Document:

EXECUTIVE EMPLOYMENT AGREEMENT

                  This Executive Employment Agreement (this "Agreement") is
dated as of December 2, 1999, between First Aviation Services Inc., a Delaware
corporation (the "Company"), and Gerald E. Schlesinger, an individual (the
"Executive").

                                   WITNESSETH:

                  WHEREAS, the Company believes that the Executive will be a
valued employee of the Company and wishes to secure his employment with the
Company and document the terms of the Executive's employment by the Company.

                  WHEREAS, the Company also has determined that it is in the
best interests of the Company and its shareholders to reinforce and encourage
the continued attention and dedication of certain key members of the Company's
management, including the Executive, to their assigned duties without
distraction in uncertain circumstances arising from the possibility of a change
in control of the Company.

                  NOW, THEREFORE, taking into account the foregoing and in
consideration of the mutual promises and conditions contained herein, the
parties hereto agree as follows:

I

                                   EMPLOYMENT

                  .1 Employment. The Company employs the Executive and the
Executive hereby accepts employment as a Senior Vice President upon the terms
and conditions hereinafter set forth.

                  .2 Term. The employment of the Executive by the Company under
the terms and conditions of this Agreement will commence on the date hereof and
continue, subject to Article IV hereof, for a period of three years ("Employment
Term").

                  .3 Executive Duties. As a Senior Vice President of the
Company, the Executive shall perform such duties as are requested by and shall
report directly to the Company's Chief Executive Officer. The Executive agrees
to devote his full business time (with allowances for vacations and sick leave)
and attention and best efforts to the affairs of the Company and its
subsidiaries and affiliates during the Employment Term. Executive shall not,
while an employee of the Company, directly or indirectly, be engaged (including
as a stockholder, proprietor, general partner, limited partner, trustee,
consultant, employee, director,
<PAGE>

officer, lender, investor or otherwise) in any business or activity that is
competitive with that of the Company, its parent or any of its subsidiaries, or
affiliates.

II

                            COMPENSATION AND BENEFITS

                  .1 Annual Salary. During the Employment Term, the Company
shall pay to the Executive a base salary at the rate of Two Hundred Twenty Five
Thousand Dollars ($225,000) per year (the "Annual Salary"), payable in
substantially equal biweekly installments. The Company will review annually and
may, in the sole discretion of the Board of Directors of the Company, increase
such base salary in light of the Executive's performance, inflation in cost of
living or other factors.

                  .2 Benefits. Subject to the discretion of the Board of
Directors, during the Employment Term, the Executive may be permitted to
participate in and be covered under any and all such performance, bonus, profit
sharing, incentive stock option, and other compensation plans and such medical,
dental, disability, life, and other insurance plans and such other benefits
generally available to other employees of the Company in similar employment
positions, as the Board of Directors shall determine, subject to meeting
applicable eligibility requirements (collectively referred to herein as the
"Company Benefit Plans").

                  .3 Reimbursement of Expenses. The Executive shall be entitled
to receive prompt reimbursement of all reasonable expenses incurred by the
Executive in performing services hereunder, including all reasonable expenses of
travel, entertainment and living expenses while away from home on business at
the request of, or in the service of, the Company, provided that such expenses
are incurred and accounted for in accordance with the policies and procedures
established by the Company.

                  .4 Vacation and Holidays. The Executive shall be entitled to
an annual vacation leave of three (3) weeks at full pay or such greater vacation
benefits as may be provided for by the Company's vacation policies applicable to
senior executives of the Company. Up to a maximum of one week of vacation time
may be accumulated and carried over from one year to the next. Executive shall
be entitled to such holidays as are established by the Company for all
employees.

III

                        CONFIDENTIALITY AND NONDISCLOSURE

                  .1 Confidentiality. Executive shall not, during Executive's
employment by the Company or thereafter, at any time disclose, directly or
indirectly, to any person or entity or use for Executive's or any other person's
or entity's benefit any trade secrets or confidential information relating to
the Company's, its subsidiaries' or affiliates' businesses, operations,
marketing data, business plans, strategies, employees, products, prices,
negotiations and contracts with other companies, or any other subject matter
pertaining to the business of the
<PAGE>

Company or its subsidiaries or affiliates or any of their respective clients,
customers, suppliers, consultants, or licensees, known, learned, or acquired by
Executive during the period of Executive's employment by the Company
(collectively "Confidential Information"), except as may be necessary in the
ordinary course of performing Executive's particular duties as an employee of
the Company.

                  .2 Return of Confidential Material. Executive shall promptly
deliver to the Company on termination of Executive's employment with the
Company, whether or not for Cause, or at any time the Company may so request,
all memoranda, notes, records, reports, manuals, drawings, blueprints,
rolodexes, computer files and records, Confidential Information and any other
documents of a confidential nature belonging to the Company or its subsidiaries
or affiliates, including all copies of such materials which Executive may then
possess or have under Executive's control and any notes of Executive relating
thereto whether in print-based or electronic media. Upon termination of
Executive's employment by the Company, Executive shall not retain any document,
data, or other material of any nature containing or pertaining to the
proprietary information of the Company or its subsidiaries or affiliates.

                  .3 Prohibition on Solicitation of Customers. During the term
of Executive's employment by the Company, and for a period of six (6) months
thereafter, Executive shall not, directly or indirectly, either for Executive or
for any other person or entity, solicit any person or entity to terminate such
person's or entity's contractual and/or business relationship with the Company
or its subsidiaries or affiliates, nor shall Executive interfere with or disrupt
or attempt to interfere with or disrupt any such relationship. None of the
foregoing shall be deemed a waiver of any rights and remedies the Company may
have under applicable law.

                  .4 Prohibition on Solicitation of Employees, Agents or
Independent Contractors After Termination. During the term of Executive's
employment by the Company and for a period of six months following the
termination of Executive's employment by the Company, Executive will not solicit
any of the employees, agents, or independent contractors of the Company or its
subsidiaries or affiliates to leave the employ of the Company or its
subsidiaries or affiliates. However, Executive may solicit any employee, agent
or independent contractor who voluntarily terminates his employment with the
Company or its subsidiaries or affiliates after a period of 180 days have
elapsed since the termination date of such employee, agent or independent
contractor. None of the foregoing shall be deemed a waiver of any rights and
remedies the Company may have under applicable law.

                  .5 Right to Injunctive and Equitable Relief. Executive's
obligations not to disclose or use "Confidential Information" and to refrain
from the solicitations described in this Article III are of a special and unique
character. The Company and its subsidiaries and affiliates cannot be reasonably
or adequately compensated for damages in an action at law in the event Executive
breaches such obligations. Therefore, Executive expressly agrees that the
Company and its subsidiaries and affiliates shall be entitled to injunctive and
other equitable relief without bond or other security in the event of such
breach in addition to any other rights or remedies which the Company or its
subsidiaries or affiliates may possess or be entitled to pursue.

                       Furthermore, the obligations of Executive and the rights
and remedies of the Company and its subsidiaries and affiliates under this
Article III are cumulative and in addition to, and not in lieu of, any
obligations, rights, or remedies created by applicable law relating to
<PAGE>

misappropriation or theft of trade secrets or "Confidential Information". The
parties agree that all of the subsidiaries and affiliates of the Company shall
be third party beneficiaries of this Section III and be entitled to enforce
directly against Executive the provisions of this Section III to the extent that
shall be related to the businesses of such subsidiaries or affiliates.

                  .6 Survival of Obligations. Executive agrees that the terms of
this Article III and Article V hereof shall survive the term of this Agreement
and the termination of Executive's employment by the Company.

IV

                                   TERMINATION

                  .1     Definitions.  For purposes of this Article IV, the
following definitions shall be applicable to the terms set forth below:

                         (a) Cause. "Cause" shall mean only the following: (i)
                  continued failure by the Executive after receipt of written
                  notice thereof to perform his duties hereunder or those duties
                  which may, from time to time, be reasonably requested by the
                  Chief Operating Officer or the Chief Executive Officer of the
                  Company (other than such failure resulting from the
                  Executive's incapacity due to physical or mental illness), as
                  determined by the Board of Directors in their reasonable
                  discretion; (ii) misconduct by the Executive which is
                  materially injurious to the Company; (iii) conviction of or
                  pleading no contest to a felony or crime of moral turpitude;
                  (iv) habitual drunkenness or drug use by the Executive; (v)
                  failure to uphold the policies of the Company and/or action by
                  the Executive beyond the scope of his employment, as such
                  scope is set by the Chief Operating Officer or the Chief
                  Executive Officer of the Company from time to time; (vi) a
                  material breach of this Agreement by the Executive.

                         (b) Disability. "Disability" shall mean a physical or
                  mental incapacity as a result of which the Executive becomes
                  unable to continue the proper performance of his duties
                  hereunder (reasonable absences because of sickness for up to
                  three (3) consecutive months excepted). A determination of
                  Disability shall be subject to the certification of a
                  qualified medical doctor agreed to by the Company and the
                  Executive or, in the event of the Executive's incapacity to
                  designate a doctor, the Executive's legal representative. In
                  the absence of agreement between the Company and the
                  Executive, each party shall nominate a qualified medical
                  doctor and the two doctors so nominated shall select a third
                  doctor, who shall make the determination as to Disability.

                  .2     Termination by Company. The Executive's employment
hereunder may be terminated by the Company immediately for Cause. Subject to the
provisions contained in Section IV(.3)(b) of this Agreement, the Company may
terminate this Agreement at any time for any reason other than Cause upon thirty
(30) days' written notice to Executive. The effective date of termination
("Effective Date") shall be considered to be thirty (30) days subsequent to
<PAGE>

written notice of termination; however, the Company may elect to have Executive
leave the Company and its subsidiaries immediately upon issuance of the
aforementioned written notice.

                  .3       Severance Benefits Received Upon Termination.

                         (a) If at any time the Executive's employment is
                  terminated by the Company for Cause, the Company shall pay the
                  Executive his Annual Salary prorated through the end of the
                  month during which such termination occurs plus payment for
                  any vacation earned but not taken, and the Company shall
                  thereafter have no further obligations under this Agreement to
                  the Executive or his dependents, beneficiaries or estate;
                  provided, however, that the Company will continue to honor any
                  obligations that may have been accrued and vested under then
                  existing Company Benefit Plans or any other written and duly
                  authorized agreements or arrangements applicable to the
                  Executive. The only Agreements in effect for Gerald E.
                  Schlesinger are the written Incentive Stock Option
                  Agreement(s) previously awarded and the Change of Control
                  Agreement. This signed Employment Agreement supersedes or
                  replaces any other agreement or arrangement applicable to this
                  Executive.

