Document:

FIXED RATE SENIOR NOTE

REGISTERED                                                    REGISTERED
No. FXR                                                       U.S. $
                                                              CUSIP:

     Unless this certificate is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) to the issuer or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or such other name as requested
by an authorized representative of The Depository Trust Company and any payment
is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof,
Cede & Co., has an interest herein.

                                       1
<PAGE>

<TABLE>
                                                  MORGAN STANLEY
                                    SENIOR GLOBAL MEDIUM-TERM NOTES, SERIES C
                                                   (Fixed Rate)

                                          STOCK PARTICIPATION ACCRETING
                                REDEMPTION QUARTERLY-PAY SECURITIES(SM) ("SPARQS")

                                       10% SPARQS(R) DUE SEPTEMBER 15, 2005
                                             MANDATORILY EXCHANGEABLE
                                          FOR SHARES OF COMMON STOCK OF
                                               APPLE COMPUTER, INC.

<S>                           <C>                           <C>                        <C>
-----------------------------------------------------------------------------------------------------------------
ORIGINAL ISSUE DATE:          INITIAL REDEMPTION DATE:     INTEREST RATE: % per annum  MATURITY DATE:
                                 See "Morgan Stanley          (equivalent                 See "Maturity Date"
                                 Call Right" below.           to $ per annum per          below.
                                                              SPARQS)
-----------------------------------------------------------------------------------------------------------------
INTEREST ACCRUAL DATE:        INITIAL REDEMPTION           INTEREST PAYMENT            OPTIONAL REPAYMENT
                                 PERCENTAGE: See "Morgan      DATE(S): See "Interest      DATE(S):  N/A
                                 Stanley Call Right" and      Payment Dates" below.
                                 "Call Price" below.
-----------------------------------------------------------------------------------------------------------------
SPECIFIED CURRENCY:           ANNUAL REDEMPTION            INTEREST PAYMENT            APPLICABILITY OF
    U.S. dollars                 PERCENTAGE                   PERIOD: Quarterly           MODIFIED PAYMENT UPON
                                 REDUCTION: N/A                                           ACCELERATION OR
                                                                                          REDEMPTION: See
                                                                                          "Alternate Exchange
                                                                                          Calculation in Case of
                                                                                          an Event of Default"
                                                                                          below.
-----------------------------------------------------------------------------------------------------------------
IF SPECIFIED                  REDEMPTION NOTICE PERIOD:    APPLICABILITY OF            If yes, state Issue Price:
    CURRENCY OTHER THAN U.S.     At least 10 days but no      ANNUAL INTEREST             N/A
    DOLLARS, OPTION TO ELECT     more than 30 days.  See      PAYMENTS: N/A
    PAYMENT IN U.S. DOLLARS:     "Morgan Stanley Call
    N/A                          Right" and "Morgan
                                 Stanley Notice Date"
                                 below.
-----------------------------------------------------------------------------------------------------------------
EXCHANGE RATE                 TAX REDEMPTION AND PAYMENT   PRICE APPLICABLE UPON       ORIGINAL YIELD TO
   AGENT: N/A                    OF ADDITIONAL AMOUNTS:       OPTIONAL REPAYMENT: N/A     MATURITY: N/A
                                 N/A
-----------------------------------------------------------------------------------------------------------------
OTHER PROVISIONS: See below.  IF YES, STATE INITIAL
                                 OFFERING DATE: N/A
-----------------------------------------------------------------------------------------------------------------
</TABLE>

For the purposes of this SPARQS, the tenth paragraph of Section 2.08 of the
Amended and Restated Indenture, dated as of May 1, 1999, between the Issuer and
JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank) as Trustee,
shall not apply.

 Issue Price..................   $      per each $      principal amount of this
                                 SPARQS

Maturity Date.................   September 15, 2005, subject to acceleration as
                                 described below in "Price Event Acceleration"
                                 and "Alternate

                                       2
<PAGE>

                                 Exchange Calculation in Case of an Event of
                                 Default" and subject to extension if the Final
                                 Call Notice Date is postponed in accordance
                                 with the following paragraph.

                                 If the Final Call Notice Date is postponed
                                 because it is not a Trading Day or due to a
                                 Market Disruption Event or otherwise and the
                                 Issuer exercises the Morgan Stanley Call Right,
                                 the Maturity Date shall be postponed so that
                                 the Maturity Date will be the tenth calendar
                                 day following the Final Call Notice Date. See
                                 "Final Call Notice Date" below.

                                 In the event that the Final Call Notice Date is
                                 postponed because it is not a Trading Day or
                                 due to a Market Disruption Event or otherwise,
                                 the Issuer shall give notice of such
                                 postponement as promptly as possible, and in no
                                 case later than two Business Days following the
                                 scheduled Final Call Notice Date, (i) to the
                                 holder of this SPARQS by mailing notice of such
                                 postponement by first class mail, postage
                                 prepaid, to the holder's last address as it
                                 shall appear upon the registry books, (ii) to
                                 the Trustee by telephone or facsimile confirmed
                                 by mailing such notice to the Trustee by first
                                 class mail, postage prepaid, at its New York
                                 office and (iii) to The Depository Trust
                                 Company (the "Depositary") by telephone or
                                 facsimile confirmed by mailing such notice to
                                 the Depositary by first class mail, postage
                                 prepaid. Any notice that is mailed in the
                                 manner herein provided shall be conclusively
                                 presumed to have been duly given, whether or
                                 not the holder of this SPARQS receives the
                                 notice. Notice of the date to which the
                                 Maturity Date has been rescheduled as a result
                                 of postponement of the Final Call Notice Date,
                                 if applicable, shall be included in the
                                 Issuer's notice of exercise of the Morgan
                                 Stanley Call Right.

Interest Payment Dates........   If the scheduled Maturity Date is postponed due
                                 to a Market Disruption Event or otherwise, the
                                 Issuer shall pay interest on the Maturity Date
                                 as postponed rather than on September 15, 2005,
                                 but no interest will accrue on this SPARQS or
                                 on such payment during the period from or after
                                 the scheduled Maturity Date.

Record Date...................   Notwithstanding the definition of "Record Date"
                                 on page 22 hereof, the Record Date for each
                                 Interest Payment Date, including the Interest
                                 Payment Date scheduled to

                                       3
<PAGE>

                                 occur on the Maturity Date, shall be the date 5
                                 calendar days prior to such scheduled Interest
                                 Payment Date, whether or not that date is a
                                 Business Day; provided, however, that in the
                                 event that the Issuer exercises the Morgan
                                 Stanley Call Right, no Interest Payment Date
                                 shall occur after the Morgan Stanley Notice
                                 Date, except for any Interest Payment Date for
                                 which the Morgan Stanley Notice Date falls on
                                 or after the "ex-interest" date for the related
                                 interest payment, in which case the related
                                 interest payment shall be made on such Interest
                                 Payment Date; and provided, further, that
                                 accrued but unpaid interest payable on the Call
                                 Date, if any, shall be payable to the person to
                                 whom the Call Price is payable. The
                                 "ex-interest" date for any interest payment is
                                 the date on which purchase transactions in the
                                 SPARQS no longer carry the right to receive
                                 such interest payment.

                                 In the event that the Issuer exercises the
                                 Morgan Stanley Call Right and the Morgan
                                 Stanley Notice Date falls before the
                                 "ex-interest" date for an interest payment, so
                                 that as a result a scheduled Interest Payment
                                 Date will not occur, the Issuer shall cause the
                                 Calculation Agent to give notice to the Trustee
                                 and to the Depositary, in each case in the
                                 manner and at the time described in the second
                                 and third paragraphs under "Morgan Stanley Call
                                 Right" below, that no Interest Payment Date
                                 will occur after such Morgan Stanley Notice
                                 Date.

Denominations.................   $      and integral multiples thereof

Morgan Stanley Call Right.....   On any scheduled Trading Day on or after March
                                    , 2005 or on the Maturity Date (including
                                 the Maturity Date as it may be extended and
                                 regardless of whether the Maturity Date is a
                                 Trading Day), the Issuer may call the SPARQS,
                                 in whole but not in part, for mandatory
                                 exchange for the Call Price paid in cash
                                 (together with accrued but unpaid interest) on
                                 the Call Date.

                                 On the Morgan Stanley Notice Date, the Issuer
                                 shall give notice of the Issuer's exercise of
                                 the Morgan Stanley Call Right (i) to the holder
                                 of this SPARQS by mailing notice of such
                                 exercise, specifying the Call Date on which the
                                 Issuer shall effect such exchange, by first
                                 class mail, postage prepaid, to the holder's
                                 last address as it shall appear upon the
                                 registry books, (ii) to the Trustee by
                                 telephone or facsimile confirmed by mailing
                                 such notice

                                       4
<PAGE>

                                 to the Trustee by first class mail, postage
                                 prepaid, at its New York office and (iii) to
                                 the Depositary in accordance with the
                                 applicable procedures set forth in the Blanket
                                 Letter of Representations prepared by the
                                 Issuer. Any notice which is mailed in the
                                 manner herein provided shall be conclusively
                                 presumed to have been duly given, whether or
                                 not the holder of this SPARQS receives the
                                 notice. Failure to give notice by mail or any
                                 defect in the notice to the holder of any
                                 SPARQS shall not affect the validity of the
                                 proceedings for the exercise of the Morgan
                                 Stanley Call Right with respect to any other
                                 SPARQS.

                                 The notice of the Issuer's exercise of the
                                 Morgan Stanley Call Right shall specify (i) the
                                 Call Date, (ii) the Call Price payable per
                                 SPARQS, (iii) the amount of accrued but unpaid
                                 interest payable per SPARQS on the Call Date,
                                 (iv) whether any subsequently scheduled
                                 Interest Payment Date shall no longer be an
                                 Interest Payment Date as a result of the
                                 exercise of the Morgan Stanley Call Right, (v)
                                 the place or places of payment of such Call
                                 Price, (vi) that such delivery will be made
                                 upon presentation and surrender of this SPARQS,
                                 (vii) that such exchange is pursuant to the
                                 Morgan Stanley Call Right and (viii) if
                                 applicable, the date to which the Maturity Date
                                 has been extended due to a Market Disruption
                                 Event as described under "Maturity Date" above.

                                 The notice of the Issuer's exercise of the
                                 Morgan Stanley Call Right shall be given by the
                                 Issuer or, at the Issuer's request, by the
                                 Trustee in the name and at the expense of the
                                 Issuer.

                                 If this SPARQS is so called for mandatory
                                 exchange by the Issuer, then the cash Call
                                 Price and any accrued but unpaid interest on
                                 this SPARQS to be delivered to the holder of
                                 this SPARQS shall be delivered on the Call Date
                                 fixed by the Issuer and set forth in its notice
                                 of its exercise of the Morgan Stanley Call
                                 Right, upon delivery of this SPARQS to the
                                 Trustee. The Issuer shall, or shall cause the
                                 Calculation Agent to, deliver such cash to the
                                 Trustee for delivery to the holder of this
                                 SPARQS.

                                 If this SPARQS is not surrendered for exchange
                                 on the Call Date, it shall be deemed to be no
                                 longer Outstanding under, and as defined in,
                                 the Senior Indenture after the

                                       5
<PAGE>

                                 Call Date, except with respect to the holder's
                                 right to receive cash due in connection with
                                 the Morgan Stanley Call Right.

Morgan Stanley Notice Date....   The scheduled Trading Day on which the Issuer
                                 issues its notice of mandatory exchange, which
                                 must be at least 10 but not more than 30 days
                                 prior to the Call Date.

Final Call Notice Date........   September 5, 2005; provided that if September
                                 5, 2005 is not a Trading Day or if a Market
                                 Disruption Event occurs on such day, the Final
                                 Call Notice Date will be the immediately
                                 succeeding Trading Day on which no Market
                                 Disruption Event occurs.

Call Date.....................   The day specified in the Issuer's notice of
                                 mandatory exchange, on which the Issuer shall
                                 deliver cash to the holder of this SPARQS, for
                                 mandatory exchange, which day may be any
                                 scheduled Trading Day on or after March  , 2005
                                 or the Maturity Date (including the Maturity
                                 Date as it may be extended and regardless of
                                 whether the Maturity Date is a scheduled
                                 Trading Day). See "Maturity Date" above.

Call Price....................   The Call Price with respect to any Call Date is
                                 an amount of cash per each $      principal
                                 amount of this SPARQS, as calculated by the
                                 Calculation Agent, such that the sum of the
                                 present values of all cash flows on each
                                 $       principal amount of this SPARQS to and
                                 including the Call Date (i.e., the Call Price
                                 and all of the interest payments, including
                                 accrued and unpaid interest payable on the Call
                                 Date), discounted to the Original Issue Date
                                 from the applicable payment date at the Yield
                                 to Call rate of   % per annum computed on the
                                 basis of a 360-day year of twelve 30-day
                                 months, equals the Issue Price, as determined
                                 by the Calculation Agent.

Exchange at Maturity..........   At maturity, subject to a prior call of this
                                 SPARQS for cash in an amount equal to the Call
                                 Price by the Issuer as described under "Morgan
                                 Stanley Call Right" above or any acceleration
                                 of the SPARQS, upon delivery of this SPARQS to
                                 the Trustee, each $         principal amount of
                                 this SPARQS shall be applied by the Issuer as
                                 payment for a number of shares of the common
                                 stock of Apple Computer, Inc. ("Apple Stock")
                                 at the Exchange Ratio, and the Issuer shall
                                 deliver with respect to each $

                                       6
<PAGE>

                                 principal amount of this SPARQS an amount of
                                 Apple Stock equal to the Exchange Ratio.

                                 The amount of Apple Stock to be delivered at
                                 maturity shall be subject to any applicable
                                 adjustments (i) to the Exchange Ratio
                                 (including, as applicable, any New Stock
                                 Exchange Ratio or any Basket Stock Exchange
                                 Ratio, each as defined in paragraph 5 under
                                 "Antidilution Adjustments" below) and (ii) in
                                 the Exchange Property, as defined in paragraph
                                 5 under "Antidilution Adjustments" below, to be
                                 delivered instead of, or in addition to, such
                                 Apple Stock as a result of any corporate event
                                 described under "Antidilution Adjustments"
                                 below, in each case, required to be made
                                 through the close of business on the third
                                 Trading Day prior to maturity.

                                 The Issuer shall, or shall cause the
                                 Calculation Agent to, provide written notice to
                                 the Trustee at its New York Office and to the
                                 Depositary, on which notice the Trustee and
                                 Depositary may conclusively rely, on or prior
                                 to 10:30 a.m. on the Trading Day immediately
                                 prior to maturity of this SPARQS (but if such
                                 Trading Day is not a Business Day, prior to the
                                 close of business on the Business Day preceding
                                 maturity of this SPARQS), of the amount of
                                 Apple Stock (or the amount of Exchange
                                 Property) or cash to be delivered with respect
                                 to each $ principal amount of this SPARQS and
                                 of the amount of any cash to be paid in lieu of
                                 any fractional share of Apple Stock (or of any
                                 other securities included in Exchange Property,
                                 if applicable); provided that if the maturity
                                 date of this SPARQS is accelerated (x) because
                                 of a Price Event Acceleration (as described
                                 under "Price Event Acceleration" below) or (y)
                                 because of an Event of Default Acceleration (as
                                 defined under "Alternate Exchange Calculation
                                 in Case of an Event of Default" below), the
                                 Issuer shall give notice of such acceleration
                                 as promptly as possible, and in no case later
                                 than (A) in the case of an Event of Default
                                 Acceleration, two Trading Days following such
                                 deemed maturity date or (B) in the case of a
                                 Price Event Acceleration, 10:30 a.m. on the
                                 Trading Day immediately prior to the date of
                                 acceleration (as defined under "Price Event
                                 Acceleration" below), (i) to the holder of this
                                 SPARQS by mailing notice of such acceleration
                                 by first class mail, postage prepaid, to the
                                 holder's last address as it shall appear upon
                                 the registry books, (ii) to the Trustee by
                                 telephone or facsimile

                                       7
<PAGE>

                                 confirmed by mailing such notice to the Trustee
                                 by first class mail, postage prepaid, at its
                                 New York office and (iii) to the Depositary by
                                 telephone or facsimile confirmed by mailing
                                 such notice to the Depositary by first class
                                 mail, postage prepaid. Any notice that is
                                 mailed in the manner herein provided shall be
                                 conclusively presumed to have been duly given,
                                 whether or not the holder of this SPARQS
                                 receives the notice. If the maturity of this
                                 SPARQS is accelerated, no interest on the
                                 amounts payable with respect to this SPARQS
                                 shall accrue for the period from and after such
                                 accelerated maturity date; provided that the
                                 Issuer has deposited with the Trustee the Apple
                                 Stock, the Exchange Property or any cash due
                                 with respect to such acceleration by such
                                 accelerated maturity date.

                                 The Issuer shall, or shall cause the
                                 Calculation Agent to, deliver any such shares
                                 of Apple Stock (or any Exchange Property) and
                                 cash in respect of interest and any fractional
                                 share of Apple Stock (or any Exchange Property)
                                 and cash otherwise due upon any acceleration
                                 described above to the Trustee for delivery to
                                 the holder of this Note. References to payment
                                 "per SPARQS" refer to each $ principal amount
                                 of this SPARQS.

                                 If this SPARQS is not surrendered for exchange
                                 at maturity, it shall be deemed to be no longer
                                 Outstanding under, and as defined in, the
                                 Senior Indenture, except with respect to the
                                 holder's right to receive the Apple Stock (and,
                                 if applicable, any Exchange Property) and any
                                 cash in respect of interest and any fractional
                                 share of Apple Stock (or any Exchange Property)
                                 and any other cash due at maturity as described
                                 in the preceding paragraph under this heading.

Price Event Acceleration......   If on any two consecutive Trading Days during
                                 the period prior to and ending on the third
                                 Business Day immediately preceding the Maturity
                                 Date, the product of the Closing Price per
                                 share of Apple Stock and the Exchange Ratio is
                                 less than $1.00, the Maturity Date of this
                                 SPARQS shall be deemed to be accelerated to the
                                 third Business Day immediately following such
                                 second Trading Day (the "date of
                                 acceleration"). Upon such acceleration, the
                                 holder of each $       principal amount of this
                                 SPARQS shall receive per SPARQS on the date of
                                 acceleration:

                                       8
<PAGE>

                                    (i) a number of shares of Apple Stock at the
                                    then current Exchange Ratio;

                                    (ii) accrued but unpaid interest on each
                                    $          principal amount of this SPARQS
                                    to but excluding the date of acceleration;
                                    and

                                    (iii) an amount of cash as determined by the
                                    Calculation Agent equal to the sum of the
                                    present values of the remaining scheduled
                                    payments of interest on each $
                                    principal amount of this SPARQS (excluding
                                    the amounts included in clause (ii) above)
                                    discounted to the date of acceleration. The
                                    present value of each remaining scheduled
                                    payment will be based on the comparable
                                    yield that the Issuer would pay on a
                                    non-interest bearing, senior unsecured debt
                                    obligation of the Issuer having a maturity
                                    equal to the term of each such remaining
                                    scheduled payment, as determined by the
                                    Calculation Agent.

No Fractional Shares..........   Upon delivery of this SPARQS to the Trustee at
                                 maturity, the Issuer shall deliver the
                                 aggregate number of shares of Apple Stock due
                                 with respect to this SPARQS, as described
                                 above, but the Issuer shall pay cash in lieu of
                                 delivering any fractional share of Apple Stock
                                 in an amount equal to the corresponding
                                 fractional Closing Price of such fraction of a
                                 share of Apple Stock as determined by the
                                 Calculation Agent as of the second scheduled
                                 Trading Day prior to maturity of this SPARQS.

Exchange Ratio................         , subject to adjustment for corporate
                                 events relating to Apple Computer, Inc.
                                 ("Apple") described under "Antidilution
                                 Adjustments" below.

Closing Price.................   The Closing Price for one share of Apple Stock
                                 (or one unit of any other security for which a
                                 Closing Price must be determined) on any
                                 Trading Day (as defined below) means:

                                 o   if Apple Stock (or any such other security)
                                 is listed or admitted to trading on a national
                                 securities exchange, the last reported sale
                                 price, regular way, of the principal trading
                                 session on such day on the principal United
                                 States securities exchange registered under the
                                 Securities Exchange Act of 1934, as amended
                                 (the "Exchange Act"),

                                       9
<PAGE>

                                 on which Apple Stock (or any such other
                                 security) is listed or admitted to trading,

                                 o   if Apple Stock (or any such other security)
                                 is a security of the Nasdaq National Market
                                 (and provided that the Nasdaq National Market
                                 is not then a national securities exchange),
                                 the Nasdaq official closing price published by
                                 The Nasdaq Stock Market, Inc. on such day, or

                                 o   if Apple Stock (or any such other security)
                                 is neither listed or admitted to trading on any
                                 national securities exchange nor a security of
                                 the Nasdaq National Market but is included in
                                 the OTC Bulletin Board Service (the "OTC
                                 Bulletin Board") operated by the National
                                 Association of Securities Dealers, Inc. (the
                                 "NASD"), the last reported sale price of the
                                 principal trading session on the OTC Bulletin
                                 Board on such day.

                                 If Apple Stock (or any such other security) is
                                 listed or admitted to trading on any national
                                 securities exchange or is a security of the
                                 Nasdaq National Market but the last reported
                                 sale price or Nasdaq official closing price, as
                                 applicable, is not available pursuant to the
                                 preceding sentence, then the Closing Price for
                                 one share of Apple Stock (or one unit of any
                                 such other security) on any Trading Day will
                                 mean the last reported sale price of the
                                 principal trading session on the
                                 over-the-counter market as reported on the
                                 Nasdaq National Market or the OTC Bulletin
                                 Board on such day. If, because of a Market
                                 Disruption Event (as defined below) or
                                 otherwise, the last reported sale price or
                                 Nasdaq official closing price, as applicable,
                                 for Apple Stock (or any such other security) is
                                 not available pursuant to either of the two
                                 preceding sentences, then the Closing Price for
                                 any Trading Day will be the mean, as determined
                                 by the Calculation Agent, of the bid prices for
                                 Apple Stock (or any such other security)
                                 obtained from as many recognized dealers in
                                 such security, but not exceeding three, as will
                                 make such bid prices available to the
                                 Calculation Agent. Bids of MS & Co. or any of
                                 its affiliates may be included in the
                                 calculation of such mean, but only to the
                                 extent that any such bid is the highest of the
                                 bids obtained. The term "security of the Nasdaq
                                 National Market" will include a security
                                 included in any successor to such system, and
                                 the

                                       10
<PAGE>

                                 term OTC Bulletin Board Service will include
                                 any successor service thereto.

Trading Day...................   A day, as determined by the Calculation Agent,
                                 on which trading is generally conducted on the
                                 New York Stock Exchange, Inc. ("NYSE"), the
                                 American Stock Exchange LLC ("AMEX"), the
                                 Nasdaq National Market, the Chicago Mercantile
                                 Exchange and the Chicago Board of Options
                                 Exchange and in the over-the-counter market for
                                 equity securities in the United States.

Calculation Agent.............   MS & Co. and its successors.

                                 All calculations with respect to the Exchange
                                 Ratio and Call Price for the SPARQS shall be
                                 made by the Calculation Agent and shall be
                                 rounded to the nearest one hundred-thousandth,
                                 with five one-millionths rounded upward (e.g.,
                                 .876545 would be rounded to .87655); all dollar
                                 amounts related to the Call Price resulting
                                 from such calculations shall be rounded to the
                                 nearest ten-thousandth, with five one
                                 hundred-thousandths rounded upward (e.g.,
                                 .76545 would be rounded to .7655); and all
                                 dollar amounts paid with respect to the Call
                                 Price on the aggregate number of SPARQS shall
                                 be rounded to the nearest cent, with one-half
                                 cent rounded upward.

                                 All determinations made by the Calculation
                                 Agent shall be at the sole discretion of the
                                 Calculation Agent and shall, in the absence of
                                 manifest error, be conclusive for all purposes
                                 and binding on the holder of this SPARQS, the
                                 Trustee and the Issuer.

Antidilution Adjustments......   The Exchange Ratio shall be adjusted as
                                 follows:

                                      1. If Apple Stock is subject to a stock
                                 split or reverse stock split, then once such
                                 split has become effective, the Exchange Ratio
                                 shall be adjusted to equal the product of the
                                 prior Exchange Ratio and the number of shares
                                 issued in such stock split or reverse stock
                                 split with respect to one share of Apple Stock.

                                      2. If Apple Stock is subject (i) to a
                                 stock dividend (issuance of additional shares
                                 of Apple Stock) that is given ratably to all
                                 holders of shares of Apple Stock or (ii) to a
                                 distribution of Apple Stock as a result of the
                                 triggering of any provision of the corporate
                                 charter of

                                       11
<PAGE>

                                 Apple, then once the dividend has become
                                 effective and Apple Stock is trading ex-
                                 dividend, the Exchange Ratio shall be adjusted
                                 so that the new Exchange Ratio shall equal the
                                 prior Exchange Ratio plus the product of (i)
                                 the number of shares issued with respect to one
                                 share of Apple Stock and (ii) the prior
                                 Exchange Ratio.

                                      3. If Apple issues rights or warrants to
                                 all holders of Apple Stock to subscribe for or
                                 purchase Apple Stock at an exercise price per
                                 share less than the Closing Price of Apple
                                 Stock on both (i) the date the exercise price
                                 of such rights or warrants is determined and
                                 (ii) the expiration date of such rights or
                                 warrants, and if the expiration date of such
                                 rights or warrants precedes the maturity of
                                 this SPARQS, then the Exchange Ratio shall be
                                 adjusted to equal the product of the prior
                                 Exchange Ratio and a fraction, the numerator of
                                 which shall be the number of shares of Apple
                                 Stock outstanding immediately prior to the
                                 issuance of such rights or warrants plus the
                                 number of additional shares of Apple Stock
                                 offered for subscription or purchase pursuant
                                 to such rights or warrants and the denominator
                                 of which shall be the number of shares of Apple
                                 Stock outstanding immediately prior to the
                                 issuance of such rights or warrants plus the
                                 number of additional shares of Apple Stock
                                 which the aggregate offering price of the total
                                 number of shares of Apple Stock so offered for
                                 subscription or purchase pursuant to such
                                 rights or warrants would purchase at the
                                 Closing Price on the expiration date of such
                                 rights or warrants, which shall be determined
                                 by multiplying such total number of shares
                                 offered by the exercise price of such rights or
                                 warrants and dividing the product so obtained
                                 by such Closing Price.

                                      4. There shall be no adjustments to the
                                 Exchange Ratio to reflect cash dividends or
                                 other distributions paid with respect to Apple
                                 Stock other than distributions described in
                                 paragraph 2, paragraph 3 and clauses (i), (iv)
                                 and (v) of the first sentence of paragraph 5
                                 and Extraordinary Dividends. "Extraordinary
                                 Dividend" means each of (a) the full amount per
                                 share of Apple Stock of any cash dividend or
                                 special dividend or distribution that is
                                 identified by Apple as an extraordinary or
                                 special dividend or distribution, (b) the
                                 excess of any cash dividend or other cash
                                 distribution (that is not otherwise identified
                                 by Apple as an extraordinary or

                                       12
<PAGE>

                                 special dividend or distribution) distributed
                                 per share of Apple Stock over the immediately
                                 preceding cash dividend or other cash
                                 distribution, if any, per share of Apple Stock
                                 that did not include an Extraordinary Dividend
                                 (as adjusted for any subsequent corporate event
                                 requiring an adjustment hereunder, such as a
                                 stock split or reverse stock split) if such
                                 excess portion of the dividend or distribution
                                 is more than 5% of the Closing Price of Apple
                                 Stock on the Trading Day preceding the
                                 "ex-dividend date" (that is, the day on and
                                 after which transactions in Apple Stock on an
                                 organized securities exchange or trading system
                                 no longer carry the right to receive that cash
                                 dividend or other cash distribution) for the
                                 payment of such cash dividend or other cash
                                 distribution (such Closing Price, the "Base
                                 Closing Price") and (c) the full cash value of
                                 any non-cash dividend or distribution per share
                                 of Apple Stock (excluding Marketable
                                 Securities, as defined in paragraph 5 below).
                                 Subject to the following sentence, if any cash
                                 dividend or distribution of such other property
                                 with respect to Apple Stock includes an
                                 Extraordinary Dividend, the Exchange Ratio with
                                 respect to Apple Stock shall be adjusted on the
                                 ex-dividend date so that the new Exchange Ratio
                                 shall equal the product of (i) the prior
                                 Exchange Ratio and (ii) a fraction, the
                                 numerator of which is the Base Closing Price,
                                 and the denominator of which is the amount by
                                 which the Base Closing Price exceeds the
                                 Extraordinary Dividend. If any Extraordinary
                                 Dividend is at least 35% of the Base Closing
                                 Price, then, instead of adjusting the Exchange
                                 Ratio, the amount payable upon exchange at
                                 maturity shall be determined as described in
                                 paragraph 5 below, and the Extraordinary
                                 Dividend shall be allocated to Reference Basket
                                 Stocks in accordance with the procedures for a
                                 Reference Basket Event as described in clause
                                 (c)(ii) of paragraph 5 below. The value of the
                                 non-cash component of an Extraordinary Dividend
                                 shall be determined on the ex-dividend date for
                                 such distribution by the Calculation Agent,
                                 whose determination shall be conclusive in the
                                 absence of manifest error. A distribution on
                                 Apple Stock described in clause (i), (iv) or
                                 (v) of the first sentence of paragraph 5 below
                                 shall cause an adjustment to the Exchange Ratio
                                 pursuant only to clause (i), (iv) or (v) of the
                                 first sentence of paragraph 5, as applicable.

                                       13
<PAGE>

                                      5. Any of the following shall constitute a
                                 Reorganization Event: (i) Apple Stock is
                                 reclassified or changed, including, without
                                 limitation, as a result of the issuance of any
                                 tracking stock by Apple, (ii) Apple has been
                                 subject to any merger, combination or
                                 consolidation and is not the surviving entity,
                                 (iii) Apple completes a statutory exchange of
                                 securities with another corporation (other than
                                 pursuant to clause (ii) above), (iv) Apple is
                                 liquidated, (v) Apple issues to all of its
                                 shareholders equity securities of an issuer
                                 other than Apple (other than in a transaction
                                 described in clause (ii), (iii) or (iv) above)
                                 (a "spinoff stock") or (vi) Apple Stock is the
                                 subject of a tender or exchange offer or going
                                 private transaction on all of the outstanding
                                 shares. If any Reorganization Event occurs, in
                                 each case as a result of which the holders of
                                 Apple Stock receive any equity security listed
                                 on a national securities exchange or traded on
                                 The Nasdaq National Market (a "Marketable
                                 Security"), other securities or other property,
                                 assets or cash (collectively "Exchange
                                 Property"), the amount payable upon exchange at
                                 maturity with respect to each $       principal
                                 amount of this SPARQS following the effective
                                 date for such Reorganization Event (or, if
                                 applicable, in the case of spinoff stock, the
                                 ex-dividend date for the distribution of such
                                 spinoff stock) shall be determined in
                                 accordance with the following:

                                 (a) if Apple Stock continues to be outstanding,
                                 Apple Stock (if applicable, as reclassified
                                 upon the issuance of any tracking stock) at the
                                 Exchange Ratio in effect on the third Trading
                                 Day prior to the scheduled Maturity Date
                                 (taking into account any adjustments for any
                                 distributions described under clause (c)(i)
                                 below); and

                                 (b) for each Marketable Security received in
                                 such Reorganization Event (each a "New Stock"),
                                 including the issuance of any tracking stock or
                                 spinoff stock or the receipt of any stock
                                 received in exchange for Apple Stock, the
                                 number of shares of the New Stock received with
                                 respect to one share of Apple Stock multiplied
                                 by the Exchange Ratio for Apple Stock on the
                                 Trading Day immediately prior to the effective
                                 date of the Reorganization Event (the "New
                                 Stock Exchange Ratio"), as adjusted to the
                                 third Trading Day prior to the scheduled
                                 Maturity Date (taking into account any
                                 adjustments for distributions described under
                                 clause (c)(i) below); and

                                       14
<PAGE>

                                 (c) for any cash and any other property or
                                 securities other than Marketable Securities
                                 received in such Reorganization Event (the
                                 "Non-Stock Exchange Property"),

                                    (i) if the combined value of the amount of
                                    Non-Stock Exchange Property received per
                                    share of Apple Stock, as determined by the
                                    Calculation Agent in its sole discretion on
                                    the effective date of such Reorganization
                                    Event (the "Non-Stock Exchange Property
                                    Value"), by holders of Apple Stock is less
                                    than 25% of the Closing Price of Apple Stock
                                    on the Trading Day immediately prior to the
                                    effective date of such Reorganization Event,
                                    a number of shares of Apple Stock, if
                                    applicable, and of any New Stock received in
                                    connection with such Reorganization Event,
                                    if applicable, in proportion to the relative
                                    Closing Prices of Apple Stock and any such
                                    New Stock, and with an aggregate value equal
                                    to the Non-Stock Exchange Property Value
                                    multiplied by the Exchange Ratio in effect
                                    for Apple Stock on the Trading Day
                                    immediately prior to the effective date of
                                    such Reorganization Event, based on such
                                    Closing Prices, in each case as determined
                                    by the Calculation Agent in its sole
                                    discretion on the effective date of such
                                    Reorganization Event; and the number of such
                                    shares of Apple Stock or any New Stock
                                    determined in accordance with this clause
                                    (c)(i) shall be added at the time of such
                                    adjustment to the Exchange Ratio in
                                    subparagraph (a) above and/or the New Stock
                                    Exchange Ratio in subparagraph (b) above, as
                                    applicable, or

                                    (ii) if the Non-Stock Exchange Property
                                    Value is equal to or exceeds 25% of the
                                    Closing Price of Apple Stock on the Trading
                                    Day immediately prior to the effective date
                                    relating to such Reorganization Event or, if
                                    Apple Stock is surrendered exclusively for
                                    Non-Stock Exchange Property (in each case, a
                                    "Reference Basket Event"), an initially
                                    equal-dollar weighted basket of three
                                    Reference Basket Stocks (as defined below)
                                    with an aggregate value on the effective
                                    date of such Reorganization Event equal to
                                    the Non-Stock Exchange Property Value
                                    multiplied by the Exchange Ratio in effect
                                    for Apple Stock on the Trading Day
                                    immediately prior to the effective

                                       15
<PAGE>

                                    date of such Reorganization Event. The
                                    "Reference Basket Stocks" shall be the three
                                    stocks with the largest market
                                    capitalization among the stocks that then
                                    comprise the S&P 500 Index (or, if
                                    publication of such index is discontinued,
                                    any successor or substitute index selected
                                    by the Calculation Agent in its sole
                                    discretion) with the same primary Standard
                                    Industrial Classification Code ("SIC Code")
                                    as Apple; provided, however, that a
                                    Reference Basket Stock shall not include any
                                    stock that is subject to a trading
                                    restriction under the trading restriction
                                    policies of Morgan Stanley or any of its
                                    affiliates that would materially limit the
                                    ability of Morgan Stanley or any of its
                                    affiliates to hedge the SPARQS with respect
                                    to such stock (a "Hedging Restriction");
                                    provided further that if three Reference
                                    Basket Stocks cannot be identified from the
                                    S&P 500 Index by primary SIC Code for which
                                    a Hedging Restriction does not exist, the
                                    remaining Reference Basket Stock(s) shall be
                                    selected by the Calculation Agent from the
                                    largest market capitalization stock(s)
                                    within the same Division and Major Group
                                    classification (as defined by the Office of
                                    Management and Budget) as the primary SIC
                                    Code for Apple. Each Reference Basket Stock
                                    shall be assigned a Basket Stock Exchange
                                    Ratio equal to the number of shares of such
                                    Reference Basket Stock with a Closing Price
                                    on the effective date of such Reorganization
                                    Event equal to the product of (a) the
                                    Non-Stock Exchange Property Value, (b) the
                                    Exchange Ratio in effect for Apple Stock on
                                    the Trading Day immediately prior to the
                                    effective date of such Reorganization Event
                                    and (c) 0.3333333.

                                 Following the allocation of any Extraordinary
                                 Dividend to Reference Basket Stocks pursuant to
                                 paragraph 4 above or any Reorganization Event
                                 described in this paragraph 5, the amount
                                 payable upon exchange at maturity with respect
                                 to each $      principal amount of this SPARQS
                                 shall be the sum of:

                                    (x)  if applicable, Apple Stock at the
                                         Exchange Ratio then in effect; and

                                       16
<PAGE>

                                    (y)  if applicable, for each New Stock, such
                                         New Stock at the New Stock Exchange
                                         Ratio then in effect for such New
                                         Stock; and

                                    (z)  if applicable, for each Reference
                                         Basket Stock, such Reference Basket
                                         Stock at the Basket Stock Exchange
                                         Ratio then in effect for such Reference
                                         Basket Stock.

                                 In each case, the applicable Exchange Ratio
                                 (including for this purpose, any New Stock
                                 Exchange Ratio or Basket Stock Exchange Ratio)
                                 shall be determined by the Calculation Agent on
                                 the third Trading Day prior to the scheduled
                                 Maturity Date.

                                 For purposes of paragraph 5 above, in the case
                                 of a consummated tender or exchange offer or
                                 going-private transaction involving Exchange
                                 Property of a particular type, Exchange
                                 Property shall be deemed to include the amount
                                 of cash or other property paid by the offeror
                                 in the tender or exchange offer with respect to
                                 such Exchange Property (in an amount determined
                                 on the basis of the rate of exchange in such
                                 tender or exchange offer or going-private
                                 transaction). In the event of a tender or
                                 exchange offer or a going-private transaction
                                 with respect to Exchange Property in which an
                                 offeree may elect to receive cash or other
                                 property, Exchange Property shall be deemed to
                                 include the kind and amount of cash and other
                                 property received by offerees who elect to
                                 receive cash.

                                 Following the occurrence of any Reorganization
                                 Event referred to in paragraphs 4 or 5 above,
                                 (i) references to "Apple Stock" under "No
                                 Fractional Shares," "Closing Price" and "Market
                                 Disruption Event" shall be deemed to also refer
                                 to any New Stock or Reference Basket Stock, and
                                 (ii) all other references in this SPARQS to
                                 "Apple Stock" shall be deemed to refer to the
                                 Exchange Property into which this SPARQS is
                                 thereafter exchangeable and references to a
                                 "share" or "shares" of Apple Stock shall be
                                 deemed to refer to the applicable unit or units
                                 of such Exchange Property, including any New
                                 Stock or Reference Basket Stock, unless the
                                 context otherwise requires. The New Stock
                                 Exchange Ratio(s) or Basket Stock Exchange
                                 Ratios resulting from any Reorganization Event
                                 described in paragraph 5 above or similar
                                 adjustment under paragraph 4 above shall be
                                 subject to

                                       17
<PAGE>

                                 the adjustments set forth in paragraphs 1
                                 through 5 hereof.

                                 If a Reference Basket Event occurs, the Issuer
                                 shall, or shall cause the Calculation Agent to,
                                 provide written notice to the Trustee at its
                                 New York office, on which notice the Trustee
                                 may conclusively rely, and to DTC of the
                                 occurrence of such Reference Basket Event and
                                 of the three Reference Basket Stocks selected
                                 as promptly as possible and in no event later
                                 than five Business Days after the date of the
                                 Reference Basket Event.

                                 No adjustment to any Exchange Ratio (including
                                 for this purpose, any New Stock Exchange Ratio
                                 or Basket Stock Exchange Ratio) shall be
                                 required unless such adjustment would require a
                                 change of at least 0.1% in the Exchange Ratio
                                 then in effect. The Exchange Ratio resulting
                                 from any of the adjustments specified above
                                 will be rounded to the nearest one
                                 hundred-thousandth, with five one-millionths
                                 rounded upward. Adjustments to the Exchange
                                 Ratios will be made up to the close of business
                                 on the third Trading Day prior to the Maturity
                                 Date.

                                 No adjustments to the Exchange Ratio or method
                                 of calculating the Exchange Ratio shall be made
                                 other than those specified above.

                                 The Calculation Agent shall be solely
                                 responsible for the determination and
                                 calculation of any adjustments to the Exchange
                                 Ratio, any New Stock Exchange Ratio or Basket
                                 Stock Exchange Ratio or method of calculating
                                 the Exchange Property Value and of any related
                                 determinations and calculations with respect to
                                 any distributions of stock, other securities or
                                 other property or assets (including cash) in
                                 connection with any corporate event described
                                 in paragraphs 1 through 5 above, and its
                                 determinations and calculations with respect
                                 thereto shall be conclusive in the absence of
                                 manifest error.

                                 The Calculation Agent shall provide information
                                 as to any adjustments to the Exchange Ratio or
                                 to the method of calculating the amount payable
                                 upon exchange at maturity of the SPARQS made
                                 pursuant to paragraphs 1 through 5 above upon
                                 written request by any holder of this SPARQS.

                                       18
<PAGE>

Market Disruption Event.......   "Market Disruption Event" means, with respect
                                 to Apple Stock:

                                    (i) a suspension, absence or material
                                    limitation of trading of Apple Stock on the
                                    primary market for Apple Stock for more than
                                    two hours of trading or during the one-half
                                    hour period preceding the close of the
                                    principal trading session in such market; or
                                    a breakdown or failure in the price and
                                    trade reporting systems of the primary
                                    market for Apple Stock as a result of which
                                    the reported trading prices for Apple Stock
                                    during the last one-half hour preceding the
                                    close of the principal trading session in
                                    such market are materially inaccurate; or
                                    the suspension, absence or material
                                    limitation of trading on the primary market
                                    for trading in options contracts related to
                                    Apple Stock, if available, during the
                                    one-half hour period preceding the close of
                                    the principal trading session in the
                                    applicable market, in each case as
                                    determined by the Calculation Agent in its
                                    sole discretion; and

                                    (ii) a determination by the Calculation
                                    Agent in its sole discretion that any event
                                    described in clause (i) above materially
                                    interfered with the ability of the Issuer or
                                    any of its affiliates to unwind or adjust
                                    all or a material portion of the hedge with
                                    respect to the SPARQS due September 15,
                                    2005, Mandatorily Exchangeable for Shares of
                                    Common Stock of Apple Computer, Inc.

                                 For purposes of determining whether a Market
                                 Disruption Event has occurred: (i) a limitation
                                 on the hours or number of days of trading shall
                                 not constitute a Market Disruption Event if it
                                 results from an announced change in the regular
                                 business hours of the relevant exchange, (ii) a
                                 decision to permanently discontinue trading in
                                 the relevant options contract shall not
                                 constitute a Market Disruption Event, (iii)
                                 limitations pursuant to NYSE Rule 80A (or any
                                 applicable rule or regulation enacted or
                                 promulgated by the NYSE, any other
                                 self-regulatory organization or the Securities
                                 and Exchange Commission of scope similar to
                                 NYSE Rule 80A as determined by the Calculation
                                 Agent) on trading during significant market
                                 fluctuations shall constitute a suspension,
                                 absence or material limitation of trading, (iv)
                                 a suspension of trading

                                       19
<PAGE>

                                 in options contracts on Apple Stock by the
                                 primary securities market trading in such
                                 options, if available, by reason of (a) a price
                                 change exceeding limits set by such securities
                                 exchange or market, (b) an imbalance of orders
                                 relating to such contracts or (c) a disparity
                                 in bid and ask quotes relating to such
                                 contracts shall constitute a suspension,
                                 absence or material limitation of trading in
                                 options contracts related to Apple Stock and
                                 (v) a suspension, absence or material
                                 limitation of trading on the primary securities
                                 market on which options contracts related to
                                 Apple Stock are traded shall not include any
                                 time when such securities market is itself
                                 closed for trading under ordinary
                                 circumstances.

Alternate Exchange
Calculation in Case of an
Event of Default..............   In case an event of default with respect to the
                                 SPARQS shall have occurred and be continuing,
                                 the amount declared due and payable per each
                                 $         principal amount of this SPARQS upon
                                 any acceleration of this SPARQS (an "Event of
                                 Default Acceleration") shall be determined by
                                 the Calculation Agent and shall be an amount in
                                 cash equal to the lesser of (i) the product of
                                 (x) the Closing Price of Apple Stock (and/or
                                 the value of any Exchange Property) as of the
                                 date of such acceleration and (y) the then
                                 current Exchange Ratio and (ii) the Call Price
                                 calculated as though the date of acceleration
                                 were the Call Date (but in no event less than
                                 the Call Price for the first Call Date), in
                                 each case plus accrued but unpaid interest to
                                 but excluding the date of acceleration;
                                 provided that if the Issuer has called the
                                 SPARQS in accordance with the Morgan Stanley
                                 Call Right, the amount declared due and payable
                                 upon any such acceleration shall be an amount
                                 in cash for each $        principal amount of
                                 this SPARQS equal to the Call Price for the
                                 Call Date specified in the Issuer's notice of
                                 mandatory exchange, plus accrued but unpaid
                                 interest to but excluding the date of
                                 acceleration.

