Document:

<PAGE>

                                                                  CONFORMED COPY
                                                                  --------------

          PURCHASE AGREEMENT ASSIGNMENT [N587ML], dated as of December 30, 1999,
between MIDWAY AIRLINES CORPORATION, a Delaware corporation (herein called the
"Assignor") and FLEET NATIONAL BANK, a national banking association established
under the laws of the United States of America (herein called the "Assignee").

                             W I T N E S S E T H :
                             - - - - - - - - - -

          WHEREAS, the Assignor and Bombardier, Inc. (the "Manufacturer") are
parties to the Purchase Agreement, providing, among other things, for the
manufacture by the Manufacturer and the sale by the Manufacturer to the Assignor
of certain aircraft, engines and related equipment, including the Aircraft; and

          WHEREAS, the Manufacturer has transferred the Purchase Agreement to
Bombardier Capital Inc. (the "Seller"), the Assignee wishes to acquire the
Aircraft from the Seller and the Assignor, on the terms and conditions
hereinafter set forth, wishes to assign to the Assignee certain of the
Assignor's rights and interests under the Purchase Agreement and the Assignee is
willing to accept such assignment, as hereinafter set forth; and

          WHEREAS, the Assignee intends to lease to the Assignor, and the
Assignor intends to lease from the Assignee, the Aircraft pursuant to the lease
agreement dated as of December 30, 1999 as the same may be amended, modified or
supplemented, between the Assignee, as lessor, and the Assignor, as lessee,
providing for the lease of the Aircraft (the "Lease").

          NOW, THEREFORE, in consideration of mutual covenants and agreements
herein contained and for other valuable consideration, receipt of which is
hereby acknowledged by the Assignor, the parties hereto agree as follows:

          1.   For all purposes of this Assignment, except as otherwise
expressly provided or unless the context otherwise requires, all terms used
herein in capitalized form and not otherwise defined herein, shall have the
meanings set forth in Appendix A to the Lease.

          2.   Subject to the terms and conditions of this Assignment, Assignor
does hereby sell, assign and convey to Assignee, its successors and permitted
assigns all of Assignor's rights in and to the Purchase Agreement as and to the
extent that the same relate to the Aircraft and the purchase and operation
thereof  (except to the extent reserved below), including, without limitation,
<PAGE>

all warranty and indemnity provisions in the Purchase Agreement with respect to
the Aircraft and all claims thereunder in respect of the Aircraft, and any and
all rights of the Assignor to compel performance of the terms of the Purchase
Agreement in respect of the Aircraft, reserving to Assignor, however, (i) all
                                      --------- -- --------  -------
the Assignor's rights and interests in and to the Purchase Agreement to the
extent that each relates to aircraft other than the Aircraft and the purchase
and operation of such aircraft and to the extent that each relates to any other
matters not directly pertaining to the Aircraft, (ii) so long as the Aircraft
shall be subject to the Lease and no Event of Default shall have occurred and be
continuing and the Assignee has not commenced the exercise remedies set forth in
Section 17 of the Lease, all rights of the Assignor to obtain services,
training, product support, promotional support, publications or demonstrations
and test flights pursuant to the Purchase Agreement, and (iii) with respect to
the Aircraft, all of Assignor's rights with respect to payments made by Assignor
pursuant to the Purchase Agreement (including without limitation any post-
delivery adjustments to the purchase price or amounts credited or to be credited
by the Manufacturer to Assignor).  The foregoing assignment is subject to the
conditions that (i) concurrently with its execution, Assignee shall lease the
Aircraft to Assignor under the Lease and (ii) the written consent of the
Manufacturer to such assignment (the "Consent and Agreement") be provided in the
form of the Annex hereto.

          Unless an Event of Default shall have occurred and be continuing and
the Assignee shall have commenced the exercise of remedies set forth in Section
17 of the Lease, and subject to the provisions hereof, the Assignee shall and it
does hereby authorize the Assignor during the Term as Lessee under the Lease, to
the exclusion of the Assignee, to exercise in the Assignor's name, all rights
and powers of the "Buyer" under the Purchase Agreement and any warranty with
respect to the Aircraft made by the Manufacturer or any subcontractor or
supplier, and any other claims against the Manufacturer or any such
subcontractor or supplier with respect to the Aircraft, except that the Assignor
may not enter into any change, order or other amendment, modification or
supplement to the Purchase Agreement insofar as it relates to the Aircraft
without the written consent of the Assignee if such change, order, amendment,
modification or supplement would result in any recission, cancellation or
termination of the Purchase Agreement in respect to the Aircraft or otherwise
materially adversely affect Assignee's rights assigned hereunder.  Without
limiting the rights of the Assignor to exercise, in its own name, its rights in
respect of the Purchase Agreement, Assignor shall not attempt to enforce any
performance in the name of Assignee without Assignee's prior written approval.
Any recovery or benefit resulting from enforcement of any warranty, indemnity or
claim shall be applied to remedy any defect in respect of the Aircraft (or to
reimburse the Assignor for its remedying of any such defect) and the balance to
be paid to the Assignor or the Assignee, as their interests may appear,
provided, however, that upon the occurrence of any Event of Default, all such
--------  -------
recoveries or benefits, other than those used to remedy any defect in respect of
the Aircraft (or to reimburse the Assignor for its remedying of any such
defect), shall be paid directly to Assignee to be held by the Assignee for so
long as an Event of Default is continuing.  Assignee hereby accepts the
foregoing assignment subject to the terms hereof.

                                       2
<PAGE>

          3.   It is expressly agreed that, anything herein contained to the
contrary notwithstanding:  (a) the Assignor shall at all times remain liable to
the Manufacturer under the Purchase Agreement to perform all the duties and
obligations of the "Buyer" thereunder to the same extent as if this Assignment
had not been executed; (b) the exercise by the Assignee of any of the rights
assigned hereunder shall not release the Assignor from any of its duties or
obligations to the Manufacturer under the Purchase Agreement except to the
extent that such exercise by the Assignee shall constitute performance of such
duties and obligations; and (c) except as expressly provided herein, the
Assignee shall not have any obligation or liability under the Purchase Agreement
or otherwise by reason of, or arising out of, this Assignment or be obligated to
perform any of the obligations or duties of the Assignor under the Purchase
Agreement or otherwise or to make any payment or to make any inquiry as to the
sufficiency of any payment received by it or to present or file any claim or to
take any other action to collect or enforce any claim for any payment assignment
hereunder.

          Without in any way releasing the Assignor from any of its duties or
obligations under the Purchase Agreement, the Assignee confirms for the benefit
of the Manufacturer that, insofar as the provisions of the Purchase Agreement
relate to the Aircraft, in exercising any rights under the Purchase Agreement,
or in making any claim with respect to the Aircraft or other things (including
data, documents, training and services) delivered or to be delivered pursuant to
the Purchase Agreement, the terms and conditions of the Purchase Agreement shall
apply to, and be binding upon, the Assignee to the same extent as the Assignor.