                         (b) If at any time the Executive's employment is
                  terminated by the Company without Cause or as a result of
                  death or Disability, then the Company shall:

                              (1) following the execution of the Company's
                         Separation Agreement, pay to the Executive an amount
                         equal to six (6) months' salary based upon the
                         Executive's current "Monthly Base Salary" (defined as
                         the Annualized Salary in effect on the date of
                         termination divided by twelve (12)), plus payment for
                         any vacation earned but not taken. This payment shall
                         be in lieu of any amounts otherwise due Executive under
                         the Company's policy for severance benefits. And in
                         addition, the Company will continue to honor any
                         obligations that may have been accrued and vested under
                         then existing Company Benefit Plans or any other
                         written and duly authorized agreements or arrangements
                         applicable to the Executive. The six-month's base
                         salary will be paid co-incident with the regularly
                         scheduled payroll in substantially bi-weekly
                         installments until the end of the six-month period.
                         Accrued and unused vacation will be paid upon
                         termination.

                              (2) provide Executive with such insurance coverage
                         as is then required by COBRA or any similar then
                         applicable law.

                  .4       No Obligation to Mitigate Damages; No Effect on Other
                           Contractual Rights.

                         (a) The Executive shall not be required to mitigate
                  damages or the amount of any payment provided for under this
                  Agreement by seeking other employment or otherwise, nor shall
                  the amount of any payment provided for under this Agreement be
                  reduced by any compensation earned by the Executive as the
                  result of employment by another employer after the date of
                  termination, or otherwise.
<PAGE>

                         (b) The provisions of this Agreement, and any payment
                  or benefit provided for hereunder, shall not reduce any
                  amounts otherwise payable, or in any way diminish the
                  Executive's existing rights, or rights which would accrue
                  solely as a result of the passage of time, under any Company
                  Benefit Plan or other contract, plan or arrangement. However,
                  it is expressly understood that a termination of employment in
                  accordance with Section 3(a) or Section 3(b) renders the
                  Change of Control Agreement null, void, or inoperable.

                         (c) Executive may terminate this Agreement upon 30 days
                  written notice to the Company and upon such termination the
                  Company shall make the payment provided for in Section IV
                  (.3)(a) hereof and no further payments shall be required to be
                  made by the Company to Executive unless the termination of
                  this Agreement by the Executive follows a change of control as
                  that term is defined in the Change of Control Agreement dated
                  December 2, 1999.

                         (d) Notwithstanding any inference to the contrary, the
                  benefits payable to the Executive in accordance with the
                  aforementioned portion of this Section IV, shall not include
                  incentive compensation awards based upon performance except
                  that which is earned, accrued and payable at the close of the
                  prior fiscal year.

V

                               GENERAL PROVISIONS

                  .1 Notice. For purposes of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by Federal Express or
similar priority mail service, or United States registered mail, return receipt
requested, postage prepaid, as follows:

     If to the Company:

         First Aviation Services Inc.
         15 Riverside Avenue
         Westport, CT  06880-4214

         Telephone:  (203) 291-3300
         Fax:  (203) 291-3330

   Company Counsel:

         Frederick Green, Esq.
         Weil Gotshal & Manges
         767 Fifth Avenue
         New York, NY  10153

         Telephone:  (212) 310-8524
         Fax:  (212) 310-8007
<PAGE>

    If to the Executive:

         Gerald E. Schlesinger
         16942 Old Pond Drive
         Dallas, TX  75248

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

                  .2 No Waivers. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time.

                  .3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Connecticut without regard
to conflicts of law principles. Executive hereby agrees to submit to the
exclusive jurisdiction of the courts in and of the State of Connecticut, and
consents that service of process with respect to all courts in and of the State
of Connecticut may be made by registered mail to Executive at his address for
notices specified herein.

                  .4 Severability or Partial Invalidity. The invalidity or
unenforceability of any provisions of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which shall
remain in full force and effect.

                  .5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

                  .6 Legal Fees and Expenses. Should any party institute any
action or proceeding to enforce this Agreement or any provision hereof, or for
damages by reason of any alleged breach of this Agreement or of any provision
hereof, or for a declaration of rights hereunder, the prevailing party in any
such action or proceeding shall be entitled to receive from the other party all
costs and expenses, including reasonable attorneys' fees, incurred by the
prevailing party in connection with such action or proceeding.

                  .7 Entire Agreement. This Agreement constitutes the entire
agreement of the parties and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings, and negotiations between the
parties with respect to the subject matter hereof. This Agreement is intended by
the parties as the final expression of their agreement with respect to such
terms as are included in this Agreement and may not be contradicted by evidence
of any prior or contemporaneous agreement. The parties further intend that this
Agreement constitutes the complete and exclusive statement of its terms and that
no extrinsic evidence may be introduced in any judicial proceeding involving
this Agreement.
<PAGE>

                  .8 Assignment. This Agreement and the rights, duties, and
obligations hereunder may not be assigned or delegated by any party without the
prior written consent of the other party. Notwithstanding the foregoing
provisions of this Section 5.8, the Company may assign or delegate its rights,
duties, and obligations hereunder to any person or entity which succeeds to all
or substantially all of the business of the Company through merger,
consolidation, reorganization, or other business combination or by acquisition
of all or substantially all of the assets of the Company; provided that such
person assumes the Company's obligations under this Agreement.

                  IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.

                             FIRST AVIATION SERVICES INC.
                             a Delaware corporation

                             By: /s/ Aaron P. Hollander
                                -----------------------
                             Title: Chairman

                             By: /s/ Michael C. Culver
                                ----------------------
                             Title: Chief Executive Officer

                             Gerald E. Schlesinger
                             an individual

                             /s/ Gerald E. Schlesinger
                             -------------------------COMMERCIAL REVOLVING LOAN AND SECURITY AGREEMENT

                                     BETWEEN

                               HUDSON UNITED BANK

                                       AND

                      AEROSPACE PRODUCTS INTERNATIONAL, INC

                           Dated as of March 30, 2000

<PAGE>

                                    Exhibits
                                    --------

Exhibit "A"    -     $20,000,000 Commercial Revolving Promissory Note
-----------

Exhibit "B"    -     Borrowing Base Certificate
-----------

Exhibit "C"    -     Covenant Compliance Certificate
-----------

Exhibit "D"    -     Guaranty of First Aviation Services, Inc.
-----------

Exhibit "E"    -     Guaranty of  Aircraft Parts International, Ltd.
-----------

                                    Schedules
                                    ---------

                                       2
<PAGE>

     AGREEMENT dated as of March30, 2000 between AEROSPACE PRODUCTS
INTERNATIONAL, INC., a Delaware corporation with an office at 3778 Distriplex
Drive North, Memphis, Tennessee ("Borrower") and HUDSON UNITED BANK, a state
banking corporation with an office located at 87 Post Road East, Westport,
Connecticut 06880 (the "Bank").

                                    Recitals
                                    --------

     A. The Borrower has requested that the Bank provide the Loan to the
Borrower to be utilized by the Borrower for the satisfaction of its indebtedness
to Fleet Bank, N.A. and for working capital purposes.

     B. The Bank agrees, subject to the terms and conditions contained in this
Agreement, to make the Loan available to the Borrower, based upon the Borrowing
Base.

                                    Agreement
                                    ---------

     In consideration of the Background, which is incorporated by reference and
the mutual covenants contained in this Agreement, the Borrower and the Bank, for
good and valid consideration, the receipt and sufficiency of which is hereby
acknowledged, intending to be bound legally, agree as follows:

                                   ARTICLE I.

                                   Definitions
                                   -----------

          1.01 Definitions. As used herein, or in any certificate, document or
report delivered pursuant to this Agreement or any of the other Loan Documents,
capitalized terms shall have the meanings set forth on the attached Schedule
"1.01".

          1.02 Accounting Terms.Except as otherwise specifically set forth in
this Agreement, each accounting term used in this Agreement shall have the
meaning given to it under GAAP. Any dispute or disagreement between the Borrower
and the Bank relating to the determination of GAAP shall, in the absence of
manifest error, be conclusively resolved for all purposes hereof by the written
opinion with respect thereto, delivered to the Bank, of independent accountants
selected by the Borrower and approved by the Bank for the purposes of auditing
the periodic financial statements of the Borrower.

                                       3
<PAGE>

                                   ARTICLE II.

                                 Loan Facilities
                                 ---------------

          2.01 Revolving Loans Subject to the terms and conditions, and relying
upon the representations and warranties set forth in this Agreement, the Bank
agrees to make revolving loans (each a "Revolving Loan" and, collectively, the
"Revolving Loans") to the Borrower at any time until the Commitment Termination
Date, in the principal amount which shall not exceed in the aggregate at any one
time the Borrowing Base (the "Revolving Loan Commitment"). In addition to this
Agreement, the Loan shall be evidenced by the Commercial Revolving Promissory
Note of this date, a copy of which is attached hereto as Exhibit "A" (the
"Note").

          (a) Procedure For Revolving Loan Borrowing. Provided that the
Revolving Loan Commitment has not been terminated as provided in this Agreement
the Borrower may borrow under the Revolving Loan Commitment by giving the Bank
irrevocable notice of a request for a Revolving Loan one (1) Business Day before
a proposed borrowing, such irrevocable notice setting forth (i) the amount of
the Revolving Loan requested, which shall not be less than $100,000.00, and (ii)
the requested Revolving Loan Borrowing Date. Such notice must be written
(including, without limitation, via facsimile transmission), accompanied by a
executed Borrowing Base Certificate in the form of Exhibit B attached hereto,
and shall be sufficient if received by 2:00 p.m. (Eastern Standard Time) on the
date on which such notice is to be given. Unless notification is otherwise
furnished by the Borrower to the Bank in a manner consistent with the
requirements of this Section 2.01(a), Revolving Loans will be made by credits to
the Borrower's deposit account maintained with the Bank.

          (b) Ability to Borrow and Reborrow. Within the limits of the Borrowing
Base, so long as the Borrower is in compliance with all the terms and conditions
of this Agreement and no Default or Event of Default exists, and so long as the
Bank has not demanded payment or accelerated payment of any of the then
outstanding Revolving Loans, the Borrower may borrow, repay and reborrow
Revolving Loan funds.

          (c) Absence of Demand. Termination or Default. The Bank shall not, and
shall not be obligated to, make any Advances (i) if it has demanded payment of,
accelerated payment of, or terminated the Revolving Loans due to a Default, or
the occurrence of an Event of Default, or (ii) on or after the Commitment
Termination Date.

          (d) Discretion of Bank. Notwithstanding any other terms of this
Agreement, Eligible Receivables, the Borrowing Base, Eligible Inventory, and
appropriate reserve levels from the availability under the Borrowing Base, shall
be determined by the Bank from time-to-time in its sole reasonable discretion.

                                       4
<PAGE>

          2.02 Inventory Limitations. Notwithstanding anything to the contrary
contained in this Agreement, in no event shall the Bank be required to make
Revolving Loans which exceed $10,000,000 in the aggregate based on all Eligible
Inventory or which exceed $1,000,000 in the aggregate based on Eligible
Inventory of Aircraft Parts International, Ltd.