Treatment of SPARQS for
United States Federal
Income Tax Purposes...........   The Issuer, by its sale of this SPARQS, and the
                                 holder of this SPARQS (and any successor holder
                                 of, or holder of a beneficial interest in, this
                                 SPARQS), by its respective purchase hereof,
                                 agree (in the absence of an administrative
                                 determination or judicial ruling to the
                                 contrary) to characterize each $
                                 principal amount of this SPARQS for all tax
                                 purposes as an investment unit

                                       20
<PAGE>

                                 consisting of (A) a terminable contract (the
                                 "Terminable Forward Contract") that (i)
                                 requires the holder of this SPARQS (subject to
                                 the Morgan Stanley Call Right) to purchase, and
                                 the Issuer to sell, for an amount equal to
                                 $             (the "Forward Price"), Apple
                                 Stock at maturity and (ii) allows the Issuer,
                                 upon exercise of the Morgan Stanley Call Right,
                                 to terminate the Terminable Forward Contract by
                                 returning to such holder the Deposit (as
                                 defined below) and paying to such holder an
                                 amount of cash equal to the difference between
                                 the Deposit and the Call Price and (B) a
                                 deposit with the Issuer of a fixed amount of
                                 cash, equal to the Issue Price per each
                                 $           principal amount of this SPARQS, to
                                 secure the holder's obligation to purchase
                                 Apple Stock pursuant to the Terminable Forward
                                 Contract (the "Deposit"), which Deposit bears a
                                 quarterly compounded yield of    % per annum.

                                       21
<PAGE>

     Morgan Stanley, a Delaware corporation (together with its successors and
assigns, the "Issuer"), for value received, hereby promises to pay to CEDE &
CO., or registered assignees, the amount of Apple Stock (or other Exchange
Property), as determined in accordance with the provisions set forth under
"Exchange at Maturity" above, due with respect to the principal sum of U.S.
$                  (UNITED STATES DOLLARS                 ) on the Maturity Date
specified above (except to the extent redeemed or repaid prior to maturity) and
to pay interest thereon at the Interest Rate per annum specified above, from and
including the Interest Accrual Date specified above until the principal hereof
is paid or duly made available for payment weekly, monthly, quarterly,
semiannually or annually in arrears as specified above as the Interest Payment
Period on each Interest Payment Date (as specified above), commencing on the
Interest Payment Date next succeeding the Interest Accrual Date specified above,
and at maturity (or on any redemption or repayment date); provided, however,
that if the Interest Accrual Date occurs between a Record Date, as defined
below, and the next succeeding Interest Payment Date, interest payments will
commence on the second Interest Payment Date succeeding the Interest Accrual
Date to the registered holder of this Note on the Record Date with respect to
such second Interest Payment Date; and provided, further, that if this Note is
subject to "Annual Interest Payments," interest payments shall be made annually
in arrears and the term "Interest Payment Date" shall be deemed to mean the
first day of March in each year.

     Interest on this Note will accrue from and including the most recent date
to which interest has been paid or duly provided for, or, if no interest has
been paid or duly provided for, from and including the Interest Accrual Date,
until but excluding the date the principal hereof has been paid or duly made
available for payment. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, subject to certain exceptions
described herein, be paid to the person in whose name this Note (or one or more
predecessor Notes) is registered at the close of business on the date 15
calendar days prior to such Interest Payment Date (whether or not a Business Day
(as defined below)) (each such date, a "Record Date"); provided, however, that
interest payable at maturity (or any redemption or repayment date) will be
payable to the person to whom the principal hereof shall be payable. As used
herein, "Business Day" means any day, other than a Saturday or Sunday, (a) that
is neither a legal holiday nor a day on which banking institutions are
authorized or required by law or regulation to close (x) in The City of New York
or (y) if this Note is denominated in a Specified Currency other than U.S.
dollars, euro or Australian dollars, in the principal financial center of the
country of the Specified Currency, or (z) if this Note is denominated in
Australian dollars, in Sydney and (b) if this Note is denominated in euro, that
is also a day on which the Trans-European Automated Real-time Gross Settlement
Express Transfer System ("TARGET") is operating (a "TARGET Settlement Day").

     Payment of the principal of this Note, any premium and the interest due at
maturity (or any redemption or repayment date), unless this Note is denominated
in a Specified Currency other than U.S. dollars and is to be paid in whole or in
part in such Specified Currency, will be made in immediately available funds
upon surrender of this Note at the office or agency of the Paying Agent, as
defined on the reverse hereof, maintained for that purpose in the Borough of
Manhattan, The City of New York, or at such other paying agency as the Issuer
may determine, in U.S. dollars. U.S. dollar payments of interest, other than
interest due at maturity or on any date of redemption or repayment, will be made
by U.S. dollar check mailed to the address of the person entitled thereto as
such address shall appear in the Note register. A holder of U.S. $10,000,000 (or
the equivalent

                                       22
<PAGE>

in a Specified Currency) or more in aggregate principal amount of Notes having
the same Interest Payment Date, the interest on which is payable in U.S.
dollars, shall be entitled to receive payments of interest, other than interest
due at maturity or on any date of redemption or repayment, by wire transfer of
immediately available funds if appropriate wire transfer instructions have been
received by the Paying Agent in writing not less than 15 calendar days prior to
the applicable Interest Payment Date.

     If this Note is denominated in a Specified Currency other than U.S.
dollars, and the holder does not elect (in whole or in part) to receive payment
in U.S. dollars pursuant to the next succeeding paragraph, payments of interest,
principal or any premium with regard to this Note will be made by wire transfer
of immediately available funds to an account maintained by the holder hereof
with a bank located outside the United States if appropriate wire transfer
instructions have been received by the Paying Agent in writing, with respect to
payments of interest, on or prior to the fifth Business Day after the applicable
Record Date and, with respect to payments of principal or any premium, at least
ten Business Days prior to the Maturity Date or any redemption or repayment
date, as the case may be; provided that, if payment of interest, principal or
any premium with regard to this Note is payable in euro, the account must be a
euro account in a country for which the euro is the lawful currency, provided,
further, that if such wire transfer instructions are not received, such payments
will be made by check payable in such Specified Currency mailed to the address
of the person entitled thereto as such address shall appear in the Note
register; and provided, further, that payment of the principal of this Note, any
premium and the interest due at maturity (or on any redemption or repayment
date) will be made upon surrender of this Note at the office or agency referred
to in the preceding paragraph.

     If so indicated on the face hereof, the holder of this Note, if denominated
in a Specified Currency other than U.S. dollars, may elect to receive all or a
portion of payments on this Note in U.S. dollars by transmitting a written
request to the Paying Agent, on or prior to the fifth Business Day after such
Record Date or at least ten Business Days prior to the Maturity Date or any
redemption or repayment date, as the case may be. Such election shall remain in
effect unless such request is revoked by written notice to the Paying Agent as
to all or a portion of payments on this Note at least five Business Days prior
to such Record Date, for payments of interest, or at least ten calendar days
prior to the Maturity Date or any redemption or repayment date, for payments of
principal, as the case may be.

     If the holder elects to receive all or a portion of payments of principal
of, premium, if any, and interest on this Note, if denominated in a Specified
Currency other than U.S. dollars, in U.S. dollars, the Exchange Rate Agent (as
defined on the reverse hereof) will convert such payments into U.S. dollars. In
the event of such an election, payment in respect of this Note will be based
upon the exchange rate as determined by the Exchange Rate Agent based on the
highest bid quotation in The City of New York received by such Exchange Rate
Agent at approximately 11:00 a.m., New York City time, on the second Business
Day preceding the applicable payment date from three recognized foreign exchange
dealers (one of which may be the Exchange Rate Agent unless such Exchange Rate
Agent is an affiliate of the Issuer) for the purchase by the quoting dealer of
the Specified Currency for U.S. dollars for settlement on such payment date in
the amount of the Specified Currency payable in the absence of such an election
to such holder and at which the applicable dealer commits to execute a contract.
If such bid quotations are not available, such

                                       23
<PAGE>

payment will be made in the Specified Currency. All currency exchange costs will
be borne by the holder of this Note by deductions from such payments.

     Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.

     Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Note shall
not be entitled to any benefit under the Senior Indenture, as defined on the
reverse hereof, or be valid or obligatory for any purpose.

                                       24
<PAGE>

     IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed.

DATED:
                                                     MORGAN STANLEY

                                                     By:
                                                         -----------------------
                                                         Name:
                                                         Title:

TRUSTEE'S CERTIFICATE
   OF AUTHENTICATION

This is one of the Notes referred
    to in the within-mentioned
    Senior Indenture.

JPMORGAN CHASE BANK,
    as Trustee

By:
    -----------------------------
    Authorized Officer

                                       25
<PAGE>

                              REVERSE OF SECURITY

     This Note is one of a duly authorized issue of Senior Global Medium-Term
Notes, Series C, having maturities more than nine months from the date of issue
(the "Notes") of the Issuer. The Notes are issuable under an Amended and
Restated Senior Indenture, dated as of May 1, 1999, between the Issuer and
JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), as Trustee
(the "Trustee," which term includes any successor trustee under the Senior
Indenture) (as may be amended or supplemented from time to time, the "Senior
Indenture"), to which Senior Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities of the Issuer, the Trustee and holders of the
Notes and the terms upon which the Notes are, and are to be, authenticated and
delivered. The Issuer has appointed JPMorgan Chase Bank at its corporate trust
office in The City of New York as the paying agent (the "Paying Agent," which
term includes any additional or successor Paying Agent appointed by the Issuer)
with respect to the Notes. The terms of individual Notes may vary with respect
to interest rates, interest rate formulas, issue dates, maturity dates, or
otherwise, all as provided in the Senior Indenture. To the extent not
inconsistent herewith, the terms of the Senior Indenture are hereby incorporated
by reference herein.

     Unless otherwise indicated on the face hereof, this Note will not be
subject to any sinking fund and, unless otherwise provided on the face hereof in
accordance with the provisions of the following two paragraphs, will not be
redeemable or subject to repayment at the option of the holder prior to
maturity.

     If so indicated on the face hereof, this Note may be redeemed in whole or
in part at the option of the Issuer on or after the Initial Redemption Date
specified on the face hereof on the terms set forth on the face hereof, together
with interest accrued and unpaid hereon to the date of redemption. If this Note
is subject to "Annual Redemption Percentage Reduction," the Initial Redemption
Percentage indicated on the face hereof will be reduced on each anniversary of
the Initial Redemption Date by the Annual Redemption Percentage Reduction
specified on the face hereof until the redemption price of this Note is 100% of
the principal amount hereof, together with interest accrued and unpaid hereon to
the date of redemption. Notice of redemption shall be mailed to the registered
holders of the Notes designated for redemption at their addresses as the same
shall appear on the Note register not less than 30 nor more than 60 calendar
days prior to the date fixed for redemption or within the Redemption Notice
Period specified on the face hereof, subject to all the conditions and
provisions of the Senior Indenture. In the event of redemption of this Note in
part only, a new Note or Notes for the amount of the unredeemed portion hereof
shall be issued in the name of the holder hereof upon the cancellation hereof.

     If so indicated on the face of this Note, this Note will be subject to
repayment at the option of the holder on the Optional Repayment Date or Dates
specified on the face hereof on the terms set forth herein. On any Optional
Repayment Date, this Note will be repayable in whole or in part in increments of
$1,000 or, if this Note is denominated in a Specified Currency other than U.S.
dollars, in increments of 1,000 units of such Specified Currency (provided that
any remaining principal amount hereof shall not be less than the minimum
authorized denomination hereof) at the option of the holder hereof at a price
equal to 100% of the principal amount to be repaid, together with interest
accrued and unpaid hereon to the date of repayment, provided that if this Note
is issued with original

                                       26
<PAGE>

issue discount, this Note will be repayable on the applicable Optional Repayment
Date or Dates at the price(s) specified on the face hereof. For this Note to be
repaid at the option of the holder hereof, the Paying Agent must receive at its
corporate trust office in the Borough of Manhattan, The City of New York, at
least 15 but not more than 30 calendar days prior to the date of repayment, (i)
this Note with the form entitled "Option to Elect Repayment" below duly
completed or (ii) a telegram, telex, facsimile transmission or a letter from a
member of a national securities exchange or the National Association of
Securities Dealers, Inc. or a commercial bank or a trust company in the United
States setting forth the name of the holder of this Note, the principal amount
hereof, the certificate number of this Note or a description of this Note's
tenor and terms, the principal amount hereof to be repaid, a statement that the
option to elect repayment is being exercised thereby and a guarantee that this
Note, together with the form entitled "Option to Elect Repayment" duly
completed, will be received by the Paying Agent not later than the fifth
Business Day after the date of such telegram, telex, facsimile transmission or
letter; provided, that such telegram, telex, facsimile transmission or letter
shall only be effective if this Note and form duly completed are received by the
Paying Agent by such fifth Business Day. Exercise of such repayment option by
the holder hereof shall be irrevocable. In the event of repayment of this Note
in part only, a new Note or Notes for the amount of the unpaid portion hereof
shall be issued in the name of the holder hereof upon the cancellation hereof.

     Interest payments on this Note will include interest accrued to but
excluding the Interest Payment Dates or the Maturity Date (or any earlier
redemption or repayment date), as the case may be. Unless otherwise provided on
the face hereof, interest payments for this Note will be computed and paid on
the basis of a 360-day year of twelve 30-day months.

     In the case where the Interest Payment Date or the Maturity Date (or any
redemption or repayment date) does not fall on a Business Day, payment of
interest, premium, if any, or principal otherwise payable on such date need not
be made on such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on the Interest Payment Date or on the
Maturity Date (or any redemption or repayment date), and no interest on such
payment shall accrue for the period from and after the Interest Payment Date or
the Maturity Date (or any redemption or repayment date) to such next succeeding
Business Day.

     This Note and all the obligations of the Issuer hereunder are direct,
unsecured obligations of the Issuer and rank without preference or priority
among themselves and pari passu with all other existing and future unsecured and
unsubordinated indebtedness of the Issuer, subject to certain statutory
exceptions in the event of liquidation upon insolvency.

     This Note, and any Note or Notes issued upon transfer or exchange hereof,
is issuable only in fully registered form, without coupons, and, if denominated
in U.S. dollars, unless otherwise stated above, is issuable only in
denominations of U.S. $1,000 and any integral multiple of U.S. $1,000 in excess
thereof. If this Note is denominated in a Specified Currency other than U.S.
dollars, then, unless a higher minimum denomination is required by applicable
law, it is issuable only in denominations of the equivalent of U.S. $1,000
(rounded to an integral multiple of 1,000 units of such Specified Currency), or
any amount in excess thereof which is an integral multiple of 1,000 units of
such Specified Currency, as determined by reference to the noon dollar buying
rate in The City of New York for cable transfers of such Specified Currency
published by the Federal

                                       27
<PAGE>

Reserve Bank of New York (the "Market Exchange Rate") on the Business Day
immediately preceding the date of issuance.

     The Trustee has been appointed registrar for the Notes, and the Trustee
will maintain at its office in The City of New York a register for the
registration and transfer of Notes. This Note may be transferred at the
aforesaid office of the Trustee by surrendering this Note for cancellation,
accompanied by a written instrument of transfer in form satisfactory to the
Issuer and the Trustee and duly executed by the registered holder hereof in
person or by the holder's attorney duly authorized in writing, and thereupon the
Trustee shall issue in the name of the transferee or transferees, in exchange
herefor, a new Note or Notes having identical terms and provisions and having a
like aggregate principal amount in authorized denominations, subject to the
terms and conditions set forth herein; provided, however, that the Trustee will
not be required (i) to register the transfer of or exchange any Note that has
been called for redemption in whole or in part, except the unredeemed portion of
Notes being redeemed in part, (ii) to register the transfer of or exchange any
Note if the holder thereof has exercised his right, if any, to require the
Issuer to repurchase such Note in whole or in part, except the portion of such
Note not required to be repurchased, or (iii) to register the transfer of or
exchange Notes to the extent and during the period so provided in the Senior
Indenture with respect to the redemption of Notes. Notes are exchangeable at
said office for other Notes of other authorized denominations of equal aggregate
principal amount having identical terms and provisions. All such exchanges and
transfers of Notes will be free of charge, but the Issuer may require payment of
a sum sufficient to cover any tax or other governmental charge in connection
therewith. All Notes surrendered for exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Issuer and the Trustee and
executed by the registered holder in person or by the holder's attorney duly
authorized in writing. The date of registration of any Note delivered upon any
exchange or transfer of Notes shall be such that no gain or loss of interest
results from such exchange or transfer.

     In case this Note shall at any time become mutilated, defaced or be
destroyed, lost or stolen and this Note or evidence of the loss, theft or
destruction thereof (together with the indemnity hereinafter referred to and
such other documents or proof as may be required in the premises) shall be
delivered to the Trustee, the Issuer in its discretion may execute a new Note of
like tenor in exchange for this Note, but, if this Note is destroyed, lost or
stolen, only upon receipt of evidence satisfactory to the Trustee and the Issuer
that this Note was destroyed or lost or stolen and, if required, upon receipt
also of indemnity satisfactory to each of them. All expenses and reasonable
charges associated with procuring such indemnity and with the preparation,
authentication and delivery of a new Note shall be borne by the owner of the
Note mutilated, defaced, destroyed, lost or stolen.

     The Senior Indenture provides that (a) if an Event of Default (as defined
in the Senior Indenture) due to the default in payment of principal of, premium,
if any, or interest on, any series of debt securities issued under the Senior
Indenture, including the series of Senior Medium-Term Notes of which this Note
forms a part, or due to the default in the performance or breach of any other
covenant or warranty of the Issuer applicable to the debt securities of such
series but not applicable to all outstanding debt securities issued under the
Senior Indenture shall have occurred and be continuing, either the Trustee or
the holders of not less than 25% in aggregate principal amount of the
outstanding debt securities of each affected series, voting as one class, by
notice in

                                       28
<PAGE>

writing to the Issuer and to the Trustee, if given by the securityholders, may
then declare the principal of all debt securities of all such series and
interest accrued thereon to be due and payable immediately and (b) if an Event
of Default due to a default in the performance of any other of the covenants or
agreements in the Senior Indenture applicable to all outstanding debt securities
issued thereunder, including this Note, or due to certain events of bankruptcy,
insolvency or reorganization of the Issuer, shall have occurred and be
continuing, either the Trustee or the holders of not less than 25% in aggregate
principal amount of all outstanding debt securities issued under the Senior
Indenture, voting as one class, by notice in writing to the Issuer and to the
Trustee, if given by the securityholders, may declare the principal of all such
debt securities and interest accrued thereon to be due and payable immediately,
but upon certain conditions such declarations may be annulled and past defaults
may be waived (except a continuing default in payment of principal or premium,
if any, or interest on such debt securities) by the holders of a majority in
aggregate principal amount of the debt securities of all affected series then
outstanding.

     If the face hereof indicates that this Note is subject to "Modified Payment
upon Acceleration or Redemption," then (i) if the principal hereof is declared
to be due and payable as described in the preceding paragraph, the amount of
principal due and payable with respect to this Note shall be limited to the
aggregate principal amount hereof multiplied by the sum of the Issue Price
specified on the face hereof (expressed as a percentage of the aggregate
principal amount) plus the original issue discount amortized from the Interest
Accrual Date to the date of declaration, which amortization shall be calculated
using the "interest method" (computed in accordance with generally accepted
accounting principles in effect on the date of declaration), (ii) for the
purpose of any vote of securityholders taken pursuant to the Senior Indenture
prior to the acceleration of payment of this Note, the principal amount hereof
shall equal the amount that would be due and payable hereon, calculated as set
forth in clause (i) above, if this Note were declared to be due and payable on
the date of any such vote and (iii) for the purpose of any vote of
securityholders taken pursuant to the Senior Indenture following the
acceleration of payment of this Note, the principal amount hereof shall equal
the amount of principal due and payable with respect to this Note, calculated as
set forth in clause (i) above.

     If the face hereof indicates that this Note is subject to "Tax Redemption
and Payment of Additional Amounts," this Note may be redeemed, as a whole, at
the option of the Issuer at any time prior to maturity, upon the giving of a
notice of redemption as described below, at a redemption price equal to 100% of
the principal amount hereof, together with accrued interest to the date fixed
for redemption (except that if this Note is subject to "Modified Payment upon
Acceleration or Redemption," such redemption price would be limited to the
aggregate principal amount hereof multiplied by the sum of the Issue Price
specified on the face hereof (expressed as a percentage of the aggregate
principal amount) plus the original issue discount amortized from the Interest
Accrual Date to the date of redemption, which amortization shall be calculated
using the "interest method" (computed in accordance with generally accepted
accounting principles in effect on the date of redemption) (the "Amortized
Amount")), if the Issuer determines that, as a result of any change in or
amendment to the laws, or any regulations or rulings promulgated thereunder, of
the United States or of any political subdivision or taxing authority thereof or
therein affecting taxation, or any change in official position regarding the
application or interpretation of such laws, regulations or rulings, which change
or amendment becomes effective on or after the Initial Offering Date hereof, the
Issuer has or will become obligated to pay Additional Amounts, as defined below,
with respect to this Note

                                       29
<PAGE>

as described below. Prior to the giving of any notice of redemption pursuant to
this paragraph, the Issuer shall deliver to the Trustee (i) a certificate
stating that the Issuer is entitled to effect such redemption and setting forth
a statement of facts showing that the conditions precedent to the right of the
Issuer to so redeem have occurred, and (ii) an opinion of independent legal
counsel satisfactory to the Trustee to such effect based on such statement of
facts; provided that no such notice of redemption shall be given earlier than 60
calendar days prior to the earliest date on which the Issuer would be obligated
to pay such Additional Amounts if a payment in respect of this Note were then
due.

     Notice of redemption will be given not less than 30 nor more than 60
calendar days prior to the date fixed for redemption or within the Redemption
Notice Period specified on the face hereof, which date and the applicable
redemption price will be specified in the notice.

     If the face hereof indicates that this Note is subject to "Tax Redemption
and Payment of Additional Amounts," the Issuer will, subject to certain
exceptions and limitations set forth below, pay such additional amounts (the
"Additional Amounts") to the holder of this Note who is a United States Alien as
may be necessary in order that every net payment of the principal of and
interest on this Note and any other amounts payable on this Note, after
withholding or deduction for or on account of any present or future tax,
assessment or governmental charge imposed upon or as a result of such payment by
the United States, or any political subdivision or taxing authority thereof or
therein, will not be less than the amount provided for in this Note to be then
due and payable. The Issuer will not, however, make any payment of Additional
Amounts to any such holder who is a United States Alien for or on account of:

          (a) any present or future tax, assessment or other governmental charge
     that would not have been so imposed but for (i) the existence of any
     present or former connection between such holder, or between a fiduciary,
     settlor, beneficiary, member or shareholder of such holder, if such holder
     is an estate, a trust, a partnership or a corporation for United States
     federal income tax purposes, and the United States, including, without
     limitation, such holder, or such fiduciary, settlor, beneficiary, member or
     shareholder, being or having been a citizen or resident thereof or being or
     having been engaged in a trade or business or present therein or having, or
     having had, a permanent establishment therein or (ii) the presentation by
     or on behalf of the holder of this Note for payment on a date more than 15
     calendar days after the date on which such payment became due and payable
     or the date on which payment thereof is duly provided for, whichever occurs
     later;

          (b) any estate, inheritance, gift, sales, transfer, excise or personal
     property tax or any similar tax, assessment or governmental charge;

          (c) any tax, assessment or other governmental charge imposed by reason
     of such holder's past or present status as a personal holding company or
     foreign personal holding company or controlled foreign corporation or
     passive foreign investment company with respect to the United States or as
     a corporation which accumulates earnings to avoid United States federal
     income tax or as a private foundation or other tax-exempt organization or a
     bank receiving interest under Section 881(c)(3)(A) of the Internal Revenue
     Code of 1986, as amended;

                                       30
<PAGE>

          (d) any tax, assessment or other governmental charge that is payable
     otherwise than by withholding or deduction from payments on or in respect
     of this Note;

          (e) any tax, assessment or other governmental charge required to be
     withheld by any Paying Agent from any payment of principal of, or interest
     on, this Note, if such payment can be made without such withholding by any
     other Paying Agent in a city in Western Europe;

          (f) any tax, assessment or other governmental charge that would not
     have been imposed but for the failure to comply with certification,
     information or other reporting requirements concerning the nationality,
     residence or identity of the holder or beneficial owner of this Note, if
     such compliance is required by statute or by regulation of the United
     States or of any political subdivision or taxing authority thereof or
     therein as a precondition to relief or exemption from such tax, assessment
     or other governmental charge;

          (g) any tax, assessment or other governmental charge imposed by reason
     of such holder's past or present status as the actual or constructive owner
     of 10% or more of the total combined voting power of all classes of stock
     entitled to vote of the Issuer or as a direct or indirect subsidiary of the
     Issuer; or

          (h) any combination of items (a), (b), (c), (d), (e), (f) or (g).

In addition, the Issuer shall not be required to make any payment of Additional
Amounts (i) to any such holder where such withholding or deduction is imposed on
a payment to an individual and is required to be made pursuant to any law
implementing or complying with, or introduced in order to conform to, any
European Union Directive on the taxation of savings; or (ii) by or on behalf of
a holder who would have been able to avoid such withholding or deduction by
presenting this Note or the relevant coupon to another Paying Agent in a member
state of the European Union. Nor shall the Issuer pay Additional Amounts with
respect to any payment on this Note to a United States Alien who is a fiduciary
or partnership or other than the sole beneficial owner of such payment to the
extent such payment would be required by the laws of the United States (or any
political subdivision thereof) to be included in the income, for tax purposes,
of a beneficiary or settlor with respect to such fiduciary or a member of such
partnership or a beneficial owner who would not have been entitled to the
Additional Amounts had such beneficiary, settlor, member or beneficial owner
been the holder of this Note.

     The Senior Indenture permits the Issuer and the Trustee, with the consent
of the holders of not less than a majority in aggregate principal amount of the
debt securities of all series issued under the Senior Indenture then outstanding
and affected (voting as one class), to execute supplemental indentures adding
any provisions to or changing in any manner the rights of the holders of each
series so affected; provided that the Issuer and the Trustee may not, without
the consent of the holder of each outstanding debt security affected thereby,
(a) extend the final maturity of any such debt security, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest
thereon, or reduce any amount payable on redemption thereof, or change the
currency of payment thereof, or modify or amend the provisions for conversion of
any currency into any other currency, or modify or amend the provisions for
conversion or exchange of the debt security for securities of the Issuer or
other entities or for other property or the cash value of the property (other

                                       31
<PAGE>

than as provided in the antidilution provisions or other similar adjustment
provisions of the debt securities or otherwise in accordance with the terms
thereof), or impair or affect the rights of any holder to institute suit for the
payment thereof or (b) reduce the aforesaid percentage in principal amount of
debt securities the consent of the holders of which is required for any such
supplemental indenture.

     Except as set forth below, if the principal of, premium, if any, or
interest on this Note is payable in a Specified Currency other than U.S. dollars
and such Specified Currency is not available to the Issuer for making payments
hereon due to the imposition of exchange controls or other circumstances beyond
the control of the Issuer or is no longer used by the government of the country
issuing such currency or for the settlement of transactions by public
institutions within the international banking community, then the Issuer will be
entitled to satisfy its obligations to the holder of this Note by making such
payments in U.S. dollars on the basis of the Market Exchange Rate on the date of
such payment or, if the Market Exchange Rate is not available on such date, as
of the most recent practicable date; provided, however, that if the euro has
been substituted for such Specified Currency, the Issuer may at its option (or
shall, if so required by applicable law) without the consent of the holder of
this Note effect the payment of principal of, premium, if any, or interest on,
any Note denominated in such Specified Currency in euro in lieu of such
Specified Currency in conformity with legally applicable measures taken pursuant
to, or by virtue of, the Treaty establishing the European Community, as amended.
Any payment made under such circumstances in U.S. dollars or euro where the
required payment is in an unavailable Specified Currency will not constitute an
Event of Default. If such Market Exchange Rate is not then available to the
Issuer or is not published for a particular Specified Currency, the Market
Exchange Rate will be based on the highest bid quotation in The City of New York
received by the Exchange Rate Agent at approximately 11:00 a.m., New York City
time, on the second Business Day preceding the date of such payment from three
recognized foreign exchange dealers (the "Exchange Dealers") for the purchase by
the quoting Exchange Dealer of the Specified Currency for U.S. dollars for
settlement on the payment date, in the aggregate amount of the Specified
Currency payable to those holders or beneficial owners of Notes and at which the
applicable Exchange Dealer commits to execute a contract. One of the Exchange
Dealers providing quotations may be the Exchange Rate Agent unless the Exchange
Rate Agent is an affiliate of the Issuer. If those bid quotations are not
available, the Exchange Rate Agent shall determine the market exchange rate at
its sole discretion.

     The "Exchange Rate Agent" shall be Morgan Stanley & Co. Incorporated,
unless otherwise indicated on the face hereof.

     All determinations referred to above made by, or on behalf of, the Issuer
or by, or on behalf of, the Exchange Rate Agent shall be at such entity's sole
discretion and shall, in the absence of manifest error, be conclusive for all
purposes and binding on holders of Notes and coupons.

     So long as this Note shall be outstanding, the Issuer will cause to be
maintained an office or agency for the payment of the principal of and premium,
if any, and interest on this Note as herein provided in the Borough of
Manhattan, The City of New York, and an office or agency in said Borough of
Manhattan for the registration, transfer and exchange as aforesaid of the Notes.
The Issuer may designate other agencies for the payment of said principal,
premium and interest at such place or places (subject to applicable laws and
regulations) as the Issuer may decide. So long as

                                       32
<PAGE>

there shall be such an agency, the Issuer shall keep the Trustee advised of the
names and locations of such agencies, if any are so designated. If any European
Union Directive on the taxation of savings comes into force, the Issuer will, to
the extent possible as a matter of law, maintain a Paying Agent in a member
state of the European Union that will not be obligated to withhold or deduct tax
pursuant to any such Directive or any law implementing or complying with, or
introduced in order to conform to, such Directive.

     With respect to moneys paid by the Issuer and held by the Trustee or any
Paying Agent for payment of the principal of or interest or premium, if any, on
any Notes that remain unclaimed at the end of two years after such principal,
interest or premium shall have become due and payable (whether at maturity or
upon call for redemption or otherwise), (i) the Trustee or such Paying Agent
shall notify the holders of such Notes that such moneys shall be repaid to the
Issuer and any person claiming such moneys shall thereafter look only to the
Issuer for payment thereof and (ii) such moneys shall be so repaid to the
Issuer. Upon such repayment all liability of the Trustee or such Paying Agent
with respect to such moneys shall thereupon cease, without, however, limiting in
any way any obligation that the Issuer may have to pay the principal of or
interest or premium, if any, on this Note as the same shall become due.

     No provision of this Note or of the Senior Indenture shall alter or impair
the obligation of the Issuer, which is absolute and unconditional, to pay the
principal of, premium, if any, and interest on this Note at the time, place, and
rate, and in the coin or currency, herein prescribed unless otherwise agreed
between the Issuer and the registered holder of this Note.

     Prior to due presentment of this Note for registration of transfer, the
Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
holder in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and none of the Issuer, the
Trustee or any such agent shall be affected by notice to the contrary.

     No recourse shall be had for the payment of the principal of, premium, if
any, or the interest on this Note, for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Senior Indenture or any
indenture supplemental thereto, against any incorporator, shareholder, officer
or director, as such, past, present or future, of the Issuer or of any successor
corporation, either directly or through the Issuer or any successor corporation,
whether by virtue of any constitution, statute or rule of law or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.

     This Note shall for all purposes be governed by, and construed in
accordance with, the laws of the State of New York.

     As used herein, the term "United States Alien" means any person who is, for
United States federal income tax purposes, (i) a nonresident alien individual,
(ii) a foreign corporation, (iii) a nonresident alien fiduciary of a foreign
estate or trust or (iv) a foreign partnership one or more of the members of
which is, for United States federal income tax purposes, a nonresident alien
individual, a foreign corporation or a nonresident alien fiduciary of a foreign
estate or trust.

                                       33
<PAGE>

     All terms used in this Note which are defined in the Senior Indenture and
not otherwise defined herein shall have the meanings assigned to them in the
Senior Indenture.

                                       34
<PAGE>

                                  ABBREVIATIONS

     The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

       TEN COM - as tenants in common
       TEN ENT - as tenants by the entireties
       JT TEN  - as joint tenants with right of survivorship and not as tenants
                 in common

     UNIF GIFT MIN ACT -________________________ Custodian _____________________
                               (Minor)                            (Cust)

     Under Uniform Gifts to Minors Act__________________________________________
                                                    (State)

     Additional abbreviations may also be used though not in the above list.

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

                                       35
<PAGE>

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto

---------------------------------------
[PLEASE INSERT SOCIAL SECURITY OR OTHER
     IDENTIFYING NUMBER OF ASSIGNEE]

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

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

--------------------------------------------------------------------------------
    [PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE]

the within Note and all rights thereunder, hereby irrevocably constituting and
appointing such person attorney to transfer such note on the books of the
Issuer, with full power of substitution in the premises.

Dated:____________________________

NOTICE:  The signature to this assignment must correspond with the name
         as written upon the face of the within Note in every particular
         without alteration or enlargement or any change whatsoever.

                                       36
<PAGE>

                            OPTION TO ELECT REPAYMENT

     The undersigned hereby irrevocably requests and instructs the Issuer to
repay the within Note (or portion thereof specified below) pursuant to its terms
at a price equal to the principal amount thereof, together with interest to the
Optional Repayment Date, to the undersigned at

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

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

--------------------------------------------------------------------------------
         (Please print or typewrite name and address of the undersigned)

     If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof which the holder elects to have repaid:
_______________ ; and specify the denomination or denominations (which shall not
be less than the minimum authorized denomination) of the Notes to be issued to
the holder for the portion of the within Note not being repaid (in the absence
of any such specification, one such Note will be issued for the portion not
being repaid): _________________.

Dated:___________________________   ____________________________________________
                                    NOTICE: The signature on this Option to
                                    Elect Repayment must correspond with the
                                    name as written upon the face of the within
                                    instrument in every particular without
                                    alteration or enlargement.

                                       37<PAGE>

                                                                   EXHIBIT 10.12

                                                                  EXECUTION COPY
--------------------------------------------------------------------------------

                            STOCK PURCHASE AGREEMENT

                                 by and between

                       MACQUARIE INVESTMENT HOLDINGS, INC.

                           EXECUTIVE AIR SUPPORT, INC.

                                       and

                                THE SHAREHOLDERS
                                       OF
                           EXECUTIVE AIR SUPPORT, INC.

                                   Dated as of

                                 April 28, 2004

--------------------------------------------------------------------------------
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                 PAGE
                                                                                                 ----
<S>                                                                                              <C>
ARTICLE 1 PURCHASE AND SALE..................................................................       1
         1.1      Agreement to Sell and Purchase.............................................       1
         1.2      Purchase Price.............................................................       1
         1.3      Adjustments to Purchase Price..............................................       2
         1.4      Payment of Purchase Price..................................................       3
         1.5      The Closing................................................................       5
         1.6      Conduct of Closing.........................................................       5
         1.7      Net Working Capital Determination..........................................       6
         1.8      Cash and Cash Equivalents Determination....................................       8
         1.9      Shareholder Representative.................................................       9

ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF EACH SHAREHOLDER.................................      10
         2.1      Authority Relative to the Agreement........................................      10
         2.2      Title to Stock.............................................................      10
         2.3      Shareholder Authorization; Absence of Breach; Consents.....................      10

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS.................................      11
         3.1      Qualification..............................................................      11
         3.2      Authorization..............................................................      11
         3.3      No Violations..............................................................      11
         3.4      Consents and Approvals.....................................................      12
         3.5      Capitalization.............................................................      12
         3.6      Subsidiaries...............................................................      12
         3.7      Interests in Other Entities................................................      13
         3.8      Compliance with Law........................................................      13
         3.9      Litigation.................................................................      13
         3.10     Insurance..................................................................      14
         3.11     Financial Statements.......................................................      14
         3.12     Accounts Receivable........................................................      14
         3.13     Inventory..................................................................      14
         3.14     No Undisclosed Liabilities.................................................      14
         3.15     Powers of Attorney.........................................................      15
         3.16     Contracts..................................................................      15
         3.17     Bank Accounts, Etc.........................................................      16
         3.18     Employees; Employee Benefit Plans..........................................      16
         3.19     Labor Matters..............................................................      19
         3.20     Property...................................................................      21
         3.21     Taxes......................................................................      23
         3.22     Environmental Matters......................................................      25
         3.23     Permits....................................................................      27
         3.24     Transactions with Affiliates...............................................      27
         3.25     Intellectual Property......................................................      28
         3.26     Absence of Certain Changes or Events.......................................      28
</TABLE>

                                       i

<PAGE>

<TABLE>
<S>                                                                                                <C>
         3.27     Brokerage..................................................................      30
         3.28     Fuel Flowage...............................................................      30

ARTICLE 4 REPRESENTATION AND WARRANTIES OF PURCHASER.........................................      30
         4.1      Organization...............................................................      30
         4.2      Authorization..............................................................      30
         4.3      No Violations..............................................................      31
         4.4      Brokerage..................................................................      31

ARTICLE 5 OTHER OBLIGATIONS..................................................................      31
         5.1      Conduct of Business Pending Closing........................................      31
         5.2      Access, Information and Documents..........................................      33
         5.3      Acquisition Proposals......................................................      33
         5.4      HSR Filing; Further Assurances.............................................      33

ARTICLE 6 CONDITIONS TO CLOSING; TERMINATION.................................................      34
         6.1      Conditions Precedent to Obligations of Purchaser...........................      34
         6.2      Conditions Precedent to the Obligations of the Shareholders................      37
         6.3      Termination................................................................      38

ARTICLE 7 CERTAIN ADDITIONAL COVENANTS.......................................................      39
         7.1      Costs, Expenses............................................................      39
         7.2      Public Announcement........................................................      39
         7.3      Mutual Covenants...........................................................      39
         7.4      Tax Matters................................................................      39
         7.5      Indemnification of Directors and Officers..................................      40
         7.6      Shareholder Agreement......................................................      41
         7.7      Subsequent Transaction.....................................................      41
         7.8      Updating of Disclosure Schedules...........................................      41
         7.9      Atlantic Indemnification Claim.............................................      41
         7.10     Additional Covenant of Certain Shareholders................................      42

ARTICLE 8 SURVIVAL/INDEMNIFICATION...........................................................      42
         8.1      Nature and Survival of Representations and Agreements......................      42
         8.2      Indemnification by Shareholders............................................      42
         8.3      Indemnification by Purchaser...............................................      45
         8.4      Indemnity Procedures.......................................................      45
         8.5      Exclusive Remedy...........................................................      47
         8.6      Adjustments to Purchase Price..............................................      47

ARTICLE 9 MISCELLANEOUS......................................................................      47
         9.1      Entire Agreement...........................................................      47
         9.2      Notices....................................................................      47
         9.3      Successors and Assigns.....................................................      48
         9.4      Arbitration................................................................      48
         9.5      Headings; Interpretation...................................................      49
         9.6      Knowledge..................................................................      49
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>                                                                                       <C>
9.7      Further Assurances.........................................................      49
9.8      Amendment and Waiver.......................................................      49
9.9      No Other Beneficiaries.....................................................      50
9.10     Governing Law..............................................................      50
9.11     Schedules..................................................................      50
9.12     Additional Matters Regarding Canterbury Warrant............................      50
9.13     Counterparts...............................................................      50
</TABLE>

                                      iii

<PAGE>

                                LIST OF EXHIBITS

Exhibit A    List of Shareholders
Exhibit B    Escrow Agreement
Exhibit C    Form of Cancellation Agreement
Exhibit D    Form of Opinion of Shareholders Counsel
Exhibit E    Form of Shareholder Release
Exhibit F    Form of Opinion of Purchaser Counsel

                                       iv

<PAGE>

                                LIST OF SCHEDULES

Schedule 1.3                     Excluded Funded Indebtedness
Schedule 1.7                     Working Capital Determination
Schedule 3.1                     Subsidiaries
Schedule 3.3                     No Violations/Third Party Consents
Schedule 3.4                     Governmental Consents
Schedule 3.5                     Shareholders/Options/Warrants
Schedule 3.6                     Subsidiaries
Schedule 3.7                     Interests in Other Entities
Schedule 3.8                     Compliance with Law
Schedule 3.9                     Litigation
Schedule 3.10                    Insurance
Schedule 3.11(a)                 Financial Statements
Schedule 3.11(b)                 Funded Indebtedness
Schedule 3.12                    Accounts Receivable
Schedule 3.13                    Inventory
Schedule 3.14                    Undisclosed Liabilities
Schedule 3.15                    Powers of Attorney
Schedule 3.16                    Contracts
Schedule 3.16(b)(i)              FBO Leases
Schedule 3.16(b)(ii)             Terms/Renewal Periods of FBO Leases
Schedule 3.17                    Bank Accounts
Schedule 3.18(a)                 Employees
Schedule 3.18(b)                 Benefit Plans
Schedule 3.18(c)(i) and (ii)     Qualified Plans
Schedule 3.18(c) (vii)           Multiemployer Plans
Schedule 3.18(d)                 Retiree Benefits
Schedule 3.18(e)                 Bonus Compensation
Schedule 3.19                    Labor Matters
Schedule 3.20                    Property
Schedule 3.21                    Taxes
Schedule 3.22                    Environmental Matters
Schedule 3.23                    Permits
Schedule 3.24                    Transactions with Affiliates
Schedule 3.25                    Intellectual Property
Schedule 3.26                    Absence of Certain Changes
Schedule 3.28                    Fuel Flowage Statements
Schedule 6.1(m)                  Estoppel Letters
Schedule 8.2(b)(ii)              Certain Indemnification Matters
Schedule 9.6                     Certain EAS Individuals

                                       v

<PAGE>

                             TABLE OF DEFINED TERMS

<TABLE>
<CAPTION>
TERM                                                                  PAGE
----                                                                  ----
<S>                                                                   <C>
Accounting Firm ................................................        7
Affiliate.......................................................       27
Agreement ......................................................        1
Airports .......................................................       21
Argosy..........................................................       50
Association.....................................................       48
Benefit Plans ..................................................       17
Business .......................................................       11
Cancellation Agreement..........................................       12
Canterbury......................................................        1
Canterbury Warrant .............................................        1
Canterbury Warrant Shares.......................................        1
CERCLA..........................................................       25
Claims .........................................................        1
Closing.........................................................        5
Closing Certification...........................................        2
Closing Date....................................................        5
Closing Statement ..............................................        3
Code ...........................................................       17
Consents .......................................................       11
Contracts ......................................................       15
Convertible Notes ..............................................       36
Damages.........................................................       43
Disbursement Agent..............................................        3
Disbursement Fund ..............................................        3
Effective Time .................................................        5
Environmental Laws .............................................       26
Environmental Notices...........................................       26
ERISA ..........................................................       16
ERISA Affiliate ................................................       17
Escrow Agent....................................................        3
Escrow Agreement................................................        3
Escrow Funds....................................................        3
Executive.......................................................        1
Executive Balance Sheet.........................................       14
FAA.............................................................       13
FBO Leases......................................................       15
Financial Statements ...........................................       14
Funded Indebtedness.............................................        2
GAAP............................................................        6
Governmental Entity.............................................       12
Guaranteed Obligations .........................................       51
Guarantor ......................................................       51
</TABLE>

                                       vi

<PAGE>

<TABLE>
<S>                                                                    <C>
Hazardous Substances............................................       25
HSR Act.........................................................       12
Intellectual Property...........................................       27
Interim Balance Sheet Date .....................................       14
Interim Financial Statements ...................................       32
IRS ............................................................       17
Knowledge of the Shareholders ..................................       49
Leases..........................................................       20
Option Equivalent Stock.........................................        4
Options.........................................................       12
Permit..........................................................       26
Permits ........................................................       26
Permitted Liens ................................................       21
Person..........................................................       11
Purchase Agreement .............................................       51
Purchase Price..................................................        1
Purchaser.......................................................        1
Purchaser Indemnified Parties ..................................       42
Qualified Plans.................................................       17
Shareholder ....................................................        1
Shareholder Representative .....................................        9
Shareholders....................................................        1
Shareholders' Knowledge.........................................       49
Shares .........................................................        1
Subsequent Transaction .........................................       41
Tax Returns.....................................................       22
Taxes...........................................................       23
Taxing Authority................................................       22
Warrants .......................................................       12
</TABLE>

                                       vii

<PAGE>

                            STOCK PURCHASE AGREEMENT

      THIS STOCK PURCHASE AGREEMENT (the "AGREEMENT"), dated as of April 28,
2004, is made by and between Macquarie Investment Holdings, Inc., a Delaware
corporation ("PURCHASER"), Executive Air Support, Inc., a Delaware corporation
("EXECUTIVE"), and all the Shareholders of Executive (individually, a
"SHAREHOLDER" and collectively, the "SHAREHOLDERS"). The Shareholders are listed
on Exhibit A to this Agreement.