          Nothing contained herein shall subject the Manufacturer to any
liability to which it would not otherwise be subject under the Purchase
Agreement or modify in any respect the contract rights of the Manufacturer under
the Purchase Agreement, and all limitations or exclusions on liability
provisions under the Purchase Agreement for the benefit of the Manufacturer and
its Affiliates shall apply to Assignee and to the Assignor as if the Assignor
remained the Buyer under the Purchase Agreement.

          At any time after an Event of Default shall have occurred and be
continuing and the Assignee shall have commenced the exercise of remedies set
forth in Section 17 of the Lease, the Assignee and its successors and permitted
assigns shall, to the exclusion of the Assignor, be entitled to assert and
enforce all rights and claims of the "Buyer" under the Purchase Agreement
assigned hereunder (including the right to receive payments), and the Assignor
agrees to cooperate with the Assignee in asserting such rights and claims, and
the Assignor does hereby constitute, effective at any time after an Event of
Default shall have occurred and be continuing and the Assignee shall have
commenced the exercise of remedies set forth in Section 17 of the Lease, the
Assignee, its successors and assigns, the Assignor's true and lawful attorney,
irrevocably, with full power (in the name of the Assignor or otherwise) to ask,
require, demand, receive, compound and give acquittance for any and all monies
and claims for monies due or to become due under, or arising out of, the
Purchase

                                       3
<PAGE>

Agreement in respect of the Aircraft, to the extent that the same have been
expressly assigned by this Assignment and for such period as the Assignee may
exercise rights with respect thereto under this Assignment, to endorse any
checks or other instruments or orders in connection therewith and to file any
claims or take any action or institute (or, if previously commenced, assume
control of) any proceedings and to obtain any recovery in connection therewith
that the Assignee may deem to be necessary or advisable with respect to such
monies and claims for monies.

          For all purposes of this Assignment, the Manufacturer shall not be
deemed to have knowledge of and need not recognize nor take any action with
respect to the occurrence of any Event of Default, the declaration of an Event
of Default, or the exercise of remedies set forth in Section 17 of the Lease by
the Assignee, the discontinuance of any Event of Default or the Aircraft's
becoming no longer subject to the Lease or the Assignor's no longer being
entitled to possession of the Aircraft unless and until the Manufacturer shall
have received from the Assignee written notice thereof and the Manufacturer may
act with acquittance and conclusively rely upon any such notice.

          4.   The Assignor agrees that at any time and from time to time, upon
the written request of the Assignee, the Assignor, at its own cost and expense,
will promptly and duly execute and deliver any and all such further instruments
and documents and take such further action as the Assignee may reasonably
request in order to obtain the full benefits of this Assignment and of the
rights and powers herein granted.

          5.   The Assignor does hereby represent and warrant that the Purchase
Agreement is in full force and effect as to the Assignor and is enforceable
against the Assignor in accordance with its terms.  The Assignor further
represents and warrants that it has, with the authorized execution of the
Consent and  Agreement, received all necessary consents to the assignment and
transfer contemplated herein.

          6.   The Assignor does hereby represent and warrant that it has not
assigned or pledged, and hereby covenants that it will not assign or pledge, so
long as this Assignment shall remain in effect, the whole or any part of the
rights hereby assigned or any of its rights with respect to the Aircraft under
the Purchase Agreement not assigned hereby, to anyone other than the Assignee.
The Assignor agrees that it will not enter into any agreement with the
Manufacturer that would materially and adversely affect the rights of the
parties under the Purchase Agreement insofar as it relates to the Aircraft or
waive any rights thereunder.

          7.   So long as the Aircraft is leased to the Assignor under the Lease
and unless an Event of Default shall have occurred and be continuing and the
Assignee shall have commenced the exercise of remedies under Section 17 of the
Lease, the Assignee agrees that it will not enter into any agreement with the
Manufacturer that would amend, modify, rescind, cancel or terminate the

                                       4
<PAGE>

Purchase Agreement insofar as it relates to the Aircraft or waive any rights of
Assignor thereunder without the prior written consent of the Assignor.

          8.   This Assignment is executed by the Assignor and the Assignee
concurrently with the execution and delivery of the Lease.

          9.   This Assignment shall be binding upon and shall inure to the
benefit of the Assignor, the Assignee and their respective successors and
permitted assigns.

          10.  Neither this Assignment nor any of the terms hereof may be
terminated, amended, supplemented, waived or modified orally, but only by an
instrument in writing signed by the parties hereto and consented to by the
Manufacturer.

          11.  This Assignment may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original
but all such counterparts shall together constitute but one and the same
instrument.

          12.  This Assignment shall in all respects be governed by, and
construed in accordance with, the laws of the State of New York, including all
matters of construction, validity and performance.  This Assignment is being
delivered in the State of New York.

          13.  Except as otherwise expressly provided herein, notice hereunder
may be given, and shall be deemed to have been given, as provided in Section
9.01 of the Supplemental Agreement.

*                             *                              *

                                       5
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Assignment to
be duly executed as of the day and year above written.

                              MIDWAY AIRLINES CORPORATION,
                              as Assignor

                              By:   /s/ Jonathan S. Waller
                                    ----------------------
                                    Name:  Jonathan S. Waller
                                    Title: Senior Vice President
                                           General Counsel

                              FLEET NATIONAL BANK,
                              as Assignee

                              By:   /s/ Edward W. O'Brien
                                    ---------------------
                                    Name:  Edward W. O'Brien
                                    Title: Banking Officer

                                       6
<PAGE>

                                     ANNEX

                                BOMBARDIER INC.

            AIRCRAFT MANUFACTURER'S CONSENT AND AGREEMENT [N587ML]
            ------------------------------------------------------

          The undersigned, Bombardier Inc. ("Manufacturer"), hereby acknowledges
notice of and consents to the terms of the foregoing Purchase Agreement
Assignment [N587ML] (the "Assignment") dated as of December 30, 1999, between
MIDWAY AIRLINES CORPORATION, a Delaware corporation (the "Assignor") and FLEET
NATIONAL BANK, a national banking association established under the laws of the
United States of America (the "Assignee").  The capitalized terms used
hereinafter being defined as such terms are defined in the Assignment.  The
Manufacturer hereby confirms to Assignor and Assignee that (i) the Assignee
shall not be liable for any of the obligations or duties of the Assignor under
the Purchase Agreement, nor shall the Assignment give rise to any duties or
obligations whatsoever on the part of the Assignee owing to the Manufacturer
except for the Assignee's agreement in the Assignment to the effect that in
exercising any rights under the Purchase Agreement with respect to the Aircraft,
or in making any claim with respect to the Aircraft or other things (including
data, documents, training and services) delivered or to be delivered pursuant to
the Purchase Agreement, the terms and conditions of the Purchase Agreement shall
apply to and be binding upon the Assignee to the same extent as the Assignor;
(ii) the Manufacturer consents to sale of the Aircraft by the Seller to the
Assignee; (iii) the Manufacturer consents to the lease of the Aircraft by the
Assignee to the Assignor under the Lease; (iv) pursuant to and in accordance
with the provisions of the Purchase Agreement, the Manufacturer consents to the
assignment of Assignor's interest in the Purchase Agreement as it relates to the
Aircraft to Assignee pursuant to the Assignment; (v) all representations,
warranties, indemnities and agreements of Manufacturer under the Purchase
Agreement with respect to the Aircraft shall inure to the benefit of Assignee to
the same extent as if originally named the "Buyer" therein, except as otherwise
provided in the Assignment; and (vi) during the Term the Manufacturer will
continue to pay all amounts and provide all goods and services to Assignor which
it may be required to pay or provide in respect of the Aircraft under the
Purchase Agreement unless and until the Manufacturer shall have then received
written notice in the manner specified in Section 3 of the Assignment from
Assignee that an Event of Default has occurred and is continuing and the
Assignee has commenced the exercise of remedies set forth in Section 17 of the
Lease, whereupon the Manufacturer will pay such amounts or provide such goods
and services directly to the Assignee unless and until the Manufacturer shall
have then received written notice in the manner specified in Section 3 of the
Assignment from Assignee that no such Event of Default is continuing and remains
unremedied, whereupon the Manufacturer will pay such amounts or provide such
goods and services to Assignor unless Manufacturer receives any other written
notice in the manner specified in Section 3 of the

