================================================================================



                            AIRCRAFT LEASE AGREEMENT


                            Dated as of May 31, 1996


                                     BETWEEN


                         WESTERN PACIFIC AIRLINES, INC.


                                    as LESSEE


                                       and


                     INTERNATIONAL LEASE FINANCE CORPORATION


                                    as LESSOR

================================================================================


Aircraft Make and Model:                         Used Boeing 737-3Q8
Aircraft Manufacturer's Serial Number:           2299
Aircraft Registration Mark:                      N956WP (Formerly,
EC-FER)
Make and Model of Engines:                            CFM-56-3B2
Serial Numbers and Engines:                      722248 and 722249


                               USED AIRCRAFT NO. 1
                               ===================


<PAGE>



                                TABLE OF CONTENTS


ARTICLE 1     SUMMARY OF TRANSACTION.........................................  2
      1.1     Description of Aircraft .......................................  2
      1.2     Scheduled Delivery Date and Location...........................  2
      1.3     Lease Term.....................................................  2
      1.4     Security Deposit...............................................  2
      1.5     Transaction Fee................................................  2
      1.6     Rent During Initial Lease Term.................................  2
      1.7     Reserves.......................................................  2
      1.8     Additional Rent for Excess Cycles..............................  2
      1.9     Country of Aircraft Registration...............................  3
      1.10    Maintenance Program............................................  3
      1.11    Agreed Value of Aircraft.......................................  3
      1.12    LESSOR's Bank Account..........................................  3

ARTICLE 2     DEFINITIONS....................................................  4
      2.1     General Definitions............................................  4
      2.2     Specific Definitions...........................................  7

ARTICLE 3     PLACE AND DATE OF DELIVERY.....................................  9
      3.1     Place of Delivery..............................................  9
      3.2     Scheduled Delivery Date........................................  9
      3.3     No LESSOR Liability............................................  9
      3.4     Total Loss of Aircraft Prior to Delivery.......................  9
      3.5     Cancellation for Delay.........................................  9
      3.6     Cancellation for Anticipated Delay.............................  9

ARTICLE 4     LEASE TERM..................................................... 11
      4.1     Lease Term..................................................... 11
      4.2     "Expiration Date".............................................. 11
      4.3     "Termination Date"............................................. 11
      4.4      Survival of Certain LESSEE Obligations........................ 12

ARTICLE 5      SECURITY DEPOSIT, TRANSACTION FEE, RENT,
               RESERVES AND OTHER PAYMENTS................................... 13
      5.1      Security Deposit.............................................. 13
      5.2      Transaction Fee............................................... 13
      5.3      Rent.......................................................... 13
      5.4      Reserves...................................................... 14
      5.5      Additional Rent for Excess Cycles............................. 15
      5.6      LESSOR's Bank Account......................................... 15
      5.7      Default Interest.............................................. 15
      5.8      No Deductions or Withholdings................................. 16

                                        i


<PAGE>



      5.9      Value Added Taxes............................................. 16
      5.10     Wire Transfer Disbursement Report............................. 16
      5.11     Net Lease..................................................... 16
      5.12     LESSOR Performance of LESSEE Obligation....................... 18
      5.13     Consideration for Rent and Other Amounts...................... 18

ARTICLE 6      DELIVERY CONDITION AND INSPECTION OF
               AIRCRAFT...................................................... 19
      6.1      LESSEE Selection of Aircraft.................................. 19
      6.2      Condition at Delivery......................................... 19
      6.3      LESSEE Inspection of Aircraft at Delivery..................... 19
      6.4      Delivery of Aircraft to LESSEE................................ 19

ARTICLE 7      PRE-DELIVERY, DELIVERY AND POST-DELIVERY
               DOCUMENTARY AND OTHER REQUIREMENTS............................ 20
      7.1      Pre-Delivery Requirements..................................... 20
      7.2      Delivery Requirements......................................... 20
      7.3      Post-Delivery Requirements.................................... 22

ARTICLE 8      DISCLAIMERS................................................... 23
      8.1      "As Is, Where Is"............................................. 23
      8.2      Waiver of Warranty of Description............................. 23
      8.3      LESSEE Acknowledgement........................................ 23
      8.4      LESSEE Waiver................................................. 23
      8.5      Conclusive Proof.............................................. 24
      8.6      No LESSOR Liability for Losses................................ 24
      8.7      No Liability to Repair or Replace............................. 24
      8.8      No Waiver..................................................... 24

ARTICLE 9      MANUFACTURERS' AND VENDORS' WARRANTIES........................ 25
      9.1      Warranties.................................................... 25
      9.2      Reassignment.................................................. 25
      9.3      Warranty Claims............................................... 25

ARTICLE 10     OPERATION OF AIRCRAFT......................................... 26
      10.1     Costs of Operation............................................ 26
      10.2     Compliance with Laws.......................................... 26
      10.3     Training...................................................... 26
      10.4     No Violation of Insurance Policies............................ 26
      10.5     Flight Charges................................................ 26

ARTICLE 11     SUBLEASES..................................................... 28
      11.1     No Sublease without LESSOR Consent............................ 28
      11.2     Subleasing Proposal Fee....................................... 28
      11.3     Civil Reserve Air Fleet Program............................... 28


                                       ii


<PAGE>



      11.4     Any Approved Sublease......................................... 28
      11.5     Assignment of Sublease........................................ 29
      11.6     Continued Responsibility of LESSEE............................ 29

ARTICLE 12     MAINTENANCE OF AIRCRAFT....................................... 30
      12.1     General Obligation............................................ 30
      12.2     Specific Obligations.......................................... 30
      12.3     Replacement of Parts.......................................... 32
      12.4     Removal of Engines............................................ 33
      12.5     Installation of Engines on other aircraft..................... 33
      12.6     Modifications................................................. 34
      12.7     Pooling of Engines and Parts.................................. 35
      12.8     Performance of Work by Third Parties.......................... 35
      12.9     Reporting Requirements........................................ 35
      12.10    Information Regarding Maintenance Program..................... 36
      12.11    LESSOR Rights to Inspect Aircraft............................. 36

ARTICLE 13     USE OF RESERVES............................................... 37
      13.1     Airframe Reserves............................................. 37
      13.2     Engine Reserves............................................... 37
      13.3     Reimbursement................................................. 37
      13.4     Reimbursement Adjustment...................................... 38
      13.5     Costs in Excess of Reserves................................... 38
      13.6     Reimbursement after Termination Date.......................... 38

ARTICLE 14     TITLE AND REGISTRATION........................................ 39
      14.1     Title to the Aircraft During Lease Term....................... 39
      14.2     Registration of Aircraft...................................... 39
      14.3     Filing of this Lease.......................................... 39

ARTICLE 15     IDENTIFICATION PLATES......................................... 40

ARTICLE 16     TAXES......................................................... 41
      16.1     General Obligation of LESSEE.................................. 41
      16.2     Exceptions to Indemnity....................................... 41
      16.3     After-Tax Basis............................................... 42
      16.4     Timing of Payment............................................. 42
      16.5     Contests...................................................... 42
      16.6     Tax Benefits.................................................. 43
      16.7     Cooperation in Filing Tax Returns............................. 43
      16.8     Survival of Obligations....................................... 43

ARTICLE 17     INDEMNITIES................................................... 44
      17.1     General Indemnity............................................. 44
      17.2     Exceptions to General Indemnities............................. 45
      17.3     After-Tax Basis............................................... 45
      17.4     Timing of Payment............................................. 45
      17.5     Subrogation................................................... 46

                                       iii


<PAGE>



      17.6     Notice........................................................ 46
      17.7     Refunds....................................................... 46
      17.8     Defense of Claims............................................. 46
      17.9     Survival of Obligation........................................ 46

ARTICLE 18     INSURANCE..................................................... 47
      18.1     Categories of Insurance....................................... 47
      18.2     Insurance for Indemnities..................................... 47
      18.3     Renewal....................................................... 47
      18.4     Assignment of Rights by LESSOR................................ 47
      18.5     Deductibles................................................... 47
      18.6     Other Insurance............................................... 47
      18.7     Information................................................... 48
      18.8     Currency...................................................... 48
      18.9     Grounding of Aircraft......................................... 48
      18.10    Failure to Insure............................................. 48
      18.11    Reinsurance................................................... 48
      18.12    Limit on Hull in favor of LESSEE.............................. 49

ARTICLE 19     LOSS, DAMAGE AND REQUISITION.................................. 50
      19.1     Definitions................................................... 50
      19.2     Notice of Total Loss.......................................... 51
      19.3     Total Loss of Aircraft or Airframe............................ 51
      19.4     Surviving Engine(s)........................................... 52
      19.5     Total Loss of Engine and not Airframe......................... 52
      19.6     Other Loss or Damage.......................................... 53
      19.7     Government Requisition........................................ 54
      19.8     Division of Reserves.......................................... 54

ARTICLE 20     REPRESENTATIONS, WARRANTIES AND COVENANTS
               OF LESSEE..................................................... 55
      20.1     Representations and Warranties................................ 55
      20.2     Covenants..................................................... 57

ARTICLE 21     REPRESENTATIONS, WARRANTIES AND COVENANTS
               OF LESSOR..................................................... 58
      21.1     Representations and Warranties................................ 58
      21.2     Covenants..................................................... 58

ARTICLE 22     FINANCIAL AND RELATED INFORMATION............................. 60
      22.1     Information about Suits....................................... 60

ARTICLE 23     RETURN OF AIRCRAFT............................................ 61
      23.1     Date of Return................................................ 61
      23.2     Technical Reporting........................................... 61
      23.3     Return Location............................................... 61

                                       iv


<PAGE>



      23.4     Aircraft Documentation Review................................. 61
      23.5     Aircraft Inspection........................................... 61
      23.6     Certificate of Airworthiness Matters.......................... 62
      23.7     General Condition of Aircraft at Return....................... 63
      23.8     Checks Prior to Return........................................ 65
      23.9     Part Lives.................................................... 67
      23.10    LESSEE's Continuing Obligations............................... 70
      23.11    Return Acceptance Certificate................................. 71
      23.12    Indemnities and Insurance..................................... 71

ARTICLE 24     ASSIGNMENT.................................................... 72
      24.1     No Assignment by LESSEE....................................... 72
      24.2     Sale or Assignment by LESSOR.................................. 72
      24.3     LESSEE Cooperation............................................ 73
      24.4     Protections................................................... 73

ARTICLE 25     DEFAULT OF LESSEE............................................. 75
      25.1     LESSEE Notice to LESSOR....................................... 75
      25.2     Events of Default............................................. 75
      25.3     LESSOR's General Rights....................................... 76
      25.4     Deregistration and Export of Aircraft......................... 77
      25.5     LESSEE Liability for Damages.................................. 77
      25.6     Waiver of Default............................................. 78
      25.7     Present Value of Payments..................................... 78
      25.8     Use of "Termination Date"..................................... 79
      25.9     Mitigation of Damages......................................... 79

ARTICLE 26     NOTICES....................................................... 80
      26.1     Manner of Sending Notices..................................... 80
      26.2     Notice Information............................................ 80

ARTICLE 27     GOVERNING LAW AND JURISDICTION................................ 81
      27.1     California Law................................................ 81
      27.2     Non-Exclusive Jurisdiction in California...................... 81
      27.3     Service of Process............................................ 81
      27.4     Prevailing Party in Dispute................................... 81
      27.5     Waiver........................................................ 81

ARTICLE 28     MISCELLANEOUS................................................. 82
      28.1     Press Releases................................................ 82
      28.2     Power of Attorney............................................. 82
      28.3     LESSOR Performance for LESSEE................................. 82
      28.4     LESSOR's Payment Obligations.................................. 82
      28.5     Usury Laws.................................................... 82
      28.6     Delegation by LESSOR.......................................... 82
      28.7     Confidentiality............................................... 83

                                        v


<PAGE>


      28.8     Rights of Parties............................................. 83
      28.9     Further Assurances............................................ 83
      28.10    Use of Word "including"....................................... 83
      28.11    Headings...................................................... 83
      28.12    Invalidity of any Provision................................... 83
      28.13    Negotiation................................................... 83
      28.14    Time is of the Essence........................................ 84
      28.15    Amendments in Writing......................................... 84
      28.16    Counterparts.................................................. 84
      28.17    Delivery of Documents by Fax.................................. 84
      28.18    Entire Agreement.............................................. 84

EXHIBIT A      AIRCRAFT DESCRIPTION.......................................... 86
EXHIBIT B      CONDITION AT DELIVERY......................................... 87
EXHIBIT C      CERTIFICATE OF INSURANCE...................................... 89
EXHIBIT D      BROKERS' LETTER OF UNDERTAKING................................ 95
EXHIBIT E      ESTOPPEL AND ACCEPTANCE CERTIFICATE........................... 97
EXHIBIT F      OPINION OF COUNSEL............................................104
EXHIBIT G      ASSIGNMENT OF RIGHTS (AIRFRAME)...............................107
EXHIBIT H      ASSIGNMENT OF RIGHTS (ENGINES)................................110
EXHIBIT I      RETURN ACCEPTANCE RECEIPT.....................................113
EXHIBIT J      MONTHLY REPORT................................................120
EXHIBIT K      AIRCRAFT DOCUMENTATION........................................123
EXHIBIT L      TECHNICAL EVALUATION REPORT...................................124


                                       vi


<PAGE>


                            AIRCRAFT LEASE AGREEMENT


         THIS AIRCRAFT LEASE  AGREEMENT is made and entered into as of this 31st
day of May, 1996.

         BETWEEN:

         WESTERN PACIFIC  AIRLINES,  INC., a Delaware  corporation whose address
and  principal  place of business  is at 2864 South  Circle  Drive,  Suite 1100,
Colorado  Springs,   CO  80906  ("LESSEE")  and   INTERNATIONAL   LEASE  FINANCE
CORPORATION,  a California  corporation  whose  address and  principal  place of
business is at 1999 Avenue of the Stars,  39th Floor,  Los  Angeles,  California
90067 ("LESSOR").

         The  subject  matter  of this  Lease  is one (1) used  Boeing  737- 3Q8
aircraft.

         In  consideration  of and  subject to the mutual  covenants,  terms and
conditions  contained in this Lease, LESSOR hereby agrees to lease to LESSEE and
LESSEE  hereby  agrees to lease from LESSOR the  Aircraft for the Lease Term and
the parties further agree as follows:



<PAGE>



         ARTICLE 1     SUMMARY OF TRANSACTION
         ---------     ----------------------

         The following is a summary of the lease transaction  between LESSEE and
LESSOR.  It is set forth for the convenience of the parties only and will not be
deemed in any way to amend,  detract  from or simplify the other  provisions  of
this Lease.

1.1               Description of Aircraft

                           One used Boeing 737-3Q8

1.2               Scheduled Delivery Date and Location

                           On or about June 20, 1996 at Pemco  Aeroplex,  Inc.'s
                           facility in Dothan, Alabama or such other location as
                           may be mutually agreed upon by LESSOR and LESSEE.

1.3               Lease Term

                           10 years

1.4               Security Deposit

                           US$ 700,000, payable as follows:

                           Received                     350,000
                           Upon execution of the Lease  350,000

1.5               Transaction Fee

                           US$ 15,000, payable upon execution of this Lease

1.6               Rent During Initial Lease Term

                           US$  239,350  per month for the first four (4) months
                           of the Lease Term,  and  thereafter,  US$ 243,350 per
                           month for the remainder of the Lease Term, payable in
                           advance

1.7               Reserves

                           A total of US$ 245, as follows:

                           Airframe Reserve:    US$ 75 per airframe flight
                                                hour

                           Engine Reserve:      US$ 85 per engine flight hour
                                                for each Engine

1.8               Additional Rent for Excess Cycles

                           US$ 150 for each cycle the aircraft operated
                           during a calendar year in excess of the maximum


                                       -2-

<PAGE>



                           number of cycles which would result from an
                           average hour/cycle ratio of 1.5 hours to 1 cycle

1.9               Country of Aircraft Registration

                           United States

1.10              Maintenance Program

                           LESSEE's Maintenance Program

1.11              Agreed Value of Aircraft

                           US$ 23,500,000 during years 1-5
                           US$ 20,000,000 during years 6-10

1.12              LESSOR's Bank Account

                           International Lease Finance Corporation Account
                           No. 2-181-01503-9
                           National Westminster Bank USA
                           SPEC Leasing Midwest
                           175 Water Street
                           New York, NY 10038
                           ABA# 021200339


                                       -3-

<PAGE>



         ARTICLE 2     DEFINITIONS
         ---------     -----------

         Except where the context otherwise  requires,  the following words have
the  following  meanings for all  purposes of this Lease.  The  definitions  are
equally  applicable to the singular and plural forms of the words. Any agreement
defined  below  includes each  amendment,  modification,  supplement  and waiver
thereto in effect from time to time.

2.1               General Definitions.

                  "Aircraft" means the Airframe,  the two (2) Engines, the Parts
and  the  Aircraft  Documentation,   collectively.   As  the  context  requires,
"Aircraft"  may also mean the  Airframe,  any  Engine,  any Part,  the  Aircraft
Documentation or any part thereof  individually.  For example, in the context of
return to LESSOR the term  "Aircraft"  means the  Airframe,  Engines,  Parts and
Aircraft Documentation  collectively,  yet in the context of LESSEE not creating
any Security  Interests  other than  Permitted  Liens on the Aircraft,  the term
"Aircraft"  means any of the  Airframe,  any  Engine,  any Part or the  Aircraft
Documentation individually.

                  "Aircraft  Documentation"  means all (i) log  books,  Aircraft
records,  manuals and other documents  provided to LESSEE in connection with the
Aircraft,  (ii)  documents  listed in the  exhibit  to the actual  Estoppel  and
Acceptance  Certificate and (iii) any other documents  required to be maintained
during the Lease Term by the Aviation  Authority,  LESSEE's  Maintenance Program
and this Lease.

                  "Airframe" means the airframe  described in Exhibit A together
with all Parts relating thereto.

                  "Aviation  Authority"  means the FAA or any Government  Entity
which  under  the Laws of the U.S.  from  time to time has  control  over  civil
aviation or the registration, airworthiness or operation of aircraft in the U.S.
If the  Aircraft  is  registered  in a country  other  than the U.S.,  "Aviation
Authority"  means the  agency  which  regulates  civil  aviation  in such  other
country.

                  "Aviation  Documents"  means any or all of the following which
at any time  may be  obtainable  from the  Aviation  Authority  in the  State of
Registration:  (i) an  application  for  registration  of the Aircraft  with the
appropriate  authority in the State of  Registration,  which will be provided by
LESSOR,  (ii) the  certificate of  registration  for the Aircraft  issued by the
State  of  Registration,  which  is  to be  provided  by  LESSOR  (iii)  a  full
certificate of  airworthiness  for the Aircraft  specifying  transport  category
(passenger) to be provided by LESSOR, (iv) an air transport license,  (v) an air
operator's certificate,  (vi) such recordation of LESSOR's title to the Aircraft
and interest in this Lease as may be available in the State of Registration  and
(vii) all such other authorizations, approvals, consents and


                                       -4-

<PAGE>



certificates  in the State of  Registration  as may be required to enable LESSEE
lawfully to operate the Aircraft.

                  "Business  Day" means a day other than a Saturday or Sunday on
which the banks in the city  where  LESSOR's  Bank is  located  and in  Colorado
Springs,  Colorado are open for the transaction of business of the type required
by this Lease.

                  "Creditor" means any lessor, owner, bank, lender, mortgagee or
other Person which is the owner of or has any interest in an aircraft  engine or
aircraft operated by LESSEE.

                  "Creditor  Agreement" means the applicable agreement between a
Creditor  and LESSEE  pursuant  to which such  Creditor  owns,  leases or has an
interest  in either an  aircraft  operated  by LESSEE on which an Engine  may be
installed or in an aircraft engine which may be installed on the Airframe.

                  "Default"  means any event  which,  upon the giving of notice,
the lapse of time and/or a relevant determination,  would constitute an Event of
Default.

                  "Delivery"  means the  delivery  of the  Aircraft by LESSOR to
LESSEE pursuant to Articles 3 and 6.

                  "Delivery Date" means the date on which Delivery takes place.

                  "Dollars" and "$" means the lawful currency of the U.S.

                  "Engine"  means (i) each of the engines listed on the Estoppel
and Acceptance  Certificate;  (ii) any replacement engine acquired by LESSOR and
leased to LESSEE  pursuant to Article 19.5  following a Total Loss of an Engine;
and (iii) all Parts  installed  in or on any of such  engines  at  Delivery  (or
substituted,  renewed or  replacement  Parts  installed in accordance  with this
Lease) so long as title  thereto  is or remains  vested in LESSOR in  accordance
with the terms of Article 12.3.

                  "Event of  Default"  means any of the  events  referred  to in
Article 25.2.

                  "FAA"  means  the  Federal  Aviation   Administration  of  the
Department of Transportation or any successor thereto under the Laws of the U.S.

                  "FARs" means the U.S. Federal Aviation Regulations embodied in
Title 14 of the U.S. Code of Federal Regulations,  as amended from time to time,
or any successor regulations thereto.

                  "Government  Entity"  means any (i)  national,  state or local
government, and (ii) board, commission,  department, division,  instrumentality,
court, agency or political subdivision thereof.


                                       -5-

<PAGE>




                  "Law" means any (i) statute, decree, constitution, regulation,
order or any directive of any Government Entity,  (ii) treaty,  pact, compact or
other agreement to which any Government Entity is a signatory or party and (iii)
judicial  or  administrative   interpretation  or  application  of  any  of  the
foregoing.

                  "Lease" means this Aircraft Lease Agreement, together with all
Exhibits, side letters and amendments hereto.

                  "LESSOR's  Lien" means any  Security  Interest  arising as the
result of any act or  omission  of LESSOR or any Person  claiming  by or through
LESSOR.

                  "Maintenance  Program" means LESSEE's  maintenance  program as
approved by the Aviation  Authority or such other maintenance  program as LESSOR
may, in its absolute discretion, accept in writing.

                  "Manufacturer" means Boeing Commercial Airplane Group.

                  "MPD" means the Maintenance Planning Document published by the
Manufacturer and applicable to the Aircraft.

                  "Overhaul" means the full  refurbishment  of the Aircraft,  an
Engine,  APU,  landing  gear,  module or Part, as the case may be, in which such
equipment  has  been  disassembled;   cleaned  thoroughly  inspected,  repaired,
reworked  or  had a  replacement  of  parts;  reassembled;  and  tested  to  the
tolerances  and standards  specified by the applicable  manufacturer's  overhaul
procedures  manual or equivalent  establishing  conformity to its type design as
evidenced by a complete  record of all work performed  during the course of such
full refurbishment and that the Aircraft,  Engine,  APU, landing gear, module or
Part, as the case may be, is airworthy and released for return to service.

                  "Part" means any part,  component,  appliance,  system module,
engine module, the auxiliary power unit (APU), accessory,  material, instrument,
communications  equipment,  furnishing,   LESSEE-furnished  or  LESSOR-purchased
equipment or other item of equipment  (other than  complete  Engines or engines)
for the time being  installed  in or attached  to the  Airframe or any Engine or
which, having been removed from the Airframe or any Engine, remains the property
of LESSOR.

                  "Permitted  Lien"  means (i)  LESSOR's  Liens;  (ii)  Security
Interests  arising in the ordinary course of LESSEE's  business for Taxes either
not yet assessed or, if assessed,  not yet due or being  contested in good faith
in accordance with Article 16.5 or (iii) materialmen's,  mechanics',  workmen's,
repairmen's, employees' liens or similar Security Interests arising by operation
of Law after the Delivery  Date in the ordinary  course of LESSEE's  business or
judgments  for amounts  which are either not yet due or are being  contested  in
good faith


                                       -6-

<PAGE>



by appropriate  proceedings (and for which adequate  reserves have been made or,
when  required in order to pursue such  proceedings,  an adequate  bond has been
provided)  so long as such  proceedings  do not  involve  any  danger  of  sale,
forfeiture or loss of the Aircraft.

                  "Person"  means  any  individual,  firm,  partnership,   joint
venture, trust, corporation, Government Entity, committee, department, authority
or any body,  incorporated  or  unincorporated,  whether  having  distinct legal
personality or not.

                  "Prime  Rate"  means  the rate of  interest  from time to time
announced by National Westminster Bank USA as its prime commercial lending rate.

                  "Prior   Lessee"  means  VIVA,   Vuelos   Internacionales   de
Vacaciones, S.A.


                  "Prior  Lessee Lease  Agreement"  means the Aircraft  SubLease
Agreement  dated  November 1, 1990  between  Prior  Lessee and ILFC Belgium S.A.
pursuant to which Prior  Lessee is  subleasing  the  Aircraft  from ILFC Belgium
S.A., a subsidiary of LESSOR which is leasing the Aircraft from LESSOR  pursuant
to the Headlease dated November 1, 1990.

                  "Security   Interest"   means  any   encumbrance  or  security
interest,  however and wherever created or arising including  (without prejudice
to the generality of the foregoing) any right of ownership,  security, mortgage,
pledge,  charge,  encumbrance,  lease,  lien,  statutory  or other right in rem,
hypothecation,  title retention,  attachment, levy, claim or right of possession
or detention.

                  "State of  Registration"  means the U.S. or such other country
or  state of  registration  of the  Aircraft  as  LESSOR  may,  in its  absolute
discretion, approve in writing.

                  "U.S." means the United States of America.

2.2               Specific  Definitions.  The following terms are defined in the
Articles referenced below:

                  Terms                              Article
                  -----                              -------

                  Agreed Value                       19.1
                  Airframe Reserves                  5.4.1
                  Default Interest                   5.7
                  Delivery Location                  3.1
                  Engine Reserves                    5.4.1
                  Expenses                           17.1
                  Expiration Date                    4.2
                  Indemnitees                        17.1
                  Initial Lease Term                 4.1


                                       -7-

<PAGE>



                  Lease Term                         4.2
                  LESSOR's Assignee                  24.2.2
                  LESSOR's Bank                      5.6
                  Modification                       12.6.1
                  Net Total Loss Proceeds            19.1
                  Operative Documents                20.1.3
                  Rent                               5.3.1
                  Reserves                           5.4.1
                  Scheduled Delivery Date            3.2
                  Security Deposit                   5.1.1
                  Taxes                              16.1
                  Termination Date                   4.3
                  Total Loss                         19.1
                  Total Loss Date                    19.1
                  Total Loss Proceeds                19.1
                  Transaction Fee                    5.2


                                       -8-

<PAGE>



         ARTICLE 3     PLACE AND DATE OF DELIVERY
         ---------     --------------------------

3.1               Place of Delivery.  LESSOR will deliver the Aircraft to LESSEE
at Dothan,  Alabama or such other place as may be agreed in writing  between the
parties (the "Delivery Location").

3.2               Scheduled  Delivery  Date.  As of  the  date  of  this  Lease,
Delivery of the  Aircraft  hereunder  is scheduled to occur on or about June 20,
1996.  LESSOR will notify LESSEE from time to time and in a timely manner of the
exact date on which LESSOR  expects  Delivery to take place and will give LESSEE
at least 24 hours notice of the actual  Delivery date (the  "Scheduled  Delivery
Date").

3.3               No LESSOR Liability. LESSOR will not be liable for any loss or
expense, or any loss of profit, arising from any delay or failure in Delivery to
LESSEE  unless  such  delay or  failure  arises as a direct  consequence  of the
willful misconduct of LESSOR;  provided,  however,  in the event LESSOR receives
compensation,  including  without  limitation  penalty  rent, if any, from Prior
Lessee as a result of Prior  Lessee's  delay in returning  the  Aircraft,  after
LESSOR has  deducted a sum equal to the Rent  LESSOR  would have  received  from
LESSEE on a daily basis had the Aircraft been delivered on time, LESSOR will pay
to LESSEE any such compensation which LESSOR receives from Prior Lessee.

3.4               Total Loss of Aircraft  Prior to Delivery.  If a Total Loss of
the Aircraft  occurs prior to Delivery,  this Lease will  terminate  and neither
party will have any  further  liability  to the other  except  that  LESSOR will
return to LESSEE the Security Deposit, the Transaction Fee and any prepaid Rent.

3.5               Cancellation  for Delay. If a delay, not caused by LESSEE's or
LESSOR's breach of this Lease,  causes  Delivery to be delayed beyond  September
20, 1996,  LESSEE will have the right to terminate  this Lease by giving  LESSOR
written notice within ten (10) Business Days after such date and this Lease will
terminate  on the  date  of  receipt  of  such  notice.  In the  event  of  such
termination,  neither party will have any further  liability to the other except
that LESSOR will return to LESSEE the Security Deposit,  the Transaction Fee and
any prepaid Rent. If LESSEE does not give notice of termination  within such ten
(10) Business Days, LESSEE shall lose all rights to terminate under this Article
3.5, unless otherwise agreed by the parties.

3.6               Cancellation  for  Anticipated  Delay.  Promptly  after LESSOR
becomes aware that in Prior  Lessee's  opinion a delay will cause Delivery to be
delayed beyond September 20, 1996,  LESSOR will notify LESSEE. By written notice
given  within ten (10)  Business  Days  after  LESSEE's  receipt of such  LESSOR
notice,  LESSEE may by written  notice to LESSOR  terminate  this Lease and this
Lease will terminate on the date of receipt of such notice. In the event of such
termination, neither party will have any


                                       -9-

<PAGE>



further  liability  to the other  except  that  LESSOR will return to LESSEE the
Security  Deposit,  the Transaction Fee and any prepaid Rent. If LESSEE does not
give notice of termination within such ten (10) Business Days, LESSEE shall lose
all right to terminate  under  Articles 3.5 and 3.6 unless  otherwise  agreed in
writing by the parties.



                                      -10-

<PAGE>



         ARTICLE 4     LEASE TERM
         ---------     ----------

4.1               Lease Term.  The term of leasing of the Aircraft will commence
on the  Delivery  Date and  continue  for a term of ten (10) years  (the  "Lease
Term").

4.2               "Expiration Date". "Expiration Date" means the last day of the
Lease Term.

4.3               "Termination Date". This Lease may in fact terminate on any of
the following dates:

                  (a)      the Expiration Date; or

                  (b)      a date earlier than the Expiration Date, if:

                           (1)      there is a Total Loss of the Aircraft prior
                           to Delivery pursuant to Article 3.4.

                           (2)      cancellation  of this Lease occurs  pursuant
                           to Article 3.5 or 3.6.

                           (3)      there  is a  Total  Loss  of  the  Aircraft,
                           payment is made to LESSOR in accordance  with Article
                           19.3.

                           (4)      this  Lease is or  becomes  wholly or partly
                           invalid  or  unenforceable   due  to  reasons  beyond
                           LESSEE's and LESSOR's control and (i) LESSEE fails to
                           continue to perform under this Lease, (ii) after good
                           faith negotiation, LESSOR and LESSEE have not arrived
                           at  a  mutually  acceptable   alternative  basis  for
                           continuation  of this Lease within  fifteen (15) days
                           after  LESSOR or LESSEE  has sent a notice  requiring
                           negotiation  and (iii) LESSEE returns the Aircraft to
                           LESSOR in the condition required by Article 23.

                           (5)      an  Event  of  Default   occurs  and  LESSOR
                           repossesses the Aircraft or otherwise terminates this
                           Lease pursuant to Article 25.3.

                  (c)      a date later than the Expiration  Date,  which is the
                  date of return of the  Aircraft in the  condition  required by
                  Article 23, if an Event of Default occurs  hereunder by LESSEE
                  returning the Aircraft in the condition required by this Lease
                  after the Expiration Date.

The "Termination Date" is the date on which this Lease terminates because one of
the  foregoing  has occurred  and LESSEE has  performed  all of its  obligations
hereunder.


                                      -11-

<PAGE>



4.4               Survival of Certain  LESSEE  Obligations.  The  obligations of
LESSEE  set  forth in  Articles  10.5,  16 and 17 by  their  terms  survive  the
termination of this Lease.  Notwithstanding the foregoing, LESSOR agrees that by
executing  the Return  Acceptance  Receipt,  LESSOR is waiving all other  claims
LESSOR might otherwise have,  except as may be specifically  noted on the Return
Acceptance Receipt and except as to items specifically represented and warranted
by LESSEE in the Return  Acceptance  Receipt.  For  purposes  of  clarification,
LESSOR is not waiving any rights to  indemnification  in accordance with Article
10.5,  16, and 17 in the event any third party  claims are made after the return
of the Aircraft  relating to any action or omissions of LESSEE  during the Lease
Term.


                                      -12-

<PAGE>



         ARTICLE 5     SECURITY DEPOSIT, TRANSACTION FEE,
         ---------     RENT, RESERVES AND OTHER PAYMENTS
                       ----------------------------------

5.1               Security Deposit.

5.1.1             LESSEE  will pay  LESSOR a security  deposit of Seven  Hundred
                  Thousand U.S. Dollars (US$ 700,000)  for   its   lease  of the
                  Aircraft (the  "Security  Deposit").  The Security  Deposit is
                  payable as follows (in US$):

                  Received                            350,000
                  Upon execution of the Lease         350,000

5.1.2             The Security  Deposit may be commingled with LESSOR's  general
                  funds and any interest earned on such Security Deposit will be
                  for LESSOR's account. If the Security Deposit is reduced below
                  the  required   amount  by   application   to  meet   LESSEE's
                  unperformed   obligations   under  this  Lease,   LESSEE  will
                  replenish  the  Security  Deposit  within  ten (10) days after
                  LESSOR's demand  therefor.  The Security Deposit will serve as
                  security  for the  performance  by LESSEE  of its  obligations
                  under this Lease and any other  agreements  between LESSEE and
                  LESSOR relating to aircraft,  engines,  aircraft  equipment or
                  the  extension of credit and may be applied by LESSOR upon the
                  occurrence  of an Event of Default  hereunder  or of a default
                  (and the  expiration  of  applicable  cure  periods) by LESSEE
                  under any such other agreements.

5.1.3             Upon  termination of this Lease in accordance with Article 4.3
                  other than in accordance  with Article 25 hereof,  LESSOR will
                  return to LESSEE the amount of the Security  Deposit then held
                  by LESSOR,  without  interest,  less an amount  determined  by
                  LESSOR to be a reasonable estimate of the costs, if any, which
                  LESSOR  will incur to remedy any  unperformed  obligations  of
                  LESSEE under this Lease,  if any,  including the correction of
                  any discrepancies  from the required condition of the Aircraft
                  on return of the Aircraft.

5.2               Transaction Fee. Upon execution of this Lease, LESSEE will pay
                  LESSOR a nonrefundable  transaction  fee of  Fifteen  Thousand
                  U.S. Dollars (US$ 15,000) (the "Transaction Fee").

5.3               Rent.

5.3.1             LESSEE  will pay  LESSOR  the  following  amounts  monthly  in
                  advance as rent for the Aircraft ("Rent"):


                                      -13-

<PAGE>




                  Period of Lease Term          Amount of Monthly Rent
                  --------------------          ----------------------

                  Months 1-4 of the
                  Lease Term                    Two Hundred Thirty Nine
                                                Thousand Three Hundred
                                                Fifty U.S. Dollars (US$
                                                239,350)

                  Months 5-120 of the
                  Lease Term                    Two Hundred Forty Three
                                                Thousand Three Hundred
                                                Fifty U.S. Dollars
                                                (US$ 243,350)

5.3.2             The first  payment of Rent  during the Lease Term will be paid
                  no later  than one (1)  Business  Day prior to  Delivery  (the
                  first  month's  Rent will be  $239,350  plus a per diem rental
                  amount  necessary  to cover the Rent up to the 15th day of the
                  following  calendar  month).  Each subsequent  payment of Rent
                  will be due monthly  thereafter on the fifteenth (15th) day of
                  each month except that, if such day is not a Business Day, the
                  Rent will be due on the immediately preceding Business Day.

5.4               Reserves.

5.4.1             LESSEE will pay to LESSOR supplemental Rent, based on LESSEE's
                  use of the  Aircraft  during  the Lease  Term,  the  following
                  amounts per flight hour (individually, "Airframe Reserves" and
                  "Engine Reserves", and
                  collectively "Reserves"):

                           A total of US$ 245, as follows:

                           Airframe Reserve:    US$ 75 per airframe flight
                                                hour

                           Engine Reserve:      US$ 85 per Engine per flight
                                                hour (payable when the Engine
                                                is utilized on the Aircraft or
                                                another aircraft)

5.4.2             Such  Reserves  will be paid on or before  the 10th day of the
                  calendar  month next following the month in which the Delivery
                  Date  occurs and on or before the 10th day of each  succeeding
                  calendar month for flying  performed during the calendar month
                  prior to payment. All Reserves for flying performed during the
                  month in which the Termination Date occurs will be paid on the
                  Termination Date, unless otherwise agreed by the parties.