                                   Background

      The Shareholders collectively own all the outstanding shares of capital
stock of Executive (collectively, the "SHARES");

      Canterbury Mezzanine Capital II, L.P., a Shareholder of Executive
("CANTERBURY"), is the record owner of warrants to purchase 1,104,354 shares of
Common Stock of Executive (the "CANTERBURY WARRANT SHARES") pursuant to a
Warrant Agreement, dated December 20, 2000 (the "CANTERBURY WARRANT"); and

      Subject to the terms and conditions hereinafter set forth in this
Agreement, the Purchaser desires to purchase from the Shareholders, and the
Shareholders desire to sell to the Purchaser, the Shares and the Canterbury
Warrant.

                                      Terms

      In consideration of the premises and the mutual terms and covenants
contained herein, the parties hereto agree as follows:

                                   ARTICLE 1.
                                PURCHASE AND SALE

      1.1   Agreement to Sell and Purchase. Subject to the terms and conditions
of this Agreement, at the Closing, the Shareholders shall sell to Purchaser, and
Purchaser shall purchase from the Shareholders, the Shares and the Canterbury
Warrant, free and clear of any and all liens, claims, options, charges, pledges,
security interests, voting agreements or trusts, proxies, preemptive rights,
rights of first refusal, encumbrances or other restrictions (other than any
restrictions under federal and state securities laws) or interests of any kind
or nature whatsoever (collectively, "CLAIMS").

      1.2   Purchase Price. Subject to the terms and conditions of this
Agreement, Purchaser shall pay at the Closing, an aggregate cash purchase price
in the amount of Two Hundred Seventeen Million Dollars ($217,000,000) (the
"PURCHASE PRICE"); provided, however, that the Purchase Price shall be subject
to adjustment on the date of Closing as provided in Section 1.3 of this
Agreement and subject to further adjustment after the Closing as provided in
Section 1.7 and Section 1.8 of this Agreement.

<PAGE>

      1.3   Adjustments to Purchase Price.

            (a)   Adjustments on the Closing Date. The Purchase Price shall be
subject to adjustment at the Closing as follows:

                  (i)   Decreases. The Purchase Price shall be decreased as
                        follows:

                        (1)   by an amount equal to the outstanding principal
      of, and accrued interest on, the Funded Indebtedness (as defined below) as
      of the Closing Date; and

                        (2)   by an amount equal to the amount by which the Base
      Net Working Capital exceeds the Net Working Capital estimated as of the
      Closing Date pursuant to Section 1.7(c), if any.

                  (ii)  Increases. The Purchase Price shall be decreased as
                        follows:

                        (1)   by an amount equal to the amount by which the Net
      Working Capital estimated as of the Closing Date pursuant to Section
      1.7(c) exceeds Base Net Working Capital, if any;

                        (2)   by an amount equal to the amount of the Cash and
      Cash Equivalents of Executive estimated as of the Closing Date pursuant to
      Section 1.8(a); and

                        (3)   by an amount equal to all capital expenditures
      paid by Executive on or after April 1, 2004, but prior to the Closing, for
      the construction of capital improvements at its fixed base operation
      located at Midway Airport, Chicago, Illinois up to a maximum amount of Two
      Million One Hundred Fifty Thousand Dollars ($2,150,000).

            (b)   Definitions. For the purposes of this Agreement, "FUNDED
INDEBTEDNESS" shall mean the aggregate amount (including the current portions
thereof) of (i) all indebtedness for money borrowed from others (whether in the
form of direct loans or capital leases) and purchase money indebtedness of
Executive or its Subsidiaries, other than the indebtedness listed in Schedule
1.3; (ii) indebtedness of the type described in clause (i) above secured by any
lien upon property owned by either Executive or its Subsidiaries, even though
Executive or its Subsidiaries has not in any manner become liable for the
payment of such indebtedness, (iii) interest expense accrued but unpaid, and all
prepayment premiums, on or relating to any of such indebtedness, (iv)
indebtedness of the type described in clause (i) above guaranteed, directly or
indirectly, by either Executive or its Subsidiaries, and (v) any purchase money
indebtedness for premiums for insurance maintained by Executive and its
Subsidiaries to the extent the outstanding balance thereof exceeds the amortized
value of the premiums. Funded Indebtedness shall not include the letters of
credit listed in Schedule 1.3 to the extent outstanding on the Closing Date.
Reference to the "Confidentiality Agreement" shall mean the letter agreement
dated November 5, 2003, between Executive Air Support, Inc, and Macquarie
Securities (USA) Inc.

                                       2

<PAGE>

            (c)   Closing Certification. Executive shall deliver to Purchaser at
least two (2) days prior to the Closing its certification, duly executed by the
Chief Executive Officer and Chief Financial Officer of Executive, in form
acceptable to Purchaser ("CLOSING CERTIFICATION"), of (a) the amount of the
Funded Indebtedness as of the Closing, broken down by lender, accompanied by
pay-off statements or the functional equivalent thereof from all of the lenders
of the Funded Indebtedness in form reasonably acceptable to Purchaser, (b) a
list of all shareholders of Executive as of the Closing and the number of shares
of Common Stock and Series A Preferred Stock owned by each, (c) a list of all
holders of stock options and warrants of Executive and number and type of shares
of capital stock subject to each such stock option and warrant held by each
holder and (d) the amount of all capital expenditures paid by Executive on or
after April 1, 2004, but prior to Closing, for the construction of capital
improvements at its fixed base operation located at Midway Airport, Chicago,
Illinois.

      1.4   Payment of Purchase Price.

            (a)   The Purchase Price shall be payable as set forth pursuant to a
closing statement (the "CLOSING STATEMENT") in a form reasonably acceptable to
Purchaser and duly executed by the Chief Executive Officer and Chief Financial
Officer of Executive which shall (i) calculate the Purchase Price as adjusted
pursuant to Section 1.3 hereof, (ii) reflect the amounts payable with respect to
the Funded Indebtedness that were deducted from the Purchase Price pursuant to
Section 1.3(a)(i)(1) hereof, and (iii) reflect the portion of the Purchase Price
payable to each Shareholder and to each holder of stock options and warrants to
satisfy the payment obligations of Executive pursuant to the Cancellation
Agreements as defined in Section 3.5.

            (b)   Two Million Five Hundred Thousand Dollars ($2,500,000)
(together with any interest thereon, the "ESCROW FUNDS") of the Purchase Price
shall be paid to Wachovia Bank, N.A., as Escrow Agent ("ESCROW AGENT") which
shall hold and disburse the Escrow Funds pursuant to the terms of the Escrow
Agreement in the form of Exhibit B (the "ESCROW AGREEMENT"). As set forth in the
Escrow Agreement, the Escrow Funds shall be used solely for the payment of any
amounts payable to the Purchaser under Section 1.7 or 1.8 of this Agreement and
to satisfy any indemnification obligations of the Shareholders pursuant to
Section 8.2. On the first anniversary of the Closing Date, the balance of the
Escrow Funds that have not been used to pay Purchaser under Section 1.7 or 1.8
of this Agreement or to satisfy indemnification obligations of the Shareholders
pursuant to Section 8.2, less the aggregate amount of any indemnification claims
asserted by one or more Purchaser Indemnified Parties that are pending as of the
first anniversary of the Closing Date, shall be distributed in accordance with
Section 1.4(e)(iii) to the Shareholders and the stock option and warrant
holders. If, upon resolution of all such indemnification claims pending as of
such first anniversary date, there is a positive balance of Escrow Funds, such
positive balance shall be distributed in accordance with Section 1.4(e)(iii) to
the Shareholders and the stock option and warrant holders.

            (c)   The amount of the Purchase Price payable to the Shareholders
and the consideration payable to the stock option and warrant holders pursuant
to the Cancellation Agreements, as defined in Section 3.5, as shown in the
Closing Statement less the Escrow Funds (such difference being referred to as
the "DISBURSEMENT FUND") shall be paid to ABS Capital Partners III, LLC to act
as the disbursement agent for the Shareholders and the stock option and warrant
holders (the "DISBURSEMENT AGENT") by wire transfer of same day funds on the
Closing

                                       3

<PAGE>

Date to an account designated by the Disbursement Agent at least two (2)
business days prior to Closing.

                  (d)   The Disbursement Agent shall hold such fund in trust for
the Shareholders and the stock option and warrant holders in a separate account
until its application as provided herein.

                  (e)   The Disbursement Agent shall apply the Disbursement Fund
as follows:

                        (i)   The Disbursement Agent shall retain One Million
                              Dollars ($1,000,000) to be held for disbursement
                              upon the instructions of the Shareholder
                              Representative for the payment of expenses
                              incurred for or on behalf of Executive, the
                              Shareholders or the stock option and warrant
                              holders for which the Shareholders are responsible
                              pursuant to Section 7.1 of this Agreement or, if
                              not so used, for distribution to the Shareholders
                              and the stock option and warrant holders pursuant
                              to Section 1.4(e)(iii) below.

                        (ii)  Next, the holder of each share of Series A
                              Preferred Stock outstanding immediately prior to
                              the Closing shall be paid $1.81 in cash per share;
                              and

                        (iii) Next, the holders of each share of Common Stock,
                              each share of Series A Preferred Stock and each
                              share of Option Equivalent Stock (as defined in
                              Section 1.4(f) below) outstanding immediately
                              prior to the Closing shall be paid an amount per
                              share determined on a prorata per share basis in
                              the balance of the Disbursement Fund remaining
                              after the payments pursuant to Subsections (i) and
                              (ii) above. Such prorata allocation shall be
                              reflected in the Closing Certification. For the
                              purposes of this Section 1.4(e)(iii), subject to
                              Section 9.12 of this Agreement, Canterbury shall
                              be deemed to hold, in addition to any other shares
                              of capital stock of Executive owned by Canterbury,
                              a number of shares of Common Stock equal to the
                              number of shares of the Canterbury Warrant Shares
                              as if such shares were outstanding shares of
                              Common Stock and the payments made to Canterbury
                              pursuant to this Section 1.4(e)(iii) shall include
                              the consideration payable to Canterbury for the
                              purchase of the Canterbury Warrant.

            (f)   As used in this Agreement, the term "Option Equivalent Stock"
shall mean the result obtained by multiplying the total number of shares subject
to an outstanding employee stock option or outstanding warrant (other than the
Canterbury Warrant) by the Option Ratio (defined below) and rounding the result
to a whole number. For purposes of this Section: (i) the phrase "Option Ratio"
shall mean a fraction (A) the numerator of which shall be the amount calculated
by dividing the Adjusted Purchase Price by the Applicable Number of Shares and
reducing the result by $3.62, and (B) the denominator of which shall be the
Adjusted Purchase Price divided by the Applicable Number of Shares; (ii) the
phrase "Adjusted Purchase Price"

                                       4

<PAGE>

shall be Purchase Price adjusted: (A) as provided in Section 1.3 of this
Agreement, (B) by decreasing the same by the product of $1.81 times the number
of Series A Preferred Shares outstanding immediately prior to Closing, and (C)
by increasing the same by $3.62 times the total number of shares subject to an
outstanding employee stock option or outstanding warrant (other than the
Canterbury Warrant) immediately prior to Closing; and (iii) the phrase
"Applicable Number of Shares" shall mean the total of each of the following
which is outstanding immediately prior to Closing: (A) each share of Common
Stock, (B) each share of Series A Preferred Stock, and (C) the total number of
shares subject to an outstanding employee stock option or outstanding warrant
(other than the Canterbury Warrant). Option Equivalent Stock shall apply to all
the outstanding employee stock options and warrants of Executive, other than the
Canterbury Warrant.

            (g)   Any additional Purchase Price paid to the Disbursement Agent
pursuant to Section 1.7 and Section 1.8 of this Agreement shall be distributed
by the Disbursement Agent in accordance with the provisions of Section
1.4(e)(iii) above.

      1.5   The Closing. The closing of the transactions contemplated by this
Agreement (the "CLOSING") will take place on a business day selected by
Purchaser with written notice to Executive and the Shareholder Representative
that is no sooner than three (3) days and no later than five (5) days after the
day on which the last of the conditions set forth in Sections 6.1 and 6.2 (other
than those conditions which are only capable of being satisfied contemporaneous
with the Closing) is fulfilled or waived or on such other date as the parties
hereto may agree in writing (the "CLOSING DATE"), at 10:00 a.m. (local time) at
such place as the parties hereto shall mutually agree (including Closing by
facsimile transmission exchange of executed documents or signature pages
followed promptly by overnight courier of originals), and will be effective as
of the 12:01 a.m. on the Closing Date ("EFFECTIVE TIME"),

      1.6   Conduct of Closing.

            (a)   At or prior to the Closing, Executive shall deliver to
      Purchaser:

                  (i)   The original share certificates representing the Shares
                        and the original certificate representing the Canterbury
                        Warrant, all duly endorsed for transfer by the
                        respective Shareholder or with appropriate stock powers
                        with respect thereto duly endorsed by the respective
                        Shareholder;

                  (ii)  The certificates required in Section 6.1 (a) and (b)
                        hereof;

                  (iii) The opinion of counsel referred to in Section 6.1(c);

                  (iv)  The Closing Certification duly executed by the Chief
                        Executive Officer and Chief Financial Officer of
                        Executive;

                  (v)   The Escrow Agreement duly executed by the Shareholder
                        Representative, the Disbursement Agent and Executive;
                        and

                                       5

<PAGE>

                  (vi)  Any other documents and certificates contemplated by
                        Article 5 and Article 6 hereof to be delivered by or on
                        behalf of Executive, the Shareholders or the stock
                        option and warrant holders.

            (b)   At or prior to the Closing, Purchaser shall deliver to the
Shareholder Representative:

                  (i)   The certificates referred to in Section 6.2 (a) and (b)
                        hereof;

                  (ii)  The opinion of counsel referred to in Section 6.2 (c);

                  (iii) The Escrow Agreement duly executed by Purchaser; and

                  (iv)  Any other documents and certificates contemplated by
                        Article 5 and Article 6 hereof.

            (c)   At or prior to the Closing, the Purchaser shall deliver to the
holders of the Funded Indebtedness the amount reflected in the pay-off
statements or the functional equivalents thereof from such holders as necessary
to pay such indebtedness in full.

            (d)   At or prior to the Closing, the Purchaser shall deliver to the
Escrow Agent the Escrow Funds.

            (e)   At or prior to the Closing, the Purchaser shall deliver to the
Disbursement Agent the Disbursement Fund.

      1.7   Net Working Capital Determination.

            (a)   As used herein, the term "Net Working Capital" shall mean the
aggregate current assets of Executive and its Subsidiaries on a consolidated
basis (excluding all cash and cash equivalents which would otherwise be included
in current assets) minus the aggregate current liabilities of Executive and its
Subsidiaries on a consolidated basis (excluding the current portion of any
Funded Indebtedness to be paid in connection with the Closing which would
otherwise be included in current liabilities), all as determined in accordance
with generally accepted accounting principles ("GAAP") consistent with past
practice and all as determined as of the Effective Time; provided, however, that
the determination of Net Working Capital shall take into account the adjustments
and changes to current assets and current liabilities resulting from the
cancellation of the employee stock options and the warrants effective upon the
Closing and resulting from the payment of the Funded Indebtedness upon the
Closing hereunder.

            (b)   As used herein, the term "Base Net Working Capital" shall mean
a negative $2,599,500.

            (c)   At least ten (10) business days prior to Closing, Executive
shall deliver to Purchaser a reasonable estimate of Net Working Capital as of
the Effective Time, based on a balance sheet as of the last day of the most
recently ended calendar month prior to the Closing Date and containing
reasonable detail and supporting documents showing the derivation of such
estimate. Certain principles, specifications and methodologies for determining
Net Working

                                       6

<PAGE>

Capital are specified in Schedule 1.7 and shall be used for purposes of
calculating Net Working Capital.

            (d)   Within ninety (90) days after the Closing, Purchaser shall
deliver to the Shareholder Representative its determination of the actual Net
Working Capital as of the Effective Time (following the same principles,
specifications and methodologies used to determine the estimated Net Working
Capital as set forth in Schedule 1.7). Each party shall have full access to the
financial books and records pertaining to Executive and its Subsidiaries to
confirm or audit the Net Working Capital computations. Should the Shareholder
Representative disagree with Purchaser's determination of Net Working Capital,
the Shareholder Representative shall notify Purchaser within thirty (30) days
after Purchaser's delivery of its determination of Net Working Capital. If the
Shareholder Representative and Purchaser fail to agree within thirty (30) days
after Shareholder Representative's delivery of notice of disagreement on the
amount of Net Working Capital, such disagreement shall be resolved in accordance
with the procedure set forth in Section 1.7(f) which shall be the sole and
exclusive remedy for resolving accounting disputes relative to the determination
of Net Working Capital.

            (e)   The Purchase Price shall be increased or decreased based on
whether the actual Net Working Capital as of the Effective Time (determined
pursuant to Section 1.7(d)) exceeds or is less than the estimated Net Working
Capital as of such time (determined pursuant to Section 1.7(c) hereof). If the
actual Net Working Capital as of the Effective Time (determined pursuant to
Section 1.7(d)) exceeds the estimated Net Working Capital as of such time
(determined pursuant to Section 1.7(c) hereof), then the Purchase Price shall be
increased by such difference. If the actual Net Working Capital as of the
Effective Time (determined pursuant to Section 1.7(d)) is less than the
estimated Net Working Capital as of such time (determined pursuant to Section
1.7(c) hereof), then the Purchase Price shall be decreased by such shortfall.
Within five (5) business days after the final determination of the actual Net
Working Capital as of the Effective Time, any increase in the Purchase Price
shall be paid in cash by Purchaser to the Disbursement Agent, and any decrease
in the Purchase Price shall be paid in cash to Purchaser out of the Escrow Funds
by the Escrow Agent, or, if such amount is insufficient, from the Shareholders.

            (f)   In the event that the Shareholder Representative and the
Purchaser are not able to agree on the actual Net Working Capital as of the
Effective Time within thirty (30) days after the Shareholder Representative's
delivery of notice of disagreement, the Shareholder Representative and the
Purchaser shall each have the right to require that such disputed determination
be submitted to Ernst & Young, LLP, or if Ernst & Young, LLP is not available
for any reason or does not maintain its independent status, such other
independent certified public accounting firm as the Shareholder Representative
and the Purchaser may then mutually agree upon in writing (the "ACCOUNTING
FIRM") for computation or verification in accordance with the provisions of this
Agreement. The Accounting Firm shall review the matters in dispute and acting as
arbitrators shall promptly decide the proper amounts of such disputed entries
(which decision shall also include a final calculation of the actual Net Working
Capital as of the Effective Time). The submission of the disputed matter to the
Accounting Firm shall be the exclusive remedy for resolving accounting disputes
relative to the determination of Net Working Capital. The Accounting Firm's
determination shall be binding upon the Shareholder

                                       7

<PAGE>

Representative and the Purchaser. The Accounting Firm's fees and expenses shall
be borne equally by the Shareholders out of the Escrow Funds and the Purchaser.

      1.8   Cash and Cash Equivalents Determination.

            (a)   At least ten (10) business days prior to Closing, Executive
shall deliver to Purchaser a reasonable estimate of cash and cash equivalents of
Executive and its Subsidiaries as of the Effective Time containing reasonable
detail and supporting documents showing the derivation of such estimate. The
amount of cash and cash equivalents shall be determined in accordance with GAAP,
consistent with past practice.

            (b)   Within ninety (90) days after the Closing, Purchaser shall
deliver to the Shareholder Representative its determination of the actual cash
and cash equivalents of Executive and its Subsidiaries as of the Effective Time
immediately prior to the consummation of the transaction contemplated by this
Agreement. Each party shall have full access to the financial books and records
pertaining to Executive and its Subsidiaries to confirm or audit the cash and
cash equivalents computations. Should the Shareholder Representative disagree
with Purchaser's determination of cash and cash equivalents, the Shareholder
Representative shall notify Purchaser within thirty (30) days after Purchaser's
delivery of its determination of the actual cash and cash equivalents of
Executive and its Subsidiaries as of the Effective Time. If the Shareholder
Representative and Purchaser fail to agree within thirty (30) days after
Shareholder Representative's delivery of notice of disagreement on the amount of
cash and cash equivalents, such disagreement shall be resolved in accordance
with the procedure set forth in Section 1.8(d) which shall be the sole and
exclusive remedy for resolving accounting disputes relative to the determination
of cash and cash equivalents of Executive and its Subsidiaries as of the
Effective Time.

            (c)   The Purchase Price shall be increased or decreased based on
whether the actual cash and cash equivalents of Executive and its Subsidiaries
as of the Effective Time (determined pursuant to Section 1.8(b)) exceeds or is
less than the estimated cash and cash equivalents as of such time (determined
pursuant to Section 1.8(a) hereof). If the actual cash and cash equivalents of
Executive and its Subsidiaries as of the Effective Time (determined pursuant to
Section 1.8(b)) exceeds the estimated cash and cash equivalents as of such time
(determined pursuant to Section 1.8(a) hereof), the Purchase Price shall be
increased by such difference. If the actual cash and cash equivalents of
Executive and its Subsidiaries as of the Effective Time (determined pursuant to
Section 1.8(b)) is less than the estimated cash and cash equivalents as of such
time (determined pursuant to Section 1.8(a) hereof), the Purchase Price shall be
decreased by such shortfall. Within five (5) business days after the final
determination of the actual cash and cash equivalents of Executive and its
Subsidiaries as of the Effective Time, any increase in the Purchase Price shall
be paid in cash by Purchaser to the Disbursement Agent, and any decrease in the
Purchase Price shall be paid in cash to Purchaser out of the Escrow Funds by the
Escrow Agent, or, if such amount is insufficient, from the Shareholders.

            (d)   In the event that the Shareholder Representative and the
Purchaser are not able to agree on the actual cash and cash equivalents of
Executive and its Subsidiaries as of the Effective Time within thirty (30) days
after the Shareholder Representative's delivery of notice of disagreement, the
Shareholder Representative and the Purchaser shall each have the right to

                                       8

<PAGE>

require that such disputed determination be submitted to the Accounting Firm (as
determined in accordance with Section 1.7(f)) for computation or verification in
accordance with the provisions of this Agreement. The Accounting Finn shall
review the matters in dispute and acting as arbitrators shall promptly decide
the proper amounts of such disputed entries (which decision shall also include a
final calculation of the actual cash and cash equivalents of Executive and its
Subsidiaries as of the Effective Time). The submission of the disputed matter to
the Accounting Firm shall be the exclusive remedy for resolving accounting
disputes relative to the determination of the amount of cash and cash
equivalents of Executive and its Subsidiaries as of the Effective Time. The
Accounting Firm's determination shall be binding upon the Shareholder
Representative and the Purchaser. The Accounting Firm's fees and expenses shall
be borne equally by the Shareholders out of the Escrow Funds and the Purchaser.

      1.9   Shareholder Representative.

            (a)   Appointment. By execution and delivery of this Agreement, each
Shareholder, for the heirs, executors, legal representatives, successors and
assigns of each Shareholder, irrevocably constitutes and appoints ABS Capital
Partners, III, LLC (the "SHAREHOLDER REPRESENTATIVE"), as his/her/its true and
lawful agent and attorney-in-fact with full power of substitution to act in the
name, place and stead of such Shareholder with respect to all transactions
contemplated by the terms and provisions of this Agreement, and to act on behalf
of the Shareholders in any dispute, litigation or arbitration involving matters
arising as a result of or under this Agreement, and to take all actions on
behalf of the Shareholders in connection therewith.

            (b)   Authority. The appointment of the Shareholder Representative
shall be deemed coupled with an interest and shall be irrevocable, and the
Purchaser and any other person may conclusively and absolutely rely, without
inquiry, upon any action of the Shareholder Representative on behalf of the
Shareholders in all matters in which it has been granted authority pursuant to
Section 1.9(a) above. The Shareholder Representative shall act for the
Shareholders in all matters set forth in this Agreement.

            (c)   Final Decision. All actions, decisions and instructions of the
Shareholder Representative taken, made or given pursuant to the authority
granted to the Shareholder Representative pursuant to Section 1.9(a) above shall
be final, conclusive and binding upon all Shareholders and all actions,
decisions and instructions of the Shareholder Representative taken, made or
given pursuant to the authority granted to such Shareholder Representative
pursuant to Section 1.9(a) shall be conclusive and binding upon all individual
Shareholders. Purchaser, its officers, directors, employees, agents and
affiliates shall be able to rely exclusively on the instructions, decisions and
actions of the Shareholder Representative.

            (d)   Power of Attorney. The provisions of this Section are
independent and severable, shall constitute an irrevocable power of attorney,
complete with an interest and surviving death or dissolution, granted by each
Shareholder and shall be binding upon the heirs, executors, legal
representatives, successors and assigns of each Shareholder.

                                       9

<PAGE>

                                    ARTICLE 2
               REPRESENTATIONS AND WARRANTIES OF EACH SHAREHOLDER

      Each Shareholder, severally and not jointly, represents and warrants to
Purchaser as follows:

      2.1   Authority Relative to the Agreement. This Agreement has been duly
and validly executed and delivered by the Shareholder and constitutes a valid,
legal and binding agreement of the Shareholder enforceable in accordance with
its terms, subject to (i) applicable bankruptcy, insolvency, fraudulent transfer
and conveyance, moratorium reorganization, receivership and similar laws
relating to or affecting the enforcement of the rights and remedies of creditors
generally and (ii) principles of equity (regardless of whether considered and
applied in a proceeding in equity or at law). The other agreements to be
executed and delivered by the Shareholder pursuant to this Agreement will be
valid, legal and binding agreements of the Shareholder enforceable in accordance
with their respective terms when so executed and delivered by the Shareholder,
subject to (i) applicable bankruptcy, insolvency, fraudulent transfer and
conveyance, moratorium reorganization, receivership end similar laws relating to
or affecting the enforcement of the rights and remedies of creditors generally
and (ii) principles of equity (regardless of whether considered and applied in a
proceeding in equity or at law).

      2.2   Title to Stock. The Shareholder is the unconditional sole legal,
beneficial, record and equitable owner of the number of the Shares set forth
opposite the name of such Shareholder on Exhibit A and, in the case of
Canterbury, the Canterbury Warrant except as noted in Section 9.12. The
Shareholder has not granted and is not a party to any agreement granting
preemptive rights, rights of first refusal or any similar or comparable rights
with respect to the Shares (and, in the case of Canterbury, the Canterbury
Warrant except as noted in Section 9.12), except as have been waived in this
Agreement. The Shareholder is not entering into this Agreement as a trustee of
any trust. At the Closing, each Shareholder will convey to Purchaser good and
valid title to the Shares owned by the Shareholder (and, in the case of
Canterbury, the Canterbury Warrant, free and clear of any and all Claims.

      2.3   Shareholder Authorization; Absence of Breach; Consents. The
execution and delivery of this Agreement and the performance of the transactions
contemplated by this Agreement and all other instruments, agreements,
certificates and documents contemplated hereby to which the Shareholder is or
will be a party does not (i) violate any decree or judgment of any court or
governmental authority which may be applicable to the Shareholder; (ii) violate
any law, rule or regulation binding on, or any fiduciary obligation of, the
Shareholder; (iii) violate or conflict with, or result in a breach of, or
constitute a default (or an event which, with or without notice or lapse of time
or both, would constitute a default) under any of the terms, conditions, or
provisions of any material contract or other agreement, including any charter
documents or bylaws if the Shareholder is a corporation, partnership, limited
liability company or other entity, to which the Shareholder is a party, or by
which the Shareholder is bound; (iv) require the consent, approval or
authorization of any person, entity or governmental agency. The Shareholder is
not insolvent and no receiver has been appointed over any part of the
Shareholder's assets.

                                       10

<PAGE>

                                    ARTICLE 3
               REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS

      The Shareholders, jointly and severally, hereby represent and warrant to
Purchaser as follows:

      3.1   Qualification. Executive and its Subsidiaries are corporations or
limited liability companies duly organized or formed, validly existing and in
good standing under the laws of their respective states of incorporation or
formation as set forth in Schedule 3.1. Executive and its Subsidiaries have all
requisite power and authority to own and operate their businesses as conducted
as of the date hereof (collectively the "BUSINESS") and to own, operate and
lease the properties and assets owned, operated or leased by Executive or its
Subsidiaries and used in the Business. Executive and its Subsidiaries are
licensed or qualified to do business as a foreign corporation and each is in
good standing in each jurisdiction in which the properties owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except where the failure to be qualified
would not be material to Executive or its Subsidiaries as a whole. Executive has
heretofore made available to Purchaser complete and correct copies of the
Certificates of Incorporation, Certificates of Formation, Bylaws and Operating
Agreements or similar constituent documents, as the case may be, of Executive
and its Subsidiaries as currently in effect.

      3.2   Authorization. Executive has the full corporate power and authority
to enter into this Agreement and the execution, delivery and performance of this
Agreement have been duly authorized by all necessary corporate action on the
part of Executive. This Agreement has been duly executed and delivered by
Executive and constitutes a valid, legal and binding obligation of Executive
enforceable in accordance with its terms and conditions, subject to (i)
applicable bankruptcy, insolvency, fraudulent transfer and conveyance,
moratorium reorganization, receivership and similar laws relating to or
affecting the enforcement of the rights and remedies of creditors generally and
(ii) principles of equity (regardless of whether considered and applied in a
proceeding in equity or at law).

      3.3   No Violations. Except as set forth in Schedule 3.3 or in Schedule
3.4, the execution, delivery and performance of this Agreement by Executive will
not (a) conflict with or result in any breach of any provision of the
Certificates of Incorporation, Certificates of Formation, Bylaws or Operating
Agreements or similar organizational documents of Executive or its Subsidiaries,
(b) result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
amendment, termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any material note, bond, mortgage, indenture, lease,
license, contract, agreement or other instrument or obligation to which
Executive or its Subsidiaries are a party or by which any of them is bound or
(c) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Executive or its Subsidiaries, or their properties or assets.
Except as set forth in Schedule 3.3 or Schedule 3.4, neither Executive nor any
of its Subsidiaries is or will be required to give any notice or obtain any
consent from any person, corporation, general partnership, limited partnership,
limited liability company, proprietorship, joint venture, trust, association,
union, entity, or other form of business organization or any Governmental Entity
(as defined in Section 3.4 below) (a

                                       11

<PAGE>

"PERSON") whatsoever in connection with the execution of this Agreement and the
consummation of the transactions contemplated hereby.

      3.4   Consents and Approvals. Except as set forth in Schedule 3.4, no
consent, approval, order or authorization of or registration, declaration or
filing with or exemption (collectively, "CONSENTS") by any court, administrative
agency or commission or other governmental authority or instrumentality, whether
local, domestic or foreign (each a "GOVERNMENTAL ENTITY"), is required by or
with respect to Executive or its Subsidiaries or the Shareholders in connection
with the execution and delivery of this Agreement by Executive, or the
consummation of the transactions contemplated hereby, except for the filing of
all required documents by Purchaser and the Shareholders, and the expiration of
all applicable waiting periods, under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR ACT").

      3.5   Capitalization.

            (a)   The authorized capital stock of Executive consists of
30,000,000 shares of Common Stock, $.01 par value per share, of which 1,843,689
shares of the Common Stock are issued and outstanding; and 20,000,000 shares of
Preferred Stock, par value of $.01 per share, of which 18,508,784 have been
designated as Series A Preferred Stock and of which 18,508,784 shares of Series
A Preferred Stock are issued and outstanding. Except as set forth in Schedule
3.5, all of the issued and outstanding shares of Common Stock and Series A
Preferred Stock have been duly authorized and are validly issued, fully paid and
nonassessable and free of preemptive rights, were not issued in violation of the
terms of any agreement or other understanding binding upon Executive or any
other Person and were issued in compliance with applicable federal and state
securities or blue sky laws and regulations. Except for the Shares and the
outstanding employee stock options (the "OPTIONS") and the outstanding warrants
(the "WARRANTS") set forth in Schedule 3.5, which Options and Warrants shall be
exercised or terminated as of the Closing Date, there are not now and will not
be as of the Closing any other shares of capital stock of Executive issued or
outstanding nor, except as described in this Section, any options, warrants,
subscriptions, calls, rights, convertible securities or other agreements or
commitments obligating Executive or its Subsidiaries to issue, transfer, sell,
redeem, repurchase or otherwise acquire any share of its capital stock. There
are no outstanding or authorized stock appreciation, phantom stock, profit
participation or similar rights with respect to Executive or any of its
Subsidiaries. Each holder of Options and Warrants (other than the Canterbury
Warrant) marked with an asterisk in Schedule 3.5 has duly executed and delivered
to Executive a cancellation agreement in the form of Exhibit C (each a
"CANCELLATION AGREEMENT").

            (b)   The Shareholders owning all of the issued and outstanding
capital stock of Executive are shown on Exhibit A. Except as shown in Schedule
3.5, there are no voting trust agreements or other agreements restricting the
voting, dividend rights or disposition of any of the shares of Stock.

      3.6   Subsidiaries. Schedule 3.6 contains a complete and accurate list of
each Subsidiary of Executive and sets forth for each such Subsidiary: (a) its
name and jurisdiction of incorporation or organization, (b) its authorized
capital stock or ownership interests and (c) the number of issued and
outstanding shares of capital stock or ownership interests. Executive owns

                                       12

<PAGE>

directly or indirectly each of the outstanding shares of capital stock (or other
ownership interests having by their terms ordinary voting power to elect a
majority of directors or others performing similar functions with respect to
such Subsidiary) of each of the Subsidiaries set forth in Schedule 3.6. Each of
the outstanding shares of capital stock (or other ownership interests) of each
of Executive's Subsidiaries is duly authorized, validly issued, fully paid and
nonassessable. All of the outstanding shares of capital stock (or other
ownership interests) of each such Subsidiary is owned, directly or indirectly,
by Executive, free and clear of all liens, pledges, security interests, claims,
or other encumbrances, except as set forth in Schedule 3.6. There are not now,
and at Closing there will not be, (a) issued or outstanding (i) any shares of
capital stock or ownership interests of any of Executive's Subsidiaries other
than shares or ownership interests owned by Executive, directly or indirectly,
or (ii) any securities convertible into or exchangeable for, or any options,
warrants, calls, subscriptions or other rights (preemptive or otherwise) to
acquire, any shares of capital stock or ownership interests of any of
Executive's Subsidiaries, or (b) any agreements or contractual commitments
obligating Executive, or restricting Executive's rights, to transfer, sell, or
vote, the capital stock or ownership interests of Executive's Subsidiaries owned
by it, directly or indirectly. For purposes of this Agreement, the definition of
"Subsidiaries" shall mean with respect to any Person, any corporation,
partnership, joint venture or other legal entity of which such Person (either
alone or through or together with any other Subsidiary), owns, directly or
indirectly, at least 50% of the stock or other equity interests the holders of
which are generally entitled to vote for the election of the board of directors
or other governing body of such corporation or other legal entity.

      3.7   Interests in Other Entities. Except as set forth in Schedule 3.7,
neither Executive nor any of its Subsidiaries, directly or indirectly, has any
(a) interest in the outstanding stock or ownership interests of any corporation
or in any partnership, joint venture or other entity, other than the
Subsidiaries, or (b) agreement, understanding, contract or commitment relating
to an interest in any such entity or Executive's or any of its Subsidiaries'
investment therein.

      3.8   Compliance with Law. Except as set forth in Schedule 3.8, each of
Executive and its Subsidiaries has complied in all material respects with (or,
in these instances occurring and relating solely to periods prior to the
Effective Date in which Executive or its Subsidiaries has not complied, such
compliance has been achieved, waived or resolved prior to the Effective Time
with no continuing liability or obligation of Executive or any of its
Subsidiaries), and is in compliance in all material respects with, all federal,
state, county, and local laws, regulations, and orders that are applicable to
Executive's and its Subsidiaries' Business, including, but not limited to, the
rules and regulations of the Federal Aviation Administration (the "FAA"), and
the states and municipalities in which Executive and its Subsidiaries are
located, and has timely filed with the proper authorities all material
statements and reports required by the laws, regulations, and orders to which
Executive, its Subsidiaries and their respective Businesses are subject.

      3.9   Litigation. Except as described in Schedule 3.9, Executive and its
Subsidiaries have received no notice of any litigation, claim, action, suit,
proceeding or governmental investigation pending and there is no pending, or, to
the Shareholders' Knowledge, threatened litigation, claim, action, suit,
proceeding or governmental investigation against Executive or its Subsidiaries.
Executive and its Subsidiaries are not in violation of any material term of any
judgment decree, injunction or order outstanding against them.

                                       13

<PAGE>

      3.10  Insurance.

            (a)   Each of Executive and its Subsidiaries maintains insurance
with respect to the Business, and Executive and its Subsidiaries are in
compliance with all requirements and provisions thereof and have not failed to
give any notice or present any claim under any such policy in a timely fashion
or in the manner or detail required by the policy.

            (b)   True and correct copies of all insurance policies relating to
such coverage have been made available by Executive to Purchaser. All such
policies are in full force and effect and no notice of cancellation has been
given to or received by Executive or any of its Subsidiaries with respect to any
of its insurance policies and no such policy permitted to lapse, and, except as
set forth in Schedule 3.10, no such policies are subject to any retroactive rate
or audit adjustments or coinsurance arrangements.

      3.11  Financial Statements.

            (a)   Attached hereto as Schedule 3.11 (a) are true and complete
copies of (i) the audited consolidated balance sheets of Executive and its
Subsidiaries as of December 31, 2001, 2002 and 2003 and the related statements
of operations and cash flow for each of the fiscal years in the three
fiscal-year period ending December 31, 2003 and (ii) the unaudited consolidated
balance sheet and statements of income, changes in stockholders' equity and cash
flow of Executive and its Subsidiaries (the "EXECUTIVE BALANCE SHEET") as of and
for the two (2) month period ended February 29, 2004 (the "INTERIM BALANCE SHEET
DATE") for Executive and its Subsidiaries (collectively, including the notes
thereto, the "FINANCIAL STATEMENTS"). The Financial Statements have been
prepared in accordance with the books and records of Executive and its
Subsidiaries and present fairly the financial position and the results of
operations and cash flows of Executive and its Subsidiaries as of the dates or
for the periods set forth therein. The Financial Statements have been prepared
in accordance with GAAP, consistently applied.

            (b)   Schedule 3.11(b) includes a list of all Funded Indebtedness as
of the date hereof.

      3.12  Accounts Receivable. Except as set forth in Schedule 3.12, each of
Executive's and its Subsidiaries' accounts receivable arose, and all accounts
receivable that will be outstanding as of the Closing Date shall have arisen,
from bona fide transactions in the ordinary course of business. The reserve for
accounts receivables set forth in the Executive Balance Sheet have been
established consistently with Executive's and its Subsidiaries' historical
accounting practice.

      3.13  Inventory. Except as set forth in Schedule 3.13, Executive's and its
Subsidiaries' inventory consists of items of a quality and quantity usable and
salable in the ordinary course of business. The value of the inventory, which is
obsolete, of below standard quality or in excess of reasonably estimated usage
has been written-off or down and adequate reserves provided therefor. The values
at which Executive and its Subsidiaries' inventories carried in the Financial
Statements reflect the normal inventory valuation policy of Executive and its
Subsidiaries.

      3.14  No Undisclosed Liabilities. Except as set forth in Schedule 3.14 or
expressly set forth in any of the other Schedules hereto, Executive and its
Subsidiaries have no liabilities or

                                       14

<PAGE>

obligations of any nature (contingent or otherwise) required by GAAP to be
disclosed on the Executive Balance Sheet, except for the liabilities or
obligations reflected or reserved against in the Executive Balance Sheet and for
current liabilities incurred in the ordinary course of business since February
29, 2004.

      3.15  Powers of Attorney. Except as set forth in Schedule 3.15, neither
Executive nor any of its Subsidiaries or any of their directors or officers, has
any power of attorney with respect to Executive's and its Subsidiaries' Business
outstanding.

      3.16  Contracts.

            (a)   Schedule 3.16 lists all of the following Contracts
("CONTRACTS") of Executive and each of its Subsidiaries:

                  (i)   each partnership, joint venture or other similar
                        agreement or arrangement to which Executive or any of
                        its Subsidiaries is a party;

                  (ii)  each lease of real property to which Executive or one of
                        its Subsidiaries is a party, including all FBO Leases
                        (defined below), and each lease of personal property to
                        which Executive or one of its subsidiaries is a party
                        that has rent payable after the date hereof in excess of
                        $100,000;

                  (iii) each agreement of Executive and its Subsidiaries
                        relating to indebtedness for borrowed money (whether
                        incurred, assumed, guaranteed or secured by any asset);

                  (iv)  each contract containing covenants purporting to
                        materially limit the freedom of Executive or any of its
                        Subsidiaries to compete in any line of business or in
                        any geographic area;

                  (v)   each contract that is not for the purchase, sale or
                        license of goods or services in the ordinary course of
                        business consistent with past practice;

                  (vi)  each policy of insurance; and

                  (vii) each agreement which has aggregate expenditure
                        obligations of $150,000 or more to any Person.

            (b)   True and complete copies of all such Contracts have been
provided to Purchaser. True and complete copies of the lease or use agreement
with or on behalf of the airport authority relating to each fixed base operation
location of Executive and its Subsidiaries (the "FBO LEASES") are attached to
Schedule 3.16(b)(i). Each of the FBO Leases has a term and renewal period as set
forth in Schedule 3.16(b)(ii). Except as set forth in Schedule 3.16, the
Contracts are in full force and effect, are valid and binding, and enforceable
against Executive and its Subsidiaries, as applicable, and, to the Knowledge of
the Shareholders, the other parties

                                       15

<PAGE>

thereto in accordance with their respective terms. Neither Executive nor any of
its Subsidiaries, nor, to the Shareholders' Knowledge, any other party to any
such contract is in default in the performance of, or is not in compliance with,
any material provision of any such contract, including any minimum service
requirements under any FBO Lease and no event has occurred that with the passage
of time or the giving of notice or both would constitute a default by Executive
or any Subsidiary or, to the Shareholders' Knowledge, any other party under any
material provision thereof.

            (c)   Except as set forth in Schedule 3.16, the consummation of the
transactions contemplated by this Agreement would not give any party to a
Contract listed in Schedule 3.16 the right to terminate or alter the terms of
such contract.

            (d)   Set forth in Schedule 3.16 is a list of the twenty-five (25)
largest customers of Executive and its Subsidiaries by gallons of fuel purchased
in the 2003 calendar year at each facility where Executive or a Subsidiary has a
fixed base operation. Other than the customers set forth in Schedule 3.16, no
other customer accounted for more than five percent (5%) of the gallons of fuel
purchased by customers of Executive and its Subsidiaries taken as a whole in the
2003 calendar year. None of the customers listed in Schedule 3.16 has given
Executive or its Subsidiaries written notice that such customer intends to cease
or reduce its buying of goods or services from Executive or its Subsidiaries.

            (e)   Except as disclosed in Schedule 3.16, no material supplier to
or landlord of Executive or any of its Subsidiaries, including any party to the
FBO Leases, or any Governmental Entity has taken, and neither Executive nor any
of its Subsidiaries have received any written notice that, any material supplier
to or landlord of Executive or any of its Subsidiaries, including any party to
any of the FBO Leases, or any Governmental Entity contemplates taking, any steps
to terminate the business relationship of the Executive or any of its
Subsidiaries with such supplier or landlord, including any party to the FBO
Leases.

      3.17  Bank Accounts, Etc. Schedule 3.17 sets forth a true, and complete
list of all bank accounts, safe deposit boxes and lock boxes of Executive and
its Subsidiaries including, with respect to each such account and lock box,
identification of all authorized signatories.