                                       1
<PAGE>

Assignment from Assignee that an Event of Default has occurred and is continuing
and the Assignee has commenced the exercise of remedies set forth in Section 17
of the Lease. Any notice to be delivered to the Manufacturer as contemplated by
the preceding sentence shall be addressed to the Manufacturer as follows:

          Bombardier Aerospace
          Regional Aircraft
          123 Garratt Boulevard
          Downsview Ontario M3K 1Y5
          Attention:  Director, Contracts Americas

          The Manufacturer hereby represents and warrants that: (i) the
Manufacturer is a corporation duly organized and existing in good standing under
the laws of Canada; (ii) the making and performance of the Purchase Agreement
and this Consent and Agreement have been duly authorized by all necessary
corporate action on the part of the Manufacturer, do not require any stockholder
or other approval, and do not contravene the Manufacturer's Certificate of
Incorporation or By-Laws or any indenture, credit agreement or other contractual
agreement to which the Manufacturer is a party or by which it is bound, and the
making of the Purchase Agreement and this Consent and Agreement does not
contravene, and to the best of the Manufacturer's knowledge, the Manufacturer's
performance of the Purchase Agreement and this Consent and Agreement does not
contravene any law binding on the Manufacturer; and (iii) each of the Purchase
Agreement and this Consent and Agreement constitutes a legal, valid and binding
obligation of the Manufacturer enforceable against the Manufacturer in
accordance with its respective terms, except that the enforceability of each may
be (a) limited by applicable bankruptcy, reorganization, insolvency, moratorium
or other similar laws affecting the enforceability of creditors' rights
generally and (b) subject to the application of equitable principles and the
availability of equitable remedies.

          The Manufacturer's consent to the Assignment is subject to and
conditional upon the agreement of Assignor and Assignee that nothing in the
Assignment shall vary or modify the rights and obligations of the Manufacturer
under the Purchase Agreement and that all limitations or exclusions on liability
provisions under the Purchase Agreement for the benefit of the Manufacturer and
its Affiliates shall apply to Assignee and to the Assignor as if the Assignor
remained the Buyer under the Purchase Agreement.

          This Consent and Agreement shall be governed by, and construed in
accordance with, the law of the State of New York, U.S.A.

*                             *                              *

                                       2
<PAGE>

          IN WITNESS WHEREOF, the Manufacturer has caused this Aircraft
Manufacturer's Consent and Agreement to be duly executed as of December 30,
1999.

                              BOMBARDIER INC.

                              By:   ____________________________________
                                    Name:
                                    Title:

                              By:   ____________________________________
                                    Name:
                                    Title:

                                       3
<PAGE>

                                BOMBARDIER INC.

            AIRCRAFT MANUFACTURER'S CONSENT AND AGREEMENT [N587ML]
            ------------------------------------------------------

          The undersigned, Bombardier Inc. ("Manufacturer"), hereby acknowledges
notice of and consents to the terms of the foregoing Purchase Agreement
Assignment [N587ML] (the "Assignment") dated as of December 30, 1999, between
MIDWAY AIRLINES CORPORATION, a Delaware corporation (the "Assignor") and FLEET
NATIONAL BANK, a national banking association established under the laws of the
United States of America (the "Assignee").  The capitalized terms used
hereinafter being defined as such terms are defined in the Assignment.  The
Manufacturer hereby confirms to Assignor and Assignee that (i) the Assignee
shall not be liable for any of the obligations or duties of the Assignor under
the Purchase Agreement, nor shall the Assignment give rise to any duties or
obligations whatsoever on the part of the Assignee owing to the Manufacturer
except for the Assignee's agreement in the Assignment to the effect that in
exercising any rights under the Purchase Agreement with respect to the Aircraft,
or in making any claim with respect to the Aircraft or other things (including
data, documents, training and services) delivered or to be delivered pursuant to
the Purchase Agreement, the terms and conditions of the Purchase Agreement shall
apply to and be binding upon the Assignee to the same extent as the Assignor;
(ii) the Manufacturer consents to sale of the Aircraft by the Seller to the
Assignee; (iii) the Manufacturer consents to the lease of the Aircraft by the
Assignee to the Assignor under the Lease; (iv) pursuant to and in accordance
with the provisions of the Purchase Agreement, the Manufacturer consents to the
assignment of Assignor's interest in the Purchase Agreement as it relates to the
Aircraft to Assignee pursuant to the Assignment; (v) all representations,
warranties, indemnities and agreements of Manufacturer under the Purchase
Agreement with respect to the Aircraft shall inure to the benefit of Assignee to
the same extent as if originally named the "Buyer" therein, except as otherwise
provided in the Assignment; and (vi) during the Term the Manufacturer will
continue to pay all amounts and provide all goods and services to Assignor which
it may be required to pay or provide in respect of the Aircraft under the
Purchase Agreement unless and until the Manufacturer shall have then received
written notice in the manner specified in Section 3 of the Assignment from
Assignee that an Event of Default has occurred and is continuing and the
Assignee has commenced the exercise of remedies set forth in Section 17 of the
Lease, whereupon the Manufacturer will pay such amounts or provide such goods
and services directly to the Assignee unless and until the Manufacturer shall
have then received written notice in the manner specified in Section 3 of the
Assignment from Assignee that no such Event of Default is continuing and remains
unremedied, whereupon the Manufacturer will pay such amounts or provide such
goods and services to Assignor unless Manufacturer receives any other written
notice in the manner specified in Section 3 of the Assignment from Assignee that
an Event of Default has occurred and is continuing and the Assignee has
commenced the exercise of remedies set forth in Section 17 of the Lease.  Any
notice to be delivered to the Manufacturer as contemplated by the preceding
sentence shall be addressed to the Manufacturer as follows:
<PAGE>