                                      -14-

<PAGE>



5.4.3             No  interest  will  accrue or be paid at any time to LESSEE on
                  such  Reserves  and,  subject to  LESSOR's  obligations  under
                  Article 13,  LESSOR may  commingle  the Reserves with LESSOR's
                  general funds.

5.5               Additional  Rent for Excess Cycles.  If during the Lease Term,
at December 31 of any calendar year thereof,  the Aircraft  operated more cycles
in the  preceding  calendar  year than the maximum  number of cycles which would
result from an average hour/cycle ratio of 1.5 hours to 1 cycle, LESSEE will pay
LESSOR as additional Rent US$ 150 for each cycle the Aircraft  actually operated
during such calendar year (or portion thereof) in excess of the number of cycles
which  result  from an  average  hour/cycle  ratio of 1.5  hours  to 1 cycle.  A
calculation  will be made as of December 31 each year and such  additional  Rent
will be due and payable by LESSEE on the date on which the next Reserve  payment
is due (in accordance with Article 5.4.2) following such hour/cycle  calculation
period.

         Example:  If the Aircraft  operated  1,500 hours in a calendar year, it
         would have 1,000 cycles  resulting from an average  hour/cycle ratio of
         1.5 hours to 1 cycle. If in fact the Aircraft  operated 1,100 cycles in
         such  calendar  year,  the Aircraft  operated 100 excess cycles in such
         calendar  year and LESSEE will pay LESSOR US$ 15,000 (100 excess cycles
         x 150 = US$ 15,000).

5.6               LESSOR's Bank Account. The Security Deposit,  Transaction Fee,
Rent, Reserves and any other payment due to LESSOR under this Lease will be paid
by wire transfer of  immediately  available  U.S.  Dollar funds to LESSOR'S bank
account at:

                  International Lease Finance Corporation
                  Account No. 2-181-01503-9
                  National Westminster Bank USA
                  SPEC Leasing Midwest
                  175 Water Street
                  New York, NY 10038
                  ABA# 021200339

or to such  other  bank  account  in the U.S.  as  LESSOR  may from time to time
designate by written notice ("LESSOR's Bank").

5.7               Default  Interest.  If LESSOR's Bank does not receive the Rent
or any other amount on or before the date when due,  LESSOR will suffer loss and
damage the exact  nature  and amount of which are  difficult  or  impossible  to
ascertain.  LESSEE will,  except in the case where the non-receipt of payment is
due to LESSOR's  Bank's  failure to properly  credit a payment  that was paid on
time by LESSEE,  pay LESSOR as supplemental Rent (by way of agreed  compensation
and not as a penalty)  interest on any due and unpaid amounts  payable by LESSEE
under this Lease.  Interest  will be  calculated at a per annum rate (based on a
360 day year)


                                      -15-

<PAGE>



which is equal to five percent (5%) plus the Prime Rate in effect on the date on
which the amount was  originally due for the period from the date the amount was
due to, but excluding, the actual date the amount is received or, in the case of
LESSOR's performance of LESSEE's obligations  hereunder,  from and including the
date of payment by LESSOR to but  excluding  the date of LESSEE's  repayment  to
LESSOR ("Default Interest").  Default Interest will accrue on a day-to-day basis
and be compounded monthly.

5.8               No  Deductions or  Withholdings.  All payments by LESSEE under
this Lease,  including the Security  Deposit,  Transaction  Fee,  Rent,  Default
Interest,  fees, indemnities or any other item, will be made in full without any
deduction or withholding whether in respect of set-off, counterclaim, duties, or
Taxes (as  defined in Article 16)  imposed in the State of  Registration  or any
jurisdiction  from which such  payments are made unless  LESSEE is prohibited by
Law from doing so, in which event  LESSEE will gross up the payment  amount such
that the net  payment  received by LESSOR  after any  deduction  or  withholding
equals the amounts called for under this Lease.

5.9               Value  Added  Taxes.  The Rent and other  amounts  payable  by
LESSEE under this Lease are  exclusive  of any value added tax,  turnover tax or
similar tax or duty.  If a value added tax or any similar tax or duty is payable
in any jurisdiction in respect of any Rent or other amounts as aforesaid, LESSEE
will pay all such tax or duty and  indemnify  LESSOR  against any claims for the
same and any related claims, losses or liabilities.

5.10              Wire Transfer Disbursement Report. At the time of each Rent or
other  payment,  LESSEE  will  complete  and  fax  to  LESSOR  a  wire  transfer
disbursement  report  stating the amount of the payment being made by LESSEE and
the allocation of such payment to the Security Deposit, Rent, Reserves,  Default
Interest and other charges. Notwithstanding the allocation set forth in LESSEE's
report,  in the event  LESSEE is in default  under this Lease,  LESSOR will have
complete discretion to allocate LESSEE's payments as LESSOR determines.

5.11              Net Lease.

5.11.1            This Lease is a net lease and LESSEE's  obligation to pay Rent
                  and make other payments in accordance  with this Lease will be
                  absolute and  unconditional  under any and all  circumstances,
                  except as set forth in Article 5.11.2, and regardless of other
                  events, including the following:

                  (a)      Any  right  of  set-off,  counterclaim,   recoupment,
                  defense or other right (including any right of  reimbursement)
                  which  LESSEE  may  have   against   LESSOR,   Prior   Lessee,
                  Manufacturer, the Engine manufacturer or


                                      -16-

<PAGE>



                  any other  person for any reason,  including  any claim LESSEE
                  may have for the foregoing.

                  (b)      Unavailability or interruption in use of the Aircraft
                  for  any  reason,  including  a  requisition  thereof  or  any
                  prohibition or interference with or other restriction  against
                  LESSEE's use, operation or possession of the Aircraft (whether
                  by Law or  otherwise)  any  defect  in  title,  airworthiness,
                  merchantability,  fitness for any purpose, condition,  design,
                  specification  or  operation  of any  kind  or  nature  of the
                  Aircraft the  ineligibility of the Aircraft for any particular
                  use or trade or for  registration or  documentation  under the
                  Laws of any jurisdiction or Total Loss of the Aircraft.

                  (c)      Insolvency, bankruptcy, reorganization,  arrangement,
                  readjustment of debt, dissolution, liquidation,  receivership,
                  administration  or similar  proceedings by or against  LESSOR,
                  LESSEE, Prior Lessee, Manufacturer, the Engine manufacturer or
                  any other Person.

                  (d)      Invalidity  or   unenforceability   or  lack  of  due
                  authorization of or other defect in this Lease.

                  (e)      Failure  or delay on the part of any party to perform
                  its obligations under this Lease.

                  (f)      Any other  circumstance  which but for this provision
                  would or might have the effect of  terminating or in any other
                  way affecting any obligation of LESSEE hereunder.

5.11.2            Nothing in Article 5.11 will be  construed  to limit  LESSEE's
                  rights and  remedies  in the event of  LESSOR's  breach of its
                  warranty of quiet  enjoyment set forth in Article 21.2.1 or to
                  limit LESSEE's rights and remedies to pursue in a court of law
                  any claim it may have against  LESSOR or any other Person.  In
                  addition, and notwithstanding  anything in Article 5.11 to the
                  contrary,  in the event that as a result of LESSOR's breach of
                  its  warranty of quiet  enjoyment  LESSEE shall be deprived of
                  possession or use of the Aircraft under and in accordance with
                  the  terms  of this  Lease,  five (5) days  after  LESSEE  has
                  provided  LESSOR with written notice of its loss of possession
                  or use,  provided  no  payment  Default  has  occurred  and is
                  continuing  under this Lease.  LESSEE may suspend  payments of
                  Rent  to  LESSOR  for so long  as  such  possession  or use is
                  interrupted.  If such  deprivation  continues  for thirty (30)
                  days after such notice has been given and  provided no payment
                  Default  has  occurred  and is  continuing  under this  Lease,
                  LESSEE may terminate this Lease and return


                                      -17-

<PAGE>



                  the Aircraft to LESSOR (or if LESSEE is not in  possession  of
                  the  Aircraft,  LESSEE will provide  reasonable  assistance in
                  returning  the  Aircraft to LESSOR).  In such event,  upon the
                  return of the  Aircraft,  either  the  Aircraft  will meet the
                  return  conditions  set forth in  Article  23 hereof or LESSEE
                  will pay to LESSOR a sum  sufficient to compensate  LESSOR for
                  the hours and cycles that LESSEE has  consumed on the Aircraft
                  Parts,  and Engines  since the last time the Aircraft did meet
                  the  return  conditions  relating  to hours and  cycles.  Such
                  amount  will  be  determined  based  upon  LESSEE's  cost  for
                  Airframe,  Part and Engine  Overhauls  at the  facility  where
                  LESSEE most recently had such work  performed and the Reserves
                  may be drawn  upon for the hours  which  LESSEE has used since
                  the last  Overhauls  and for the  purposes  and subject to the
                  limitations  under for which  Reserves  are  reimbursable  for
                  meeting   such   return    conditions   and   providing   such
                  compensation.

5.12              LESSOR  Performance of LESSEE  Obligation.  If LESSEE fails to
make any  payment  under  this  Lease to a third  party in  connection  with the
Aircraft  (except where such failure  results only in a Permitted  Lien or in no
Lien) or fails to perform any other  obligation  required  under this Lease,  in
either case,  when due,  LESSOR may (but is not required to) at its election and
without  waiver of its rights  perform such  obligation  and/or pay such amount.
Within five (5) Business Days after written  notice to LESSEE of the amount paid
by LESSOR on behalf of LESSEE,  LESSEE will repay such amount to LESSOR together
with Default  Interest.  Such payment to LESSOR will constitute  additional Rent
payable by LESSEE to LESSOR hereunder. Any payment, performance or compliance by
LESSOR of a LESSEE  obligation  hereunder  will not  affect  the  occurrence  or
continuance of a Default or Event of Default, as the case may be.

5.13              Consideration  for Rent and Other  Amounts.  The amount of the
Rent and other payments contained herein are in consideration of LESSEE's waiver
of warranties and indemnities set forth in Articles 8 and 17, respectively,  and
the other provisions of this Lease.


                                      -18-

<PAGE>



         ARTICLE 6     DELIVERY CONDITION AND INSPECTION OF AIRCRAFT
         ---------     ---------------------------------------------

6.1               LESSEE Selection of Aircraft.  LESSEE COVENANTS TO LESSOR THAT
LESSEE HAS USED ITS OWN JUDGMENT IN SELECTING THE AIRCRAFT AND HAS DONE SO BASED
ON  ITS  SIZE,  DESIGN  AND  TYPE.  LESSEE  ACKNOWLEDGES  THAT  LESSOR  IS NOT A
MANUFACTURER OF THE AIRCRAFT.

6.2               Condition  at  Delivery.  LESSOR has  advised  LESSEE  that at
Delivery  the  Aircraft  will be  substantially  in the  condition  set forth in
Exhibit B. To the extent that at  Delivery  the  Aircraft  is not  substantially
different  than as set forth in Exhibit B,  LESSEE will  nonetheless  accept the
Aircraft  but LESSEE and LESSOR will record such  discrepancies  on the Estoppel
and  Acceptance  Certificate  and the return  conditions set forth in Article 23
will be deemed amended in a corresponding fashion.

6.3               LESSEE  Inspection  of Aircraft at Delivery.  LESSEE will have
the right to  conduct  a full  ground  inspection,  inspection  of the  Aircraft
Documentation  and an  acceptance  flight not to exceed  two hours (at  LESSOR's
cost) with respect to the Aircraft  prior to accepting the Aircraft,  comparable
to those rights set forth in Article 23 hereof.  LESSEE  acknowledges  that,  as
between  it and  LESSOR,  in  accepting  the  Aircraft  it is relying on its own
inspection  and  knowledge of the Aircraft in  determining  whether it meets the
requirements of this Lease.

6.4               Delivery  of  Aircraft  to LESSEE.  Subject  to LESSEE  having
performed all of the conditions  precedent to delivery set forth herein,  LESSOR
will deliver the Aircraft to LESSEE at the Delivery Location.  Provided that the
Aircraft is in the condition  required by Article 6.2 hereof and that LESSOR has
met its obligations  under this Lease, upon the tender of the Aircraft by LESSOR
to LESSEE,  LESSEE will accept the  Aircraft and the date of tender by LESSOR to
LESSEE will be deemed to be the Delivery Date for all purposes under this Lease,
including,  but not limited to, the  commencement of LESSEE's  obligation to pay
Rent hereunder.


                                      -19-

<PAGE>



         ARTICLE 7     PRE-DELIVERY, DELIVERY AND POST-DELIVERY
         ---------     DOCUMENTARY AND OTHER REQUIREMENTS
                       ----------------------------------------

7.1               Pre-Delivery   Requirements.   LESSEE  will  do  each  of  the
following  prior to the  Scheduled  Delivery  Date of the  Aircraft  within  the
timeframes set forth below:

                  (a)      Within one (1) month after  execution  of this Lease,
                  LESSEE will deliver to LESSOR each of the following:

                           (1)      Copies  of   resolutions  of  the  Board  of
                           Directors  of LESSEE  or other  written  evidence  of
                           appropriate  corporate  action,  duly  certifying and
                           authorizing  the lease of the Aircraft  hereunder and
                           the  execution,  delivery  and  performance  of  this
                           Lease, together with an incumbency  certificate as to
                           the  person or  persons  authorized  to  execute  and
                           deliver documents on behalf of LESSEE hereunder.

                           (2)      A draft opinion of counsel in  substantially
                           the form and substance of Exhibit F.

                  (b)      At least  fourteen  (14) days prior to the  Scheduled
                  Delivery  Date,  LESSEE will have  delivered to LESSOR a draft
                  Certificate of Insurance and Brokers' Letter of Undertaking in
                  the form and substance of Exhibits C and D, respectively, from
                  LESSEE's  insurance  brokers   evidencing   insurance  of  the
                  Aircraft in accordance with this Lease from the Delivery Date.

                  (c)      At  least  three  (3)  days  prior  to the  Scheduled
                  Delivery Date, LESSEE will do each of the following:

                           (1)      Provide  LESSOR with a copy of such Aviation
                           Documents as may be available  prior to the Scheduled
                           Delivery Date.

                           (2)      Provide LESSOR with such other  documents as
                           LESSOR may reasonably request sufficiently in advance
                           in  order  to  permit  LESSEE  to  comply  with  such
                           request.

                  (d)      At least one (1) day prior to the Scheduled  Delivery
                  Date, LESSEE will pay to LESSOR the first monthly  installment
                  of Rent (and any stub  payment)  in  accordance  with  Article
                  5.3.2.

7.2               Delivery  Requirements.  On the Delivery  Date (unless  agreed
otherwise below) of the Aircraft, each of the following will occur:


                                      -20-

<PAGE>



                  (a)      LESSEE and LESSOR will  execute and deliver to LESSOR
                  an Estoppel and Acceptance  Certificate in the form of Exhibit
                  E covering the Aircraft and effective as of the Delivery Date.
                  Execution of such Estoppel and Acceptance  Certificate will be
                  conclusive  proof  that  LESSEE  has,  as  between  LESSEE and
                  LESSOR,  unconditionally accepted the Aircraft for lease under
                  this Lease.

                  (b)     LESSEE  will  deliver  a  certificate  signed  by  an
                  officer of LESSEE stating all of the following:

                           (1)      The representations and warranties contained
                           in Article 20 are true and  accurate on and as of the
                           Delivery  Date as though  made on and as of such date
                           (except to the extent that such  representations  and
                           warranties relate solely to an earlier date).

                           (2)      No Default has occurred and is continuing or
                           will  result  from  LESSEE's  lease  of the  Aircraft
                           hereunder.

                           (3)      Such   officer  has  examined  the  Creditor
                           Agreements between LESSEE and the other Creditors and
                           none of such Creditor Agreements contains terms which
                           provide  or  contemplate  that  such  Creditors  will
                           obtain  any  right,  title or  interest  in an Engine
                           which is installed on another  aircraft  (or, if this
                           is not the case,  such officer  will  identify in the
                           certificate   the  parties,   the  aircraft  and  the
                           Creditor  Agreements  for  which  this  statement  is
                           untrue).

                  (c)      LESSEE's  counsel  will deliver an opinion of counsel
                  substantially in the form of Exhibit F.

                  (d)      LESSOR  will  deliver  to  LESSEE  an  assignment  of
                  Manufacturer  and Engine  manufacturer  rights in the form and
                  substance of Exhibits G and H.

                  (e)      LESSEE will deliver to LESSOR a copy of such Aviation
                  Documents  that are  deliverable  by  LESSEE  as have not been
                  previously delivered which are available.

                  (f)      LESSOR will  deliver to LESSEE an opinion of LESSOR's
                  counsel as to the due  execution  and delivery of the Lease by
                  LESSOR and as to the enforceability of the Lease.

                  (g)      Prior to Delivery,  LESSOR will register the Aircraft
                  in the  register  of  aircraft  of the  State of  Registration
                  showing LESSOR as the owner.


                                      -21-

<PAGE>



                  (h)      LESSOR will deliver to LESSEE such Aviation Documents
                  that are deliverable by LESSOR.

7.3               Post-Delivery Requirements.

                  (a)      Within  seven  (7)  days  after  Delivery  or as soon
                  thereafter  as such  documents  become  available,  LESSEE and
                  LESSOR will  provide one another  with copies of all  Aviation
                  Documents not previously delivered.

                  (b)      Within three (3) Business Days after Delivery, LESSEE
                  will  provide  LESSOR  with  copies  of  all  UCC-1  financing
                  statements  required  to be filed  hereunder  and,  as soon as
                  available   thereafter,   evidence  that  all  such  financing
                  statements have been duly filed.


                                      -22-

<PAGE>



         ARTICLE 8     DISCLAIMERS
         ---------     -----------

         LESSOR HAS  COMMITTED TO LESSEE THAT ON THE DELIVERY  DATE THE AIRCRAFT
WILL BE IN THE CONDITION  REQUIRED BY EXHIBIT B. SUCH  COMMITMENT OR COVENANT ON
THE PART OF LESSOR EXPIRES AND THE DISCLAIMERS SET FORTH IN THIS ARTICLE 8 APPLY
UPON  LESSEE'S  ACCEPTANCE  OF THE  AIRCRAFT  AND  EXECUTION OF THE ESTOPPEL AND
ACCEPTANCE CERTIFICATE. AFTER SUCH TIME, THEN AS BETWEEN LESSOR AND LESSEE:

8.1               "As Is, Where Is".  LESSEE  UNCONDITIONALLY  ACKNOWLEDGES  AND
AGREES THAT  NEITHER  LESSOR NOR ANY OF ITS  OFFICERS,  DIRECTORS,  EMPLOYEES OR
REPRESENTATIVES  HAVE MADE OR WILL BE  DEEMED TO HAVE MADE ANY TERM,  CONDITION,
REPRESENTATION,  WARRANTY OR COVENANT EXPRESS OR IMPLIED  (WHETHER  STATUTORY OR
OTHERWISE)  AS  TO  (I)  THE  CAPACITY,  AGE,  AIRWORTHINESS,   VALUE,  QUALITY,
DURABILITY,  CONFORMITY  TO THE  PROVISIONS  OF THIS LEASE AND THE PRIOR  LESSEE
LEASE AGREEMENT,  DESCRIPTION,  CONDITION (WHETHER OF THE AIRCRAFT,  ANY ENGINE,
ANY PART THEREOF OR THE AIRCRAFT DOCUMENTATION), DESIGN, WORKMANSHIP, MATERIALS,
MANUFACTURE,   CONSTRUCTION,  OPERATION,  DESCRIPTION,  STATE,  MERCHANTABILITY,
PERFORMANCE, FITNESS FOR ANY PARTICULAR USE OR PURPOSE (INCLUDING THE ABILITY TO
OPERATE  THE  AIRCRAFT  OR  USE  THE  AIRCRAFT   DOCUMENTATION  IN  ANY  OR  ALL
JURISDICTIONS)  OR  SUITABILITY  OF THE AIRCRAFT OR ANY PART THEREOF,  AS TO THE
ABSENCE  OF LATENT  OR OTHER  DEFECTS,  WHETHER  OR NOT  DISCOVERABLE,  KNOWN OR
UNKNOWN,  APPARENT OR CONCEALED,  EXTERIOR OR INTERIOR,  (II) THE ABSENCE OF ANY
INFRINGEMENT OF ANY PATENT, TRADEMARK,  COPYRIGHT OR OTHER INTELLECTUAL PROPERTY
RIGHTS, (III) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF
DEALING OR USAGE OF TRADE OR (IV) ANY OTHER REPRESENTATION OR WARRANTY,  EXPRESS
OR IMPLIED,  WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF,  ALL OF WHICH ARE
HEREBY EXPRESSLY EXCLUDED AND EXTINGUISHED.

8.2               Waiver of Warranty of  Description.  IN  CONSIDERATION  OF (I)
LESSEE'S RIGHTS  HEREUNDER TO INSPECT THE AIRCRAFT AND (II) LESSOR'S  ASSIGNMENT
TO LESSEE OF ANY EXISTING AND  ASSIGNABLE  WARRANTIES  OF  MANUFACTURER  AND THE
ENGINE MANUFACTURER, LESSEE HEREBY AGREES THAT ITS ACCEPTANCE OF THE AIRCRAFT AT
DELIVERY  AND  ITS  EXECUTION  AND  DELIVERY  OF  THE  ESTOPPEL  AND  ACCEPTANCE
CERTIFICATE  CONSTITUTE  LESSEE'S  WAIVER OF THE  WARRANTY OF  DESCRIPTION,  ANY
CLAIMS LESSEE MAY HAVE AGAINST  LESSOR BASED UPON THE FAILURE OF THE AIRCRAFT TO
CONFORM WITH SUCH DESCRIPTION.

8.3               LESSEE Acknowledgement. LESSEE agrees that subject to Articles
6.2 and 8.1 hereof, it is leasing the Aircraft "AS IS, WHERE IS."

8.4               LESSEE  Waiver.  LESSEE  hereby  waives as between  itself and
LESSOR and agrees not to seek to establish  or enforce any rights and  remedies,
express  or implied  (whether  statutory  or  otherwise)  against  LESSOR or the
Aircraft relating to any of the


                                      -23-

<PAGE>



matters as to which LESSOR has made a disclaimer in Articles 8.1 or 8.2.

8.5               Conclusive Proof. DELIVERY BY LESSEE TO LESSOR OF THE ESTOPPEL
AND ACCEPTANCE CERTIFICATE WILL BE CONCLUSIVE PROOF AS BETWEEN LESSOR AND LESSEE
THAT LESSEE'S  TECHNICAL EXPERTS HAVE EXAMINED AND INVESTIGATED THE AIRCRAFT AND
ENGINES AND THE AIRCRAFT AND ENGINES AND THE AIRCRAFT DOCUMENTATION ARE IN EVERY
WAY SATISFACTORY TO LESSEE.

8.6               No LESSOR Liability for Losses.  LESSEE agrees that, except as
otherwise agreed in writing by LESSOR,  LESSOR will not be liable to LESSEE, any
sublessee or any Person,  whether in contract or tort and however  arising,  for
any  cost,  loss or  damage  (consequential  or  otherwise)  arising  out of the
condition of the  Aircraft,  whether or not due in whole or in part to an act or
omission or the active or passive negligence of LESSOR.

8.7               No Liability  to Repair or Replace.  LESSOR will not be liable
for any expense in repairing or replacing  any item of the Aircraft or be liable
to  supply  another  aircraft  or any item in lieu of the  Aircraft  or any part
thereof  if the same is  lost,  confiscated,  damaged,  destroyed  or  otherwise
rendered unfit for use.

8.8               No Waiver.  Nothing  in this  Article 8 or  elsewhere  in this
Lease will be deemed to be a waiver by LESSEE of any rights it may have  against
Manufacturer, the Engine manufacturer or any other Person.


                                      -24-

<PAGE>



         ARTICLE 9     MANUFACTURERS' AND VENDORS' WARRANTIES
         ---------     --------------------------------------

9.1               Warranties.  Effective at Delivery,  LESSOR hereby  assigns to
LESSEE for the  duration  of the Lease Term the  benefit of all  warranties  and
indemnities given to LESSOR by Manufacturer,  the Engine  manufacturer and other
vendors, repair, overhaul or service facilities with respect to the Aircraft.

9.2               Reassignment.  On the  Termination  Date,  the  benefit of any
warranty  assigned  by LESSOR to LESSEE  pursuant  to Article 7.2 or 9.1 will be
reassigned  automatically to LESSOR or its designee.  LESSEE's rights under such
warranties  (including  LESSEE's claims and rights to payment  thereunder)  will
revert to LESSOR  during any period in which an Event of Default is  continuing.
LESSEE at its own cost and  expense  will do all such  things and  execute  such
documents as may be required for this purpose.

9.3               Warranty  Claims.  LESSEE will  diligently and promptly pursue
any  valid  claims  it may have  against  Manufacturer  and  others  under  such
warranties  with respect to the Aircraft and at LESSOR's  request,  will provide
notice of the same to LESSOR.



                                      -25-

<PAGE>



         ARTICLE 10    OPERATION OF AIRCRAFT
         ----------    ---------------------

10.1              Costs of Operation.  LESSEE will pay all costs incurred in the
operation  of the  Aircraft  during the Lease  Term,  for  profit or  otherwise,
including the costs of flight crews,  cabin  personnel,  fuel, oil,  lubricants,
maintenance,  insurance,  storage, landing and navigation fees, airport charges,
passenger service and any and all other expenses of any kind or nature, directly
or indirectly,  in connection with or related to the use, movement and operation
of the Aircraft. The obligations, covenants and liabilities of LESSEE under this
paragraph  arising  prior to return of the  Aircraft to LESSOR will  continue in
full  force  and  effect,  notwithstanding  the  termination  of this  Lease  or
expiration of the Lease Term except as set forth in Article 5.11.2.

10.2              Compliance with Laws.  LESSEE agrees throughout the Lease Term
to  maintain  operational  control  of the  Aircraft  and  use the  Aircraft  in
accordance with applicable Laws of the State of Registration and of any country,
state,  territory or  municipality  into or over which LESSEE may operate and in
accordance  with the  applicable  regulations  of IATA.  LESSEE will not employ,
suffer or cause the  Aircraft to be used in any  business  which is forbidden by
Law or in any manner  which may render it liable to  condemnation,  destruction,
seizure,  or confiscation by any authority.  LESSEE will not permit the Aircraft
to fly to any  airport  or  country  if so doing  would  cause  LESSOR  to be in
violation of any U.S. Law.

10.3              Training.  LESSEE will not use the Aircraft for testing or for
training of flight  crewmembers  other than LESSEE  crewmembers and will not use
the  Aircraft  for  training  any more than it utilizes  for  training the other
aircraft in its fleet.

10.4              No  Violation of  Insurance  Policies.  LESSEE will not use or
permit the  Aircraft  to be used in any manner or for any  purpose  which is not
covered by the  insurance  policies  LESSEE is required to carry and maintain as
set forth in this  Lease.  LESSEE  will not  carry any goods of any  description
excepted or exempted from such policies or do any other act or permit to be done
anything  which could  reasonably  be expected to  invalidate  or limit any such
insurance policy.

10.5              Flight Charges.

10.5.1            LESSEE  will  pay  promptly  when due all  enroute  navigation
                  charges,  navigation  service  charges  and all other  charges
                  payable by LESSEE (unless  incurred by a third party or LESSOR
                  following  a breach of LESSOR's  covenant of quiet  enjoyment)
                  for the use of or for  services  provided  at any  airport  in
                  respect of the  Aircraft  and will  indemnify  and hold LESSOR
                  harmless in respect of the same.  This indemnity will continue
                  in


                                      -26-

<PAGE>



                  full  force and  effect  notwithstanding  the  termination  or
                  expiration  of the Lease  Term for any reason or the return of
                  the Aircraft.


                                      -27-

<PAGE>



         ARTICLE 11    SUBLEASES
         ----------    ---------

11.1              No Sublease  without LESSOR Consent.  LESSEE WILL NOT SUBLEASE
OR PART WITH  POSSESSION OF THE AIRCRAFT OTHER THAN AS SET FORTH IN ARTICLE 11.3
HEREOF (EXCEPT FOR MAINTENANCE AND REPAIR) AT ANY TIME WITHOUT THE PRIOR WRITTEN
CONSENT OF LESSOR (NOT TO BE UNREASONABLY  WITHHELD) AND IN ACCORDANCE WITH SUCH
REQUIREMENTS  AS MAY FROM TIME TO TIME BE AGREED IN WRITING  BETWEEN  LESSOR AND
LESSEE.  The wet leasing of the Aircraft  during the Lease Term (in which LESSEE
and its crews retain operational control of the Aircraft) will not be considered
a sublease of the Aircraft.

11.2              Subleasing Proposal Fee. Any subleasing proposals submitted to
LESSOR  will be subject to a processing fee of Twenty-five Thousand U.S. Dollars
(US$ 25,000),  payable on  demand  (whether the sublease is approved or not). In
addition,  LESSEE will indemnify LESSOR on demand for all out-of-pocket expenses
(including  legal  fees)  incurred  in  connection  with its  assessment  of the
proposal  or  its  implementation.  Notwithstanding  the  foregoing,  if  LESSEE
contacts  LESSOR and suggests a sublessee which LESSOR rejects without having to
do any analysis, LESSEE will not be required to pay the processing fee.

11.3              Civil  Reserve  Air Fleet  Program.  LESSEE  may  subject  the
Aircraft to the Civil Reserve Air Fleet Program ("CRAF") and transfer possession
of the Aircraft to the United States, or any agency or instrumentality  thereof,
pursuant  to CRAF,  so long as (i) LESSEE  shall  promptly  notify  LESSOR  upon
subjecting  the Aircraft to CRAF and provide LESSOR with the name and address of
the appropriate  Contracting  Officer  Representative  for the Military  Airlift
Command of the United States Air Force, (ii) LESSEE shall promptly notify LESSOR
of any such  transfer,  and (iii) the  period of such  transfer  does not extend
beyond the end of the Lease Term.

11.4              Any Approved Sublease. Any sublease approved by LESSOR will be
for a term no  greater  than the  remaining  Lease Term and  contain  provisions
consistent with this Lease protecting  LESSOR's title to the Aircraft.  Any such
sublease will also provide LESSOR indemnities substantially similar to those set
forth in this  Lease  and  contain  maintenance  and  repair  standards  for the
Aircraft  substantially similar to those set forth in this Lease. The insurances
which will be carried by the sublessee and the circumstances  which constitute a
Total Loss of the Aircraft will also be substantially similar to those set forth
herein.  Any such sublease will be subject and subordinate to this Lease. In its
sole  discretion,  LESSOR may require an opinion of counsel in  connection  with
such sublease,  including LESSOR's rights to repossess the Aircraft in the event
of an Event of Default  hereunder or under the  sublease.  LESSEE will not amend
the terms of any approved  sublease without the prior written consent of LESSOR,
which will not be unreasonably withheld.


                                      -28-

<PAGE>




11.5              Assignment of Sublease. Any approved sublease will be assigned
to LESSOR as  security.  LESSEE will  deliver the  original  counterpart  of the
sublease to LESSOR and make any filings  necessary to protect LESSOR's  security
interest.

11.6              Continued Responsibility of LESSEE. LESSEE will continue to be
responsible  for  performance  of its  obligations  under this Lease  during any
period of sublease.


                                      -29-

<PAGE>



         ARTICLE 12    MAINTENANCE OF AIRCRAFT
         ----------    -----------------------

12.1              General  Obligation.  During  the  Lease  Term and  until  the
Aircraft is returned to LESSOR in the condition  required by this Lease,  LESSEE
alone has the obligation,  at its expense,  to maintain and repair the Aircraft,
Engines and all of the Parts (i) in  accordance  with the  Maintenance  Program,
(ii) in accordance  with the rules and  regulations  of the Aviation  Authority,
(iii) in  conformance  to its type  design,  (iv) in  accordance  with any other
regulations or requirements  necessary in order to maintain a valid  Certificate
of Airworthiness for the Aircraft (except during those periods when the Aircraft
is undergoing  maintenance or repairs as required or permitted by this Lease and
to the extent in conflict with the  requirements of the Aviation  Authority) and
(v) in the same manner and with the same care as used by LESSEE with  respect to
similar aircraft,  engines,  and parts operated by LESSEE and without in any way
discriminating against the Aircraft.

12.2              Specific  Obligations.  Without limiting Article 12.1,  LESSEE
agrees that such maintenance and repairs will include but will not be limited to
each of the following specific items:

                  (a)      Performance  in  accordance   with  the   Maintenance
                  Program of all routine and non-routine maintenance work.

                  (b)      Incorporation  in  the  Aircraft  of  all  applicable
                  airworthiness  directives or  equivalent  (referred to in this
                  Lease generally as "airworthiness  directives") of the FAA and
                  the  Aviation  Authority,   all  alert  service  bulletins  of
                  Manufacturer,   Engine   manufacturer  and  other  vendors  or
                  manufacturers  of Parts  incorporated  on the Aircraft and any
                  service bulletins which must be performed in order to maintain
                  the warranties on the Aircraft, Engines and Parts.

                  (c)      Incorporation  in the  Aircraft of all other  service
                  bulletins of Manufacturer,  the Engine  manufacturer and other
                  vendors which LESSEE  schedules to adopt within the Lease Term
                  for the rest of its 737-300  aircraft  fleet. It is the intent
                  of the parties  that the  Aircraft  will not be  discriminated
                  from the rest of LESSEE's fleet in service bulletin compliance
                  (including method of compliance) or other maintenance matters.
                  LESSEE will not discriminate  against the Engines with respect
                  to   Overhaul   build   standards   and  life   limited   part
                  replacements.

                  (d)      Incorporation  into the  Maintenance  Program for the
                  Aircraft of a  corrosion  prevention  and  control  program as
                  recommended by  Manufacturer,  the Aviation  Authority and the
                  FAA and the correction of any discrepancies in


                                      -30-

<PAGE>



                  accordance with the  recommendations  of Manufacturer  and the
                  Structural  Repair Manual.  In addition,  all inspected  areas
                  will  be  properly   treated  with   corrosion   inhibitor  as
                  recommended by Manufacturer.

                  (e)      Incorporation  into  the  Maintenance  Program  of an
                  anti-fungus/biological  growth and  contamination  prevention,
                  control and treatment  program of all fuel tanks in accordance
                  with Manufacturer's approved procedures.

                  (f)      Providing  LESSOR  with  written   summaries  of  the
                  results of all maintenance and inspection  sampling  programs,
                  if any,  involving or  affecting  the Aircraft and the rest of
                  its 737-300 aircraft fleet.

                  (g)      Maintaining  in English and keeping in an  up-to-date
                  status  the  records  and  historical  documents  set forth in
                  Attachment  1  of  Exhibit  I,  however  LESSEE  will  not  be
                  responsible for any specific documents not delivered to LESSEE
                  by LESSOR or for the translation of any documents delivered by
                  LESSOR in a language other than English.

                  (h)      Maintaining   historical  records,  in  English,  for
                  on-condition,  condition-monitored, hard time and life limited
                  Parts (including certification documents from the manufacturer
                  of such Part or a repair  facility  which  evidence  that such
                  Part is new or overhauled  and establish  authenticity,  total
                  time in service  expressed in hours,  cycles  and/or  calendar
                  time as applicable and time since overhaul for such Part), the
                  hours and cycles the  Aircraft  and  Engines  operate  and all
                  maintenance and repairs performed on the Aircraft.

                  (i)      Properly   documenting  and  maintaining   historical
                  records   of   all   maintenance,    repairs,   Modifications,
                  alterations,   compliance   with   Airworthiness   Directives,
                  accomplishment  of instructions and  recommendations  from the
                  manufacturer  such  as  service  bulletins,  service  letters,
                  in-service  activities,  etc.,  and the  addition,  removal or
                  replacement of equipment,  systems or components in accordance
                  with the rules and  regulations of the Aviation  Authority and
                  reflecting  such  items  in  the  Aircraft  Documentation.  In
                  addition,  all repairs to the Aircraft will be accomplished in
                  accordance with  Manufacturer's  Structural  Repair Manual (or
                  FAA- approved data  supported by FAA Form 8110-3 or equivalent
                  and FAA Form 337). All Modifications and alterations will also
                  be accomplished in accordance with FAA-approved data supported
                  by FAA Form 8110-3 or equivalent and FAA Form 337.