      3.18  Employees; Employee Benefit Plans.

            (a)   Schedule 3.18(a) sets forth a complete and correct list of
each person who, as of the date set forth in Schedule 3.18(a), is employed by
Executive or any of its Subsidiaries, including each active employee and each
employee classified as inactive as a result of disability, leave of absence,
layoff, or other absence. With respect to each such person, Schedule 3.18(a)
includes the position, 2003 compensation, and the current wage rate as of the
date specified on the Schedule. Schedule 3.18(a) sets forth a listing of all
bonuses paid to management employees of Executive or any of its Subsidiaries
with respect to calendar year 2003 and all bonuses in excess of $1,000 per
individual paid to other employees of Executive or any of its Subsidiaries with
respect to calendar year 2003.

            (b)   Schedule 3.18(b) lists all deferred compensation, pension,
profit sharing, stock option, stock purchase, savings, group insurance and
retirement plans, and all vacation pay,

                                       16

<PAGE>

severance pay, incentive compensation, consulting, bonus and other employee
benefit or fringe benefit plans or arrangements, including but not limited to
all plans or programs that constitute "employee benefit plans" as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), maintained by Executive or its Subsidiaries or with respect to which
contributions are made by Executive or its Subsidiaries (including health, life
insurance and other benefit plans maintained for retirees) or with respect to
which Executive or its Subsidiaries have any current or contingent liability
(the "BENEFIT PLANS"). Schedule 3.18(b) identifies all Benefit Plans (if any)
that are "QUALIFIED PLANS". A "Qualified Plan" means those Benefit Plans
intended to qualify under Section 401(a) of the Internal Revenue Code of 1986,
as amended (the "CODE") and any trusts maintained pursuant thereto which are
intended to be exempt from federal income taxation under Section 501 of the
Code.

            (c)   With respect, as applicable, to Benefit Plans (provided,
however, that for the purposes of Sections 3.18(c)(iii) through (vi), inclusive,
and Section 3.18(g), the term Benefit Plan shall not include the I.A.M. National
Pension Fund listed on Schedule 3.18(b)):

                  (i)   Except as set forth in Schedule 3.18(c)(i), neither
                        Executive nor any of its Subsidiaries has since January
                        1, 1999, maintained or contributed to a Qualified Plan
                        and, except to the extent accrued on the Financial
                        Statements, Executive and its Subsidiaries have no
                        unpaid material liability with respect to any Qualified
                        Plan required by GAAP to be reflected on the Financial
                        Statements.

                  (ii)  Except as set forth in Schedule 3.18(c)(ii), neither
                        Executive nor any of its Subsidiaries has since January
                        1, 1999 sponsored, maintained, contributed to, had any
                        obligation to sponsor, maintain, contribute to or had
                        any material liability (whether actual, contingent with
                        respect to any of its assets, or otherwise) with respect
                        to any Benefit Plan subject to Section 302 of ERISA or
                        Section 412 of the Code or Title IV of ERISA. Except as
                        shown in Schedule 3.18(c)(ii), Executive and its
                        Subsidiaries neither have nor, since January 1, 1999,
                        have had any ERISA Affiliates other than each other. For
                        purposes of this Agreement, "ERISA AFFILIATE" shall mean
                        any person, trade or business, whether or not
                        incorporated, which together with such person would be
                        deemed, at any time from January 1, 1999 through the
                        Closing Date, to be a single employer pursuant to the
                        rules set forth in Section 4001 of ERISA or Section
                        414(b), (c), (m) or (o) of the Code.

                  (iii) True, correct and complete copies of all of the
                        following documents with respect to each Benefit Plan
                        have been provided to Purchaser: (1) all plan documents,
                        including but not limited to trust agreements, insurance
                        policies, service agreements and amendments thereto, (2)
                        the Forms 5500 and any financial statements attached
                        thereto for the last three plan years for each Benefit
                        Plan, (3) the last Internal Revenue Service ("IRS")
                        determination letters that covered the qualification of
                        each

                                       17

<PAGE>

                           Qualified Plan, and the materials submitted by
                           Executive to obtain those letters, (4) the most
                           recent summary plan descriptions and summaries of
                           material modifications, (5) copies of all
                           non-discrimination testing reports for the last three
                           plan years for each Benefit Plan and (6) all other
                           material employee communications relating to such
                           Benefit Plans. To the Knowledge of the Shareholders,
                           no officer, director, agent, representative or
                           employee of Executive has made any oral or written
                           representation which is inconsistent in any material
                           respect with the terms of any written Benefit Plan.

                  (iv)     There are no pending claims or lawsuits by, against,
                           or relating to any Benefit Plan, and no claims or
                           lawsuits have been asserted or instituted relating to
                           any Benefit Plan, against the assets of any trust or
                           other funding arrangement under any such plan, by or
                           against Executive or any of its Subsidiaries with
                           respect to any Benefit Plan or by or against the plan
                           administrator or any fiduciary of any Benefit Plan,
                           and the Shareholders do not have Knowledge of any
                           fact that could form the basis for any such claim
                           (other than routine claims for benefits) or lawsuit.

                  (v)      Each Benefit Plan has been maintained in all material
                           respects in accordance with its constituent documents
                           and with all applicable provisions of the Code, ERISA
                           and other laws, including federal and state
                           securities laws. Each Benefit Plan that is a
                           Qualified Plan meets the requirements of Section
                           401(a) of the Code.

                  (vi)     Except to the extent that it could not reasonably be
                           expected to result in a liability to Purchaser,
                           Executive or any Subsidiary, with respect to each
                           Benefit Plan, there has occurred no material
                           non-exempt "prohibited transaction" (within the
                           meaning of Section 4975 of the Code) or material
                           transaction prohibited by Section 406 of ERISA or
                           material breach of any fiduciary duty described in
                           Section 404 of ERISA and no Benefit Plan held or
                           holds any stock or other security issued by Executive
                           or its Subsidiaries.

                  (vii)    Executive and its Subsidiaries do not contribute to
                           and do not have any actual or contingent liability
                           with respect to any "multiemployer plan" as defined
                           in Section 3(37) of ERISA other than the I.A.M.
                           National Pension Fund, and have not incurred any
                           withdrawal liability with respect to any such plans
                           including but not limited to the I.A.M. National
                           Pension Fund, since January 1, 1999.

                  (viii)   Neither Executive nor any Subsidiary has ever
                           maintained, contributed to or had any actual or
                           contingent liability to a "voluntary employees
                           beneficiary association" as defined on

                                       18

<PAGE>

                           Section 501(c)(9) of the Code or any other "welfare
                           benefit fund" as defined on Section 419(e) of the
                           Code and all liability with respect to any self
                           funded or self insured Benefit Plan has been properly
                           accrued on the Financial Statements to the extent
                           required by GAAP.

                  (ix)     No matters are currently pending with respect to any
                           Benefit Plan under the Employee Plans Compliance
                           Resolution System maintained by the IRS or any
                           similar program maintained by any other governmental
                           entity.

                  (x)      All contributions, premiums or other payments due
                           under each Benefit Plan or required by applicable law
                           have been made within the time due and all unpaid
                           amounts attributable to each Benefit Plan for any
                           period prior to the Closing Date will be accrued on
                           the books and records of Executive and its
                           Subsidiaries in accordance with GAAP.

            (d)   Except as set forth in Schedule 3.18(d), no employee,
independent contractor, or former employee (or any dependents or beneficiaries
of any such person) of Executive or any of its Subsidiaries is entitled to
receive any benefits, including, without limitation, death or medical benefits
(whether or not insured) beyond retirement or other termination of employment,
other than (1) death or retirement benefits under a Qualified Plan, (2) deferred
compensation benefits accrued as liabilities on the Financial Statements or (3)
continuation coverage mandated under Section 4980B of the Code or other
applicable law.

            (e)   Except as set forth in Schedule 3.18(e), neither Executive nor
any of its Subsidiaries has declared or paid or will pay any bonus compensation
in contemplation of the transactions contemplated by this Agreement.

            (f)   Neither Executive nor its Subsidiaries are parties to any
contract, agreement, plan or arrangement requiring them to make payments to any
person that would be a "parachute payment" (within the meaning of Section 280G
of the Code) by reason of the consummation of the transactions contemplated by
this Agreement.

            (g)   Each Benefit Plan is terminable at the discretion of Executive
or a Subsidiary and without cost to such entity.

            (h)   To the Knowledge of the Shareholders and subject to the
provisions of the existing labor union agreements listed in Schedule 3.19,
Executive and its Subsidiaries may, without cost, withdraw its employees from
the I.A.M. National Pension Fund. For purposes of this paragraph, withdrawal
liability with respect to such multiemployer plan shall be treated as a cost.

      3.19  Labor Matters. Except as set forth in the correspondingly numbered
section of Schedule 3.19, with respect to employees of Executive and its
Subsidiaries:

                                       19

<PAGE>

            (a)   Executive and its Subsidiaries are and have been in material
compliance with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, including
without limitation any such laws respecting employment discrimination, workers
compensation, family and medical leave, the Immigration Reform and Control Act,
the Americans with Disabilities Act, and occupational safety and health
requirements, and have not and are not engaged in any unfair labor practice;

            (b)   There is not now, nor since January 1, 2000 has there been any
unfair labor practice complaint against Executive or any of its Subsidiaries
pending or to the Shareholders' Knowledge, threatened before the National Labor
Relations Board or any other comparable authority;

            (c)   There is not now, nor since January 1, 2000, has there been,
any labor strike, lock-out, slowdown, or work stoppage actually pending or, to
the Shareholders' Knowledge, threatened against or directly affecting Executive
or any of its Subsidiaries;

            (d)   No labor representation organization effort exists nor has
there been any such activity since January 1, 2000;

            (e)   No grievance or any arbitration proceeding arising out of or
under collective bargaining agreements is pending and, to the Shareholders'
Knowledge, no claims therefor exist or have been threatened;

            (f)   The employees of Executive and its Subsidiaries are not
represented by any labor union, and no collective bargaining agreement is
binding and in force against Executive or any of its Subsidiaries or currently
being negotiated by Executive or any of its Subsidiaries;

            (g)   Neither Executive nor its Subsidiaries is a party to an
employment agreement and, subject to the provisions of the employment agreements
listed in Schedule 3.18(b) and the labor union agreements listed in Schedule
3.19, the terms of employment of all employees of Executive and each Subsidiary
are such that their employment may be terminated at will with notice given at
any time and without liability for payment of compensation or damages;

            (h)   Since January 1, 2000, all individuals classified by Executive
and its Subsidiaries as "independent contractors" satisfy and have satisfied the
requirements of law to be so classified and Executive and its Subsidiaries have
fully and accurately reported the compensation paid to such independent
contractors on IRS Forms 1099 when required to do so; and

            (i)   No employee of Executive or any Subsidiary is currently on
leave as a result of any work related injury or accident or receiving disability
benefits under any Benefit Plan.

                                       20

<PAGE>

      3.20  Property.

            (a)   Schedule 3.20 lists all oral or written leases, including the
FBO Leases, subleases, licenses, concession agreements or other use or occupancy
agreements pursuant to which Executive or its Subsidiaries lease to or from any
other party any real property, including all renewals, extensions, modifications
or supplements to any of the foregoing or substitutions for any of the foregoing
(collectively, the "LEASES"), and, if applicable, identifies each of the
municipal airports to which they relate (collectively, the "AIRPORTS").
Executive and its Subsidiaries do not own any real property.

            (b)   Schedule 3.20 identifies, as of the date reflected thereon all
tangible personal property and assets (other than inventory) owned or leased by
Executive or its Subsidiaries. Except as set forth in Schedule 3.20, each of
Executive and its Subsidiaries has good and marketable title to all, of tangible
and intangible property and assets owned by it, free of liens except for
statutory mechanics' and materialmen's liens and liens for Taxes (as defined in
Section 3.21(b) below) not yet due and payable (such items described therein
bring referred to as "PERMITTED LIENS") of any nature whatsoever. Executive and
its Subsidiaries own or lease all assets and properties that are used in or
necessary to the operation of the Business.

            (c)   Except as set forth in Schedule 3.20:

                  (i)   All Leases are valid and in full force and effect, and
                        have not been assigned, modified, supplemented or
                        amended. Executive has provided Purchaser with true and
                        complete copies of all of the Leases and all amendments
                        thereto, and has made available to Purchaser all
                        material correspondence related thereto. Except as set
                        forth in Schedule 3.20, Executive's and its
                        Subsidiaries' interests under the Leases are held free
                        of all mortgages, liens, charges, claims, restrictions,
                        pledges, security interests, impositions, covenants,
                        conditions and other encumbrances.

                  (ii)  Executive and its Subsidiaries have received no notice
                        of threatened condemnation proceedings, lawsuits or
                        administrative actions relating to any of the real
                        property or any other matters which do or may adversely
                        effect the current use, occupancy or value thereof and
                        there an no pending or, to the Shareholders' Knowledge,
                        threatened condemnation proceedings, lawsuits or
                        administrative actions relating to any of the real
                        property or any other matters which do or may adversely
                        effect the current use, occupancy or value thereof.

                  (iii) All facilities, buildings, improvements and other
                        structures located on the leased real property and all
                        present uses and operations of the leased real property
                        and the structures by Executive and its Subsidiaries,
                        comply in all material respects to the Knowledge of the
                        Shareholders with all applicable zoning, land-use,
                        building, fire, labor, safety, subdivision and other
                        governmental

                                       21

<PAGE>

                        requirements and all deed or other title covenants or
                        restrictions applicable thereto. Neither Executive nor
                        any of its Subsidiaries has received any notice that any
                        of the leased real property or any of the structures, or
                        the use, occupancy or operation thereof by Executive or
                        its Subsidiaries, violate any governmental requirements
                        or deed or other title, covenants or restrictions,
                        except for any violations which do not have a material
                        effect.

                  (iv)  Each of Executive and its Subsidiaries has obtained all
                        approvals of governmental authorities (including
                        certificates of use and occupancy, licenses and permits)
                        required in connection with the construction, ownership,
                        use, occupation and operation of the leased real
                        property and the structures thereon, and all equipment
                        owned or used by Executive or its Subsidiaries. To the
                        Knowledge of the Shareholders, none of the leased real
                        property or any of the structures thereon are dependent
                        upon or benefit from any "nonconforming use" or similar
                        zoning classification.

                  (v)   Other than in the ordinary course of business, there are
                        no parties other than Executive or its Subsidiaries in
                        possession of any of the leased real property or any
                        portion thereof, and, other than in the ordinary course
                        of business, there are no leases, subleases, licenses,
                        concessions or other agreements, written or oral,
                        granting to any party or parties the right of use or
                        occupancy of any of the leased real property or any
                        portion thereof.

                  (vi)  To the Knowledge of the Shareholders, the legal
                        descriptions for the real property contained in the
                        Leases adequately describe the leased real property
                        subject thereto. To the Knowledge of the Shareholders,
                        all structures on the leased real property are located
                        within the boundary lines of the leased real property
                        and no structures, facilities or other improvements on
                        any parcel adjacent to any of the leased real property
                        encroach onto any of the leased real property. To the
                        Knowledge of the Shareholders, all structural,
                        mechanical and other physical systems related to the
                        leased real property are in good operating condition and
                        repair, reasonable wear and tear excepted, in all
                        material respects.

                  (vii) Neither Executive nor its Subsidiaries nor their
                        respective landlords are in default under any of the
                        Leases, nor are there any state of facts which with
                        notice, the passage of time or both would constitute a
                        default by Executive or any of its Subsidiaries under
                        any of the Leases. Neither Executive nor any of its
                        Subsidiaries has received any notice of default or claim
                        of default by any landlord under any of the Leases.

                                       22

<PAGE>

                  (viii)   Neither Executive nor any of its Subsidiaries is
                           required to make any capital expenditure under the
                           terms of the Leases.

      3.21  Taxes.

            (a)   Executive and its Subsidiaries have timely filed with the
appropriate federal, state, local or foreign governmental authorities (each a
"TAXING AUTHORITY") any and all declarations, returns, reports, estimates,
information returns, schedules, statements or other documents filed or required
to be filed with any Taxing Authority, ("TAX RETURNS") on or before the date
hereof (taking into account any extension of time obtained or allowed for filing
such Tax Returns) (and will file all such Tax Returns required to be filed after
the date hereof through the Closing Date), and such Tax Returns are (or will be)
true, correct and complete in all material respects. Executive and its
Subsidiaries have made available to Purchaser true and complete copies of all
their Tax Returns for all periods ending on or after December 31, 2000, and all
material examination reports issued since such date by Taxing Authorities with
respect to Taxes of Executive and its Subsidiaries and statements of material
Taxes assessed since such date against Executive or its Subsidiaries that were
not shown, but were required to have been shown, on Tax Returns filed by them.

            (b)   Executive and its Subsidiaries have paid in full all federal,
state and local or foreign income, estimated, payroll, withholding, excise,
sales, use, real and personal property, use and occupancy, business and
occupation, mercantile, transfer, capital stock and franchise or other taxes of
any kind whatsoever (all the foregoing taxes, including interest, additions and
penalties thereon, being hereinafter collectively called ("TAXES") required to
have been paid by Executive and its Subsidiaries (whether or not shown on any
Tax Return).

            (c)   Except as set forth in Schedule 3.21, Executive and its
Subsidiaries have made adequate provision in the Executive Balance Sheet and
will make adequate provision in the estimated statement of Net Working Capital
described in Section 1.7(c), in accordance with GAAP, for payment of all Taxes
payable by Executive and its Subsidiaries for any taxable period or portion
thereof ending on or before the effective date of such statement, and any Tax
attribute reflected on its Tax Returns is correctly reflected in all material
respects.

            (d)   Except as set forth in Schedule 3.21, none of Executive or its
Subsidiaries is delinquent in the payment of any Tax or has requested or been
granted any extension of time within which to file any Tax Return which Tax
Return has not since been filed.

            (e)   Except as set forth in Schedule 3.21, there are no outstanding
requests for rulings or determinations in respect of any Tax or Tax attribute
pending between Executive or any of its Subsidiaries and any Taxing Authority.

            (f)   None of Executive or its Subsidiaries has granted any
extension or waiver of the statute of limitations period applicable to
assessment or collection of any Tax, which period (after, giving effect to such
extension or waiver) has not expired.

            (g)   For purposes of filing income Tax Returns and calculating
income Taxes, except as set forth in Schedule 3.21, neither Executive nor its
Subsidiaries have been a member of an affiliated, consolidated, combined or
unitary group other than one of which Executive was

                                       23

<PAGE>

the common parent. Except as set forth in Schedule 3.21, Executive and
Subsidiaries are not and have not been a party to any Tax allocation, Tax
sharing or similar agreement or arrangement, have no liability for or with
respect to Taxes of another Person pursuant to Treasury Regulation Section
1.1502-6 (or any similar provision of state, local, or foreign law), as a
transferee or successor, by contract, or otherwise.

            (h)   Executive and its Subsidiaries have not received any written
notice of deficiency or assessment from any Taxing Authority with respect to
liabilities for income Taxes or any other Taxes which have not been fully paid
or finally settled. There are no mortgages, pledges, security interests,
encumbrances, liens or charges of any kind with respect to Taxes upon any of the
properties or assets of Executive or its Subsidiaries, other than liens for
Taxes not yet due and payable or that are being contested in good faith.

            (i)   Except as set forth in Schedule 3.21, there are no ongoing
audits relating to Taxes of Executive or any of its Subsidiaries or examinations
of any Tax Return which includes Executive or any of its Subsidiaries and no
notice of such audit or examination has been received by Executive or any of its
Subsidiaries in respect of any such future audit or examination.

            (j)   Executive and its Subsidiaries have not entered into nor has
there been entered into on their behalf any closing or similar agreement with
any Taxing Authority, and have not obtained any ruling or determination relating
to Taxes, that remains in effect (including, without limitation, any
requirement, incident to a change in method of accounting, to include an amount
in income for any taxable period ending after the Closing Date pursuant to
Section 481(a) of the Code or any similar provision).

            (k)   Executive and its Subsidiaries have received no notice of any
claims, actions, suits, proceedings, or investigations, and there are no pending
claims, actions, suits, proceedings, or investigations, with respect to
Executive or any of its Subsidiaries in respect of any Tax or Tax attribute.

            (l)   All monies which Executive or its Subsidiaries are required by
law to withhold from employees or other third parties have been withheld and
either timely paid to the proper governmental authority or set aside in
accounting for payment when due and accrued in the books of Executive or its
Subsidiaries. Executive and its Subsidiaries have complied with all information
reporting and backup withholding requirements.

            (m)   Except as set forth in Schedule 3.21, neither Executive nor
any Subsidiary is a party to any contract, agreement, plan or arrangement
covering any employee or former employee of either Executive or any of its
Subsidiaries that, individually or collectively, would obligate Executive or any
of its Subsidiaries to make a payment of any amount (or portion thereof) that
would not be deductible pursuant to Sections 280G, 404 or 162 of the Code;
provided that for purposes of determining compliance with this representation,
payments made after the Closing other than payments made pursuant to contracts,
agreements, plans or arrangements described above that are in effect as of the
time of the Closing shall not be taken into account, and the law in effect as of
the Closing Date shall be applied.

                                       24

<PAGE>

            (n)   Neither Executive nor its Subsidiaries has filed any consent
agreement under Section 341(f) of the Code or agreed to have Section 341(f)(2)
of the Code apply to any disposition of a subsection (f) asset (as defined in
Section 341(f)(4) of the Code) owned by any of them.

            (o)   Neither Executive nor any of its Subsidiaries is, and has not
been at any time, a "United States real property holding corporation" within the
meaning of Section 897(c)(2) of the Code.

            (p)   Neither Executive nor its Subsidiaries have taken any action
not in accordance with past practice that would have the effect of deferring a
measure of Tax from a period (or portion thereof) ending on or before the
Closing Date to a period (or portion thereof) beginning after the Closing Date.
Neither Executive nor its Subsidiaries have any deferred income or Tax Liability
arising out of any transaction, including without limitation, any (i)
intercompany transaction (as defined in Treasury Regulation Section 1.1502-13),
or (ii) the disposal of any property in a transaction accounted for under the
installment method pursuant to Section 453 of the Code, except to the extent
adequately reserved for on the Interim Balance Sheet.

            (q)   No property owned by Executive or its Subsidiaries is (i)
property required to be treated as being owned by another Person pursuant to the
provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as amended
and in effect immediately prior to the enactment of the Tax Reform Act of 1986,
(ii) "tax-exempt use property" within the meaning of Section 168(h)(1) of the
Code or (iii) is "tax-exempt bond financed property" within the meaning of
Section 168(g) of the Code.

            (r)   None of Executive or its Subsidiaries have, in the two years
prior to the date of this Agreement, constituted either a "distributing
corporation" or a "controlled corporation" within the meaning of Section
355(a)(1)(A) of the Code in a distribution qualifying (or intended to qualify)
under Section 355 of the Code (or so much of Section 356 as relates to Section
355).

      3.22  Environmental Matters.

            (a)   Except as set forth in Schedule 3.22:

                  (i)   To the Knowledge of the Shareholders, Executive and each
                        of its Subsidiaries hold, and are in compliance in all
                        material respects with, all Permits, and with all
                        applicable federal, state and local laws, regulations,
                        orders, requirements, and common law relating to
                        pollution or protection of the environment, health, or
                        safety (including, without limitation, ambient air,
                        surface water, groundwater, land, or surface or
                        subsurface strata) including, without limitation, all
                        federal, state or local laws, regulations, orders,
                        requirements, and common law relating to emissions,
                        discharges, releases or threatened releases of petroleum
                        and petroleum-derived products, pollutants,
                        contaminants, chemicals,

                                       25

<PAGE>

                        or industrial, toxic or hazardous substances or wastes
                        (collectively, "HAZARDOUS SUBSTANCES"), and all federal,
                        state or local laws, regulations, orders, requirements,
                        and common law relating to the manufacture, processing,
                        distribution, use, treatment, storage, disposal,
                        transport or handling of any Hazardous Substances
                        including, without limitation, the Comprehensive
                        Environmental Response, Compensation and Liability Act,
                        42 U.S.C. Section 9601 et seq. ("CERCLA"), the Resource
                        Conservation and Recovery Act, 42 U.S.C. Section 6901
                        et seq., the Hazardous Materials Transportation Act, 49
                        U.S.C. Section 1801 et seq., and the rules and
                        regulations promulgated thereunder, all as amended and
                        supplemented from time to time, and together with any
                        successors thereto (all the foregoing collectively,
                        "ENVIRONMENTAL LAWS"), and, to the Shareholders'
                        Knowledge, there are no circumstances that will prevent
                        such compliance in the future.

                  (ii)  Neither Executive nor any of its Subsidiaries has
                        received any written request for information, or has
                        been notified that it is a potentially responsible
                        party, under the CERCLA, or any similar state law with
                        respect to any on-site or offsite location.

                  (iii) No notice, notification, demand, request for
                        information, citation, summons, complaint or order has
                        been issued, no complaint has been filed, no penalty has
                        been assessed, no claim has been made, and no
                        investigation or review (collectively, "ENVIRONMENTAL
                        NOTICES") is pending or, to the Shareholders' Knowledge,
                        threatened by any Governmental Entity or other Person
                        with respect to any (1) alleged violation by Executive
                        or any of its Subsidiaries of any Environmental Law or
                        liability thereunder or (2) alleged failure by Executive
                        or any of its Subsidiaries to have any required Permit.

                  (iv)  Other than those listed in Schedule 3.22, to the
                        Knowledge of the Shareholders, there have been no
                        discharges, emissions, spilling, leaking, pouring,
                        emptying, or other releases of Hazardous Substances
                        which are or were reportable by Executive or its
                        Subsidiaries under any Environmental Law.

            (b)   Except as set forth in Schedule 3.22, there has been no
investigation, study, audit, test, review or other analysis (including any Phase
I environmental assessments) conducted by, for, or provided to Executive or its
Subsidiaries in relation to any real property or the Business.

            (c)   Neither Executive nor any of its Subsidiaries is subject to
any judgment, decree, order, or consent agreement relating to compliance with
any Environmental Law, or the cleanup of Hazardous Substances under any
Environmental Law.

                                       26

<PAGE>

      3.23  Permits.

            (a)   Executive and each of its Subsidiaries has obtained and holds
in full force, and Schedule 3.23 sets forth a complete and accurate list of, all
licenses, permits, certificates of authority, authorizations, approvals,
registrations, franchises, rights, orders, qualifications and similar rights or
approvals granted or issued by any governmental or regulatory authority relating
to the Business of Executive or any of its Subsidiaries (each, a "PERMIT" and
collectively, "PERMITS") that are necessary or advisable for the operation of
the Business or of any real property or equipment used therein. Executive, its
Subsidiaries and each of their employees, independent contractors or agents is
in compliance with the material terms of any such Permit.

            (b)   Neither Executive nor any of its Subsidiaries (1) hold any
Permit issued by the FAA or by the U.S. Department of Transportation or (2) own
or lease aircraft or (3) operate aircraft for a third party under a management
agreement or other similar arrangement.

            (c)   Neither Executive nor any of its Subsidiaries provide aircraft
repair or maintenance services to third parties or operate aircraft for
compensation or hire and the failure to provide aircraft repair or maintenance
service to third parties or to operate aircraft for compensation or hire does
not contravene any provision in any contract, license, permit, order, lease, or
agreement with any party and does not form the basis for termination of any
contract, license, permit, lease or agreement.

            (d)   Except as set forth in Schedule 3.23, neither the execution,
delivery and performance of this Agreement, nor the consummation of the
transactions contemplated hereby, will (i) result in or give to any person any
right of termination, non-renewal, cancellation, acceleration or modification in
or with respect to any such Permit, (ii) result in or give to any Person any
additional rights or entitlement to increased, additional, accelerated or
guaranteed payments under any such Permit or (iii) result in the creation or
imposition of any adverse claim upon Executive, any of its Subsidiaries or any
of their respective assets under the terms of any Permit.

            (e)   Except as set forth in Schedule 3.23, there is no order,
notice, rule, or directive, outstanding or, to the Knowledge of Shareholders,
any proposed order, rule notice or directive, issued by any governmental
authority against Executive or any of its Subsidiaries, nor is there now
pending, or to the Knowledge of the Shareholders, threatened, any legal or
regulatory proceeding, which could adversely affect the business or assets of
Executive or any of its Subsidiaries, or any Permit required to be obtained and
maintained by Executive or any of its Subsidiaries.

      3.24  Transactions with Affiliates. Except as set forth in Schedule 3.24
since January 1, 2000 there have been no transactions, contracts, understanding
or agreements of any kind between Executive or any of its Subsidiaries and any
of their respective Affiliates (as defined below) which require disclosure in
audited financial statements prepared in accordance with GAAP and were not
disclosed. For purposes of this Agreement, "AFFILIATE" shall mean, with respect
to any Person, a Person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with the
first mentioned Person.

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<PAGE>

      3.25  Intellectual Property. Schedule 3.25 contains an accurate and
complete list of (a) all patents, patent applications, registered trademarks and
service marks, trademark and service mark applications, registered copyrights
and copyright registration applications owned or filed by Executive or any of
its Subsidiaries and (b) all material licenses and other agreements relating to
technology, know-how, software or processes used in or otherwise necessary to
the Business of Executive or any of its Subsidiaries, whether proprietary to
Executive or any of its Subsidiaries or licenses or otherwise authorized to use
by others (the items set forth in clauses (a) and (b) above are collectively
referred to herein as the "INTELLECTUAL PROPERTY"). Except as set forth in
Schedule 3.25, the patents, trademarks and the copyrights that constitute
Intellectual Property are valid, subsisting and enforceable in accordance with
their terms and conditions (subject to (i) applicable bankruptcy, insolvency,
fraudulent transfer and conveyance, moratorium, reorganization, receivership and
similar laws relating to or affecting the enforcement of the rights and remedies
of creditors generally and (ii) principles of equity (regardless of whether
considered and applied in a proceeding in equity or at law)), and the patents,
registered trademarks and services marks, and registered copyrights are duly
recorded in the name of Executive or its Subsidiaries. Except as set forth in
Schedule 3.25, no claims have been asserted by any entity or person with respect
to challenging the ownership, validity, enforceability or use of the
Intellectual Property, nor to the Shareholders' Knowledge, is there any valid
grounds for any such bona fide claims. The use or other exploitation of such
Intellectual Property by Executive and its Subsidiaries do not infringe the
rights of any other entity or person. Schedule 3.25 sets forth a true and
complete list of all license agreements between any of Executive or any of its
Subsidiaries and third-parties with respect to the use of the Intellectual
Property. To the extent Executive or any of its Subsidiaries uses any
Intellectual Property owned by a third party, Executive or Subsidiary has a
license with such third party for the use of such Intellectual Property and, to
the Knowledge of the Shareholders, is not in default under any such license.

      3.26  Absence of Certain Changes or Events. From December 31, 2003 to the
date hereof, except as disclosed in Schedule 3.26 or in the Financial
Statements, or as otherwise expressly consented to in writing by Purchaser,
Executive's and its Subsidiaries' Business have been operated only in the
ordinary course of business (except as expressly contemplated by this
Agreement), and there has not been any:

            (a)   Change in the financial condition, assets, liabilities,
prospects, or net worth of Executive or its Subsidiaries, except changes in the
ordinary course of business, none of which, individually or in the aggregate has
been or is reasonably likely to be materially adverse to Executive or its
Subsidiaries;

            (b)   Sale, assignment or transfer, other than in the ordinary
course of business and consistent with past practice, of any assets of Executive
or any of its Subsidiaries;

            (c)   Acquisition by merger, consolidation with, purchase of
substantially all of the assets or capital stock of, or any other acquisition of
any material assets or business of, any corporation, partnership, association or
other business organization or division thereof;

            (d)   Change in accounting methods or practices by Executive or any
of its Subsidiaries, except as required by GAAP;

                                       28

<PAGE>

            (e)   Entry into, or termination, amendment or modification of, any
material contract, agreement, commitment, transaction, license, permit or other
instrument (including, without limitation, any borrowing, capital expenditure,
capital contribution or capital financing).

            (f)   Increase in salary, bonuses or other compensation payable or
to become payable to, or any advance or loan to any officer or employee of
Executive or its Subsidiaries, except in the ordinary course of business,
consistent with past practice, and neither Executive nor its Subsidiaries have
(i) entered into any Benefit Plan or Benefit Agreement, employment, severance,
or other agreements relating to compensation or fringe benefits or (ii) adopted
or changed any existing Benefit Plan or Benefit Arrangement;

            (g)   Casualty involving material assets of Executive's or any of
its Subsidiaries' Business, not covered by insurance, in excess of $15,000;

            (h)   Strike, walkout, labor trouble or any other new or continued
event, development or condition of any character which has or could materially
adversely affect the Business, properties, assets of Executive or its
Subsidiaries;

            (i)   Declaration, setting aside or payment of a dividend or other
distribution in respect of any of the capital stock of Executive or its
Subsidiaries, or any direct or indirect redemption, purchase or other
acquisition of any capital stock of Executive or its Subsidiaries or any rights
to purchase such capital stock or securities convertible into or exchangeable
for such capital stock;

            (j)   Cancellation or waiver of any right material to the operation
of Executive's or its Subsidiaries' Business or any cancellation or waiver of
any debts or claims of substantial value or any cancellation or waiver of any
debts or claims against any officer, director or employee of Executive or its
Subsidiaries;

            (k)   Payment, discharge or satisfaction of any liability or
obligation (whether accrued, absolute, contingent or otherwise) by Executive or
any of its Subsidiaries, other than the payment, discharge or satisfaction, in
the ordinary course of business, of liabilities or obligations shown or
reflected on the Financial Statements or incurred in the ordinary course of
business since the Interim Balance Sheet Date;

            (l)   Adverse change, or, to the Knowledge of the Shareholders,
threat of any adverse change, in Executive's or any of its Subsidiaries'
relations with, or any loss, or, to the Knowledge of the Shareholders, threat of
loss of, Executive's or any of its Subsidiaries' landlords, suppliers, clients
or customers, including any party to the FBO Leases or any Governmental Entity,
which, individually or in the aggregate, has been or will be materially adverse
to Executive or any of its Subsidiaries as a whole;

            (m)   Write-offs as uncollectible of any notes or accounts
receivable of Executive or its Subsidiaries or write-downs of the value of any
asset or inventory by Executive other than in immaterial amounts or in the
ordinary course of business consistent with past practice and at a rate no
greater than the during the six months ended on the Interim Balance Sheet Date;

                                       29

<PAGE>

            (n)   Creation, incurrence, assumption or guarantee by Executive or
its Subsidiaries of any obligations or liabilities (whether absolute, accrued,
contingent or otherwise and whether due or to become due), except in the
ordinary course of business, or any creation, incurrence, assumption or
guarantee by Executive or its Subsidiaries of any indebtedness for borrowed
money;

            (o)   Disposition of or failure to keep in effect any rights in, or
for the use of any patent, trademark, service mark, trade name or copyright, or
any disclosure to any person not an employee or other disposal of any trade
secret, process or know-how;

            (p)   Transaction, agreement or event (i) outside the ordinary
course of business for Executive's or any of its Subsidiaries' Business, or (ii)
inconsistent with past practice and which could have a material adverse affect
on Executive, any of its Subsidiaries or the Business; or

            (q)   Agreement by Executive to do any of the foregoing.

      3.27  Brokerage. Executive has not made any agreement or taken any other
action which might cause anyone to become entitled to a broker's fee or
commission as a result of the transactions contemplated hereby.

      3.28  Fuel Flowage. True and correct copies of Executive's and its
Subsidiaries' fuel flowage and gross receipt statements as filed with the
relevant Airport authorities for the period from January 1, 2003 through
December 31, 2003, reflecting the gallons of fuel sold by Executive and its
Subsidiaries, and revenues on which Executive and its Subsidiaries paid a
percentage fee, during such period are attached to Schedule 3.28. Such
statements accurately reflect the gallons of fuel sold and revenues earned by
Executive and its Subsidiaries during such period and were prepared in
accordance with Executive's books and records. Executive's and its Subsidiaries'
fuel sales records for each customer who purchased fuel during the period
January 1, 2004 through March 31, 2004 are also attached to Schedule 3.28. Such
fuel sales records accurately reflect the actual number of gallons sold to each
customer of Executive and its Subsidiaries during such period and the actual
prices charged by Executive and its Subsidiaries to each customer during such
period.

                                    ARTICLE 4
                   REPRESENTATION AND WARRANTIES OF PURCHASER

      Purchaser represents and warrants to Executive as follows:

      4.1   Organization. Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.

      4.2   Authorization. Purchaser has the full corporate power and authority
to enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery by Purchaser of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Purchaser. This Agreement has
been duly executed and delivered by the Purchaser and constitutes a valid, legal
and binding obligation of Purchaser, enforceable in accordance with its terms
and

                                       30

<PAGE>

conditions, subject to (i) applicable bankruptcy, insolvency, fraudulent
transfer and conveyance, moratorium reorganization, receivership and similar
laws relating to or affecting the enforcement of the rights and remedies of
creditors generally and (ii) principles of equity (regardless of whether
considered and applied in a proceeding in equity or at law).

      4.3   No Violations. The execution, delivery and performance of this
Agreement by Purchaser, and the consummation by Purchaser of the transactions
contemplated hereby, will not (a) conflict with or result in any breach of any
provision of the Certificate of Incorporation or Bylaws of Purchaser, (b) result
in a violation or breach of, or constitute (with or without due notice or lapse
of time or both) a default (or give rise to any right of amendment, termination,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, lease, license, contract, agreement or
other instrument or obligation to which Purchaser is a party or by which it is
bound, or (c) assuming compliance with the HSR Act, violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Purchaser, or its
properties or assets.

      4.4   Brokerage. Purchaser has not made any agreement or taken any other
action which might cause anyone to become entitled to a broker's fee or
commission from Executive or the Shareholders as a result of the transactions
contemplated hereunder.

                                    ARTICLE 5
                                OTHER OBLIGATIONS

      5.1   Conduct of Business Pending Closing. From and after the date hereof
and pending Closing, and unless Purchaser shall otherwise consent or agree in
writing, Executive and the Shareholders covenant and agree that:

            (a)   Ordinary Course. The Business of Executive and its
Subsidiaries will be conducted only in the ordinary course and consistent with
past practice, including billing and collection practices and payment of
accounts payable.

            (b)   Preservation of Business. Executive and the Shareholders will
use commercial best efforts to preserve the business organization of Executive
and its Subsidiaries intact, to keep available the services of the present
officers and employees of Executive and its Subsidiaries, and to preserve the
goodwill of the suppliers, customers and others having business relations with
Executive and its Subsidiaries.

            (c)   Material Transactions. Executive will not, and will not permit
its Subsidiaries to:

                  (i)   amend its certificate of incorporation, bylaws, or other
                        organizational documents;

                  (ii)  change its authorized or issued capital stock, or other
                        equity interest or issue any rights or options to
                        acquire shares of its capital stock or other equity
                        interest;

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<PAGE>

                  (iii)    enter into any contract or commitment the performance
                           of which may extend beyond the Closing, except those
                           made in the ordinary course of business, the terms of
                           which are consistent with past practice and
                           reasonable in light of current conditions;

                  (iv)     enter into any employment or consulting contract or
                           arrangement with any person which is not terminable
                           at will, without penalty or continuing obligation;

                  (v)      incur, create, assume or suffer to exist any
                           mortgage, pledge, lien, restriction, encumbrance,
                           tenancy, encroachment, covenant, condition,
                           right-of-way, easement, claim, security interest,
                           charge or other matter affecting title on any of its
                           assets or other property, except Permitted Liens;

                  (vi)     make, change or revoke any Tax election or make any
                           agreement or settlement with any Taxing Authority;

                  (vii)    incur any debt or other obligation for money
                           borrowed;

                  (viii)   loan, advance funds or make an investment in or
                           capital contribution to any person other than
                           Executive;

                  (ix)     except as expressly contemplated in this Agreement,
                           take any action or permit to occur any event
                           described in Section 3.26;

                  (x)      take any action or omit to take any action which will
                           result in a violation of any applicable law or cause
                           a breach of any agreements, contracts or commitments;
                           or

                  (xi)     enter into any agreement, or otherwise commit, to do
                           any of the foregoing.

It is expressly understood, however, that Executive, at its discretion, may
elect at any time prior to the Closing to resolve its pending claim for
indemnification under the indemnification insurance policy obtained in
connection with the acquisition of Atlantic Aviation Corporation by Executive.

            (d)   Interim Financial Statements. Executive will deliver to
Purchaser as soon as practicable after the end of each month and the end of each
calendar quarter prior to the Closing Date, commencing with the month ended
March 31, 2004, an unaudited consolidated balance sheet as of such date and
related unaudited consolidated statements of income and cash flows for the
periods then ended for Executive and its Subsidiaries (the "INTERIM FINANCIAL
STATEMENTS"), which Interim Financial Statements shall fairly present Executive
and its Subsidiaries' financial condition, results of operations and cash flows
for the periods then ended in accordance with GAAP. Notwithstanding anything to
the contrary contained in this Agreement or the Confidentiality Agreement, the
Purchaser (and its permitted assigns) shall have the right to use and disclose
the Interim Financial Statements and related documents, together with such
information about Executive and its Subsidiaries as Purchaser (or its permitted
assign)

                                       32

<PAGE>

reasonably believes is required or advisable to be included therewith, in
connection with any debt or equity financing to be done by the Purchaser or any
of its Affiliates.

            (e)   Maintenance of Employees. Executive will use, and cause each
of its Subsidiaries to use, commercially reasonable efforts to retain all
existing employees of Executive and its Subsidiaries and will promptly notify
Purchaser of the termination of employment of any existing employee or the
receipt by Executive or any of its Subsidiaries of notice of termination of
employment of any existing employee.

            (f)   Insurance. Executive and its Subsidiaries shall maintain and
shall cause its Subsidiaries to maintain in full force and effect the policies
of insurance listed in Schedule 3.16, subject only to variations required by the
ordinary operations of the Business, or else will obtain, prior to the lapse of
any such policy, substantially similar coverage with insurers of recognized
standing and approved in writing by the Purchaser which approval shall not be
unreasonably withheld or delayed. Executive shall promptly advise Purchaser in
writing of any change of insurer or type of coverage in respect of the policies
listed in Schedule 3.16.

      5.2   Access, Information and Documents. Executive and its Subsidiaries
will give to Purchaser and to Purchaser's counsel, accountants and other
representatives reasonable access during normal business hours to all of
Executive's and its Subsidiaries' properties, books, Tax Returns, contracts,
commitments, records, officers, personnel, accountants, customers and suppliers
and will furnish to Purchaser all such documents and copies of documents
(certified to be true copies if requested) and all information with respect to
the affairs of Executive and its Subsidiaries as Purchaser may reasonably
request. No investigation or receipt of information by Purchaser pursuant to
this Agreement shall diminish or obviate any of the representations, warranties,
covenants or agreements of Executive under this Agreement or the conditions to
the obligations of Purchaser under this Agreement.

      5.3   Acquisition Proposals. From the date hereof through the Closing, the
Shareholders shall not sell or otherwise transfer any of the Shares to any other
person, and neither Executive nor its Subsidiaries, or any of their Affiliates,
officers, directors, employees, representatives or agents, shall, directly or
indirectly, solicit, initiate or participate in any way in discussions or
negotiations with, or provide any information or assistance to, any person or
group of persons (other than Purchaser) concerning any acquisition of an equity
interest in, or in a merger, consolidation, liquidation, dissolution,
disposition of assets (other than in the ordinary course of business and as
specifically permitted pursuant to this Agreement) of Executive or any of its
Subsidiaries, or any disposition of any of the Shares (other than pursuant to
the transactions contemplated by this Agreement), or assist or participate in,
facilitate or encourage any effort or attempt by any other person to do or seek
to do any of the foregoing.

      5.4   HSR Filing; Further Assurances.

            (a)   Each of the parties hereto shall use commercially reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable to consummate the transactions
contemplated hereby as soon as practicable. Without limiting the foregoing,
Executive and Purchaser will as promptly as practicable, but in no event later
than ten (10) days following the execution and delivery of this Agreement, file

                                       33

<PAGE>

with the Federal Trade Commission and the Department of Justice the notification
and report form, if any, required for the transactions contemplated hereby
pursuant to the HSR Act. Any such notification and report will be in substantial
compliance with the requirements of the HSR Act. Executive and Purchaser shall
furnish to the other such necessary information and reasonable assistance as the
other may request in connection with its preparation of any filing or submission
which is necessary under the HSR Act. Executive and Purchaser shall keep each
other apprised of the status of any communications with, and inquiries or
requests for additional information from, the Federal Trade Commission and
Department of Justice. Purchaser shall be responsible for the payment of all
filing or other fees applicable to the Notification and Report Form filed
pursuant to the HSR Act.