          Bombardier Aerospace
          Regional Aircraft
          123 Garratt Boulevard
          Downsview Ontario M3K 1Y5
          Attention:  Director, Contracts Americas

          The Manufacturer hereby represents and warrants that: (i) the
Manufacturer is a corporation duly organized and existing in good standing under
the laws of Canada; (ii) the making and performance of the Purchase Agreement
and this Consent and Agreement have been duly authorized by all necessary
corporate action on the part of the Manufacturer, do not require any stockholder
or other approval, and do not contravene the Manufacturer's Certificate of
Incorporation or By-Laws or any indenture, credit agreement or other contractual
agreement to which the Manufacturer is a party or by which it is bound, and the
making of the Purchase Agreement and this Consent and Agreement does not
contravene, and to the best of the Manufacturer's knowledge, the Manufacturer's
performance of the Purchase Agreement and this Consent and Agreement does not
contravene any law binding on the Manufacturer; and (iii) each of the Purchase
Agreement and this Consent and Agreement constitutes a legal, valid and binding
obligation of the Manufacturer enforceable against the Manufacturer in
accordance with its respective terms, except that the enforceability of each may
be (a) limited by applicable bankruptcy, reorganization, insolvency, moratorium
or other similar laws affecting the enforceability of creditors' rights
generally and (b) subject to the application of equitable principles and the
availability of equitable remedies.

          The Manufacturer's consent to the Assignment is subject to and
conditional upon the agreement of Assignor and Assignee that nothing in the
Assignment shall vary or modify the rights and obligations of the Manufacturer
under the Purchase Agreement and that all limitations or exclusions on liability
provisions under the Purchase Agreement for the benefit of the Manufacturer and
its Affiliates shall apply to Assignee and to the Assignor as if the Assignor
remained the Buyer under the Purchase Agreement.

          This Consent and Agreement shall be governed by, and construed in
accordance with, the law of the State of New York, U.S.A.

*                             *                              *
<PAGE>

          IN WITNESS WHEREOF, the Manufacturer has caused this Aircraft
Manufacturer's Consent and Agreement to be duly executed as of December 30,
1999.

                              BOMBARDIER INC.

                              By:   /s/ Daniel Desjardins
                                    ---------------------
                                    Name:  Daniel Desjardins
                                    Title: Vice President, Legal Services

                              By:   /s/ Francois Lemarchand
                                    -----------------------
                                    Name:  Francois Lemarchand
                                    Title: Vice President and Treasurer<PAGE>

                                                                  CONFORMED COPY
                                                                  --------------

                          ENGINE WARRANTY ASSIGNMENT
                                   [N587ML]

                                    between

                          MIDWAY AIRLINES CORPORATION

                                      and

                              FLEET NATIONAL BANK

                                      and

                           GENERAL ELECTRIC COMPANY

                  ENGINE MANUFACTURER'S CONSENT AND AGREEMENT
<PAGE>

     THIS ENGINE WARRANTY ASSIGNMENT [N587ML] is made as of this 30th day of
December, 1999 between MIDWAY AIRLINES CORPORATION, a Delaware corporation(the
"Assignor") and FLEET NATIONAL BANK, a national banking association established
under the laws of the United States of America (the "Assignee").

                             W I T N E S S E T H:
                             - - - - - - - - - -

     WHEREAS, the Assignor and General Electric Company (the "Engine
Manufacturer") are parties to the General Terms Agreement, providing, among
other things, for product support, including warranties for the support, of the
Engines covered thereby and related equipment given to the Assignor by the
Engine Manufacturer;

     WHEREAS, the Assignee wishes to acquire certain rights and interests in and
to warranties relating to the Engines and the Assignor, on the terms and
conditions hereinafter set forth, is willing to assign to the Assignee such
rights and interests of the Assignor in and to such warranties, and the Assignee
is willing to accept such assignment, as hereinafter set forth; and

     WHEREAS, the Engine Manufacturer is willing to execute and deliver to the
Assignee an Engine Manufacturer's Consent and Agreement (the "Engine
Manufacturer's Consent and Agreement") to the provisions hereof in substantially
the form of the Annex hereto.

     IT IS HEREBY AGREED as follows:

     In consideration of the mutual covenants herein contained and of the
Assignee's agreement in the Purchase Agreement Assignment to pay the purchase
price for the Aircraft on the terms and conditions therein stated, the parties
hereto agree as follows:

     1.    Definitions
           -----------

     1.1.  For all purposes of this Assignment, except as otherwise expressly
provided or unless the context otherwise requires, the following terms shall
have the following meanings:

     "Aircraft" means One Canadair Regional Jet Aircraft Model CL-600-2B19
      --------
bearing manufacturer's serial number 7346 including two General Electric
CF34-3B1 turbofan engines bearing manufacturer's serial numbers GE-E-872593 and
GE-E-872592 respectively (collectively the "Engines"), installed on such
aircraft at the time of delivery.

     "Aircraft Purchase Agreement" means the Bombardier Regional Aircraft
      ---------------------------
Division Purchase Agreement No. PA-0393 dated September 17, 1997, as amended,
between the Assignor

                                       2

<PAGE>

and the Manufacturer (including all exhibits thereto, together with all letter
agreements entered into that by their terms constitute part of any such Aircraft
Purchase Agreement) whereby, inter alia, the Manufacturer has agreed to sell and
the Assignor has agreed to purchase the Aircraft, but only to the extent the
same relates to the Aircraft.

     "CF34 Warranty" means the CF34 Turbofan Engine Airline Operator Warranty
      -------------
from the Engine Manufacturer, dated May 22, 1990, as contained in Exhibit B of
the General Terms Agreement.

     "Engine Manufacturer" means General Electric Company, a New York
      -------------------
corporation, and its successors and assigns.

     "Event of Default" has the meaning given to such term in Section 16 of the
      ----------------
Lease.

     "General Terms Agreement" means the General Terms Agreement No. CF34-0897-
      -----------------------
065 entered into as of 25 May 1998 between the Engine Manufacturer and the
Assignor, including Article XIV (Limitation of Liability), but excluding any and
all letter agreements attached thereto, but only to the extent the same relates
to the Engines.

     "Lease" means the lease agreement [N587ML] dated as of December 30, 1999 as
      -----
the same may be amended, modified or supplemented, between the Assignee, as
lessor, and the Assignor, as lessee, providing for the lease of the Aircraft.

     "Manufacturer" means with respect to the Aircraft or Airframe, Bombardier
      ------------
Inc., a Canadian corporation represented by its Bombardier Regional Aircraft
Division, and its successor and assigns.

     "Purchase Agreement Assignment" means the Purchase Agreement Assignment
      -----------------------------
dated as of December 30, 1999, between the Assignor and Assignee as the same
may be amended, modified or supplemented from time to time, together with the
Consent and Agreement thereto executed by the Manufacturer.