          2.03 Use of Proceeds. (a) The Borrower represents that the proceeds of
the Loan will be used to satisfy the indebtedness of the Borrower to Fleet Bank,
N.A. and for general working capital purposes.

          (a) The Borrower shall not apply any funds advanced under the Loan to,
or for the benefit of, any Affiliate or Subsidiary other than Aircraft Parts
International, Ltd.

                                  ARTICLE III.

                               Interest And Terms
                               ------------------

          3.01 Interest Rate.

          (a) The Revolving Loan shall bear and the Borrower promises to pay
interest on the terms and conditions set forth in the Note.

          (b) Lawful Interest. It is the intent of the parties that the rate of
interest and all other charges to the Borrower be lawful. If for any reason the
payment of a portion of interest, fees or charges as required by this Agreement
would exceed the limit established by applicable law which a commercial Bank
such as the Bank may charge to a commercial borrower such as the Borrower, then
the obligation to pay interest or charges shall automatically be reduced to such
limit and, if any amounts in excess of such limits shall be paid, then such
amounts shall be applied to the unpaid principal amount of the Obligations of
the Borrower to Bank or refunded so that under no circumstances shall the
interest or charges required hereunder exceed the maximum rate allowed by law.

          3.02 Term and Termination. Unless sooner terminated as a result of the
occurrence of an Event of Default, the Revolving Loans shall be due and payable
in full on the Maturity Date. Upon termination of the Revolving Loan Commitment,
the Borrower shall have no ability to receive, and the Bank shall have no
obligation to make any further advances under the Revolving Loan Commitment. All
of the rights, interest and remedies of the Bank and Obligations of the Borrower
under this Agreement and the other Loan Documents shall survive termination of
the Revolving Loan Commitment until all of the Obligations of the Borrower are
fully satisfied.

                                       5
<PAGE>

          3.03 Repayments Any payments made by the Borrower to the Bank shall be
credited first to late charges, costs and expenses, then to accrued and unpaid
interest and then to the outstanding principal balance.

          (a) Mandatory Prepayment. If on any date the sum of Revolving Loans
outstanding exceeds the Borrowing Base, the Borrower shall, no later than the
second Business Day following such date, make prepayment of the Revolving Loans
in such amount so that the sum of Revolving Loans does not exceed the Borrowing
Base.

          (b) Payments. For purposes only of computing interest hereunder, all
payments shall be applied by the Bank on the Business Day on which payment has
been received by the Bank no later than 3:00 p.m.

          3.04 Unused Facility Fee. The Borrower agrees that Bank may debit the
Revolving Loan Account for the Unused Facility Fee quarterly in arrears on the
last Business Day of each calendar quarter. The Unused Facility Fee shall be
computed on the basis of the actual number of days elapsed in a year of 360
days.

                                   ARTICLE IV.

                         Representations And Warranties
                         ------------------------------

          4.01 The Borrower represents and warrants to the Bank that:

          (a) Organization and Qualification. The Borrower (i) is a corporation
duly organized, validly existing and in good standing under the laws of the
state of Delaware, (ii) has all requisite power and authority to own and operate
its properties and to carry on its business as presently conducted and as
proposed to be conducted, (iii) is qualified to do business in the state of
Tennessee and in every jurisdiction where such qualification is required, and
(iv) has the power to execute, deliver and perform its obligations under each of
the Loan Documents and each other agreement or instrument contemplated thereby
to which it is or will be a party and to borrow hereunder.

          (b) Corporate Authority. The Borrower has full corporate power and
authority to enter into and perform the obligations under this Agreement, to
make the borrowings contemplated herein, to execute and deliver the Note and the
other Loan Documents and to incur the obligations provided for herein and
therein. The execution, delivery and performance by the Borrower of each of the
Loan Documents and the borrowings hereunder have been duly

                                       6
<PAGE>

authorized by all necessary and proper corporate and, if required, stockholder
action. No other consent or approval or the taking of any other action in
respect of shareholders or of any public authority is required as a condition to
the validity or enforceability of this Agreement, the Note or any of the other
Loan Documents. The execution and delivery of this Agreement and the other Loan
Documents is for valid corporate purposes.

          (c) Binding Agreements. This Agreement constitutes, and the Note and
the other Loan Documents delivered in connection herewith shall constitute,
legal, valid and legally binding obligations of the Borrower, enforceable in
accordance with their respective terms.

          (d) Governmental Approvals. To the best of the Borrower's knowledge,
no action, consent or approval of, registration or filing with or any other
action by any Governmental Authority is or will be required in connection with
the transactions contemplated by this Agreement and the other Loan Documents,
except such as have been made or obtained and are in full force and effect.

          (e) Litigation. Except as set forth in Schedule "4.01(e)", there are
no actions, suits, proceedings or investigations pending or, to the knowledge of
the Borrower, threatened against or affecting the Borrower or the Subsidiaries,
or any business, property or rights of any such person, before any court or
administrative agency, which either in any case or in the aggregate, if
adversely determined, would either question the validity of this Agreement, the
Note, or any other Loan Documents, or any action to be taken in connection with
the transactions contemplated hereby or result in a Material Adverse Effect.

          (f) No Material Adverse Change. There has been no Material Adverse
Change since January 31, 2000.

          (g) No Conflicting Law or Agreements. To the best of the Borrower's
knowledge, the execution, delivery and performance by the Borrower of this
Agreement, the Note and the other Loan Documents (i) do not violate any
provision of the certificate of incorporation or bylaws of the Borrower, (ii) do
not violate any order, decree or judgment, or any provision of any statute, rule
or regulation, (iii) do not violate or conflict with, result in a breach of or
constitute (with notice or lapse of time, or both) a default under any
shareholder agreement, stock preference agreement, mortgage, indenture or
contract to which the Borrower is a party, or by which any of its properties are
bound, or (iv) do not result in the creation or imposition of any lien, charge
or encumbrance of any nature whatsoever upon any property or assets of the
Borrower except as contemplated herein.

          (h) Taxes. Except as set forth on the attached Schedule "4.01(h)",
with respect to all taxable periods of the Borrower, the Borrower has properly
prepared, executed and filed all tax returns (or extensions for filing) required
to be filed by it and has paid all federal,

                                       7
<PAGE>

state, municipal, franchise and other taxes shown on such filed returns. Other
than a current ongoing audit of the Borrower and the Guarantor by the Internal
Revenue Service, the Borrower is not the subject of any audit. The reserves and
provisions for taxes on the books of the Borrower and each Subsidiary are
adequate for all open years and for its current fiscal period. Neither the
Borrower nor any Subsidiary knows of any proposed additional assessment or bases
for any material assessment for additional taxes (whether or not reserved
against) except taxes that are being contested in accordance with Section
6.01(e) hereof.

          (i) Existence of Assets and Title Thereto. The Borrower has good and
marketable title to, or valid leasehold interests in, all its properties and
assets, including the properties and assets reflected in the financial
statements referred to above. All such properties and assets are not subject to
any mortgage, pledge, lien, lease, encumbrance, restriction or charge except
those permitted under the terms of this Agreement or as set forth in Schedule
"4.01(i)", and none of the foregoing prohibit or interfere with ownership of the
Borrower's assets or the operation of its business presently conducted thereon.

          (j) Regulations G, T, U and X. The proceeds of the borrowings
hereunder will not be used, directly or indirectly, for any consumer purpose or
purchases, or for the purposes of purchasing or carrying any margin stock in
contravention of Regulations G, T, U or X promulgated by the Board of Governors
of the Federal Reserve System.

          (k) Investment Company Act/Public Utility Holding Company Act. Neither
the Borrower nor any Subsidiary is (i) an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940, or (ii) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.

          (l) Compliance. To the best of its knowledge, the Borrower is not in
default with respect to, or in violation of, any order, writ, injunction or
decree of any court or of any federal, state, municipal or other governmental
department, commission, board, bureau, agency, authority or official, or in
violation of any law, statute, rule or regulation to which it or its properties
is or are subject, where such default or violation would materially and
adversely affect the financial condition of the Borrower. The Borrower
represents that it has not received notice of any such default from any party.
To the best of its knowledge, the Borrower is not in default in the payment or
performance of any of its obligations to any third parties or in the performance
of any mortgage, indenture, lease, contract or other agreement to which it is a
party or by which any of its assets or properties are bound.

          (m) Leases. The Borrower enjoys quiet and undisturbed possession under
all leases under which it is operating, and all such leases are valid and
subsisting and the Borrower is not in default under any of its leases. The
leases to which the Borrower is currently a party are set forth on the attached
Schedule "4.01(m)".

                                       8
<PAGE>

          (n) Employee Benefit Plans. The Borrower is in compliance in all
material respects with the applicable provisions of ERISA and the regulations
and published interpretations thereunder. No Reportable Event has occurred with
respect to any Plan as to which the Borrower was required to file a report with
the Pension Benefit Guaranty Corporation (hereinafter called the "PBGC"), and
the present value of all benefit liabilities under each Plan maintained by the
Borrower (based on those assumptions used to fund such plan) did not, as of the
last annual valuation date applicable thereto, exceed by a material amount the
value of the assets of such Plan. The Borrower has no unfunded liability with
respect to any Plan in contravention of ERISA.

          (o) Solvency. (i) Immediately after the first Advance, the fair
salable value of the assets of the Borrower taken as a whole will exceed the
amount that will be required to be paid on or in respect of the existing debts
and other liabilities (including contingent liabilities) of the Borrower.

               (ii) The Borrower does not intend to, and does not believe it
will, incur debts beyond its ability to pay such debts as they mature (taking
into account the timing and amounts of cash to be received by the Borrower, and
of amounts to be payable on or in respect of debt of the Borrower). The Borrower
expects that the cash flow of the Borrower (including from asset dispositions),
after taking into account all anticipated uses of the cash of the Borrower, will
at all times be sufficient to pay all such amounts or in respect of debt of the
Borrower when such amounts are required to be paid.

               (iii) The Borrower does not intend, and does not believe, that
final judgments against the Borrower in actions for money damages will be
rendered at a time when, or in an amount such that, the Borrower will be unable
to satisfy any such judgments promptly in accordance with their terms (taking
into account the maximum reasonable amount of such judgments in any such actions
and the earliest reasonable time at which such judgments might be rendered).

          (p) Office. The chief executive office and principal place of business
of the Borrower, and the office where its records concerning Collateral are kept
is 3778 Distriplex Drive North, Memphis, Tennessee.

          (q) Places of Business. The Borrower has no other places of business
and locates no Collateral, specifically including books and records, at any
location other than those set forth on the attached Schedule "4.01(q)".

          (r) Guaranty Obligations. Intentionally deleted.

                                       9
<PAGE>

          (s) Contracts. Borrower is not in default of any material contract,
governmental or otherwise, to which the Borrower is a party, and the and there
are no contracts which the termination of which by the Borrower would require
the payment of any amount of money.