            (b)   Each party shall promptly give the other party written notice
of the existence or occurrence of any condition which would make any
representation or warranty herein contained of either party untrue as of the
date of this Agreement or any subsequent date as if made on and as of such
subsequent date (except for those representations and warranties which address
matters only as of a particular date) or which might reasonably be expected to
prevent the consummation of the transactions contemplated hereby.

            (c)   From and after the date hereof, Executive covenants and agrees
to cooperate with the Purchaser and shall use its commercially reasonable
efforts to take, or cause to be taken, all actions and to do or cause to be
done, all things necessary or desirable, including the making of any applicable
disclosures, under applicable law and regulation as the Purchaser may reasonably
request to take or do in connection with any restructuring or equity or debt
financing done by the Purchaser or any of its Affiliates; provided, however,
that Executive shall not be obligated to incur or pay any costs or expenses in
connection with providing such cooperation or taking or doing any such actions
or things.

                                    ARTICLE 6
                       CONDITIONS TO CLOSING; TERMINATION

      6.1   Conditions Precedent to Obligations of Purchaser. The obligations of
Purchaser to proceed with the Closing under this Agreement are subject to the
fulfillment prior to or at Closing of the following conditions (any one or more
of which may be waived in whole or in part by Purchaser in Purchaser's sole
discretion):

            (a)   Bringdown of Representations and Warranties. The
representations and warranties of the Shareholders contained in this Agreement
shall be true and correct in all material respects on and as of the time of
Closing, with the same force and effect as though such representations and
warranties had been made on, as of and with reference to such time, and
Purchaser shall have received a certificate to such effect as to the
representations and warranties contained in Article 3 of this Agreement signed
by an officer of Executive and the Shareholder Representative in form reasonably
acceptable to Purchaser.

            (b)   Performance and Compliance. The Shareholders and Executive
shall have performed, in all material respects, all of the covenants and
complied, with all of the provisions required by this Agreement to be performed
or complied with by them on or before the Closing,

                                       34

<PAGE>

and Purchaser shall have received a certificate to such effect signed by an
officer of Executive and the Shareholder Representative in form reasonably
acceptable to Purchaser.

            (c)   Opinion of Counsel. Purchaser shall have received from counsel
for the Shareholders and Executive an opinion dated the date of the Closing
substantially in the form set forth in Exhibit D.

            (d)   Satisfactory Instruments. All instruments and documents
reasonably required on the part of the Shareholders or Executive to effectuate
and consummate the transactions contemplated hereby shall be delivered to
Purchaser and shall be in form and substance reasonably satisfactory to
Purchaser and its counsel. Purchaser shall have received the original
certificates representing all of the Shares and the Canterbury Warrant, duly
endorsed in blank or with duly executed stock powers attached, and certificates
of good standing of Executive and each of its Subsidiaries, issued not earlier
than ten (10) days prior to the Closing Date, by the appropriate Governmental
Entity for the jurisdiction of its incorporation or formation.

            (e)   Required Consents. All required consents and approvals of
third parties, including, without limitation, all governmental departments,
agencies, authorities and commissions to the transactions contemplated hereby
shall have been obtained and no such consent or approval shall have been
conditioned upon the modification in any material respect, cancellation or
termination of any material lease, commitment, agreement, easement, right,
license, permit or authorization of Executive or any of its Subsidiaries or
shall impose on Purchaser, Executive or any of its Subsidiaries any material
condition, provision or requirement not presently imposed upon any of them or
any condition that would be materially more restrictive after the Closing than
the conditions presently imposed on Executive or any of its Subsidiaries, as the
case may be.

            (f)   HSR. All waiting periods applicable under the HSR Act shall
have expired and no action shall have been taken or threatened by the Federal
Trade Commission or the Department of Justice seeking to prohibit the
transactions contemplated hereby.

            (g)   Litigation. No order of any court or administrative agency
shall be in effect which restrains or prohibits the transactions contemplated
hereby or which would limit or adversely affect Purchaser's ownership or control
of Executive, any or its Subsidiaries or the Business of Executive or any of its
Subsidiaries, and there shall not have been threatened, nor shall there be
pending, any action or proceeding by or before any court or governmental agency
or other regulatory or administrative agency or commission: (i) challenging any
of the transactions contemplated by this Agreement or seeking monetary relief by
reason of the consummation of such transactions; (ii) by any present or former
owner of any capital stock or equity interest in Executive of any of its
Subsidiaries (whether through a derivative action or otherwise) against
Executive or any of its Subsidiaries or any officer, director or shareholder of
Executive or any of its Subsidiaries in his or her capacity as such; or (iii)
which could reasonably be expected to have a material adverse effect on the
business or condition (financial or otherwise) of Executive or any of its
Subsidiaries.

                                       35

<PAGE>

            (h)   No Material Adverse Change. No material adverse change in its
business, operations, properties, assets, income, cash flow, liabilities,
working capital or condition (financial or otherwise) of Executive and its
Subsidiaries, as a whole, shall have occurred since December 31, 2003.

            (i)   Stock Options. As of the Closing, all of the Options and
Warrants (other than the Canterbury Warrant) shall have been cancelled pursuant
to Cancellation Agreements for the consideration specified in the Cancellation
Agreements. Simultaneously with the Closing, the holders of such Options and
Warrants shall have paid to Executive the amount of all required withholding
Taxes due as a result of the cancellation of such Options and Warrants.

            (j)   Convertible Notes. On or before ten (10) days after date of
this Agreement, either (i) Executive and the holder of that certain Subordinated
Convertible Note dated November 7, 2000 in the original principal amount of
$100,000 payable to Susan B. Sullivan and that certain Subordinated Convertible
Note dated November 7, 2000 in the original principal amount of $250,000 payable
to Timothy M. Bannon (collectively, the "CONVERTIBLE NOTES") have entered into
irrevocable agreements for the payment in full of the Convertible Notes prior to
the Effective Time or (ii) the holders of the Convertible Notes have converted
the Convertible Notes in full and executed an agreement by which the holder has
become a party to this Agreement as a Shareholder.

            (k)   Affiliate Loans. All loans by Executive or any of its
Subsidiaries to any Affiliate, if any, shall have been repaid in full, and there
shall be no outstanding debts or obligations due from any Affiliate of
Executive, Shareholder or holder of Options or Warrants to Executive or any of
its Subsidiaries.

            (l)   Releases. Each of the Shareholders shall have executed and
delivered to Purchaser a release in substantially the form of Exhibit E to this
Agreement.

            (m)   Estoppel Letters. Purchaser shall have received duly executed
estoppel letters from the third parties to the FBO Leases addressed to
Purchaser, dated not earlier than thirty (30) days prior to the Closing Date,
stating the following: (i) the copy of the contract with such third party
attached to the estoppel letter is a true, correct and complete copy of such FBO
Lease and represents the entire agreement between the third party and Executive
or its Subsidiary, as the case may be, (ii) to the knowledge of such third party
neither the third party nor Executive or its Subsidiary, as the case may be, is
in breach or default under such FBO Lease, and, to the knowledge of such third
party, no event has occurred which, with notice or the passage of time, or both,
would constitute a breach or default, or permit termination or modification of
such FBO Lease, (iii) the third party has not repudiated any provision of such
FBO Lease, (iv) to the third party's knowledge, there are no disputes or
forbearance programs in effect as to such FBO Lease, (v) if listed in Schedule
6.1(m) or if otherwise required, the consent of the third party to the
transaction contemplated by this Agreement, including any subsequent assignment
of the capital stock of Executive to any Affiliate of Purchaser, and (vi) the
third party's current notice address.

            (n)   Resignations. Purchaser shall have received the written
resignations, effective as of the Closing Date, of such of the directors and
officers of Executive and its

                                       36

<PAGE>

Subsidiaries as are designated by Purchaser to resign, which resignations shall
include releases of liability for the benefit of Executive, its Subsidiaries,
and their respective successors and assigns.

            (o)   Tax Certificates. Purchaser shall have received: (i) a
properly executed Foreign Investment and Real Property Tax Act of 1980
Notification Letter, which states that Shares do not constitute "United States
real property interests" under Section 897(c) of the Code, for purposes of
satisfying Purchaser's obligations under Treasury Regulation Section
1.1445-2(c)(3) and a form of notice to the IRS in accordance with the
requirements of Treasury Regulation Section 1.897-2(h)(2), along with written
authorization for Purchaser to deliver such notice to the IRS on behalf of
Executive; and (ii) all clearance certificates or similar types of documents
which may be required by any Taxing Authority in order to relieve the Purchaser
of any obligation to withhold any portion of the Purchase Price or any
transferee liability.

            (p)   Additional Cancellation Agreements. On or before ten (10) days
after the date of this Agreement, the Shareholders shall have delivered to the
Purchaser Cancellation Agreements in the form of Exhibit C signed by each holder
of a stock option whose name was not marked with an asterisk in Schedule 3.5.

      6.2   Conditions Precedent to the Obligations of the Shareholders. The
obligations of the Shareholders to proceed with the Closing hereunder are
subject to the fulfillment prior to or at Closing of the following conditions
(any one or more of which may be waived in whole or in part by the Shareholder
Representative in its sole discretion):

            (a)   Bringdown of Representations and Warranties. The
representations and warranties of Purchaser contained in this Agreement shall be
true and correct in all material respects on and as of the time of Closing, with
the same force and effect as though such representations and warranties had been
made on, as of and with reference to such time and Purchaser shall have
delivered to the Shareholders a certificate to such effect.

            (b)   Performance and Compliance. Purchaser shall have performed all
of the covenants and complied, in all material respects, with all the provisions
required by this Agreement to be performed or complied with by it on or before
the Closing, and Purchaser shall have delivered to the Shareholders a
certificate to such effect.

            (c)   Opinion of Counsel. The Shareholders shall have received from
counsel for Purchaser an opinion dated the date of Closing substantially in the
form set forth in Exhibit F.

            (d)   Litigation. No order of any court or administrative agency
shall be in effect which restrains or prohibits the transactions contemplated
hereby, and there shall not have been threatened, nor shall there be pending,
any action or proceeding by or before any court or governmental agency or other
regulatory or administrative agency or commission challenging any of the
transactions contemplated by this Agreement or seeking monetary relief by reason
of the consummation of such transactions.

            (e)   Satisfactory Instruments. All instruments and documents
required on the part of Purchaser to effectuate and consummate the transactions
contemplated hereby shall be delivered to the Shareholders.

                                       37

<PAGE>

            (f)   HSR. All waiting periods applicable under the HSR Act shall
have expired and no action shall have been taken or threatened by the Federal
Trade Commission or the Department of Justice seeking to prohibit the
transactions contemplated hereby.

      6.3   Termination.

            (a)   When Agreement May Be Terminated. This Agreement may be
terminated at any time prior to Closing:

                  (i)   By mutual consent of Purchaser and the Shareholder
                        Representative;

                  (ii)  By Purchaser if there has been a material
                        misrepresentation by the Shareholders or a material
                        breach by the Shareholders of any of their warranties or
                        covenants, and such breach shall not have been cured
                        within 10 days after notice thereof has been delivered
                        by Purchaser to the Shareholder Representative (or in
                        any event prior to the date of Closing), or if any of
                        the conditions specified in Section 6.1 hereof shall not
                        have been fulfilled by the time required and shall not
                        have been waived by Purchaser;

                  (iii) By the Shareholder Representative, if there has been a
                        material misrepresentation by Purchaser, or a material
                        breach by Purchaser of any of its warranties or
                        covenants, and such breach shall not have been cured
                        within 10 days after notice thereof has been delivered
                        by the Shareholder Representative to Purchaser (or in
                        any event prior to the date of Closing), or if any of
                        the conditions specified in Section 6.2 hereof shall not
                        have been fulfilled by the time required and shall not
                        have been waived by the Shareholder Representative;

                  (iv)  By Purchaser or the Shareholder Representative if
                        Closing shall not have occurred prior to August 15,
                        2004; provided, however, that Purchaser or the
                        Shareholder Representative may terminate this Agreement
                        pursuant to this subparagraph (iv) only if Closing shall
                        not have occurred by such date for a reason other than a
                        failure by such party to satisfy the conditions to
                        Closing of the other party set forth in Sections 6.1 or
                        6.2 hereof, as applicable that are within the control of
                        such party.

            (b)   Effect of Termination. In the event of termination of this
Agreement by either the Shareholder Representative or Purchaser, as provided
above, this Agreement shall forthwith terminate; provided, however, that the
obligations of the parties set forth in Sections 7.1 and 8.5 hereof shall
survive such termination; and, provided further, that no such termination will
relieve Purchaser, Executive or the Shareholders from liability for any breach
of any representation or warranty or the failure to perform any covenant or
agreement set forth in this Agreement prior to such termination, and, in the
event of such breach or failure to perform, the

                                       38

<PAGE>

parties hereto shall be entitled to exercise any and all remedies available
under law or equity in accordance with this Agreement, subject to the limitation
that, in the event such breach or failure is not the result of a knowingly or
intentional breach or failure by Executive or the Shareholders the maximum
amount of damages that Purchaser may recover as a result of any such breach by
the Shareholders or Executive shall be a total of not more than $2,000,000 and
the Purchaser shall only have recourse against Executive with respect to any
such Damages.

                                    ARTICLE 7
                          CERTAIN ADDITIONAL COVENANTS

      7.1   Costs, Expenses. Except as may be specified elsewhere in this
Agreement, Purchaser shall pay all costs and expenses, including legal fees and
the fees of any broker, relating to or resulting from Purchaser's negotiation,
performance of and compliance with this Agreement by Purchaser. The Shareholders
shall pay all costs and expenses, including legal fees and the fees of any
broker relating to or resulting from the negotiations, performance of, and
compliance with this Agreement by Executive and the Shareholders but only to the
extent that such cost and expense either has not been paid by Executive prior to
the Effective Time or is not included in the calculation of Net Working Capital
pursuant to Section 1.7 of this Agreement. For the purposes of this Section 7.1,
the consulting fee listed in Schedule 3.18(e) shall constitute an expense of the
Shareholders relating to this Agreement.

      7.2   Public Announcement. No party hereto shall make or issue, or cause
to be made or issued, any public announcement or written statement concerning
this Agreement or the transactions contemplated hereby without the prior written
consent of the other party, except to the extent required by law or in
accordance with the rules, regulations and orders of any Governmental Entity.

      7.3   Mutual Covenants. The parties mutually covenant from the date of
this Agreement to the Closing Date:

            (a)   to cooperate with each other in determining whether filings
are required to be made or consents required to be obtained in any jurisdiction
in connection with the consummation of the transactions contemplated by this
Agreement and in making or causing to be made any such filings promptly and in
seeking to obtain timely any such consents;

            (b)   to use all reasonable efforts in good faith to obtain promptly
the satisfaction of the conditions to the Closing of the transactions
contemplated herein, including, without limitation, the obtaining of all
required consents and approvals;

            (c)   to furnish to the other and to the other's counsel all such
information as may be reasonably required in order to effectuate the foregoing
actions; and

            (d)   to advise the other party promptly if such party determines
that any condition precedent to its obligations hereunder will not be satisfied
in a timely manner.

      7.4   Tax Matters.

                                       39

<PAGE>

            (a)   Purchaser shall be responsible for preparing or causing to be
prepared Tax Returns for Executive and its Subsidiaries that are required to be
filed after the Effective Time.

            (b)   Notwithstanding any other provision of this Agreement, the
Shareholders shall not be considered to be in breach of any of their
representations or warranties under this Agreement if and to the extent any such
representation or warranty is rendered inaccurate as a result of, and the
Shareholders shall not be obligated to provide indemnification with respect to,
any Taxes or other Damages arising from, either:

                  (i)   the filing of Tax Returns after the Effective Time
                        prepared in a manner that is not consistent with past
                        practice of Executive and its Subsidiaries (to the
                        extent applicable), except to the extent that treating a
                        specific item in a manner consistent with past practice
                        would not have sufficient legal support to avoid the
                        imposition of penalties (assuming that such treatment
                        were not specifically disclosed or identified in such
                        Tax Return in a Treasury Form 8275 or similar disclosure
                        statement);

                  (ii)  the filing, after the Closing, of an amended Tax Return
                        amending a Tax Return filed by or with respect to
                        Executive or any of its Subsidiaries prior to the
                        Effective Time without the consent of the Shareholder
                        Representative, such consent not to be unreasonably
                        withheld, or unless such filing is required by
                        applicable law, or is an appropriate correlative
                        adjustment to a final determination of a Taxing
                        Authority relating to another taxable period; or

                  (iii) any election under Section 338 of the Code (or any
                        comparable provision of state, local or foreign Tax law)
                        made with respect to the transactions contemplated by
                        this Agreement.

            (c)   In the event that the parties disagree as to (i) whether any
Tax Return has been prepared in a manner consistent with past practice, (ii)
whether preparation of any Tax Return in a manner consistent with past practice
would have insufficient legal support to avoid the imposition of penalties, or
(iii) whether applicable law requires the filing of an amended Tax Return, the
parties shall submit the matter to the Accounting Firm, which shall resolve the
dispute. The Accounting Firm shall, within forty-five (45) days after
submission, make a determination with respect to the dispute and report such
determination to the parties in writing. The determination of the Accounting
Firm shall be conclusive and binding on the parties. The fees and expenses of
the Accounting Firm shall be borne equally by Purchaser and the Shareholders.

      7.5   Indemnification of Directors and Officers. Nothing contained herein
shall be deemed or construed to waive, discharge, release or limit in any
respect whatever indemnification rights (including rights to advancement of
expenses) any present or former director, officer or employee of Executive and
its Subsidiaries in office prior to the Effective Time have under the
Certificate of Incorporation and Bylaws of Executive and any such Subsidiary in
effect on the date hereof with respect to all acts or omissions by such persons
in

                                       40

<PAGE>

such respective capacity on or prior to the Effective Time; provided, however
that such indemnification rights shall not apply with respect to any liability
with respect to which any such person is obligated as a Shareholder to indemnify
Purchaser under Section 8.2 of this Agreement.

      7.6   Shareholder Agreement. Each of the Shareholders and Executive hereby
consents to the transfer of the Shares by the other Shareholders pursuant to the
terms of this Agreement and hereby waives and releases any rights of first
refusal or comparable rights that such Shareholder or Executive may have with
respect to such transfer under that certain Shareholders Agreement, dated as of
March 14, 2000, as amended, by and between Executive and certain shareholders of
Executive.

      7.7   Subsequent Transaction. In the event that, within twelve (12) months
of the Closing Date, the Purchaser enters into a binding agreement with an
unaffiliated third party that, as of the date of this Agreement, owns or
operates general aviation fixed base operations, at multiple locations in the
United States pursuant to which the Purchaser, directly or indirectly, will
sell, transfer or convey all the equity ownership interests in Executive or all
or substantially all of the assets of Executive to such unaffiliated third party
(a "SUBSEQUENT TRANSACTION"), then Purchaser shall pay to the Shareholders an
amount equal to fifty percent (50%) of the difference between the aggregate
consideration, including the assumption of any indebtedness for borrowed money,
paid to Purchaser for the Subsequent Transaction and the Purchase Price, net of
fees, costs and expenses (other than taxes), Purchaser incurs or otherwise pays
in connection with the transactions contemplated hereby and the Subsequent
Transaction. If such aggregate consideration for the Subsequent Transaction is
less than the Purchase Price, then no payment shall be due from the Purchaser to
the Shareholders. Such payment, if any, shall be made to the Disbursement Agent
upon the closing of the Subsequent Transaction. For purposes of this Agreement,
any third party that is managed by an entity that is owned or controlled,
directly or indirectly, by Macquarie Bank Limited shall be deemed affiliated
with Purchaser.

      7.8   Updating of Disclosure Schedules. The Shareholders shall notify
Purchaser of any changes, additions, or events which cause any material change
in or addition to the Schedules promptly after the Shareholders become aware of
the same by delivery of appropriate updates to all such Schedules to Purchaser.
No notification of a change or addition to a Schedule made pursuant to this
Section 7.8 shall be deemed to cure any breach of any representation or warranty
resulting from such change or addition unless Purchaser specifically agrees
thereto in writing or consummates the Closing under this Agreement after receipt
of such written notification, nor shall any such notification be considered to
constitute or give rise to a waiver by Purchaser of any condition set forth in
this Agreement, unless Purchaser specifically agrees thereto in writing or
consummates the Closing under this Agreement after receipt of such written
notification.

      7.9   Atlantic Indemnification Claim. In the event that the pending
indemnification claim by Executive under the indemnification insurance policy
obtained in connection with the acquisition of Atlantic Aviation Corporation is
not settled and paid prior to the Effective Time but is thereafter resolved and
a payment made to Executive as a result thereof, Purchaser shall cause Executive
to pay to the Disbursement Agent fifty percent (50%) of the amount of such
payment after deduction of all out-of-pocket expenses incurred by Executive
after the Effective Time in connection with resolving such claim.

                                       41

<PAGE>

      7.10  Additional Covenant of Certain Shareholders. Each Shareholder that
is not a natural person covenants and agrees that, for a period of eighteen (18)
months from the Effective Time, such Shareholder shall not dissolve, liquidate
or otherwise distribute its assets without creating and maintaining a reserve
fund for satisfaction of the indemnity obligation of such Shareholder pursuant
to Section 8.2 of this Agreement in an amount equal to the maximum individual
liability of such Shareholder under Section 8.2(b)(iv) of this Agreement
(without consideration of any exception to such limitation); provided, however,
the Shareholder shall not be obligated to maintain such reserve fund, if the
Shareholder provides to Purchaser a guaranty in form satisfactory to Purchaser
of such obligation up to such dollar amount executed by a financially viable
person or entity reasonably satisfactory to Purchaser.

                                    ARTICLE 8
                            SURVIVAL/INDEMNIFICATION

      8.1   Nature and Survival of Representations and Agreements. The
representations, warranties, covenants and agreements of Purchaser, Shareholders
and Executive contained in this Agreement, and all statements contained in this
Agreement or any Exhibit or Schedule hereto or any certificate, financial
statement or report or other document delivered pursuant to this Agreement or in
connection with the transactions contemplated hereby, shall be deemed to
constitute representations, warranties, covenants and agreements of the
respective party delivering the same. All such representations, warranties,
covenants and agreements, including the indemnification obligations for breaches
or failures with respect thereto, other than such representations, warranties,
covenants and agreements specifically identified in the following clause, shall
survive the Closing for a period of eighteen (18) months after the Effective
Time; provided, that, (A) the representations and warranties made in Section 2.2
(Title to Stock) and Section 3.5 (Capitalization), and Section 3.21 (Taxes), (B)
any claims based on fraud, willful misconduct or intentional misrepresentation
and (C) any matter set forth in Schedule 8.2(b)(ii) shall survive the Closing
for a period of (a) sixty (60) days after the expiration of the applicable
federal or state statute of limitations, whichever is longer, or (b) the fifth
(5th) anniversary of the Closing Date, whichever is later, and that the
representations and warranties made in Section 3.18 (Employees; Employee Benefit
Plans) and Section 3.19 (Labor Matters) shall survive for a period of three (3)
years after the Effective Time. Notwithstanding the foregoing, any matter as to
which an indemnification notice (including, without limitation, a notice
relating to a potential or contingent claim) shall have been asserted during the
applicable survival period shall continue in effect with respect to such claim
until such claim shall have been finally resolved or settled.

      8.2   Indemnification by Shareholders.

            (a)   Extent of Indemnity. Subject to the provisions of Section
8.2(b) hereof, the Shareholders hereby agree, jointly and severally, except as
noted below, to indemnify and hold harmless Purchaser, Executive and its
Subsidiaries, and their officers, directors, shareholders, and employees (the
"PURCHASER INDEMNIFIED PARTIES") from and against: any and all Damages (as
defined below) of or to any Purchaser Indemnified Parties arising out of or
resulting from (i) any misrepresentation, breach of warranty or nonfulfillment
of any agreement on the part of the Shareholders or, at or before the Effective
Time, Executive, contained in this Agreement or in any statement or certificate
furnished or to be furnished to Purchaser pursuant hereto, and (ii) any of the
matters disclosed on Schedule 8.2(b)(ii). Provided, however,

                                       42

<PAGE>

notwithstanding the foregoing or any other provision of this Agreement to the
contrary, such indemnity and hold harmless obligations of the Shareholders in
favor of the Purchaser Indemnified Parties based on or arising out of a breach
of the representations and warranties of each Shareholder contained in Article 2
of this Agreement shall be several but not joint.

      For purposes of this Agreement, "DAMAGES" shall mean any and all losses,
liabilities, claims, demands, damages (including any governmental penalty or
punitive damages), deficiencies, diminution in value, interest, costs and
expenses and any actions, judgments, costs and expenses (including attorneys'
fees and all other reasonable expenses incurred in investigating, preparing or
defending any litigation or proceeding commenced incident to the enforcement of
this Agreement). For purposes of calculating the amount of Damages incurred by a
party arising out of or resulting from, any breach of a representation,
warranty, covenant or agreement by the other party, the references to
materiality (or other correlative terms) shall be disregarded.

            (b)   Limitations.

                  (i)   Notwithstanding anything else contained herein to the
                        contrary, the Shareholders' obligation to indemnify
                        Purchaser pursuant to Section 8.2(a) shall be
                        Purchaser's sole and exclusive remedy for breaches of
                        all matters (including breaches of representations and
                        warranties) relating to this Agreement and shall be
                        limited in amount as set forth below.

                  (ii)  Subject to the exceptions in Section 8.2(b)(vii),
                        Purchaser shall not be entitled to indemnification for
                        any Damages pursuant to Section 8.2(a) hereof unless (x)
                        in the case of an individual claim, the Damages relating
                        to such claim exceed Twenty-Five Thousand Dollars
                        ($25,000) (for these purposes, the parties acknowledge
                        and agree that any claim for Damages arising from a
                        single event or series of related circumstances or
                        transactions shall be deemed to be an individual claim)
                        and (y) the cumulative total of Damages for all claims
                        asserted pursuant to Section 8.2(a) exceeds One Million
                        Dollars ($1,000,000) in the aggregate; and in such case
                        the amount of Damages that may be recovered shall only
                        be the amount that such Damages exceed One Million
                        Dollars ($1,000,000); provided, however, that such
                        cumulative indemnification threshold shall not be
                        applicable to (A) breaches of the representations or
                        warranties set forth in Section 3.18 (Employees;
                        Employee Benefit Plans) and Section 3.21 (Taxes) and (B)
                        any of the matters listed in Schedule 8.2(b)(ii).

                  (iii) Subject to the exceptions in Section 8.2(b)(vii),
                        subject to the separate individual limitations
                        applicable to each Shareholder as set forth below, and
                        subject to the several and not joint nature of the
                        representations and warranties of each Shareholder
                        contained in Article 2 hereof, the aggregate amount of
                        Damages recoverable

                                       43

<PAGE>

                        from all Shareholders shall be Twenty Million Dollars
                        ($20,000,000).

                  (iv)  With respect to the amount of Damages that may be
                        recovered against a Shareholder with respect to each
                        indemnification claim, (1) the amount of each such claim
                        against a Shareholder shall be limited to the total
                        amount of such Damages of such claim multiplied by a
                        fraction equal to the amount of the Purchase Price less
                        the amount of the Fund Indebtedness that is distributed
                        to the Shareholder for the Shares and Option Equivalent
                        Stock owned by such Shareholder divided by the total
                        aggregate Purchase Price less the amount of the Fund
                        Indebtedness distributed to all Shareholders for the
                        Shares and Option Equivalent Stock and (2), subject to
                        the exceptions in Section 8.2(b)(vii), the total
                        aggregate liability of each Shareholder for all
                        indemnification claims shall be limited to Twenty
                        Million Dollars ($20,000,000) multiplied by the same
                        fraction (such percentage and the maximum
                        indemnification liability of each Shareholder shall be
                        set forth on the Closing Statement);.

                  (v)   The amount payable by the Shareholders with respect to
                        any Damages for which they have an indemnification
                        obligation under this Section 8.2 shall be reduced by
                        the amount of any insurance proceeds received by
                        Purchaser Indemnified Parties. Purchaser, Executive and
                        each of its Subsidiaries shall fully pursue all
                        potential claims against applicable policies with
                        respect to Damages before recovering any portion of such
                        Damages from the Escrow Funds or the Shareholders;

                  (vi)  Any Damages shall be calculated and determined net of
                        any tax benefit to the Purchaser or Executive resulting
                        from the indemnifiable event or matter; and

                  (vii) Notwithstanding the foregoing, the Shareholders shall be
                        liable for all Damages incurred by the Purchaser
                        Indemnified Parties arising from: (A) breaches of the
                        representations or warranties set forth in Section 2.2
                        (Title to Stock), but only on several and not joint
                        basis, Section 3.5 (Capitalization) and Section 3.21
                        (Taxes), and (B) any claims based on fraud, willful
                        misconduct or intentional misrepresentation without
                        regard to the cumulative indemnification threshold set
                        forth in clause (y) of Section 8.2(b)(ii), or the
                        aggregate limitation on indemnification set forth in
                        Section 8.2(b)(iii); provided, however, that, in any
                        such case, the total amount of Damages for which a
                        Shareholder shall be liable shall be the amount of the
                        Purchase Price distributed to the Shareholder for the
                        Shares and Option Equivalent Stock owned by such
                        Shareholder, and provided, further, however that the
                        provisions of

                                       44

<PAGE>

                        Subsection (1) of Section 8.2(b)(iv) shall still be
                        applicable in each such case.

      8.3   Indemnification by Purchaser.

            (a)   Extent of Indemnity. Purchaser hereby agrees to indemnify and
hold harmless the Shareholders and their respective shareholders, partners,
directors, officers and employees from and against any and all damages of or to
the Shareholders arising out of or resulting from any misrepresentation, breach
of warranty or nonfulfillment of any agreement on the part of Purchaser
contained in this Agreement or in any statement or certificate furnished or to
be furnished to Executive pursuant hereto or in connection with the transactions
contemplated hereby.

            (b)   Limitations. Notwithstanding any provisions of this Section
8.3 to the contrary, the aggregate amount of Damages recoverable by the
Shareholders under this Section 8.3 shall be Twenty Million Dollars
($20,000,000); provided, however, that the Purchaser shall be liable for all
Damages incurred by the Shareholders arising from any claims based on fraud,
willful misconduct or intentional misrepresentation of the Purchaser without
regard to such indemnification Damages limitation.

      8.4   Indemnity Procedures.

            (a)   Third Party Claims. In case any claim, demand or action shall
be brought by any third party including, without limitation, any governmental
authority, against a party entitled to indemnity under Section 8.2 or 8.3 above,
such party shall promptly notify the other party or parties, as the case may be,
from whom indemnity is or may be sought in writing and the indemnifying party or
parties shall assume the defense thereof, including the employment of counsel.
In addition, in case a party hereto shall become aware of any facts which could
reasonably be expected to result in any such claim, demand or action, such party
shall promptly notify the other party or parties who would be obligated to
provide indemnity hereunder with respect to such claim, demand or action, and
such other party or parties shall have the right to take such action as it or
they may deem appropriate to resolve such matter. The indemnifying party shall
have fifteen (15) days from the receipt of notice of a third party claim for
which an indemnified party is seeking indemnification under Section 8.2 or 8.3
above to notify the indemnified party (i) whether or not the indemnifying party
disputes liability to the indemnified party hereunder with respect to Damages
attributable to such third party claim and (ii) whether or not the indemnifying
party desires, at its sole cost and expense, to defend against such third party
claim. In the event that the indemnifying party timely notifies the indemnified
party that the indemnifying party does not dispute its obligation to indemnify
hereunder and desires to defend the indemnified party against such third party
claim and except as hereinafter provided, the indemnifying party shall have the
right to defend by appropriate proceedings, which proceedings shall be promptly
settled or prosecuted by the indemnifying party to a final conclusion; provided
that, unless the indemnified party otherwise agrees in writing, the indemnifying
party may not settle any matter (in whole or in part) unless such settlement
includes a complete and unconditional release of the indemnified party with
respect to claims raised in such proceeding. The indemnified party or parties
shall have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be

                                       45

<PAGE>

at the expense of such indemnified party or parties, unless the employment of
such counsel has been specifically authorized by the indemnifying party or
parties. If requested by the indemnifying party, the indemnified party shall
cooperate with the indemnifying party and its counsel and use its best efforts
in contesting any such claim or, if appropriate, in making any counter-claim or
cross-complaint against the party asserting the claim, provided that the
indemnifying party will reimburse the indemnified party for reasonable expenses
incurred in so cooperating upon presentation of receipts or other evidence of
such expense. The indemnifying party and its representatives shall have full and
complete access during reasonable hours to all books, records and files of the
indemnified party expressly related to the defense of any claim undertaken by
the indemnifying party pursuant to this Section 8.4(a); provided, that, the
indemnifying party shall safeguard and maintain the confidentiality of all such
books, records and files. Notwithstanding the foregoing, if at any time, in the
reasonable opinion of the indemnified party, notice of which shall be given in
writing to the indemnifying party, any such third party claim seeks relief which
could have a material adverse effect on any indemnified party, the indemnified
party shall have the right to control or assume (as the case may be) the defense
of any such claim and the amount of any judgment or settlement and the
reasonable costs and expenses of defense shall be included as part of the
indemnification obligations of the indemnifying party hereunder. If the
indemnified party should elect to exercise such right, the indemnifying party
shall have the right to participate in, but not control, the defense of such
claim at the sole cost and expense of the indemnifying party. If the
indemnifying party elects not to defend the indemnified party against such third
party claim, whether by failure of the indemnifying party to give the
indemnified party timely notice as provided above or otherwise, then the
indemnified party, without waiving any rights against the indemnifying party,
may settle or defend against any such claim in the indemnified party's sole
discretion and the indemnified party shall be entitled to recover from the
indemnifying party the amount of any settlement or judgment and, on an ongoing
basis, all costs and expenses of the indemnified party with respect thereto,
including interest from the date such costs and expenses were incurred, subject
to the provisions of Section 8.2 or 8.3, as the case may be.

            (b)   Other Claims. With respect to any other claim as to which a
party shall seek indemnity from the other party, such party shall promptly
notify the other party from whom indemnity is or may be sought in writing of the
claim. The notice of claim (i) shall state in reasonable detail the nature of
the alleged liability, (ii) shall state the amount of the loss that the party
claims it is entitled to be indemnified including, if appropriate, the estimate
of the potential loss, and (iii) shall further provide a particular statement
explaining the basis of the claim and of the amount or estimate of the loss. The
indemnifying party shall have the right to take such action as it may deem
appropriate to resolve such matter; provided, however, that the indemnified
party shall have the right to participate in such matter. In the event that the
parties are ultimately unable to resolve in good faith the claim or the amount
of the loss, then the parties will arbitrate the claim.

            (c)   The indemnified party's failure to give reasonably prompt
notice to the indemnifying party of any actual, threatened or possible claim or
demand which may give rise to a right of indemnification hereunder, shall not
relieve the indemnifying party of any liability which it may have to the
indemnified party unless, and solely to the extent that, the failure to give
such notice materially and adversely prejudiced the indemnifying party.

                                       46

<PAGE>

      8.5   Exclusive Remedy. The indemnification obligations of the
Shareholders and Purchaser contained in this Article 8 shall, if the Closing
occurs, be the sole and exclusive remedy of the parties hereto, their
Affiliates, successors and assigns with respect to any and all claims for
Damages sustained or incurred arising out of or relating to this Agreement or
the transactions contemplated hereby.

      8.6   Adjustments to Purchase Price. Amounts payable in respect of the
indemnification obligations under Sections 8.2 and 8.3 hereof shall be treated
by the Shareholders and Purchaser as adjustments to the Purchase Price to the
extent such amounts may be properly so treated for Tax Purposes.

                                    ARTICLE 9
                                  MISCELLANEOUS

      9.1   Entire Agreement. This Agreement and the Schedules and Exhibits
hereto, each of which is hereby incorporated herein, set forth all of the
promises, covenants, agreements, conditions, undertakings, representations and
warranties between the parties hereto with respect to the subject matter hereof
and supersede all prior and contemporaneous agreements and understandings,
inducements or conditions, express or implied, oral or written.

      9.2   Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered, telefaxed (with confirmation of transmission) or, if
mailed, when mailed by United States first-class, certified or registered mail,
postage prepaid, or by any national overnight delivery service, to the other
party at the following addresses (or at such other address as shall be given in
writing by any party to the other):

            (a)   if to Purchaser, to:

                  Macquarie Investment Holdings, Inc.
                  800 Fifth Avenue
                  20th Floor
                  New York, New York 10020
                  Attention: Mr. Murray Bleach, President
                  Fax: 212-399-8931

                  With a required copy to:

                  Shaw Pittman LLP
                  1650 Tysons Blvd., Suite 1400
                  McLean, Virginia 22102
                  Attention: Craig E. Chason, Esq.
                  Fax: (703) 770-7901

                                       47

<PAGE>

            (b)   If to Executive to:

                  Executive Air Support, Inc.
                  6504 International Parkway
                  Suite 1100
                  Plano, Texas 75093
                  Attention: Louis T. Pepper
                  Fax: (972) 447-4229

                  With a required copy to:

                  Strasburger & Price, LLP
                  901 Main Street
                  Suite 4300
                  Dallas, Texas 75202
                  Attention: David K. Meyercord, Esq.
                  Fax: (214) 651-4330

            (c)   If to the Shareholder Representative to:

                  ABS Capital Partners, III, LLC
                  400 Pratt Street, Suite 910
                  Baltimore, Maryland 21202-3116
                  Attention: Don Hebb
                  Fax: 410-246-5606

                  with a required copy to:

                  Strasburger & Price, LLP
                  901 Main Street
                  Suite 4300
                  Dallas, Texas 75202
                  Attention: David K. Meyercord, Esq.
                  Fax: (214)-651-4330

      9.3   Successors and Assigns. Purchaser may assign this Agreement in whole
or in part to any of its Subsidiaries, to any Affiliate of Purchaser or
Macquarie Bank Limited or to any person or entity which becomes a successor in
interest (by purchase of assets or stock, or by merger or otherwise) to
Purchaser, although no such assignment shall relieve Purchaser of its
obligations hereunder. Subject to the foregoing, this Agreement, and all rights
and powers granted hereby, will bind and inure to the benefit of the parties
hereto and their respective successors and assigns.

      9.4   Arbitration. All disputes under this Agreement may at the election
of the Indemnified Party, be settled by arbitration in Wilmington, Delaware,
pursuant to the rules of the American Arbitration Association (the
"ASSOCIATION") before a panel of three (3) arbitrators. Arbitration may be
commenced at any time by a party hereto giving written notice to all other
parties hereto that such dispute has been referred to arbitration. The party (or
parties) initiating

                                       48

<PAGE>

the arbitration shall be entitled to select one arbitrator, the other party (or
parties) shall be entitled to select one arbitrator, and the two arbitrators so
selected shall select the third arbitrator; provided, that, all three of the
arbitrators shall be selected from a list of arbitrators with expertise in
commercial disputes and/or contract interpretation maintained by the
Association. Any award rendered by the arbitrators shall be conclusive and
binding upon the parties hereto; provided, however, that any such award shall be
accompanied by a written opinion of the arbitrators giving the reasons for the
award. This provision for arbitration shall be specifically enforceable by the
parties and the decision of the arbitrator in accordance herewith shall be final
and binding and there shall be no right of appeal therefrom. Each party shall
pay its own expense of arbitration and the expenses of the arbitrators shall be
equally shared; provided, however, that if in the opinion of the arbitrators any
claim made was unreasonable, the arbitrators may assess, as part of their award,
all or any part of the arbitration expenses of the other party (including
reasonable attorneys' fees) and of the arbitrators against the party raising
such unreasonable claim, defense or objection. To the extent that arbitration
may not be legally permitted hereunder or the parties to any dispute hereunder
may not at the time of such dispute mutually agree to submit such dispute to
arbitration any party may commence a civil action in the federal district courts
in Wilmington, Delaware, and the parties agree to submit to the personal
jurisdiction of such court. Each party hereto irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to the
laying of the venue of any proceeding brought in the federal district courts in
Wilmington, Delaware, any claim that any proceeding brought in such a court has
been brought in an inconvenient forum, and any right to which it may be entitled
on account of its place of residence or domicile.

      9.5   Headings; Interpretation. The headings preceding the text of the
sections and subsections hereof are inserted solely for convenience of reference
and shall not constitute a part of this Agreement, nor shall they affect its
meaning, construction or effect. The parties agree that any rule of law or any
legal decision that would require interpretation of any claimed ambiguities in
this Agreement against the party that drafted it has no application and is
expressly waived.

      9.6   Knowledge. For purposes of this Agreement, "KNOWLEDGE OF THE
SHAREHOLDERS" "SHAREHOLDERS' KNOWLEDGE" or words of similar import, shall mean
the actual knowledge of the individuals listed in Schedule 9.6 and the knowledge
that such individuals should have acquired in performing their respective duties
as officers and/or employees of Executive and its Subsidiaries, as the case
maybe.

      9.7   Further Assurances. Each party shall cooperate and take such action
as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.

      9.8   Amendment and Waiver. The parties may by mutual agreement amend this
Agreement in any respect, and any party, as to such party, may (a) extend the
time for the performance of any of the obligations of any other party, (b) waive
any inaccuracies in representations by any other party, (c) waive compliance by
any other party with any of the agreements contained herein and performance of
any obligations by such other party, and (d) waive the fulfillment of any
condition that is precedent to the performance by such party of any

                                       49

<PAGE>

of its obligations under this Agreement. To be effective, any such amendment or
waiver, must be in writing and be signed by the party against whom enforcement
of the same is sought.

      9.9   No Other Beneficiaries. This Agreement is being made and entered
into solely for the benefit of Purchaser and the Shareholders, and neither
Purchaser nor the Shareholders intend hereby to create any rights in favor of
any other person as a third party beneficiary of this Agreement or otherwise.

      9.10  Governing Law. This Agreement shall be governed by the laws of the
State of Delaware without regard to its principles of conflict of laws.

      9.11  Schedules. References to a Schedule shall include any disclosure
expressly set forth on the face of any other Schedule which a reasonable person
would conclude is, by its terms, applicable to another Schedule, even if not
specifically cross-referenced to such other Schedule; provided, however, that
the representations and warranties of a party set forth in this Agreement shall
not be affected or deemed modified, waived or limited in any respect by the
information contained in any agreement or document listed or referenced in a
Schedule unless the reference on the face of the Schedule expressly indicates
how the agreement or document modifies or limits the scope of a representation
or warranty.

      9.12  Additional Matters Regarding Canterbury Warrant. Canterbury hereby
discloses to Purchaser that it has assigned to Argosy Investment Partners, L.P.
("ARGOSY"), a Shareholder, a portion of the Canterbury Warrant representing the
right to acquire 31,553 shares of Common Stock of Executive and retained the
right to acquire the remaining 1,077,801 shares of Common Stock of Executive
subject to the Canterbury Warrant. Canterbury and Argosy have not as of the date
hereof surrendered the original certificate representing the Canterbury Warrant
and requested Executive to issue replacement warrant certificates to effectuate
such assignment. Argosy hereby agrees that Canterbury is authorized to bind its
beneficial interest in the Canterbury Warrant to be sold to the Purchaser as
provided in this Agreement and such assignment of Canterbury contained in this
Agreement shall be fully binding upon and enforceable against Argosy to the
extent of the beneficial interest of Argosy in the Canterbury Warrant. Argosy
hereby makes and hereby agrees that it shall be deemed and considered to have
made for the purposes of Article 2 of this Agreement, the same representations
and warranties as are contained in Section 2.2 of this Agreement with respect to
its beneficial interest in the right to acquire 31,553 shares of Common Stock of
Executive under the Canterbury Warrant that has been assigned to it by
Canterbury.

      9.13  Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument. A facsimile of this Agreement may
be executed by one or more parties hereto and an executed copy of this Agreement
may be delivered by one or more parties hereto by facsimile pursuant to which
the signature of or on behalf of such party can be seen, and such execution and
delivery shall be considered valid, binding and effective for all purposes.

                            [SIGNATURE PAGE FOLLOWS]

                                       50

<PAGE>

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

PURCHASER                                      EXECUTIVE

MACQUARIE INVESTMENT HOLDINGS, INC.            EXECUTIVE AIR SUPPORT, INC.