     "Warranties" means all warranties or assurances of any kind whatsoever
      ----------
relating to the Engines and related equipment manufactured by the Engine
Manufacturer contained in the CF34 Warranty and as limited by the applicable
terms of the General Terms Agreement, but only to the extent the same relates to
the Engines.

     1.2.  All other capitalized terms used and not otherwise defined herein
shall have the respective meanings set forth in Appendix A to the Lease
(including definitions incorporated therin by reference to another document).

                                       3
<PAGE>

          2.   Assignment and Authorization of Assignor
               ----------------------------------------

          2.1. The Assignor does hereby sell, assign, transfer and set over unto
the Assignee, its successors and permitted assigns, all of the Assignor's rights
and interests in and to the Warranties as and to the extent that the same relate
to the Engines and the operation thereof, except as and to the extent expressly
reserved below, including, without limitation, in such assignment, (a) all
claims for damages in respect of any Engine arising as a result of any default
by the Engine Manufacturer in respect of the Warranties under the CF34 Warranty
and/or the General Terms Agreement, and (b) any and all rights of the Assignor
to compel performance of the terms of the CF34 Warranty and/or the General Terms
Agreement in respect of the Warranties; reserving exclusively to the Assignor,
however, (i) all of the Assignor's rights and interests in and to the CF34
Warranty and/or the General Terms Agreement as and to the extent that the same
relate to engines other than the Engines and the purchase and operation of such
engines, (ii) any and all letter agreements, "concessions" and/or "special
guarantees" (as defined in the General Terms Agreement), including without
limitation, those found in Exhibit D of the General Terms Agreement. The
Assignee hereby accepts such assignment.

          2.2. Notwithstanding the foregoing, unless an Event of Default shall
have occurred and be continuing and the Assignee shall have commenced the
exercise of remedies set forth in Section 17 of the Lease, the Assignee hereby
authorizes the Assignor, to exercise in the Assignor's name all rights in
respect of the Warranties, except that: the Assignor may not enter into any
change order or other amendment, modification or supplement to the CF34 Warranty
and/or the General Terms Agreement in respect of any Warranties without the
prior written consent or countersignature of the Assignee if such change, order,
amendment, modification or supplement would result in any recission,
cancellation or termination of the CF34 Warranty and/or the General Terms
Agreement (to the extent it relates to any applicable Warranties) or otherwise
materially adversely affect Assignee's rights assigned hereunder. Without
limiting the rights of the Assignor to exercise, in its own name, its rights in
respect of the Warranties, Assignor shall not attempt to enforce any performance
in the name of Assignee without Assignee's prior written approval.

          2.3. For all purposes of this Assignment, the Engine Manufacturer
shall not be deemed to have knowledge of and need not recognize the occurrence,
the continuance or the discontinuance of any Event of Default under the Lease,
or the exercise of remedies set forth in Section 17 of the Lease by the
Assignee, unless and until the Engine Manufacturer shall have received from the
Assignee written notice thereof addressed to the Engine Manufacturer's Manager
of Small Commercial Engine Contracts, G.E. Aircraft Engines, 1000 Western
Avenue, Lynn, Massachusetts, 01910, U.S.A., and, in acting in acquittance with
the CF34 Warranty, the General Terms Agreement and this Assignment, the Engine
Manufacturer may conclusively rely on such notice. Until such time as notice
shall have been given by the Assignee to the Engine Manufacturer that an Event
of Default has occurred and is continuing and the Assignee has commenced the
exercise of remedies set forth in Section 17 of the Lease, the Engine
Manufacturer shall with respect

                                       4
<PAGE>

to the Warranties deal solely and exclusively with the Assignor. The Assignee
shall promptly after all such Events of Default shall have been remedied, give
written notice of the same to the Engine Manufacturer's Manager of Small
Commercial Engine Contracts as provided above, with a copy to the Assignor at
its address for notices set forth in Section 9.01 of the Supplemental Agreement,
and upon the Engine Manufacturer's receipt of such notice, the Engine
Manufacturer shall, in the absence of a notice from the Assignee to the Engine
Manufacturer that an Event of Default has occurred and is continuing and the
Assignee has commenced the exercise of remedies set forth in Section 17 of the
Lease, resume the sole and exclusive dealings with the Assignor authorized by
this Clause 2 and by the Engine Manufacturer's Consent and Agreement.

          2.4. The Assignment contained herein shall apply only to the Engines
(as installed on the Aircraft at the time of delivery) and shall not extend to
any replacement or substitute engine, unless and until the Engine Manufacturer
has received written notice thereof. The Engine Manufacturer shall not be deemed
to have knowledge of the replacement or substitution of an Engine due to a
Failure (as such term is defined in the CF34 Warranty, excluding normal wear,
tear and deterioration which can be restored by overhaul or repair), damage or
loss, until notified of such Failure, damage or loss. Notice shall be sent to:
Engine Manufacturer's Manager of Small Commercial Engine Contracts. Such notice
shall contain the serial number of the replaced or substituted Engine, the
serial number of the new engine and confirmation that such new engine shall be
subject to the terms and conditions of this Assignment.

          3.   Assignor's Continuing Obligations
               ---------------------------------

          3.1. It is expressly agreed that, anything herein contained to the
contrary notwithstanding: (a) on or prior to the Delivery Date for the Aircraft
under the Purchase Agreement Assignment, the Assignor will perform its
obligations with respect to the Engines to be performed by it on or before such
Delivery Date, (b) the Assignor shall at all times remain liable to the Engine
Manufacturer under the terms and conditions of the General Terms Agreement to
perform all duties and obligations of the Assignor thereunder to the same extent
as if this Assignment had not been executed, (c) the exercise by the Assignee of
any of the rights assigned hereunder shall not release the Assignor from any of
its duties or obligations to the Engine Manufacturer under the General Terms
Agreement, except to the extent that such exercise by the Assignee shall
constitute performance of such duties and obligations, (d) after the Delivery
Date for the Aircraft, the Assignor will exercise its rights and perform its
obligations under the General Terms Agreement in respect of the Engines to the
extent that such rights and obligations have not been assigned hereunder, and
(e) except as specifically provided in Clause 3.2 with respect to the Assignee,
the Assignee shall not have any obligation or liability under the General Terms
Agreement by reason of or arising out of this Assignment or otherwise be
obligated to perform any of the obligations or duties of the Assignor under the
General Terms Agreement or to make any payment or to make any inquiry as to the
sufficiency of any payment received by it or to present or file any claim or to
take any other action to collect or enforce any claim for any payment assigned
hereunder.

                                       5
<PAGE>

          3.2   Anything contained in this Assignment to the contrary
notwithstanding (but without in any way releasing the Assignor from any of its
duties or obligations under the General Terms Agreement), the Assignee confirms
expressly for the benefit of the Engine Manufacturer that, in exercising any
rights in and to the Warranties, or in making any claim with respect thereto,
the applicable terms and conditions of the General Terms Agreement, including
Article XIV (Limitation of Liability) and the Warranties shall apply to, and be
binding upon, the Assignee to the same extent as the Assignor. Nothing contained
herein shall in any way diminish or limit the provisions of the Assignor's
indemnities in the Lease and the Supplemental Agreement and in the Aircraft
Purchase Agreement with respect to any liability of the Assignee to the
Manufacturer in any way relating to or arising out of the Purchase Agreement
Assignment. Except as expressly provided in this Assignment (including this
Section 3.2), the Assignee shall have no obligations, duties or liabilities to
Engine Manufacturer.