          (t) Labor Matters. There are no strikes or other material labor
disputes against the Borrower pending or, to the Borrower's knowledge,
threatened such as would reasonably be expected to result in a Material Adverse
Effect. As of the Closing Date, the hours worked and payments made to employees
of the Borrower have not been in violation in any material respect of the Fair
Labor Standards Act or any other applicable law dealing with such matters. As of
the Closing Date, all payments due from the Borrower for which any claim has
been made against the Borrower on account of wages and employee health and
welfare insurance and other benefits have been paid or accrued as a liability on
the books of the Borrower. Upon request, the Company will furnish or make
available to the Banks copies of all collective bargaining agreements to which
the Borrower is a party. The consummation of the transactions contemplated by
this Agreement will not give rise to a right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement
to which the Borrower is a party or by which the Borrower is bound.

          (u) Stock Matters. There are no options or rights outstanding to
purchase any of the Borrower's capital stock except as set forth on the attached
Schedule "4.01(u)". The authorized capital stock of the Borrower consists of
300,000 shares of common stock, $.001 par value per share, 93,660 of which
shares are outstanding. There are no authorized shares of preferred stock except
as set forth on Schedule "4.01(u)". The record and beneficial ownership of such
capital stock of the Borrower is set forth in Schedule "4.01(u)". All of such
shares are fully paid and non-assessable, are not, and will not have been,
issued in violation of any preemptive rights.

          (v) Licenses. The Borrower has all licenses, permits, approvals and
other authorization required by any government, agency or subdivision thereof,
or from any licensing entity necessary for the conduct of its business, all of
which the Borrower represents to be current, valid and in full force and effect.

          (w) Insurance. All policies of insurance in effect of any kind or
nature owned by or issued to the Borrower, including (as applicable), policies
of life, fire, theft, product liability, public liability, property damage,
other casualty, malpractice, business interruption, employee fidelity, workers'
compensation, property and liability insurance are in full force and effect, and
of a nature and provide such coverage as is customarily carried by companies
engaged in similar businesses and owning or operating similar properties in the
same general areas in which the Borrower operates. The Borrower does not provide
any of its insurance through self-insurance.

                                       10
<PAGE>

                  (x) Accounts. (i) Each Account is, or at the time it comes
into existence, will be, a true and correct statement of (A) the bona fide
indebtedness of each Account Debtor, and (B) the amount of the account for
merchandise sold and delivered to, or for services performed for and accepted
by, such Account Debtor, net of any charges, adjustments, discounts or other
reductions whatsoever; (ii) at the time of each borrowing hereunder, there are,
and to the best of the Borrower's knowledge after due investigation will be, no
defenses, counterclaims, discounts or setoffs that may be asserted against any
of the Eligible Receivables; and (iii) the Borrower shall be deemed to have
warranted as to each Eligible Receivable that (iv) each Account and all papers
relating thereto are genuine and in all respects are what they purport to be,
(v) each Account is valid and existing and arises out of a bona fide sale of
goods sold and delivered by the Borrower to, or in the process of being
delivered to, or out of and for actual services previously rendered by the
Borrower to the Account Debtor named in the Account, (vi) the amount of the
Account represented as owing is the correct amount actually and unconditionally
owing except for normal cash discounts and is not disputed, and except for such
normal cash discounts is not subject to any setoffs, credits, deductions or
counter changes, (vii) the Borrower is the owner of each Account free and clear
of all liens, encumbrances, right of setoff and security interests of any nature
whatsoever, and (viii) no surety bond was required or given in connection with
any account or the contract or purchase orders out of which the same arose.

          (y) Financial Information. All financial information including, but
not limited to, information relating to the Accounts and Inventory submitted by
the Borrower to the Bank, whether previously or in the future, is and will be
true and correct in all material respects, and is and will be complete insofar
as may be necessary to give the Bank a true and accurate knowledge of the
subject matter.

          (z) Environmental Matters. Except as disclosed in Schedule "4.01(z)",
the Borrower, and its plants and sites, have complied in all material respects
with all federal, state, local and regional statutes, ordinances, orders,
judgments, rulings and regulations relating to any matters of pollution or of
environmental regulation or control except where such failure to comply would
not result in a Material Adverse Effect. Except as disclosed in Schedule
"4.01(z)", the Borrower has not received notice of or has any knowledge of any
actual or claimed or asserted failure so to comply which alone, or together with
any other such failure is material and would result in a Material Adverse
Effect. Except as disclosed in Schedule 4.01(z)", neither the Borrower, nor any
of its Subsidiaries or its plants, or other sites manage, generate or dispose of
or during its periods of use, occupancy or operation have managed, generated or
disposed of any hazardous wastes, hazardous substances, hazardous materials,
toxic substances or toxic pollutants, as those terms are used in the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response
Compensation and Liability Act, in material violation of or in a manner which
would result in liability under such statutes or any regulations promulgated
pursuant thereto or any other applicable law except where such noncompliance
would not result in a Material Adverse Effect.

                                       11
<PAGE>

               (aa) Parent. Affiliate or Subsidiary Corporations. Except for the
Guarantor, First Aviation Services, Inc. , the Borrower has no parent
corporation and except as set forth on Schedule "4.01(aa);and except for First
Equity Group and its subsidiaries; the Borrower has no Affiliate or Subsidiary.

               (ab) Intellectual Property. The Borrower owns, or is licensed to
use, all trademarks, tradenames, copyrights, technology, know-how and processes
believed to be necessary for the conduct of its business as currently conducted
except for those the failure to own or license which could not reasonably be
expected to have a Material Adverse Effect. No claim has been asserted or is
pending by any Person challenging or questioning the use of any of the foregoing
or the validity or effectiveness of any of the foregoing, nor does the Borrower
know of any valid basis for any such claim. To the best of its knowledge, the
use of the foregoing by the Borrower does not infringe on the valid intellectual
property rights of any Person, except for such claims and infringements that, in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect.

               (ac) Officers and Directors. The officers and directors of the
Borrower on the date of this Agreement are as set forth
on the attached Schedule "4.01(ac)".

               (ad) No Material Misrepresentations and Omissions. No
information, report, financial statement, exhibit or schedule furnished by or on
behalf of the Borrower to the Bank in connection with the negotiation of any of
the Loan Documents or included therein or delivered pursuant thereto contained,
contains or will contain any material misstatement of fact or omitted, omits or
will omit to state any material fact necessary to make the statements therein,
in light of the circumstances under which they were, are or will be made, not
misleading.

                                       12
<PAGE>

                                   ARTICLE V.

                              Conditions Of Lending
                              ---------------------

          5.01 Initial Advance. The Borrower agrees that the Bank's obligation
to make the initial Advance under the Revolving Loan is subject to fulfillment
by the Borrower of the following conditions precedent, all in form, scope and
substance reasonably satisfactory to the Bank and its counsel:

          (a) Representations and Warranties. All of the representations,
warranties and covenants contained in this Agreement shall continue to be true
and correct in all material respects.

          (b) Non-Existence of Event of Default. The Borrower shall have
complied with each and every covenant, condition precedent or condition
subsequent required hereunder and no Event of Default shall have occurred and be
continuing, no condition exists (or would exist after giving effect to the
Advances requested to be made on such date) which would constitute a Default but
for the giving of notice or passage of time or both.

          (c) Borrowing Base Certificate. The Bank shall have received a fully
completed and executed Borrowing Base Certificate.

          (d) Certificate of Borrower. The Bank shall have received a fully
completed and executed Compliance Certificate of Borrower in the form of Exhibit
"C" attached hereto.

          (e) Evidence of Corporate Action. The Bank shall have received
certified copies of all corporate actions taken by the Borrower to authorize the
execution, delivery and performance of this Agreement, the Note, the other Loan
Documents, and the borrowings to be made hereunder, together with copies of the
Borrower's certificate of incorporation and bylaws, all amendments thereto, and
such other papers as the Bank or its counsel may reasonably require.

          (f) Note. The Bank shall have received the duly executed Note drawn to
its order.

          (g) Guaranties. The Bank shall have received a duly executed Guaranty
from First Aviation Services, Inc. and a duly executed Guaranty from Aircraft
Parts International, Ltd., each of which shall continue in full force and effect
without default and without repudiation,

          (h) UCC-l Financing Statements. The Bank shall have received from the
Borrower (i) duly executed copies of the Financing Statements on the applicable
Form UCC-1,

                                       13
<PAGE>

(ii) evidence of the Borrower's intended payment of the state of Tennessee
recordation tax , and (iii) such other documents as the Bank deems reasonably
necessary or proper to perfect its security interest in the Collateral.

          (i) Perfection Certificate. The Bank shall have received a fully
completed and executed Perfection Certificate from the Borrower.

          (j) Legal Matters. All legal matters incident to this Agreement and
the borrowing hereunder shall be reasonably satisfactory to the Bank and its
counsel, Quatrella & Rizio, LLC.

          (k) Insurance. The Bank shall have received evidence of insurance in
such amounts and with such companies reasonably satisfactory to the Bank, and
the Bank shall be named as a loss payee/mortgagee on all such insurance.

          (l) Lessor's Agreement. The Bank shall have received a fully executed
Lessor's Agreement with respect to the locations where the Borrower and Aircraft
Parts International, Ltd. conducts business or locates assets .

          (m) Security Agreement; Personal Property Registrations. The Bank
shall have received the fully executed Security Agreement executed by Aircraft
Parts International, Ltd., together with evidence that all applicable Personal
Property registrations have been filed in the provinces of Alberta and Quebec,
Canada.

          (n) Opinion of Counsel. The Bank shall have received a written opinion
of counsel to the Borrower and each of the Guarantors in form and substance, and
accompanied by such supporting documents, as the Bank or its counsel may
reasonably require.

          (o) Subordination. The Bank shall have received a fully executed
Subordination Agreement from First Aviation Services, Inc. with respect to
Indebtedness owed by the Borrower, in form and substance as the Bank or its
counsel may reasonably require.

          (p) Organizational Documents/Secretary's Certificate. The Bank shall
have received from the Borrower and each Guarantor (i) copies of its
organizational documents, (ii) a certificate of its Secretary or Assistant
Secretary dated the Closing Date and certifying (A) that attached thereto is a
true and complete copy of its by-laws as in effect on the Closing Date and at
all times since a date prior to the date of the resolutions described in clause
(B) below, and (B) that attached thereto is a true and complete copy of
resolutions duly adopted by its Board of Directors authorizing the execution,
delivery and performance of the Loan Documents and the borrowings hereunder, and
that such resolutions have not been modified, rescinded or amended and are in
full force and effect, (iii) a certificate of another officer as to the
incumbency and

                                       14
<PAGE>

specimen signature of the officer executing any Loan Documents or any other
document delivered in connection herewith on behalf of it, executing the
certificate pursuant to (ii) above, and (iv) such other documents as the Bank or
its counsel, may reasonably request.

