on  ______________  amount or amounts not exceeding in aggregate US$
_________________  upon receipt by us of the following  demand  certificate from
you:

       "The undersigned are authorised officers of Wilmington Trust Company, not
       in its individual  capacity,  but solely as Owner Trustee (the "LESSOR").
       We refer to the Lease  Agreement  dated June ___,  1997 (as  amended  and
       supplemented from time to time, the "LEASE AGREEMENT") between the Lessor
       and Western Pacific  Airlines,  Inc. (the "LESSEE") and we hereby certify
       that the Lessee has defaulted under the Lease Agreement. Accordingly, the
       Lessor  hereby  draws  upon  your  irrevocable  Letter  of  Credit  dated
       ________________ and we hereby instruct you to transfer immediately, with
       telex  confirmation  to us, the sum of US$  _______________  (US  Dollars
       ___________________________________) to Morgan Guaranty Trust Company, 23
       Wall  Street,  New York,  N.Y.  10260-0023,  for the  account  of Bank of
       Ireland, Group Treasury,  Dublin (Account No. 65919429) to be credited to
       Sunrock Aircraft Corporation Limited (Account No. 1422592).

We hereby agree with you that drawings  drawn under and in  compliance  with the
terms of this Letter of Credit received on or prior to ____________________ will
be duly  honoured  upon  receipt  by us of such a  demand  certificate.  Partial


                                      121
<PAGE>


drawings  are  permitted.  Payment of amounts  drawn under this Letter of Credit
shall be made in full,  without any set-off or counterclaim  whatsoever and free
and clear of any deductions or withholdings.

All our charges and commissions are for the account of the Lessee.

References in this Letter of Credit to the Lease Agreement dated June ___, 1997,
(as amended and supplemented from time to time, the "LEASE  AGREEMENT")  between
the Lessor and the Lessee are for  identification  purposes  only. The terms and
conditions of the Lease Agreement are not  incorporated in nor made part of this
Letter of Credit  and our  obligations  hereunder  will not be  affected  by any
matter  relating  to the  Lease  Agreement  or  the  obligations  of the  Lessee
thereunder including, without limitation, (i) any time or indulgence granted to,
or composition with, the Lessee or any other person; (ii) the taking,  exercise,
variation,  renewal or  release  of, or  neglect  to  perfect  or  enforce,  any
securities or any rights or remedies against the Lessee or any other person;  or
(iii) any unenforceability or invalidity of any obligation of the Lessee.

Until all amounts  which are or will become  payable to the Lessor by the Lessee
have been  irrevocably  paid in full we shall  not by  virtue of this  Letter of
Credit be subrogated to any of the Lessor's rights or claim in competition  with
the Lessor against the Lessee.

This Letter of Credit is not  transferable and constitutes an obligation to make
payment against  documents.  Except to the extent the express  provisions hereof
conflict,  this Letter of Credit is issued  subject to the  Uniform  Customs and
Practice for Documentary Credits, 1993 Revision, ICC Publication no. 500 (to the
extent applicable to Standby Letters of Credit).

This Letter of Credit is governed by and construed in  accordance  with the laws
of New York.

Upon  expiry  this  Standby  Letter of Credit  shall  become  null and void (but
without  prejudice to any claims made prior to expiry),  whether  returned to us
for cancellation or not, and any claim or statement  received after expiry shall
be ineffective.




SIGNED



-----------------------------------
Authorised Signatory



                                      122
<PAGE>



                                   SCHEDULE 8

                            ENGINE LIFE-LIMITED PARTS

          [To be provided by Lessee and approved by Beneficial Owner]



                                      123
<PAGE>




                                   SCHEDULE 9

                          FORM OF MONTHLY STATUS REPORT


       AIRCRAFT TYPE          REG. MARK       SERIAL NO.     MONTH  ENDING

       Boeing 737-300         N966WP          28871          .............



1.     AIRCRAFT UTILISATION:

(a)    Airframe Total Flight Hours
 ..................................................

(b)    Airframe Total Cycles
 ..................................................

(c)    Airframe Flight Hours for Month
 .................................................

(d)    Airframe Flight Cycles for Month
 .................................................


2.     POWERPLANT STATUS:     NO.1               NO.2

(a)    Serial Nos. of Delivered Engines          ............    .............

(b)    Serial Nos. of Replacement Engines        ............    .............
       (if applicable)

(c)    Serial Nos. of Installed Engines          ............    .............
       (if different from (a) or (b) above)

(d)    Current Location of Delivered or          ............    .............
       Replacement Engines (as applicable)
       (if not installed on Airframe)

(e)    Total Time Since New of Delivered         ............    ............
       or Replacement Engines (as applicable)

(f)    Total Cycles Since New of Delivered       ............    ............
       or Replacement Engines (as applicable)

(g)    Total Flight Hours for the Month for      ............    ............
       each Delivered or Replacement Engine
       (as applicable)

                                      124
<PAGE>


(h)    Total Cycles for the Month for each       ............    ............
       Delivered or Replacement Engine
       (as applicable)

(i)    Serial No. of Delivered APU                      ..............