By: /s/ Oliver Yates  /s/ Murray Bleach      By: /s/ Louis T. Pepper
    ----------------------------------------     ----------------------------

     Oliver Yates, President                     Louis T. Pepper, President
Its:
    ----------------------------------------
    Murray Bleach, Executive Director

                                    GUARANTY

      Macquarie Bank Limited ("GUARANTOR"), a __________, guarantees the full
and complete performance of all of the payment obligations of the Purchaser to
the Shareholders under and pursuant to the foregoing Stock Purchase Agreement,
dated as of April ____, 2004 (the "PURCHASE AGREEMENT") of whatsoever nature
(collectively, the "GUARANTEED OBLIGATIONS"); provided, that, Guarantor's
liability hereunder shall not exceed, and in no event shall Guarantor be
obligated to expend more than, the Purchase Price pursuant to this Guaranty and
this Guaranty shall terminate on August 31, 2004 or immediately following the
Closing, whichever occurs first, except as to any demand for performance of this
Guaranty which has been made prior to such date as to which this Guaranty shall
remain applicable. In addition, upon payment of the Purchase Price by Purchaser,
this Guaranty shall terminate. The Shareholders may waive, exchange,
subordinate, release, surrender or in any other manner deal with Purchaser
without affecting Guarantor's obligations hereunder. Guarantor waives all
notices, including notice of (i) Shareholders' acceptance of this Guaranty,
Shareholders' intention to act or any Shareholders' action hereunder; (ii) the
existence or creation of or any alteration in any of the Guaranteed Obligations;
(iii) any default by Purchaser; and (iv) the obtaining, enforcing or releasing
of any other guaranty or of any pledge, assignment or security for any of the
Guaranteed Obligations and all other notices related to the Guaranteed
Obligations. Shareholders may proceed against Guarantor without first proceeding
against Purchaser for performance of the Guaranteed Obligations and is not
required to join Purchaser in any such proceeding against Guarantor; provided,
however, as a condition precedent to the commencement of any action against
Guarantor, Shareholders shall first comply with all procedures specified in the
Purchase Agreement with respect to actions taken by the Shareholders against
Purchaser.

     EXECUTED as of the 28th day of April, 2004.

                                   Macquarie Bank Limited

                                       /s/ Murray Bleach
                                   By:
                                      ----------------------------------------

                                         MURRAY BLEACH
                                   Name:
                                        --------------------------------------

                                          EXECUTIVE DIRECTOR
                                   Title:
                                         -------------------------------------

                    [SIGNATURE PAGES OF SHAREHOLDERS FOLLOW]

                                       51

<PAGE>

                          SIGNATURE PAGE OF SHAREHOLDER

      IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.

                                   /s/ Susan C. Sommers
                                   --------------------------------------------
                                   Shareholder
                                   Name: SUSAN C. SOMMERS
                                        ---------------------------------------

<PAGE>

                          SIGNATURE PAGE OF SHAREHOLDER

      IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.

                                   /s/ Louis T. Pepper
                                   ----------------------------------
                                   Shareholder
                                   Name: LOUIS T. PEPPER
                                        -----------------------------

<PAGE>

                          SIGNATURE PAGE OF SHAREHOLDER

      IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.

                             Argosy Investment Partners, L.P.
                             By:  Argosy Associates, L.P., its general partner
                             By:  Argosy Associates, Inc., its general partner

                             By: /s/ Kirk B. Griswold
                                -----------------------------------------------
                                        Kirk B. Griswold, Vice President

<PAGE>

                          SIGNATURE PAGE OF SHAREHOLDER

      IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.

                                   /s/ Gregory S. Campbell, President,
                                       CD Ventures, LLC, Its General Partner
                                   ---------------------------------------------
                                   Shareholder
                                   Name: CD Ventures, V, L.P.

                                      C-6
<PAGE>

                          SIGNATURE PAGE OF SHAREHOLDER

      IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.

                         Bermuda Trust (Limited) as Trustee for Trident Private
                         Equity Fund, L.P.

                         By:  /s/ Illegible
                            -------------------------------------------------
                         Shareholder
                         Name:
                              -----------------------------------------------

<PAGE>

                          SIGNATURE PAGE OF SHAREHOLDER

      IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.

                                   /s/ Gregory S. Campbell
                                   --------------------------------------------
                                   Shareholder

                                         Gregory S. Campbell as
                                   Name:
                                        ---------------------------------------
                                         Attorney-in-Fact for
                                         Brian G. Campbell

                                      C-8

<PAGE>

                                POWER OF ATTORNEY

            KNOW ALL MEN BY THESE PRESENTS That I, Brian G. Campbell have made,
constituted and appointed, and by these presents do make, constitute and
appoint, Gregory S. Campbell (hereinafter "my Attorney"), my true and lawful
attorney for me and in my name and on my behalf generally to do and perform all
matters and things, transact all business, make, execute and acknowledge the
Agreement and Plan of Merger by and between EAS Acquisition, Inc. and Executive
Air Support, Inc. and all other documents and instruments which may be requisite
or proper regarding the sale of my stock in Executive Air Support, Inc., with
the same powers and to all intents and purposes with the same validity as I
could, if personally present, hereby ratifying and confirming whatsoever my
Attorney shall or may do by virtue hereof.

            This Power of Attorney shall not be affected by my later disability
or incapacity at law and shall expire on April 30, 2004.

            IN WITNESS WHEREOF, I have hereunto set my hand and seal this 16th
day of April, 2004.

WITNESS:

/s/ Illegible                             /s/ Brian G. Campbell
----------------------------------        -------------------------------------
                                          Brian G. Campbell

<PAGE>

COMMONWEALTH OF PENNSYLVANIA     :
                                 : SS
COUNTY OF CHESTER                :

            On this, the 16th day of April, 2004, before me, the undersigned
officer, personally appeared Brian G. Campbell known to me (or satisfactorily
proven) to be the person whose name is subscribed to the within instrument and
acknowledged that he executed the same for the purposes therein contained.

            IN WITNESS WHEREOF, I hereunto set my hand and official seal.

                                /s/ Kay W. Myers
                                -----------------------------------------
                                Notary Public

                                My Commission Expires:

                                              Notarial Seal

                                Kay W. Myers, Notary Public
                                West Sadsbury Twp., Chester County
                                My Commission Expires Mar. 18, 2006

                                -------------------------------------------
                                Member Pennsylvania Association of Notaries
<PAGE>

                          SIGNATURE PAGE OF SHAREHOLDER

      IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.

                                   CD Venture Partners LLC

                                   /s/ Gregory S. Campbell, President,
                                       CD Ventures LLC, Its General Partner
                                   --------------------------------------------
                                   Shareholder
                                   Name:  CDV Equity Associates, L.P.

                                      C-9
<PAGE>

                          SIGNATURE PAGE OF SHAREHOLDER

      IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.

                        ABS Capital Partners III, L.P.
                        --------------------------------------------------------
                        Shareholder
                        Name: /s/ Donald B. Hebb, Jr.
                              --------------------------------------------------
                              Donald B. Hebb, Jr.
                              Managing Member of ABS Partners III, L.L.C.
                              General Partner of ABS Capital Partners, III, L.P.
<PAGE>

                          SIGNATURE PAGE OF SHAREHOLDER

      IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.

                                   /s/ Gordon G. Cohen
                                   -------------------------------------------
                                   Merchants Capital Partners, LP

                                   Name:   Gordon G. Cohen
                                         ---------------------------------------
                                   Title:  Principal
                                         --------------------------------------
<PAGE>

                          SIGNATURE PAGE OF SHAREHOLDER

      IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.

                                     /s/ Jason Le Roux  /s/ Gillian Newton
                                --------------------------------------------
                                Shareholder

                                Name:  Jason Le Roux        Gillian Newton
                                     ---------------------------------------
                                   Authorized Signatory   Authorized Signatory

                                      FOR AND ON BEHALF OF BANC OF BERMUDA.
                                      (illegible) LIMITED AS CUSTODIAN FOR
                                      (illegible) INTERNATIONAL GROWTH FUND.

<PAGE>

                          SIGNATURE PAGE OF SHAREHOLDER

      IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.

                                   Hare & Co.
                                   Signature Guaranteed
                                   Medallion Guaranteed
                                   The Bank of New York
                                   --------------------------------------------
                                   Shareholder
                                   Name: /s/ Illegible
                                        ---------------------------------------
                                        (SG510)        Executive Vice President
                                        SECURITIES TRANSFER            X0809012
                                        AGENTS MEDALLION PROGRAM
<PAGE>

                          SIGNATURE PAGE OF SHAREHOLDER

      IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.

                                   /s/ Illegible
                                   --------------------------------------------
                                   Shareholder
                                   Name: Illegible
                                        ---------------------------------------

<PAGE>

                          SIGNATURE PAGE OF SHAREHOLDER

      IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.

                                   PNC VENTURE CORP
                                   BY PETER V DEL PRESTO PARTNER
                                   --------------------------------------------
                                   Shareholder
                                   Name: /s/ Illegible
                                        ---------------------------------------

<PAGE>

                          SIGNATURE PAGE OF SHAREHOLDER

      IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.

                           CANTERBURY MEZZANINE CAPITAL II,
                           L.P., as Agent and as a Lender,

                               By:  Canterbury Capital II, L.L.C., its general
                                    partner,

                                    By:    /s/ Nicholas B. Dunphy
                                           ------------------------------------
                                    Name:  Nicholas B. Dunphy
                                    Title: Manager

<PAGE>

                          SIGNATURE PAGE OF SHAREHOLDER

      IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.

                                   DAVIS PARTNERS LP
                                   --------------------------------------------
                                   Shareholder

                                   Name: /s/ Illegible
                                        ---------------------------------------

<PAGE>

                          SIGNATURE PAGE OF SHAREHOLDER

      IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.

                         /s/ Gregory S. Campbell, President, CD Ventures, LLC
                         ----------------------------------------------------
                         Shareholder

                         Name: CD Venture Partners V, L.P. its General Partner
                                AP. 18
                               -----------------------------------------------

<PAGE>

                          SIGNATURE PAGE OF SHAREHOLDER

      IN WITNESS WHEREOF, the undersigned Shareholder has executed this Stock
Purchase Agreement as of the day and year first above written.

                                   BancBoston Capital, Inc.
                                   /s/ Maia D. Heymann
                                   --------------------------------------------
                                   Shareholder

                                   Name: Maia D. Heymann
                                         ---------------------------------------
                                         Managing Director
<PAGE>

                                                                   EXHIBIT 10.13

                           USE AND OCCUPANCY AGREEMENT

                                     BETWEEN

                        PAN AMERICAN WORLD AIRWAYS, INC.

                                       AND

                                  TEXACO, INC.

                                     TA-191

                                TETERBORO AIRPORT

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
Section
Number                                         Title                                          Page
------                                         -----                                          ----
<S>        <C>                                                                                <C>
1.         Term..........................................................................       1

2.         Rights of User................................................................       1

3.         Fees to Pan American..........................................................       2

4.         Time of Payment and Computation of Amounts....................................       2

5.         Obstruction Lights............................................................       2

6.         Care, Maintenance and Repair..................................................       3

7.         Insurance.....................................................................       3

8.         Indemnity, Liability Insurance................................................       5

9.         Ingress and Egress............................................................       6

10.        Various Obligations of the User...............................................       6

11.        Prohibited Acts...............................................................       9

12.        Rules and Regulations.........................................................      11

13.        Signs.........................................................................      12

14.        Construction by the User......................................................      12

15.        Assignment and Sub-Use........................................................      12

16.        Condemnation..................................................................      13

17.        Non-Discrimination............................................................      14

18.        Governmental Requirements.....................................................      15

19.        Rights of Entry Reserved......................................................      16

20.        Basic Agreement...............................................................      17

21.        Patents, Trademarks...........................................................      17

22.        Additional Fees and Charges...................................................      17

23.        Right of Re-Entry.............................................................      18
</TABLE>

<PAGE>

<TABLE>
<S>        <C>                                                                                 <C>
24.        Surrender.....................................................................      18

25.        Termination by Pan American...................................................      18

26.        Survival of the Obligations of the User.......................................      20

27.        Use Subsequent to Cancellation or Termination.................................      21

28.        Remedies to be Non-Exclusive..................................................      21

29.        Limitation of Rights and Privileges Granted...................................      22

30.        Option for Renewal............................................................      22

31.        Removal of Personal Property..................................................      23

32.        Brokerage.....................................................................      23

33.        Notices.......................................................................      23

34.        Construction and Application of Terms.........................................      24

35.        Non-Liability of Individuals..................................................      24

36.        Abatement.....................................................................      24

37.        Port Authority Consent........................................................      24

38.        Entire Agreement..............................................................      24

           Exhibit A
           Consent Agreement.............................................................     1-4
</TABLE>

                                       2
<PAGE>

                                                     Teterboro Airport
                                                     Use and Occupancy Agreement
                                                     TA 191

                           USE AND OCCUPANCY AGREEMENT

         THIS AGREEMENT, made as of January 1, 1986, by and between PAN AMERICAN
WORLD AIRWAYS, INC. (hereinafter called "Pan American"), a New York Corporation,
and TEXACO, INC. (hereinafter called the "User"), a Delaware Corporation.

                                WITNESSETH THAT:

         WHEREAS, the Port Authority of New York and New Jersey (hereinafter
called "the Port Authority") is the owner of Teterboro Airport located in the
Boroughs of Teterboro, Moonachie and Hasbrouck Heights and in the Township of
Lyndhurst, County of Bergen in the State of New Jersey (hereinafter called "the
Airport"); and,

         WHEREAS, Pan American is the operator of the Airport and has the right
to operate and use the Airport under an agreement between Pan American and the
Port Authority dated September 19, 1967 (hereinafter called the "Basic
Agreement"); and

         WHEREAS, User by a Use and Occupancy Agreement, dated January 1, 1976,
bearing file designation TA-107, used and occupied certain premises at the
Airport; and

         WHEREAS, User desires to continue to use and occupy the area at the
Airport as hereinafter described;

         NOW, THEREFORE, for and in consideration of the respective promises and
mutual agreements made by the parties hereto hereinafter set forth Pan American
hereby grants to the User the right to use and occupy the areas at the Airport
shown in diagonal hatching on Exhibit A attached hereto, which exhibit is hereby
made a part hereof, together with all buildings, structures, improvements,
additions and permanent installations existing therein or thereon and
constructed and installed therein or thereon during the term of this Agreement
(hereinafter referred to as the "Space") upon the following terms and conditions
and it is hereby mutually agreed as follows:

1.       Term

         The term of this Agreement shall commence upon January 1, 1986
         ("effective date"), and, unless so terminated or extended, shall expire
         on December 31, 1990.

2.       Rights of User

2.1      The User shall use the Space for the storage and maintenance of
         aircraft owned, leased by or operated for the User and for private
         aircraft owned or leased by the elected officers and directors of the
         User and for no other purpose whatsoever.

                                       1
<PAGE>

2.2      Nothing contained in this Agreement shall give or shall be construed or
         deemed to give to the User any right to sell aviation fuel at the
         Airport except under a separate agreement with Pan American for bulk
         fuel storage and sale to authorized Permittees at the Airport.

2.2.1    The User shall be permitted to acquire its own petroleum products for
         purposes authorized hereunder from authorized Permittees at the
         Airport.

2.2.2    If at such time no Permittee at the Airport is able to supply the User
         with Texaco, Inc., petroleum products then the User may supply itself
         with its requirements for such petroleum products for its own use only,
         provided that the User shall pay to Pan American whatever fuel fees are
         applicable at the Airport at such time.

3.       Fees to Pan American

3.1      The User shall pay to Pan American a basic annual fee of Two Hundred
         Thousand Twenty-Two Dollars and Eighty Four Cents ($200,022.84) in
         monthly installments of Sixteen Thousand Six Hundred Sixty Eight
         Dollars and Fifty Seven Cents ($16,668.57) throughout the term of this
         Agreement.

4.       Time of Payment and Computation of Amounts

4.1      User shall pay to Pan American the monthly installments of the basic
         annual fee specified in Section 3.1 in advance on the first (1st) day
         of each and every month of this Agreement, provided, however, that if
         this Agreement is terminated on other than the last day of a month the
         last payment shall be the then effective monthly installment of the
         basic annual fee prorated in the same proportion the number of days the
         Agreement was effective in the last month bears to the actual number of
         days in said month.

4.2      The fees specified herein shall be payable at the office of the Manager
         of Teterboro Airport, 399 Industrial Avenue, Teterboro, New Jersey
         07608, or at such other location as may from time to time be
         substituted therefor.

5.       Obstruction Lights

         The User shall furnish such obstruction lights as Pan American shall
         direct, of the type and design approved by Pan American, and shall
         install said lights in the locations on the Space designated by Pan
         American and shall maintain them in first class operating condition at
         all times. The User shall furnish and install the bulbs and furnish the
         electricity necessary for the operation of the said lights, and shall
         operate the same in accordance with the directions of Pan American. Pan
         American hereby directs that all said obstruction lights shall, until
         further notice, be operated daily for a period commencing thirty (30)
         minutes before sunset and ending thirty (30) minutes after sunrise and
         for such other periods as may be directed or requested by the Control
         Tower of the Airport.

                                       2
<PAGE>

6.       Care, Maintenance and Repair

6.1      The User shall at its own expense at all times keep the Space and all
         the User's fixtures, equipment and personal property which are located
         in any parts of the Space which are open to or visible by the general
         public, in a clean and orderly condition and appearance.

6.2      The User shall at its own expense repair, replace or rebuild all or any
         part of the Space which may be damaged or destroyed by the acts or
         omissions of the User or by those of its employees, customers, guests
         or invitees or of other persons doing business with the User.

6.3      Further, the User at its own expense shall take good care of the Space,
         including without limitation paved areas, fences, roofs, skylights,
         steelwork, walls, partitions, floors, foundations, ceilings, columns,
         windows, doors, glass of every kind, plumbing, heating, lights,
         fire-protection, fire-alarm, sewerage, drainage, water-supply and
         electrical systems, including all pipes, wires, lines, conduits,
         equipment and fixtures and shall make all necessary structural and
         nonstructural repairs and replacements and do all necessary rebuilding
         and repainting, regardless of the cause or the condition requiring the
         same.

6.4      In the event the User fails to commence to so repair, replace, rebuild
         or paint as required above within a period of ten (10) days after
         notice from Pan American so to do, or fails diligently to continue to
         complete the repair, rebuilding, replacement, or painting of all the
         Space required to be repaired, replaced, rebuilt or painted by the User
         under the terms of this Agreement, Pan American may, at its option, and
         in addition to any other remedies which may be available to it, repair,
         replace, rebuild or paint all or any part of the Space included in the
         said notice, and charge the cost thereof to the User, the amount of
         such charge to constitute an item of additional fee.

7.       Insurance

7.1      During the term of this Agreement the User shall, insure and keep
         insured to the extent of One Hundred Percent (100%) of the replacement
         value thereof, all buildings, structures, improvements, installations,
         facilities, and fixtures now or in the future located on the Space
         against such hazards and risks as may now or in the future be included
         under the standard form of fire insurance policy of the State of New
         Jersey and also against damage or loss by windstorm, cyclone, tornado,
         hail, explosion, riot, civil commotion, aircraft, vehicles and smoke,
         under the standard form of fire insurance policy of New Jersey, and the
         form of extended coverage endorsement prescribed as of the effective
         date of the said insurance by the rating organization having
         jurisdiction, and also covering boiler and machinery hazards and risks
         and also, subject to the availability thereof, covering nuclear
         property losses and contamination hazards and risks in a separate
         insurance policy or policies or as an additional coverage endorsement
         to the aforesaid policies in the form as may now or in the future be
         prescribed as of the effective date of said insurance by the rating
         organization having jurisdiction.

                                       3
<PAGE>

7.2      The aforesaid insurance coverages and renewals thereof shall insure the
         Port Authority and Pan American as their interests may appear and shall
         provide that the loss, if any, shall be adjusted with Pan American and
         the Port Authority and shall be payable to the Port Authority or Pan
         American as their interests may appear.

7.3      In the event the Space or any part thereof shall be damaged by any
         casualty against which insurance is carried pursuant to this Section,
         the User shall promptly notify Pan American of such casualty, and shall
         thereafter furnish to Pan American such information and data as shall
         enable the parties to adjust the loss.

7.4      At least seven (7) days prior to the beginning of the term of this
         Agreement, the policies or certificates representing said insurance
         shall be delivered by the User to Pan American and each policy or
         certificate delivered shall bear an endorsement obligating the
         insurance company to furnish the Port Authority and Pan American twenty
         (20) days' advance notice of the cancellation of the insurance
         evidenced by said policy or certificates or of any changes or
         endorsements which may be made thereon. Renewal policies or
         certificates shall be delivered to Pan American at least twenty (20)
         days before the expiration of the insurance which such policies are to
         renew.

7.5      The aforesaid insurance shall be written by a company or companies
         approved by Pan American.

7.6      To the extent that any loss is recouped by actual payment to the Port
         Authority or Pan American of the proceeds of the insurance herein
         referred to above, such proceeds will be paid to the User to cover its
         costs of rebuilding or repairing the portion or all of the Space which
         has been damaged or destroyed. Such payment will be made by Pan
         American to the User in installments if requested by the User and as
         work progresses provided that as to each request for payment the User
         shall certify by a responsible officer or authorized representative
         thereof that the amounts requested are due and payable to its
         contractor for work completed. Upon completion of all the work, the
         User shall certify by a responsible officer or authorized
         representative that such rebuilding and repairs have been completed,
         that all costs in connection therewith have been paid by the User and
         said costs are fair and reasonable and said certification shall also
         include an itemization of costs. Nothing herein contained shall be
         deemed to release the User from any of its repair, maintenance or
         rebuilding obligations under the Agreement. If the proceeds of any such
         insurance paid to Pan American exceed the User's costs of rebuilding or
         repair, the excess of such proceeds shall be retained by Pan American.

7.7      If there is damage or destruction to the Space covered by insurance
         under this Section, the User shall promptly repair, rebuild or replace
         the damaged or destroyed portion of the Space.

7.8      If the User does not so properly proceed then Pan American may repair
         or rebuild and may apply such proceeds of such insurance towards such
         repair, replacement and rebuilding, but no such application shall
         relieve the User of its obligations under this

                                       4
<PAGE>

         Agreement, or Pan American in its discretion may elect to relieve the
         User of its obligations under this Agreement to repair, replace and
         rebuild the damaged or destroyed property, and not to have said
         property repaired, replaced or rebuilt and in such latter event the
         entire proceeds of the insurance shall be retained by Pan American.

7.9      If, moreover, there is damage or destruction to the property covered
         under this Section which occurs within the last three years of the term
         of the Agreement, the obligations of the User to repair, replace or
         rebuild such damaged or destroyed property shall be discharged
         (provided that the insurance applicable thereto has been maintained in
         full force and effect) and the entire proceeds of the insurance
         applicable thereto small be retained by Pan American.

8.       Indemnity, Liability Insurance

8.1      The User shall indemnify and hold harmless the Port Authority, its
         Commissioners, officers, employees and representatives; and Pan
         American, its subsidiaries and affiliates, their Directors, officers,
         employees and agents (to include reasonable attorney and other
         professional fees) from and against all claims and demands of third
         persons, including, but not limited to, claims and demands for death or
         personal injury or for property damage arising out of the use and
         occupancy of the Space by the User or out of any other acts or
         omissions of the User, its officers, employees on the Space or out of
         the acts or omissions of others on the Space with the consent of the
         User whether or not such claims, demands, causes of action,
         liabilities, etc., are made or asserted before or against termination
         or expiration of this Agreement.

8.2      In addition to the obligations set forth in the Subsection immediately
         above, the User, in its own name as assured, shall maintain and pay the
         premiums or the following described policies of comprehensive general
         including aircraft liability insurance and automobile liability
         insurance which shall cover its operations hereunder and shall be
         effective throughout the term in limits not lower than the following:

8.2.1    Combined single limit of $100,000,000 for bodily injury and property
         damage.

8.3      Neither the Port Authority nor Pan American shall be named as an
         insured in any policy of insurance required by this Agreement, unless
         the Port Authority or Pan American shall, at any time during the
         effective period of this Agreement, direct otherwise in writing, in
         which case the User shall cause the Port Authority and/or Pan American
         to be so named.

8.4      As to any insurance required by the provisions of this Agreement to be
         obtained by or at the direction of the User, a certified copy of each
         of the policies or certificates evidencing the existence thereof, or
         binders, together with evidence of the payment of the premium thereon,
         shall be delivered to Pan American within fifteen (15) days prior to
         occupancy by User of the Space. In the event any binder is delivered,
         it shall be replaced within thirty (30) days by a certified copy of the
         policy or a certificate. Each such copy or certificate shall contain a
         valid provision or endorsement that the

                                       5
<PAGE>

         policy may not be cancelled, terminated, changed or modified without
         giving twenty (20) days' written advance notice thereof to Pan
         American. A renewal policy shall be delivered to Pan American at least
         twenty (20) days prior to the expiration date of each expiring policy,
         except for any policy expiring after the date of expiration of the
         term. If at any time any of the policies shall be or become
         unsatisfactory to Pan American as to form or substance or if any of the
         carriers issuing such policies shall be or become unsatisfactory to Pan
         American, the User shall promptly obtain a new and satisfactory policy
         in replacement.

9.       Ingress and Egress

9.1      The User, its customers, its contractors, suppliers of material and
         furnishers of services shall have the right of ingress and egress
         between the Space and the city streets or public ways outside the
         Airport by means of such pedestrian or vehicular roadways to be used in
         common with others having rights of passage within the Airport, as may
         from time to time be designated by Pan American for the use of the
         public.

9.2      The User shall have the right of ingress and egress between the Space
         and the public landing areas at the Airport by means of connecting
         taxiways, to be used in common with others having rights of passage
         thereon.

9.3      The use of any such roadway or taxiway shall be subject to the Rules
         and Regulations of the Airport which are now in effect or which may
         hereafter be promulgated for the safe and efficient operation of the
         Airport. Pan American may, at any time, temporarily or permanently,
         close or consent to or request the closing of, any such roadway or
         taxiway and any other way at, in or near the Space presently or
         hereafter used as such, so long as a reasonable means of ingress and
         egress as provided above remains available to the User. The User hereby
         releases and discharges the Port Authority, its Commissioners,
         officers, employees and agents; Pan American, its subsidiaries, their
         Directors, officers, employees and agents and all municipalities and
         other governmental authorities and their respective successors and
         assigns, of and from any and all claims, demands, or causes of action
         which the User may now or at any time hereafter have against any of the
         foregoing, arising or alleged to arise out of the closing of any
         street, roadway or other area, whether within or outside the Space. The
         User shall not do or permit anything to be done which will interfere
         with the free access and passage of others to space adjacent to the
         Space or in any streets or roadways near the Space.

10.      Various Obligations of the User

10.1     The User shall conduct its operations in an orderly and proper manner
         and so as not to annoy, disturb or be offensive to others at the Space
         on the Airport. The User shall take all reasonable measures:

                                       6
<PAGE>

10.1.1   to eliminate vibrations tending to damage any equipment, structure,
         building or portion of a building which is on the Space, or is a part
         thereof, or is located elsewhere on the Airport, and

10.1.2   to keep the sound level of its operations as low as possible.

10.2     The User shall control the conduct, demeanor and appearance of its
         employees and invitees and of those doing business with it, and upon
         objection from Pan American concerning the conduct, demeanor or
         appearance of any such shall immediately take all lawful steps
         necessary to remove the cause of the objection. If Pan American shall
         so request, the User agrees to supply and require its employees to wear
         or carry badges or other suitable means of identification, which shall
         be subject to the prior and continuing approval of the Manager of the
         Airport.

10.3     It is the intent of the parties hereto that noise caused by aircraft
         engine operation shall be held to a minimum. To this end the User will
         conduct its operations in such a manner as to keep the noise produced
         by aircraft engines and component parts thereof to a minimum by such
         methods as are practicable, considering the extent and type of the
         operations of the User. In addition, the User will employ the maximum
         amount of noise arresting and noise reducing devices that are available
         and economically practicable, considering the extent of the operations
         of the User. In its use of the Space, the User shall take all possible
         care, caution and precaution and shall use its best efforts to minimize
         prop or jet blast interference to aircraft operating on or to
         buildings, structures and roadways, now located on or which in the
         future may be located on areas adjacent to the Space. In the event Pan
         American determines that the User has not curbed the prop or jet blast
         interference, the User hereby covenants and agrees to erect and
         maintain at its own expense such structure or structures as may be
         necessary to prevent prop or jet blast interference subject, however,
         to the prior written approval of Pan American as to type, manner and
         method of construction.

10.4     The User shall daily remove from the Space by means of facilities
         provided by User all garbage, debris and other waste materials arising
         out of or in correction with its operations hereunder, and any such not
         immediately removed shall be temporarily stored in a clean and sanitary
         condition in suitable garbage and waste receptacles, the same to be
         made of metal and equipped with tight-fitting covers, and to be of a
         design safely and properly to contain whatever material may be placed
         therein, said receptacles being provided and maintained by the User.
         The receptacles shall be kept covered except when filling or emptying
         the same. The User shall exercise extreme care in removing such
         garbage, debris and other waste materials from the Space. The manner of
         such storage and removal shall be subject in all respects to the
         continual approval of Pan American. No facilities of the Airport shall
         be used for such removal unless with Pan American's prior consent in
         writing. No such garbage, debris or other waste materials shall be or
         be permitted to be thrown, discharged or disposed into or upon the
         waters at or bounding the Space.

10.5     It is intended that the standards and obligations imposed by this
         Section shall be maintained or complied with by the User in addition to
         its compliance with all

                                       7
<PAGE>

         applicable Federal, State and Municipal laws, ordinances and
         regulations, and in the event that any of said laws, ordinances and
         regulations shall be more stringent than such standards and
         obligations, the User agrees that it will comply with such laws,
         ordinances and regulations in its operations hereunder. Changes in such
         laws or regulations are not grounds for termination of this Agreement.

10.6     The User shall promptly observe, comply with and execute the provisions
         of any and all present and future rules and regulations, requirements,
         orders and directions of the National Fire Protection Association and
         the Fire Insurance Organization of New Jersey or of any other board or
         organization exercising or which may exercise similar functions which
         may pertain or apply to the operations of the User on the Space and the
         User shall, subject to and in accordance with the provisions of this
         Agreement relating to construction by the User, make any and all
         structural or nonstructural improvements, alterations or repairs of the
         Space that may be required at any time hereafter by any such present or
         future rule, regulation, requirement, order or direction. If by reason
         of any failure on the part of the User to comply with the provisions of
         this Section, any fire insurance, extended coverage or other insurance
         rate on the Space or any part thereof, or on the Airport or any part
         thereof, shall at any time be higher than it otherwise would be, then
         the User shall pay to Pan American that part of all premiums paid by
         Pan American which shall have been charged because of such violation or
         failure by the User.

10.7     In addition to compliance by the User with all laws, ordinances,
         governmental rules, regulations and orders now or at any time in effect
         during the term of the use hereunder which as a matter of law are
         applicable to the operation, use or maintenance by the User of the
         Space or the operations of the User under this Agreement (the foregoing
         not to be construed as a submission by Pan American or the Port
         Authority to the application to itself of such requirements or any of
         them), the User agrees that it shall conduct all its operations under
         the Agreement and shall operate, use and maintain the Space in
         accordance with a high standard and in such manner that there will be
         at all times a minimum of air pollution, water pollution or any other
         type of pollution and a minimum of noise emanating from, arising out of
         or resulting from the operation, use or maintenance of the Space by the
         User and from the operations of the User under this Agreement. Pan
         American hereby reserves the right from time to time and at any time
         during the term of the Agreement to require the User, and the User
         agrees to design and construct at its sole cost and expense such
         reasonable structures, fences, equipment, devices and other facilities
         as may be necessary or appropriate to accomplish the objectives as set
         forth in the first sentence of this paragraph. All locations, the
         manner, type and method of construction and the size of any of the
         foregoing shall be determined by Pan American. The User shall submit
         for Pan American approval a Construction Application together with its
         plans and specifications covering the required work and upon receiving
         such approval shall proceed diligently to construct the same.

10.8     The obligations assumed by the User under the above paragraph shall
         continue throughout the term of this Agreement and shall not be
         limited, affected, impaired or in any manner modified by the fact that
         Pan American or the Port Authority shall

                                       8
<PAGE>

         have approved any Construction Application and supporting plans,
         specifications and contracts covering construction work and
         notwithstanding the incorporation therein of Pan American's or the Port
         Authority's recommendations or requirements and notwithstanding that
         Pan American and the Port Authority may have at any time during the
         term of the Agreement consented to or approved any particular procedure
         or method of operation which the User may have proposed, or Pan
         American or the Port Authority may have itself prescribed the use of
         any procedure or method. The agreement of the User to assume the
         obligations under the above paragraph is a special inducement and
         consideration to Pan American in entering into this Agreement with the
         User.

10.9     The Port Authority has applied for and received a grant or grants of
         money from the Administrator of the Federal Aviation Administration
         pursuant to the Federal Airport Act of 1946 and pursuant to the Airport
         and Airway Development Act of 1970 (49 U.S.C. 1701), as the same have
         been amended and supplemented, and the Port Authority may in the future
         apply for and receive further such grants. Pan American under its
         Operating Agreement with the Port Authority for Teterboro Airport,
         Dated September 19, 1967, has assumed certain obligations of the Port
         Authority under the Grant Agreement and in connection therewith, the
         Port Authority and Pan American may in the future undertake certain
         additional obligations respecting the operation of the Airport and the
         activities of contractors, lessees and permittees thereon. The
         performance by the User of the promises and obligations contained in
         this Agreement is therefore a special consideration and inducement to
         Pan American to enter into this Agreement and the User further
         covenants and agrees that if the Administrator of the Federal Aviation
         Administration or any other governmental officer or body having
         jurisdiction over the enforcement of the obligations of the Port
         Authority and/or Pan American in connection with Federal Airport Aid,
         shall make any orders, recommendations or suggestions respecting the
         performance by the User will promptly comply therewith, at the time or
         times when and to the extent that Pan American may direct.

10.10    The User shall be solely responsible for compliance with the provisions
         of this Section and no act or omission of Pan American shall relieve
         the User of such responsibility.

11.      Prohibited Acts

11.1     The User shall not install, maintain, operate or permit the
         installation, maintenance or operation of any restaurant, kitchen,
         stand or other establishment of any type for the sale of food or of any
         vending machines or device designed to dispense or sell merchandise or
         services of any kind to the public, except that User may, for the
         benefit of its employees, customers, guests and visitors install coin
         operated vending machines or services for the dispensing and sale of
         the following:

11.1.1   Hot and cold packaged foods;

11.1.2   Hot and cold beverages;

                                       9
<PAGE>

11.1.3   Candy and chewing gum;

11.1.4   Tobacco and tobacco products;

11.1.5   Newspapers and periodicals;

11.1.6   Telephone services (pay stations)

         (hereinafter called "vending machines").

11.2     If User, installs or causes to be installed vending machines on the
         Space for the limited sale of merchandise or services permitted
         hereunder, User shall have the right to retain the revenues derived
         therefrom, provided, however, that:

11.2.1   The User shall itself, and shall also require its contractors, to
         indemnify and hold harmless Pan American, its subsidiaries, their
         Directors, officers, agents and employees and the Port Authority, its
         Commissioners, officers, agents and employees (to include reasonable
         attorney's and other professional fees) from and against all claims and
         demands of third persons (including employees, (to include reasonable
         attorney and other professional fees) officers and agents of Pan
         American and the Port Authority) arising or alleged to arise out of the
         installation, operation or maintenance of the vending machines (or
         consumable obtained therefrom) or arising or alleged to arise out of
         any actual or alleged infringement of any patent, trademark or
         copyright or any alleged or actual unfair competition in any wise
         connected with the operation of the vending machines whether or not
         such claims, demands, causes of action, liabilities, etc. are made or
         asserted before or after termination or expiration of this agreement.

11.3     The limited right to install, operate and maintain vending machines
         granted to User herein may be terminated by Pan American at any time
         during the term of this Agreement upon ninety (90) days' notice to the
         User and Pan American, at any time thereafter, may substitute for the
         User's vending machines other machines selling similar merchandise or
         services operated by Pan American or by its permittee or concessionaire
         and thereupon User shall remove its machines.

11.4     Upon installation by Pan American or by its permittee or concessionaire
         of vending machines in substitution of User's vending machines, all
         revenues derived therefrom shall be retained by Pan American.

11.5     Upon rendering of notice to User of termination of the right to operate
         vending machines, Pan American may elect to permit User's vending
         machines to remain, but in such case, User shall pay or cause to be
         paid to Pan American each month for each machine upon the same basis
         for the preceding month as any permittee or concessionaire of Pan
         American then operating machines at the Airport for sale to the general
         public of similar merchandise or rendering of similar services.

11.6     The termination by Pan American of the limited right of User to install
         vending machines at the Space shall be nondiscriminatory in that
         similar rights granted to

                                       10
<PAGE>

         other Users at the Airport shall be terminated concurrently therewith,
         and in the exercise of such right by Pan American User shall not be
         entitled to assert any claim or institute any action or proceeding at
         law or in equity to assert any claim on account thereof whether for
         loss, damages or loss of revenue, consequential or otherwise.

11.7     The User shall nor overload any floor or paved area on the Space and
         shall repair any floor including supporting members and any paved area
         damaged by overloading.

11.8     The User shall not do or permit to be done anything which may interfere
         with the effectiveness or accessibility of the utility, mechanical,
         electrical, drainage and sewer systems, fire-protection system and
         other systems installed or located on or in the Space.

11.9     The User shall not commit any nuisance or permit its employees or
         others on the Space with its consent to commit or create or continue or
         tend to create any nuisance on the Space or in or near the Airport.

11.10    The User shall not cause or permit to be caused or produced upon the
         Space, to permeate the same or to emanate therefrom, any unusual,
         noxious or objectionable smokes, gases, vapor or odors.

11.11.1  The User shall not do or permit to be done any act or thing upon the
         Space which:

11.11.2  will invalidate or conflict with any fire insurance policies covering
         the Space or any part thereof, or the Airport or any part thereof; or

11.11.3  which, in the opinion of Pan American, may constitute an extra
         hazardous condition so as to increase the risks normally attendant upon
         the operations permitted by this Agreement; or

11.11.4  which will increase the rate of any fire insurance, extended coverage
         or other insurance on the Airport or any part thereof or upon the
         contents of any building or structure thereon.

12.      Rules and Regulations

12.1     User shall observe and obey and shall compel others on the Space and
         those doing business with it with respect to the Space to observe and
         obey such Rules and Regulations of the Airport as are now in effect or
         as may be promulgated from time to time for the government and conduct
         of operations of the Airport for reasons of safety, health or
         preservation of property, for the good and orderly appearance of the
         Space and for the safe and efficient operation and use of the Space. If
         a copy of the Rules and Regulations is not attached, then Pan American
         will make a copy thereof available to the User at the office of the
         Manager of Teterboro Airport.

                                       11
<PAGE>

13.      Signs

13.1     Except with the prior written approval of Pan American, the User shall
         not erect, maintain or display any advertising, signs, posters or
         similar devices at or on the Space.

13.2     Upon demand by Pan American, the User shall remove, obliterate or paint
         out any and all advertising, signs, posters and similar devices placed
         by the User on the Space or elsewhere on the Airport without the prior
         approval of Pan American. In the event of a failure on the part of the
         User so to remove, obliterate or paint out each and every sign or piece
         of advertising and so to restore the Space and the Airport, Pan
         American may perform the necessary work and the User shall pay the
         costs thereof to Pan American on demand.

14.      Construction by the User

14.1     The User shall not erect any structures, make any improvements or do
         any construction work on the Space, or install any fixtures (other than
         trade fixtures, removable without material damage to the Space, any
         such damage to be immediately repaired by the User) without the prior
         written approval of Pan American through the medium of a construction
         or alteration application and in the event any construction,
         improvement, alteration, modification, addition, repair or replacement
         is made without such approval, then upon reasonable notice so to do,
         the User will remove the same or at the option of Pan American, cause
         the same to be changed to the satisfaction of Pan American. In case of
         any failure on the part of the User to comply with such notice, Pan
         American may effect the removal or change and User shall pay the cost
         thereof to Pan American.

14.2     Title to any construction, improvement, alteration, modification or
         addition performed by User at or on the Space in accordance with a Pan
         American approved construction or alteration application shall vest in
         the Port Authority immediately upon completion without any further
         action or notice of any kind.

15.      Assignment

15.1     The User agrees that it will not grant the right of sub-use, sell,
         convey, transfer, assign, mortgage or pledge this Agreement or any part
         thereof or any rights granted thereby in the Agreement hereunder or any
         part hereof without the prior written consent of Pan American, which
         consent shall not be unreasonable withheld.

15.1.1   In the event that such right of sub-use is granted by Pan American, the
         User agrees to pay to Pan American an amount equal to Fifty Percent
         (50%) of any fees paid by the sub-user to the User in excess of the
         fees due to Pan American under Section 3 of the Agreement.

15.2     Notwithstanding the provisions of the foregoing subsection, the User
         may assign this Agreement in its entirety to any successor in interest
         to the User with or into which the User may be merged or consolidated
         or to any entity to whom the User has sold

                                       12
<PAGE>

         all or substantially all of its assets, provided that each such
         succeeding entity or purchaser shall execute and deliver an instrument
         to Pan American in a form satisfactory to Pan American assuming the
         obligations of the User under this Agreement, and provided, further,
         that the User shall execute and deliver to Pan American a statement to
         the effect the User's guarantee of the obligations hereunder shall
         cover hereunder the obligations of each succeeding entity or purchaser.

15.3     Nothing contained herein nor the privileges of assignment or granting
         the right of sub-use as set forth in Section 15.1.1 and 15.2 above
         shall be or be deemed to constitute a waiver or release of liability of
         the User and the User agrees that it shall at all time remain primarily
         liable for all of the obligations imposed upon it as User under this
         Agreement as if no assignment of or granting of right of sub-use under
         this Agreement was ever made or attempted.

15.4     If the User assigns, sells, conveys, transfers, mortgages, pledges or
         grants the right of sub-use under this Agreement in violation of the
         foregoing provisions of this Section 15, Pan American may collect from
         any assignee, sub-user or anyone who claims a right to this Agreement
         or who occupies the Space or any part thereof, and shall apply the net
         amount collected to the fees herein reserved; and no such collection
         shall be deemed a waiver by Pan American of the covenants contained in
         this Section 15 nor of acceptance by Pan American of any assignee,
         sub-user, claimant or occupant nor a release of the User by Pan
         American from the further performance by the User of the covenants
         contained herein.

16.      Condemnation

16.1     The User, in any action or proceeding instituted by any governmental
         agency or agencies for the taking for a public use of any interest in
         all or any part of the Space, shall not be entitled to assert any claim
         to any compensation or award or part thereof made or to be made therein
         or therefor, or to institute any action or proceeding or to assert any
         claim against such agency or agencies or against the Port Authority or
         Pan American, or its subsidiaries and affiliates for or on account of
         any such taking (except the possible claim to an award for loss of the
         User's removable fixtures), it being understood and agreed between Pan
         American and the User that Pan American shall be entitled to all the
         compensation or awards made or to be made or paid for in such taking,
         free of any claim or right of the User.

16.2     In the event of a taking of the entire Space by any governmental agency
         or agencies, then this Agreement shall be cancelled as of the date
         possession is taken from the Port Authority by the agency or agencies,
         and shall cease and expire in the same manner and with the same effect
         as if the Agreement had on that date expired.

16.3     In the event that all or any portion of the Space is required by the
         Port Authority to comply with any present or future governmental law,
         rules, regulation, requirement, order or direction, Pan American may by
         notice given to the User terminate the Agreement with respect to all or
         such portion of the Space so required. Such termination shall be
         effective on the date specified in the notice. The User hereby

                                       13
<PAGE>

         agrees to deliver possession of all or such portion of Space so
         required upon the effective date of such termination.

16.4     No taking by or conveyance to any governmental authority as described
         above nor any delivery by the User nor taking by the Port Authority
         pursuant to this subsection shall be or be construed to be a breach of
         this Agreement or be made the basis of any claim by the User against
         the Port Authority or Pan American or its subsidiaries and affiliates
         for damages, consequential or otherwise.

16.5     In the event of a taking by any governmental agency or agencies or by
         the Port Authority of a part of the Space, then use of such part only
         shall, as of the date possession thereof is taken, cease and determine,
         and the Fees thereafter to be paid by the User to Pan American shall be
         abated as hereinafter provided from and after the date of such taking.
         In the event that a substantial part shall be taken, which shall be
         deemed to mean a taking so extensive that the User is unable to use or
         operate the Space for the purposes expressed in this Agreement, then
         the User shall have the right to be exercised within thirty (30) days
         of the taking to terminate this Agreement, such termination to have the
         same effect as expiration.