                                      -31-

<PAGE>



                  (j)      Ensuring that  Overhauls are  accomplished  utilizing
                  maintenance  and quality  control  procedures  approved by the
                  Aviation  Authority  and that the  repair  agency  provides  a
                  complete record and  description of all work performed  during
                  the course of such overhaul  including  teardown,  inspection,
                  shop  findings  reports and  certifies  that such Overhaul was
                  accomplished  in accordance with the  manufacturer's  overhaul
                  manual,  that the  equipment  is  airworthy  and  released for
                  return to service and that the Aircraft,  Engine,  or Part was
                  in conformity with its original type design.

12.3              Replacement of Parts.

12.3.1            LESSEE, at its own cost and expense, will promptly replace all
                  Parts  that may  from  time to time  become  worn  out,  lost,
                  stolen, destroyed, seized, confiscated,  damaged beyond repair
                  or rendered  unfit or beyond  economical  repair (BER) for use
                  for any reason. In the ordinary course of maintenance, repair,
                  Overhaul or testing,  LESSEE may remove any Part provided that
                  LESSEE  replaces  such part as  promptly as  practicable.  All
                  replacement  Parts will (i) be free and clear of all  Security
                  Interests (except Permitted Liens) of any kind or description,
                  (ii) be in  airworthy  condition  and of at  least  equivalent
                  model,  service  bulletin and  modification  status and have a
                  value  and  utility  at least  equal to the  Parts  originally
                  installed  at Delivery  and (iii) have a current  FAA-approved
                  "serviceable tag" of the manufacturer or maintenance  facility
                  providing such items to LESSEE, indicating that such Parts are
                  new,  serviceable  or  overhauled.  So long as a  substitution
                  meets the requirements of the Maintenance Program and Aviation
                  Authority, LESSEE may substitute for any Part a part that does
                  not meet  the  requirements  of the  foregoing  sentence  if a
                  complying  Part  cannot be procured  or  installed  within the
                  available   groundtime   of  the   Aircraft  and  as  soon  as
                  practicable the noncomplying part is removed and replaced by a
                  complying Part.

12.3.2            All Parts  removed from the Airframe or any Engine will remain
                  the  property  of LESSOR  and  subject to this Lease no matter
                  where  located,  until  such  time as  such  Parts  have  been
                  replaced by Parts (which have been  incorporated  or installed
                  in or attached to the Airframe or such Engine)  which meet the
                  requirements  for replacement  Parts specified above and title
                  to such replacement  Parts has passed to LESSOR under the Laws
                  of the State of  Registration  and lex  situs.  To the  extent
                  permitted by the Laws of the State of Registration and the lex
                  situs it is the  intent  of LESSOR  and  LESSEE  that  without
                  further act and immediately upon any replacement Part becoming


                                      -32-

<PAGE>



                  incorporated,  installed  or  attached  to the  Airframe or an
                  Engine as above  provided,  (i) title to the removed Part will
                  thereupon  vest in  LESSEE,  free and  clear of all  rights of
                  LESSOR, (ii) title to the replacement Part will thereupon vest
                  in  LESSOR  free and clear of all  rights of LESSEE  and (iii)
                  such replacement Part will become subject to this Lease and be
                  deemed to be a Part  hereunder to the same extent as the Parts
                  originally  incorporated  or  installed  in or attached to the
                  Airframe or such Engine.

12.4              Removal of Engines.

12.4.1            If  an  Engine  is  removed  for  testing,   service,  repair,
                  maintenance,  overhaul  work,  alterations  or  modifications,
                  title  to such  Engine  will at all  times  remain  vested  in
                  LESSOR.

12.4.2            LESSEE will be entitled to remove any of the Engines  from the
                  Aircraft  and  install   another  engine  or  engines  on  the
                  Aircraft,  provided  that  LESSEE  complies  with  each of the
                  following obligations:

                  (a)      The  insurance  requirements  set forth in Article 18
                  and Exhibit C are in place.

                  (b)      LESSEE   ensures  that  the   identification   plates
                  referred to in Article 15 are not removed from any Engine upon
                  such Engine being detached from the Aircraft.

                  (c)      Title to the Engine remains with LESSOR free from all
                  Security  Interests (except Permitted Liens) regardless of the
                  location of the Engine or its attachment to or detachment from
                  the Aircraft.

12.5              Installation of Engines on other aircraft.  Any Engine removed
                  from  the  Aircraft  may be  installed on another  aircraft in
                  LESSEE's  fleet  which  utilizes  engines of  the same type as
                  the Engine only if one  of  the  situations  described in this
                  Article 12.5 exists:

12.5.1            LESSEE or LESSOR  has title to such  other  aircraft  free and
                  clear of all Security Interests (except Permitted Liens).

12.5.2            LESSEE,  LESSOR  and all of the  Creditors  of  LESSEE of such
                  aircraft enter into an engines  cooperation  agreement in form
                  and substance  acceptable to LESSOR in which each party agrees
                  to recognize the other parties' rights in the engines.  LESSEE
                  will  reimburse  LESSOR and its  Lender  for their  reasonable
                  attorneys'  fees and costs in  negotiating  and finalizing the
                  engine cooperation agreements with LESSEE and its Creditors.


                                      -33-

<PAGE>




12.5.3            Such other aircraft is subject to a Creditor Agreement (but no
                  other Security  Interests except Permitted Liens) which by its
                  terms  expressly or effectively  states that such Creditor and
                  its successors  and assigns will not acquire any right,  title
                  or  interest  in any  Engine by reason  of such  Engine  being
                  installed on such aircraft.  To evidence the foregoing,  at or
                  before Delivery,  LESSEE will provide LESSOR with an officer's
                  certificate   as  to  this  matter  (and  such  an   officer's
                  certificate will be provided annually during the Lease Term in
                  accordance  with  Article 22 with  respect  to other  Creditor
                  Agreements  regarding  aircraft  entering  LESSEE's  operating
                  fleet  subsequent to  Delivery).  LESSEE hereby agrees that if
                  LESSOR's title to an Engine is in fact impaired under any such
                  Creditor  Agreement,  such  impairment will be a Total Loss of
                  such Engine and the provisions of Article 19.5 will apply.  To
                  the  extent   another   Creditor   Agreement   contains   such
                  provisions,  then LESSOR  hereby agrees for the benefit of the
                  Creditor of such Creditor  Agreement  that neither  LESSOR nor
                  its  successors  or assigns  will  acquire or claim any right,
                  title or  interest  in any  engine in which  LESSEE or another
                  Creditor  has an  interest  as a result of such  engine  being
                  installed on the Airframe.

12.6              Modifications.

12.6.1            No  modification,  alteration,  addition  or  removal  to  the
                  Aircraft  ("Modification")  expected to cost over Four Hundred
                  Thousand  U.S.  Dollars (US$  400,000) or  deviation  from the
                  Aircraft's  original type design or configuration will be made
                  without the prior  written  consent of LESSOR,  which  consent
                  will  not be  unreasonably  withheld.  "Modifications"  do not
                  include airworthiness  directives of the Aviation Authority or
                  FAA or  Manufacturer's  recommended  service  bulletins or any
                  other  work  required  to be  performed  by LESSEE  under this
                  Lease, for which LESSOR consent is not required.

12.6.2            LESSOR   may  review   LESSEE's   proposed   designs,   plans,
                  engineering drawings and diagrams,  and flight and maintenance
                  manual revisions for any proposed  Modification.  If requested
                  by LESSOR,  LESSEE will furnish  LESSOR with such documents in
                  final  form and any  other  documents  required  by Law,  as a
                  result of such Modification. All Modifications incorporated on
                  the  Aircraft  will be  properly  documented  in the  Aircraft
                  Documentation and be fully approved by the Aviation Authority.

12.6.3            Notwithstanding   any  other   provision  of  this  Lease,  no
                  modification will be made which has the effect of


                                      -34-

<PAGE>



                  decreasing   the   utility  or  value  of  the   Aircraft   or
                  invalidating any warranty applicable to the Aircraft.

12.6.4            No Modification  will be made by LESSEE if an Event of Default
                  exists and is continuing hereunder.

12.6.5            Unless otherwise agreed by LESSOR in writing, all permanent or
                  structural  Modifications  (except for the  installation  of a
                  leased  telephone  system) will forthwith become a part of the
                  Aircraft  and  LESSEE  relinquishes  to LESSOR  all rights and
                  title  thereto.  However,  all  temporary  and  non-structural
                  Modifications  will  remain the  property  of LESSEE  and,  at
                  LESSEE's option or LESSOR's request and LESSEE's cost, will be
                  removed  from the  Aircraft  prior to return of the  Aircraft,
                  with LESSEE  restoring the Aircraft to the condition it was in
                  prior to the Modification in a manner cosmetically  acceptable
                  to LESSOR. Notwithstanding the foregoing, no such removal will
                  be permitted without LESSOR's  permission after the occurrence
                  of an Event of  Default  hereunder  and  immediately  upon the
                  occurrence  of an  Event of  Default  hereunder,  without  the
                  requirement of any further act or notice, all right, title and
                  interest  in  such  Modifications  will  immediately  vest  in
                  LESSOR.

12.6.6            LESSOR will bear no liability for the cost of Modifications of
                  the Aircraft  whether in the event of grounding or suspensions
                  of certification, or for any other cause.

12.7              Pooling of Engines  and Parts.  LESSEE may subject the Engines
and Parts to normal interchange or pooling agreements with responsible scheduled
commercial  air carriers  customary in the airline  industry and entered into by
LESSEE in the ordinary course of its business with respect to its entire 737-300
fleet  so long as (i) in the  case of  pooling  of an  Engine,  such  Engine  is
returned to LESSEE  within  three (3)  months,  (ii) no transfer of title to the
Engine occurs,  (iii) all other terms of this Lease continue to be observed with
respect to the  Engines or Parts,  including  but not limited to Articles 8, 10,
14, 15, 16, 17, 18 and 19 and (iv) LESSEE  continues to be fully  responsible to
LESSOR for the performance of all of its obligations hereunder.

12.8              Performance of Work by Third Parties. Whenever maintenance and
repair work on the Aircraft or Engines  will be regularly  performed by a Person
other than LESSEE, such Person will be an FAA-approved repair station.

12.9              Reporting Requirements.

                  (a)      Commencing  with a report  furnished  ten  (10)  days
                  after the end of the calendar month in which Delivery


                                      -35-

<PAGE>



                  occurs,  LESSEE  will  furnish  to LESSOR a monthly  report in
                  English  in the form  attached  hereto as Exhibit J or another
                  form that contains  substantially the same  information.  Each
                  monthly  report will be  furnished  within ten (10) days after
                  the end of each calendar month, except that the monthly report
                  pertaining  to the last month (or any portion  thereof) of the
                  Lease  Term will be  furnished  to  LESSOR on the  Termination
                  Date.

                  (b)      Thirty  (30)  days  prior  to  the  induction  of the
                  Aircraft into each "C" check, LESSEE will advise LESSOR of the
                  location of the check,  the date the Aircraft will be inducted
                  and the workscope.

                  (c)      Upon  LESSOR's  request,  LESSEE will provide  LESSOR
                  with a  technical  report  for the  Aircraft  in the  form and
                  substance of Exhibit L, as revised.

12.10             Information Regarding Maintenance Program. LESSEE will provide
LESSOR with a copy of or information  regarding the Maintenance  Program for the
Aircraft, as requested by LESSOR and LESSOR will maintain the confidentiality of
such Maintenance Program and/or such information.

12.11             LESSOR  Rights to  Inspect  Aircraft.  On  reasonable  notice,
LESSOR and/or its authorized  agents or  representatives  will have the right to
inspect  the  Aircraft  and  Aircraft  Documentation.  LESSOR  agrees  that such
requests will be  coordinated  with LESSEE so as to cause the minimum  practical
disturbance to LESSEE's  operation or its personnel.  LESSEE agrees to cooperate
with LESSOR in making the Aircraft and Aircraft Documentation  available to such
authorized technical teams. LESSOR will have no duty to make any such inspection
and will not incur  any  liability  or  obligation  by  reason of (and  LESSEE's
indemnity  obligations  pursuant to Article 17 will apply  notwithstanding)  not
making  any such  inspection  or by reason of any  reports  it  receives  or any
reviews it may make of the Aircraft records.


                                      -36-

<PAGE>



         ARTICLE 13    USE OF RESERVES
         ----------    ---------------

13.1              Airframe  Reserves.  LESSOR  will  reimburse  LESSEE  from the
Airframe  Reserves for the actual cost of the structural  inspection  portion of
completed  scheduled "C" checks as described in the MPD and the rectification of
any structural deficiencies resulting from such inspection,  with work performed
for all other causes excluded, including those causes set forth in Article 13.4.
Excluding handling,  packaging,  shipping charges, and Taxes, reimbursement will
be made up to the amount in the Airframe Reserve.

13.2              Engine Reserves.

13.2.1            Subject to the limitations set forth in Article 13.2.2, LESSOR
                  will reimburse  LESSEE from the Engine Reserves for the actual
                  cost   associated   with   performance   restoration   or  the
                  replacement  of life  limited  parts or  permanent  repair  of
                  on-condition parts in the basic Engine during completed Engine
                  shop visits (i.e. heavy maintenance visits) requiring off-wing
                  teardown and/or disassembly, with work performed for all other
                  causes  excluded,  including those causes set forth in Article
                  13.4.  Subject  to  Article  13.2.2  and  excluding  handling,
                  packaging,  and shipping charges and Taxes,  reimbursement for
                  an Engine will be made up to the amount in the Engine  Reserve
                  applicable to such Engine.

13.2.2            Twenty-five  percent  (25%)  of the per  hour  Engine  Reserve
                  payable by LESSEE for an Engine will be designated and will be
                  reimbursable  solely for the replacement of life limited parts
                  in such Engine.

13.3              Reimbursement. LESSOR shall reimburse LESSEE from the Reserves
after the work is  completed  and invoices  and proper  documentation  have been
submitted to LESSOR,  provided such  documentation  is submitted  within six (6)
months after  completion  of the work.  LESSOR will use diligent and  reasonable
efforts to  reimburse  Reserves as soon as  possible  but in no event later than
thirty (30) days following receipt of the complete and proper documentation.  In
the event any portion of a claim is being  disputed,  LESSOR will  reimburse the
undisputed  portion within said 30 days and the disputed portion at such time as
the dispute is resolved. For the Airframe,  proper documentation includes a list
of all routine and non-routine work cards with  corresponding  references to the
MPD task card  reference and an itemized  labor and materials  report.  For each
Engine,  proper documentation  includes a description of the reason for removal,
TSN and CSN at removal,  a shop teardown  report, a shop findings report, a full
description of the workscope and complete disk records for the Engine both prior
to and after the shop  visit.  Both the invoice  supplied  by the Engine  repair
facility  and that  submitted by LESSEE to LESSOR with respect to an Engine will
state whether or


                                      -37-

<PAGE>



not credits were provided due to life  remaining on any removed Engine Parts and
the amount of any such credits will be itemized.

13.4              Reimbursement   Adjustment.  By  way  of  example,  among  the
exclusions from  reimbursement are those items resulting from repairs covered by
LESSEE's or a third  party's  insurance,  (deductibles  being for the account of
LESSEE) or required as a result of an  airworthiness  directive,  manufacturer's
service  bulletin,  faulty  maintenance or  installation,  improper  operations,
misuse,  neglect,  accident,  incident,  ingestion,  or other accidental  cause.
Reimbursement  from the  Reserves  will  not be  available  for the APU,  thrust
reversers,  landing  gear or any of their  associated-components.  All  invoices
subject to  reimbursement  from LESSOR will be reduced  (by  adjustment  between
LESSEE and LESSOR  retroactively if necessary) by the actual amounts received by
LESSEE on account of such work from responsible  third parties or other sources,
such as insurance proceeds, manufacturer's warranties,  guarantees,  concessions
and credits (including,  with respect to Engines,  credits due to life remaining
on any removed Engine Parts).

13.5              Costs in Excess of Reserves.  LESSEE will be  responsible  for
payment of all costs in excess of the amounts  reimbursed  hereunder.  If on any
occasion the balance in the  Airframe or an Engine  Reserve is  insufficient  to
satisfy a claim for reimbursement in respect of the Airframe or such Engine, the
shortfall  may not be carried  forward or made the subject of any further  claim
for reimbursement.

13.6              Reimbursement  after  Termination  Date. LESSEE may not submit
any invoice for  reimbursement  from the  Reserves  after the  Termination  Date
unless on or prior to such date LESSEE has notified  LESSOR in writing that such
outstanding  invoice  will be  submitted  after  the  Termination  Date  and the
anticipated  amount, of such invoice. So long as LESSEE has provided such notice
to LESSOR,  LESSEE may then submit such  outstanding  invoice at any time within
six (6) months after the Termination Date. Subject to the foregoing, any balance
remaining in the Airframe and Engine Reserves on the  Termination  Date, will be
retained by LESSOR. Notwithstanding the foregoing, following a Total Loss of the
Aircraft, any balance remaining in the Reserves will be shared equally by LESSOR
and LESSEE after deducting and first paying to LESSEE any  reimbursable  amounts
for which LESSEE has already submitted invoices.


                                      -38-

<PAGE>



         ARTICLE 14    TITLE AND REGISTRATION
         ----------    ----------------------

14.1              Title to the Aircraft During Lease Term. Title to the Aircraft
will be and remain vested in LESSOR. LESSOR and LESSEE intend this Lease to be a
"true  lease."  LESSEE will have no right,  title or  interest  in the  Aircraft
except as provided in this Lease.

14.2              Registration  of  Aircraft.  LESSOR at LESSEE's  sole cost and
expense will (i) register and maintain  registration of the Aircraft in the name
of LESSOR at the  register of aircraft  in the State of  Registration,  and (ii)
file UCC-1  financing  statements  regarding the Aircraft and LESSOR's  interest
therein in the State of Colorado. LESSEE will, to the extent possible, from time
to time,  take all other  steps  then  required  by Law  (including  the  Geneva
Convention if applicable) or by practice,  custom or  understanding or as LESSOR
may reasonably  request to protect and perfect LESSOR's interest in the Aircraft
and this Lease in the State of Registration or in any other  jurisdictions in or
over which LESSEE may operate the Aircraft.

14.3              Filing of this Lease.  To the extent  permitted  by Law and in
accordance  with the  requirements  of the Law from time to time,  LESSEE at its
sole cost and  expense  will cause this Lease to be kept,  filed,  recorded  and
refiled or rerecorded at the FAA, with the proviso that the commercial terms are
to be reacted prior to recordation.


                                      -39-

<PAGE>



         ARTICLE 15    IDENTIFICATION PLATES
         ----------    ---------------------

         LESSOR will affix and LESSEE will at all times maintain on the Airframe
and each Engine the  identification  plates  containing the following legends or
any other legend requested by LESSOR in writing:

                              Airframe Identification Plates
                              ------------------------------

Location:                  One to be affixed to the Aircraft structure above the
                           forward entry door adjacent to and not less prominent
                           than  that  of  the  Manufacturer's  data  plate  and
                           another in a prominent place on the flight deck.

Size:                      No smaller than 4" X 6"

Legend:                    "THIS AIRCRAFT IS OWNED BY INTERNATIONAL LEASE
                           FINANCE CORPORATION.

                           MANUFACTURER'S SERIAL NO:  24299

                           OWNER'S ADDRESS:

                           INTERNATIONAL  LEASE FINANCE  CORPORATION 1999 Avenue
                           of the  Stars,  39th  Floor Los  Angeles,  California
                           90067 United States of America

                           Telex:  69-1400 INTERLEAS BVHL
                           Fax:    (310) 788-1990"



                              Engine Identification Plates
                              ----------------------------

Location:                  The  legend  on the plate  must be no less  prominent
                           than the Engine data plate and must be visible.

Size:                      No smaller than 2" X 6"

Legend
(Engines):                 "THIS ENGINE IS OWNED BY INTERNATIONAL  LEASE FINANCE
                           CORPORATION, LOS ANGELES, CALIFORNIA, USA."


                                      -40-

<PAGE>



         ARTICLE 16    TAXES
         ----------    -----

16.1              General  Obligation of LESSEE.  Except as set forth in Article
16.2, LESSEE agrees to pay promptly when due, and to indemnify and hold harmless
LESSOR on a full indemnity basis from, all license and registration fees and all
taxes, fees, levies, imposts, duties, charges, deductions or withholdings of any
nature  (including  without  limitation  any value added,  franchise,  transfer,
sales, gross receipts, use, business,  excise, personal property, stamp or other
tax)  together  with any  assessments,  penalties,  fines,  additions  to tax or
interest  thereon,  however or wherever  imposed  (whether  imposed upon LESSEE,
LESSOR,  on all or part of the  Aircraft,  the  Engines  or  otherwise),  by any
Government  Entity or taxing  authority in the U.S. or any foreign country or by
any  international  taxing  authority  (including  the  City  or  County  of Los
Angeles),  upon  or with  respect  to,  based  upon  or  measured  by any of the
following (collectively, "Taxes"):

                  (a)      the Aircraft, the Engines or any Parts.

                  (b)      the use,  operation or maintenance of the Aircraft or
                  carriage of passengers or freight during the Lease Term.

                  (c)      this Lease,  the payments due hereunder and the terms
                  and conditions hereof.

                  (d)      the ownership, financing, delivery, import or export,
                  return,   sale,  payment  of  Total  Loss  Proceeds  or  other
                  disposition of the Aircraft.

16.2              Exceptions to Indemnity. The indemnity provided for in Article
16.1 does not extend to any of the following Taxes:

                  (a)      Imposed by the U.S., any State thereof or any foreign
                  country or international  taxing authority on the net or gross
                  income,  gross  receipts,  capital or net worth of LESSOR,  or
                  doing business, franchise, minimum or similar Taxes.

                  (b)      Attributable to the period prior to Delivery or after
                  return of the Aircraft to LESSOR in accordance with this Lease
                  or after the  termination  of this Lease (it being  understood
                  and  agreed  that  the  exclusion  contained  in this  Section
                  16.2(b)  shall  not  apply to Taxes  assessed  following  such
                  periods  or  prior  to  such   periods)   if  such  Taxes  are
                  attributable to such periods.

                  (c)      Attributable  to LESSOR's gross  negligence,  willful
                  misconduct or breach of this Lease.


                                      -41-

<PAGE>



                  (d)      (I)  Imposed  as  a  result  of a  sale,  assignment,
                  transfer   or  other   disposition   (whether   voluntary   or
                  involuntary) by LESSOR of any legal or beneficial  interest in
                  the Aircraft or in this Lease (a "LESSOR,  Transfer")  or (II)
                  to the extent such Taxes exceed the amount of Taxes that would
                  have been  imposed and  indemnified  against by the LESSEE had
                  there not been a LESSOR Transfer;  provided that the exclusion
                  set forth in this subparagraph (d) shall not apply to a LESSOR
                  Transfer  resulting  from  LESSOR's  exercise of any  remedies
                  provided  for in  Article  25 in  connection  with an Event of
                  Default that has occurred and is continuing.

                  (e)      Being  contested in accordance with the provisions of
                  Section 16.5.

                  (f)      That would not have been  imposed but for any failure
                  of LESSOR to (i) file proper and timely  reports or returns or
                  to  pay  any  Taxes  when  due,   or  (y)   comply   with  any
                  certification,  information, documentation, reporting or other
                  similar  requirements  concerning the nationality,  residence,
                  identity or  connection  with the  jurisdiction  imposing such
                  Taxes,  if such  compliance is required to obtain or establish
                  relief or exemption from or reduction in such Taxes and LESSOR
                  was eligible to comply with such requirement.

16.3              After-Tax  Basis.  The amount  which LESSEE is required to pay
with respect to any Taxes  indemnified  against  under Article 16.1 is an amount
sufficient to restore LESSOR on an after-tax  basis to the same position  LESSOR
would have been in had such Taxes not been incurred.

16.4              Timing of Payment.  Any amount  payable to LESSOR  pursuant to
this  Article 16 will be paid  within  ten (10) days after  receipt of a written
demand  therefor from LESSOR  accompanied by a written  statement  describing in
reasonable detail the basis for such indemnity and the computation of the amount
so  payable  (and  if  reasonably  requested  by  LESSEE,  LESSOR  will  provide
additional  information  as may be  reasonably  necessary to  substantiate  such
claims) provided,  however, that such amount need not be paid by LESSEE prior to
the  earlier of (i) the date any Tax is payable  to the  appropriate  Government
Entity  or  taxing  authority  or (ii) in the case of  amounts  which  are being
contested  by LESSEE in good faith or by LESSOR  pursuant to Article  16.5,  the
date such contest is finally resolved.

16.5              Contests.  If written  claim is made against  LESSOR for Taxes
with  respect to which  LESSEE is liable for a payment or  indemnity  under this
Lease,  LESSOR  will  promptly  give  LESSEE  notice in  writing  of such  claim
provided,  however, that LESSOR's failure to give notice will not relieve LESSEE
of  its  obligations  hereunder,  unless  such  failure  materially  impairs  or
precludes


                                      -42-

<PAGE>



LESSEE's  ability to contest  the claim.  So long as (i) a contest of such Taxes
does not involve any danger of the sale,  forfeiture  or loss of the Aircraft or
any interest  therein,  (ii) if LESSOR so requests,  LESSEE has provided  LESSOR
with an opinion of  independent  tax counsel that a reasonable  basis exists for
contesting such claim and (iii) adequate  reserves have been made for such Taxes
or, if  required,  an  adequate  bond has been  posted,  then LESSOR at LESSEE's
written request will in good faith,  with due diligence and at LESSEE's expense,
contest  (or  permit  LESSEE to  contest  in the name of LESSEE or  LESSOR)  the
validity, applicability or amount of such Taxes.

16.6              Tax Benefits. Upon receipt by LESSOR of a refund of all or any
part of any Taxes  (including  any  deductions  or  withholdings  referred to in
Article 5.8) which LESSEE has paid, LESSOR will promptly pay to LESSEE an amount
that is equal to the  amount  of such Tax  Benefit,  or any  other  Tax  Benefit
resulting from Taxes paid by LESSEE.

16.7              Cooperation  in Filing Tax  Returns.  LESSEE  and LESSOR  will
cooperate  with one another in  providing  information  which may be  reasonably
required  to  fulfill  each  party's  tax  filing  requirements  and  any  audit
information request arising from such filing.  LESSOR shall furnish from time to
time to LESSEE such returns,  statements or other documentation ("Tax Forms") in
such form and with such substance as in the  reasonable  opinion of LESSEE shall
enable  LESSOR or LESSEE to claim an available  reduction  of or exemption  from
Taxes that LESSEE may be required to pay or indemnify against hereunder.

16.8              Survival of Obligations.  The representations,  warranties and
agreements  of  LESSEE  provided  for in  this  Article  16  shall  survive  the
Termination  Date and the  indemnities  provided  for in this  Article  16 shall
survive until the  expiration of the applicable  statute of limitations  for the
Taxes to which such indemnities relate.


                                      -43-

<PAGE>



         ARTICLE 17    INDEMNITIES
         ----------    -----------

17.1              General Indemnity. Except as set forth in Article 17.2, LESSEE
agrees to  indemnify  and hold  harmless  LESSOR  and its  officers,  directors,
employees, agents and shareholder (individually an "Indemnitee" and collectively
"Indemnitees")  from  any and all  liabilities,  obligations,  losses,  damages,
penalties,  claims, actions, suits, costs, disbursements and expenses (including
legal fees, costs and related expenses) of every kind and nature, whether or not
LESSEE accepts the Aircraft  (however,  if LESSEE has not accepted the Aircraft,
LESSEE will not be  obligated to  indemnify  LESSOR for Expenses  arising out of
subparagraphs  (b),  except with  respect to  inspections  or injury or death to
LESSEE employees or agents,  (c), or (e)) (collectively  "Expenses"),  which are
imposed on, incurred by or asserted  against any Indemnitee and which are in any
way relating to, based on or arising out of any of the following:

                  (a)      This Lease or any transactions contemplated hereby.

                  (b)      The operation,  possession,  use,  non-use,  control,
                  leasing, subleasing,  maintenance,  storage, Overhaul testing,
                  inspections or return  flights of the Aircraft,  any Engine or
                  any Part during the Lease Term by LESSEE, any sublessee or any
                  other Person,  whether or not the same is in  compliance  with
                  the terms of this Lease,  including without  limitation claims
                  for death,  personal injury,  property  damage,  other loss or
                  harm to any Person and claims relating to any Laws,  including
                  without limitation  environmental control, noise and pollution
                  laws, rules or regulations.

                  (c)      The  manufacture,  design,  sale  after  an  Event of
                  Default,  acceptance hereunder,  rejection,  delivery, return,
                  export   after  an  Event  of  Default,   condition,   repair,
                  modification, servicing, rebuilding, enforcement of warranties
                  whether  in   LESSOR's  or   LESSEE's   name,   airworthiness,
                  registration,  reregistration,  performance,  merchantability,
                  fitness for use,  substitution or replacement of the Aircraft,
                  Engine or any Part under this Lease or other  transfer  of use
                  or possession of the Aircraft,  Engine or any Part,  including
                  under a pooling or interchange arrangement,  including without
                  limitation,   latent  and  other   defects,   whether  or  not
                  discoverable, and patent, trademark or copyright infringement.

                  (d)      Any  non-compliance  by LESSEE  with any term of this
                  Lease or the falsity or  inaccuracy of any  representation  or
                  warranty of LESSEE set forth herein.


                                      -44-

<PAGE>



                  (e)      The  prevention  or attempt to  prevent  the  arrest,
                  confiscation,   seizure,  taking  in  execution,   impounding,
                  forfeiture  or detention of the  Aircraft,  or in securing the
                  release of the Aircraft.

                  (f)      As a consequence  of any Default in payment by LESSEE
                  of any sum to be paid by LESSEE  when due under  this Lease or
                  any  other   Default  by  LESSEE  in  the  due  and   punctual
                  performance of its obligations under this Lease.

The  foregoing  indemnity by LESSEE is intended to include and cover any Expense
to which an Indemnitee may be subject (in contract,  tort,  strict  liability or
under any other theory)  regardless of the negligence,  active or passive or any
other type, of such Indemnitee, so long as such Expense does not fall within any
of the exceptions listed in Article 17.2.

17.2              Exceptions to General Indemnities.  The indemnity provided for
in Article  17.1 will not extend to  Expenses  of any  Indemnitee  to the extent
resulting from or arising out of any of the following:

                  (a)      Expenses  which LESSEE and LESSOR  mutually agree or,
                  absent mutual  agreement,  are  judicially  determined to have
                  resulted  from the  willful  misconduct  of, or breach of this
                  Lease by, any Indemnitee.

                  (b)      Expenses  which LESSEE and LESSOR  mutually agree or,
                  absent  mutual  agreement,  are  judicially  determined  to be
                  attributable  to  acts  or  events  which  occurred  prior  to
                  Delivery  or after  the  Termination  Date and  return  of the
                  Aircraft to LESSOR in the condition required hereunder.

                  (c)      Expenses  representing  Taxes, it being  acknowledged
                  that the terms of Article 16 represent LESSEE's sole indemnity
                  obligations with respect to Taxes.

                  (d)      Expenses  due to the breach by LESSOR of its covenant
                  of quiet enjoyment pursuant to Article 22.1.

17.3              After-Tax  Basis.  The amount which LESSEE will be required to
pay with respect to any Expense  indemnified  against under this Article 17 will
be an amount sufficient to restore the Indemnitee, on an after-tax basis, to the
same  position  such  Indemnitee  would have been in had such  Expense  not been
incurred.

17.4              Timing of Payment.  LESSEE will pay an Indemnitee or the party
claiming  such Expense for  Expenses  pursuant to this Article 17 whether or not
the claim that gave rise to any  Expense  indemnified  under this  Article 17 is
meritorious  and  whether  or not  liability  with  respect  to  such  claim  is
established (but subject to Article 17.8) within fifteen (15) days after receipt


                                      -45-

<PAGE>



of a written  demand  therefor  from such  Indemnitee  accompanied  by a written
statement  describing in reasonable  detail the basis for such  indemnity and if
such  payment is to be made  directly to the  Indemnitee,  providing  reasonable
evidence that such Indemnitee has, in fact, paid the amount so claimed.

17.5              Subrogation.  Upon  the  payment  in  full  of  any  indemnity
pursuant to this Article 17 by LESSEE, LESSEE will be subrogated to any right of
the  Indemnitee in respect of the matter  against which such  indemnity has been
made.

17.6              Notice.  Each  Indemnitee  and LESSEE will give prompt written
notice one to the other of any  liability of which such party has  knowledge for
which LESSEE is, or may be, liable under this Article 17 provided, however, that
failure to give such notice will not terminate any of the rights of  Indemnitees
under  this  Article  17 except to the extent  that  LESSEE has been  materially
prejudiced by the failure to provide such notice.

17.7              Refunds.  If any  Indemnitee  obtains a recovery of all or any
part of any amount which  LESSEE has paid to such  Indemnitee,  such  Indemnitee
will pay to LESSEE the net amount  recovered by such  Indemnitee  together  with
interest thereon from the date of payment to LESSOR.

17.8              Defense  of  Claims.  Unless a payment  Default or an Event of
Default has occurred and is  continuing,  LESSEE and its insurers  will have the
right (in each such case at LESSEE's sole expense) to investigate  or,  provided
that LESSEE or its insurers  have not  reserved  the right to dispute  liability
with respect to any  insurance  policies  pursuant to which  coverage is sought,
defend or compromise any claim covered by insurance for which indemnification is
sought  pursuant to Article 17.1 and each  Indemnitee will cooperate with LESSEE
or its insurers  with respect  thereto.  If LESSEE or its insurers are retaining
attorneys to handle such claim, such counsel must be reasonably  satisfactory to
LESSOR.

17.9              Survival of Obligation. Notwithstanding anything in this Lease
to the contrary,  the provisions of this Article 17 will survive the Termination
Date and continue in full force and effect  notwithstanding any breach by LESSOR
(except  in the case  where  LESSOR's  breach of this Lease is the cause of such
Expense) or LESSEE of the terms of this Lease,  the  termination of the lease of
the Aircraft to LESSEE  under this Lease or the  repudiation  by LESSOR  (except
where such repudiation by LESSOR constitutes a breach by LESSOR under this Lease
and is the cause of such Expense) or LESSEE of this Lease.


                                      -46-

<PAGE>



         ARTICLE 18    INSURANCE
         ----------    ---------

18.1              Categories of Insurance.  Throughout  the Lease Term and until
the  Termination  Date LESSEE will,  at its own expense,  effect and maintain in
full force and effect the insurance  described in Exhibit C through such brokers
and with such  insurers as may be approved by LESSOR,  such  approval  not to be
unreasonably  withheld, in London or New York or such other insurance markets as
mutually  agreed upon by the parties it being  understood  that,  as of the date
hereof,  LESSEE's  broker is Marsh & McLennan and such broker is satisfactory to
LESSOR.

18.2              Insurance for Indemnities. The liability insurance referred to
in Article 18.1 will in each case include and insure (to the extent of the risks
covered by the policies) the indemnity  provisions of Article 17 and LESSEE will
maintain  liability  insurance of the indemnities for a minimum of two (2) years
following the Termination Date.

18.3              Renewal.  Not less  than five (5)  Business  Days  before  the
expiration or termination date of any insurance required hereunder,  LESSEE will
provide LESSOR with telex or fax confirmation  from LESSEE's  insurance  brokers
that renewed  certificates of insurance evidencing the renewal or replacement of
such  insurance and complying  with Exhibit C will be issued on the  termination
date of the prior certificate.  Within seven (7) days after such renewal, LESSEE
will furnish its brokers' certificates of insurance to LESSOR.

18.4              Assignment of Rights by LESSOR.  If LESSOR  assigns all or any
of its rights under this Lease as permitted by this Lease or otherwise  disposes
of any interest in the Aircraft to any other Person,  LESSEE will, upon request,
procure that such Person  hereunder be substituted as loss payee and/or added as
additional  assured in the policies effected hereunder and enjoy the same rights
and insurance  enjoyed by LESSOR under such policies.  LESSOR will  nevertheless
continue to be covered by such liability policies for 2 years.