          3.3   Nothing contained herein shall subject the Engine Manufacturer
to any obligation or liability to which it would not otherwise be subject under
the General Terms Agreement or modify in any respect the contract rights of the
Engine Manufacturer thereunder or subject the Engine Manufacturer to any
multiple or duplicative obligation or liability under the General Terms
Agreement or limit any rights of set-off the Engine Manufacturer may have
against the Assignor under applicable law. No further assignment of any
remaining Warranties, including but not limited to assignments for security
purposes, are permitted without the express prior written consent of the Engine
Manufacturer.

          3.4   Effective at any time after an Event of Default shall have
occurred and be continuing and the Assignee shall have commenced the exercise of
remedies set forth in Section 17 of the Lease, the Assignor does hereby
constitute the Assignee, its successors and permitted assigns, the Assignor's
true and lawful attorney, irrevocably, with full power (in the name of the
Assignor or otherwise) to ask, require, demand, receive, compound and give
acquittance for any and all monies and claims for monies due or to become due
under, or arising out of, the General Terms Agreement in respect of such Engine,
but only to the extent that the same have been expressly assigned by this
Assignment and, for such period as the Assignee may exercise rights with respect
thereto under this Assignment, to endorse any checks or other instruments or
orders in connection therewith and to file any claims or take any action or
institute (or, if previously commenced, assume control of) any proceedings and
to obtain any recovery in connection therewith that the Assignee may deem to be
necessary or advisable with respect to such monies and claims for monies.

          3.5.  So long as the Engine Manufacturer acts in good faith in
accordance with this Assignment, the Engine Manufacturer may rely conclusively
on any notice given by the Assignee hereunder without inquiring as to the
accuracy of, or the entitlement of the Assignee to give, such notice.

          4.    Further Assurance
                -----------------

                                       6
<PAGE>

          4.1. The Assignor agrees that at any time and from time to time, upon
the written request of the Assignee, the Assignor, at its own cost and expense,
will promptly and duly execute and deliver any and all such further instruments
and documents and take such further action as the Assignee may reasonably
request in order to obtain the full benefits of this Assignment and of the
rights and powers herein granted.

          5.   Representations, Warranties and Covenants
               -----------------------------------------

          5.1. The Assignor does hereby represent and warrant that the General
Terms Agreement and the CF34 Warranty are in full force and effect as to the
Assignor and are enforceable against the Assignor in accordance with their
respective terms. The Assignor further represents and warrants that it has, with
the authorized execution of the Engine Manufacturer's Consent and Agreement,
received all necessary consents to the assignment and transfer contemplated
herein.

          5.2. The Assignor does hereby represent and warrant that it has not
assigned or pledged, and hereby covenants that it will not assign or pledge, so
long as this Assignment shall remain in effect, the whole or any part of the
Warranties hereby assigned to anyone other than the Assignee.

          5.3. The Assignee agrees that it will not enter into any agreement
with the Engine Manufacturer that would amend, modify, rescind, cancel or
terminate the General Terms Agreement and/or the CF34 Warranty in respect of the
Assignor's rights in respect of the Warranties, without the prior written
consent of the Assignor, except if the Engine Manufacturer shall have been
notified in writing by the Assignee that an Event of Default has occurred and is
continuing and the Assignee has commenced the exercise of remedies set forth in
Section 17 of the Lease.

          5.4. Each of the Assignor, the Assignee and the Engine Manufacturer
agrees that neither this Assignment or the attached and incorporated Engine
Manufacturer's Consent and Agreement, nor any of the terms or provisions of this
Assignment or the Engine Manufacturer's Consent and Agreement, may be amended,
extended, modified, supplemented, terminated or waived orally. Any and all
amendments, extensions, modifications, supplements, terminations or waivers must
be presented to each of the other parties in writing, and be signed by the party
against whom the enforcement of such amendment, modification, supplement,
termination or waiver is sought to be charged.

          6.   Confidentiality
               ---------------

          6.1. The Assignee agrees, that it will not, without the prior written
consent of the Engine Manufacturer, disclose, directly or indirectly, to any
third party any terms of the CF34 Warranty disclosed to it in writing by the
Engine Manufacturer; provided that (a) the Assignee may

                                       7

<PAGE>

use, retain and disclose any such information to its special counsel and public
accountants and to bank examiners and auditors, each of whom shall be obligated
to not further disclose such terms, (b) the Assignee may disclose any such
information as required by applicable laws or governmental regulations, provided
that the Assignee shall first, to the extent practicable, have given the Engine
Manufacturer reasonable opportunity, at the Engine Manufacturer's cost and
expense, to obtain a protective order or other reasonably satisfactory assurance
of confidential treatment for the information required to be disclosed, (c) to
the extent that the Assignee may have received a subpoena or other written
demand under color of legal right for such information, the Assignee may
disclose such information, but it shall first, as soon as practicable upon
receipt of such demand and to the extent permitted by applicable laws, furnish a
copy thereof to the Assignor and to the Engine Manufacturer, and the Assignee
shall afford the Assignor and the Engine Manufacturer reasonable opportunity, at
the moving person's cost and expense, to obtain a protective order or other
reasonably satisfactory assurance of confidential treatment for the information
required to be disclosed, and (d) the Assignee may disclose any such information
to any potential purchaser of the Aircraft and/or the Engine, each of whom shall
be obligated to not further disclose such information.

          7.    Miscellaneous
                -------------

          7.1.  This Assignment may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the
same instrument.

          7.2.  This Assignment shall in all respects be governed by, and
construed in accordance with, the laws of the State of New York, including all
matters of construction, validity and performance. This Assignment is being
delivered in the State of New York.

*                                      *                                       *

                                       8

<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Engine
Warranty Assignment to be duly executed as of the day and year first above
written.