          (q) Litigation. The Bank shall have received evidence satisfactory to
it that on the Closing Date, no action, suit, litigation or similar proceedings
at law or in equity or by or before any court or governmental instrumentality or
agency shall exist (or, in the case of litigation or similar proceedings by any
government or governmental authority, be threatened) with respect to the
transactions contemplated by this Agreement which would in the reasonable
opinion of the Bank be likely to have a material adverse effect on the ability
of the Borrower to perform its obligations under any Loan Documents to which it
is a party, on the validity or enforceability of any of the Loan Documents or on
the rights, remedies or benefits available to the Bank thereunder.

          (r) Material Adverse Change. The Bank shall have received evidence
satisfactory to it that there has been no Material Adverse Change since January
31, 2000.

          (s) Good Standing Certificates. The Bank shall have received copies or
certificates dated as of a recent date from the Secretary of State or other
appropriate authority of such jurisdiction, evidencing the good standing of the
Borrower and each Guarantor in its state of incorporation and in the state in
which its principal business operations are located.

          (t) Additional Documents. The Bank shall have received each additional
document, instrument, legal opinion or item of information reasonably requested
by it, including, without limitation, a copy of any debt instrument, security
agreement or other material contract to which the Borrower may be a party.

          (u) No Change. There shall not have occurred any change, or
development or event involving a prospective change, which in any such case, in
the reasonable judgment of the Bank, has had or could be expected to have a
Material Adverse Effect.

          (v) Additional Matters. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be reasonably satisfactory in form and substance to the Bank, and the Bank shall
have received such other documents and legal opinions in respect of any aspect
or consequence of the transactions contemplated hereby or thereby as it shall
reasonably request.

          (w) Transaction Expenses. The Borrower shall have paid the all costs
and expenses in connection with the preparation, execution, delivery, filing,
recording, and administration of the Loan Documents, and the other documents to
be delivered under the Loan

                                       15
<PAGE>

Documents, including, without limitation, legal fees, the cost of any appraisals
of the Collateral and all costs and expenses, if any, in connection with the
enforcement of the Loan Documents and the other documents to be delivered under
the Loan Documents. Notwithstanding the foregoing, all such costs, expenses and
fees shall be reasonable.

          (x) Termination Statements. The Bank shall have received duly executed
Termination Statements on Form UCC-3 with respect to the filings in favor of
Fleet Bank, N.A.

          (y) Financial Statements. The Bank shall have received the draft
financial statements for the Borrower and Guarantor for the fiscal year ended
January 31, 2000.

          (z) Subordination Statements. The Bank shall have received
Subordination Statements on Form UCC-3 for all filings, if any with respect to
the indebtedness of the Borrower to First Aviation Services, Inc.

               (aa) Other. The Bank shall have received such other documents as
the Bank deems necessary.

          5.02 Subsequent Advances. (a) The Borrower agrees that the Bank's
obligation to make an Advance subsequent to the date of this Agreement shall be
subject to fulfillment by the Borrower of (i) the conditions precedent set forth
in Section 5.01(a), (b), (c), and (u), hereof, and (ii) the Bank's receipt of
(a) duly executed copies of the "as filed" Financing Statements on Form UCC-1,
and (b) searches evidencing the priority of the Bank's UCC filings, subject to
the liens shown on Schedule 4.01(i), all in form, scope and substance
satisfactory to the Bank and its counsel. The Borrower agrees that each request
for an Advance shall constitute a certification that no Default exists and a
reaffirmation that all representations and warranties continue to be true and
correct in all material respects on and as of the date of the Advance with the
same effect as though made as of such date, except to the extent such
representations and warranties expressly relate to an earlier date in which case
they shall be true and correct in all material respects as of such earlier date.

          (b) The Borrower agrees that upon the occurrence of an Event of
Default, the making of all Advances by the Bank shall be discretionary and the
Bank shall not be required to declare a default and accelerate the Obligations.

                                       16
<PAGE>

                                   ARTICLE VI.

                              Affirmative Covenants
                              ---------------------

          The Borrower covenants and agrees with the Bank that so long as this
Agreement shall remain in effect and so long as the Note shall remain unpaid,
the Borrower will, unless the Bank shall otherwise consent in writing:

          6.01. Compliance with Laws. Comply in all material respects with all
applicable laws, rules, regulations and orders, such compliance to include,
without limitation, paying before the same become delinquent all taxes,
assessments and governmental charges imposed upon the Borrower or upon its
property except to the extent contested in good faith.

          6.02. Insurance. Maintain insurance by responsible and reputable
companies in such amounts and against such risks as are ordinarily carried by
similar businesses (including where applicable, fire, flood, liability and
extended all-risk coverage) and in amounts not less than the full replacement
value thereof (including business interruption insurance) and, in the case of
all policies insuring property in which the Bank shall have a security interest
of any kind, all such policies shall provide that the proceeds thereof shall be
payable to the Bank, as loss payee when applicable. All such policies or
certificates thereof, including all endorsements, shall be deposited with the
Bank; and such policies shall contain provisions that no such insurance may be
cancelled or decreased without thirty (30) days prior written notice to the Bank
(or such lesser period as the Bank may consent to). In the event of acquisition
of additional insurable Collateral, the Borrower shall cause such insurance
coverage to be increased or amended in such manner and to such extent, as
prudent business judgment would dictate. If the Borrower shall at any time or
times hereafter fail to obtain or maintain any of the policies of insurance
required herein, or fail to pay any premium in whole or in part relating to such
policies, the Bank may, after five (5) days written notice to the Borrower, but
shall not be obligated to, obtain or cause to be maintained insurance coverage
with respect to the Collateral, including, at the Bank's option, the coverage
provided by all or any of the policies of the Borrower and pay all or any part
of the premium therefor, without waiving any default by the Borrower, and any
sums so disbursed by the Bank shall be an additional Revolving Loan to the
Borrower by the Bank payable on demand. If the Borrower fails to do so, the Bank
shall have the right to settle and compromise claims under any of the policies
required to be maintained by the Borrower hereunder relating to the Collateral
and the Borrower shall appoint the Bank as its attorney-in-fact, with power to
demand, receive, and receipt for all monies payable with respect thereto, to
execute in the name of the Borrower or the Bank or both any proof of loss,
notice, draft or other instruments in connection with such policies or such loss
thereunder and generally to do and perform any and all acts as the Borrower, but
for this appointment, might or could perform.

                                       17
<PAGE>

          6.03. Corporate Existence; Property. The Borrower will do or cause to
be done all things necessary to preserve and keep in full force and effect the
Borrower's corporate existence, privileges, rights and franchises; at all times
maintain, preserve and protect all material franchises and trade names and
preserve all of its property used or useful in the conduct of its business
(except (i) property removed from service or replaced or (ii) Inventory consumed
or sold, in the ordinary course of business) and keep the same in good repair,
working order and condition, ordinary wear and tear excepted, and from time to
time make, or cause to be made, all repairs, renewals, replacements, betterment
and improvements in the ordinary course of business consistent with past
practices so that the business carried on in connection therewith may be
properly and advantageously conducted at all times.

          6.04. Collateral Monitoring; Access to Records and Premises. Keep
adequate records and books of account, in which complete entries will be made in
accordance with GAAP consistently applied with prior years, reflecting all
financial transactions of the Borrower. At any reasonable time during normal
business hours and upon reasonable prior written notice, from time to time,
permit the Bank or any agents or representatives thereof, for the purpose of
ascertaining whether or not each and every provision hereof and of any related
documents, instrument or document is being performed and to make reasonable
examinations and make reasonable number of copies of and abstracts from the
records and books of account of, and visit, examine and inspect the properties
of, the Borrower and audit the Collateral of the Borrower and Aircraft Parts
International, Ltd. and to discuss the affairs, finances and accounts of the
Borrower and Aircraft Parts International, Ltd. with the President, the
Directors, the chief financial officer or the Borrower's management, including,
without limitation, permitting the Bank or its agents or representatives to
conduct semi-annual audits of the Borrower at the Borrower's reasonable expense;
Without limiting the generality of the foregoing, the Bank shall be allowed to
verify the Accounts and Inventory of the Borrower and Aircraft Parts
International, Ltd. and to confirm with Account Debtors the validity and amount
of Accounts; conduct field examinations; perform analyses of the Collateral;
and, such other activities as the Bank deems necessary The Bank agrees to
exercise its rights under this Section 6.04 in a manner which will not
unreasonably interfere with the business of the Borrower. Without limiting the
generality of the foregoing, the Bank may, at its option, retain an independent
accounting firm to perform a review of the Borrower's financial systems,
practices and procedures (and the reasonable fees of the expenses of such firm
will be paid by the Borrower).

          6.05. Financial Statements; Reports. Furnish to the Bank:

          (a) Within ten (10) days after the close of each calendar month,
monthly financial statements prepared by the Chief Financial Officer of the
Borrower;

          (b) Annual budget to be submitted within thirty (30) days following
Borrower's fiscal year end;

                                       18
<PAGE>

          (c) A Borrowing Base Certificate duly executed by the Chief Financial
Officer of the Borrower to be submitted at the time of each request for an
advance of a Revolving Loan.;

          (d) No later than five (5) Business Days after the end of each
calendar month an accounts receivable aging and report with respect to the
amount and value of the Borrower's and Aircraft Part's International, Ltd's
Inventory and Eligible Inventory, all in form and substance acceptable to Bank;

          (e) A Covenant Compliance Certificate in the form of Exhibit C , duly
executed by the Chief Financial Officer of the Borrower to be submitted within
thirty (30) days following April 30, July 30, October 30 and January 31;

          (f) Within ten (10) days of issuance, proxy statements, management
letters, reports, press releases or such other information regarding the
operations, business affairs and financial condition of the Borrower, the
Guarantors or any Subsidiary of the Borrower, or compliance with the terms of
any Loan Documents, as the Bank may reasonably request.

          6.06. Notice Requirements. Furnish to Bank:

          (a) Within ten (10) days, notification of any proposed or pending
change in the senior executive management or corporate structure of the
Borrower;

          (b) Within thirty (30) days after the commencement thereof, notice of
all actions, suits and proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, the
subject matter of which may result in an adverse decision affecting the Borrower
which would have a Material Adverse Effect;

          (c) Within ten (10) days, notification of any Material Adverse Change
in the financial condition of the Borrower; and

          (d) Within ten (10) days, of becoming aware of any Event of Default,
or any occurrence but for the giving of notice on the passage of time would
constitute an Event of Default, notification thereof in writing.

          6.07. Performance. Comply with all terms and conditions of this
Agreement, the Note and the other Loan Documents.

          6.08. Primary Bank. Maintain a depository account with the Bank.

                                       19
<PAGE>

          6.09. ERISA Reports. The Borrower will (a) comply in all material
respects with the provisions of ERISA applicable to any Plan maintained by the
Borrower and (b) furnish to the Bank (i) as soon as possible, and in any event
within ten (10) days after the Borrower knows or has reason to know that any
Reportable Event with respect to any Plan has occurred, a statement of the chief
financial officer of the Borrower setting forth details as to such Reportable
Event and the action which the Borrower proposes to take with respect thereto,
together with a copy of the notice of such Reportable Event, if any, given to
the Pension Benefit Guaranty Corporation (hereinafter called the "PBGC"), and
(ii) promptly after receipt thereof, a copy of any notice the Borrower may
receive from the PBGC relating to the intention of the PBGC to terminate any
Plan or to appoint a trustee to administer the Plan.