18.5              Deductibles.  If there is a  material  adverse  change  in the
financial  condition  of LESSEE which LESSOR  reasonably  believes  will prevent
LESSEE from paying the  deductible  upon the occurrence of a partial loss of the
Aircraft or an Engine,  then LESSOR may  require  LESSEE at LESSEE's  expense to
lower its deductibles on the insurance  maintained hereunder to a level which is
available on commercially reasonable terms in the insurance market.

18.6              Other  Insurance.  LESSOR  may from  time to time by notice to
LESSEE require LESSEE at LESSEE's expense to effect such other insurance or such
variations  to the terms of the  existing  insurance as may then be customary in
the airline


                                      -47-

<PAGE>



industry for aircraft of the same type as the Aircraft and at the time  commonly
available in the insurance market.

18.7              Information.  LESSEE will provide LESSOR with any  information
reasonably  requested  by LESSOR  from  time to time  concerning  the  insurance
maintained  with respect to the Aircraft or in  connection  with any claim being
made or proposed to be made thereunder.

18.8              Currency.  All  proceeds of  insurance  pursuant to this Lease
will be payable in Dollars except as may be otherwise agreed by LESSOR.

18.9              Grounding  of  Aircraft.  If at any time any of the  insurance
required  pursuant  to this Lease  will  cease to be in full  force and  effect,
LESSEE will forthwith  ground the Aircraft and keep the Aircraft  grounded until
such time as such insurance is in full force and effect again.

18.10             Failure to Insure.  If at any time  LESSEE  fails to  maintain
insurance in  compliance  with this Article 18,  LESSOR will be entitled but not
bound to do any of the following (without prejudice to any other rights which it
may have under this Lease by reason of such failure):

                  (a)      To pay any  premiums  due or to  effect  or  maintain
                  insurance  satisfactory  to LESSOR or  otherwise  remedy  such
                  failure in such manner as LESSOR  considers  appropriate  (and
                  LESSEE  will  upon  demand  reimburse  LESSOR  in full for any
                  amount so expended in that connection).

                  (b)      At any time while  such  failure  is  continuing,  to
                  require the  Aircraft to remain at any airport or (as the case
                  may be),  proceed to and remain at any airport  designated  by
                  LESSOR in the continental U.S., until such failure is remedied
                  to LESSOR's satisfaction.

18.11             Reinsurance.   Any   reinsurance   will  be  maintained   with
reinsurers and brokers approved by LESSOR. Such reinsurance will contain each of
the  following  terms  and will in all  other  respects  (including  amount)  be
satisfactory to LESSOR:

                  (a)      The same terms as the original insurance.

                  (b)      A cut-through and assignment  clause  satisfactory to
                  LESSOR.

                  (c)      Payment   will  be  made   notwithstanding   (i)  any
                  bankruptcy,  insolvency,  liquidation or dissolution of any of
                  the original  insurers and/or (ii) that the original  insurers
                  have made no payment under the original insurance policies.


                                      -48-

<PAGE>



18.12             Limit on Hull in favor of  LESSEE.  LESSEE  may carry hull all
risks or hull war and  allied  perils on the  Aircraft  in excess of the  Agreed
Value  (which is payable to LESSOR)  only to the extent  such  excess  insurance
which  would be  payable  to LESSEE in the event of a Total Loss does not exceed
ten percent (10%)  of  the   Agreed  Value  and  only to the  extent  that  such
additional  insurance will not prejudice the insurances  required  herein or the
recovery by LESSOR  thereunder.  LESSEE agrees that it will not create or permit
to exist any liens or encumbrances over the insurances, or its interest therein,
except as constituted by this Lease.


                                      -49-

<PAGE>



         ARTICLE 19    LOSS, DAMAGE AND REQUISITION
         ----------    ----------------------------

                  Throughout  the Lease  Term and until  the  Termination  Date,
LESSEE  will  bear  all risk of  loss,  theft,  damage  and  destruction  to the
Aircraft.

19.1              Definitions.  In this Article 19:

                  "Agreed   Value"  means  Twenty  Three  Million  Five  Hundred
Thousand U.S. Dollars (US$ 23,500,000)  during  the  first five (5) years of the
Term and Twenty Million U.S. Dollars (US$ 20,000,000) thereafter.

                  "Net  Total  Loss  Proceeds"  means  the Total  Loss  Proceeds
actually  received by LESSOR  following a Total Loss, less any reasonable  legal
and other  out-of-pocket  expenses,  taxes other than LESSOR's  income taxes, or
duties  incurred by LESSOR in connection with the collection of such proceeds as
reasonably documented by LESSOR.

                  "Total Loss" means any of the following  occurring  during the
Term in relation to the  Aircraft,  Airframe or any Engine and "Total Loss Date"
means the date set forth in parenthesis after each Total Loss:

                  (a)      Destruction,  damage beyond repair or being  rendered
                  permanently unfit for normal use for any reason (the date such
                  event occurs or, if not known, the date on which the Aircraft,
                  Airframe or Engine was last heard of).

                  (b)      Actual, constructive, compromised, arranged or agreed
                  total  loss  (the  earlier  of the date on  which  the loss is
                  agreed or compromised by the insurers or sixty (60) days after
                  the date of notice to LESSEE's  brokers or  insurers  claiming
                  such total loss).

                  (c)      Requisition of title, confiscation, forfeiture or any
                  compulsory   acquisition   or  other   similar  event  by  any
                  governmental entity (the date on which the same takes effect).

                  (d)      Sequestration,  detention,  seizure  or  any  similar
                  event for more than thirty (30)  consecutive days (the earlier
                  of the date on which  insurers  make payment on the basis of a
                  total loss or the date of expiration of such period).

                  (e)      Requisition  for use other than by government of U.S.
                  for more than one hundred and eighty  (180)  consecutive  days
                  (the earlier of the date on which the insurers make payment on
                  the basis of a total  loss or the date of  expiration  of such
                  period).


                                      -50-

<PAGE>



                  (f)      In the case of an  Engine,  the  event  described  in
                  Article 12.5.3 (the date on which the same takes effect).

                  (g)      Any other  occurrence not permitted  under this Lease
                  which  deprives  LESSEE of use or  possession  for a period of
                  sixty  (60)  consecutive  days or  longer,  other  than as the
                  result of a breach of  LESSOR's  covenant  of quiet  enjoyment
                  (the sixtieth (60th) day of such period).

                  "Total Loss  Proceeds"  means the proceeds of any insurance or
any compensation or similar payment arising in respect of a Total Loss.

19.2              Notice of Total Loss. LESSEE will notify LESSOR within two (2)
Business  Days and follow up with  written  notice  within five (5) days after a
Total Loss Date of the Aircraft, Airframe or any Engine.

19.3              Total Loss of Aircraft or  Airframe.  If the Total Loss of the
Aircraft or Airframe occurs during the Lease Term, the following will occur:

                  (a)      After the Total Loss Date and until receipt by LESSOR
                  of the  Agreed  Value as set forth in  Exhibit C and all other
                  amounts then due under this Lease, LESSEE will continue to pay
                  Rent  and  the  parties   will  perform  all  of  their  other
                  obligations under this Lease.

                  (b)      On the date  which is the  earlier  of the  following
                  dates:

                           (1)      the date on which the Total Loss Proceeds of
                           the  Aircraft  or the  Airframe  are paid by LESSEE's
                           insurance underwriters or brokers and

                           (2)      the date which falls  forty-five  (45) days,
                           or in the  case of (c) or (d) of  19.1,  one  hundred
                           twenty (120) days, after the Total Loss Date,

                  LESSEE will pay to LESSOR an amount equal to the sum of:

                           (3)      the Agreed Value and

                           (4)      all other amounts then due and payable under
                           this Lease other than  Reserves  for hours which have
                           not been flown,

                  less an amount equal to the Net Total Loss  Proceeds  received
                  by LESSOR.


                                      -51-

<PAGE>



                  (c)      LESSOR will apply the Net Total Loss Proceeds and any
                  amounts  received from LESSEE pursuant to this Article 19.3(b)
                  as follows:

                           (1)      first,  in  discharge of any unpaid Rent and
                           any other  amounts  other than  Reserves then due and
                           payable  up to the date of  LESSOR's  receipt  of the
                           Agreed Value;

                           (2)      second,  in  discharge  of the Agreed  Value
                           together  with  interest  thereon  calculated  at the
                           Default  Rate  for any  period  from the due date set
                           forth in Article 19.3(b) up to the date of discharge;
                           and

                           (3)      third,  payment of the  balance,  if any, to
                           LESSEE.

                  (d)      Upon  receipt  by LESSOR  of all  moneys  payable  by
                  LESSEE in Article 19.3, LESSOR will refund any prepaid Rent in
                  respect  of the  period  following  the date on which all such
                  moneys  are paid and this  Lease  will  terminate  except  for
                  LESSEE's  obligations  under  Articles  10.5,  16 and 17 which
                  survive  the   Termination   Date  and  except  for   LESSOR's
                  obligation to return the Security Deposit and a portion of the
                  Reserves to LESSEE as set forth in Articles 13.6 and 19.8.

FOR  AVOIDANCE OF DOUBT,  THE AGREED  VALUE OF THE  AIRCRAFT  WILL BE PAYABLE TO
LESSOR  PURSUANT TO THIS ARTICLE  19.3 WHEN A TOTAL LOSS OF THE AIRFRAME  OCCURS
EVEN IF THERE HAS NOT BEEN A TOTAL LOSS OF AN ENGINE OR ENGINES.

19.4              Surviving  Engine(s).  If a Total Loss of the Airframe  occurs
and there has not been a Total Loss of an Engine or  Engines,  then  (subject to
agreement of relevant insurers), on receipt of all monies due under Article 19.3
LESSOR  will  transfer  all its  right,  title  and  interest  in the  surviving
Engine(s) to LESSEE,  but without any  responsibility,  condition or warranty on
the part of LESSOR other than as to freedom from any LESSOR's Lien.

19.5              Total Loss of Engine and not Airframe.

19.5.1            Upon a Total Loss of any Engine not  installed on the Airframe
                  or a Total Loss of an Engine  installed  on the  Airframe  not
                  involving  a Total  Loss of the  Airframe,  LESSEE  will  give
                  LESSOR prompt written notice thereof. LESSEE will replace such
                  Engine as soon as  reasonably  possible by duly  conveying  to
                  LESSOR  title to  another  engine  (i)  free and  clear of all
                  Security  Interests  (except  Permitted  Liens) of any kind or
                  description,  (ii) in airworthy  condition  and of the same or
                  improved model, service bulletin, modification status and AD


                                      -52-

<PAGE>



                  compliance   status  and  in  the  same  or  better  operating
                  condition  as  the  Engine   which   sustained  a  Total  Loss
                  (immediately  prior to the Total  Loss) and having a value and
                  utility at least equal to the Engine that  sustained the Total
                  Loss,  taking into account  time in service,  hours and cycles
                  since  new  and  hours  and  cycles   available  to  the  next
                  inspection,  Overhaul  or  scheduled  or  anticipated  removal
                  thereof.  Such replacement engine will be an Engine as defined
                  herein and the  Engine  which  sustained  such Total Loss will
                  cease to be an Engine and LESSOR will  transfer all its right,
                  title and  interest in the replaced  Engine(s) to LESSEE,  but
                  without any responsibility,  condition or warranty on the part
                  of LESSOR other than as to freedom from any LESSOR's Lien.

19.5.2            LESSEE agrees at its own expense to take such action as LESSOR
                  may  reasonably  request  in order  that any such  replacement
                  Engine becomes the property of LESSOR and is leased  hereunder
                  on the same terms as the destroyed Engine. LESSEE's obligation
                  to pay Rent will  continue  in full force and  effect,  but an
                  amount equal to the Net Total Loss Proceeds received by LESSOR
                  with  respect  to  such  destroyed  Engine  will,  subject  to
                  LESSOR's  right to deduct  therefrom  any amounts then due and
                  payable by LESSEE under this Lease, be paid to LESSEE.

19.6              Other Loss or Damage.

19.6.1            If the  Aircraft or any part  thereof  suffers  loss or damage
                  during the Term not  constituting a Total Loss of the Aircraft
                  or the Airframe or any Engine,  all the  obligations of LESSEE
                  and LESSOR under this Lease  (including  payment of Rent) will
                  continue in full force.

19.6.2            In the event of any loss or damage to the Aircraft or Airframe
                  that does not  constitute  a Total Loss of the Aircraft or the
                  Airframe,  or any loss or damage  to an  Engine  that does not
                  constitute  a Total Loss of such  Engine,  LESSEE  will at its
                  sole cost and expense  fully  repair the Aircraft or Engine in
                  order that the  Aircraft  or Engine is placed in an  airworthy
                  condition and substantially the same condition as it was prior
                  to such loss or damage.  All repairs  will be  performed  in a
                  manner that preserves and maintains all warranties and service
                  life policies to the same extent as they existed prior to such
                  loss or damage.  LESSEE will notify  LESSOR  forthwith  of any
                  loss,  theft or damage to the  Aircraft  for which the cost of
                  repairs is  estimated  to exceed  Four Hundred  Thousand  U.S.
                  Dollars (US$ 400,000), together  with   LESSEE's  proposal for
                  carrying  out the  repair.  In the event that  LESSOR does not
                  agree with LESSEE's proposals for repair, LESSOR


                                      -53-

<PAGE>



                  will so notify  LESSEE  within two (2) Business Days after its
                  receipt of such proposal.  LESSEE and LESSOR will then consult
                  with  Manufacturer  and LESSEE  and LESSOR  agree to accept as
                  conclusive,  and be bound  by,  Manufacturer's  directions  or
                  recommendations  as to the  manner  in which to carry out such
                  repairs.  If  Manufacturer  declines  to  give  directions  or
                  recommendations,   LESSEE   will  carry  out  the  repairs  in
                  accordance  with the FAA approved  directions  of LESSOR at an
                  FAA approved repair facility.

19.6.3            To the extent insurance  proceeds  received by LESSEE directly
                  from its insurers  under the hull policy do not cover the cost
                  of such repair  work on the  Aircraft or Engine and LESSOR has
                  received additional  insurance proceeds from LESSEE's insurers
                  with  respect to such repair  work,  LESSOR  will  (subject to
                  LESSOR's  right to deduct  therefrom  any amounts then due and
                  payable by LESSEE under this Lease and submission by LESSEE of
                  reasonable  documentation  in  support of such  excess  repair
                  costs) pay to LESSEE insurance  proceeds received by LESSOR as
                  and when such repair work is performed on the Aircraft.

19.7              Government  Requisition.  If  the  Aircraft,  Airframe  or any
Engine is  requisitioned  for use by any Government  Entity and such requisition
does not  constitute a Total Loss,  LESSEE will  promptly  notify LESSOR of such
requisition.  All of LESSEE's  obligations  hereunder  will  continue as if such
requisition  had not  occurred.  So  long  as no  Default  has  occurred  and is
continuing,  all  payments  received  by LESSOR or LESSEE  from such  Government
Entity will be paid over to or retained by LESSEE. if a Default has occurred and
is continuing,  all payments  received by LESSEE or LESSOR from such  Government
Entity shall be used by LESSOR to satisfy any obligations owing by LESSEE.

19.8              Division of  Reserves.  For  avoidance  of doubt,  the parties
agree  that  upon the  Total  Loss of the  Aircraft  LESSOR  will pay to  LESSEE
one-half of all Airframe and Engine  Reserves paid by LESSEE and not  previously
reimbursed  or the subject of previous  proper  invoices  submitted by LESSEE to
LESSOR pursuant to Article 13.3.


                                      -54-

<PAGE>



         ARTICLE 20    REPRESENTATIONS, WARRANTIES AND
         ----------    COVENANTS OF LESSEE
                       -------------------------------

20.1              Representations and Warranties. LESSEE represents and warrants
the  following to LESSOR as of the date of execution of this Lease and as of the
Delivery Date:

20.1.1            Corporate Status.  LESSEE is a corporation duly  incorporated,
                  validly  existing  and in  good  standing  under  the  Laws of
                  Delaware. It has the corporate power and authority to carry on
                  its  business  as  presently  conducted  and  to  perform  its
                  obligations hereunder.

20.1.2            Governmental Approvals. No authorization,  approval,  consent,
                  license or order of, or  registration  with,  or the giving of
                  notice  to the  Aviation  Authority  or any  other  Government
                  Entity is  required  for the valid  authorization,  execution,
                  delivery and  performance  by LESSEE of this Lease,  except as
                  will have been duly effected as of the Delivery Date.

20.1.3            Binding.  LESSEE's Board of Directors has authorized LESSEE to
                  enter into this Lease,  any Side Letters  hereto and any other
                  documentation  in connection  with the leasing of the Aircraft
                  from LESSOR  (collectively,  the  "Operative  Documents")  and
                  perform its obligations  under the Operative  Documents.  This
                  Lease  and  the  other  Operative  Documents  have  been  duly
                  executed  and  delivered  by LESSEE and  represent  the valid,
                  enforceable and binding obligations of LESSEE except as may be
                  limited by  bankruptcy,  insolvency,  reorganization  or other
                  Laws of  general  application  affecting  the  enforcement  of
                  creditors'  rights.  When executed by LESSEE at Delivery,  the
                  same will apply to the Estoppel and Acceptance Certificate.

20.1.4            No  Breach.  The  execution  and  delivery  of  the  Operative
                  Documents,  the  consummation  by LESSEE  of the  transactions
                  contemplated  herein and  compliance  by LESSEE with the terms
                  and  provisions  hereof do not and will not contravene any Law
                  applicable to LESSEE, or result in any breach of or constitute
                  any default  under or result in the  creation of any  Security
                  Interest  upon  any  property  of  LESSEE,   pursuant  to  any
                  indenture,   mortgage,   chattel  mortgage,   deed  of  trust,
                  conditional  sales  contract,  bank loan or credit  agreement,
                  corporate charter,  by-law or other agreement or instrument to
                  which LESSEE is a party or by which  LESSEE or its  properties
                  or assets may be bound or affected. When executed by LESSEE at
                  Delivery,  the same will apply to the Estoppel and  Acceptance
                  Certificate.


                                      -55-

<PAGE>



20.1.5            Filings.  Except  for any  filing  or  recording  that  may be
                  required under the U.S.  Federal  Aviation  Administration  no
                  filing or recording of any  instrument or document  (including
                  the filing of any financing  statement) is necessary under the
                  Laws of the State of  Registration  and  Colorado in order for
                  this Lease to  constitute a valid lease of record  relating to
                  the Aircraft.

20.1.6            Licenses. LESSEE holds all licenses,  certificates and permits
                  from  applicable  Government  Entities  in the  U.S.  for  the
                  conduct of its  business  as a  certificated  air  carrier and
                  performance of its obligations under this Lease.

20.1.7            No  Suits.   There  are  no  suits,   arbitrations   or  other
                  proceedings  pending or threatened  against  LESSEE before any
                  court or  administrative  agency  against or affecting  LESSEE
                  which, if adversely determined,  would have a material adverse
                  effect on the  business,  assets or  condition  (financial  or
                  otherwise)  of LESSEE or its  ability  to  perform  under this
                  Lease,  except as described in the filings  provided to LESSOR
                  pursuant to Article 22.

20.1.8            General  Obligations.  The  obligations  of LESSEE  under this
                  Lease are direct,  general and  unconditional  obligations  of
                  LESSEE  and rank or will rank at least  pari passu in right of
                  payment with all other present ---- ----- and future unsecured
                  and   unsubordinated    obligations    (including   contingent
                  obligations) of LESSEE, with the exception of such obligations
                  as are  mandatorily  preferred by law and not by reason of any
                  encumbrance.

20.1.9            Tax Returns.  All  necessary  returns  have been  delivered by
                  LESSEE   to  all   relevant   taxation   authorities   in  the
                  jurisdiction  of its  incorporation  or  extensions  have been
                  obtained  as  required,  and  LESSEE is not in  default in the
                  payment of any taxes shown to be payable thereon.

20.1.10           No Material Adverse Effect. LESSEE is not in default under any
                  agreement  to  which it is a party or by which it may be bound
                  which would have a material  adverse  effect on its ability to
                  perform its obligation hereunder.

20.1.11           No Default under this Lease.  At the time of execution of this
                  Lease,  no Default  has  occurred  and is  continuing  and the
                  financial  statements  provided to LESSOR  fairly  present the
                  financial condition of LESSEE.


                                      -56-

<PAGE>



20.1.12           Shareholder  Equity.  At the time of  execution of this Lease,
                  LESSEE has common  shareholder equity in an amount of at least
                  Fifty Million U.S. Dollars (US$ 50,000,000).

20.2              Covenants. LESSEE covenants to LESSOR that it will comply with
the following throughout the entire Lease Term:

20.2.1            Restrictions  on  Mergers.  LESSEE  will  not  sell or  convey
                  substantially  all of its  property  and  assets  or  merge or
                  consolidate with or into any other  corporation  unless LESSEE
                  has obtained  LESSOR's prior written consent which will not be
                  unreasonably  withheld or, unless the  surviving  entity has a
                  net worth after the merger or  consolidation  that is at least
                  equal to that of  LESSEE  immediately  prior to the  merger or
                  consolidation.

20.2.2            No Security  Interests.  LESSEE will not create or agree to or
                  permit to arise any Security  Interest  (other than  Permitted
                  Liens) on or with respect to the  Aircraft,  title  thereto or
                  any  interest  therein.  LESSEE  will  forthwith,  at its  own
                  expense,  take all action as may be  necessary to discharge or
                  remove any such Security Interest if it exists at any time.

20.2.3            Representations to Other Parties. LESSEE will not represent or
                  hold  out  LESSOR  as  carrying  goods  or  passengers  on the
                  Aircraft or as being in any way connected or  associated  with
                  any  operation  of the Aircraft so long as LESSOR is, in fact,
                  not in any way so connected or associated.

20.2.4            Shareholder  Equity.   During  the  Lease  Term,  LESSEE  will
                  maintain  common  shareholder  equity in an amount of at least
                  Fifty Million U.S. Dollars (US$ 50,000,000),  provided that in
                  the  event  that  LESSEE  is not  able  to  comply  with  this
                  covenant,  LESSEE will  within  fourteen  (14) days  following
                  receipt of  LESSOR's  request  therefor,  provide to LESSOR an
                  additional cash security deposit in an amount to be reasonably
                  determined by LESSOR at such time.

20.2.5            LESSEE's Fleet. During the Lease Term, LESSEE will not operate
                  aircraft of any type other than Boeing 737 CFM- powered  Stage
                  III aircraft,  without  LESSOR's  prior written  consent which
                  consent shall not be unreasonably withheld.


                                      -57-

<PAGE>



         ARTICLE 21    REPRESENTATIONS, WARRANTIES AND
         ----------    COVENANTS OF LESSOR
                       -------------------------------

21.1              Representations and Warranties. LESSOR represents and warrants
the  following  to LESSEE as of the date of execution of the Lease and as of the
Delivery Date and ALL OTHER  WARRANTIES,  EXPRESS OR IMPLIED HAVE BEEN WAIVED IN
ACCORDANCE WITH ARTICLE 8:

21.1.1            Corporate Status.  LESSOR is a corporation duly  incorporated,
                  validly  existing and in good  standing  under the Laws of the
                  State of California.  It has the corporate power and authority
                  to carry on its business as presently conducted and to perform
                  its obligations hereunder.

21.1.2            Governmental Approvals. No authorization,  approval,  consent,
                  license or order of, or  registration  with,  or the giving of
                  notice to the Aviation  Authority or any Government  Entity or
                  any other  Person  is  required  for the valid  authorization,
                  execution, delivery and performance by LESSOR of this Lease.

21.1.3            Binding.  This Lease and the other  Operative  Documents  have
                  been duly  authorized,  executed  and  delivered by LESSOR and
                  represent the valid,  enforceable  and binding  obligations of
                  LESSOR except as enforceability  may be limited by bankruptcy,
                  insolvency,   reorganization   or   other   Laws  of   general
                  application affecting the enforcement of creditors' rights.

21.1.4            No  Breach.  The  execution  and  delivery  of  the  Operative
                  Documents,  the  consummation  by LESSOR  of the  transactions
                  contemplated  herein and  compliance  by LESSOR with the terms
                  and  provisions  hereof do not and will not contravene any Law
                  applicable to LESSOR, or result in any breach of or constitute
                  any default under any indenture,  mortgage,  chattel mortgage,
                  deed of trust, conditional sales contract, bank loan or credit
                  agreement,  corporate  charter,  by-law or other  agreement or
                  instrument  to which  LESSOR is a party or by which  LESSOR or
                  its properties or assets may be bound or affected.

21.1.5            Title to  Aircraft.  On the  Delivery  Date  and at all  times
                  thereafter during the Term (subject to Article 24) LESSOR will
                  have good and valid title to the Aircraft.

21.2              Covenants. LESSOR covenants to LESSEE that it will comply with
the following throughout the entire Lease Term:

21.2.1            Quiet  Enjoyment.  So long as no Event of Default has occurred
                  and is continuing  hereunder,  LESSOR  covenants  that neither
                  LESSOR nor any person lawfully claiming


                                      -58-

<PAGE>



                  through LESSOR will interfere  with LESSEE's  quiet,  peaceful
                  and undisturbed  use and enjoyment of the Aircraft,  except as
                  otherwise permitted under this Lease.

21.2.2            Registration Requirements. At all times during the Lease Term,
                  LESSOR  shall  satisfy all  requirements  applicable  to it in
                  order to maintain in effect the  registration  of the Aircraft
                  in the United States. LESSOR shall not take any act or omit to
                  take any act that is required to be  performed  by it in order
                  to ensure the continuous  registration  of the Aircraft in the
                  United States.


                                      -59-

<PAGE>



         ARTICLE 22    FINANCIAL AND RELATED INFORMATION
         ----------    ---------------------------------

                  LESSEE  agrees  to  furnish  each of the  following  to LESSOR
during the Term:

                  (a)      Within  forty-five  (45)  days  after the end of each
                  fiscal  quarter  of  LESSEE,   or  sixty  (60)  days  if  U.S.
                  Securities and Exchange  Commission (SEC) rules permit,  three
                  (3)  copies  of the  10Q,  or if  LESSEE  is  not a  reporting
                  company,    unaudited    consolidated   financial   statements
                  (including  a balance  sheet and  profit  and loss  statement)
                  prepared  for  such  quarter  in  accordance   with  generally
                  accepted accounting principles in the U.S.

                  (b)      Within  ninety (90) days after the end of each fiscal
                  year of LESSEE,  or one hundred twenty (120) days if SEC rules
                  permit,  three (3)  copies  of the 10K,  or if LESSEE is not a
                  reporting company,  audited consolidated  financial statements
                  (including  a balance  sheet and  profit  and loss  statement)
                  prepared  as of the close of such  fiscal  year in  accordance
                  with  generally  accepted  accounting  principles  in the U.S.
                  LESSEE's   chief   financial   officer  will  also  provide  a
                  certificate  stating  that no Default  exists under this Lease
                  and that such officer has  examined  the  Creditor  Agreements
                  between  LESSEE  and the other  Creditors  for  aircraft  that
                  entered  LESSEE's fleet during  LESSEE's  previous fiscal year
                  and none of such  Creditor  Agreements  contains  terms  which
                  provide or  contemplate  that such  Creditors  will obtain any
                  right,  title or interest in an Engine  which is  installed on
                  another  aircraft  (or, if this is not the case,  such officer
                  will identify in the certificate the parties, the aircraft and
                  the Creditor Agreements for which this statement is untrue).

                  (c)      Promptly after distribution,  three (3) copies of all
                  reports and financial  statements  which LESSEE sends or makes
                  available to its stockholders or creditors.

                  (d)      From time to time, such other reasonable  information
                  as LESSOR may  reasonably  request  concerning  the  location,
                  condition,  use and operation of the Aircraft or the financial
                  condition of LESSEE and not previously delivered by LESSEE.

22.1              Information about Suits. LESSEE will promptly give to LESSOR a
notice in  writing  of any suit,  arbitration  or  proceeding  before any court,
administrative agency or Government Entity which, if adversely determined, would
have a material adverse effect on the business,  assets or condition  (financial
or otherwise), of LESSEE or its ability to perform under this Lease.


                                      -60-

<PAGE>



         ARTICLE 23    RETURN OF AIRCRAFT
         ----------    ------------------

23.1              Date of Return.  LESSEE is obligated  to return the  Aircraft,
Engines,  Parts and Aircraft  Documentation to LESSOR in accordance with Article
23 on the Termination Date, unless a Total Loss of the Aircraft has occurred, or
this Lease was terminated prior to Delivery,  in accordance with Articles 3.5 or
3.6.  If an Event of  Default  occurs  prior to the  Expiration  Date and LESSOR
repossesses the Aircraft,  the return  requirements set forth in this Article 23
nonetheless must be met on the date the Aircraft is actually  returned to LESSOR
or repossessed by LESSOR.

23.2              Technical  Reporting.  Six (6) months prior to the  Expiration
Date at LESSOR's request,  LESSEE will provide LESSOR with a technical report in
the form and substance of Exhibit L, as revised,  and, in addition upon LESSOR's
request,   will  make  copies   available   of  (i)  drawings  of  the  interior
configuration  of the Aircraft both as it presently  exists and as it will exist
at return (ii) airworthiness  directive  compliance status report, (iii) service
bulletin incorporation list, (iv) hard time and life limited component inventory
and status report, (v) on- condition and condition monitored component inventory
and  status  report,   (vi)  a  list  of   LESSEE-initiated   modifications  and
alterations, (vii) interior material FAR 25.853 conformance certificates, (viii)
Aircraft   maintenance   program,   (ix)  complete  workscope  for  the  checks,
inspections and other work to be performed  prior to return,  (x) current Engine
disk sheets trend monitoring reports and (xi) any other data which is reasonably
requested by LESSOR.

23.3              Return  Location.  LESSEE  at  its  expense  will  return  the
Aircraft,  Engines,  Parts and Aircraft  Documentation to LESSOR at LESSEE's FAA
approved  maintenance  provider's  facility in the  continental  U.S. or to such
other airport as may be mutually agreed to by LESSEE and LESSOR.

23.4              Aircraft  Documentation  Review.  For the period commencing at
least  ten  (10)  Business  Days  prior  to the  proposed  redelivery  date  and
continuing  until the date on which the  Aircraft is accepted by LESSOR,  LESSEE
will provide for the review by LESSOR  and/or its  representative  of all of the
Aircraft  Documentation  described  in Exhibit K in one central  location at the
Aircraft return location.

23.5              Aircraft Inspection.

23.5.1            Lessor  may   observe   the   maintenance   checks   performed
                  immediately prior to the proposed  redelivery.  At redelivery,
                  LESSOR and/or its representatives  will have an opportunity to
                  conduct a full systems  functional and operational  inspection
                  of the  Aircraft  (and other types of  reasonable  inspections
                  based upon the Aircraft type, age, use and other known factors
                  with respect to the


                                      -61-

<PAGE>



                  Aircraft) and a full inspection of the Aircraft  Documentation
                  (including records and manuals), all to LESSOR's satisfaction.
                  Any   deficiencies   from  the   Aircraft   return   condition
                  requirements set forth in this Article 23 will be corrected by
                  LESSEE at its cost prior to the acceptance flight described in
                  Article 23.5.2.

23.5.2            Immediately prior to the proposed  redelivery of the Aircraft,
                  LESSEE   will   carry   out   for   LESSOR   and/or   LESSOR's
                  representatives  an Aircraft  acceptance  flight in accordance
                  with  Manufacturer's  standard  flight  operation check flight
                  procedures  or,  if  agreed  to  in  writing  by  LESSOR,   in
                  accordance with an airline acceptance flight procedure, either
                  of which will be for the  duration  necessary  to perform such
                  check flight procedures but in any event not less than two (2)
                  hours.  Flight  costs and fuel will be furnished by and at the
                  expense of LESSEE.  Any deficiencies  from the Aircraft return
                  condition  requirements  set forth in this  Article 23 will be
                  corrected  by  LESSEE  at its  cost  prior  to  return  of the
                  Aircraft.

23.5.3            To the extent that the ground inspection and acceptance flight
                  extend beyond the Expiration Date, unless such delay is solely
                  the result of LESSOR's  breach of its  obligations  under this
                  Lease,   the   Lease   Term   will  be  deemed  to  have  been
                  automatically extended and the obligations of LESSEE hereunder
                  (including  Article  23.10(c))  will  continue on a day-to-day
                  basis until  LESSOR  delivers to LESSEE the Return  Acceptance
                  Receipt.

23.5.4            LESSEE  agrees to  indemnify  and hold  harmless  LESSOR,  its
                  officers,  directors,  employees,  agents and  representatives
                  from and  against all  Expenses  for injury to or death of any
                  person  (other  than  LESSOR's  employees)  or  damage  to any
                  property (including the Aircraft) arising out of or in any way
                  connected with such ground  inspection  and acceptance  flight
                  unless caused by the willful misconduct of such parties.

23.6              Certificate of Airworthiness Matters.

23.6.1            The Aircraft at return shall have a U.S. Standard  Certificate
                  of Airworthiness for transport category aircraft issued by the
                  FAA in accordance with FAR Part 21 and, in addition,  meet the
                  operating requirements of FAR Part 121.

23.6.2            If the Aircraft is to be registered in a country other than in
                  the U.S.  after  return  from  LESSEE,  LESSOR may in its sole
                  discretion  waive  the  requirements  of  Article  23.6.1  and
                  instead require that LESSEE at its


                                      -62-

<PAGE>



                  expense  (to the extent such  expense is no greater  than that
                  which LESSEE would have  incurred  pursuant to Article  23.6.1
                  with any additional  expenses  being for LESSOR's  account and
                  with the  agreement  that no Rent will accrue during the delay
                  caused by such LESSOR request) put the Aircraft in a condition
                  to meet the  requirements  for  issuance of a  Certificate  of
                  Airworthiness  of the  Aviation  Authority  of  such  country.
                  Lessor will provide the workscope for such work.

23.7              General Condition of Aircraft at Return.

23.7.1            The Aircraft,  Engines and Parts will,  during the Lease Term,
                  have been  maintained  and  repaired  in  accordance  with the
                  Maintenance  Program, the rules and regulations of the FAA and
                  this Lease.

23.7.2            Aircraft  Documentation  (including  records and manuals) will
                  have been  maintained in an up-to-date  status,  in accordance
                  with the  rules  and  regulations  of the FAA and will be in a
                  form  necessary in order to meet the  requirements  of Article
                  23.6.1.  The records  and  historical  documents  set forth in
                  Attachment  1 of  Exhibit I  generated  by  LESSEE  will be in
                  English,  it being agreed that LESSEE is not  responsible  for
                  translating  any documents  that were delivered by LESSOR in a
                  language other than English.

23.7.3            The Aircraft  will be in the same working  order and condition
                  as at  Delivery  (subject  to the  other  provisions  of  this
                  Article  23,  reasonable  wear and  tear  from  normal  flight
                  operations  excepted),  with all pilot discrepancies,  minimum
                  equipment list (MEL) and deferred maintenance items cleared on
                  a terminating action basis.

23.7.4            The Aircraft will be airworthy (conform to its type design and
                  be in a  condition  for safe  operation),  with  all  Aircraft
                  equipment,  Parts,  components  and systems  operating  within
                  limits approved by Manufacturer, and FAA.

23.7.5            The Aircraft interior (including flight deck,  passenger cabin
                  and windows) and exterior  (including cargo compartments) will
                  be clean  and  cosmetically  acceptable  to  LESSOR,  with all
                  compartments free of foreign objects,  dirt,  grease,  fluids,
                  stains,  grime,  cracks, tears and rips and ready to be placed
                  into immediate  commercial airline passenger  operations.  All
                  interior  placards,   signs  and  markings  will  be  properly
                  attached, free from damage, clean and legible.


                                      -63-

<PAGE>



23.7.6            No  special or unique  Manufacturer,  Engine  manufacturer  or
                  Aviation Authority  inspection or check requirements which are
                  specific  to  the  Aircraft  or  Engines  (as  opposed  to all
                  aircraft or engines of their types) will exist with respect to
                  the   Airframe,   Engines  and  Aircraft   equipment,   Parts,
                  components and systems.

23.7.7            All repairs,  modifications  and  alterations  to the Aircraft
                  effected  by  LESSEE or any of its  sublessees  will have been
                  accomplished  in  accordance  with  Manufacturer's  Structural
                  Repair  Manual (or FAA-  approved  data  supported by FAA Form
                  8110-3 and FAA Form 337).