                                             MIDWAY AIRLINES CORPORATION,
                                             as Assignor

                                             By: /s/ Jonathan S. Waller
                                                 ----------------------------
                                                 Name: Jonathan S. Waller
                                                 Title: Senior Vice President
                                                          General Counsel

                                             FLEET NATIONAL BANK,
                                             as Assignee

                                             By: /s/ Edward W. O'Brien
                                                 ----------------------------
                                                 Name: Edward W. O'Brien
                                                 Title: Banking Officer

                                       9

<PAGE>

                                     ANNEX

                           GENERAL ELECTRIC COMPANY

             ENGINE MANUFACTURER'S CONSENT AND AGREEMENT [N586ML]
             ----------------------------------------------------

          The undersigned, GENERAL ELECTRIC COMPANY, a New York corporation (the
"Engine Manufacturer"), hereby acknowledges notice of and consents to all of the
terms of the Engine Warranty Assignment [N586ML] (herein called the
"Assignment", the defined terms therein being hereinafter used with the same
meaning), dated as of December 10, 1999, between MIDWAY AIRLINES CORPORATION, a
Delaware corporation, as Assignor and FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity but
solely as Owner Trustee, as Assignee, relating to the assignment by the Assignor
of, its rights and interests in the Warranties, and hereby confirms to the
Assignee that:  (i) all the Warranties given by the Engine Manufacturer under
the CF34 Warranty and/or the General Terms Agreement with respect to the Engines
shall, subject to the terms and conditions thereof and of the Assignment inure
to the benefit of the Assignee to the same extent as if the Assignee had
originally been a party thereto except as provided by Clause 2 of the
Assignment; (ii) the Assignee shall not be liable for any of the obligations or
duties of the Assignor under the General Terms Agreement in respect of the
Engines, and the Assignment shall not give rise to any duties or obligations
whatsoever on the part of the Assignee owing to the Engine Manufacturer, except
for the Assignee's agreement in the Assignment with respect to the Engines to
the effect that, in exercising any right in and to the Warranties, or in making
any claim with respect thereto, the applicable terms and conditions of the
General Terms Agreement including Article XIV (Limitation of Liability) shall
apply to, and be binding upon, the Assignee to the same extent as the Assignor,
and with respect to such agreement the Engine Manufacturer agrees that, anything
contained in the General Terms Agreement or the Assignment to the contrary
notwithstanding, the Assignee shall have no liability to the Engine Manufacturer
for failure to comply with any of the terms of the General Terms Agreement with
respect to the Warranties while under the Lease to the Assignor so long as the
Assignee acts upon the written instructions of the Assignor (to which
instructions the undersigned understands that it shall have access on request);
provided, that no person other than the Engine Manufacturer or any assignee of
the Engine Manufacturer as permitted under the General Terms Agreement shall
have any rights against the Assignee with respect to the undertaking and
agreement set forth in this clause (ii); (iii) the Engine Manufacturer consents
to the execution of the Lease; (iv) the Engine Manufacturer agrees that the
Assignment constitutes an agreement permitted by the General Terms Agreement and
pursuant to and in accordance with the provisions of the General Terms
Agreement, the Engine Manufacturer consents to the assignment of Assignor's
interest in and to the Warranties as and to the extent that the same relate to
the Engines and the operation thereof to Assignee pursuant to the Assignment;
and (v) the Engine Manufacturer will continue to pay to the Assignor all
payments which the Engine Manufacturer may be required to

                                       1
<PAGE>

make under the General Terms Agreement in respect of the Warranties unless and
until the Engine Manufacturer shall have received written notice from the
Assignee addressed to the Engine Manufacturer's Manager of Small Commercial
Engine Contracts, G.E. Aircraft Engines, 1000 Western Avenue, Lynn,
Massachusetts, 01910, U.S.A., that an Event of Default has occurred and is
continuing and the Assignee has commenced the exercise of remedies set forth in
Section 17 of the Lease (which such notice shall be conclusive proof thereof
between the Engine Manufacturer and the Assignor), whereupon the Engine
Manufacturer will, until the Assignee shall have notified the Engine
Manufacturer in writing that no such Event of Default is continuing and remains
unremedied, make any and all payments and take all actions which it may be
required thereafter to make or take under CF34 Warranty and/or the General Terms
Agreement in respect of the Warranties and the right to receive which has been
assigned to the Assignee under the Assignment directly to the Assignee at its
address as from time to time notified to the Engine Manufacturer in writing.

          The Engine Manufacturer hereby represents and warrants (a) the Engine
Manufacturer is a corporation organized and existing in good standing under the
law of the State of New York, (b) the making and performance in accordance with
the respective terms of the General Terms Agreement, the CF34 Warranty and this
Engine Manufacturer's Consent and Agreement have been duly authorized by all
necessary corporate action on the part of the Engine Manufacturer, do not
require any stockholder approval, contravene the Engine Manufacturer's
certificate of incorporation or by-laws or any indenture, credit agreement or
other contractual agreement to which the Engine Manufacturer is a party or by
which it is bound and do not, as to the making thereof, contravene any law
binding on the Engine Manufacturer, and, as to the best knowledge of the Engine
Manufacturer, do not, to the performance thereof, contravene any law binding on
the Engine Manufacturer, (c) to the best of the Engine Manufacturer's knowledge,
all applicable provisions of the General Terms Agreement and the CF34 Warranty
have been compiled with to effect the assignment to the Assignee of the
Warranties contemplated by the Assignment, and (d) the General Terms Agreement
and the CF34 Warranty constituted, as of the date thereof and at all times
thereafter to and including the date of this Engine Manufacturer's Consent and
Agreement the legal, valid and binding obligations of the Engine Manufacturer
enforceable against the Engine Manufacturer in accordance with their respective
terms, and this Engine Manufacturer's Consent and Agreement is the legal, valid
and binding obligation of the Engine Manufacturer, enforceable against the
Engine Manufacturer in accordance with its terms subject to:  (i) the
limitations of applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws affecting the rights of creditors generally,
and (ii) general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law), which principles do not make
the remedies available at law or in equity with respect to the General Terms
Agreement or this Engine Manufacturer's Consent and Agreement inadequate for the
practical realization of the benefits intended to be provided thereby.
Notwithstanding any provision to the contrary in this Engine Manufacturer's
Consent and Agreement or the Assignment, nothing contained in this Engine
Manufacturer's Consent and Agreement or the Assignment shall subject the Engine
Manufacturer to any obligation or liability to which it would not otherwise be
subject under the General Terms Agreement or modify

                                       2
<PAGE>

in any respect the Engine Manufacturer's contract rights thereunder or subject
the Engine Manufacturer to any multiple or duplicative obligation or liability
under the General Terms Agreement.

          It is understood that the execution by the Engine Manufacturer, and
validity, of this Engine Manufacturer's Consent and Agreement is subject to the
condition that, upon the delivery of the Aircraft (including the Engines) by the
Assignor to the Assignee and the acceptance thereof by the Assignee pursuant to
the Purchase Agreement Assignment, the Assignee shall lease such Aircraft
(including the Engines) to the Assignor under the Lease (but that said Lease may
be terminated by its terms thereafter).

          This Engine Manufacturer's Consent and Agreement shall be governed by,
and construed in accordance with, the law of the State of New York, U.S.A.

*                                      *                                       *

                                       3
<PAGE>

          IN WITNESS WHEREOF, the Engine Manufacturer has caused this Engine
Manufacturer's Consent and Agreement to be duly executed as of December 30,
1999.