17.      Non-Discrimination

17.1     Without limiting the generality of any of the provisions of this
         Agreement, the User, for itself, its successors in interest, and
         assigns, as a part of the consideration hereof, does hereby covenant
         and agree as a covenant running with the land that (1) no person on the
         grounds of sex, race, color, or national origin shall be excluded from
         participation in, denied the benefits of, or be otherwise subjected to
         discrimination in the use of the Space, (2) that in the construction of
         any improvement on, over, or under the Space and the furnishing of
         services thereon, no person on the grounds of race, color, or national
         origin shall be excluded from participation in, denied the benefits of,
         or otherwise subjected to discrimination, (3) that the User shall use
         the Space in compliance with all other requirements imposed by or
         pursuant to Title 49, Code of Federal Regulations, Department of
         Transportation, Subtitle A, Office of the Secretary, Part 21,
         nondiscrimination in Federally-assisted programs of the Department of
         Transportation-Effectuation of Title VI of the Civil Rights Act of
         1964, and as said Regulations may be amended, and any other present or
         future laws, rules, regulations, orders or directions of the United
         States of America with respect thereto which from tine to time may be
         applicable to the User's operations thereat, whether by reason of
         agreement between Pan American and the United States Government or
         otherwise.

17.2     The User assures that it will undertake an affirmative action program
         as required by 14 CFR Part 152, Subpart E, to insure that no person
         shall on the grounds of race, creed, color, national origin, or sex be
         excluded from participating in any employment activities covered in 14
         CFR Part 152, Subpart E. The User assures that no person shall be
         excluded on these grounds from participating in or receiving the
         services or benefits of any program or activity covered by this
         subpart. The User assures that it will require that its covered
         suborganization provide assurances to the

                                       14
<PAGE>

         User that they similarly will undertake affirmative action programs and
         that they will require assurances from their suborganizations, as
         required by 14 CFR Part 152, Subpart E, to the same effect.

17.3     The User shall include the provisions of the above subsections in every
         agreement or concession pursuant to which any person or persons, other
         than the User, operates any business or facility in or at the Space
         providing services to the public and shall also include therein a
         provision granting Pan American a right to take such action as the
         United States may direct to enforce such covenant.

17.4     The User's noncompliance with the provisions of this Section shall
         constitute a material breach of the Agreement. In the event of the
         breach by the User of any of the above nondiscrimination provisions,
         Pan American may take any appropriate action to enforce compliance; or
         in the event such noncompliance shall continue for a period of twenty
         (20) days after receipt of written notice from Pan American, Pan
         American shall have the right to terminate this Agreement with the same
         force and effect as a termination under the Section of the Agreement
         providing for termination for default by the User in the performance or
         observance of any other term or provision of the Agreement; or may
         pursue such other remedies as may be provided by law; and as to any or
         all of the foregoing, Pan American may take such action as the United
         States may direct.

17.5     The User shall indemnify and hold harmless Pan American, its
         subsidiaries and affiliates and the Port Authority (to include
         reasonable attorney's and other professional fees) from any claims and
         demands of third persons including the United States of America
         resulting from the User's noncompliance with any of the provisions of
         this Section and the User shall reimburse Pan American and the Port
         Authority for any loss or expense incurred by reason of such
         noncompliance, whether or not such claims, demands, causes of action,
         liability, etc., are made or asserted before or after termination or
         expiration of this agreement.

17.6     Nothing contained in this Section shall grant or shall be deemed to
         grant to the User the right to transfer or assign the Agreement, to
         make any agreement or concession of the type mentioned in this Section,
         or any right to perform any construction on the Space.

18.      Governmental Requirements

18.1     The User shall procure all licenses, certificates, permits or other
         authorization from all governmental authorities, if any, having
         jurisdiction over the User's operations at the Space which may be
         necessary for the User's operations thereat.

18.2     The User shall pay all taxes, license, certification, permit and
         examination fees and excise which may be assessed, levied, exacted or
         imposed on the Space or operation hereunder or on the gross receipts or
         income to User therefrom, and shall make all applications, reports and
         returns required in connection therewith.

                                       15
<PAGE>

18.3     Pan American has agreed by a provision in its agreement with the Port
         Authority covering the Airport to conform to the enactments,
         ordinances, resolutions and regulations of various governmental
         authorities having jurisdiction of the airport and of their various
         departments, boards and bureaus in regard to construction and
         maintenance of buildings and structures and in regard to health and
         fire protection. The User shall, within forty-eight (48) hours after
         its receipt of any notice of violation, warning notice, summons or
         other legal process for the enforcement of any such enactment,
         ordinance, resolution or regulation, deliver the same to Pan American.
         Unless otherwise directed in writing by Pan American because the same
         is inapplicable, the User shall conform to such enactments, ordinances,
         resolutions and regulations insofar as they relate to the operations of
         the User at the Space. In the event of compliance with any such
         enactment, ordinance, resolution or regulation on the part of the User,
         acting in good faith, commenced after such delivery to Pan American but
         prior to the receipt by the User of a written direction from Pan
         American, such compliance shall not constitute a breach of this
         Agreement, although Pan American thereafter notifies the User to
         refrain from such compliance.

18.4     The User shall promptly observe, comply with and execute the provisions
         of any and all present and future governmental laws, rules,
         regulations, requirements, orders and directions which may pertain or
         apply to the User's operations at the Space.

18.5     The User's obligations to comply with governmental requirements are
         provided herein for the purpose of assuring proper safeguards for the
         protection of persons and property at the Space.

19.      Rights of Entry Reserved

19.1     The Port Authority, by its officers, employees, agents, representatives
         and contractors and Pan American and its subsidiaries and affiliates by
         its officers, employees, agents, representatives and contractors shall
         have the right at all reasonable times to enter upon the Space for the
         purpose of inspecting the same, for observing the performance by the
         User of its obligations under this Agreement and for the doing of any
         act or thing which the Port Authority or Pan American nay be obligated
         or have the right to do under this Agreement, or otherwise.

19.2     Without limiting the generality of the foregoing, Pan American, by its
         officers, employees, agents, representatives and contractors and by the
         employees, agents, representatives and contractors of any furnisher of
         utility services in the vicinity, shall have the right, for its own
         benefit, for the benefit of the User, or for the benefit of others than
         the User at the Airport, to maintain existing and future utilities
         systems or portions thereof on the Space, including therein, without
         limitation thereto, systems for the supply of heat, water, gas, fuel,
         electricity and for the furnishing of fire-alarm, fire-protection,
         sprinkler, sewerage, drainage, telegraph and telephone services,
         including all lines, pipes, mains, wires, conduits and equipment
         connected with or appurtenant to such systems, and to enter upon the
         Space at all reasonable times to make such repairs, replacements or
         alterations as may, in the opinion of Pan American, be deemed necessary
         or advisable and, from time to time to construct or

                                       16
<PAGE>

         install over, in or under the Space new systems or parts thereof,
         including lines, pipes, mains, wires, conduits and equipment; provided,
         however, that in the exercise of such rights of repair, alteration or
         new construction Pan American shall not unreasonably interfere with the
         use and occupancy of the Space by the User.

19.3     The exercise of any or all of the foregoing rights by the Port
         Authority, Pan American or others shall not be or be construed to be an
         eviction of the User nor be made the grounds for any abatement of fees,
         nor any claim or demand for damages, consequential or otherwise.

19.4     Nothing in this Section shall impose or shall be construed to impose
         upon Pan American or the Port Authority any obligation so to construct
         or maintain or to make repairs, replacements, alterations or additions,
         or shall create any liability for any failure so to do.

20.      Basic Agreement

20.1     In the event the Basic Agreement is terminated, revoked, cancelled or
         expires, this Agreement shall terminate on the day preceding such date
         the same as if such preceding date were the expiration date of the term
         of this Agreement and such termination, revocation, cancellation or
         expiration of the Basic Agreement shall not be deemed a breach of this
         Agreement.

21.      Patents, Trademarks

21.1     The User represents that it is the owner of or fully authorized to use
         any and all services, processes, machines, articles, marks, names or
         slogans used by it in its operations under or in anywise connected with
         this Agreement. The User agrees to indemnify and to save and hold the
         Port Authority, Pan American, its subsidiaries and affiliates, their
         Commissioners, Directors, officers, employees, agents and
         representatives free and harmless of and from any loss, liability,
         expense, suit or claim for damages in connection with any actual or
         infringement of any patent, trademark or copyright, or arising from any
         alleged or actual unfair competition or other similar claim arising out
         of the operations of the User under or in anywise connected with this
         Agreement, whether or not such claims, demands, causes of action,
         liabilities, etc., are made or asserted before or after termination or
         expiration of this Agreement and to include reasonable attorney's and
         other professional fees.

22.      Additional Fees and Charges

22.1     If Pan American is required or elects to pay any sum or sums or incurs
         any obligations or expense by reason of the failure, neglect or refusal
         of the User to perform or fulfill any one or more of the conditions or
         agreements contained in this Agreement, or as a result of an act or
         omission of the User contrary to the said conditions and agreements,
         the User agrees to pay the sum or sums so paid or the expense so
         incurred, including all interest, costs, damages and penalties, and the
         same may be added to any installment of Fees thereafter due hereunder,
         and each and every part of the same shall be and become additional
         Fees, recoverable by Pan American

                                       17
<PAGE>

         in the same manner and with like remedies as if they were originally a
         part of the Fees as set forth in the Section entitled "Fees to Pan
         American" hereof.

23.      Right of Re-Entry

23.1     Pan American shall, as an additional remedy upon the giving of a notice
         of termination as provided in the Section entitled "Termination by Pan
         American" hereof, have the right to re-enter the Space and every part
         thereof upon the effective date of termination without further notice
         of any kind, and may regain and resume possession either with or
         without the institution of summary or any other legal proceedings or
         otherwise. Such re-entry or regaining or resumption of possession,
         however, shall not in any manner affect, alter or diminish any of the
         obligations of the User under this Agreement, and shall in no event
         constitute an acceptance of surrender.

24.      Surrender

24.1     The User covenants and agrees to yield and deliver peaceably to Pan
         American, possession of the Space on the date of cessation of the
         Agreement, whether such cessation be by termination, expiration or
         otherwise, promptly and in good condition, except for reasonable wear
         which does not cause or tend to cause deterioration of the improvements
         or adversely affect the efficiency or proper utilization thereof.

25.      Termination by Pan American

25.1     Upon the occurrence of any of the following events or at any time
         thereafter during the continuance thereof, Pan American may terminate
         the rights of the User under this Agreement upon five (5) days' written
         notice, such termination to be effective upon the date specified in
         such notice:

25.1.1   The User shall become insolvent or shall take the benefit of any
         present or future insolvency statute, or shall make a general
         assignment for the benefit of creditors, or file a voluntary petition
         in bankruptcy or a petition or an answer seeking an arrangement or its
         reorganization or the readjustment of its indebtedness under the
         federal bankruptcy laws or under any other law or statute of the United
         States or of any State thereof, or consent to the appointment of a
         receiver, trustee or liquidator of all or substantially all of its
         property; or

25.1.2   By order of decree of a court, the User shall be adjudged bankrupt or
         an order shall be made approving a petition filed by any of the
         creditors or, if the User is a corporation, by any of the stockholders
         of the user, seeking its reorganization or the readjustment of its
         indebtedness under the federal bankruptcy laws or under any law or
         statute of the United States or of any State thereof; or

25.1.3   A petition under any part of the federal bankruptcy laws or an action
         under any present or future insolvency law or statute shall be filed
         against the User and shall not be dismissed within thirty (30) days
         after the filing thereof; or

                                       18
<PAGE>

25.1.4   Except as may be provided in the Section of this Agreement entitled
         "Assignment," the interest of User under this Agreement shall be
         transferred to, pass to or devolve upon, by operation of law or
         otherwise, any other person, firm or corporation; or

25.1.5   The User, if a corporation, shall, without the prior written approval
         of Pan American, become a successor or merged corporation in a merger,
         a constituent corporation in a consolidation, or a corporation in
         dissolution; or

25.1.6   By or pursuant to, or under authority of any legislative act,
         resolution or rule, or any order or decree of any court or governmental
         board, agency or officer having jurisdiction, a receiver, trustee, or
         liquidator shall take possession or control of all or substantially all
         of the Space of the User and such possession or control shall continue
         in effect for a period of twenty (20) working days; or

25.1.7   The User shall voluntarily abandon, desert or vacate the Space or
         discontinue its operations at the Airport, or, after exhausting or
         abandoning any right of further appeal, the User shall be prevented for
         a period of sixty (60) days by action of any governmental agency having
         jurisdiction thereof, from conducting its operations at the Airport,
         regardless of the fault of the User; or

25.1.8   Any lien is filed against the Space because of any act or omission of
         the User and is not removed within forty-five (45) days after notice to
         the User thereof; or

25.1.9   The User shall fail duly and punctually to pay the Fees or to make any
         other payment required hereunder when due to Pan American and shall
         persist in its failure for a period of ten (10) days following the
         receipt of written notice of such default from Pan American; or

25.1.10  The User shall fail to keep, perform and observe each and every other
         promise and agreement set forth in this Agreement on its part to be
         kept, performed, or observed, within ten (10) days after receipt of
         notice of default thereunder from Pan American (except where
         fulfillment or its obligation requires activity over a period of time,
         and the User shall have commenced substantially to perform whatever may
         be required for fulfillment within ten (10) days after receipt of
         notice and continues diligently such substantial performance without
         interruption except for causes beyond its control); or

25.1.11  There shall be an occurrence of any of the events of default resulting
         in termination of any other use and occupancy agreements or permits
         between the User and Pan American at the Airport.

25.2     If any of the events enumerated in the above subsections of this
         Section shall occur prior to the effective date of this Agreement, the
         User shall not be entitled to enter into possession of the Space, and
         Pan American upon the occurrence of any such event, or at any time
         thereafter during the continuance thereof by twenty-four (24) hours'
         notice may cancel this Agreement, such cancellation to be effective
         upon the date specified in such notice.

                                       19
<PAGE>

25.3     No acceptance by Pan American of fees, charges, or other payments in
         whole or in part for any period or periods after a default of any of
         the terms, agreements and conditions hereof to be performed, kept or
         observed by the User shall be deemed a waiver of any right on the part
         of Pan American to terminate this Agreement.

25.4     No waiver by Pan American of any default on the part of the User in
         performance of any of the terms, covenants or conditions hereof to be
         performed, kept or observed by the User shall be or be construed to be
         a waiver by Pan American, of any other or subsequent default in
         performance of any of the valid terms, agreements and conditions.

25.5     The rights of termination described above shall be in addition to any
         other rights of termination provided in this Agreement and in addition
         to any rights and remedies that Pan American would have at law or in
         equity consequent upon any breach of this Agreement by the User, and
         the exercise by Pan American of any right of termination shall be
         without prejudice to any other such rights and remedies, except that in
         the event of termination pursuant to the portion of the subsection
         above of this Section reading "after exhausting or abandoning any right
         of further appeal, the User shall be prevented for a period of sixty
         (60) days by action of any governmental agency having jurisdiction
         thereof, from conducting its operations at the Airport, regardless of
         the fault of the User," the sole right of Pan American shall be a right
         of termination.

26.      Survival of the Obligations of the User

26.1     In the event that the Agreement shall have been terminated in
         accordance with a notice of termination as provided in the Section
         entitled "Termination by Pan American" hereof, or in the event that Pan
         American has re-entered, regained or resumed possession of the Space in
         accordance with the provisions of the Section entitled "Right of
         Re-Entry" hereof, all the obligations of the User under this Agreement
         shall survive such termination or cancellation, re-entry, regaining or
         resumption of possession and shall remain in full force and effect for
         the full term of this Agreement, and the amount or amounts of damages
         or deficiency shall become due and payable to Pan American to the same
         extent, at the same time or times, and in the same manner as if no
         termination, cancellation, re-entry, regaining or resumption of
         possession had taken place. Pan American may maintain separate actions
         each month to recover the damage or deficiency then due or at its
         option and at any time may sue to recover the full deficiency, for the
         entire unexpired term of the Agreement.

26.2     The amount of damages for the period of time subsequent to termination
         or cancellation (or re-entry, regaining or resumption of possession) on
         account of the User's Fee obligations, shall be the sum of the
         following:

26.2.1   The amount of the total of all installments of fees pursuant to the
         Section entitled "Fees to Pan American" hereof, less the installments
         thereof payable prior to the effective date of termination except that
         the credit to be allowed for the installment

                                       20
<PAGE>

         payable on the first (1st) day of the month in which the termination is
         effective shall be prorated for the part of the month the Agreement
         remains in effect on the basis of the total days in the month; and an
         amount equal to all expenses incurred by Pan American in connection
         with regaining possession, restoring the Space, acquiring a User for
         the Space, legal expenses (including but not limited to attorneys'
         fees), putting the Space in order including, without limitation to,
         cleaning, redecorating (on failure of the User to restore), maintenance
         and brokerage fees.

27.      Use Subsequent to Cancellation or Termination

27.1     Pan American, upon termination or cancellation pursuant to the Section
         entitled "Termination by Pan American" of this Agreement, or upon any
         re-entry, regaining or resumption of possession pursuant to the Section
         entitled "Right of Re-Entry" of this Agreement, may occupy the Space or
         may enter into an agreement with another User and shall have the right
         to permit any person, firm or corporation to enter upon the Space and
         use the same. Such use may be part only of the Space or of the entire
         Space or a part thereof, together with other space, and for a period of
         time the same as or different from the balance of the term hereunder
         remaining, and on terms and conditions the same as or different from
         those set forth in this Agreement. Pan American shall also, upon said
         termination or cancellation, or upon said re-entry, regaining or
         resumption of possession, have the right to repair and to make
         structural or other changes in the Space, including changes which alter
         the character of the Space and the suitability thereof for the purposes
         of the User under this Agreement, without affecting, altering or
         diminishing the obligations of the User hereunder.

27.2     In the event either of use by others or of any actual use and occupancy
         by Pan American, there shall be credited to the account of the User
         against its survived obligations hereunder any net amount remaining
         after deducting from the amount actually received from any User,
         licensee, permittee or other occupier in connection with the use of the
         said Space or portion thereof during the balance of the term of use and
         occupancy as the same is originally stated in this Agreement, or from
         the market value of the occupancy of such portion of the Space as Pan
         American may itself during such period actually use and occupy, less
         all expenses, costs and disbursements incurred or paid by Pan American
         in connection therewith.

27.3     No such use and occupancy shall be or be construed to be an acceptance
         of a surrender of the Space, nor shall such use and occupancy
         constitute a waiver of any rights of Pan American hereunder. Pan
         American will use its best efforts to minimize damages to User under
         this Section commensurate with its obligations under the Basic
         Agreement.

28.      Remedies to be Non-Exclusive

28.1     Except where otherwise specifically provided, all remedies provided in
         this Agreement shall be deemed cumulative and additional and not in
         lieu of or exclusive of each other or of any other remedy available to
         either party at law or in equity.

                                       21
<PAGE>

29.      Limitation of Rights and Privileges Granted

29.1     No exclusive rights at the Airport are granted by this Agreement and no
         greater rights or privileges with respect to the use of the Space or
         any part thereof are granted or intended to be granted to the User by
         this Agreement, or by any provision thereof, than the rights and
         privileges expressly and specifically granted hereby.

30.      Option for Renewal

30.1     The User shall have the right to extend this Agreement for an
         additional period of (5) years ("extended term") on the same terms and
         conditions except for fees and this option, upon condition that:

30.1.1   The User shall notify Pan American of its desire to so extend this
         Agreement on or before December 31, 1989; and

30.1.2   At both the date of receipt of notice to Pan American and on January 1,
         1991:

30.1.3   the User shall be in possession of and occupying the Space under this
         Agreement,

30.1.4   the User shall not be under notice of termination from Pan American,
         and

30.1.5   the User shall not be in default in the performance of any of the
         terms, covenants and agreements contained herein and to be performed by
         the User.

30.2     Upon the date the option shall have become effective and throughout the
         extended term User shall pay to Pan American the following fees:

30.2.1   A basic annual fee of Two Hundred Thousand Twenty Two Dollars and
         Eighty Four Cents ($200,022.84) multiplied by a fraction the numerator
         of which shall be all Urban Consumers of the Bureau of Labor Statistics
         of the United States Department of Labor, all items, Selected Large
         Cities for the New York - Northeastern New Jersey area (hereinafter
         called "the CPI") as published for the month of December 1990 and the
         denominator of which shall be the CPI published for the month of June
         1985.

30.2.2   In computing the basic annual fee for the extended term, in no event
         shall the basic annual fee be less than Two Hundred Thousand Twenty Two
         Dollars and Eight Four Cents ($200,022.84).

30.2.3   The basic annual fee for the extended term as computed in Section
         30.2.1 above shall be payable in equal monthly installments each and
         every month throughout the extended term.

                                       22
<PAGE>

31.      Removal of Personal Property

31.1     The User shall have the right at any time during the term of this
         Agreement to remove its equipment, inventories, removable fixtures and
         other personal property from the Space.

31.2     If the User shall fail to remove its property on or before the
         termination or expiration of the term, Pan American may remove such
         property to a public warehouse for deposit or retain the same in its
         own possession, all without insurance, and sell the same at public
         auction, the proceeds of which shall be applied first, to the expense
         of removal, storage and sale; second, to any sums owed by the User to
         Pan American, with any balance remaining to be paid to the User, but if
         the expenses of such removal, storage and sale shall exceed the
         proceeds of sale, the User shall pay such excess to Pan American upon
         demand.

32.      Brokerage

32.1     The User represents and warrants that no broker has been concerned on
         its behalf in the negotiation of this Agreement and that there is no
         such broker who is or may be entitled to be paid a commission in
         connection therewith. The User shall indemnify and save harmless Pan
         American its subsidiaries and affiliates of and from any claim for
         commission or brokerage made by any such broker when such claim is
         based in whole or in part upon any act or omission of the User, whether
         or not such claims, demands, causes of action, liabilities, etc., are
         made or asserted before or after termination or expiration of this
         Agreement (to include reasonable attorney's and other professional
         fees).

33.      Notices

33.1     Except where expressly required or permitted herein to be oral, all
         notices, requests, consents and approvals required to be given to or by
         either party shall be in writing, and all such notices and requests
         shall be personally delivered to the duly designated officer or
         representative of such party or delivered to the office of such officer
         or representative during regular business hours, or forwarded to him or
         to the party at such address by certified mail.

         Notices to Pan American shall be directed to:

                  J. Scott Piper
                  Authorized Representative
                  Pan Am World Services
                  Pan Am Building
                  Teterboro Airport, New Jersey  07608

                                       23
<PAGE>

         with copy to:

                  Airport Manager
                  399 Industrial Avenue
                  Teterboro Airport, New Jersey 07608

         Notices to User shall be directed to:

                  Manager, Aviation Transportation
                  Texaco, Inc.
                  177 Industrial Avenue
                  Teterboro Airport
                  Teterboro, New Jersey 07608

34.      Construction and Application of Terms

34.1     The Section and subsection headings, if any, in this Agreement, are
         inserted only as a matter of convenience and for reference and in no
         way define, limit or describe the scope of intent of any provision
         hereof.

35.      Non-Liability of Individuals

35.1     Neither the Directors of Pan American, its subsidiaries and affiliates,
         or User nor any officers, agents or employees thereof, shall be charged
         personally by the other with any liability or held liable to the other
         under any term or provision of this Agreement, or because of its
         execution or attempted execution, or because of any breach or attempted
         or alleged breach thereof.

36.      Abatement

36.1     If at any time the User shall become entitled to abatement of Fees by
         the provisions of this Agreement or otherwise, the abatement of Fees
         shall be made on an equitable basis giving effect to the amount and
         character of the Space, the use of which is denied the User as compared
         with the entire Space.

37.      Port Authority Consent

37.1     This Agreement shall become effective upon the execution hereof by all
         parties hereto and the execution of a Consent Agreement between and
         among the Port Authority, Pan American, and User.

38.      Entire Agreement

38.1     This Agreement consists of the following:

         Sections 1 through 38 and Exhibit A.

                                       24
<PAGE>

38.2     The foregoing constitutes the entire Agreement of the parties on the
         subject matter hereof. It may not be changed, modified, discharged or
         extended except by written instrument duly executed by Pan American and
         the User. The User agrees that no representations or warranties shall
         be binding upon Pan American unless expressed in writing in this
         Agreement.

                                       25
<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed these presents as of the
day and year first above written.

                                            PAN AMERICAN WORLD AIRWAYS, INC.
ATTEST:

/s/ Illegible
-------------------------------             By /s/ Linda B. Young
                                              ----------------------------------

                                            Title: Authorized Representative
                                                  ------------------------------

                                            TEXACO INC.

                                            /s/ G. Marshall
                                            ------------------------------------
                                                           (User)

ATTEST:

/s/ R. Koch
-------------------------------             By General Manager
     Assistant Secretary                      ----------------------------------
                                            Title: Corporate Real Estate
                                                   Department

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

                                       26
<PAGE>

                                                            Assignment Agreement
                                                                          TA-191

                                CONSENT AGREEMENT

THIS AGREEMENT, dated as of       , 1988, by and among THE PORT AUTHORITY OF NEW
YORK AND NEW JERSEY (hereinafter called "the Port Authority") and PAN AMERICAN
WORLD AIRWAYS, INC. (hereinafter called "the Airport Operator"), and TEXACO INC,
a Delaware corporation (hereinafter called "the Assignor") and ATLANTIC AVIATION
CORPORATION, a Delaware corporation (hereinafter called "the Assignee"),

WITNESSETH, THAT:

WHEREAS, the Port Authority and the Airport Operator have heretofore entered
into an agreement dated September 19, 1967 (which agreement, as the same has
been or may be supplemented and amended, is hereinafter called "the Main
Agreement") pursuant to which the Airport Operator is operating and using
Teterboro Airport (hereinafter called "the Airport"); and

WHEREAS, the Airport Operator entered into a Use and Occupancy Agreement with
the Assignor dated January 1, 1986 designated TA-191 and the Consent Agreement
in connection therewith (which Use and Occupancy Agreement as heretofore
supplemented and amended, is hereinafter referred to as "the Agreement" and
together with the said Consent Agreement, collectively hereinafter referred to
as the "Assigned Agreements").

WHEREAS, the Assignor proposes to assign the Agreement to the Assignee in
accordance with an "Assignment Agreement", a copy of which is attached hereto
and made a part hereof and hereafter referred to as "the Assignment Agreement",
subject to the consent of the Airport Operator and the Port Authority, and the
execution of a Consent Agreement by and among the Airport Operator, the
Assignor, the Assignee and the Port Authority pursuant to and in accordance with
the terms of the Main Agreement.

NOW, THEREFORE, for and in consideration of the mutual agreements herein
contained, the Port Authority, the Airport Operator, the Assignor and the
Assignee hereby agree effective as of June 1, 1988 as follows:

1.       On the terms and conditions hereinafter set forth, the Port Authority
         and the Airport Operator consent to the Assignment Agreement.

2.       The execution of this instrument by the Airport Operator and the Port
         Authority does not constitute a representation by them that the
         Assignor has performed or fulfilled every obligation required by the
         Agreement; as to such matters the Assignee agrees to rely solely upon
         the representations of the Assignor.

3.       The Agreement shall terminate, without notice to the Assignee, on the
         day preceding the date of expiration or earlier termination of the Main
         Agreement, or on such earlier date as may be provided for in the
         Agreement.

                                       1
<PAGE>

4.       Neither this Consent Agreement, nor anything contained herein nor the
         consent granted hereunder shall constitute or be deemed to constitute a
         consent to nor shall they create an inference or implication that there
         has been consent to any enlargement, variation or change in the rights,
         powers and privileges granted to the Airport Operator under the Main
         Agreement, nor consent to the granting or conferring of any rights,
         powers or privileges to the Assignee as may be provided by the
         Agreement if not granted to the Airport Operator under the Main
         Agreement, nor shall the same impair or change any of the duties,
         liabilities and obligations imposed on the Airport Operator under the
         Main Agreement. The Assignment Agreement is an agreement between the
         Assignor and the Assignee with respect to the various matters set forth
         therein. Neither this Consent Agreement nor anything contained herein
         nor the consent granted hereunder shall apply and pertain as between
         the Airport Operator and the Port Authority, it being understood that
         the terms, provisions, covenants, conditions and agreements of the Main
         Agreement shall, in all respects, be controlling, effective and
         determinative. The specific mention of or reference to the Port
         Authority in any part of the Agreement or the Assignment Agreement
         including, without limitation thereto, any mention of any consent or
         approval of the Port Authority now or hereafter to be obtained, shall
         not be or be deemed to create an inference that the Port Authority has
         granted its consent or approval thereto under this Consent Agreement or
         shall thereafter grant its consent or approval thereto or that the
         subject matter as to which the consent or approval applies has been or
         shall be approved or consented to in principle or in fact or that the
         Port Authority's discretion pursuant to the Main Agreement as to any
         such consents or approvals shall in any way be affected or impaired.
         The lack of any specific reference in any provisions of the Assignment
         Agreement to Port Authority approval or consent shall not be deemed to
         imply that no such approval or consent is required and the Main
         Agreement shall in all respects be controlling, effective and
         determinative.

         No provision of the Assigned Agreements including, but not limited to,
         those imposing obligations on the Assignee with respect to laws, rules,
         regulations, taxes, assessments and liens, shall be construed as a
         submission or admission by the Port Authority that the same could or
         does lawfully apply to the Port Authority, nor shall the existence of
         any provision of the Assigned Agreements covering actions which shall
         or may be undertaken by the Assignee or the Airport Operator be deemed
         to imply or infer that Port Authority consent or approval thereto
         pursuant to the Main Agreement will be given or that Port Authority
         discretion with respect thereto will in any way be affected or
         impaired. References in this paragraph to specific matters and
         provisions shall not be construed as indicating any limitation upon the
         rights of the Port Authority with respect to its discretion as to the
         granting or withholding approvals or consents as to other matters and
         provisions in the Assigned Agreements or the Assignment Agreement which
         are not specifically referred to herein.

5.       The Assignee, in its operations under or in connection with the
         Assigned Agreements shall be subject to the applicable terms,
         provisions, covenants and conditions of the Main Agreement. Without in
         any way affecting the obligations of the Airport Operator under the
         Main Agreement and under this Consent Agreement, all acts and omissions
         of the Assignee shall be deemed to be acts and omissions of the Airport
         Operator under the Main Agreement, but notwithstanding the foregoing
         shall not constitute a breach thereof

                                       2
<PAGE>

         if, except for causes beyond the control of the Airport Operator, it
         shall have commenced to remedy said default within twenty (20) days
         after receipt of notice thereof from the Port Authority and continues
         diligently to pursue such remedy.

6.       Neither the Assigned Agreements nor the Assignment Agreement shall be
         changed, modified, discharged or extended except by written instrument
         duly executed by the parties thereto and only with the express prior
         written consent of the Port Authority.

7.       If the Airport Operator shall at any time be in default of its
         obligations under the Main Agreement to make payments to the Port
         Authority, or if there shall occur at any time an event involving
         insolvency, bankruptcy, arrangement or reorganization of the Airport
         Operator which under the terms of the Main Agreement would constitute
         an event the occurrence of which grants the Port Authority the right to
         terminate the Main Agreement, and provided the same has not been cured
         within the time granted therefor, if any, under the Main Agreement, the
         Assignee shall on demand of the Port Authority pay directly to the Port
         Authority any fee or other amount due to the Airport Operator. No such
         payment shall relieve the Airport Operator from any obligations under
         the Main Agreement or under this Consent Agreement but all such
         payments shall be credited against the obligations of the Airport
         Operator and of the Assignee for each payment or part thereof.

8.       The granting of the consent hereunder by the Port Authority shall not
         be or be deemed to operate as a waiver of consent to any subsequent
         agreement with respect to privileges at the Airport (by the Airport
         Operator or by the Assignee) or to any assignment of the Main Agreement
         or the Assigned Agreements or of any rights under either of them,
         whether in whole or in part.

9.       In the event of any substantial default by the Assignee under any of
         the provisions of this Consent Agreement and said default has not been
         cured within thirty (30) days after the Port Authority has served a
         notice of such default upon the Airport Operator and the Assignee, the
         Port Authority shall have the right to revoke the consent granted
         hereunder upon thirty (30) days' written notice to the Airport Operator
         and the Assignee, but no such revocation shall be deemed to affect the
         Main Agreement and the continuance thereof, it being understood,
         moreover, that the foregoing shall not be deemed to affect or limit any
         rights of the Port Authority under the Main Agreement or the Assigned
         Agreements. In the event of the revocation of the consent hereunder as
         hereinabove provided, the Airport Operator shall immediately terminate
         the Agreement.

10.      Reference herein to the Assignee shall mean and include the Assignee,
         its officers, agents, employees and also others on the space covered by
         the Agreement or on the Airport with the consent of the Assignee.

11.      Neither the Commissioners of the Port Authority nor any of them, nor
         any officer, agent or employee thereof shall be held personally liable
         to the Airport Operator, to the Assignor or to the Assignee under any
         term or provision of this Consent Agreement or because of its execution
         or because of any breach or alleged breach hereof.

                                       3
<PAGE>

12.      Neither the Directors of the Airport Operator, nor any of them, nor any
         officer, agent or employee thereof shall be personally liable to the
         Assignor or the Assignee under any term or provision of this Consent
         Agreement or because of its execution or because of any breach or
         alleged breach thereof.

                                       4
<PAGE>

                            CERTIFICATE OF SECRETARY

         I, Franklin S. Eyster, II, certify that I am the Secretary of the
corporation named in the attached agreement; that Donald R. Romano, who signed
said authorized agreement on behalf of the corporation was then the Senior Vice
President and Treasurer of said corporation; that said agreement was duly signed
for and in behalf of said corporation by authority of its governing body, and is
within the scope of its corporate powers.

                                     /s/ Franklin S. Eyster, II
                                     -------------------------------------------
                                               Franklin S. Eyster, II

                                                  (Corporate Seal)

STATE OF DELAWARE    )
                     ) SS.
NEW CASTLE COUNTY    )

         On this 8th day of July, One Thousand Nine Hundred and Eighty Eight
before me, Victoria A. Tait, a Notary Public in and for the County of New
Castle, State of Delaware, duly commissioned and qualified, personally appeared
Franklin S. Eyster, II, known to me to be the person described in and whose name
is subscribed to the attached instrument, and acknowledged to me that he
executed the instrument for the purposes and consideration therein stated.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my office
seal, at my office the day and year in this certificate first written above.

                                     /s/ Victoria A. Tait
                                     -------------------------------------------
                                                    Notary Public

My Commission Expires:
August 27, 1990

                                       1
<PAGE>

I, Catherine Doherty, certify that I am the Assistant Secretary of the
corporation named in the attached agreement; that Les Gertach who signed
said authorized agreement on behalf of the corporation was then the
__________________ of said corporation; that said agreement was duly signed for
and in behalf of said corporation by authority of its governing body, and is
within the scope of its corporate powers.

                                     /s/ Catherine Doherty
                                     -------------------------------------------
                                                    (Signature)

                                                  (Corporate Seal)

STATE OF NEW YORK

COUNTY OF WESTCHESTER

         On this 2nd day of August, One Thousand Nine Hundred and Eighty Eight
before me, Lerodie A. Robertson, a Notary Public in and for the County of
Westchester, State of New York, duly commissioned and qualified, personally
appeared Catherine Doherty, known to me to be the person described in and whose
name is subscribed to the attached instrument, and acknowledged to me that he
executed the instrument for the purposes and consideration therein stated.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my office
seal, at my office the day and year in this certificate first written above.

                                     By: /s/ Lerodie A. Robertson
                                         ---------------------------------------

My Commission Expires:

March 30, 1989

                                       1
<PAGE>

                              ASSIGNMENT AGREEMENT

         This Assignment Agreement made this 8th day of July, 1988, between
ATLANTIC AVIATION CORPORATION a Delaware corporation, with its principal place
of business at 153 North DuPont Highway, Greater Wilmington Airport, New Castle,
Delaware 19720 ("Atlantic") and TEXACO INC., a Delaware corporation, with an
office at 2000 Westchester Avenue, White Plains, New York 10650 ("Texaco").

         A.       Texaco uses and occupies space at Teterboro Airport located in
Bergen County, New Jersey, pursuant to a Use and Occupancy Agreement with Pan
American World Airways, Inc. bearing file designation TA 191, and the Consent
Agreement in connection with the foregoing, which Use and Occupancy Agreement,
together with said Consent Agreement, are hereafter collectively referred to as
(the "Agreement").

         B.       Atlantic uses and occupies space at the Airport adjacent to
the space occupied by Texaco and wishes to expand the area occupied by it.

         C.       Texaco and Atlantic have agreed to an assignment of the
Agreement.

         NOW, THEREFORE, Texaco and Atlantic agree as follows:

         1.       Texaco assigns to Atlantic all of its right, title and
interest in and to the Agreement, a true, correct and complete copy of which
with all amendments thereto is attached to this Assignment Agreement as Exhibit
A.

         2.       Atlantic accepts the assignment and agrees to perform and
observe all the terms, conditions and obligations in the Agreement which were
imposed on Texaco, as though Atlantic were the original signatory to the
Agreement, and to hold harmless and indemnify Texaco from any claims, demands or
actions brought against it by reason of the failure of Atlantic to observe and
perform the terms, conditions and obligations of the Agreement.

         3.       Texaco warrants that as of the date Atlantic occupies the
space that the Agreement is in full force and effect; it is not in default;
Texaco has committed no act or omission that could give rise to a default and
that all fees required to be paid have been paid through April 30, 1988.

         4.       This Assignment Agreement is subject to the approval of Pan
American World Airways, Inc. ("Pan American") and The Port Authority of New York
and New Jersey ("Port Authority"). Atlantic will submit the Assignment Agreement
to Pan Am for approval.

         5.       Texaco shall use its best efforts to vacate the space on or
prior to June 1, 1988, but Texaco shall incur no liability if for any reason it
is unable to do so.

                                       1
<PAGE>

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

                                               TEXACO INC.

ATTEST:                                        By: /s/ Les Gerlach
                                                  ------------------------------
/s/ Catherine Doherty
-------------------------------                Title: Manager Aviation Transport
                                                     ---------------------------
            Secretary

                                               ATLANTIC AVIATION CORPORATION

ATTEST:                                        By: /s/ Illegible
                                                  ------------------------------
/s/ Franklin S. Eyster, II
-------------------------------                Title: Illegible
            Secretary                                ---------------------------

                                       2
<PAGE>

                            CERTIFICATE OF SECRETARY

         I, Franklin S. Eyster, II, certify that I am the Secretary of the
corporation named in the attached agreement; that Donald R. Romano, who signed
said authorized agreement on behalf of the corporation was then the Senior Vice
President and Treasurer of said corporation; that said agreement was duly signed
for and in behalf of said corporation by authority of its governing body, and is
within the scope of its corporate powers.

                                            /s/ Franklin S. Eyster, II
                                     -------------------------------------------
                                                Franklin S. Eyster, II

                                                   (Corporate Seal)

STATE OF DELAWARE    )
                     )   SS.
NEW CASTLE COUNTY    )

         On this 8th day of July, One Thousand Nine Hundred and Eighty Eight
before me, Victoria A. Tait, a Notary Public in and for the County of New
Castle, State of Delaware, duly commissioned and qualified, personally appeared
Franklin S. Eyster, II, known to me to be the person described in and whose name
is subscribed to the attached instrument, and acknowledged to me that he
executed the instrument for the purposes and consideration therein stated.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my office
seal, at my office the day and year in this certificate first written above.

                                             /s/ Victoria A. Tait
                                     -------------------------------------------
                                                  Notary Public

My Commission Expires:
August 27, 1990

                                       1
<PAGE>

I, Catherine Doherty, certify that I am the Assistant Secretary of the
corporation named in the attached agreement ("Texaco Inc."); that Les Gerlach
who signed said authorized agreement on behalf of the corporation was then the
Manager of Aviation Transport of said corporation; that said agreement was duly
signed for and in behalf of said corporation by authority of its governing body,
and is within the scope of its corporate powers.

                                               /s/ Catherine Doherty
                                     -------------------------------------------
                                                     (Signature)

                                                   (Corporate Seal)

STATE OF NEW YORK

COUNTY OF WESTCHESTER

         On this 2nd day of August, One Thousand Nine Hundred and Eighty Eight
before me, _____ A. Robertson, a Notary Public in and for the County of
Westchester; State of New York, duly commissioned and qualified, personally
appeared Catherine Doherty, known to me to be the person described in and whose
name is subscribed to the attached instrument, and acknowledged to me that he
executed the instrument for the purposes and consideration therein stated.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my office
seal, at my office the day and year in this certificate first written above.

                                     By:  /s/ Lerodie A. Robertson
                                        ----------------------------------------

My Commission Expires:

March 30, 1989

                                       1
<PAGE>

                                                       Teterboro Airport
                                                       Use & Occupancy Agreement
                                                       Agreement TA-191
                                                       Supplement No. 1

                              Supplement Agreement

                  THIS AGREEMENT, made this 23rd day of January, 1995 by and
between JOHNSON CONTROLS WORLD SERVICES INC. (hereinafter called "Johnson
Controls"), a Florida State Corporation, and ATLANTIC AVIATION CORPORATION, a
Delaware corporation (hereinafter called "the User").

                  WITNESSETH, THAT:

                  WHEREAS, The Port Authority of New York and New Jersey
(hereinafter called "the Port Authority"), is the owner of Teterboro Airport
located in the Boroughs of Teterboro, Moonachie and Hasbrouck Heights and in the
Township of Lyndhurst, County of Bergen in the State of New Jersey; and

                  WHEREAS, Johnson Controls is the operator of Teterboro Airport
and has the right to operate and use the Airport as successor - assignee to an
agreement between Pan American World Airways, Inc ("Pan American") and the Port
Authority dated September 19, 1967 (Basic Agreement") ; and

                  WHEREAS, Pan American entered into a Use and Occupancy
Agreement with Texaco, Inc. dated as of January 1, 1986 designated TA-191 and a
Consent Agreement in connection therewith (which Use and Occupancy Agreement is
hereinafter referred to as the "the Agreement"); and

                  WHEREAS, the Agreement was assigned to Atlantic Aviation
Corporation pursuant to an Assignment Agreement (hereinafter called the
"Assignment Agreement") between Texaco Inc. and Atlantic Aviation Corporation
dated July 8, 1988; and

                  WHEREAS, the User and Johnson Controls desire to amend and
extend the term of the Agreement as hereinafter provided.

                  NOW, THEREFORE, in consideration of the mutual agreements and
respective promises herein contained, and made by the parties hereto, it is
mutually agreed as follows:

         1.       Section 1 "Term: The expiration date of December 31, 1990, as
                  revised by Letter Renewal Notice dated September 29, 1989,
                  which revised the expiration date to December 31, 1995 is now
                  changed to read "December 30, 1999".

         2.       Section 3 "Fees" shall be amended by adding a new
                  subparagraphs 3.2 as follows:

                  "3.2 Beginning January 1, 1996, and continuing until December
                  30, 1999, the User shall pay to Johnson Controls a monthly fee
                  whichever is the greater of:

                                       1
<PAGE>

                           (i)      Twenty Five Thousand Dollars and Zero Cents
                                    ($25,000.00); or

                           (ii)     Sixteen Thousand Six Hundred Sixty Eight
                                    Dollars and Fifty Cents ($16,668.50)
                                    multiplied by a fraction, the numerator of
                                    which shall be the CPI (as hereinafter
                                    defined) published for the month of
                                    December, 1995 and the denominator shall be
                                    the CPI published for the month of June,
                                    1985.

         3.       Except as provided herein, all the terms, covenants and
                  conditions of the Agreement remain and shall be in full force
                  and effect.

         4.       Neither the Directors of Johnson Controls, its subsidiaries
                  and affiliates, nor any officer or employee thereof shall be
                  charged personally by the user with any liability or held
                  liable to it under any term or provision of this Supplement,
                  or because of its execution or attempted execution, or because
                  of any breach or attempted or alleged breach thereof.

IN WITNESS WHEREOF, the parties hereto have executed these presents as of the
day and year first above written.

ATTEST:                                   JOHNSON CONTROLS WORLD SERVICES INC.