23.7.8            The Aircraft will be returned  with the Engines  installed and
                  with the same equipment as at Delivery,  subject only to those
                  replacements, additions and Modifications permitted under this
                  Lease.

23.7.9            All  airworthiness  directives and other  instructions  of the
                  Aviation  Authority and FAA  applicable to the Aircraft  which
                  are  issued  prior to the date of return of the  Aircraft  and
                  require compliance (either by means of repetitive inspections,
                  modifications  or  terminating  action) prior to return of the
                  Aircraft  to  LESSOR  will  have  been  complied  with  on the
                  Aircraft on a  terminating  action  basis.  Any  airworthiness
                  directives  of the  Aviation  Authority  or FAA which  must be
                  completed  within one (1) year after the Termination Date must
                  also be performed on a  terminating  action basis by LESSEE at
                  LESSEE's cost. Airworthiness directives and instructions which
                  do not have a terminating  action will be  accomplished at the
                  highest  level of  inspection or  modification  possible.  If,
                  after  using best  efforts,  LESSEE is unable to  acquire  the
                  material,  parts or components  necessary to  accomplish  such
                  airworthiness directive, LESSEE will pay to LESSOR upon return
                  of  the  Aircraft  the  estimated  cost  of  terminating  such
                  airworthiness  directive.  If the  estimated  cost  cannot  be
                  mutually  agreed upon by LESSEE and LESSOR,  LESSEE and LESSOR
                  will each obtain an estimate  from a  reputable  FAA  approved
                  maintenance  facility  and  the  estimated  cost  will  be the
                  average of the two estimates.

23.7.10           The  Aircraft  will  be  in  compliance  with   Manufacturer's
                  Corrosion  Prevention and Control Program (CPCP) specified for
                  the model type by Manufacturer.

23.7.11           If any waivers, alternate means of compliance,  dispensations,
                  extensions  or  carry-overs   with  respect  to  airworthiness
                  directives  or  operating  or  maintenance   requirements  are
                  granted  by  the  Aviation   Authority  or  permitted  by  the
                  Maintenance Program, LESSEE at its


                                      -64-

<PAGE>



                  sole  cost  and  expense   will   nonetheless   perform   such
                  airworthiness  directives  and other  operating or maintenance
                  requirements on a terminating action basis as if such waivers,
                  alternate means of compliance, dispensations or extensions did
                  not exist.

23.7.12           The Aircraft  will be free from any Security  Interest  except
                  Permitted Liens.

23.7.13           All no-charge vendor and Manufacturer's  service bulletin kits
                  received by LESSEE for the Aircraft but not installed  thereon
                  will be on board the Aircraft as cargo.  At LESSOR's  request,
                  any other  service  bulletin kit that LESSEE has paid, or will
                  pay,  for will  also be  delivered  to  LESSOR  on  board  the
                  Aircraft,  but  LESSOR  will  reimburse  LESSEE for its actual
                  out-of-pocket costs for such kit, unless LESSEE purchased such
                  kit as part of its implementation of a service bulletin on its
                  fleet of aircraft of the same type of the Aircraft but had not
                  yet installed such kit on the Aircraft, in which case such kit
                  will be furnished free of charge to LESSOR.

23.7.14           The Aircraft will be free of any system-related  leaks and any
                  damage  resulting  therefrom.   All  repairs  will  have  been
                  performed  on  a  permanent   basis  in  accordance  with  the
                  applicable manufacturer's instructions.

23.7.15           The  Aircraft  fluid   reservoirs   (including  oil,   oxygen,
                  hydraulic  and water)  will be  serviced to full and the waste
                  tank  freshly  serviced  in  accordance  with   Manufacturer's
                  instructions.  Each  fuel  tank will be at least as full as at
                  Delivery.

23.7.16           All  fuel  tanks  will  have   recently   undergone  an  anti-
                  fungus/biological  growth contamination laboratory evaluation,
                  with appropriate  correction taken in the event that excessive
                  levels of contamination are identified.

23.7.17           At LESSOR's request, LESSEE will provide LESSOR with a written
                  summary  of the  results  of all  maintenance  and  inspection
                  sampling programs  involving or affecting the Aircraft and the
                  rest of its 737-300 aircraft fleet.

23.8              Checks  Prior to  Return.  Immediately  prior to return of the
                  Aircraft to LESSOR, LESSEE at its expense will do each of the
                  following:

                  (a)      Have performed,  by an  FAA-approved  repair station,
                  the next  full and  complete  zonal,  systems,  corrosion  and
                  structural "C" check and any other tasks listed in the MPD and
                  scheduled for completion at such date including all lesser and
                  corresponding Flight Hour,


                                      -65-

<PAGE>



                  Cycle  and  calendar  controlled  maintenance  and  inspection
                  tasks, all in accordance with the MPD, sufficient to clear the
                  Aircraft  for 3,200  Flight  Hours or Cycles of  operation  or
                  until its next  scheduled full and complete "C" check interval
                  in accordance  with the MPD  (whichever is greater)  (which in
                  any event  will not be less than one year).  LESSEE  will also
                  weigh the  Aircraft,  revise the weight and balance  equipment
                  list  records and compute  new weight and  balance  data.  Any
                  discrepancies   revealed   during  such   inspection  will  be
                  corrected in accordance  with  Manufacturer's  maintenance and
                  repair manuals or FAA-approved  data. So long as the same does
                  not require any additional downtime,  LESSEE agrees to perform
                  during such check any other work reasonably required by LESSOR
                  (and not otherwise  required under this Lease) and LESSOR will
                  reimburse  LESSEE for LESSEE's actual cost of such work, or if
                  such work is performed by LESSEE, LESSOR will reimburse LESSEE
                  at LESSEE's  preferred  customer  rates, in either case within
                  ten  (10)  days  after   submission  of  complete  and  proper
                  invoices.

                  (b)      Perform an internal and external corrosion inspection
                  in accordance  with the MPD and correct any  discrepancies  in
                  accordance with the  recommendations  of Manufacturer  and the
                  Structural  Repair Manual.  In addition,  all inspected  areas
                  will  be  properly   treated  with   corrosion   inhibitor  as
                  recommended by Manufacturer.

                  (c)      Remove  LESSEE's  exterior  markings,  including  all
                  exterior  paint,   by  stripping  (or,  at  LESSOR's   option,
                  pneumatically  scuff/sanding)  the paint from the Airframe and
                  clean,  reseal,  refinish,  prepare (including  application of
                  alodine or another corrosion inhibitor) and prime the surfaces
                  to be painted, all in accordance with Manufacturer's and paint
                  manufacturer's  recommendations.  LESSEE will then repaint the
                  Airframe  white.  Such painting will be accomplished in such a
                  manner as to result in a  uniformly  smooth  and  cosmetically
                  acceptable  aerodynamic surface. All external placards,  signs
                  and  markings  will be properly  attached,  free from  damage,
                  clean and legible.

                  (d)      If reasonably required by LESSOR repaint the interior
                  of the Aircraft, including flight deck, and replace placards.

                  (e)      In accordance with  Manufacturer's  Structural Repair
                  Manual or FAA-approved data,  permanently repair damage to the
                  Aircraft  that exceeds  Manufacturer's  limits and replace any
                  non-flush  structural patch repairs  installed on the Airframe
                  with flush-type repairs, unless otherwise agreed in writing by
                  LESSOR.


                                      -66-

<PAGE>



                  LESSEE will not be required to replace any  non-flush  patches
                  that were present on the Aircraft at Delivery.

                  (f)      Perform  full  and  complete  hot  and  cold  section
                  videotape   borescope  on  each  Engine  and  its  modules  in
                  accordance with the Engine manufacturer's  maintenance manual,
                  with  LESSOR or its  representatives  entitled  to be present.
                  LESSEE will  provide  documentation  to LESSOR's  satisfaction
                  that such inspection does not reveal any condition which would
                  cause the  Engine or any  module to be  unserviceable,  beyond
                  serviceable  limits or serviceable with limitations  under the
                  Engine manufacturer's  maintenance manual. LESSEE will correct
                  any discrepancies in accordance with the guidelines set out by
                  the Engine  manufacturer  which may be discovered  during such
                  inspection.

                  (g)      If the Engine or APU historical and technical records
                  and/or  condition  trend  monitoring data of any Engine or APU
                  indicate an acceleration in the rate of  deterioration  in the
                  performance  or a material  increase in oil  consumption of an
                  Engine or APU, LESSEE will correct, to LESSOR's  satisfaction,
                  the  conditions   that  are  determined  to  be  causing  such
                  accelerated rate of deterioration or material  increase in oil
                  consumption.

                  (h)      In accordance with the applicable maintenance manual,
                  accomplish  a  maximum   take-off  power   assurance  run  and
                  condition,  acceleration and bleed valve scheduling  checks on
                  the Engines. LESSEE will record the results of such checks and
                  evaluate  the  Engine  performance,  with  LESSOR  and/or  its
                  representative entitled to be present. The performance and all
                  operating  parameters of each Engine will be within the limits
                  specified in the Manufacturer's maintenance manual.

                  (i)      In the  event the  Engine  historical  and  technical
                  records,  borescope  inspection,  trend  monitoring  and other
                  checks specified in (f), (g) and (h) above result in a dispute
                  regarding the conformity of an Engine with the requirements of
                  this  Article 23,  LESSEE and LESSOR will  consult with Engine
                  manufacturer and follow Engine manufacturer's  recommendations
                  with regard to  determining  if such Engine  complies with the
                  requirements  of this  Article  23 and the manner in which any
                  discrepancies from the requirements of this Article 23 will be
                  rectified.

23.9              Part Lives.  At return,  the condition of the Aircraft will be
                  as follows:

                  (a)      The Aircraft will have zero (0) hours  consumed since
                  the last full and complete zonal, systems,


                                      -67-

<PAGE>



                  corrosion and structural "C" check  (excluding  hours consumed
                  on the acceptance  flight) and will not have  accumulated more
                  than 12,800  hours,  or four (4) times the then MPD hourly "C"
                  check  interval,  since  the last full and  complete  systems,
                  zonal, corrosion and structural "C7" check as defined in MPD.

                  (b)      (i) Each  Part of an  Engine  which  has a hard  time
                  limit will,  except as set forth in (ii) below,  have at least
                  fifty  percent  (50%) of its full  allotment  of  hours/cycles
                  (whichever  is the more  limiting)  remaining to operate until
                  its  next-scheduled  overhaul or removal.  In  addition,  each
                  Engine will also have at least five thousand (5,000) hours and
                  five   thousand    (5,000)   cycles    remaining   until   its
                  next-anticipated  full  performance   restoration  shop  visit
                  (based  upon the  Engine  manufacturer's  estimated  mean time
                  between  removals  (MTBR) for  engines of the same type as the
                  Engines).  Each Engine  will also have a remaining  EGT margin
                  sufficient  to permit  the  operation  of such  Engine for the
                  hours and cycles set forth in the  preceding  sentence,  based
                  upon the historical  experience of the Engine manufacturer for
                  engines of the same type as the Engines.  In the event that on
                  Delivery  LESSEE  received the Engine or any Part thereof from
                  LESSOR in a  condition  less  than what is set forth  above in
                  this  paragraph,  as  evidenced  on  the  attachments  to  the
                  Estoppel and Acceptance Certificate,  it is agreed that LESSEE
                  will not be required to return such Engine or Part  thereof in
                  a better condition than that in which it was received.

                  (ii)     Each Part of an Engine  which has a life  limit  will
                  have at least 3,000 cycles remaining to operate until its next
                  scheduled  removal.  In  addition,  the overall  average  life
                  remaining  on all life  limited  Parts of an Engine will be no
                  less than the overall  average life  remaining on the Parts of
                  such Engine as they were received at Delivery.

                  (c)      The  installed APU will be in  serviceable  condition
                  with no more  than  2,000  hours  accumulated  since  its last
                  Overhaul (excluding hours consumed on the acceptance flight).

                  (d)      The installed main and nose landing gear,  components
                  and their  associated  actuators,  side  braces and parts (the
                  "Landing Gear") will have no more  hours/cycles/calendar  time
                  consumed  since  the last  Overhaul  than at  Delivery  of the
                  Aircraft.  In the event the  installed  Landing  Gear does not
                  meet the  foregoing  condition,  LESSEE  will be  entitled  to
                  return the Landing Gear with a minimum of twenty-five  percent
                  (25%) of the full allotment of hours/cycles/calendar


                                      -68-

<PAGE>



                  time (whichever is the more limiting  factor)  remaining until
                  the next overhaul or scheduled  removal,  provided that LESSEE
                  will  reimburse  LESSOR  an  amount  equal  to the  number  of
                  hours/cycles/calendar  time  (whichever  is the more  limiting
                  factor)  consumed on the Landing Gear at return since the last
                  overhaul   in  excess  of  that  which   existed  at  Delivery
                  multiplied by a Landing Gear Overhaul cost per hour calculated
                  as follows:

                           such Landing Gear  Overhaul  cost price per hour will
                           be the quotient obtained by dividing (i) the expected
                           cost of the next  Landing  Gear  Overhaul by (ii) the
                           full allotment of hours between  scheduled  Overhauls
                           for such  Landing  Gear as  approved  by the MPD.  If
                           LESSEE and LESSOR are unable to agree on the expected
                           cost of the next  scheduled  Landing  Gear  Overhaul,
                           such cost will be  established  by taking the average
                           of the price quotes  submitted  by two (2)  reputable
                           FAA-approved  Landing Gear Overhaul  facilities,  one
                           selected by LESSEE and the other selected by LESSOR.

                  (e)      Each  component or Part of the  Aircraft  which has a
                  hard time  (hour/cycle)  limit to overhaul pursuant to the MPD
                  will have the greater of (i) fifty percent (50%)  of  the full
                  allotment of hours and cycles,  or (ii) the lesser of (1) five
                  thousand (5,000) hours or cycles  (whichever is applicable) or
                  (2) one hundred percent (100%) of  its total approved life, if
                  its approved life is less than five thousand (5,000)  hours or
                  cycles, remaining to operate until its next scheduled overhaul
                  pursuant  to the MPD.  In the event  that on  Delivery  LESSEE
                  received from LESSOR hard time controlled  components or Parts
                  less  than  what is set  forth  above  in this  paragraph,  as
                  evidenced on the  attachments  to the Estoppel and  Acceptance
                  Certificate,  it is agreed that LESSEE will not be required to
                  return such hard time controlled components or Parts in better
                  condition than that in which they were received.

                  (f)      Each  life-limited  component or Part of the Aircraft
                  will have the greater of (i) fifty percent (50%) of  the  full
                  allotment of hours and cycles,  or (ii) the lesser of (1) five
                  thousand (5,000)  hours or cycles or (2) one  hundred  percent
                  (100%)  of  its  total  approved  life  remaining  to  operate
                  pursuant  to the  Maintenance  Program.  In the event  that on
                  Delivery LESSEE received from LESSOR  life-limited  components
                  or Parts in a  condition  less than what is set forth above in
                  this  paragraph,  as  evidenced  on  the  attachments  to  the
                  Estoppel and Acceptance Certificate,  it is agreed that LESSEE
                  will not be required to return such life-  limited  components
                  or Parts in  better  condition  than  that in which  they were
                  received.


                                      -69-

<PAGE>




                  (g)      Each  component  or Part of the  Aircraft  that has a
                  calendar limit  (including  emergency  equipment) will have at
                  least as much time  remaining to operate at the date of return
                  of the Aircraft to LESSOR as it had at  Delivery,  pursuant to
                  the Maintenance Program.

                  (h)      No Engine,  installed  component  or Part will have a
                  total time since new  greater  than one  hundred  ten  percent
                  (110%)  of that  of the  Airframe  and,  with  respect  to all
                  installed  components as a group,  the components will have an
                  average  total  time  since  new no  greater  than that of the
                  Airframe, so long as such condition was met at Delivery.

                  (i)      The  Aircraft  tires and brakes will be new or in the
                  same condition as at Delivery.

23.10             LESSEE's Continuing Obligations. In the event that LESSEE does

                  not return  the  Aircraft to LESSOR on the Expiration  Date in
                  the  condition  required  by  this  Article 23 for  any reason
                  (whether  or  not  the  reason  is  within  LESSEE's  control,
                  except as provided below):

                  (a)      the  obligations  of LESSEE  under  this  Lease  will
                  continue in full force and effect on a day-to-day  basis until
                  such return.  This will not be considered a waiver of LESSEE's
                  Event of Default or any right of LESSOR hereunder;

                  (b)      Until such time as the  Aircraft  is  redelivered  to
                  LESSOR and put into the condition required by this Article 23,
                  instead of paying the Rent  specified in Article  5.3,  LESSEE
                  will  pay  twice  the  amount  of Rent  for  each day from the
                  scheduled  Expiration  Date  until the  Termination  Date (the
                  monthly  Rent  payable  under  Article  5.3.1 will be prorated
                  based on the actual number of days in the  applicable  month).
                  Notwithstanding  the foregoing,  if the delay is caused solely
                  by a force  majeure,  LESSEE  will only be required to pay the
                  normal  stated Rent during any such delay and payment  will be
                  made upon presentation of LESSOR's invoice;  and if such delay
                  in return is the direct and sole result of LESSOR's failure to
                  perform  any   redelivery   inspection  and  acceptance  in  a
                  commercially  reasonable  manner,  LESSEE  shall  pay no  Rent
                  during such delay;

                  (c)      LESSOR   may   elect,   in  its  sole  and   absolute
                  discretion,  to accept the return of the Aircraft prior to the
                  Aircraft  being put in the condition  required by this Article
                  23 and thereafter have any such non- conformance  corrected at
                  such time as LESSOR may deem  appropriate  (but within  ninety
                  (90)  days  following  the  return  of  the  Aircraft)  and at
                  commercial rates then


                                      -70-

<PAGE>



                  charged  by the  Person  selected  by LESSOR to  perform  such
                  correction.  Any direct  expenses  incurred by LESSOR for such
                  correction  will  become  additional  Rent  payable  by LESSEE
                  within fifteen (15) days following the submission of a written
                  statement by LESSOR to LESSEE, identifying the items corrected
                  and setting  forth the expense of such  corrections.  LESSEE's
                  obligation  to pay such  supplemental  Rent will  survive  the
                  Termination Date.

23.11             Return Acceptance Certificate.  Upon return of the Aircraft in
accordance with the terms of this Lease, LESSOR will prepare and execute two (2)
Return  Acceptance  Certificates  in the form and  substance  of  Exhibit  I. In
addition, LESSEE and LESSOR will execute a Lease Termination for filing with the
FAA evidencing termination of this Lease.

23.12             Indemnities  and  Insurance.  The  indemnities  and  insurance
requirements  set  forth in  Articles  17 and 18,  respectively,  will  apply to
Indemnitees  and  LESSOR's   representatives  during  return  of  the  Aircraft,
including the ground inspection and acceptance flight.


                                      -71-

<PAGE>



         ARTICLE 24    ASSIGNMENT
         ----------    ----------

24.1              No  Assignment  by  LESSEE.  EXCEPT  AS  MAY  BE  SPECIFICALLY
                  PERMITTED  IN THIS LEASE, NO  ASSIGNMENT,  NOVATION, TRANSFER,
                  MORTGAGE OR  OTHER CHARGE  MAY BE MADE BY LESSEE OF ANY OF ITS
                  RIGHTS WITH  RESPECT  TO THE AIRCRAFT,  ENGINE OR PART OR THIS
                  LEASE.

24.2              Sale or Assignment by LESSOR.

24.2.1            Subject to LESSEE's rights pursuant to this Lease,  LESSOR may
                  at any time and  without  LESSEE's  consent  sell,  assign  or
                  transfer its rights and interest  hereunder or with respect to
                  the  Aircraft to a third party  ("LESSOR's  Assignee").  For a
                  period of two (2) years after such sale or  assignment  and at
                  LESSEE's  cost,  LESSEE  will  continue  to name  LESSOR as an
                  additional  insured  under the  Aviation  and Airline  General
                  Third Party Liability Insurance specified in Exhibit C.

24.2.2            Notwithstanding   Article  24.2.1  hereof,  LESSOR  shall  not
                  assign, mortgage,  pledge, convey or otherwise transfer any of
                  its  right,  title  or  interest  in or to this  Lease  or the
                  Aircraft, whether directly or indirectly,  through the sale or
                  other  transfer of all or  substantially  all of its assets or
                  business, or otherwise,  except on the conditions set forth in
                  this  Article  24.  LESSOR  may  transfer  to  another  Person
                  ("Lessor's Assignee") such right, title and interest,  subject
                  to the conditions that:

                  (a)      LESSOR's  Assignee  shall have full power,  authority
                  and legal  right to execute  and deliver and to perform all of
                  the  obligations of the LESSOR under this Lease that are being
                  assigned  to it  and  shall  provide  reasonably  satisfactory
                  evidence of such power and authority to LESSEE;

                  (b)      LESSOR's Assignee shall enter into one or more legal,
                  valid,  binding and enforceable  agreements that (i) is/are in
                  form suitable for  recordation by the FAA  (accompanied  by an
                  opinion of counsel addressed to LESSEE to the effect that such
                  agreement  or  agreements  are  legal,   valid,   binding  and
                  enforceable,  subject to a  customary  exception  relating  to
                  insolvency and similar laws), (ii) is/are effective to confirm
                  that such LESSOR's  Assignee  agrees to be bound by all of the
                  terms of,  and to  undertake  all of the  obligations  of, the
                  transferring   LESSOR,   whether   or  not   LESSOR  has  also
                  transferred  to such  LESSOR's  Assignee  any  portion  of the
                  Security  Deposit,  any  Reserves or any other  amount paid by
                  LESSEE hereunder and (iii) contain(s) each of


                                      -72-

<PAGE>



                  the representations and warranties made by the LESSOR herein;

                  (c)      LESSOR's  Assignee  shall  not  be an  airline  which
                  directly competes with LESSEE;

                  (d)      In  connection  with any  transfer  by LESSOR of less
                  than all of its right, title and interest in this Lease or the
                  Aircraft  (other than a mortgage or other security  agreement)
                  (i) the  obligations  of LESSOR arising under this Lease shall
                  become joint and several  obligations  among  LESSOR,  the new
                  LESSOR's  Assignee and all other  LESSOR's  Assignees (if any)
                  and (ii)  notwithstanding the other provisions of this Article
                  24,  LESSEE  shall  pay to one  party,  and that  party  shall
                  receive on behalf of each  LESSOR's  Assignee,  all  payments,
                  notices  and other  communications  to be  provided  by LESSEE
                  hereunder  and each  LESSOR's  Assignee by accepting  any such
                  assignment appoints LESSOR or the appointed  representative as
                  its agent for the purposes of taking any action hereunder;

                  (e)      No  assignment,  sale,  transfer  or  granting  of  a
                  Security Interest by LESSOR hereunder shall impose or increase
                  any costs or expenses,  including  any costs related to Taxes,
                  to which  LESSEE  would  not have  been  subject  absent  such
                  transfer, assignment, sale, or security interest.

24.3              LESSEE Cooperation.  On request by LESSOR, LESSEE will execute
                  all such  documents (such  as a lease assignment agreement) as
                  LESSOR  may   reasonably    require    to   confirm   LESSEE's
                  obligations   under   this    Lease    and   obtain   LESSEE's
                  acknowledgement  that  LESSOR  is  not in breach of the Lease,
                  if  such  is  the  case.   LESSEE   will   provide  all  other
                  reasonable  assistance and  cooperation  to  LESSOR,  LESSOR's
                  Assignee  and  LESSOR's  Lender  in  connection  with any such
                  sale  or  assignment.  LESSOR  will  reimburse  LESSEE for its
                  reasonable  out-of-pocket  costs,  including  reasonable legal
                  fees incurred in reviewing documents required by LESSOR.

24.4              Protections.

24.4.1            Wherever  the term  "LESSOR" is used in this Lease in relation
                  to any of the  provisions  relating to  disclaimer,  title and
                  registration, indemnity and insurance contained in Articles 8,
                  14,  17 and 18,  respectively,  or  with  respect  to  Article
                  20.2.3,  the term "LESSOR" will be deemed to include  LESSOR's
                  Assignee and LESSOR's Lender, if applicable. Provided LESSOR's
                  assignee meets the requirement of this Article 24, LESSEE will
                  acknowledge and accept  LESSOR's  Assignee as the new "LESSOR"
                  under  this  Lease and  (except  in  accordance  with  Article
                  24.2.2(d))  will look  solely  to  LESSOR's  Assignee  for the
                  performance of all


                                      -73-

<PAGE>



                  LESSOR  obligations  and covenants under this Lease arising on
                  and after the Aircraft sale date.

24.4.2            In the event that LESSOR advises LESSEE that LESSOR intends to
                  sell the  Aircraft and assign this Lease to a Person who has a
                  net worth which is less than US$25,000,000,  LESSEE shall have
                  five (5) Business Days to  irrevocably  commit to purchase the
                  Aircraft for the price, on the terms and within the time frame
                  that  LESSOR's  purchaser  has agreed  to. If LESSEE  does not
                  irrevocably  commit in writing  within such five (5)  Business
                  Days to purchase the Aircraft, LESSOR may sell the Aircraft to
                  LESSOR's  purchaser  provided such purchaser complies with and
                  meets all of the  requirements of this Article 24. LESSOR will
                  advise  LESSEE  as  soon  as  possible  of any  offers  LESSOR
                  receives  regarding  the purchase of the  Aircraft  that would
                  trigger this provision.


                                      -74-

<PAGE>



         ARTICLE 25    DEFAULT OF LESSEE
         ----------    -----------------

25.1              LESSEE Notice to LESSOR. LESSEE will promptly notify LESSOR if
                  LESSEE becomes aware of the occurrence of any Default.

25.2              Events of Default. The occurrence of any of the following will
                  constitute  an  Event of  Default and  material breach of this
                  Lease by LESSEE:

                  (a)      LESSEE fails to take  delivery of the  Aircraft  when
                  obligated to do so under the terms of this Lease.

                  (b)      LESSEE  fails  to make a Rent or  other  payment  due
                  hereunder  in the manner and by the date  provided  herein and
                  such failure  continues for three (3) Business Days after such
                  payment is due.

                  (c)      LESSEE  fails to obtain  or  maintain  the  insurance
                  required by Article 18.

                  (d)      LESSEE  fails to return the Aircraft to LESSOR on the
                  Expiration  Date in accordance with Article 23 unless delay is
                  caused solely by LESSOR.

                  (e)      LESSEE  fails to observe or perform  any of its other
                  obligations  hereunder  and  fails  to cure  the  same  within
                  fifteen (15) days after written notice  thereof to LESSEE.  If
                  such failure cannot by its nature be cured within fifteen (15)
                  days, LESSEE will have the reasonable number of days necessary
                  to cure such  failure  (not to  exceed a period of sixty  (60)
                  days) so long as it uses diligent and all  reasonable  efforts
                  to do so.

                  (f)      Any  representation  or  warranty  of  LESSEE  herein
                  proves to have been untrue in any  material  respect as of the
                  date when made and the same  remains  material  at the time of
                  discovery.

                  (g)      The  registration  of the Aircraft is cancelled other
                  than as a result of an act or omission of LESSOR.

                  (h)      LESSEE  or  an  approved   sublessee  no  longer  has
                  unencumbered   control   (other  than   Permitted   Liens)  or
                  possession  of the  Aircraft or Engines,  except as  otherwise
                  permitted by this Lease.

                  (i)      LESSEE   temporarily  or   permanently   discontinues
                  business  (except in the case of a labor action which does not
                  create a  material  risk of LESSEE  not being  able to perform
                  hereunder)   or  sells  or   otherwise   disposes  of  all  or
                  substantially all of its assets, except as may be specifically
                  permitted under this Lease.


                                      -75-

<PAGE>



                  (j)      LESSEE no longer possesses the licenses, certificates
                  and  permits  required  for the  conduct of its  business as a
                  certificated air carrier in the U.S.

                  (k)      LESSEE  (i)  suspends  payment  on its debts or other
                  obligations  generally,  (ii)  is  unable  to  or  admits  its
                  inability to pay its debts or other  obligations  as they fall
                  due, (iii) is adjudicated or becomes  bankrupt or insolvent or
                  (iv)  proposes  or  enters  into  any   composition  or  other
                  arrangement for the benefit of its creditors generally.

                  (l)      Any proceedings,  resolutions, filings or other steps
                  are  instituted   with  respect  to  LESSEE  relating  to  the
                  bankruptcy,  liquidation,  reorganization  or protection  from
                  creditors  of  LESSEE  or  a  substantial   part  of  LESSEE's
                  property.  If  instituted  by  LESSEE,  the  same  will  be an
                  immediate  Event of Default.  If instituted by another Person,
                  the  same  will  be an  Event  of  Default  if not  dismissed,
                  remedied or relinquished within sixty (60) days.

                  (m)      Any order, judgment or decree is entered by any court
                  of competent  jurisdiction  appointing a receiver,  trustee or
                  liquidator of LESSEE or a substantial part of its property, or
                  if  a  substantial   part  of  LESSEE's   property  is  to  be
                  sequestered. If instituted or done with the consent of LESSEE,
                  the same will be an immediate Event of Default.  If instituted
                  by another Person, the same will be an Event of Default if not
                  dismissed, remedied or relinquished within sixty (60) days.

                  (n)      Any  indebtedness  for borrowed moneys or a guarantee
                  or similar obligation owed by LESSEE with an unpaid balance of
                  Three Million U.S. Dollars (US$3,000,000)  or more becomes due
                  or is declared due before its stated  maturity or LESSEE is in
                  payment  default  under  any  other  lease,  conditional  sale
                  agreement or other  agreement (and any applicable cure periods
                  have expired)  pursuant to which LESSEE has  possession of any
                  aircraft.

                  (o)      LESSEE  is  in  default  under  any  other  lease  or
                  agreement between LESSEE and LESSOR and the same is not waived
                  or cured within its specified cure period.

                  (p)      Any approved  sublessee acts so as to prevent present
                  or future  performance by LESSEE of its obligations under this
                  Lease.

25.3              LESSOR's  General Rights.  Upon the occurrence of any Event of
                  Default,   all  rights  of  LESSEE  hereunder  to  continued
                  possession  of  the  Aircraft  will  immediately  cease  and
                  terminate


                                      -76-

<PAGE>



                  (but LESSEE's obligations hereunder will continue, including
                  the  obligations  to  protect  and insure  the  Aircraft  as
                  required under this Lease).  LESSOR may do all or any of the
                  following  at its option (in  addition to such other  rights
                  and  remedies  which LESSOR may have by statute or otherwise
                  but subject to any requirements of applicable Law):

                  (a)      Terminate  this  Lease by  giving  written  notice to
                  LESSEE.

                  (b)      Require that LESSEE  immediately move the Aircraft to
                  an  airport  or  other  location  in  the   continental   U.S.
                  designated by LESSOR.

                  (c)      For LESSEE's account, do anything that may reasonably
                  be required  to cure any  default and recover  from LESSEE all
                  reasonable  costs,  including legal fees and expenses incurred
                  in doing so and Default Interest.

                  (d)      Proceed as appropriate to enforce performance of this
                  Lease  and to  recover  any  damages  for the  breach  hereof,
                  including the amounts specified in Article 25.5.

                  (e)      Terminate  this  Lease by  taking  possession  of the
                  Aircraft or by serving notice  requiring  LESSEE to return the
                  Aircraft to LESSOR at the location  specified by LESSOR in the
                  continental  U.S. If LESSOR takes  possession of the Aircraft,
                  it may enter upon  LESSEE's  premises  where the  Aircraft  is
                  located without liability.  Upon repossession of the Aircraft,
                  LESSOR will then be entitled to sell,  lease or otherwise deal
                  with the Aircraft free of any right or claim of LESSEE. LESSOR
                  will be  entitled  to the full  benefit  of its  bargain  with
                  LESSEE.

                  (f)      Apply all or any portion of the  Security  Deposit or
                  the Reserves and any other security  deposits or reserves held
                  by LESSOR pursuant to any other agreements  between LESSOR and
                  LESSEE to any amounts due.

25.4              Deregistration and Export of Aircraft.  If an Event of Default
has  occurred  and is  continuing,  LESSOR  may  take  all  steps  necessary  to
deregister   the  Aircraft  in  and  export  the  Aircraft  from  the  State  of
Registration.

25.5              LESSEE  Liability for Damages.  If an Event of Default occurs,
in addition to all other remedies available at law or in equity,  LESSOR has the
right to recover from LESSEE and LESSEE will pay LESSOR  within two (2) Business
Days  after  LESSOR's  written  demand,  all  of  the  following,   but  without
duplication:


                                      -77-

<PAGE>



                  (a)      All amounts  which are then due and unpaid  hereunder
                  and which become due prior to the earlier of LESSOR's recovery
                  of  possession  of the Aircraft or LESSEE  making an effective
                  tender thereof.

                  (b)      Any losses  suffered  by LESSOR  because of  LESSOR's
                  inability to place the  Aircraft on lease with another  lessee
                  or to otherwise  utilize the  Aircraft on  financial  terms as
                  favorable to LESSOR as the terms  hereof or, if LESSOR  elects
                  to sell or dispose of the  Aircraft,  the funds  arising  from
                  such sale or other disposition are not as profitable to LESSOR
                  as leasing the  Aircraft in  accordance  with the terms hereof
                  would have been (and LESSOR will be entitled to accelerate any
                  and all scheduled Rent which would have been due from the date
                  of LESSOR's  recovery or repossession of the Aircraft  through
                  the Expiration Date).

                  (c)      All  properly   documented   costs   associated  with
                  LESSOR's exercise of its remedies hereunder, including but not
                  limited to repossession  costs,  legal fees,  Aircraft storage
                  costs,  Aircraft  re-lease or sale costs and LESSOR's internal
                  reasonable  and actual costs and expenses  (including the cost
                  of personnel time calculated based upon the compensation  paid
                  to the individuals involved on an annual basis).

                  (d)      Any amount of principal, interest, fees or other sums
                  paid or by LESSOR  payable  on account  of funds  borrowed  in
                  order to carry  any  unpaid  amount  resulting  from  LESSEE's
                  failure to make any payments due hereunder.

                  (e)      Any loss,  cost,  expense or  liability  sustained by
                  LESSOR due to LESSEE's  failure to  redeliver  the Aircraft in
                  the condition required by this Lease.

                  (f)      Any other loss,  damage,  expense,  cost or liability
                  which  LESSOR  suffers  or  incurs as a result of the Event of
                  Default and/or termination of this Lease.

25.6              Waiver of Default. By written notice to LESSEE,  LESSOR may at
its  election  waive any  Default or Event of Default and its  consequences  and
rescind and annul any prior notice of termination of this Lease.  The respective
rights of the  parties  will then be as they  would  have been had no Default or
Event of Default occurred and no such notice been given.

25.7              Present Value of Payments.  In  calculating  LESSOR's  damages
hereunder,  upon an Event of Default all Rent that would have been due hereunder
during the Lease Term if an Event of Default had not occurred will be calculated
on a present  value basis using a discount  rate of five percent (5%)  per annum
discounted to the date of payment.


                                      -78-

<PAGE>




25.8              Use of  "Termination  Date".  For  avoidance  of doubt,  it is
agreed that if this Lease  terminates  and the Aircraft is repossessed by LESSOR
due  to an  Event  of  Default,  then,  notwithstanding  the  use  of  the  term
"Termination  Date"  in  this  Lease,  the  period  of the  Lease  Term  and the
"Expiration Date" will be utilized in calculating the damages to which LESSOR is
entitled pursuant to Article 25.5.

25.9              Mitigation of Damages.  LESSOR will use reasonable  efforts to
mitigate damages.


                                      -79-

<PAGE>



         ARTICLE 26    NOTICES
         ----------    -------

26.1              Manner of Sending Notices. Any notice,  request or information
required  or  permissible  under this Lease will be in writing  and in  English.
Notices  will be  delivered  in  person or sent by telex,  fax,  letter  (mailed
airmail,  certified  and return  receipt  requested),  or by expedited  delivery
addressed to the parties as set forth in Article 26.2. In the case of a telex or
fax,  notice will be deemed  received upon actual  receipt (in the case of a fax
notice,  the date of actual  receipt  will be deemed to be the date set forth on
the  confirmation  of receipt  produced by the sender's fax machine  immediately
after the fax is sent).  In the case of a mailed  letter,  notice will be deemed
received on the tenth (10th) day after mailing.  In the case of a notice sent by
expedited  delivery,  notice will be deemed received on the date of delivery set
forth in the  records of the Person  which  accomplished  the  delivery.  If any
notice is sent by more  than one of the above  listed  methods,  notice  will be
deemed  received on the  earliest  possible  date in  accordance  with the above
provisions.