                         GENERAL ELECTRIC COMPANY

                         By:  ____________________________________
                              Name:
                              Title:

                                       4
<PAGE>

                           GENERAL ELECTRIC COMPANY

             ENGINE MANUFACTURER'S CONSENT AND AGREEMENT [N587ML]
             ----------------------------------------------------

          The undersigned, GENERAL ELECTRIC COMPANY, a New York corporation (the
"Engine Manufacturer"), hereby acknowledges notice of and consents to all of the
terms of the Engine Warranty Assignment [N587ML] (herein called the
"Assignment", the defined terms therein being hereinafter used with the same
meaning), dated as of December 30, 1999, between MIDWAY AIRLINES CORPORATION, a
Delaware corporation, as Assignor and FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity but
solely as Owner Trustee, as Assignee, relating to the assignment by the Assignor
of, its rights and interests in the Warranties, and hereby confirms to the
Assignee that:  (i) all the War  ranties given by the Engine Manufacturer under
the CF34 Warranty and/or the General Terms Agreement with respect to the Engines
shall, subject to the terms and conditions thereof and of the Assignment inure
to the benefit of the Assignee to the same extent as if the Assignee had
originally been a party thereto except as provided by Clause 2 of the
Assignment; (ii) the Assignee shall not be liable for any of the obligations or
duties of the Assignor under the General Terms Agreement in respect of the
Engines, and the Assignment shall not give rise to any duties or obligations
whatsoever on the part of the Assignee owing to the Engine Manufacturer, except
for the Assignee's agreement in the Assignment with respect to the Engines to
the effect that, in exercising any right in and to the Warranties, or in making
any claim with respect thereto, the applicable terms and conditions of the
General Terms Agreement including Article XIV (Limitation of Liability) shall
apply to, and be binding upon, the Assignee to the same extent as the Assignor,
and with respect to such agreement the Engine Manufacturer agrees that, anything
contained in the General Terms Agreement or the As  signment to the contrary
notwithstanding, the Assignee shall have no liability to the Engine Manufacturer
for failure to comply with any of the terms of the General Terms Agreement with
respect to the Warranties while under the Lease to the Assignor so long as the
Assignee acts upon the written instructions of the Assignor (to which
instructions the undersigned understands that it shall have access on request);
provided, that no person other than the Engine Manufacturer or any assignee of
the Engine Manufacturer as permitted under the General Terms Agreement shall
have any rights against the Assignee with respect to the undertaking and
agreement set forth in this clause (ii); (iii) the Engine Manufacturer consents
to the execution of the Lease; (iv) the Engine Manufacturer agrees that the
Assignment constitutes an agreement permitted by the General Terms Agreement and
pursuant to and in accordance with the provisions of the General Terms
Agreement, the Engine Manufacturer consents to the assignment of Assignor's
interest in and to the Warranties as and to the extent that the same relate to
the Engines and the operation thereof to Assignee pursuant to the Assignment;
and (v) the Engine Manufacturer will continue to pay to the Assignor all
payments which the Engine Manufacturer may be required to make under the General
Terms Agreement in respect of the Warranties unless and until the Engine
Manufacturer shall have received written notice from the Assignee addressed to
the Engine
<PAGE>

Manufacturer's Manager of Small Commercial Engine Contracts, G.E. Aircraft
Engines, 1000 Western Avenue, Lynn, Massachusetts, 01910, U.S.A., that an Event
of Default has occurred and is continuing and the Assignee has commenced the
exercise of remedies set forth in Section 17 of the Lease (which such notice
shall be conclusive proof thereof between the Engine Manufacturer and the
Assignor), whereupon the Engine Manufacturer will, until the Assignee shall have
notified the Engine Manufacturer in writing that no such Event of Default is
continuing and remains unremedied, make any and all payments and take all
actions which it may be required thereafter to make or take under CF34 Warranty
and/or the General Terms Agreement in respect of the Warranties and the right to
receive which has been assigned to the Assignee under the Assignment directly to
the Assignee at its address as from time to time notified to the Engine
Manufacturer in writing.

          The Engine Manufacturer hereby represents and warrants (a) the Engine
Manufacturer is a corporation organized and existing in good standing under the
law of the State of New York, (b) the making and performance in accordance with
the respective terms of the General Terms Agreement, the CF34 Warranty and this
Engine Manufacturer's Consent and Agreement have been duly authorized by all
necessary corporate action on the part of the Engine Manufacturer, do not
require any stockholder approval, contravene the Engine Manufacturer's
certificate of incorporation or by-laws or any indenture, credit agreement or
other contractual agreement to which the Engine Manufacturer is a party or by
which it is bound and do not, as to the making thereof, contravene any law
binding on the Engine Manufacturer, and, as to the best knowledge of the Engine
Manufacturer, do not, to the performance thereof, contravene any law binding on
the Engine Manufacturer, (c) to the best of the Engine Manufacturer's knowledge,
all applicable provisions of the General Terms Agreement and the CF34 Warranty
have been compiled with to effect the assignment to the Assignee of the
Warranties contemplated by the Assignment, and (d) the General Terms Agreement
and the CF34 Warranty constituted, as of the date thereof and at all times
thereafter to and including the date of this Engine Manufacturer's Consent and
Agreement the legal, valid and binding obligations of the Engine Manufacturer
enforceable against the Engine Manufacturer in accordance with their respective
terms, and this Engine Manufacturer's Consent and Agreement is the legal, valid
and binding obligation of the Engine Manufacturer, enforceable against the
Engine Manufacturer in accordance with its terms subject to:  (i) the
limitations of applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws affecting the rights of creditors generally,
and (ii) general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law), which principles do not make
the remedies available at law or in equity with respect to the General Terms
Agreement or this Engine Manufacturer's Consent and Agreement inadequate for the
practical realization of the benefits intended to be provided thereby.
Notwithstanding any provision to the contrary in this Engine Manufacturer's
Consent and Agreement or the Assignment, nothing contained in this Engine
Manufacturer's Consent and Agreement or the Assignment shall subject the Engine
Manufacturer to any obligation or liability to which it would not otherwise be
subject under the General Terms Agreement or modify in any respect the Engine
Manufacturer's contract rights thereunder or subject the Engine
<PAGE>

Manufacturer to any multiple or duplicative obligation or liability under the
General Terms Agreement.

          It is understood that the execution by the Engine Manufacturer, and
validity, of this Engine Manufacturer's Consent and Agreement is subject to the
condition that, upon the delivery of the Aircraft (including the Engines) by the
Assignor to the Assignee and the acceptance thereof by the Assignee pursuant to
the Purchase Agreement Assignment, the Assignee shall lease such Aircraft
(including the Engines) to the Assignor under the Lease (but that said Lease may
be terminated by its terms thereafter).

          This Engine Manufacturer's Consent and Agreement shall be governed by,
and construed in accordance with, the law of the State of New York, U.S.A.

*                                      *                                       *
<PAGE>

          IN WITNESS WHEREOF, the Engine Manufacturer has caused this Engine
Manufacturer's Consent and Agreement to be duly executed as of December 30,
1999.

                         GENERAL ELECTRIC COMPANY

                         By:  /s/ Patricia A. Bowles
                              ----------------------
                              Name: Patricia A. Bowles
                              Title: Contracts Manager,
                                     Attorney-In-Fact

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