/s/ Illegible                             By: /s/ Illegible
----------------------------------           -----------------------------------

Title: Illegible                          Title: Vice President
      ----------------------------

ATTEST:                                   ATLANTIC AVIATION CORPORATION

/s/ H.J. Esposito                         By: /s/ Franklin S. Eyster, II
----------------------------------           -----------------------------------

Title: Illegible                          Title: Sr. VP
      ----------------------------              --------------------------------

                                       2
<PAGE>

                                CONSENT AGREEMENT

                  THIS AGREEMENT, dated as of January 23, 1995 by and among THE
PORT AUTHORITY OF NEW YORK AND NEW JERSEY (herein after called "The Port
Authority") and JOHNSON CONTROLS WORLD SERVICES INC. (hereinafter called "the
Airport Operator") and ATLANTIC AVIATION CORPORATION (hereinafter called "the
User"),

                  WITNESSETH, THAT:

                  WHEREAS, the Port Authority and the Airport operator have
heretofore entered into an agreement dated September 19, 1967 (which agreement,
as the same has been or may hereafter be supplemented and amended, is
hereinafter called "the Main Agreement"), pursuant to which the Airport Operator
is operating and using Teterboro Airport (hereinafter called "the Airport"); and

                  WHEREAS, pursuant to and in accordance with the terms of the
Main Agreement, the Airport Operator and the User, have entered into a Use and
Occupancy Agreement dated January 1, 1986 with the consent of the Port Authority
which Use and Occupancy Agreement has been designated TA-191; and

                  WHEREAS, the Port Authority, the Airport Operator and the User
entered into a Consent Agreement dated as of January 1, 1986 (hereinafter called
"the Use and Occupancy Consent Agreement"), wherein the Port Authority gave its
consent to the Use and Occupancy Agreement; and

                  WHEREAS, the Airport Operator and the User desire to
supplement the above referenced Use and Occupancy Agreement, a copy of which
Supplement is attached hereto, made a part hereof and hereafter called "the
supplement", subject to the consent of the Port Authority and the execution of a
Consent Agreement by and among the Airport Operator, the User and the Port
Authority.

                  NOW, THEREFORE, for and in consideration of the covenants and
mutual agreements contained, the Port Authority, the Airport Operator and the
User hereby agree effective as of the effective date of the Supplement as
follows:

         1.       On the terms and condition hereinafter set forth, the Port
                  Authority consents to the Supplement.

         2.       It is hereby specifically agreed that all of the terms and
                  provisions of the Use and Occupancy Consent Agreement shall
                  apply with like effect to this consent to the Supplement as
                  though each and every such term and such provision were
                  incorporated herein.

         3.       Neither the Commissioner of the Port Authority nor any of
                  them, nor any officer, agent or employee thereof shall be held
                  personally liable to the Airport Operator or to the User under
                  any term or provision of this Consent Agreement to the
                  Supplement or because of its execution or because of any
                  breach or alleged breach hereof.

                                       1
<PAGE>

IN WITNESS WHEREOF, the Port Authority, the Airport Operator and the User have
executed these presents.

                                          PORT AUTHORITY OF NEW YORK AND
                                            NEW JERSEY

ATTEST:

/s/ Lysa C. Meduri                        By: /s/ Illegible
----------------------------------           -----------------------------------

Title: Acting Secretary                   Title: /s/ Illegible
      ----------------------------              --------------------------------

                                          JOHNSON CONTROLS WORLD SERVICES INC.

ATTEST:

/s/ Illegible                             By: /s/ Illegible
----------------------------------           -----------------------------------

Title: Illegible                          Title: Vice President
      ----------------------------              --------------------------------

                                          ATLANTIC AVIATION CORPORATION
                                                     (User)

ATTEST:

/s/ H.J. Esposito                         By: /s/ Franklin S. Eyster, II
----------------------------------           -----------------------------------

Title: Illegible                          Title: Sr. VP
      ----------------------------             --------------------------------

                                       2
<PAGE>

                                                       Teterboro Airport
                                                       Use & Occupancy Agreement
                                                       Agreement TA-191
                                                       Supplement No. 2

                              Supplement Agreement

                  THIS AGREEMENT, dated this 27 day of May, 1999 by and between
JOHNSON CONTROLS WORLD SERVICES INC. (hereinafter called "Johnson Controls"), a
Florida Corporation, and ATLANTIC AVIATION CORPORATION, a Delaware corporation
(hereinafter called "the User").

                  WITNESSETH, THAT:

                  WHEREAS, The Port Authority of New York and New Jersey
(hereinafter called "the Port Authority"), is the owner of Teterboro Airport
located in the Boroughs of Teterboro, Moonachie and Hasbrouck Heights and in the
Township of Lyndhurst, County of Bergen in the State of New Jersey; and

                  WHEREAS, Johnson Controls is the operator of Teterboro Airport
and has the right to operate and use the Airport as successor - assignee to an
agreement between Pan American World Airways, Inc ("Pan American") and the Port
Authority dated September 19, 1967 ("Basic Agreement"); and

                  WHEREAS, Pan American entered into a Use and Occupancy
Agreement with Texaco, Inc. dated as of January 1, 1986 and designated TA-191
and a Consent Agreement in connection therewith (which Use and Occupancy
Agreement, as the same has heretofore been supplemented or amended, and Consent
Agreement are hereinafter collectively referred to as the "Agreement"); and

                  WHEREAS, the Agreement was assigned to the User pursuant to an
Assignment Agreement between Texaco Inc. and the User dated July 8, 1988 and a
Consent Agreement in connection therewith (which Assignment Agreement and
Consent Agreement are hereinafter collectively called the "Assignment
Agreement"); and

                  WHEREAS, the User, in accordance with the terms of Supplement
No. 4 to Use and Occupancy Agreement designated TA-121, has agreed to the
demolition of the facility known as Hangar 2 and the construction of a
replacement facility; and

                  WHEREAS, the User and Johnson Controls desire to amend and
extend the term of the Agreement as hereinafter provided in order to provide
sufficient time to construct said replacement facility;

                  NOW, THEREFORE, in consideration of the mutual agreements and
respective promises herein contained and made by the parties hereto, it is
mutually agreed, effective as of the date of this Supplement, as follows:

                                       1
<PAGE>

         1.       Effective on May 31, 1999, Exhibit A to the Agreement shall be
                  deemed deleted and of no further effect, and reference to
                  "Exhibit A" in the Agreement shall be deleted and substituted
                  by reference "Exhibit A-1".

         2.       Effective on June 1, 1999, the Space under the Agreement shall
                  be the area set forth in hatching on Exhibit A-1, attached
                  hereto and made a part hereof, together with all buildings,
                  structures, improvements, additions and permanent
                  installations constructed and installed or to be constructed
                  and installed therein or thereon or thereunder during the
                  remainder of the term of this Agreement (hereinafter
                  collectively referred to as the "Space").

         3.       The parties hereby agree that the term of the Agreement shall
                  be extended beyond the current expiration date of December 30,
                  1999 to expire thirty (30) days after the completion (as
                  hereinafter defined) of the hangar facility as provided for in
                  Paragraph 3 of Supplement No. 4 to User's Use and Occupancy
                  Agreement bearing file No. TA-121.

         4.       The term "completion" shall mean the Completion Date as
                  defined in subsection 3.6.14 of Use and Occupancy Agreement
                  TA-121.

         5.       In the event that, upon the expiration date referenced in
                  Paragraph 3 above, the Space shall not be occupied by First
                  Aviation Services, Inc., the current user of the facility
                  known as Hangar 1, or if First Aviation Services, Inc. shall
                  have notified Johnson Controls of its intention not to occupy
                  Hangar 1, then, upon notice by Johnson Controls to the User
                  the term of the Agreement shall be extended to expire upon the
                  expiration date of Use and Occupancy Agreement TA-121.

         6.       In the event that Taxiway P at the Airport is relocated, then,
                  upon notice by Johnson Controls to the User that said Taxiway
                  has been decommissioned, Area 2 as shown on Exhibit A-1 shall
                  be added to and become part of the Space as herein defined.
                  The User shall proceed expeditiously and with all reasonable
                  diligence, in accordance with Section 14 of the Agreement, to
                  pave and construct an aircraft parking ramp on said Area 2.

         7.       Section 3 "Fees" shall be further amended by adding new
                  subparagraphs 3.3, 3.4, 3.5 and 3.6 as follows:

                  "3.3     Beginning on the effective date of Supplement No. 2
                           to the Agreement and continuing until December 31,
                           1999, the User shall pay to Johnson Controls a
                           monthly fee of Twenty-seven Thousand Nine Hundred
                           Thirty-three Dollars and One Cent ($27,933.01), as
                           detailed on Exhibit B as Area 1, attached hereto and
                           made a part hereof.

                  3.4      Effective January 1, 2000 the User shall pay to
                           Johnson Controls a monthly fee of Thirty-four
                           Thousand Two Hundred Twenty-one Dollars and
                           Fifty-three Cents ($34,221.53), multiplied by a
                           fraction, the numerator of which shall be the CPI as
                           published for the month of December 1999

                                       2
<PAGE>

                           and the denominator of which shall be the CPI
                           published for the month of December 1998. In
                           computing the monthly fee payable January 1, 2000 in
                           no event shall the monthly fee be less than
                           Thirty-four Thousand Two Hundred Twenty-one Dollars
                           and Fifty-three Cents ($34,221.53).

                  3.4.1    In the event that Area 2 as shown on Exhibit A-1 has
                           become part of the Space, effective January 1, 2000
                           the User shall pay to Johnson Controls a total
                           monthly land use fee determined as follows: a total
                           base fee of Three Thousand Three Hundred Sixty-five
                           Dollars and Fifty Cents ($3,365.50) shall first be
                           multiplied by a fraction, the numerator of which
                           shall be the CPI as published for the month of
                           December 1999 and the denominator of which shall be
                           the CPI published for the month of December 1998 and
                           the User shall pay the product thereof on January 1,
                           2000 and on the first day of each and every month
                           thereafter . In computing the total monthly fee
                           payable January 1, 2000 in no event shall the monthly
                           fee be less than Three Thousand Three Hundred
                           Sixty-five Dollars and Fifty Cents ($3,365.50).

                  3.4.2    Effective January 1, 2001 and annually thereafter the
                           User shall pay to Johnson Controls a total monthly
                           fee for Area 1 and Area 2, if then a part of the
                           Space, equal to the prior year's fee multiplied by a
                           fraction, the numerator of which shall be the CPI as
                           published for the month of December of the year prior
                           to the affected year and the denominator of which
                           shall be the CPI published for the month of December
                           of two years prior to the affected year. In computing
                           the total monthly fee payable in no event shall the
                           monthly fee be less than the prior year's fee or be
                           increased by an amount greater than six percent (6%).

                  3.5      Johnson Controls reserves the right, at its option,
                           to perform a real estate appraisal of the User's
                           Space in the year 2009. In the event that such an
                           appraisal is performed, from and after January 1,
                           2010 the monthly fee payable by the User shall be the
                           greater of either (i) one twelfth of the appraised
                           building rate for Hangar 12 plus the appraised land
                           rate for the Space or (ii) the December 2009 total
                           monthly fee payable multiplied by a fraction, the
                           numerator of which shall be the CPI as published for
                           the month of December 2009 and the denominator of
                           which shall be the CPI published for the month of
                           December 2008. In the event that the fee calculated
                           in accordance with (ii) above is fifteen percent
                           (15%) or higher than that calculated in accordance
                           with (i) above, then the monthly fee payable
                           effective January 1, 2010 would be the greater of (a)
                           the fee payable January 2000 adjusted annually by 1/2
                           of the change in the CPI or (b) the rate calculated
                           per (i) above.

                  3.5.1    In the event that a real estate appraisal of the
                           User's Space is not performed in the year 2009,
                           effective January 1, 2010 the User shall pay to
                           Johnson Controls a total monthly fee equal to the fee
                           payable December 2009 multiplied by a fraction, the
                           numerator of which shall be the CPI as

                                       3
<PAGE>

                           published for the month of December 2009 and the
                           denominator of which shall be the CPI published for
                           the month of December 2008. In computing the total
                           monthly fee payable in no event shall the monthly fee
                           be less than the prior year's fee or be increased by
                           an amount greater than six percent (6%).

                  3.6      Effective January 1, 2011 and annually thereafter the
                           User shall pay to Johnson Controls a total monthly
                           fee equal to the prior year's fee multiplied by a
                           fraction, the numerator of which shall be the CPI as
                           published for the month of December of the year prior
                           to the affected year and the denominator of which
                           shall be the CPI published for the month of December
                           of two years prior to the effected year. In computing
                           the total monthly fee payable in no event shall the
                           monthly fee be less than the prior year's fee or be
                           increased by an amount greater than six percent
                           (6%)."

         8.       (a) The following Subsection 10.11 shall be added to Section
                  10 "Various Obligations of the User":

                  "10.11   The following terms shall have the following
                           respective meanings as used herein:

                  10.11.1  "Environmental Damages" shall mean any one or more of
                           the following: (i) the presence on, about or under
                           the Space of any Hazardous Substance, as hereinafter
                           defined, and/or (ii) the disposal, release or
                           threatened release of any Hazardous Substance from
                           the Space, and/or (iii) an Off-Space Hazardous
                           Substance, as hereinafter defined, and/or (iv) any
                           personal injury (including wrongful death) or
                           property damage arising out of or related to such
                           Hazardous Substances, and/or (v) the violation of any
                           Environmental Requirements, as hereinafter defined,
                           pertaining to such Hazardous Substances or Off-Space
                           Hazardous Substances, the Space and/or the activities
                           thereon.

                  10.11.2  "Environmental Requirements" and "Environmental
                           Requirement" shall mean all applicable present and
                           future laws, statues, enactments, resolutions,
                           regulations, rules, ordinances, codes, licenses,
                           permits, orders (including agreed upon consent
                           orders), approvals, plans, authorizations,
                           concessions, franchises, requirements and similar
                           items, of all Governmental Agencies, and all
                           applicable judicial, administrative, and regulatory
                           decrees, judgments, and orders relating to the
                           protection of human health or the environment, and in
                           the event that there shall be more than one
                           compliance standard, as among the various
                           Governmental Agencies, the standard for any of the
                           foregoing to be that which requires the lowest level
                           of a Hazardous Substance taking into account the
                           nature and intended use of the Space, the foregoing
                           to include without limitation:

                                       4
<PAGE>

                           (a) All requirements pertaining to reporting,
                           licensing, permitting, investigation and remediation
                           of emissions, discharges, releases, or threatened
                           releases of Hazardous Substances into the air,
                           surface water, groundwater, or land, or relating to
                           the manufacture, processing, distribution, use
                           treatment, storage, disposal, transport, or handling
                           of Hazardous Substances; and

                           (b) All environmental requirements pertaining to the
                           protection of the health and safety of employees or
                           the public.

                  10.11.4  "Hazardous Substances" and "Hazardous Substance"
                           shall mean and include without limitation any
                           pollutant, contaminant, toxic or hazardous waste,
                           dangerous substance, potentially dangerous substance,
                           noxious substance, toxic substance, flammable,
                           explosive or radioactive material, urea formaldehyde
                           foam insulation, asbestos, polychlorinated biphenyls
                           (PCBs), chemicals known to cause cancer or
                           reproductive toxicity, petroleum and petroleum
                           products and other substances which have been or in
                           the future shall be declared to be hazardous or
                           toxic, or the removal of which have been or in the
                           future shall be required, or the manufacture,
                           preparation, production, generation, use,
                           maintenance, treatment, storage, transfer, handling,
                           or ownership of which have been or in the future
                           shall be restricted, prohibited, regulated or
                           penalized by any Environmental Requirement.

                  10.11.5  "Off-Premises Hazardous Substance" shall mean the
                           presence of any Hazardous Substance in, about or
                           under property at the Airport other than the Space as
                           a result of the User's use and occupancy of the
                           Space, whether by migration, release, discharge or
                           any other manner, it being understood that the User
                           shall have the burden of proof to establish that any
                           migration of a Hazardous Substance from the Space was
                           not a result of the User's use and occupancy of the
                           Space.

                  (b) The User, prior to the execution of this Agreement, had
                  thoroughly examined the Space and determined it to be suitable
                  for the User's operations hereunder and the User restates and
                  continues said determination in connection with the extension
                  hereunder. Except as otherwise provided herein, the User
                  hereby agrees to assume all responsibility for any and all
                  risks, costs and expenses of any kind whatsoever caused by,
                  arising out of or in connection with the condition of the
                  Space whether any aspect of such condition existed prior to,
                  on or after the effective date of the letting of the Space,
                  including, without limitation, all Environmental Requirements
                  and Environmental Damages, as herein defined and all soil
                  remediation to the extent required under Environmental
                  Requirements, including but not limited to, remediation which
                  may be required as a result of discovery of any contaminants
                  while performing test borings or in the performance of any
                  construction work, and to indemnify and hold harmless the Port
                  Authority and Johnson Controls with respect to third party
                  claims for Section 8 of this Agreement TA 191, as amended.
                  Notwithstanding the foregoing, the

                                       5
<PAGE>

                  User shall be responsible for the removal of and remediation
                  of Hazardous Substances placed, or permitted or caused to be
                  placed, on, in or under the Space by the User or by its
                  employees, agents, contractors, or others using or occupying
                  the Space under this Agreement.

         9.       Port Authority's Additional Rights to Recapture or Accommodate
                  Others on Portions of User's Ramp Space

                  The User acknowledges that the Airport serves the
                  transportation needs of the public and that the Public
                  Aircraft Facilities should be utilized to the fullest extent
                  possible with airport users afforded fair and reasonable
                  access. The User also acknowledges that the following
                  subsections provide that if the User does not utilize its
                  facilities to the level set forth in stated performance
                  criteria such underutilized facilities may be either
                  recaptured by the Port Authority or required to be offered by
                  the User to another user in accordance with the following:

         9.1      It is hereby agreed that, commencing either one year after the
                  effective date of the addition of Area 2 to the Space, or
                  January 1, 2002, whichever occurs earlier and which will be
                  known as the "Start Date", and for each and every calendar
                  year thereafter, the Port Authority may ascertain the User's
                  percentage share (hereinafter referred to as the "User's
                  Current Fuel Share") of the total aircraft fuel gallons sold
                  (hereinafter referred to as "Total Current Fuel Dispensed") at
                  the Airport for the preceding calendar year. The fuel
                  dispensed by the User for the year preceding the Start Date
                  and the year preceding each and every calendar year thereafter
                  during which such calculation is made shall be known as the
                  "User's Current Fuel Dispensed". The User's Current Fuel Share
                  shall be calculated by dividing the User's Current Fuel
                  Dispensed by the Total Current Fuel Dispensed preceding the
                  year during which such calculation is made. The User's Current
                  Fuel Share for calendar year 1998 shall hereinafter be defined
                  as "the Base Year Fuel Share" and is shown below:

<TABLE>
<CAPTION>
            Teterboro Airport User                                    Fuel Share in 1998
            ----------------------                                    ------------------
<S>                                                                   <C>
Atlantic Aviation Corporation                                               17.8%
First Aviation Services, Inc.                                               16.5%
Jet Aviation of America, Inc.                                               34.4%
General Aviation Aircraft Services, Inc. (doing                             17.0%
  business as Million Air-Teterboro
Signature Flight Support-New Jersey, Inc.                                   14.3%
</TABLE>

         9.2      As of the Start Date and as of January 1 of each succeeding
                  calendar year, in the event that the User's Current Fuel Share
                  for the respective preceding calendar year is determined to be
                  at least twelve and one-half percent (12.5%) less than the
                  User's Base Year Fuel Share, the Port Authority shall have the
                  right but not the obligation, upon two (2) month's written
                  notice to the User, to require the User and the User hereby
                  agrees to make ramp space in Area 2 (hereinafter called
                  "Accommodation Space") available to other users, sub-users or
                  the Port Authority

                                       6
<PAGE>

                  in useable increments as directed by the Port Authority in the
                  manner and amount and to the extent set forth below:

<TABLE>
<CAPTION>
  Percentage of the User's
Current Fuel Share Divided by                      Ramp Space to be Made
 User's Base Year Fuel Share                        Available in Area 2
 ---------------------------                        -------------------
<S>                                                <C>
87.5% (12.5% reduction or greater)                 Up to 20.0% of Total
75.0% (25% reduction or greater)                   Up to 50.0% of Total
50.0% (50% reduction or greater)                   Up to 100.0% of Total
</TABLE>

         9.3      In the event the User is so notified by the Port Authority it
                  shall either (a) enter into a sub-use and occupancy agreement
                  with another user as determined by the Port Authority or (b)
                  enter into a surrender agreement as directed by the Port
                  Authority. Any such sub-use and occupancy agreement shall be
                  subject to the prior and continuing approval of the Port
                  Authority and the execution by and among the User, the
                  Sub-user, the Airport Operator, and the Port Authority of a
                  Consent Agreement in form satisfactory to the Port Authority.
                  Moreover, and without limiting the forgoing, the User shall
                  provide any and all information to the Airport Operator as may
                  be requested by the Airport Operator from time to time as to
                  all aspects of its accommodation of a Sub-user hereunder.
                  Nothing contained herein shall in any way affect the
                  discretion of the Airport Operator or the Port Authority in
                  granting or withholding its consent to a sub-use and occupancy
                  agreement.

         9.4      The failure of the Port Authority to exercise its right under
                  this Section during any year in which it may have such a right
                  shall not affect, waive or limit its rights to exercise such
                  right in any subsequent year during any period of
                  underutilization. In no event will the Accommodation Space
                  exceed the percentages set forth above.

         9.5      The User shall make such ramp space available during the
                  period set forth in the aforesaid notice. The Port Authority
                  shall consider a request by the User to restore the
                  Accommodation Space to the User when the User's Current Fuel
                  Share shall have returned to within twelve and one-half
                  percent (12.5%) or less of the User's Base Year Fuel Share,
                  provided the Accommodation Space is not then covered by a
                  sub-use or other agreement or at such other time as the Port
                  Authority deems it is in the best interest of the Airport to
                  restore the Accommodation Space to the User.

         9.6      The User agrees that all handling, sublease, sub-use and
                  occupancy agreements shall be reasonable and at
                  non-discriminatory rates, fees and charges and shall be based
                  on the recovery by the User of a pro rata score share of the
                  User's costs of (1) operation and maintenance, (2) services
                  provided, and (3) the User's fees and investment in the
                  Accommodation Space.

         10.      Except as provided herein, all the terms, covenants and
                  conditions of the Agreement remain and shall be in full force
                  and effect.

                                       7
<PAGE>

         11.      Neither the Directors of Johnson Controls, its subsidiaries
                  and affiliates, nor any officer or employee thereof shall be
                  charged personally by the User with any liability or held
                  liable to it under any term or provision of this Supplement,
                  or because of its execution or attempted execution, or because
                  of any breach or attempted or alleged breach thereof.

IN WITNESS WHEREOF, the parties hereto have executed these presents as of the
day and year first above written.

ATTEST:                                   JOHNSON CONTROLS WORLD SERVICES INC.

/s/ Laura Conner                          By: /s/ Illegible
----------------------------------           -----------------------------------

Title: Admin. Assistant                   Title: Vice President
      ----------------------------              --------------------------------

ATTEST:                                   ATLANTIC AVIATION CORPORATION

/s/ Victoria A. Tait                      By: /s/ RN Fitzgerald
----------------------------------           -----------------------------------

Title: Secretary                          Title: President
      ----------------------------              --------------------------------

                                       8
<PAGE>

                                CONSENT AGREEMENT

                  THIS AGREEMENT, dated as of May 27, 1999 by and among THE PORT
AUTHORITY OF NEW YORK AND NEW JERSEY (hereinafter called "The Port Authority")
and JOHNSON CONTROLS WORLD SERVICES INC. (hereinafter called "the Airport
Operator") and ATLANTIC AVIATION CORPORATION (hereinafter called "the User"),

                  WITNESSETH, THAT:

                  WHEREAS, the Port Authority and the Airport Operator have
heretofore entered into an agreement dated September 19, 1967 (which agreement,
as the same has been or may hereafter be supplemented and amended, is
hereinafter called "the Main Agreement"), pursuant to which the Airport Operator
is operating and using Teterboro Airport (hereinafter called "the Airport"); and

                  WHEREAS, pursuant to and in accordance with the terms of the
Main Agreement, the Airport Operator and the User, have entered into a Use and
Occupancy Agreement dated January 1, 1986 and is hereinafter called the "Use and
Occupancy Agreement" which Use and Occupancy Agreement has been designated
TA-191; and

                  WHEREAS, the Port Authority, the Airport Operator and the User
entered into a Consent Agreement dated as of January 1, 1986 (hereinafter called
"the Use and Occupancy Consent Agreement"), wherein the Port Authority gave its
consent to the Use and Occupancy Agreement; and

                  WHEREAS, the Airport Operator and the User desire to
supplement the above referenced Use and Occupancy Agreement, a copy of which
Supplement is attached hereto, made a part hereof and hereinafter called "the
Supplement", subject to the consent of the Port Authority and the execution of a
Consent Agreement by and among the Airport Operator, the User and the Port
Authority;

                  NOW, THEREFORE, for and in consideration of the covenants and
mutual agreements hereinafter contained, the Port Authority, the Airport
Operator and the User hereby agree, effective as of the effective date of the
Supplement, as follows:

         1.       On the terms and condition hereinafter set forth, the Port
                  Authority consents to the Supplement.

         2.       (a) If the Main Agreement shall terminate (whether through the
                  expiration of its term or by earlier termination as provided
                  in the Main Agreement) before the expiration date of the Use
                  and Occupancy Agreement, the Use and Occupancy Agreement shall
                  terminate as hereinafter provided and, if the User is in
                  occupancy and using the Space, the Port Authority or a
                  successor airport operator selected by the Port Authority
                  shall enter into a use and occupancy agreement with the User
                  covering the use and occupancy of the Space, with the term
                  thereof commencing as of the expiration or earlier termination
                  of the Use and Occupancy Agreement, the permitted uses of the
                  Space, the fees and charges thereunder being as set forth in
                  the Use and Occupancy Agreement, and on substantially the same
                  remaining

                                       1
<PAGE>

                  terms and conditions as set forth in the Use and Occupancy
                  Agreement and such additional terms as may be necessary or
                  appropriate.

                  (b) Any successor airport operator that may be selected by the
                  Port Authority shall be required to assume all Port Authority
                  obligations hereunder and under any successor use and
                  occupancy agreement and relieve the Port Authority of same.

                  (c) In the event the User has commenced the construction work
                  set forth in Paragraph 3 to Supplement 3 to User's Use and
                  Occupancy Agreement TA-121, the expiration date of December
                  30, 1999, as referenced in Section 1, "Term" of said Agreement
                  shall be changed to expire, unless sooner terminated in
                  accordance with said Agreement, thirty (30) days after
                  completion of said construction. In the event that, upon the
                  expiration date referenced above, the Space shall not be
                  occupied by First Aviation Services, Inc., or if First
                  Aviation Services, Inc. shall have notified the Airport
                  Operator of its intention not to occupy Hangar 1 at the
                  Airport, the term of the Agreement shall be changed to expire
                  on the day before the Twentieth (20th) Year Anniversary of the
                  completion of the construction as provided for in Paragraph 3
                  and 10 of said Agreement TA-121, whichever occurs last.

         3.       Neither this Consent Agreement, nor anything contained herein
                  nor the consent granted hereunder shall constitute or be
                  deemed to constitute a consent to nor shall they create an
                  inference or implication that there has been consent to any
                  enlargement, variation or change in the rights, powers and
                  privileges granted to the Airport Operator under the Main
                  Agreement, nor consent to the granting or conferring of any
                  rights, powers or privileges to the User as may be provided by
                  the Use and Occupancy Agreement or the Supplement if not
                  granted to the Airport Operator under the Main Agreement, nor
                  shall the same impair or change any of the duties, liabilities
                  and obligations imposed on the Airport Operator under the Main
                  Agreement. The Use and Occupancy Agreement and the Supplement
                  are agreements between the Airport Operator and the User with
                  respect to the various matters set forth therein. Neither this
                  Consent Agreement nor anything contained herein nor the
                  consent granted hereunder shall constitute an agreement
                  between the Port Authority and the Airport Operator that the
                  provisions of the Use and Occupancy Agreement or the
                  Supplement shall apply and pertain as between the Airport
                  Operator and the Port Authority, it being understood that the
                  terms, provisions, covenants, conditions and agreements of the
                  Main Agreement shall, in all respects, be controlling,
                  effective and determinative. The specific mention of or
                  reference to the Port Authority in any part of the Use and
                  Occupancy Agreement or the Supplement, including, without
                  limitation thereto, any mention of any consent or approval of
                  the Port Authority now or hereafter to be obtained, shall not
                  be or be deemed to create an inference that the Port Authority
                  has granted its consent or approval thereto under this Consent
                  Agreement or shall thereafter grant its consent or approval
                  thereto or that the subject matter as to which the consent or
                  approval applies has been or shall be approved or consented to
                  in principle or in fact or that the Port Authority's

                                       2
<PAGE>

                  discretion pursuant to the Main Agreement as to any such
                  consents or approvals shall in any way be affected or
                  impaired. The lack of any specific reference in any provisions
                  of the Use and Occupancy Agreement or the Supplement to Port
                  Authority approval or consent shall not be deemed to imply
                  that no such approval or consent is required and the Main
                  Agreement shall, in all respects, be controlling, effective
                  and determinative.

         4.       No provision of the Use and Occupancy Agreement or the
                  Supplement including, but not limited to, those imposing
                  obligations on the User with respect to laws, rules,
                  regulations, taxes, assessments and liens, shall be construed
                  as a submission or admission by the Port Authority that the
                  same could or does lawfully apply to the Port Authority, nor
                  shall the existence of any provision of the Use and Occupancy
                  Agreement or the Supplement covering actions which shall or
                  may be undertaken by the User or the Airport Operator
                  including, but not limited to, construction on the Space
                  covered by the Use and Occupancy Agreement or the Supplement,
                  be deemed to imply or infer that Port Authority consent or
                  approval thereto pursuant to the Main Agreement will be given
                  or that Port Authority discretion with respect thereto will in
                  any way be affected or impaired. References in this paragraph
                  to specific matters and provisions shall not be construed as
                  indicating any limitation upon the rights of the Port
                  Authority with respect to its discretion as to the granting or
                  withholding approvals or consents as to other matters and
                  provisions in the Use and Occupancy Agreement or the
                  Supplement which are not specifically referred to herein.

         5.       The User, in its operations under or in connection with the
                  Use and Occupancy Agreement or the Supplement and in its
                  occupancy of the Space covered by the Use and Occupancy
                  Agreement or the Supplement, shall be subject to the
                  applicable terms, provisions, covenants and conditions of the
                  Main Agreement. Without in any way affecting the obligations
                  of the Airport Operator under the Main Agreement and under
                  this Consent Agreement, all acts and omissions of the User
                  shall be deemed to be acts and omissions of the Airport
                  Operator under the Main Agreement, but notwithstanding the
                  foregoing, the Airport Operator shall not be or be deemed to
                  be in default of the Main Agreement to the extent that any of
                  the foregoing shall constitute a breach thereof if, except for
                  causes beyond the control of the Airport Operator, it shall
                  have commenced to remedy said default within twenty (20) days
                  after receipt of notice thereof from the Port Authority and
                  continues diligently to pursue such remedy.

         6.       The Use and Occupancy Agreement or the Supplement shall not be
                  changed, modified, discharged or extended except by written
                  instrument duly executed by the parties thereto and only with
                  the express prior written consent of the Port Authority.

         7.       If the Airport Operator shall at any time be in default of its
                  obligations under the Main Agreement to make payments to the
                  Port Authority, or if there shall occur at any time an event
                  involving insolvency, bankruptcy, arrangement or
                  reorganization of the Airport Operator which under the terms
                  of the Main

                                       3
<PAGE>

                  Agreement would constitute an event the occurrence of which
                  grants the Port Authority the right to terminate the Main
                  Agreement, and provided the same has not been cured within the
                  time granted therefor, if any, under the Main Agreement, the
                  User shall on demand of the Port Authority pay directly to the
                  Port Authority any fee or other amount due to the Airport
                  Operator. No such payment shall relieve the Airport Operator
                  from any obligations under the Main Agreement or under this
                  Consent Agreement but all such payments shall be credited
                  against the obligations of the Airport Operator and of the
                  User for each payment or part thereof.

         8.       The granting of the consent hereunder by the Port Authority
                  shall not be or be deemed to operate as a waiver of consent to
                  any subsequent agreement with respect to the use or occupancy
                  of space at the Airport (by the Airport Operator or by the
                  User) or to any assignment of the Main Agreement or the Use
                  and Occupancy Agreement or the Supplement or of any rights
                  under any of them, whether in whole or in part.

         9.       In the event of any default by the User under any of the
                  provisions of this Consent Agreement and said default has not
                  been cured within thirty (30) days (or such longer period as
                  is required in the reasonable opinion of the Port Authority,
                  to correct such default, provided the User promptly commences
                  and diligently continues to effectuate a cure) after the Port
                  Authority has served a notice of such default upon the Airport
                  Operator and the User, the Port Authority shall have the right
                  to revoke the consent granted hereunder upon thirty (30) days'
                  written notice to the Airport Operator and the User, but no
                  such revocation shall be deemed to affect the Main Agreement
                  and the continuance thereof, it being understood, moreover,
                  that the foregoing shall not be deemed to affect or limit any
                  rights of the Port Authority under the Main Agreement. In the
                  event of the revocation of the consent hereunder as
                  hereinabove provided, the Airport Operator shall immediately
                  terminate the Use and Occupancy Agreement.

         10.      Reference herein to the User shall mean and include the User,
                  its officers, agents, employees and also others on the Space
                  covered by the Use and Occupancy Agreement or the Supplement
                  or elsewhere on the Airport with the consent of the User.

         11.      Neither the Commissioners of the Port Authority nor any of
                  them, nor any officer, agent or employee thereof shall be held
                  personally liable to the Airport Operator or to the User under
                  any term of provision of this Consent Agreement or because of
                  its execution or because of any breach or alleged breach
                  hereof.

                                       4
<PAGE>

IN WITNESS WHEREOF, the Port Authority, the Airport Operator and the User have
executed these presents.

                                          PORT AUTHORITY OF NEW YORK AND
                                            NEW JERSEY
ATTEST:
/s/ Karen Eastman                         By: /s/ R. Kelly
----------------------------------           -----------------------------------

Title:  Assistant Secretary               Title:  Aviation Director
      ----------------------------              --------------------------------
                                          JOHNSON CONTROLS WORLD SERVICES INC.
ATTEST:

/s/ Laura Conner                          By: /s/ Illegible
----------------------------------           -----------------------------------
Title:  Admin. Assistant                  Title:  Vice President
      ----------------------------              --------------------------------
                                          ATLANTIC AVIATION CORPORATION
                                                      (User)
ATTEST:

/s/ Illegible                             By: /s/ RN Fitzgerald
----------------------------------           -----------------------------------
Title:  Secretary                         Title:  President
      ----------------------------              --------------------------------
                                       5
<PAGE>
                                                                  EXECUTION COPY

                            CLOSING LETTER AGREEMENT

     This Closing Letter Agreement is entered into as of July 29, 2004, by and
between North America Capital Holding Company, a Delaware corporation
("Purchaser"), Executive Air Support, Inc., a Delaware corporation
("Executive"), and ABS Capital Partners III, L.P., a Delaware limited
partnership, as the Shareholder Representative under that certain Stock Purchase
Agreement by and between Macquarie Investment Holdings, Inc., a Delaware
corporation, Executive and the stockholders of Executive, dated as of April 28,
2004, as assigned to Purchaser (the "Stock Purchase Agreement").

     Now, therefore, in consideration of the mutual promises and agreements set
forth herein, the parties agree as follows:

     1.   Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Stock Purchase Agreement.

     2.   Executive has paid the Port Authority of New York and New Jersey (the
"Port Authority") the sum of Five Hundred Thousand Dollars ($500,000.00) as the
payment (the "Consent Fee") required by the Port Authority to receive an
estoppel letter in the form provided to the Port Authority and previously
approved by Purchaser, which estoppel letter is a condition precedent to the
Purchaser's obligation to consummate the Closing pursuant to Section 6.1(m) of
the Stock Purchase Agreement. The full amount of such payment is reducing
Executive's cash and cash equivalents as of the Effective Time for purposes of
determining any adjustment to the Purchase Price under Section 1.8 of the Stock
Purchase Agreement. At the Closing, as reflected on the Closing Statement, the
Purchase Price paid by Purchaser is being increased by Two Hundred Fifty
Thousand Dollars ($250,000.00) to reflect the parties' agreement to split the
cost of the Consent Fee. In addition, the Shareholders shall indemnify the
Purchaser Indemnified Parties for one-half (1/2) of any payments(s) required by
the Department of Transportation of the State of New York to receive an estoppel
letter with respect to Executive's operations at Republic Airport, Farmingdale,
New York; provided, that, in no event shall the Shareholders be liable under the
foregoing clause for more than Two Hundred Fifty Thousand Dollars ($250,000.00);
and provided, further, that such indemnification obligation shall not be subject
to the limitations set forth in Section 8.2(b)(ii) of the Stock Purchase
Agreement.

     3.   The parties acknowledge that it is impractical to obtain pay-off
statements or the functional equivalents thereof from the holders of the Funded
Indebtedness set forth on Exhibit A hereto prior to the Closing as contemplated
by Section 1.3(c) of the Stock Purchase Agreement. Accordingly, the parties
agree that payment of such Funded Indebtedness by the Purchaser to such holders
at or prior to the Closing shall not be a condition precedent to the Closing,
but the Purchase Price shall be reduced by an amount equal to the outstanding
principal of, and accrued interest on, such Funded Indebtedness as of the
Closing Date.

     4.   In addition to the indemnification obligations set forth in Article 8
of the Stock Purchase Agreement and notwithstanding anything to the contrary set
forth in the Stock Purchase Agreement, the Shareholders shall, jointly and
severally, indemnify and hold harmless the

                                       1

<PAGE>
Purchaser Indemnified Parties from and against any and all Damages, except as
expressly limited herein, of or to any Purchaser Indemnified Parties arising out
of or resulting from:

     (a)  any and all benefits accrued or required to be accrued under the
General Aviation Corporation Retirement Plan (the "GAC 401(k) Plan") as of the
Closing Date, and all other Damages incurred in connection with, resulting from
or arising out of, directly or indirectly (whether or not involving a third
party claim), the GAC 401(k) Plan with respect to acts or omissions prior to the
Effective Time including, but not limited to:

          (i)   the failure of General Aviation, LLC ("GAC") to adopt timely
either a "GUST" amendment within the meaning of Section 12.03 of Revenue
Procedure 2003-44 or an "EGTRRA good faith amendment" within the meaning of
Section 4.10 of IRS Revenue Procedure 2003-44 for the GAC 401(k) Plan;

          (ii)  the failure of GAC to file timely with the IRS a Form 5500 with
respect to the GAC 401(k) Plan for the 2002 calendar year; or

          (iii) the failure of GAC to have performed an independent financial
audit of the GAC 401(k) Plan for the 2002 calendar year and included such audit
with the Form 5500 with respect to the GAC 401(k) Plan for the 2002 calendar
year, as filed with the IRS; and

     (b)  the failure of Executive or GAC to have satisfied in full any amounts
specified in the estoppel letter attached hereto as Exhibit B which are finally
determined to be due and owing to the City of New Orleans arising out of or
resulting from operations at the New Orleans International Airport prior to the
Closing;

     (c)  the termination or surrender of, and the failure of EAS or the
Subsidiaries to have maintained, the FCC licenses listed on Exhibit C hereto;

     (d)  any action or threatened action by the Town of Babylon regarding
construction of a hanger facility for Talon Air Services, LLC on premises leased
by Flightways of Long Island, Inc., at Republic Airport, Farmingdale, New York;
and

     (e)  Taxes incurred as a result of the mergers or dissolutions of the
Subsidiaries identified with an asterisk (*) on Schedule 3.1; provided, that,
the loss or diminution of any net operating losses (NOLs) of such Subsidiaries
shall not be deemed to be Damages for these purposes.

     Purchaser covenants and agrees to use commercially reasonable efforts to
mitigate "Damages" under this paragraph 4, which efforts shall include causing
Executive to duly pursue all indemnification rights from the former owners of
GAC under the Member Interests Purchase Agreement dated December 17, 2003, as
amended, between Executive and such former owners. The indemnification
obligations set forth in this paragraph 4 shall survive the Closing for a
period of (i) sixty (60) days after the expiration of the applicable federal or
state statute of limitations, whichever is longer, or (ii) five (5) years after
the Closing, whichever is later. The indemnification obligations set forth in
this paragraph 4 shall be subject to the limitations set

                                       2

<PAGE>

forth in Section 8.2 of the Stock Purchase Agreement, other than the limitation
set forth in Section 8.2(b)(ii)(y) of the Stock Purchase Agreement which shall
not apply.

      5.   The parties hereby further amend the Stock Purchase Agreement as
follows:

      (a)   all references to "ABS Capital Partners, III, LLC" are replaced with
"ABS Capital Partners III, L.P.";

      (b)   the following paragraph is added as Section 1.9(e):

   "Purchaser covenants and agrees to provide the Shareholder Representative
   reasonable access to information of and concerning any Claim (provided such
   access is not restricted or precluded by law, regulation or any agreement to
   which Purchaser is bound, or would otherwise adversely affect Purchaser's
   right to assert a legal privilege with respect thereto) and shall cause its
   officers and employees to cooperate with the Shareholder Representative in
   performing its duties and exercising its rights hereunder. The Shareholder
   Representative shall treat all such information as confidential information
   and not disclose any such information to anyone (except to the Shareholder
   Representative's attorneys, accountants or other advisers, to the arbitrators
   appointed to resolve disputes, and on a need-to-know basis to other
   individuals who agree to keep such information confidential)."

      (c)   Section 3.5(a) is amended to change the number disclosed for
Executive's issued and outstanding shares of Common Stock from 1,843,689 to
1,895,684.

      6.   The parties acknowledge and agree that any post-Closing adjustments
to the Purchase Price based on Executive's and its Subsidiaries' Net Working
Capital and Cash and Cash Equivalents as of the Effective Time shall be
determined in a manner that is consistent with Exhibit D hereto and calculated
as of July 31, 2004; provided, however, such determination shall not take into
account any charges, dividends or distributions, outside the ordinary course of
business, effected by Executive after the Closing.

      7.   In the event of any conflict between any provision of this Closing
Letter Agreement and any provision of the Stock Purchase Agreement, such
provision of this Closing Letter Agreement shall prevail.

      8.   This Closing Letter Agreement may be executed by facsimile
transmission and in one or more counterparts, each of which shall be deemed an
original but all of which together will constitute one and the same instrument.
This Closing Letter Agreement shall be governed by and construed in accordance
with the domestic laws of the State of Delaware, without giving effect to any
choice or conflict of law provision or rule (whether of the State of Delaware or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.

                                       3

<PAGE>
     In witness whereof, the parties have executed this Closing Letter
Agreement as of the date written above.

                         NORTH AMERICA CAPITAL HOLDING COMPANY

                              By:
                                 -------------------------
                              Name:  Murray Bleach
                              Title: President

                              By: /s/ Christopher Leslie
                                 -------------------------
                              Name:  Christopher Leslie
                              Title: Vice President

                         EXECUTIVE AIR SUPPORT, INC.

                              By:
                                 -------------------------
                              Name:  Louis T. Pepper
                              Title: President

                         ABS CAPITAL PARTNERS III, L.P.
                         as the Shareholder Representative

                              By: ABS Partners III, L.L.C.
                              Its General Partner

                              By:
                                 -------------------------
                              Name:  Donald B. Hebb, Jr.
                              Title: Managing Member

                                       4

<PAGE>
     In witness whereof, the parties have executed this Closing Letter
Agreement as of the date written above.

                                  NORTH AMERICA CAPITAL HOLDING COMPANY

                                      By:
                                          --------------------------------------
                                      Name:
                                      Title:

                                      By:
                                          --------------------------------------
                                      Name:
                                      Title:

                                  EXECUTIVE AIR SUPPORT, INC.

                                       By: /s/ Louis T. Pepper
                                           -------------------------------------
                                       Name: Louis T. Pepper
                                       Title: President

                                  ABS CAPITAL PARTNERS III, L.P.
                                  as the Shareholder Representative

                                       By: ABS Partners III, L.L.C.
                                       Its General Partner

                                       By:
                                           -------------------------------------
                                       Name: Donald B. Hebb, Jr.
                                       Title: Managing Member

                                       4
<PAGE>
     In witness whereof, the parties have executed this Closing Letter Agreement
as of the date written above.

                                        NORTH AMERICA CAPITAL HOLDING COMPANY

                                             By:
                                                 -------------------------------
                                             Name:
                                             Title:

                                             By:
                                                 -------------------------------
                                             Name:
                                             Title:

                                        EXECUTIVE AIR SUPPORT, INC.

                                             By:
                                                 -------------------------------
                                             Name:  Louis T. Pepper
                                             Title: President

                                        ABS CAPITAL PARTNERS III, L.P.
                                        as the Shareholder Representative

                                             By: ABS Partners III, L.L.C.
                                             Its General Partner

                                             By: /s/ Donald B. Hebb, Jr.
                                                 -------------------------------
                                             Name:  Donald B. Hebb, Jr.
                                             Title: Managing Member

                                       4

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