26.2              Notice Information.  Notices will be sent:

If to LESSOR:          INTERNATIONAL LEASE FINANCE CORPORATION
                       1999 Avenue of the Stars
                       39th Floor
                       Los Angeles, California 90067
                       United States of America

                       Attention:  Legal Department

                       Telex:  69-1400 INTERLEAS BVHL
                       Fax:        310-788-1990
                       Telephone:  310-788-1999

If to LESSEE:          WESTERN PACIFIC AIRLINES, INC.
                       2864 South Circle Drive
                       Suite 1100
                       Colorado Springs, CO 80906

                       Attention:  Chief Financial Officer

                       Fax:      1-719-527-7481
                       Telephone:  1-719-529-7737

or to such other  places and numbers as either  party  directs in writing to the
other party.


                                      -80-

<PAGE>



         ARTICLE 27    GOVERNING LAW AND JURISDICTION
         ----------    ------------------------------

27.1              California  Law. This Lease is being delivered in the State of
California  and will in all respects be governed by and  construed in accordance
with the Laws of the State of California  (notwithstanding  the conflict Laws of
the State of California).

27.2              Non-Exclusive  Jurisdiction  in  California.  As  permitted by
Section 410.40 of the  California  Code of Civil  Procedure,  the parties hereby
irrevocably  submit to the  non-exclusive  jurisdiction of the Federal  District
Court  for the  Central  District  of  California  and the  State of  California
Superior or Municipal  Court in Los  Angeles,  California.  Nothing  herein will
prevent either party from bringing suit in any other appropriate jurisdiction.

27.3              Service of Process.  The parties hereby consent to the service
of process (i) out of any of the courts  referred to above,  (ii) in  accordance
with Section 415.40 of the California  Code of Civil Procedure by mailing copies
of the summons and  complaint to the person to be served by air mail,  certified
or registered  mail to the address set forth in Article 26.2,  postage  prepaid,
return receipt  requested or (iii) in accordance with the Hague  Convention,  if
applicable.

27.4              Prevailing  Party in  Dispute.  If any  legal  action or other
proceeding is brought in connection with or arises out of any provisions in this
Lease,  the prevailing party will be entitled to recover  reasonable  attorneys'
fees and other  costs  incurred in such action or  proceedings.  The  prevailing
party will also, to the extent  permissible  by Law, be entitled to receive pre-
and post-judgment Default Interest.

27.5              Waiver. LESSEE and LESSOR hereby waive the right to a trial by
jury. LESSEE and LESSOR hereby  irrevocably waive any objection which it may now
or hereafter  have to the laying of the venue of any suit,  action or proceeding
arising out of or related to this Lease brought in any of the courts referred to
in Article 27.2, and hereby further  irrevocably  waives any claim that any such
suit,  action or  proceeding  brought in any such  court has been  brought in an
inconvenient forum.


                                      -81-

<PAGE>



         ARTICLE 28    MISCELLANEOUS
         ----------    -------------

28.1              Press  Releases.  The parties will give copies to one another,
in advance if possible, of all news, articles and other releases provided to the
public media specifically regarding this Lease.

28.2              Power of Attorney.  LESSEE hereby irrevocably  appoints LESSOR
as its attorney for the purpose of  exercising  remedies  provided in Article 25
following  an  Event of  Default,  including  without  limitation,  the  return,
repossession, deregistration of the Aircraft.

28.3              LESSOR  Performance for LESSEE.  The exercise by LESSOR of its
remedy of performing a LESSEE  obligation  hereunder is not a waiver of and will
not relieve  LESSEE from the  performance  of such  obligation at any subsequent
time or from the performance of any of its other obligations hereunder.

28.4              LESSOR's Payment  Obligations.  Any obligation of LESSOR under
this Lease to pay or release  any amount to LESSEE is  conditioned  upon (i) all
amounts  then due and payable by LESSEE to LESSOR  under this Lease or under any
other  agreement  between LESSOR and LESSEE having been paid in full and (ii) no
Default  having  occurred and  continuing  hereunder at the time such payment or
release of payment is payable to LESSEE.

28.5              Usury  Laws.   The  parties   intend  to  contract  in  strict
compliance  with the usury Laws of the State of  California  and,  to the extent
applicable,  the U.S.  Notwithstanding anything to the contrary in the Operative
Documents,  LESSEE  will  not be  obligated  to pay  Default  Interest  or other
interest in excess of the maximum non-usurious  interest rate, as in effect from
time to time, which may by applicable Law be charged,  contracted for, reserved,
received or  collected by LESSOR in  connection  with the  Operative  Documents.
During any period of time in which the  then-applicable  highest  lawful rate is
lower than the  Default  Interest  rate,  Default  Interest  will  accrue and be
payable at such  highest  lawful rate.  However,  if at later times such highest
lawful rate is greater  than the  Default  Interest  rate,  then LESSEE will pay
Default  Interest at the highest lawful rate until the Default Interest which is
paid by LESSEE  equals the amount of  interest  that would have been  payable in
accordance with the interest rate set forth in Article 5.7.

28.6              Delegation by LESSOR. LESSOR may delegate to any Person(s) all
or any of the rights,  powers or  discretion  vested in it by this Lease and any
such  delegation  may be made upon such  terms and  conditions  as LESSOR in its
absolute  discretion thinks fit but no such delegation shall release LESSOR from
any of its obligations except to the extent discharged by such delegates.


                                      -82-

<PAGE>



28.7              Confidentiality.  The Operative  Documents and all  non-public
information  obtained by either party about the other are  confidential  and are
between  LESSOR and LESSEE  only and will not be  disclosed  by a party to third
parties (other than to such party's auditors or legal advisors or as required in
connection  with any  filings of this  Lease in  accordance  with  Article 14 or
otherwise  as required by law)  without the prior  written  consent of the other
party.  If  disclosure  is required as a result of  applicable  Law,  LESSEE and
LESSOR will  cooperate with one another to obtain  confidential  treatment as to
the commercial terms and other material provisions of this Lease.

28.8              Rights of  Parties.  The rights of the parties  hereunder  are
cumulative,  not  exclusive,  may be exercised as often as each party  considers
appropriate  and are in addition to its rights under  general Law. The rights of
one party  against the other  party are not  capable of being  waived or amended
except by an express waiver or amendment in writing.  Any failure to exercise or
any delay in  exercising  any of such  rights  will not  operate  as a waiver or
amendment of that or any other such right any  defective or partial  exercise of
any such rights will not preclude  any other or further  exercise of that or any
other such right and no act or course of  conduct  or  negotiation  on a party's
part or on its behalf will in any way preclude  such party from  exercising  any
such right or constitute a suspension or any amendment of any such right.

28.9              Further Assurances.  Each party agrees from time to time to do
and perform such other and further acts and execute and deliver any and all such
other  instruments  as may be required  by Law or  reasonably  requested  by the
auditors of the other party or requested by other party to  establish,  maintain
or protect the rights and remedies of the  requesting  party or to carry out and
effect the intent and purpose of this Lease.

28.10             Use of Word  "including".  The term "including" is used herein
without limitation and by way of example only.

28.11             Headings.  All article and paragraph headings and captions are
purely for convenience and will not affect the interpretation of this Lease. Any
reference to a specific  article,  paragraph or section will be interpreted as a
reference to such article, paragraph or section of this Lease.

28.12             Invalidity of any Provision.  If any of the provisions of this
Lease become invalid, illegal or unenforceable in any respect under any Law, the
validity,  legality and  enforceability of the remaining  provisions will not in
any way be affected or impaired.

28.13             Negotiation. The terms of this Lease are agreed by LESSOR from
its principal place of business in Los Angeles, California.


                                      -83-

<PAGE>



28.14             Time  is of  the  Essence.  Time  is of  the  essence  in  the
performance   of  all   obligations   of  the  parties  under  this  Lease  and,
consequently,  all time  limitations  set forth in the  provisions of this Lease
will be strictly observed.

28.15             Amendments in Writing.  The  provisions of this Lease may only
be amended or modified by a writing executed by LESSOR and LESSEE.

28.16             Counterparts.  This  Lease may be  executed  in any  number of
identical counterparts,  each of which will be deemed to be an original, and all
of which  together  will be deemed to be one and the same  instrument  when each
party has signed and delivered one such counterpart to the other party.

28.17             Delivery  of  Documents  by  Fax.   Delivery  of  an  executed
counterpart  of this Lease or of any other  documents  in  connection  with this
Lease by fax will be deemed as effective as delivery of an  originally  executed
counterpart. Any party delivering an executed counterpart of this Lease or other
document by fax will also deliver an originally  executed  counterpart,  but the
failure of any party to deliver an originally executed counterpart of this Lease
or such other  document  will not affect the validity or  effectiveness  of this
Lease or such other document.

28.18             Entire  Agreement.  The  Operative  Documents  constitute  the
entire agreement  between the parties in relation to the leasing of the Aircraft
by LESSOR to LESSEE and supersede all previous  proposals,  agreements and other
written and oral communications in relation hereto. The parties acknowledge that
there  have  been  no  representations,   warranties,  promises,  guarantees  or
agreements, express or implied, except as set forth herein.


                                      -84-

<PAGE>



         IN WITNESS  WHEREOF,  LESSEE and LESSOR  have  caused  this Lease to be
executed by their respective officers of this 31st day of May, 1996.

INTERNATIONAL LEASE FINANCE            WESTERN PACIFIC AIRLINES, INC.
CORPORATION

By: ______________________________     By: _______________________________


Its: _____________________________     Its: ______________________________



                                      -85-

<PAGE>



           EXHIBIT A                        AIRCRAFT DESCRIPTION
           ---------                        --------------------

Aircraft Manufacturer and Model:               Boeing 737-3Q8

Seating Configuration:                         148Y

Manufacturer's Serial Number:                  24299

Registration Mark:                             N956WP
                                               (formerly EC-FER)

Engine Manufacturer and Model:                 CFM-56-3B2

Engine Serial Numbers:                         722248 and 722249

Engine Thrust Rating                           22,000 pounds

Maximum Gross Takeoff Weight:                  137,000 pounds



                                      -86-

<PAGE>



                 EXHIBIT B     CONDITION AT DELIVERY
                 ---------     ---------------------

Engines
-------
Each Engine will be in serviceable condition.

Each life  limited part of an Engine will have at least three  thousand  (3,000)
cycles remaining until removal.

LESSOR will accomplish  maximum takeoff power assurance checks of each Engine in
accordance with the Engine manufacturer's recommended procedures.

LESSOR  will  accomplish  a  full  hot  and  cold  section  videotape  borescope
inspection  of each Engine in  accordance  with the  manufacturer's  maintenance
manual  and  ensure  all  parameters   are  within  the  engine   manufacturer's
maintenance manual limits.

LESSEE is entitled to be present during accomplishment of the above items.

APU
---
The APU will be in serviceable condition.

Landing Gear
------------
The  installed  landing  gear  will  have at least  fifty  percent  (50%) of its
allowable hours/cycles remaining until its next overhaul.

Time-Controlled Components
--------------------------
Time  controlled  ("Hard-time")  components  will have at least  three  thousand
(3,000)  hours/cycles  or twelve (12) months  remaining until the next scheduled
overhaul.

Maintenance Checks
------------------
The Aircraft will be delivered  fresh from a full and complete  systems,  zonal,
corrosion  and  structural  "7C" check per the MPD and all  calendar  controlled
corrosion  inspection tasks will be completed  corresponding with the age of the
Aircraft.

The  Aircraft  will be weighed  prior to delivery  and LESSOR  shall  revise the
weight and balance records and compute new weight and balance data.

Interior Configuration
----------------------
The Aircraft will be delivered  with 148 Jepson Burns tourist class seats,  four
(4) Driessen galleys (G1, G2, G3 and G6) and three (3) lavatories ((1) FWD LAV A
and (2) AFT, LAV B, LAV C) installed.  However,  LESSEE has contracted  directly
with Pemco to configure the Aircraft with 138 tourist class seats.

Exterior & Interior Markings
----------------------------
The Aircraft will be delivered  with the fuselage  stripped,  primed and painted
white in accordance with Major U.S. Airline  standards  (provided LESSEE advises
LESSOR of the paint specification in


                                      -87-

<PAGE>



sufficient  time not to delay  delivery or cause  overtime  charges) and all FAA
required  exterior and interior  placards,  signs and markings  will be properly
attached, free of damage, clean and legible.

The flight deck paint will be touched up as necessary.

FAA Airworthiness Directives
----------------------------
All applicable FAA AD's which require  terminating  action within one year after
the delivery of the Aircraft will be complied with.

Aircraft Damage & Repairs
-------------------------
All damage on the Aircraft  which is out of limits as prescribed in the B737 SRM
will be permanently repaired in accordance with FAA-approved data.

All existing repairs will be permanent FAA-approved repairs.

Deferred Maintenance Items
--------------------------
All pilot  discrepancies  and  deferred  maintenance  items will be cleared on a
terminating action basis at the time of delivery,  including those defects noted
during the  acceptance  flight  check  which are out of  manufacturers  approved
limits.

Certification
-------------
The Aircraft  will be airworthy  and  delivered  with a current and valid US FAA
Certificate of Airworthiness for Transport  Category Aircraft in accordance with
FAR Part 21 (TCAS will not be installed on the Aircraft).

Aircraft Cleanliness
--------------------
The Aircraft  interior  (including  flight deck,  passenger  cabin and windows),
exterior and cargo  compartments  will be clean and  cosmetically  acceptable in
accordance  with  Major  U.S.  Airline  standards  and ready to be  placed  into
immediate commercial airline passenger flight operations.


                                      -88-

<PAGE>



                  EXHIBIT C     CERTIFICATE OF INSURANCE
                  ---------     ------------------------


[Refer to Aircraft Lease  Agreement  dated as of May 31, 1996 between LESSEE and
LESSOR  (the  "Lease").  If  applicable,  insurance  certificates  from both the
insurers and reinsurers will be provided. If there is a LESSOR's Lender, include
references to it where appropriate after references to LESSOR.]

To:      INTERNATIONAL LEASE FINANCE CORPORATION ("LESSOR")
         1999 Avenue of the Stars
         39th Floor
         Los Angeles, California  90067

WESTERN PACIFIC AIRLINES, INC.
Boeing 737-3Q8
Manufacturer's Serial No.:  24299
Registration Mark:  N956WP (the "Aircraft")

         The  following   security  has  subscribed  to  the  insurance   and/or
reinsurance policies:

         [LIST COMPANIES & PERCENTAGES]

         THIS IS TO CERTIFY THAT, as Insurance  Brokers,  we have effected Fleet
Insurance  in respect of aircraft  owned or operated  by LESSEE  (including  the
Aircraft) as specified below.

                             AIRCRAFT HULL ALL RISKS
                             -----------------------

COVERING:
--------

         All risks of  physical  loss or damage to the  Aircraft  from any cause
         (subject  only to the  exclusions  as specified  below),  for an Agreed
         Value of  Aircraft in the amount of (US$23,500,000 for  years  1-5  and
         $20,000,000  thereafter).

DEDUCTIBLES:
-----------

         US$    each and every loss.  Not applicable to Total
         Loss/Constructive Total Loss or Arranged Total Loss.

GEOGRAPHICAL COVERAGE:
---------------------

         Worldwide

               AVIATION AND AIRLINE GENERAL THIRD PARTY LIABILITY
               --------------------------------------------------

COVERING:
--------

         Aircraft Third Party, Passenger,  Baggage, Cargo and Mail Liability and
         Airline   General   Third   Party   Liability    (including   Premises,
         Hangarkeepers and Products  Liability) for combined single limit of not
         less than US$ 600,000,000


                                      -89-

<PAGE>



         (or such higher amount as LESSEE may carry on any other aircraft in its
         fleet) any one accident/occurrence (but in the aggregate in relation to
         Products  Liability),  extended to cover LESSEE's  liability  under the
         Lease to the extent of the risks  covered by the policy  including  war
         and allied perils under  Extended  Coverage  Endorsement  as per AVN 52
         subject only to exclusions as specified below.

GEOGRAPHICAL LIMITS:
-------------------

         Worldwide

                           HULL WAR AND ALLIED PERILS
                           --------------------------

COVERING:
--------

         Hull War Risks as per RJM Airline One, but including  (i)  confiscation
         or requisition (including by State of Registration),  (ii) hijacking or
         other unlawful seizure or wrongful  exercise of control of the Aircraft
         or crew in flight  (including  any attempt at such  seizure or control)
         and  including  "All Risks"  Continuation  Clause and  Extortion  Risks
         (including  expenses) and covering  claims excluded from Hull All Risks
         Policy while  Aircraft  outside  Assured's  control by reason of perils
         insured  under this  policy,  for an Agreed  Value of  Aircraft  in the
         amount of US$ 23,500,000

DEDUCTIBLE:
----------


GEOGRAPHICAL LIMITS:
-------------------

         Worldwide

                       AIRCRAFT SPARES ALL RISKS INSURANCE
                       -----------------------------------

COVERING:
--------

         All risks of  physical  loss or damage to  Aircraft  Parts or spares or
         Engines at all times  when  removed  from the  Aircraft  from  whatever
         cause,  subject only to the exclusions  specified below,  including the
         risks set down in AVN 48B other  than  paragraphs  (a) and (b)  thereof
         (but  including  paragraph (a) in respect of transit  risks) for limits
         of:

         US$ [AMOUNT] any one location US$ [AMOUNT] any one sending and covering
         replacement cost.

DEDUCTIBLE:
----------

         ___________ - each and every loss


                                      -90-

<PAGE>



GEOGRAPHICAL COVERAGE:
---------------------

         Worldwide

                       INSURANCE REQUIRED BY MANUFACTURER
                       ----------------------------------

         LESSEE will carry the insurance  required by Manufacturer in connection
         with  LESSOR's  assignment  of  Manufacturer's  warranties  and product
         support to LESSEE.


                              CONTRACTUAL INDEMNITY
                              ---------------------

         LESSEE has insurance  coverage for the indemnities  agreed to by LESSEE
         pursuant  to  Article  17 of the Lease to the  extent  provided  in the
         relevant policies.


                        PERIOD OF COVERAGE (ALL POLICIES)
                        ---------------------------------

         From Delivery Date of Aircraft to [EXPIRATION DATE]

         It is further  certified  that LESSOR has an interest in respect of the
         Aircraft under the Lease. Accordingly, with respect to losses occurring
         during  the  period  from the  Effective  Date  until the expiry of the
         Insurance  or until the  expiry or agreed  termination  of the Lease or
         until the  obligations  under the Lease are terminated by any action of
         the Insured or Lessor and in consideration of the Additional Premium it
         is confirmed that the Insurance afforded by the Policy is in full force
         and effect and it is further  agreed that the following  provisions are
         specifically endorsed to the Policy.

         1.   UNDER  THE HULL  (ALL  RISKS AND HULL WAR AND  ALLIED  RISKS)  AND
AIRCRAFT SPARES INSURANCES
--------------------------------------------------------------------------------

                  (a)      In respect  of any claim on  Equipment  that  becomes
payable on the basis of a Total Loss,  settlement  (net of any  relevant  Policy
Deductible)  shall be made to, or to the order of the  contract  Party(ies).  In
respect of any other claim,  settlement (net of any relevant Policy  Deductible)
shall be made with such  party(ies)  as may be necessary to repair the Equipment
unless otherwise agreed after consultation  between the Insurers and the Insured
and,  where  necessary  under  the  terms  of  the  Contract(s),   the  Contract
Party(ies).  Such  payments  shall only be made  provided they are in compliance
with all applicable laws and regulations.

                  (b)      Insurers agree 50/50 settlement in terms of AVS 103.

                  (c)      Insurers  have no right to replace the  Aircraft on a
Total Loss (arranged, constructive or otherwise).


                                      -91-

<PAGE>




                  (d)      Insurers recognize that LESSEE and LESSOR have agreed
that a Total Loss of the Airframe will constitute a Total Loss of the Aircraft.

                  (e)      In the event of Total Loss of the Aircraft,  Insurers
agree to pay LESSOR all amounts up to the Agreed Value.

                  (f)      In the event that LESSEE does reinsure, the following
cut-through  clause will apply:  Insurers confirm that in the event of any claim
arising under the hull insurances, the Reinsurers will in lieu of payment of the
Insurers,  its  successors  in interest and assigns,  pay to the person named as
sole loss payee under the original  insurances  that portion of any loss due for
which the Reinsurers  would otherwise be liable to pay the Insurers  (subject to
proof of loss),  it being  understood  and agreed  that any such  payment by any
Reinsurers  will fully  discharge  and release such  Reinsurer  from any and all
further  liability in  connection  therewith  and provide for payment to be made
notwithstanding  (a) any bankruptcy,  insolvency,  liquidation or dissolution of
the Insurers and (b) that the Insurers  have made no payment  under the original
insurance policies.

                  (g)      Insurers  confirm that under the insurance  policies,
if the Insured installs an engine owned by a third party on the Aircraft, either
(i) the hull insurance will  automatically  increase to such higher amount as is
necessary in order to satisfy both  Lessor's  requirement  to receive the Agreed
Value in the event of a Total Loss,  Constructive  Total Loss or Arranged  Total
Loss and the amount  required by the third party engine owner,  or (ii) separate
additional  insurance on such engine will attach in order to satisfy  separately
the requirements of the Insured to such third party engine owner.

         2.       UNDER THE LEGAL LIABILITY INSURANCE
                  -----------------------------------

                  (a)      Subject to the  provisions of this  Endorsement,  the
Insurance  will operate in all respects as if a separate  Policy had been issued
covering each party insured  hereunder,  but this  provision will not operate to
include any claim howsoever arising in respect of loss or damage to the Aircraft
insured under the Hull or Spares Insurance of the Insured.  Notwithstanding  the
foregoing  the total  liability  of Insurers in respect of any and all  Insureds
will not exceed the limits of liability stated in the Policy.

                  (b)      The Insurance  provided hereunder will be primary and
without right of contribution from any other insurance which may be available to
the Lessor.

                  (c)      This  Endorsement  does not provide  coverage for the
Lessor  with  respect  to  claims   arising  out  of  its  legal   liability  as
manufacturer, repairer, or servicing agent of the Aircraft.



                                      -92-

<PAGE>



         3.       UNDER ALL INSURANCES
                  --------------------

                  (a)      Lessor, its successors and assigns, and (with respect
to Aviation  and Airline  General  Third Party  Liability  only) its  directors,
officers and employees for their respective  rights and interests,  are included
as Additional Insured.

                  (b)      The  cover  afforded  to  Lessor  by  the  Policy  in
accordance with this  Endorsement will not be invalidated by any act or omission
(including  misrepresentation  and  non-disclosure) of any other person or party
which  results  in a breach of any term,  condition  or  warranty  of the Policy
PROVIDED THAT Lessor has not caused,  contributed  to or knowingly  condoned the
said act or omission.

                  (c)      Lessor  will have no  responsibility  for premium and
insurers will waive any right of set-off or  counterclaim  against Lessor except
in respect of  outstanding  premium in respect of the  Aircraft,  provided  that
Insurer may only set-off for premiums against the proceeds of the hull insurance
for  outstanding  premiums  in  connection  with hull all risks and hull war and
allied perils insurance.

                  (d)      Upon  payment of any loss or claim to or on behalf of
Lessor,  Insurers will to the extent and in respect of such payment be thereupon
subrogated to all legal and equitable rights of Lessor  indemnified  hereby (but
not against Lessor).  Insurers will not exercise such rights without the consent
of those  indemnified,  such  consent not to be  unreasonably  withheld.  At the
expense of Insurers Lessor will do all things reasonably necessary to assist the
Insurers to exercise said rights.

                  (e)      Except in respect of any provision  for  Cancellation
or Automatic  Termination  specified in the Policy or any  endorsement  thereof,
cover provided by this Endorsement may only be canceled or materially altered in
a manner  adverse  to Lessor by the  giving  of not less than  thirty  (30) days
notice in writing to the  appointed  broker.  Notice  will be deemed to commence
from the date  such  notice  is given by the  Insurers.  Such  notice  will NOT,
however, be given at normal expiry date of the Policy or any endorsement.

         4.       EXCEPT AS SPECIFICALLY  VARIED OR PROVIDED BY THE TERMS OF THE
ENDORSEMENT:
--------------------------------------------------------------------------------

                  (a)      LESSOR IS COVERED BY THE POLICY SUBJECT TO ALL TERMS,
CONDITIONS,  LIMITATIONS,  WARRANTIES,  EXCLUSIONS AND  CANCELLATION  PROVISIONS
THEREOF.

                  (b)      THE  POLICY  WILL  NOT BE  VARIED  BY ANY  PROVISIONS
CONTAINED IN THE LEASE WHICH PURPORT TO SERVE AS AN  ENDORSEMENT OR AMENDMENT TO
THE POLICY.


                                      -93-

<PAGE>



         SUBJECT (save as  specifically  stated in this  Certificate)  to policy
terms, conditions, limitations and exclusions.

                                            Yours faithfully,
                                            [BROKERS]


                                      -94-

<PAGE>



                  EXHIBIT D     BROKERS' LETTER OF UNDERTAKING
                  ---------     ------------------------------

To:      INTERNATIONAL LEASE FINANCE CORPORATION
         1999 Avenue of the Stars
         39th Floor
         Los Angeles, California  90067
         United States

Date:                                                           Our Ref:

Dear Sirs:

                         WESTERN PACIFIC AIRLINES, INC.
                                 Boeing 737-3Q8
                        Manufacturer's Serial No.: 24299
                            Registration Mark: N956WP


         We confirm that insurance has been effected for the account of [LESSEE]
(the "Operator")  covering all aircraft owned or operated by them, including the
above-mentioned  aircraft (the "Aircraft").  [Also confirm,  if applicable,  the
amount of any hull all risks or hull war and allied perils on the Aircraft which
LESSEE is carrying in excess of the Agreed Value (which excess  insurance  would
be payable to LESSEE). Such excess insurance may not exceed ten percent (10%) of
the Agreed Value.]


         Pursuant  to   instructions   received   from  the   Operator   and  in
consideration of your approving the arrangement of the Operator's "Fleet Policy"
(under which the  above-mentioned  Aircraft is insured) through the intermediary
of ourselves  as Brokers in  connection  with the  insurance  (the  "Insurance")
mentioned  in our  Certificate  of  Insurance  (Reference  No. [ ] dated [ ] and
attached hereto), we undertake as follows:

         1.       In  relation  to the Hull and War Risks  Insurance  to hold to
your order the insurance Slips or Contracts and any Policies which may be issued
or any policies  substituted  (with your consent)  therefor (but only insofar as
the same relate to the Aircraft  only) and the benefit of the Hull and War Risks
Insurance  thereunder,  but  subject to our  requirements  to operate  the Fleet
Policy insofar as it relates to any other aircraft insured thereunder.

         2.       To advise you of any of the following:

                  (a)      If  any   insurer   cancels   or  gives   notice   of
cancellation  of any of the  Insurance at least thirty (30) days (or such lesser
period as may be  available  in the case of war and Allied  Perils)  before such
cancellation is to take effect in respect of the Aircraft.


                                      -95-

<PAGE>



                  (b)      Of any act or  omission  or of any  event  (including
non-payment  of premium) of which we have  knowledge  or are  notified and which
might  invalidate  or  render  unenforceable  in  whole  or in  part  any of the
Insurance, insofar as the same relate to the Aircraft.

                  (c)      If we do not receive instructions to renew all or any
of the Insurance at least thirty (30) days prior to their expiration.

                  (d)      If any of the  Insurance  are not renewed on the same
terms  (save as to premium and period of cover and as you might  otherwise  have
notified us to be acceptable to you) seven (7) days prior to expiry thereof.

         The above undertakings are given subject to our continuing  appointment
for the time being as Insurance Brokers to the Operator.

         We also undertake to advise you if we cease to be Insurance  Brokers to
the operator.

                                                     Yours faithfully,


                                      -96-

<PAGE>



                  EXHIBIT E     ESTOPPEL AND ACCEPTANCE CERTIFICATE
                  ---------     -----------------------------------

         WESTERN PACIFIC  AIRLINES,  INC.  ("LESSEE"),  a corporation  organized
under the laws of Colorado does hereby represent, acknowledge, warrant and agree
as follows:

         1.       LESSEE and INTERNATIONAL LEASE FINANCE CORPORATION, as LESSOR,
have  entered  into  an  Aircraft  Lease  Agreement  dated  as of May  31,  1996
(hereinafter referred to as the "Lease"). Words used herein with capital letters
and not otherwise defined will have the meanings set forth in the Lease.

         2.       LESSEE has this ____ day of ___________, 19__ (Time: ________)
at ________________________ received from LESSOR possession of:

                  (a)      One   (1)   Boeing    737-3Q8    Aircraft,    bearing
Manufacturer's  serial number  24299,  together with two (2) CFM-56- 3B2 engines
bearing  manufacturer's  serial numbers  722248 and 722249,  all in an airworthy
condition and

                  (b)      All Aircraft  Documentation,  including the usual and
customary manuals, logbooks, flight records and historical information regarding
the  Aircraft,  Engines and Parts,  as listed in the Document  Receipt  attached
hereto.

         3.       The Airframe, Engines and Parts had the following hours/cycles
at Delivery:

                  (a)      Airframe:

                           Total hours _________ Total landings ___________
                           _____ hours/_____ cycles since last "7C" check
                           _____ hours/_____ cycles since last "22,400 flight
                                               hour structural check" check

                  (b)      Engines:

                                                Total        Hrs/Cycles since
Position       Serial No.       Total Hrs       Cycles       last shop visit
--------       ----------       ---------       ------       ----------------





                                      -97-

<PAGE>


                                                        Time Remaining to next
                                                       Life Limited Part Removal
                                                       -------------------------
                                                         Hours           Cycles
                                                         -----           ------

                           MSN

                           MSN

                  (c)      APU:             MSN ____

                           Total hours _____

                           _______ hours/_______ cycles remaining until next
                           HSI inspection

                           _______ hours/_______ cycles remaining on turbine
                           and compressor life limited parts

                  (d)      Landing Gears:

                                                 Hrs/Cycles       Hrs/Cycles to
                                  Total          since last        next Sched.
Position       Serial No.       Hrs/Cycles        Overhaul           Removal
--------       ----------       ----------       ----------       -------------

Nose

Right Main

Left Main

                  (e)      Status of  components  or Parts with  time/cycle  and
calendar limits (see attached sheet)

                  (f)      Fuel on  board  at  delivery:  _______  (circle  one)
pounds/kilos (_______ gallons)

                  (g)      Tire life remaining ____, ____, ____, ____

                  (h)      Brake life remaining ____, ____, ____, ____

         4.       All of the  foregoing  has been  delivered and accepted on the
date set forth above to LESSEE's full satisfaction and pursuant to the terms and
provisions of the Lease.

         5.       Pursuant to the terms of the Lease, the first Rent payment was
due and payable one (1)  Business  Day prior to the date set forth above and all
subsequent  monthly payments are due and payable as provided in Article 5.3.2 of
the Lease.

         6.       The Aircraft,  Engines,  Parts and Aircraft  Documentation  as
described in the Lease have been fully examined by LESSEE and have been received
in a condition  fully  satisfactory  to LESSEE and in full  conformity  with the
Lease in every respect.


                                      -98-

<PAGE>



         7.       The Lease is in full force and effect,  LESSOR has fully, duly
and timely  performed all of its obligations of every kind or nature  thereunder
and LESSEE has no claims, offsets,  deductions,  set-off or defenses of any kind
or nature in connection with the Lease.

         8.       Prior to the Delivery  Date,  LESSEE has obtained all required
permits,  authorizations,  licenses and fees of the State of Registration or any
Government  Entity thereof necessary in order for LESSEE to operate the Aircraft
as permitted by the terms of the Lease.


                        Dated on the date set forth above

                                       WESTERN PACIFIC AIRLINES, INC.


                                       By:__________________________

                                       Its:_________________________

AGREED AND ACCEPTED:

INTERNATIONAL LEASE FINANCE CORPORATION

By:______________________

Title:___________________

Date:____________________

ATTACHMENTS:      1.    List of Loose Equipment
                  2.    List of Aircraft Documentation
                  3.    List of Discrepancies
                  4.    List of time/cycle/calendar controlled
                        components and times since overhaul or new.


                                      -99-

<PAGE>



               ATTACHMENT 1 TO ESTOPPEL AND ACCEPTANCE CERTIFICATE
               ---------------------------------------------------
                             LIST OF LOOSE EQUIPMENT
                             -----------------------



                                      -100-

<PAGE>



               ATTACHMENT 2 TO ESTOPPEL AND ACCEPTANCE CERTIFICATE
               ---------------------------------------------------

                         LIST OF AIRCRAFT DOCUMENTATION
                         ------------------------------

         [The (a) manuals,and (b) Aircraft records and historical  documents set
forth below are to be returned  with the Aircraft in a current,  up-to-date  and
correct status]

                                     MANUALS
                                     -------
                    Name
                    ----

1.   FAA Approved Airplane Flight Manual

2.   Manufacturer's Operations Manual - Volume No. _____

3.   Quick Reference Handbook

4.   Maintenance Manuals

5.   Wiring Diagram Manuals

6.   Structural Repair Manual

7.   Illustrated Parts Catalog

8.   Vendor Illustrated Parts Catalog

9.   Overhaul Manuals

10.  Vendor Overhaul Manuals

11.  Drawings (Major Assembly and Installation)

12.  Weight and Balance Control and Loading Manual

13.  Weight and Balance Manual Supplement

14.  Actual Weight and Balance Compliance


                                      -101-

<PAGE>



                    AIRCRAFT RECORDS AND HISTORICAL DOCUMENTS
                    -----------------------------------------

1.   Aircraft log book (current and file copies)

2.   Aircraft Readiness Log (revised to time of return)

3.   Maintenance Time Control Report  (components,  maintenance  visit,  special
     items next due Airframe hours and cycles)

4.   Aircraft  previous  maintenance  visit record including the last inspection
     performed.

5.   Airworthiness Directive Compliance Summary

6.   Rigging Document

7.   Serviceable Tags for all rotable components installed (Airframe & Engines)

8.   ADs requiring continuous surveillance

9.   Service bulletin terminated accomplishment status

10.  Service bulletin requiring continuous  surveillance summary and maintenance
     control action

11.  Airframe and component history records

12.  FAA Form 337 for  Airframe,  repair/overhaul  certification  of last  major
     visit

13.  FAA Form 337 for each Engine,  repair/overhaul  certification  of last shop
     visit

14.  Engine Readiness Log for each Engine (components installed)

15.  Summary of Service Bulletin's accomplished for each Engine

16.  Summary of AD's accomplished for each Engine

17.  SB  and AD  status  requiring  continuous  surveillance  with  maintenance,
     control action for each Engine

18.  Engine time summary sheet including life limited items (for each Engine)

19.  Engine log books for each Engine (current and file copies)



                                      -102-

<PAGE>



                  Receipt of the foregoing documents,  except as noted,
                  is hereby acknowledged.




                                      -103-

<PAGE>



                  EXHIBIT F     OPINION OF COUNSEL
                  ---------     ------------------


TO BE GIVEN BY INDEPENDENT OUTSIDE COUNSEL OF LESSEE OR OTHER LAWYERS ACCEPTABLE
TO LESSOR


To:      International Lease Finance Corporation
         1999 Avenue of the Stars
         39th Floor
         Los Angeles, California  90067
         United States

Gentlemen:

This opinion is  furnished  to you  pursuant to Article  _______ of the Aircraft
Lease Agreement  dated as of May 31, 1996 (the "Lease")  between WESTERN PACIFIC
AIRLINES,   INC.   ("LESSEE")  and  INTERNATIONAL   LEASE  FINANCE   CORPORATION
("Lessor").  Defined  terms in this  opinion  are used  herein as defined in the
Lease.

I have  acted as  counsel  for the LESSEE in  connection  with the  preparation,
execution and delivery of the Lease.

In that connection I have examined:

                  (a)      The Lease and Estoppel and Acceptance Certificate

                  (b)      The charter of the LESSEE and all amendments  thereto
(the "Charter") and

                  (c)      Such other documents, agreements and instruments, and
such treaties, laws, rules, regulations,  decrees and the like, as I have deemed
necessary as a basis for the opinions hereinafter expressed.