          6.10 Inventory. Allow the Bank to examine and inspect the Inventory at
reasonable times and intervals and with reasonable notice. The Borrower shall
immediately notify the Bank of any event causing material loss or depreciation
in value of Inventory and the amount of such loss or depreciation.

                                  ARTICLE VII.

                               Negative Covenants
                               ------------------

         The Borrower covenants and agrees with the Bank that so long as this
Agreement shall remain in effect and so long as the Note shall remain unpaid,
the Borrower will not, directly or indirectly, without the written consent of
the Bank, which, except in the case of Sections 7.01-7.05 inclusive, shall not
be unreasonably withheld:

          7.01. Tangible Net Worth. Permit the Borrower's Tangible Net Worth as
reflected on the annual audited financial statements
delivered pursuant to Section 6.05(a) hereof to be less than $10,000,000.

          7.02. Capital Expenditures . For the fiscal year ending January 31,
2001 make any capital expenditures or fixed asset acquisitions in an aggregate
amount exceeding $5,000,000.00.

          7.03. Use of Proceeds. Use the proceeds of the Loan for any other
purposes other than as set forth in the Recitals above.

          7.04. Interest Coverage Ratio. Permit the Interest Coverage Ratio of
the Borrower to be less than the ratios set forth below:

                                       20
<PAGE>

          Period                                           Ratio
          ------                                           -----
          For the first quarter ended April 30, 2000       1.00:1
          For the second quarter ended July 31, 2000       1.25:1
          For the third quarter ended October31, 2000      1.50:1
          For the fourth quarter ended January 31, 2001    1.75:1
          For the year ending January 31, 2001             1.40:1

          7.05. Liens. Except for purchase money security interests in office
equipment, create, incur, assume or suffer to exist any lien, mortgage, pledge,
assignment, security interest or other charge or encumbrance, or any other type
of preferential arrangement, of any nature whatsoever (including conditional
sales or other title retention agreements) upon or with respect to any of the
Collateral, assets, properties or receivables, now owned or hereafter acquired,
of the Borrower, except: (a) liens existing on the date hereof as set forth on
the attached Schedule 4.01(i); (b) deposits under workmen's compensation,
unemployment insurance and social security laws, or to secure statutory
obligations or appeal bonds or discharge of lien bonds, in the ordinary course
of business; (c) liens for taxes not yet due and payable, or liens for taxes
contested as permitted by Section 4.01 above; and (d) any other liens granted to
the Bank.

          7.06. Borrowing. Create, incur, assume or suffer to exist any
liability for Indebtedness, except (i) Indebtedness under the Note and Loan
Documents, or (ii)existing Indebtedness in favor of the Guarantor.

          7.07. Merger and Acquisition or Sale of Property. Consolidate with, be
acquired by, or merge into or with any Person, or sell, lease or otherwise
dispose of all or substantially all of its properties or any of its capital
stock, or acquire all or substantially all of the stock or property of any
person, or permit any Subsidiary to do so.

          7.08. Business Changes. Materially change the nature of its business
as conducted by the Borrower on the date hereof, or alter or modify its
corporate name, structure or status (including, without limitation, its tax
status) or alter its accounting principles, treatment or recording practices,
except as permitted or required by GAAP.

          7.09. Contingent Liabilities. Assume, guaranty, endorse or otherwise
become liable for any Contingent Liability of any Person, except as required by
this Agreement and by the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business.

                                       21
<PAGE>

          7.10. Investment, Loan, Guaranties, Revolving Loan. Lend or advance
money, credit or property to any Person, or invest in (by capital contribution,
creation of subsidiaries or otherwise), or purchase or repurchase the stock or
indebtedness, or all or a substantial part of the assets of properties, of any
Person, or enter into any exchange of securities with any Person, or guaranty,
assume, endorse or otherwise become responsible for (directly or indirectly or
by any instrument having the effect of assuring any Person's payment or
performance or capability) the indebtedness, performance, obligations, stock or
dividends of any Person, or agree to do any of the foregoing, or permit or
suffer any Subsidiary to do so, except:

                    (i) endorsement of negotiable instruments for deposit or
               collection in the ordinary course of business;

                    (ii) investments representing the indebtedness of any Person
               owing as a result of the sale of goods by the Borrower or the
               Borrower's Subsidiaries in the ordinary course of business;

                    (iii) the extension of credit to customers in the ordinary
               course of business.

          7.11 Change in Control. Permit a Change in Control of the Borrower
which the Bank reasonably determines would have a Material Adverse Effect on the
Borrower.

          7.12 Change of Management. Intentionally Deleted.

          7.13. Change Name or Location. Change the Borrower's names or conduct
the Borrower's businesses under any trade name or style other than as
hereinabove set forth or change its chief executive office, place of business or
the present locations of its business assets or records relating thereto from
the address set forth in the first paragraph of this Agreement.

          7.14 Certificate of Incorporation and By-laws. Amend or otherwise
modify its certificate of incorporation or by-laws, in any way which would have
a Material Adverse Effect.

          7.15. Mergers; Sales of Assets. Merge or consolidate with or sell,
assign, lease or otherwise dispose of (whether in one transaction or in a series
of transactions) all or substantially all of their assets (whether now owned or
hereafter acquired) to, any Person or entity. The Borrower shall not sell,
assign, lease or otherwise dispose of any of their assets, except in the
ordinary course of business.

          7.16. Acquisitions. Acquire the assets or stock of any other Person.

                                       22
<PAGE>

          7.17. Change in Nature of Business. Make any material change in the
nature of the business of the Borrower.

          7.18. Distributions. Intentionally Deleted.

          7.19. Dividend. Other than with respect to the preferred shares
described on Schedule "4.01(u)" declare or pay any cash dividend on the
Borrower's capital stock or make any other distribution with respect to the
Borrower's capital stock or redeem, retire, purchase or otherwise acquire,
directly or indirectly, for value or set apart any sum for the redemption,
retirement, purchase or other acquisition of, directly or indirectly, any share
of the Borrower's capital stock.

          7.20. Sale/Leaseback. Enter into any sale/leaseback transactions.

                                  ARTICLE VIII.

                               Grant Of Collateral
                               -------------------

          8.01 Grant of Collateral. To secure the prompt payment and performance
of the Obligations, the Borrower pledges, assigns, transfers and grants to the
Bank a continuing first priority security interest in the following property of
the Borrower (collectively, the "Collateral"):

          (a) All accounts (the "Accounts"), as that term is defined in the
Uniform Commercial Code as in effect from time to time in the State of Tennessee
(the "UCC"), including, without limitation, all accounts receivable, book debts
and other forms of obligations, other than forms of obligations evidenced by
Chattel Paper or Instruments, as those terms are defined below, now owned or
hereafter received or acquired by or belonging or owing to the Borrower,
including, without limitation, under any trade name, style or division thereof,
whether arising out of goods sold or services rendered by the Borrower or from
any other transaction, whether or not the same involves the sale of goods or
services by the Borrower, including, without limitation, any such obligation
which may be characterized as an account or contract right under the UCC, and
all of the Borrower's rights in, to and under all purchase orders or receipts
now owned or hereafter acquired by it for goods or services, and all of the
Borrower's rights to any goods represented by any of the foregoing, including,
without limitation, unpaid seller's rights of rescission, replevin, reclamation
or repossessed goods, and all monies due or to become due to the Borrower under
all purchase orders and contracts for the sale of goods or the performance of
services or both by the Borrower, whether or not yet earned by performance on
the part of the Borrower or in connection with any other transaction, now in
existence or hereafter occurring, including, without limitation, the right to
receive the proceeds of such purchase orders and contracts, and all collateral
security and guaranties of any kind given by any person with respect to any of
the foregoing;

                                       23
<PAGE>

          (b) All chattel paper (the "Chattel Paper"), as that term is defined
in the UCC, now owned or hereafter acquired by the Borrower;

          (c) All contracts, undertakings, franchise agreements or other
agreements (collectively, the "Contracts"), other than rights evidenced by
Chattel Paper, Documents or Instruments, as those terms are defined below, in or
under which the Borrower may now or hereafter have any right, title or interest,
including, without limitation, with respect to an Account, any agreement
relating to the terms of payment or the terms of performance thereof;

          (d) All documents (the "Documents"), as that term is defined in the
UCC, now owned or hereafter acquired by the Borrower;

          (e) All equipment (the "Equipment"), as that term is defined in the
UCC, now or hereafter owned or acquired by the Borrower and, in any event, shall
include, without limitation, all machinery, tools, dyes, equipment, furnishings,
vehicles and computers and other electronic data processing and other office
equipment, any and all additions, substitutions and replacements of any of the
foregoing, wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto;

          (f) All general intangibles (the "General Intangibles"), as that term
is defined in the UCC, now owned or hereafter acquired by the Borrower and, in
any event, shall include, without limitation, all right, title and interest
which the Borrower may now or hereafter have in or under any Contract, all
customer lists, trademarks, rights in intellectual property, interests in
partnerships, joint ventures and other business associations, licenses, permits,
copyrights, trade secrets, proprietary or confidential information, inventions,
whether or not patented or patentable, technical information, procedures,
designs, knowledge, know-how, software, data bass, data, skill, expertise,
recipes, experience, processes, models, drawings, blueprints, catalogs,
materials and records, goodwill including, without limitation, the goodwill
associated with any trademark, trademark registration or trademark licensed
under any trademark license, claims in or under insurance policies, including
unearned premiums, uncertificated securities, deposit accounts, rights to
receive tax refunds and other payments and rights of indemnification;

          (g) All instruments (the "Instruments"), as that term is defined in
the UCC, now owned or hereafter acquired by the Borrower, including, without
limitation, all Note and other evidences of indebtedness, other than instruments
that constitute, or are a part of a group or writings that constitute, Chattel
Paper;

          (h) All inventory (the "Inventory"), as that term is defined in of the
UCC, wherever located, now or hereafter owned or acquired by the Borrower and,
in any event, shall include all inventory, merchandise, goods and other personal
property which are held by or on behalf of the Borrower for sale or lease or are
furnished or are to be furnished under a contract of

                                       24
<PAGE>

service or which constitute raw materials, work in process or materials used or
consumed or to be used or consumed in the Borrower's business, or the
processing, packaging, promotion, delivery or shipping of the same, and all
finished goods, whether or not such inventory is listed on any schedules,
assignments or reports furnished to the Bank from time to time and whether or
not the same is in transit or in the constructive, actual or exclusive occupancy
or possession of the Borrower or is held by the Borrower or by others for the
Borrower's account, including, without limitation, all goods covered by purchase
orders and contracts with suppliers and all goods billed and held by suppliers
and all inventory which may be located on premises of the Borrower or of any
carriers, forwarding agents, truckers, warehousemen, vendors, selling agents or
other persons; and

          (i) All proceeds (the "Proceeds"), as that term is defined in the UCC,
and in any event including, without limitation, (i) any and all Accounts,
Chattel Paper, Instruments, cash and other proceeds payable to the Borrower from
time to time in respect of any of the foregoing collateral security, (ii) any
and all proceeds of any insurance, indemnity, warranty or guaranty payable to
the Borrower from time to time with respect to any of the collateral security,
(iii) any and all payments (in any form whatsoever) made or due and payable to
the Borrower from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the collateral
security by any governmental body, authority, bureau or agency (or any person
acting under color of governmental authority) and (iv) any and all other amounts
from time to time paid or payable under or in connection with any of the
collateral security.