(j)    Serial No. of Replacement APU                    ..............
       (if applicable)

(k)    Serial No. of Installed APU                      .............
       (if different from (a) or (b) above)

(l)    Current Location of Delivered or                 .............
       Replacement APU (as applicable)
       (if not installed on Airframe)

(m)    Total Time Since New of Delivered                .............
       or Replacement APU (as applicable)

(n)    Total Cycles Since New of Delivered              .............
       or Replacement APU (as applicable)

(o)    Total Hours for the Month for                    .............
       Delivered or Replacement APU
       (as applicable)

(p)    Total Cycles for the Month for                   .............
       Delivered or Replacement APU
       (as applicable)

3.     ROUTINE CHECKS / A.D. AND S.B. COMPLIANCE:

(a)    Routine Checks (A and above)              ....................
       performed during Month                    ....................
                                                 ....................

(b)    A.D.'s complied with during Month         ....................
                                                 ....................
                                                 ....................



                                      125
<PAGE>


(c)    S.B.'s complied with during Month         ....................
                                                 ....................
                                                 ....................


4.     AIRCRAFT DAMAGE OR ENGINE CHANGES:

       Details of any  repairs  carried  out to the  Aircraft beyond SRM limits,
       and     Engine     changes,     giving     reasons     for    repair   or
       change...................................................................
       .........................................................................



                                        CERTIFIED BY .......................
                                        For      and      on       behalf     of
[                      




                                      126
<PAGE>



                                   SCHEDULE 10

                     APPROVED JURISDICTIONS FOR SUB-LEASING


       Australia
       Austria
       Belgium
       Canada
       Denmark
       Finland
       France
       Germany
       Greece
       Iceland
       Indonesia
       Ireland
       Italy
       Luxembourg
       Malaysia
       Netherlands
       New Zealand
       Norway
       Portugal
       Singapore
       South Korea
       Spain
       Sweden
       Switzerland
       Thailand
       United Kingdom
       United States of America

The Lessor shall be entitled from time to time to give notice to the Lessee that
it wishes to delete one or more of the above  jurisdictions and the Lessee shall
be entitled from time to time to give notice to the Lessor that it wishes to add
one or more  jurisdictions  to the above list.  In the event of the issue of any
such notice the Lessor and the Lessee shall, as soon as reasonably  practicable,
consult in good faith as to the relevant deletion(s) or addition(s), as the case
may be. In the event that agreement is reached,  the above list shall be amended
accordingly.  If no such agreement is reached,  the above list may be amended in
such  a  manner  as  the  Lessor  may,  in its  reasonable  discretion  consider
appropriate,  provided that no  jurisdiction  shall be deleted unless the Lessor
specifies  the reasons are  commercially  reasonable  for such deletion and such
reasons are concerned  exclusively with the jurisdiction  itself (and not with a
particular operator in that jurisdiction).



                                      127
<PAGE>



                                   SCHEDULE 11

                        FORM OF LETTER OF QUIET ENJOYMENT

From:  SUNROCK AIRCRAFT CORPORATION LIMITED (the "undersigned")

To:    WESTERN PACIFIC AIRLINES, INC. (the "Lessee")

                                                                            1997

In Re: One Boeing  737-300  Aircraft,  Manufacturer's Serial  Number  28871 (the
       "Aircraft")/Aircraft   Lease  Agreement  (the   "Lease")  dated      1997
       between Wilmington Trust Company (the "Lessor") and the Lessee

Dear Sirs:

1. In  consideration of $10 and other good and valuable  consideration  received
from the Lessee  and/or the Lessor the receipt of which is hereby  acknowledged,
we confirm to you that,  so long as no  Significant  Default or Event of Default
(as defined in the Lease) has  occurred  and is  continuing,  neither we nor any
person or entity lawfully  claiming by or through Sunrock  Aircraft  Corporation
Limited,  as Beneficial  Owner, will interfere with the quiet possession and use
of the  Aircraft by the Lessee,  subject at all times to the terms of the Lease;
provided that the exercise by us or our assigns of our rights or remedies  under
or in connection with the Lease will not constitute such an interference.

2. The foregoing undertaking is not to be construed as restricting the rights of
the  undersigned  to dispose of its interest in the Aircraft to such persons and
on such terms as it considers appropriate. However, if the undersigned exercises
such rights  during the term of the Lease and  provided  that at or prior to the
time of such disposal a  Significant  Default or an Event of Default (as defined
in the Lease) has not occurred and is continuing the undersigned will dispose of
the  Aircraft  expressly  subject  to the  Lease  and  procure a letter of quiet
enjoyment  with the same  terms  (mutatis  mutandis)  as this  letter  from such
transferee.

3.  The  undersigned  hereby  represents  to  Lessee  that  (i) it is a  limited
liability  company duly  organized  and validly  existing  under the laws of the
Republic of Ireland and has the  organizational  power to enter into and perform
its  obligations  under this letter of quiet enjoyment and to own its assets and
carry on its business as it is now being conducted and (ii) this letter of quiet
enjoyment is the legal, valid and binding obligation of the undersigned.

4. This  Letter of Quiet  Enjoyment  shall be  governed  by,  and  construed  in
accordance with, the internal laws of the State of New York.





                                      128
<PAGE>






                                      



                                      
Please  countersign  this letter to confirm your  agreement to the  arrangements
contained herein.


For and on behalf of

SUNROCK AIRCRAFT CORPORATION LIMITED,
as Beneficial Owner


--------------------



Agreed and accepted

--------------------

For and on behalf of

WESTERN PACIFIC AIRLINES, INC.






                                      129
<PAGE>