[                 (d)      All of the  agreements  and  any  amendments  thereto
between  LESSEE  and all other  lessors  and  lenders of LESSEE  covering  other
aircraft operated by LESSEE on which the Engines can be installed.]

Based upon the foregoing and having regard for legal considerations which I deem
relevant, I am of the opinion that:

         1.       LESSEE is a corporation  duly  incorporated,  validly existing
and in good standing under the Laws of Delaware.  It has the corporate power and
authority  to carry on its business as  presently  conducted  and to perform its
obligations hereunder.

         2.       No authorization,  approval,  consent, license or order of, or
registration  with,  or the giving of notice to the  Aviation  Authority  or any
other  regulatory  body or authority  is required  for the valid  authorization,
execution, delivery and performance by the LESSEE of the Lease.


                                      -104-

<PAGE>




         3.       The Lease and the Estoppel  and  Acceptance  Certificate  have
each  been  duly  authorized,  executed  and  delivered  by  LESSEE.  Each  such
instrument is a valid,  enforceable  and binding  obligation of LESSEE except as
enforceability may be limited by bankruptcy, insolvency, reorganization or other
Laws of general application affecting the enforcement of creditors' rights.

         4.       The  execution  and delivery of the Lease and the Estoppel and
Acceptance  Certificate,  the  consummation  by the  LESSEE of the  transactions
contemplated  therein and compliance by the LESSEE with the terms and provisions
thereof do not and will not contravene  any Law applicable to LESSEE,  or result
in any breach of or  constitute  any default  under or result in the creation of
any  lien,  charge  or  encumbrance  upon any  property  of  LESSEE,  under  any
indenture,   mortgage,  chattel  mortgage,  deed  of  trust,  conditional  sales
contract,  bank loan or credit  agreement,  corporate  charter,  by-law or other
agreement  or  instrument  to which  LESSEE is a party or by which LESSEE or its
properties or assets may be bound or affected.

         5.       Except for any filing or recording  that may be required under
the U.S. Federal Aviation Administration and except for filing a UCC-1 Financing
Statement  with the  State of  Colorado,  no other  filing or  recording  of any
instrument  or document or any other acts are  necessary or advisable  under the
laws of the U.S. or Colorado to protect  LESSOR's  title to and ownership of the
Aircraft or in order for the Lease to constitute a valid and perfected  lease of
record relating to the Aircraft, it being understood that such counsel expresses
no  opinion  as to the  nature  of the  LESSOR's  title to the  Aircraft  on the
Delivery Date. [In opinion given at Delivery,  also confirm that the filings and
other steps described have been accomplished.]

         6.       LESSEE  holds all  licenses,  certificates  and  permits  from
applicable governmental authorities in the U.S. necessary for the conduct of its
business as a certificated air carrier and performance of its obligations  under
the Lease.

         7.       To my knowledge,  there are no suits or proceedings pending or
threatened  against  LESSEE before any  Government  Entity  against or affecting
LESSEE which, if adversely  determined,  would have a material adverse effect on
the  financial  condition or business of LESSEE or its ability to perform  under
the Lease,  except as  described in the filings  provided to LESSOR  pursuant to
Article 22.

         8.       The obligations of LESSEE under the Lease are direct,  general
and  unconditional  obligations  of LESSEE  and rank or will rank at least  pari
passu with all other present and future unsecured and unsubordinated obligations
(including  contingent  obligations)  of  LESSEE,  with  the  exception  of such
obligations  as are  mandatorily  preferred  by law  and  not by  reason  of any
encumbrance.


                                      -105-

<PAGE>



[        9.       None of the  agreements  and any  amendments  thereto  between
LESSEE and all other  lessors  and  lenders to LESSEE  covering  other  aircraft
operated  by LESSEE on which the Engines can be  installed  contain  terms which
provide or contemplate that such other lessors or lenders will obtain any right,
title or interest in an Engine which is installed on such other aircraft.]

                                            Very truly yours,



                                      -106-

<PAGE>



                  EXHIBIT G     ASSIGNMENT OF RIGHTS (AIRFRAME)
                  ---------     -------------------------------

Vice President - Aircraft Contracts
The Boeing Company
P.O. Box 3707
Seattle, Washington  98124

Subject:  Assignment of Rights -  International  Lease Finance  Corporation,  as
          Lessor  and  _______________________,  as  Lessee  of  one B  ________
          Aircraft, MSN ______

Gentlemen:

In  connection  with  International   Lease  Finance   Corporation's   lease  to
_______________________________  ("Lessee")  of a Boeing  aircraft  (more  fully
described below), reference is made to the following documents:

1.       Purchase  Agreement No. _____ dated as of  _________,  19__ between The
         Boeing Company ("Boeing") and International  Lease Finance  Corporation
         ("ILFC")  (the  "Purchase  Agreement")  under  which ILFC  purchased  a
         certain Boeing Model ___-___ aircraft,  bearing  Manufacturer's  Serial
         No. _______ (the "Aircraft").

2.       Spare Parts General Terms Agreement No. Q8 dated as of May 20, 1977, as
         amended  and  supplemented,  between  Boeing  and  International  Lease
         Finance Corporation (the "ILFC GTA").

3.       Aircraft   Lease   Agreement   ("Lease")   for  the  Aircraft   bearing
         manufacturer's  serial  number  _____  dated as of ________  __,  19__,
         between ILFC and _______________________________.

Pursuant to the Lease, ILFC has leased the Aircraft to Lessee.  Included in such
Lease  are the  transfer  to  Lessee  for and  during  the term of the Lease and
commencing on ________ __, 1996 of (a) rights  related to the Aircraft under the
Purchase Agreement and (b) rights to purchase from Boeing Spare Parts related to
the Aircraft.  In order to accomplish such transfer of rights,  as authorized by
the provisions of Article 10 of the Purchase Agreement,

(1)      Lessee,  its successors  and assigns,  hereby agrees to be bound by and
         comply with all applicable  terms,  conditions,  and limitations of the
         Purchase  Agreement   including,   without  limitation,   paragraph  10
         Exclusion of Liabilities, of Part A ------------------------ of Exhibit
         B  (Product  Assurance  Document)  and  paragraphs  1  and  2,  Buyer's
         Indemnification of Boeing and Buyer's ---------------------------------
         -------  Insurance,  respectively,  of Part E of  Exhibit  C  (Customer
         --------- Support Document)  (matters relating to  indemnification  and
         insurance), to the Purchase Agreement.  Lessee recognizes that Boeing's
         obligation  to provide  support  and  services  to Lessee  pursuant  to
         Exhibit C of the Purchase Agreement is


                                      -107-

<PAGE>



         conditioned  on the  receipt by Boeing of  evidence  of  compliance  by
         Lessee with the insurance requirements set forth in paragraph 2 of Part
         E of  Exhibit  C  in  a  form  satisfactory  to  Boeing  prior  to  the
         commencement of such support and services; and

(2)      Lessee,  its  successors  and  assigns,  confirms to Boeing that Lessee
         which  is not  presently  a party  to the  Spare  Parts  General  Terms
         Agreement  with  Boeing,  agrees to be bound by all  applicable  terms,
         conditions,  and  limitations  of  the  ILFC  GTA  including,   without
         limitation,  paragraphs  15.9 and 15.10 of  Article 15 of the ILFC GTA,
         and  Article  17 of the ILFC GTA,  and  paragraphs  9.8,  9.9 and 11 of
         Exhibit A to the ILFC GTA,  with  respect to any Spare  Parts or Leased
         Parts ordered for the Aircraft; and

(3)      ILFC agrees to remain  responsible for any payments due Boeing (a) with
         respect to the  Aircraft  under  Exhibit D (Airframe  and Engine  Price
         Adjustment) of the Purchase Agreement and (b) with respect to any Spare
         Part or Leased  Part for the  Aircraft  ordered  by ILFC under the ILFC
         GTA.

(4)      Further,  ILFC hereby  assigns to Lessee the sole authority to exercise
         all rights and powers of ILFC with  respect to the  Aircraft  under the
         Purchase  Agreement.  Such  authorization  shall  continue until Boeing
         shall have received from ILFC written notice to the contrary  addressed
         to  Boeing's  Vice  President,   Contracts,  P.O.  Box  3707,  Seattle,
         Washington  98124-2207.  Until Boeing shall have  received  such notice
         Boeing  shall be  entitled to deal  exclusively  and solely with Lessee
         with respect to the Aircraft,  under the Purchase  Agreement  and, with
         respect to the rights, powers, duties or obligations under the Purchase
         Agreement,  and all actions taken by Lessee or agreements  entered into
         by Lessee  during the period prior to Boeing's  receipt of such notice,
         shall be final and binding upon ILFC.

(5)      Lessee  hereby  accepts the  authorization  set forth in paragraph  (4)
         herein  and  agrees  to be bound by and to comply  with all the  terms,
         conditions  and limitation of the Purchase  Agreement.  We request that
         Boeing,  upon receipt of this letter,  acknowledge  receipt thereof and
         the  transfer  of rights,  under the  Purchase  Agreement  as set forth
         above, by


                                      -108-

<PAGE>



         signing the  acknowledgment  set forth below and forwarding one copy of
         this letter, so acknowledged, to each of the undersigned.

Very truly yours,

__________________________                  INTERNATIONAL LEASE FINANCE
____________ (Lessee)                       CORPORATION (Lessor)


By: ______________________                  By: _______________________

Its: _____________________                  Its: ______________________


Dated: ___________________                  Dated: ____________________



                 Boeing Acknowledgment and Consent to Assignment
                 -----------------------------------------------

Receipt  of the above  letter  acknowledged  and  transfer  of rights  under the
Purchase Agreement, with respect to the Aircraft,  confirmed effective as of the
date indicated below:


                                            THE BOEING COMPANY


                                            By:_______________________

                                            Its:______________________

                                            Dated:____________________



                                      -109-

<PAGE>



                  EXHIBIT H     ASSIGNMENT OF RIGHTS (ENGINES)
                  ---------     ------------------------------

                        ___________________________ date

GENERAL ELECTRIC COMPANY
One Neumann Way
Cincinnati, OH 45215-6301

Attention:    Ms. Riv Goldman
              GE Warranties

Dear Ms. Goldman:

         Reference is hereby made to that Consent to Assignment made as of April
29, 1988 (the "Consent to Assignment"),  by and between GENERAL ELECTRIC COMPANY
("GE") and INTERNATIONAL  LEASE FINANCE CORPORATION  ("ILFC").  Terms defined in
the  Consent  to  Assignment  are used  herein  with the same  meaning as in the
Consent to Assignment.

         As of  _____________,  ILFC has assigned all of its rights and interest
in, to and under the Engine  Warranties  to  _________________  ("Assignee")  in
connection with its lease to Assignee of a _____________  ("Aircraft")  together
with ________  (__) GE Model  ________  Engines  bearing  Manufacturer's  Serial
Numbers  ____________  (the  "Engines")  as of the date  each  such  Engine  was
delivered to Assignee.  Such assignment  shall be effective from such date until
ILFC notifies GE that such assignment has been terminated.

         The Assignee has accepted such  assignment and all the  limitations and
liabilities  pertaining to the Engine  Warranties as stated in the provisions of
the GTA listed in Schedule 2 to the Consent to Assignment.

         A copy of the aforesaid assignment is attached hereto.

                                       Very truly yours,
                                       INTERNATIONAL LEASE FINANCE CORPORATION


                                       By:  ____________________________________

                                       Its: ____________________________________

cc:  Ruben M. Cabrera
     Director, Commercial Contracts


                                      -110-

<PAGE>



                            ASSIGNMENT OF WARRANTIES


________________ (date)


In consideration of  ____________________  ("Lessee") leasing from International
Lease Finance  Corporation  ("ILFC") one (1)  _______________  aircraft together
with ____________ (__) GE Model  ______________  Engines bearing  manufacturer's
serial numbers ___________ and __________, it is hereby agreed as follows:

         1.       ILFC  hereby  assigns  and  transfers  to Lessee all of ILFC's
                  respective  rights and interest in and to and in and under the
                  Engine  Warranties set forth in and subject to the limitations
                  and liabilities set forth in Exhibit B, Section X (the "Engine
                  Warranties") of General Electric Company ("GE") - ILFC General
                  Terms  Agreement No. 6-5792 dated 01 November 1985 (the "GTA")
                  during  the term of such  leases  so long as  Lessee is not in
                  default thereunder.

         2.       Lessee  hereby  accepts  such  assignment  including  all  the
                  limitations   and   liabilities   pertaining  to  said  Engine
                  Warranties as stated in the provisions of Exhibit B, Section X
                  of the GTA.

         3.       This Agreement  shall be binding upon and inure to the benefit
                  of each of the parties hereto and their respective  successors
                  and assigns to the extent permitted by the GTA and hereunder.

         4.       This   Agreement   shall  be  governed  by  and  construed  in
                  accordance with the laws of the State of California.

         5.       This Agreement may be executed in any number of  counterparts,
                  each of which when  executed and  delivered is an original but
                  all of  which  taken  together  constitute  one and  the  same
                  instrument and any party may execute this Agreement by signing
                  any counterpart.


                                      -111-

<PAGE>



IN WITNESS  WHEREOF,  the authorized  representative  of the parties hereto have
executed this Agreement as of the day and year first above written.

For and on behalf of
INTERNATIONAL LEASE FINANCE CORPORATION


_______________________________________


For and on behalf of


_____________________________

_______________________________________


                                      -112-

<PAGE>



                  EXHIBIT I     RETURN ACCEPTANCE RECEIPT
                  ---------     -------------------------


Date _______________, 19__

         1.       WESTERN PACIFIC AIRLINES,  INC., as LESSEE,  and INTERNATIONAL
LEASE  FINANCE  CORPORATION,  as LESSOR,  have  entered  into an Aircraft  Lease
Agreement dated as of May 31, 1996 (the "Lease"). Words used herein with capital
letters and not otherwise defined will have the meanings set forth in the Lease.

         2.       LESSOR  has  this  __  day  of  ______,   19__  (Time:   _____
_____________) at _________________________ received from LESSEE possession of:

                  (a)      One (1) Boeing 737-3Q8, bearing Manufacturer's serial
number 24299,  together with two (2) CFM-56-3B2  engines bearing  manufacturer's
serial numbers 722248 and 722249,  all Parts attached  thereto and thereon in an
airworthy condition and

                  (b)      All Aircraft  Documentation,  including the usual and
customary manuals, logbooks, flight records and historical information regarding
the  Aircraft,  Engines and Parts,  as listed in the Document  Receipt  attached
hereto.

         3.       The Airframe, Engines and Parts had the following hours/cycles
at return:

                  (a)      Airframe:

                           Total hours___________ Total  landings___________
                           _____ hours/_____ cycles since last "C" check
                           _____ hours/_____ cycles since last "A" check

                  (b)      Engines:

                                                 Total       Hrs/Cycles since
Position       Serial No.       Total Hrs       Cycles       last shop visit
--------       ----------       ---------       ------       ----------------





                                      -113-

<PAGE>




                                                         Time Remaining to next
                                                       Life Limited Part Removal
                                                       -------------------------
                                                         Hours          Cycles
                                                         -----          ------

                           MSN

                           MSN



                  (c)      APU: MSN

                           Total hours _____

                           _____ hours/_____ cycles remaining until next HSI
                           inspection

                           _____ hours/_____ cycles remaining on turbine and
                           compressor life limited parts

                  (d)      Landing Gears:



                                                 Hrs/Cycles      Hrs/Cycles to
                                  Total          since last      next Sched. _
Position       Serial No.       Hrs/Cycles        Overhaul       Removal
--------       ----------       ----------       ----------      -------------

Nose

Right Main

Left Main

                  (e)      Status of  components  or Parts with  time/cycle  and
calendar limits (see attached sheet)

                  (f)      Fuel  on  board  at   return:   (circle   one)  _____
pounds/kilos (______ gallons)

         4.       Other  technical  information  regarding  the Aircraft and its
components are correctly set forth on the Technical  Evaluation  Report (in form
of Exhibit L) attached hereto.

         5.       The above specified aircraft,  engines,  and documentation are
hereby  accepted by LESSOR,  subject to (a) the  provisions of the Lease and (b)
correction  by LESSEE (or  procurement  by LESSEE at  LESSEE's  cost) as soon as
reasonably possible of the discrepancies specified in Attachment 2 hereto.



                                      -114-

<PAGE>



         6.       Subject  to  the  following  paragraph,  the  leasing  of  the
Aircraft  by LESSOR to LESSEE  pursuant  to the Lease is hereby  terminated  and
LESSOR  hereby  acknowledges  that LESSEE has no further  obligations  under the
Lease except  pursuant to paragraph  5(b) above and Articles  10.5, 16 and 17 of
the Lease.

         7.       LESSEE  represents  and  warrants  that during the term of the
Lease all  maintenance and repairs to the Airframe and Engines were performed in
accordance  with the  requirements  contained  in the Lease,  provided  that the
foregoing  representation  and warranty  will expire upon the  completion of the
next heavy maintenance "C7" check on the Aircraft.  LESSEE further confirms that
all of its  obligations  under the Lease which  survive the  termination  of the
Lease by their  terms  will  remain  in full  force  and  effect  until all such
obligations have been satisfactorily completed.

         8.       This Return Acceptance Supplement is executed and delivered by
the parties in [place].


IN WITNESS  WHEREOF,  the parties  hereto  have  caused  this Return  Acceptance
Receipt  to be  executed  in their  respective  corporate  names  by their  duly
authorized representatives as of the day and year first above written.


INTERNATIONAL LEASE FINANCE                 WESTERN PACIFIC AIRLINES, INC.
CORPORATION

By: _________________________               By: __________________________


Its: ________________________               Its: _________________________


ATTACHMENTS:   1.   Aircraft Documentation
               2.   List of Discrepancies
               3.   Technical Evaluation Report (in form of Exhibit L)



                                      -115-

<PAGE>



                                  ATTACHMENT 1
                         TO RETURN ACCEPTANCE SUPPLEMENT
                         -------------------------------

                             AIRCRAFT DOCUMENTATION
                             ----------------------


         [The (a) manuals and (b) Aircraft records and historical  documents set
forth below are to be returned  with the Aircraft in a current,  up-to-date  and
correct status]

                                     MANUALS
                                     -------

                    Name
                    ----

1.   FAA Approved Airplane Flight Manual

2.   Manufacturer's Operations Manual - Volume No.____

3.   Quick Reference Handbook

4.   Maintenance Manuals

5.   Wiring Diagram Manuals

6.   Structural Repair Manual

7.   Illustrated Parts Catalog

8.   Vendor Illustrated Parts Catalog

9.   Overhaul Manuals

10.  Vendor Overhaul Manuals

11.  Drawings (Major Assembly and Installation)

12.  Weight and Balance Control and Loading Manual

13.  Weight and Balance Manual Supplement

14.  Actual Weight and Balance Compliance




                                      -116-

<PAGE>



                    AIRCRAFT RECORDS AND HISTORICAL DOCUMENTS
                    -----------------------------------------

1.   Aircraft log book (current and file copies)

2.   Aircraft Readiness Log (revised to time of return)

3.   Maintenance Time Control Report  (components,  maintenance  visit,  special
     items next due Airframe hours and cycles)

4.   Aircraft  previous  maintenance  visit record including the last inspection
     performed.

5.   Airworthiness Directive Compliance Summary

6.   Rigging Document

7.   Serviceable Tags for all ratable components installed (Airframe & Engines)

8.   ADs requiring continuous surveillance

9.   Service bulletin terminated accomplishment status

10.  Service bulletin requiring continuous  surveillance summary and maintenance
     control action

11.  Airframe and component history records

12.  FAA Form 337 for  Airframe,  repair/overhaul  certification  of last  major
     visit

13.  FAA Form 337 for each Engine,  repair/overhaul  certification  of last shop
     visit

14.  Engine Readiness Log for each Engine (components installed)

15.  Summary of Service Bulletin's accomplished for each Engine

16.  Summary of AD's accomplished for each Engine

17.  SB  and AD  status  requiring  continuous  surveillance  with  maintenance,
     control action for each Engine

18.  Engine time summary sheet including life limited items (for each Engine)

19.  Engine log books for each Engine (current and file copies)


                                      -117-

<PAGE>



                                  Receipt of the foregoing  documents, except as
                                  noted, is hereby acknowledged.



                                      -118-

<PAGE>






                                  ATTACHMENT 2
                         TO RETURN ACCEPTANCE SUPPLEMENT
                         -------------------------------

                                  Discrepancies
                                  -------------



                                      -119-

<PAGE>





                  EXHIBIT J     MONTHLY REPORT
                  ---------     --------------

                              (SEE FOLLOWING SHEET)



                                      -120-

<PAGE>



                 MONTHLY AIRCRAFT UTILIZATION AND STATUS REPORT
                 ----------------------------------------------


To:               INTERNATIONAL LEASE FINANCE CORPORATION
                  1999 Avenue of the Stars, 39th Floor
                  Los Angeles, California 90067         Fax: (310) 788-1990

From:             WESTERN PACIFIC AIRLINES, INC.                Page 1 of 2


                  AIRCRAFT TYPE:   ______________ REGISTRATION: ________
                  ENGINE TYPE:     ______________
                  SERIAL NUMBER:   __________ MONTH OF ____________ 19__


================================================================================
AIRCRAFT TOTAL TIME SINCE NEW                              HRS:
--------------------------------------------------------------------------------
AIRCRAFT TOTAL CYCLES SINCE NEW                            CYCLES:
--------------------------------------------------------------------------------
AIRFRAME HOURS FLOWN DURING MONTH                          HRS:
--------------------------------------------------------------------------------
AIRFRAME CYCLES/LANDING DURING MONTH                       CYCLES:
--------------------------------------------------------------------------------
TIME REMAINING TO NEXT SCHEDULED "C"
CHECK
--------------------------------------------------------------------------------
TIME REMAINING TO NEXT SCHEDULED
"7C" and 22,400 FH STRUCTURED CHECK.
================================================================================



                               =================================================
                                 HOURS FLOWN   X     US$ PER     =   OVERHAUL
                                   DURING          FLIGHT HOUR       RESERVES
                                   MONTH
--------------------------------------------------------------------------------
AIRFRAME                         HRS:          X                 =
--------------------------------------------------------------------------------
ORIGINAL ENGINE                  HRS:
SERIAL NUMBER:
--------------------------------------------
ORIGINAL ENGINE                  HRS:
SERIAL NUMBER:
--------------------------------------------------------------------------------
TOTAL ENGINES                    HRS:          X                 =
--------------------------------------------------------------------------------
AMOUNT OF OVERHAUL RESERVES (US$)
PAID THIS MONTH FOR AIRFRAME AND
ENGINES
================================================================================



                                      -121-

<PAGE>



                                                                    Page 2 of 2

================================================================================
ENGINE SERIAL NUMBER ___________       ENGINE SERIAL NUMBER ___________
ORIGINAL POSITION ________________     ORIGINAL POSITION ________________
--------------------------------------------------------------------------------
ACTUAL LOCATION:                       ACTUAL LOCATION:
--------------------------------------------------------------------------------
CURRENT THRUST RATING:                 CURRENT THRUST RATING:
--------------------------------------------------------------------------------
                             HOURS:                                     HOURS:
--------------------------------------------------------------------------------
TOTAL TIME SINCE NEW                   TOTAL TIME SINCE NEW
--------------------------------------------------------------------------------
TOTAL CYCLES SINCE NEW                 TOTAL CYCLES SINCE NEW
--------------------------------------------------------------------------------
HOURS FLOWN DURING MONTH               HOURS FLOWN DURING MONTH
--------------------------------------------------------------------------------
CYCLES DURING MONTH
--------------------------------------------------------------------------------
TIME SINCE LAST SHOP VISIT (HSI)       TIME SINCE LAST SHOP VISIT (HSI)
--------------------------------------------------------------------------------
TIME SINCE LAST SHOP VISIT (FULL       TIME SINCE LAST SHOP VISIT (FULL
REFURBISHMENT)                         REFURBISHMENT)
================================================================================


NOTE:    IF ILFC OWNED  ENGINE IS REMOVED OR  INSTALLED  ON ANOTHER  AIRCRAFT IT
         MUST BE REPORTED MONTHLY ON THIS FORM.



                                      -122-

<PAGE>



                  EXHIBIT K     AIRCRAFT DOCUMENTATION
                  ---------     ----------------------

                             (SEE FOLLOWING SHEETS)



                                      -123-

<PAGE>






                  EXHIBIT L     TECHNICAL EVALUATION REPORT
                  ---------     ---------------------------

                             (SEE FOLLOWING SHEETS)



                                      -124-

<PAGE>


                     INTERNATIONAL LEASE FINANCE CORPORATION
                                AIRCRAFT/OPERATOR
                           TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------



                                TABLE OF CONTENTS


                                                                            Page
                                                                            ----

AIRCRAFT SUMMARY............................................................   1

MAINTENANCE PROGRAM GENERAL.................................................   2

LANDING GEAR................................................................   5

ENGINES  ...................................................................   7

AUXILIARY POWER UNIT (APU)..................................................  12

PASSENGER CABIN CONFIGURATION...............................................  13

GALLEY PROVISIONS...........................................................  14

LAVATORIES..................................................................  15

IN-FLIGHT AUDIO & ENTERTAINMENT SYSTEM......................................  15

HYDRAULIC SYSTEM............................................................  16

FUEL SYSTEM.................................................................  16

WEIGHT & BALANCE............................................................  16

AVIONICS SYSTEMS............................................................  17

AIRCRAFT MANUALS............................................................  21

AIRCRAFT RECORDS AND DOCUMENTS..............................................  23

INSPECTOR RECORD............................................................  25


                                       -i-

<PAGE>


                     INTERNATIONAL LEASE FINANCE CORPORATION
                                AIRCRAFT/OPERATOR
                           TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------


                                AIRCRAFT SUMMARY

                  AIRCRAFT MAKE ___________     MODEL __________

                 FUS No. ________________     S/N _________________

MFG DATE _____               PROD No. __________      LN No. ___________________

DETAIL SPECIFICATION No. ______________     REV. _______________________________

A/C TYPE CERT No. ________________     ENG TYPE CERT No. _______________________

CURRENT REGISTRATION __________________     COUNTRY ____________________________

PREVIOUS REGISTRATION _______________     COUNTRY ______________________________

ANNUAL UTILIZATION ____________________   HOUR/CYCLE RATIO _____________________

TOTAL AIRCRAFT TIME:  TAT (Hrs) ______________   AS OF
                                                     (Date) ____________________
TOTAL AIRCRAFT CYCLES:  TAC (Cyc) ____________

TIME SINCE LAST "C" CHECK (Hrs) ______________   (Cyc) _________________________

TIME SINCE LAST "D" CHECK (Hrs) ______________   (Cyc) _________________________

ENGINE MAKE ______________   MODEL ___________   THRUST RATING _________________

ENGINE:   1 S/N __________   2 S/N ___________

TSN:  (Hrs) ______________   _________________

CSN:  (Cyc) ______________   _________________

TIME TO                   (Hrs)               (Hrs)
1st LIMIT:  _________     (Cyc) _________     (Cyc)



                                                                         Page 1

<PAGE>


                     INTERNATIONAL LEASE FINANCE CORPORATION
                                AIRCRAFT/OPERATOR
                           TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------


                           MAINTENANCE PROGRAM GENERAL

AIRCRAFT MAINTENANCE PROGRAM OWNED BY: [ ] OPERATOR  [ ] _______________________

PROGRAM APPROVED BY AUTHORITY OF: [ ]  FAA APPROVED  [ ] _______________________

MAINTENANCE PROGRAM/SCHEDULE (Document Title) __________________________________

REPAIR STATION PROVIDING SERVICE _______________________________________________

REPAIR STATION NUMBER __________ FAA APPROVED:  [ ] YES     [  ] NO

PRIMARY LINE MAINTENANCE PROVIDED BY:  [ ] OPERATOR     [ ] CONTRACT SERVICE

RELIABILITY CONTROLLED MAINTENANCE PROGRAM:             [ ] YES     [  ] NO

OPERATOR APPROVED FOR COMPONENT ESCALATION:             [ ] YES     [  ] NO

WHAT PERCENT WITHOUT AIRWORTHINESS AGENCY APPROVAL _____________________________

OPERATOR APPROVED FOR SCHEDULED CHECK ESCALATION:       [ ] YES     [  ] NO

WHAT PERCENT WITHOUT AIRWORTHINESS AGENCY APPROVAL _____________________________

METHOD OF RECORDING A/C HOURS & CYCLES:  [ ] COMPUTER RUN     [ ] LOG BOOK

FAA APPROVED "CORROSION PREVENTION & CONTROL PROGRAM":  [ ] YES     [  ] NO

CORROSION & STRUCTURAL MAINTENANCE PROGRAM:  [ ] 100%       [ ] SAMPLING

ALGAE CHEMICAL INHIBITOR USED IN FUEL SYSTEM:           [ ] YES     [  ] NO

TYPE OF INHIBITOR USED _______________     FREQ ________________________________

AIRCRAFT SUPPLEMENTAL STRUCTURAL INSPECTION "SSI" CANDIDATE: [ ] YES   [ ] NO

MAINTENANCE CHECKS SCHEDULED AND RECORDED:     [ ] CARD FILE   [ ] COMPUTER

CONTROLLED COMPONENTS SCHEDULED AND RECORDED:  [ ] CARD FILE   [ ] COMPUTER

COMPONENT TAGS AVAILABLE FOR CONTROLLED COMPONENTS:     [ ] YES     [  ] NO

DOES OPERATOR HAVE AN APPROVED "MEL" DEFERRAL SYSTEM:   [ ] YES     [  ] NO

"MEL" DEFERRALS RECORDED (Document Name) _______________________________________

DOES OPERATOR HAVE A SYSTEM TO DEFER NON "MEL" ITEMS:   [ ] YES     [  ] NO

NON "MEL" DEFERRALS RECORDED (Document Name)____________________________________

                                                                         Page 2



<PAGE>


                     INTERNATIONAL LEASE FINANCE CORPORATION
                                AIRCRAFT/OPERATOR
                           TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------



                  MAINTENANCE & INSPECTION PROGRAM DESCRIPTION

                  OPERATOR'S                 FREQUENCY                NUMBER OF
CHECK            NOMENCLATURE    CALENDAR       HRS         CYC        PHASES

"A"             ______________  __________  ___________  __________  ___________

"B"             ______________  __________  ___________  __________  ___________

"C"             ______________  __________  ___________  __________  ___________

"D"             ______________  __________  ___________  __________  ___________

"CPCP"          ______________  __________  ___________  __________  ___________

"Structural"    ______________  __________  ___________  __________  ___________



Describe  any  difference  to the above  program,  list  variations  and special
inspections.  Explain how phases are grouped  and if a higher  Check  zero's the
lower Checks i.e., does the "C" Check zero the "A" & "B" Checks.


________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________



              PROVIDE COPIES OF THE FOLLOWING DOCUMENTS AS CHECKED

     1.    AIRWORTHINESS DIRECTIVE STATUS LIST ------------------------- [ ]
     2.    SERVICE BULLETIN INCORPORATION LIST ------------------------- [ ]
     3.    CONTROLLED COMPONENT STATUS LIST ---------------------------- [ ]
     4.    CURRENT INSPECTIONS STATUS REPORT --------------------------- [ ]
     5.    LIST OF CURRENT MAJOR ALTERATIONS --------------------------- [ ]
     6.    CURRENT STATUS OF LIFE LIMITED PARTS ------------------------ [ ]
     7.    A/C "LOPA" INTERIOR CONFIGURATION DRAWING ------------------- [ ]
     8.    MAINTENANCE INSPECTION PROGRAM SPECIFICATION ---------------- [ ]
     9.    LAST WEIGHT AND BALANCE REPORT ------------------------------ [ ]
     10.   _______________________________________---------------------- [ ]

                                                                         Page 3



<PAGE>


                     INTERNATIONAL LEASE FINANCE CORPORATION
                                AIRCRAFT/OPERATOR
                           TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------


                     MAINTENANCE & INSPECTION PROGRAM STATUS

      PHASE                  DATE                A/C TAT            A/C TAC

NEXT "A" __________     _____/_____/____     _______________     _______________

LAST "A" __________     _____/_____/____     _______________     _______________

TIME REMAINING  (Days) __________       (Hrs) ___________      (Cyc) ___________

NEXT "B" __________     _____/_____/____     _______________     _______________

LAST "B" __________     _____/_____/____     _______________     _______________

TIME REMAINING  (Days) __________       (Hrs) ___________      (Cyc) ___________

NEXT "C" __________     _____/_____/____     _______________     _______________

LAST "C" __________     _____/_____/____     _______________     _______________

TIME REMAINING  (Days) __________       (Hrs) ___________      (Cyc) ___________

NEXT "D" __________     _____/_____/____     _______________     _______________

LAST "D" __________     _____/_____/____     _______________     _______________

TIME REMAINING  (Days) __________       (Hrs) ___________      (Cyc) ___________

NEXT CPCP/STRUCTURAL
         __________     _____/_____/____     _______________     _______________

NEXT CPCP/STRUCTURAL
         __________     _____/_____/____     _______________     _______________

TIME REMAINING  (Days) __________       (Hrs) ___________      (Cyc) ___________

ANTICIPATED DATE OF NEXT SCHEDULED "C" CHECK     _____/____/____

DATE OF LSAT ATC TRANSPONDER TEST:  # 1 _______________     # 2 ________________

DATE OF LAST PITOT STATIC TEST:     CAPT ______________     F/O ________________

DATE OF LAST ALTIMETER INST. TEST:  # 1 _______________     # 2 ________________

DATE OF LAST COMPASS SWING:  ___________________________________________________

DATE OF LAST FLIGHT RECORDER CHECK:  ___________________________________________

DATE OF LAST A/C WEIGHING:  ____________________________________________________


                                                                         Page 4



<PAGE>


                     INTERNATIONAL LEASE FINANCE CORPORATION
                                AIRCRAFT/OPERATOR
                           TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------


                                  LANDING GEAR

MLG TIRES: (Size) __________     (MPH Rating) ___________     (MFG) ____________
NLG TIRES: (Size) __________     (MPH Rating) ___________     (MFG) ____________

LEFT MAIN:              P/N ______________________     S/N _____________________

AGENCY PERFORMING SERVICE _____________________________     CERT # _____________

LAST OVERHAUL: (Date) ____/____/____     (Hrs) __________     (Cyc) ____________

ALLOWABLE LIMIT TO NEXT OVERHAUL         (Hrs) __________     (Cyc) ____________

PRESENT LANDING GEAR TOTAL TIME                (Hrs) __________  (Cyc) _________

TIME REMAINING TO NEXT OVERHAUL                (Hrs) __________  (Cyc) _________


RIGHT MAIN:             P/N ______________________     S/N _____________________

AGENCY PERFORMING SERVICE _____________________________     CERT # _____________

LAST OVERHAUL: (Date) ____/____/____     (Hrs) __________     (Cyc) ____________

ALLOWABLE LIMIT TO NEXT OVERHAUL         (Hrs) __________     (Cyc) ____________

PRESENT LANDING GEAR TOTAL TIME                (Hrs) __________  (Cyc) _________

TIME REMAINING TO NEXT OVERHAUL                (Hrs) __________  (Cyc) _________


NOSE:                   P/N ______________________     S/N _____________________

AGENCY PERFORMING SERVICE _____________________________     CERT # _____________

LAST OVERHAUL: (Date) ____/____/____     (Hrs) __________     (Cyc) ____________

ALLOWABLE LIMIT TO NEXT OVERHAUL         (Hrs) __________     (Cyc) ____________

PRESENT LANDING GEAR TOTAL TIME                (Hrs) __________  (Cyc) _________

TIME REMAINING TO NEXT OVERHAUL                (Hrs) __________  (Cyc) _________


CENTER:                 P/N ______________________     S/N _____________________

AGENCY PERFORMING SERVICE _____________________________     CERT # _____________

LAST OVERHAUL: (Date) ____/____/____     (Hrs) __________     (Cyc) ____________

ALLOWABLE LIMIT TO NEXT OVERHAUL         (Hrs) __________     (Cyc) ____________

PRESENT LANDING GEAR TOTAL TIME                (Hrs) __________  (Cyc) _________

TIME REMAINING TO NEXT OVERHAUL                (Hrs) __________  (Cyc) _________


                                                                          Page 5

<PAGE>


                     INTERNATIONAL LEASE FINANCE CORPORATION
                                AIRCRAFT/OPERATOR
                           TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------