                                   ARTICLE IX.

                                Events Of Default
                                -----------------

          9.01. Events of Default. The occurrence of any of the following events
shall constitute an "Event of Default" hereunder: With the exception of
subsections (i), (v) and (vi) below, the occurrence of which is a Default which
shall immediately constitute an Event of Default without notice or action by the
Bank, any of the following occurrences shall constitute a Default hereunder,
and, upon notice and declaration by the Bank to the Borrower of such Default,
shall be and constitute an Event of Default:

          (i) failure, when and as the same shall become due and payable,
whether at the due date thereof or by acceleration thereof or otherwise, of the
Borrower to make any payment of interest arising under this Agreement or the
Note, which failure continues for five (5) days after written notice of such
breach or failure from the Bank or failure, when and as the same shall become
due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or by acceleration thereof or otherwise, of the Borrower to
make any payment of principal or any other principal Obligation arising under
this Agreement or the Note or the other Loan Documents or such failure by any
Guarantor or surety for any of the Obligations;

                                       25
<PAGE>

          (ii) breach of, or failure timely to perform, any of the Obligations
by the Borrower or any of the Guarantors including, without limitation, any
promise, agreement, covenant, representation or warranty contained herein, or
the Borrower's failure to perform any act, duty or obligation as required by
this Agreement or any of the other Loan Documents, which failure continues for
fifteen (15) days after written notice of such breach or failure from the Bank;

          (iii) any representation or warranty made, or deemed made, in or in
connection with any of the Loan Documents or the Advances, warranty, statement
or information contained in any report, certificate, financial statement or
other instrument furnished in connection with or pursuant to any of the Loan
Documents, shall prove to have been false or misleading when so made, deemed
made or furnished (including by omission of material information);

          (iv) the failure of any condition precedent or condition subsequent
contained in this Agreement;

          (v) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (a) relief
in respect of the Borrower or any Subsidiary under Title 11 of the United States
Code, as now constituted or hereafter amended, or any other Federal or state
bankruptcy, insolvency, receivership or similar law, (b) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for
the Borrower or any Subsidiary, or (c) the winding-up or liquidation of the
Borrower or any Subsidiary; and such proceeding or petition shall continue
undismissed for 60 days, or an order or decree approving or ordering any of the
foregoing shall be entered;

          (vi) the Borrower or any Subsidiary shall (a) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other Federal or
state bankruptcy, insolvency, receivership or similar law, (b) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or the filing of any petition described in (v) above, (c) apply for
or consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Subsidiary or for a
substantial part of the property or assets of the Borrower or such Subsidiary,
(d) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (e) make a general assignment for the benefit
of creditors, (f) become unable, admit in writing its inability or fail
generally to pay its debts as they become due, or (g) take any action for the
purpose of effecting any of the foregoing;

          (vii) one or more final , nonappealable judgments (including judgments
against unrelated parties for which judgments the Borrower is liable under any
agreements, including indemnification agreements) for the payment of money in an
aggregate amount in excess of

                                       26
<PAGE>

$250,000 shall be rendered against the Borrower, any Subsidiary or any
combination thereof and the same shall remain undischarged for a period of
thirty (30) consecutive days, or any action shall be legally taken by a judgment
creditor to levy upon assets or properties of the Borrower or any Subsidiary to
enforce any such judgment;

          (viii) a Reportable Event or Reportable Events, or a failure to make a
required payment (within the meaning of Section 412(n)(1) of the Code), shall
have occurred with respect to any Plan or Plans that reasonably could be
expected to result in liability of the Borrower to the PBGC or to a Plan in an
aggregate amount which would have a Material Adverse Effect and, within thirty
(30) days after the reporting of any such Reportable Event to the Bank, the Bank
shall have notified the Borrower in writing that (A) the Bank has made a
determination that, on the basis of such Reportable Event or Reportable Events
or the failure to make a required payment, there are reasonable grounds (I) for
the termination of such Plan or Plans by the PBGC, (II) for the appointment by
the appropriate United States District Court of a trustee to administer such
Plan or Plans, or (III) for the imposition of a lien in favor of a Plan, and (B)
as a result thereof an Event of Default exists hereunder; or a trustee shall be
appointed by a United States District Court to administer any Plan or Plans; or
the PBGC shall institute proceedings to terminate any Plan or Plans;

          (ix) the Borrower or any of its plants or other sites have managed,
generated or disposed of any hazardous wastes, hazardous substances, hazardous
materials, toxic substances or toxic pollutants, as those terms are used in the
Resource Conservation and Recovery Act, the Comprehensive Environmental Resource
Compensation and Liability Act, the Hazardous Materials Transportation Act, the
Toxic Substance Control Act, the Clean Air Act and the Clean Water Act, in
material violation of or in a manner which would result in liability under such
statutes or any regulations promulgated pursuant thereto or any other applicable
law except where such noncompliance would not result in a Material Adverse
Effect; or

          (x) the Borrower shall fail to observe or perform any other material
term, covenant, condition or agreement contained in any agreement or instrument
evidencing or governing any such Indebtedness, if the effect of any failure
referred to in this clause shall have a Material Adverse Effect;

          (xi) the loss, revocation or failure to renew any license or permit
now held or hereafter acquired by the Borrower which materially affects the
ability of the Borrower to continue its operations as presently conducted;

          (xii) one or more of the Security Interests shall cease to exist at
any time after the Closing Date, or any Guaranty shall cease to be in full force
and effect or any Guarantor shall contest or repudiate his obligations under the
Guaranty to which he is a party;

                                       27
<PAGE>

          (xiii) dissolution of the Borrower or any Guarantor;

          (xiv) the occurrence of a Material Adverse Change in the condition of
the Borrower or any Guarantor, financial or otherwise, as determined by the Bank
in its sole and reasonable discretion.

          9.02. Remedies Upon Default. Upon the occurrence of an Event of
Default, the Bank may take either or any of the following actions, at the same
or different times:

          (a) (i) terminate forthwith the Revolving Loan Commitment, and (ii)
declare the Revolving Loans then outstanding to be forthwith due and payable,
whereupon the principal of the Revolving Loans, together with accrued interest
thereon and all other Obligations, shall become forthwith due and payable,
without presentment, demand, protest, notice of protest or other notice of any
kind, all of which are waived by the Borrower, anything contained in this
Agreement or in the other Loan Documents to the contrary notwithstanding;

          (b) exercise any or all of its rights or remedies permitted by
applicable law of a secured party under this Agreement or in other capacity
under the Loan Documents or applicable law;

          (c) upon demand after the occurrence of an Event of Default, the Bank
shall have in any jurisdiction where enforcement hereof is sought, in addition
to all other rights and remedies which the Bank may have under law and equity,
the following rights and remedies, to the extent permitted by law, all of which
may be exercised with or without further notice to the Borrower and without a
prior judicial or administrative hearing or notice, which notice and hearing are
expressly waived by the Borrower: (i) to enforce or foreclose the liens and
security interests created under this Agreement and the Loan Documents by any
available judicial procedure or without judicial process, (ii) to enter any
premises where any Collateral may be located for the purpose of taking
possession or removing the same, (iii) to sell, assign, lease or otherwise
dispose of the Collateral or any part thereof, either at public or private sale,
in lots or in bulk, for cash, on credit or otherwise, with or without
representations or warranties, and upon such commercially reasonable terms as
shall be acceptable to the Bank, all at the Bank's sole option and as the Bank
in its sole discretion may deem advisable, (iv) to bid or become purchaser at
any such sale if public, free from any right of the Borrower of redemption after
sale, which is expressly waived by the Borrower to the extent permitted by law,
and (v) at the option of the Bank to apply or be credited with the amount of all
or any part of the outstanding amount of the Loan against the purchase price bid
by the Bank at any such sale;

          (d) The Borrower will, at the Bank's request, assemble all Collateral
and make it available to the Bank at places which the Bank may reasonably select
and will make available to the Bank all premises and facilities of the Borrower
for the purpose of the Bank taking possession of

                                       28
<PAGE>

the Collateral or of removing or putting the Collateral in salable form. If any
Collateral shall require repairing, maintenance, preparation, or the like, or is
in process or other unfinished state, the Bank shall have the right, but shall
not be obligated, to do such repairing, maintenance, preparation, processing or
completion of manufacturing for the purpose of putting the same in such salable
form as the Bank shall deem appropriate, but the Bank shall have the right to
sell or dispose of such Collateral without such processing;

          (e) The net cash proceeds resulting from the collection, liquidation,
sale, lease or other disposition of Collateral shall be applied first to the
expenses, including all reasonable attorneys' and professionals' fees, of
retaking, holding, storing, processing and preparing for sale, selling,
collecting, liquidating the Collateral and then to the satisfaction of all of
the Loan application as to particular Loan or against principal or interest to
be at the Bank's sole discretion and the balance of the proceeds, if any, shall
be paid to the Borrower. The Borrower shall be liable to the Bank and shall pay
to the Bank on demand any deficiency which may remain after such sale,
disposition, collection or liquidation of the Collateral;

          (f) The Bank shall not have any liability for any error or omission or
delay of any kind occurring in the liquidation of any of the Collateral,
including the settlement, collection or payment of any of the Collateral or any
instrument received in payment thereof, or any damage resulting therefrom,
provided that the Bank acts in a commercially reasonable manner in its
liquidation of the Collateral. The Borrower agrees to indemnify and hold
harmless the Bank against any claim, loss or damage arising out of the
liquidation of any of the Collateral, including the settlement, collection of
payment of any of the Collateral or any instrument received in payment thereof,
provided that the Bank acted in a commercially reasonable manner in its
liquidation of any of the Collateral; and

          (g) The enumeration of the Bank's rights and remedies set forth in
this Article is not intended to be exhaustive and the exercise by the Bank of
any right or remedy shall not preclude the exercise of any other rights or
remedies, all of which shall be cumulative and shall be in addition to any other
right or remedy given hereunder or under any other agreement between the parties
or which may now or hereafter exist in law or at equity or by suit or otherwise.
The Bank's delay or failure to take action in exercising any right, power or
privilege shall not operate as a waiver thereof, and any single or partial
exercise of any such right, power or privilege shall not preclude other or
further exercise thereof or the exercise of any other right, power or privilege
or shall be construed to be a waiver of any Event of Default. No course of
dealing between the Borrower and the Bank or their employees shall be effective
to change, modify or discharge any provision of this Agreement or to constitute
a waiver of any default.