                            LANDING GEAR (Continued)

LEFT BODY:              P/N ______________________     S/N _____________________

AGENCY PERFORMING SERVICE _____________________________     CERT # _____________

LAST OVERHAUL: (Date) ____/____/____     (Hrs) __________     (Cyc) ____________

ALLOWABLE LIMIT TO NEXT OVERHAUL         (Hrs) __________     (Cyc) ____________

PRESENT LANDING GEAR TOTAL TIME                (Hrs) __________  (Cyc) _________

TIME REMAINING TO NEXT OVERHAUL                (Hrs) __________  (Cyc) _________


RIGHT BODY:             P/N ______________________     S/N _____________________

AGENCY PERFORMING SERVICE _____________________________     CERT # _____________

LAST OVERHAUL: (Date) ____/____/____     (Hrs) __________     (Cyc) ____________

ALLOWABLE LIMIT TO NEXT OVERHAUL         (Hrs) __________     (Cyc) ____________

PRESENT LANDING GEAR TOTAL TIME                (Hrs) __________  (Cyc) _________

TIME REMAINING TO NEXT OVERHAUL                (Hrs) __________  (Cyc) _________


                                                                         Page 6

<PAGE>


                     INTERNATIONAL LEASE FINANCE CORPORATION
                                AIRCRAFT/OPERATOR
                           TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------


                                     ENGINES
                           ENGINE MAINTENANCE PROGRAM

ENGINE MAINTENANCE PROGRAM OWNED BY ____________________________________________

PROGRAM APPROVED BY AUTHORITY OF _______________________________________________

OPERATORS MAINTENANCE PROGRAM SPECIFICATION (Copy) _____________________________

DOCUMENT NAME, NUMBER & REV. ___________________________________________________

REPAIR STATION PROVIDING SHOP SERVICE __________________________________________

REPAIR STATION NUMBER ________________      FAA APPROVED:   [ ] YES    [ ] NO

ENGINE MAINTENANCE PROGRAM PRIMARY MAINTENANCE PROCESS: [ ] HT [ ] OC  [ ] CM

HSI (Hrs/Cyc) __________/__________   OVERHAUL (Hrs/Cyc) __________/__________

BORESCOPE INSPECTION SCHEDULE     FREQ:  (Hrs/Cyc) _____________________________

HOT SECTION INSPECTION SCHEDULE       FREQ:  (Hrs/Cyc) _________________________

ENGINE CONDITION MONITORING TREND ANALYSIS PROGRAM:   [ ] YES           [ ] NO

SERVICE PROVIDED BY ____________________________________________________________

OIL SPECIAL ANALYSIS PART OF PROGRAM:  [ ] YES     [ ] NO     (Freq) ___________

SERVICE PROVIDED BY ____________________________________________________________

ENGINE OIL TYPE _______________   CSD/IDG _______________   STARTER ____________

         Engine(s) operated at INCREASED or DECREASED Thrust Rating Program
         limitations & required Mods. to operate at designated thrust rating

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________


                                                                         Page 7

<PAGE>


                     INTERNATIONAL LEASE FINANCE CORPORATION
                                AIRCRAFT/OPERATOR
                           TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------


                              ENGINE SPECIFICATIONS
                                 ENGINE NUMBER 1

ENGINE MAKE __________________  MODEL __________________  S/N __________________

DATE OF MFG:  _________________   TOTAL TIME:  (Hrs) __________ (Cyc) __________

LAST HOT SECTION (Date) ____________________   (Hrs) __________ (Cyc) __________

LAST OVERHAUL VISIT (Date) _________________   (Hrs) __________ (Cyc) __________

LAST SHOP VISIT (Date) _____________________   (Hrs) __________ (Cyc) __________

WORK SCOPE _____________________________________________________________________

AGENCY PERFORMING SERVICE ______________________________________________________

AGENCY FAA APPROVED:     [ ] YES  [ ] NO     CERT. #____________________________

1st LIMITED        DISK/MODULE: ________________________________________________

         ALLOWABLE LIFE/INSP LIMIT:  (Hrs) _______________ (Cyc) _______________

         TOTAL COMPONENT TIME:       (Hrs) _______________ (Cyc) _______________

         TIME REMAINING              (Hrs) _______________ (Cyc) _______________

2nd LIMITED        DISK/MODULE: ________________________________________________

         ALLOWABLE LIFE/INSP LIMIT:  (Hrs) _______________ (Cyc) _______________

         TOTAL COMPONENT TIME:       (Hrs) _______________ (Cyc) _______________

         TIME REMAINING              (Hrs) _______________ (Cyc) _______________

3rd LIMITED        DISK/MODULE: ________________________________________________

         ALLOWABLE LIFE/INSP LIMIT:  (Hrs) _______________ (Cyc) _______________

         TOTAL COMPONENT TIME:       (Hrs) _______________ (Cyc) _______________

         TIME REMAINING              (Hrs) _______________ (Cyc) _______________


4th LIMITED        DISK/MODULE: ________________________________________________

         ALLOWABLE LIFE/INSP LIMIT:  (Hrs) _______________ (Cyc) _______________

         TOTAL COMPONENT TIME:       (Hrs) _______________ (Cyc) _______________

         TIME REMAINING              (Hrs) _______________ (Cyc) _______________


                                                                         Page 8

<PAGE>


                     INTERNATIONAL LEASE FINANCE CORPORATION
                                AIRCRAFT/OPERATOR
                           TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------


                              ENGINE SPECIFICATIONS
                                 ENGINE NUMBER 2

ENGINE MAKE __________________  MODEL __________________  S/N __________________

DATE OF MFG:  _________________   TOTAL TIME:  (Hrs) __________ (Cyc) __________

LAST HOT SECTION (Date) ____________________   (Hrs) __________ (Cyc) __________

LAST OVERHAUL VISIT (Date) _________________   (Hrs) __________ (Cyc) __________

LAST SHOP VISIT (Date) _____________________   (Hrs) __________ (Cyc) __________

WORK SCOPE _____________________________________________________________________

AGENCY PERFORMING SERVICE ______________________________________________________

AGENCY FAA APPROVED:     [ ] YES  [ ] NO     CERT. #____________________________

1st LIMITED        DISK/MODULE: ________________________________________________

         ALLOWABLE LIFE/INSP LIMIT:  (Hrs) _______________ (Cyc) _______________

         TOTAL COMPONENT TIME:       (Hrs) _______________ (Cyc) _______________

         TIME REMAINING              (Hrs) _______________ (Cyc) _______________

2nd LIMITED        DISK/MODULE: ________________________________________________

         ALLOWABLE LIFE/INSP LIMIT:  (Hrs) _______________ (Cyc) _______________

         TOTAL COMPONENT TIME:       (Hrs) _______________ (Cyc) _______________

         TIME REMAINING              (Hrs) _______________ (Cyc) _______________

3rd LIMITED        DISK/MODULE: ________________________________________________

         ALLOWABLE LIFE/INSP LIMIT:  (Hrs) _______________ (Cyc) _______________

         TOTAL COMPONENT TIME:       (Hrs) _______________ (Cyc) _______________

         TIME REMAINING              (Hrs) _______________ (Cyc) _______________


4th LIMITED        DISK/MODULE: ________________________________________________

         ALLOWABLE LIFE/INSP LIMIT:  (Hrs) _______________ (Cyc) _______________

         TOTAL COMPONENT TIME:       (Hrs) _______________ (Cyc) _______________

         TIME REMAINING              (Hrs) _______________ (Cyc) _______________


                                                                         Page 9

<PAGE>


                     INTERNATIONAL LEASE FINANCE CORPORATION
                                AIRCRAFT/OPERATOR
                           TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------


                              ENGINE SPECIFICATIONS
                                 ENGINE NUMBER 3

ENGINE MAKE __________________  MODEL __________________  S/N __________________

DATE OF MFG:  _________________   TOTAL TIME:  (Hrs) __________ (Cyc) __________

LAST HOT SECTION (Date) ____________________   (Hrs) __________ (Cyc) __________

LAST OVERHAUL VISIT (Date) _________________   (Hrs) __________ (Cyc) __________

LAST SHOP VISIT (Date) _____________________   (Hrs) __________ (Cyc) __________

WORK SCOPE _____________________________________________________________________

AGENCY PERFORMING SERVICE ______________________________________________________

AGENCY FAA APPROVED:     [ ] YES  [ ] NO     CERT. #____________________________

1st LIMITED        DISK/MODULE: ________________________________________________

         ALLOWABLE LIFE/INSP LIMIT:  (Hrs) _______________ (Cyc) _______________

         TOTAL COMPONENT TIME:       (Hrs) _______________ (Cyc) _______________

         TIME REMAINING              (Hrs) _______________ (Cyc) _______________

2nd LIMITED        DISK/MODULE: ________________________________________________

         ALLOWABLE LIFE/INSP LIMIT:  (Hrs) _______________ (Cyc) _______________

         TOTAL COMPONENT TIME:       (Hrs) _______________ (Cyc) _______________

         TIME REMAINING              (Hrs) _______________ (Cyc) _______________

3rd LIMITED        DISK/MODULE: ________________________________________________

         ALLOWABLE LIFE/INSP LIMIT:  (Hrs) _______________ (Cyc) _______________

         TOTAL COMPONENT TIME:       (Hrs) _______________ (Cyc) _______________

         TIME REMAINING              (Hrs) _______________ (Cyc) _______________


4th LIMITED        DISK/MODULE: ________________________________________________

         ALLOWABLE LIFE/INSP LIMIT:  (Hrs) _______________ (Cyc) _______________

         TOTAL COMPONENT TIME:       (Hrs) _______________ (Cyc) _______________

         TIME REMAINING              (Hrs) _______________ (Cyc) _______________


                                                                        Page 10

<PAGE>


                     INTERNATIONAL LEASE FINANCE CORPORATION
                                AIRCRAFT/OPERATOR
                           TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------


                              ENGINE SPECIFICATIONS
                                 ENGINE NUMBER 4

ENGINE MAKE __________________  MODEL __________________  S/N __________________

DATE OF MFG:  _________________   TOTAL TIME:  (Hrs) __________ (Cyc) __________

LAST HOT SECTION (Date) ____________________   (Hrs) __________ (Cyc) __________

LAST OVERHAUL VISIT (Date) _________________   (Hrs) __________ (Cyc) __________

LAST SHOP VISIT (Date) _____________________   (Hrs) __________ (Cyc) __________

WORK SCOPE _____________________________________________________________________

AGENCY PERFORMING SERVICE ______________________________________________________

AGENCY FAA APPROVED:     [ ] YES  [ ] NO     CERT. #____________________________

1st LIMITED        DISK/MODULE: ________________________________________________

         ALLOWABLE LIFE/INSP LIMIT:  (Hrs) _______________ (Cyc) _______________

         TOTAL COMPONENT TIME:       (Hrs) _______________ (Cyc) _______________

         TIME REMAINING              (Hrs) _______________ (Cyc) _______________

2nd LIMITED        DISK/MODULE: ________________________________________________

         ALLOWABLE LIFE/INSP LIMIT:  (Hrs) _______________ (Cyc) _______________

         TOTAL COMPONENT TIME:       (Hrs) _______________ (Cyc) _______________

         TIME REMAINING              (Hrs) _______________ (Cyc) _______________

3rd LIMITED        DISK/MODULE: ________________________________________________

         ALLOWABLE LIFE/INSP LIMIT:  (Hrs) _______________ (Cyc) _______________

         TOTAL COMPONENT TIME:       (Hrs) _______________ (Cyc) _______________

         TIME REMAINING              (Hrs) _______________ (Cyc) _______________


4th LIMITED        DISK/MODULE: ________________________________________________

         ALLOWABLE LIFE/INSP LIMIT:  (Hrs) _______________ (Cyc) _______________

         TOTAL COMPONENT TIME:       (Hrs) _______________ (Cyc) _______________

         TIME REMAINING              (Hrs) _______________ (Cyc) _______________


                                                                        Page 11

<PAGE>


                     INTERNATIONAL LEASE FINANCE CORPORATION
                                AIRCRAFT/OPERATOR
                           TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------


                           AUXILIARY POWER UNIT (APU)

APU MAKE __________________  MODEL __________________  S/N _____________________

DATE OF MFG _______________  TOTAL TIME:  (Hrs) __________ (Cyc)N1      /N2

APU MAINTENANCE PROGRAM IS:  [ ]  O/C          [ ] C/M           [ ] H/T

APU TIMES ARE RECORDED BY:   [ ] APU CLOCK or [ ] A/C TIME  RATIO ____:____

TIME BETWEEN OVERHAUL                       (Hrs) __________  (Cyc) ____________

TIME BETWEEN HOT SECTION INSPECTIONS        (Hrs) __________  (Cyc) ____________

LAST HOT SECTION (Date) _________________   (Hrs) __________  (Cyc) ____________

LAST OVERHAUL (Date) ____________________   (Hrs) __________  (Cyc) ____________

LAST SHOP VISIT (Date) __________________   (Hrs) __________  (Cyc) ____________

WORK SCOPE _____________________________________________________________________

AGENCY PERFORMING SERVICE ______________________________________________________

AGENCY FAA APPROVED:      [ ] YES  [ ] NO        CERT. #________________________

1st LIMITED DISK/MODULE: _______________________________________________________

         ALLOWABLE LIFE/INSP LIMIT:    (Hrs) _____________  (Cyc) ______________

         TOTAL COMPONENT TIME:         (Hrs) _____________  (Cyc) ______________

         TIME REMAINING:               (Hrs) _____________  (Cyc) ______________

2nd LIMITED DISK/MODULE: _______________________________________________________

         ALLOWABLE LIFE/INSP LIMIT:    (Hrs) _____________  (Cyc) ______________

         TOTAL COMPONENT TIME:         (Hrs) _____________  (Cyc) ______________

         TIME REMAINING:               (Hrs) _____________  (Cyc) ______________

3rd LIMITED DISK/MODULE: _______________________________________________________

         ALLOWABLE LIFE/INSP LIMIT:    (Hrs) _____________  (Cyc) ______________

         TOTAL COMPONENT TIME:         (Hrs) _____________  (Cyc) ______________

         TIME REMAINING:               (Hrs) _____________  (Cyc) ______________

4th LIMITED DISK/MODULE: _______________________________________________________

         ALLOWABLE LIFE/INSP LIMIT:    (Hrs) _____________  (Cyc) ______________

         TOTAL COMPONENT TIME:         (Hrs) _____________  (Cyc) ______________

         TIME REMAINING:               (Hrs) _____________  (Cyc) ______________


                                                                        Page 12

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                                AIRCRAFT/OPERATOR
                           TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------


                          PASSENGER CABIN CONFIGURATION
                              SEATING CONFIGURATION

MAX CERTIFIED OCCUPANCY _____     PRESENT CONFIGURATION OCCUPANCY ______________

NO. OF HANDICAP SEATS INSTALLED __________


FIRST CLASS

PAX _____     SEAT MFG __________     MODEL ___________     P/N ________________

SEATS FIREBLOCKED  [ ] YES  [ ] NO          COLOR ______________________________


BUSINESS CLASS

PAX _____     SEAT MFG __________     MODEL ___________     P/N ________________

SEATS FIREBLOCKED  [ ] YES  [ ] NO          COLOR ______________________________


COACH CLASS

PAX _____     SEAT MFG __________     MODEL ___________     P/N ________________

SEATS FIREBLOCKED  [ ] YES  [ ] NO          COLOR ______________________________


UPPER DECK

PAX _____     SEAT MFG __________     MODEL ___________     P/N ________________

SEATS FIREBLOCKED  [ ] YES  [ ] NO          COLOR ______________________________


SEAT BAGGAGE RESTRAINTS INSTALLED:          [ ] YES        [ ] NO

PROVISIONS FOR LIFE VESTS UNDER SEAT:       [ ] YES        [ ] NO

ENTERTAINMENT CONTROLS INSTALLED:           [ ] YES        [ ] NO

SEATS/SEAT BELTS, TSO CONFORMITY:           [ ] YES        [ ] NO

SEAT BELTS PART NUMBER _____________________     COLOR _________________________

CONFIGURATION DRAWING No. _______________________     SOURCE ___________________

ENGINEERING ORDER/INSTALLATION DOCUMENT ________________________________________

INSTALLATION FAA APPROVED: [ ] YES  [ ] NO     METHOD OF APPROVAL:  ____________


                                                                         Page 13

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                                AIRCRAFT/OPERATOR
                           TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------


                                GALLEY PROVISIONS

       GALLEY                        MODEL           PART           EQUIPPED
      LOCATION     MANUFACTURER      NUMBER         NUMBER        WATER POWER

1.  _____________  _____________  _____________  ______________   [ ]     [ ]

2.  _____________  _____________  _____________  ______________   [ ]     [ ]

3.  _____________  _____________  _____________  ______________   [ ]     [ ]

4.  _____________  _____________  _____________  ______________   [ ]     [ ]

5.  _____________  _____________  _____________  ______________   [ ]     [ ]

6.  _____________  _____________  _____________  ______________   [ ]     [ ]

7.  _____________  _____________  _____________  ______________   [ ]     [ ]

8.  _____________  _____________  _____________  ______________   [ ]     [ ]

9.  _____________  _____________  _____________  ______________   [ ]     [ ]

10. _____________  _____________  _____________  ______________   [ ]     [ ]

NOTE:  Galley  Locations  per Spec or LOPA  drawing  i.e.,  G1,  G2 etc.  Galley
       Location numbers above correspond to the number below



    OVENS    BUN    REFER            COFFEE  WATER     HOT      HOT     BEV
           WARMERS  UNITS  CHILLERS  MAKERS  BOILERS   JUGS     CUPS    JUGS
    _____  _______  _____  ________  ______  _______  _______  ______  ______

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.


                                                                        Page 14

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                     INTERNATIONAL LEASE FINANCE CORPORATION
                                AIRCRAFT/OPERATOR
                           TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------


                                   LAVATORIES

NUMBER OF LAVATORIES ___________________   TYPE:  [ ] FLUSH    or    [ ] VACUUM

LOCATIONS:  ____________________________   HANDICAP PROVISIONS:  ________

COLOR SCHEME:  _________________________________________________________________

                     IN-FLIGHT AUDIO & ENTERTAINMENT SYSTEM

BOARDING MUSIC:                                  [ ] YES         [ ] NO

AUTO EVAC & WARNING:                             [ ] YES         [ ] NO

PRE-RECORDED ANNOUNCEMENT:                       [ ] YES         [ ] NO

PASSENGER ENTERTAINMENT (Audio):                 [ ] YES         [ ] NO

PASSENGER ENTERTAINMENT (Video):                 [ ] YES         [ ] NO

     [ ] PROJECTOR     [ ] PSU MONITOR     [ ] ISLE MONITOR      [ ] IN-SEAT

PASSENGER EN-ROUTE INFORMATION DISPLAY:          [ ] YES         [ ] NO


                        INTERIOR COLORS, SIGNS & PLACARDS

INTERIOR COLOR SCHEME     CARPETS _______________     CURTAINS _________________

GALLEY FLOOR MATS ___________  GALLEY DECORATIVE FACING ________________________

CEILING PANELS ______________  OVERHEAD BAGGAGE BINS ___________________________

BULKHEADS, WINDSCREEN & CLASS DIVIDERS _________________________________________

LOWER SIDEWALL PANELS _______          SIDE WALL PANELS ________________________

LAVATORY WALL PANELS  _______     LAVATORY FLOOR MATS __________________________


PLACARDS & LIGHTED SIGNS ENGLISH  [ ] YES [ ] NO  BI-LINGUAL [ ] YES [ ] NO

FIRST LANGUAGE ________________        SECOND LANGUAGE _________________________

FLOOR TRACK LIGHTING INSTALLED  [ ] YES [ ] NO MFG _____________________________

FLOOR TRACK LIGHTING INSTALLED  [ ] AT PRODUCTION     [ ] POST DELIVERY


                                                                        Page 15

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                     INTERNATIONAL LEASE FINANCE CORPORATION
                                AIRCRAFT/OPERATOR
                           TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------


                                HYDRAULIC SYSTEM

TYPE OF HYDRAULIC FLUID USED __________________     (MFG) ______________________

                                   FUEL SYSTEM

FUEL CAPACITY (US GAL) __________________   (LBS/KILOS) ________________________

NUMBER OF TANKS _________________  AUXILIARY TANKS INSTALLED: [ ] YES   [ ] NO

AUXILIARY TANK CAPACITY (U.S. GAL) __________     (LBS/KILOS) __________________

FUEL DUMP SYSTEM INSTALLED:         [ ] YES           [ ] NO

FUEL INSTRUMENTATION / CALIBRATION:    [ ] U.S. POUNDS     [ ] KILOGRAMS


                                WEIGHT & BALANCE

HAS AIRCRAFT BEEN MODIFIED FOR INCREASED GROSS WEIGHT:    [ ] YES    [ ] NO

         FROM ______________  MTGW    TO ____________________ MTGW

GROSS WEIGHT MODIFICATION AUTHORIZED BY WHAT DOCUMENT: _________________________

PERMANENT BALLAST INSTALLED TO CORRECT C.G. IMBALANCE:  [ ] YES     [ ] NO

IF YES, LOCATION OF BALLAST ______________     WEIGHT IN U.S. LBS. _____________

WEIGHT & BALANCE CONTROL COMPUTER SYSTEM INSTALLED:  [ ] YES           [ ] NO

WEIGHT & BALANCE MANUAL DOCUMENT NO. __________________    REV _________________

For the below weights specify the source:   [ ] AFM  [ ] DESIGN SPECIFICATION

                                               POUNDS               KILOS

MAXIMUM TAKEOFF GROSS WEIGHT  (MTOGW)     ___________________/__________________

MAXIMUM TAXI WEIGHT           (MTW)       ___________________/__________________

MAXIMUM LANDING WEIGHT        (MLW)       ___________________/__________________

MANUFACTURERS EMPTY WEIGHT    (MEW)       ___________________/__________________

MAXIMUM ZERO FUEL WEIGHT      (MZW)       ___________________/__________________

OPERATIONAL EMPTY WEIGHT      (OEW)  -    ___________________/__________________

MAXIMUM PAYLOAD                      =    ___________________/__________________


                                                                        Page 16

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                     INTERNATIONAL LEASE FINANCE CORPORATION
                                AIRCRAFT/OPERATOR
                           TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------


                                AVIONICS SYSTEMS
                                 22 AUTO FLIGHT

                                                                   MODEL or
QTY            COMPONENT                     MANUFACTURER        PART NUMBER

_____  FLIGHT CONTROL COMPUTER:            _________________  __________________

_____  AUTOTHROTTLE COMPUTER:              _________________  __________________

_____  STAB AUG COMPUTER:                  _________________  __________________

_____  STALL MANAGEMENT COMPUTER:          _________________  __________________

_____  AUTOFLIGHT ACCESSORY UNIT           _________________  __________________

_____  FLIGHT INSTRUMENT ACCESSORY UNIT:   _________________  __________________

_____  AUTO PILOT SYSTEM:                  _________________  __________________

_____  FLIGHT DIRECTOR:                    _________________  __________________

_____  PITCH COMPUTER                      _________________  __________________

_____  ROLL COMPUTER                       _________________  __________________



                                23 COMMUNICATIONS

_____  PA AMPLIFIER:                       _________________  __________________

_____  HF TRANSCEIVER                      _________________  __________________

_____  VHF TRANSCEIVER                     _________________  __________________

_____  COCKPIT VOICE RECORDER:             _________________  __________________

_____  TAPE REPRODUCER                     _________________  __________________
       (Pre-Recorded PAX Address)

_____  TAPE REPRODUCER                     _________________  __________________
       (Audio) ENTERTAINMENT:

_____  TAPE REPRODUCER                     _________________  __________________
       (Video) ENTERTAINMENT:

_____  SELCAL DECODER:                     _________________  __________________

_____  ACARS MANAGEMENT UNIT               _________________  __________________


                                                                        Page 17

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                     INTERNATIONAL LEASE FINANCE CORPORATION
                                AIRCRAFT/OPERATOR
                           TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------


                          AVIONICS SYSTEMS (Continued)

                           31 INDICATING AND RECORDING

                                                                   MODEL or
QTY              COMPONENT                   MANUFACTURER        PART NUMBER

       FLIGHT DATA
_____  RECORDER (DFDR):                    _________________  __________________

       DIGITAL FLIGHT DATA
_____  ACQUISITION UNIT (DFDAU):           _________________  __________________

_____  ACCELEROMETER:                      _________________  __________________

_____  WEIGHT AND BALANCE
       COMPUTER:                           _________________  __________________


ELECTRONIC FLIGHT INSTRUMENT SYSTEM

       EFIS DISPLAY PANEL ADI
_____  (Attitude) / FLIGHT DISPLAY:        _________________  __________________

       EFIS DISPLAY PANEL HIS
_____  (Directional) / NAV DISPLAY:        _________________  __________________

_____  EFIS SYMBOL GENERATORS:             _________________  __________________


ENGINE INDICATING AND CREW ALERTING SYSTEM (EICAS)

        EICAS DISPLAY PANEL/UNIT           _________________  __________________
_____   (Primary):

        EICAS DISPLAY PANEL/UNIT           _________________  __________________
______  (Secondary):

______  EFIS/EICAS INTERFACE UNIT:         _________________  __________________


AIRPLANE CONDITION MONITORING SYSTEM (ACMS)

_____  DATA MANAGEMENT UNIT (DMU):         _________________  __________________

_____  AIRBORNE DATA LOADER:               _________________  __________________

_____  AIR DATA COMPUTER:                  _________________  __________________

       GROUND PROXIMITY WARNING            _________________  __________________
_____  SYSTEM (GPWS) COMPUTER:

_____  WINDSHEAR SYSTEM:                   [ ] YES   [ ] NO


                                                                        Page 18

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                     INTERNATIONAL LEASE FINANCE CORPORATION
                                AIRCRAFT/OPERATOR
                           TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------


                          AVIONICS SYSTEMS (Continued)

                                  34 NAVIGATION

                                                                   MODEL or
QTY          COMPONENT                       MANUFACTURER        PART NUMBER

INERTIAL REFERENCE SYSTEM (IRS)

       INERTIAL REFERENCE
_____  UNIT (IRU):                         _________________  __________________


OMEGA NAVIGATION SYSTEM (ONS)

       RECEIVER PROCESSOR
_____  UNIT (RPU):                         _________________  __________________

_____  CONTROL DISPLAY UNIT (CDU):         _________________  __________________


VHF NAVIGATION

       DISTANCE MEASURING EQUIPMENT
_____  (DME) INTERROGATORS:                _________________  __________________

_____  VHF VOR/ILS RECEIVER:               _________________  __________________

_____  VHF VOR/MKR RECEIVER                _________________  __________________

_____  VHF ILS/only RECEIVER:              _________________  __________________

       RADIO DIGITAL DISTANCE
_____  MAGNETIC INDICATOR (RDDMI):         _________________  __________________

_____  RADIO MAGNETIC INDICATOR:           _________________  __________________

_____  RADIO ALTIMETER TRANSCEIVER:        _________________  __________________

_____  WEATHER RADAR TRANSCEIVER:          _________________  __________________

       TRAFFIC ALERT AND COLLISION
       AVOIDANCE
_____  SYSTEM (TCAS) COMPUTER:             _________________  __________________

       AIR TRAFFIC CONTROL (ATC)
_____  SYSTEM TRANSPONDER:                 _________________  __________________

_____  MICRO WAVE LANDING RECEIVER:        _________________  __________________

_____  MARKER BEACON RECEIVER              _________________  __________________

       AUTOMATIC DIRECTION FINDER          _________________  __________________
_____  (ADF) RECEIVER:


                                                                        Page 19

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                     INTERNATIONAL LEASE FINANCE CORPORATION
                                AIRCRAFT/OPERATOR
                           TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------


                          AVIONICS SYSTEMS (Continued)

                                  34 NAVIGATION

                                                                  MODEL or
QTY                COMPONENT                 MANUFACTURER       PART NUMBER

FLIGHT MANAGEMENT COMPUTER SYSTEM (FMCS)

_____  FLIGHT MANAGEMENT COMPUTER:         _________________  __________________

_____  CONTROL DISPLAY UNIT (CDU):         _________________  __________________

_____  CONTROL DISPLAY UNIT (CDU):         _________________  __________________


                       45 CENTRAL MAINTENANCE SYSTEM (CMS)

       CENTRAL MAINTENANCE
_____  COMPUTER:                           _________________  __________________

       MAINTENANCE CONTROL
_____  AND DISPLAY PANEL:                  _________________  __________________

_____  PRINTER:                            _________________  __________________


                              77 ENGINE INDICATING

       PRIMARY ENGINE DISPLAY
_____  PANEL:                              _________________  __________________

       SECONDARY ENGINE DISPLAY
_____  PANEL:                              _________________  __________________


                                                                        Page 20

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                     INTERNATIONAL LEASE FINANCE CORPORATION
                                AIRCRAFT/OPERATOR
                           TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------


                                AIRCRAFT MANUALS


         MANUAL or DOCUMENT           DOCUMENT No.     REV     QTY     QTY
                                                              MICRO    HARD
                                                              FILM     COPY

1    FAA APPROVED FLIGHT MANUAL:    ________________  _____  _______  ______

2    AIRPLANE FLIGHT OPERATION
     MANUAL:                        ________________  _____  _______  ______

3    AIRCRAFT RECOVER MANUAL:       ________________  _____  _______  ______

4    QUICK REFERENCE HANDBOOK
     (QRH):                         ________________  _____  _______  ______

5    WEIGHT AND BALANCE MANUAL:     ________________  _____  _______  ______

6    AIRCRAFT FUELING MANUAL:       ________________  _____  _______  ______

7    AIRCRAFT MAINTENANCE MANUAL
     (MM):                          ________________  _____  _______  ______

8    AIRCRAFT MAINTENANCE MANUAL
     SUPPLEMENT:                    ________________  _____  _______  ______

9    RAMP MAINTENANCE MANUAL
     (RMM):                         ________________  _____  _______  ______

10   CARGO LOADING MANUAL:          ________________  _____  _______  ______

11   FAULT REPORTING MANUAL (FRM):  ________________  _____  _______  ______

12   FAULT ISOLATION MANUAL (FIM):  ________________  _____  _______  ______

13   ILLUSTRATED PARTS CATALOG
     (IPC):                         ________________  _____  _______  ______

14   LIFE LIMITED PARTS MANUAL:     ________________  _____  _______  ______

15   STRUCTURAL REPAIR MANUAL
     (SRM):                         ________________  _____  _______  ______

16   APERTURE CARDS:                ________________  _____  _______  ______

17   WIRING DIAGRAM MANUAL (WD):    ________________  _____  _______  ______

18   WIRING PRACTICES MANUAL:       ________________  _____  _______  ______

19   SYSTEM SCHEMATICS MANUAL:      ________________  _____  _______  ______

20   B.I.T.E. MANUAL:               ________________  _____  _______  ______

21   NON-DESTRUCTIVE TEST MANUAL:   ________________  _____  _______  ______


                                                                        Page 21

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                                AIRCRAFT/OPERATOR
                           TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------




22   CORROSION PREVENTION MANUAL:   ________________  _____  _______  ______


23   AIRCRAFT OVERHAUL MANUAL
     (OHM):                         ________________  _____  _______  ______

24   COMPONENT MAINTENANCE MANUAL:  ________________  _____  _______  ______


25   APU LOG BOOK:                  ________________  _____  _______  ______

26   ENGINE MAINTENANCE MANUAL:     ________________  _____  _______  ______

27   ENGINE LOG BOOK:               ________________  _____  _______  ______

28   ENGINE ILLUSTRATED PARTS
     CATALOG:                       ________________  _____  _______  ______

29   ENGINE DATA SUBMITTAL BOOK:    ________________  _____  _______  ______

30   ENGINE OVERHAUL MANUAL:        ________________  _____  _______  ______

31   POWER PLANT BUILD-UP MANUAL:   ________________  _____  _______  ______


                                                                        Page 22

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                                AIRCRAFT/OPERATOR
                           TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------


                         AIRCRAFT RECORDS AND DOCUMENTS
                                                                    AVAILABLE

1    CERTIFICATE OF AIRWORTHINESS                                      [ ]

2    EXPORT CERTIFICATE OF AIRWORTHINESS                               [ ]

3    COPY OF ORIGINAL EXPORT CERTIFICATE OF AIRWORTHINESS

4    OPERATOR'S SCHEDULED MAINTENANCE AND INSPECTION PROGRAM
     SPECIFICATION (to include component limits)                       [ ]

5    OPERATOR ACCIDENT/INCIDENT STATEMENT                              [ ]

6    ORIGINAL AIRCRAFT READINESS LOG                                   [ ]

7    OPERATOR EMERGENCY EQUIPMENT LAYOUT                               [ ]

8    AIRCRAFT TECHNICAL LOG CURRENT OPERATOR                           [ ]

9    AIRCRAFT TECHNICAL LOG PREVIOUS OPERATOR                          [ ]

10   CURRENT FUEL SAMPLE MICROBIAL GROWTH LABORATORY RESULTS           [ ]

11   AIRCRAFT FLIGHT LOG OR FLIGHT TIME REPORT                         [ ]

12   ENGINE CONDITION MONITORING REPORT                                [ ]

13   ENGINE LOG CURRENT OPERATOR                                       [ ]

14   CURRENT ENGINE DISC SHEET                                         [ ]

15   ENGINE LOG PREVIOUS OPERATOR (including Delivery Records)         [ ]

16   APU/ENGINE LOG & HISTORICAL RECORDS                               [ ]

17   APU/ENGINE SHOP VISIT REPORTS/RECORDS                             [ ]

18   TIME CONTROLLED / LIFE LIMITED COMPONENT STATUS FOR
     AIRFRAME, ENGINES, LANDING GEAR AND APU
     (including component tags)                                        [ ]

19   FAA AIRWORTHINESS DIRECTIVE STATUS LIST                           [ ]

20   FAA AIRWORTHINESS DIRECTIVE METHOD OF COMPLIANCE DOCUMENTS        [ ]

21   FAA REPETITIVE AIRWORTHINESS DIRECTIVE STATUS LIST                [ ]

22   INTERIOR MATERIAL BURN CERTIFICATES                               [ ]

23   AIRCRAFT WEIGHT AND BALANCE RECORDS & EQUIPMENT LIST (Current)    [ ]


                                                                        Page 23

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                                AIRCRAFT/OPERATOR
                           TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------



                                                                    AVAILABLE

24   EXPLANATION OF ANY OPERATOR SAMPLING PROGRAMS                     [ ]

25   MAJOR REPAIR / MAJOR ALTERATION RECORDS (to include
     STC's, FAA 337's, Operator EO's, 8110-3's                         [ ]

26   LIST OF NON-TSO'D ITEMS INSTALLED ON AIRCRAFT                     [ ]

27   SERVICE BULLETIN & ALL OPERATOR LETTER INCORPORATION LIST         [ ]

28   OPERATOR DENT AND DAMAGE REPORT/MAP                               [ ]

29   AIRCRAFT INSPECTION STATUS & "CHECK RECORDS"                      [ ]

30   OPERATOR COMPONENT PART NUMBER TO MANUFACTURER PART NUMBER
     CROSS REFERENCE                                                   [ ]

31   GALLEY CERTIFICATE OF SANITARY CONSTRUCTION                       [ ]

32   FLIGHT CONTROL BALANCE RECORDS                                    [ ]

33   FLIGHT DATA RECORDER READOUT OF PARAMETERS                        [ ]

34   DEFERRED ITEMS LIST                                               [ ]

35   AIRFRAME AND ENGINE OWNERSHIP PLACARDS                            [ ]


                                                                        Page 24

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                     INTERNATIONAL LEASE FINANCE CORPORATION
                                AIRCRAFT/OPERATOR
                           TECHNICAL EVALUATION REPORT
--------------------------------------------------------------------------------


                                INSPECTOR RECORD

INSPECTED BY ____________________           DATE _______________________________

OPERATOR ________________________      REGISTERED OWNER ________________________

ADDRESS OF OPERATOR ____________________________________________________________

     ___________________________________________________________________________

     ___________________________________________________________________________

CONTACT (Name/Title) ___________________________________________________________

PHONE ________________________         FAX _____________________________________


                                                                        Page 25

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