                                       29
<PAGE>

                                   ARTICLE X.

                                  Miscellaneous
                                  -------------

          10.01. Modifications; Amendments. No modification, amendment or waiver
of any provision of this Agreement, the Note, or any other Loan Document, and no
consent to any departure by either party therefrom, shall in any event be
effective unless the same shall be in writing and signed by the parties hereto,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.

          10.02. Notices. All notices, requests, consents, demands and other
communications hereunder shall be in writing and shall be mailed by registered
or certified first class mail or delivered by an overnight courier or by
facsimile, to the respective parties to this Agreement as follows:

          If to the Borrower:

                  AEROSPACE PRODUCTS INTERNATIONAL, INC
                  3778 Distriplex Drive North,
                  Memphis,  Tennessee 38118
                  Attention:  Marc Greenberg

         With a copy to:

                  FIRST AVIATION SERVICES
                  15 Riverside Avenue
                  Westport, CT  06880
                  Attention:  Aaron Hollander

         If to the Bank:

                  HUDSON UNITED BANK
                  1000 MacArthur Boulevard
                  Mahwah, New Jersey, 07430
                  Attention:  Corporate Affairs

                                       30
<PAGE>

         With Copy to:

                  HUDSON UNITED BANK
                  87 Post Road West
                  Westport, Connecticut 06880
                  Attention:  Allison M. Knapp, Vice President

All such notices and communications shall be deemed to have been delivered on
the date of delivery thereof, one day after receipt of facsimile or on the third
business day after the mailing thereof.

          10.04. Cross-Default. The Revolving Loans shall be cross-defaulted
with current and future financing accommodations extended or to be extended by
the Bank to the Borrower so that a default under any loan to the Borrower which
would permit acceleration of such other loan shall be an Event of Default
hereunder and under all of the other loans extended by the Bank.

          10.05. Waiver; Remedies. No failure on the part of the Bank to
exercise, and no delay in exercising, any right under any Loan Document shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right under any Loan Document preclude any other or further exercise thereof or
the exercise of any other right. The remedies provided in the Loan Documents are
cumulative and not exclusive of any remedies provided by law.

          The Borrower assents to any extension or postponement of the time of
payment or any other indulgence, to any (substitution, exchange or) release of
the Collateral, to the addition or release of any party primarily or secondarily
liable, to the acceptance of partial payments thereon and the settlement,
compromising or adjusting of any thereof, all in such manner and at such time or
times as the Bank may deem advisable. All rights and remedies of the Bank with
respect to the liabilities of the Borrower whether evidenced hereby or by any
other instrument or document, shall be cumulative and may be exercised
singularly or concurrently.

          10.06. Costs, Expenses and Taxes. The Borrower agree to pay on demand
all costs and expenses in connection with the preparation, execution, delivery,
filing, recording, and administration of the Loan Documents, and the other
documents to be delivered under the Loan Documents, including, without
limitation, legal fees, the cost of any appraisals of the Collateral and all
costs and expenses, if any, in connection with the enforcement of the Loan
Documents and the other documents to be

                                       31
<PAGE>

delivered under the Loan Documents. Notwithstanding the foregoing, all such
costs, expenses and fees shall be reasonable. In addition, the Borrower shall
pay any and all taxes (other than income taxes) and fees payable or determined
to be payable in connection with the execution, delivery, filing and recording
of the Loan Documents and the other documents to be delivered under the Loan
Documents, and the Borrower agree to save the Bank harmless from and against any
and all liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes and fees. In the event the Bank advances any sums
under the Note, on behalf of the Borrower pursuant to the terms hereof for
expenses, fees or other sums which are otherwise payable by the Borrower, the
Borrower shall pay interest on such sums which are not paid or reimbursed to the
Bank when due at an annual rate equal to two percent (2%) in excess of the then
Note Rate under the Note.

          10.07. Right of Set-Off. Upon the occurrence of any Event of Default
and the continuance thereof, the Bank is authorized at any time and from time to
time, without notice to the Borrower (any such notice being expressly waived by
the Borrower), to set-off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by the Bank to or for the credit or the account of the Borrower
against any and all of the obligations of the Borrower now or hereafter existing
under this Agreement and the Note, irrespective of whether or not the Bank shall
have made any demand under this Agreement or the Note and although such
obligations may be unmatured. The Bank agrees promptly to notify the Borrower
after any such set-off and application made by the Bank, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Bank under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
which the Bank may have.

          10.08. Binding Effect; Governing Law and Jurisdiction. This Agreement
shall become effective when it shall have been executed by the Borrower and the
Bank and shall be binding upon and inure to the benefit of the Borrower, the
Bank and their respective successors and assigns, except that the Borrower shall
not have the right to assign its rights hereunder or any interest herein without
the prior written consent of the Bank. This Agreement is, and shall be deemed to
be, a contract entered into under and pursuant to the laws of the State of
Connecticut and shall be in all respects governed, construed, applied and
enforced in accordance with the laws of said State; and no defense given or
allowed by the laws of any other State or Country shall be interposed in any
action or proceeding hereon unless such defense is also given or allowed by the
laws of the State of Connecticut. The undersigned irrevocably appoints Aaron
Hollander and each and every officer of the undersigned as its attorneys upon
whom may be served any notice, process or pleading in any action or proceeding
against it arising out of or in connection with this Agreement or any other Loan
Document. The undersigned hereby consents that any action or proceeding against
it may be commenced and maintained in any court within the State of Connecticut
or in the United States District Court for the District of Connecticut or, at
the option of Bank, any court in which Bank shall initiate legal or equitable
proceedings and which has subject matter jurisdiction over the matter in
controversy, and that such action or proceeding may be commenced by service of
process on any such officer. The undersigned agrees that the courts of the State
of Connecticut and the United States District Court for the District of
Connecticut shall have jurisdiction with respect to the subject matter hereof
and the person of the undersigned. The undersigned agrees not to assert any
defense to any proceeding initiated by Bank based upon improper venue or
inconvenient forum.

                                       32
<PAGE>

          10.09. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.

          10.10. Compliance. The determination of the Borrower's compliance with
all financial covenants contained in this Agreement, the Note and all other Loan
Documents shall be based upon the consistent application of GAAP employed by the
Borrower as of the date of this Agreement unless otherwise subsequently and
specifically agreed to in writing by the Bank.

          10.11. Survival of Representations. All representations, warranties,
covenants and agreements herein contained or made in writing in connection with
this Agreement shall survive the execution and delivery of the Note and shall
continue in full force and effect until all amounts payable on account of the
Note shall have been paid in full and this Agreement shall have terminated.

          10.12. Severability. In case any one or more of the provisions
contained in this Agreement, the Note or in the other Loan Documents should be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby.

          10.13. Headings. Section headings used herein are for convenience of
reference only and are not to affect the construction of, or be taken into
consideration in, interpreting this Agreement.

          10.14. Sale of Participation. The Bank reserves the right to sell
participation in the Loans without the consent of the Borrower.

          10.15. Entire Agreement. This Agreement, the Note and the other Loan
Documents together with all exhibits and schedules attached hereto and thereto
embody the entire agreement and understanding between the Borrower and the Bank
and supersede all prior agreements and understandings relating to the subject
matter hereof unless otherwise specifically reaffirmed or restated herein.

          10.16. THE BORROWER ACKNOWLEDGES THAT THE LOANS EVIDENCED HEREBY ARE A
COMMERCIAL TRANSACTION AND WAIVES ITS RIGHT TO NOTICE AND HEARING UNDER CHAPTER
903a OF THE CONNECTICUT GENERAL STATUTES, OR AS OTHERWISE ALLOWED BY ANY STATE
OR FEDERAL LAW WITH

                                       33
<PAGE>

RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE BANK MAY DESIRE TO USE, AND FURTHER
WAIVES DILIGENCE, DEMAND, PRESENTMENT FOR PAYMENT, NOTICE OF NONPAYMENT, PROTEST
AND NOTICE OF ANY RENEWALS OR EXTENSIONS. THE BORROWER ALSO ACKNOWLEDGES THAT IT
MAKES THIS WAIVER KNOWINGLY, WILLINGLY AND VOLUNTARILY AND WITHOUT DURESS, AND
ONLY AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH ITS
ATTORNEYS.

          10.17. THE BORROWER WAIVES TRIAL BY JURY IN ANY COURT IN ANY SUIT,
ACTION OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN ANY WAY
RELATED TO THE FINANCING TRANSACTIONS OF WHICH THIS AGREEMENT IS A PART OR THE
ENFORCEMENT OF ANY OF THE BANK'S RIGHTS. THE BORROWER ACKNOWLEDGES THAT IT MAKES
THIS WAIVER KNOWINGLY, WILLINGLY AND VOLUNTARILY AND WITHOUT DURESS, AND ONLY
AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH ITS
ATTORNEYS.

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first written above.

Witnesses:                                 AEROSPACE PRODUCTS
                                           INTERNATIONAL, INC.

                                           By:  /s/ John Marsalisi
                                               -------------------
                                               John A. Marsalisi
                    Its Vice President

                                           HUDSON UNITED BANK

                                           By  /s/ Allison M. Knapp
                                               -------------------
                                               Allison M. Knapp
                    Its Vice President

                                       34
<PAGE>

STATE OF CONNECTICUT)
                    ) ss. Fairfield
COUNTY OF FAIRFIELD )

          On this the _____ day of March, 2000, before me, the undersigned
officer, personally appeared _______________________, who acknowledged himself
to be the ________ of AEROSPACE PRODUCTS INTERNATIONAL, INC., a corporation, and
that he, as such officer, being authorized so to do, executed the foregoing
instrument for the purposes therein contained and acknowledged the same to be
his free act and deed individually and as such officer, and the free act and
deed of the corporation.

          IN WITNESS WHEREOF, I hereunto set my hand.

                                     -----------------------------------
                                     Commissioner of the Superior Court
                                     Notary Public
                                     My Commission Expires:

STATE OF CONNECTICUT)
                    )  ss.: Fairfield
COUNTY OF FAIRFIELD )

          On this the ___ day of March, 2000, before me, the undersigned
officer, personally appeared Allison M. Knapp, who acknowledged herself to be a
Vice President of HUDSON UNITED BANK and that she, as such officer, being
authorized so to do, executed the foregoing instrument for the purposes therein
contained and acknowledged the same to be her free act and deed individually and
as such officer, and the free act and deed of the bank.

             IN WITNESS WHEREOF, I hereunto set my hand.

                                     -----------------------------------
                                     Commissioner of the Superior Court
                                     Notary Public
                                     My Commission Expires:

                                       35

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