Document:

[EXECUTION COPY]

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                            ASSET PURCHASE AGREEMENT

                                  dated as of

                                 March 19, 1999

                                    between

                                     MSA II

                                      and

                      GE CAPITAL MIETFINANZ GMBH & CO. KG

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                               TABLE OF CONTENTS

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

                                                                           PAGE
                                                                           ----
                                   ARTICLE 1
                                  DEFINITIONS

SECTION 1.01.  Definitions...................................................1

                                   ARTICLE 2
                               PURCHASE AND SALE

SECTION 2.01.  Purchase and Sale. ...........................................5
SECTION 2.02.  Assignment of Contracts and Rights.  .........................6
SECTION 2.03.  Payment of Purchase Price. ...................................6
SECTION 2.04.  Inspection.  .................................................6
SECTION 2.05.  Delivery.  ...................................................7

                                   ARTICLE 3
                    REPRESENTATIONS AND WARRANTIES OF SELLER

SECTION 3.01.  Corporate Existence and Power. ...............................7
SECTION 3.02.  Corporate Authorization.  ....................................8
SECTION 3.03.  Governmental Authorization.  .................................8
SECTION 3.04.  Noncontravention.  ...........................................8
SECTION 3.05.  Required Consents.  ..........................................8
SECTION 3.06.  Data.  .......................................................8
SECTION 3.07.  Absence of Certain Changes.  .................................8
SECTION 3.08.  No Undisclosed Material Liabilities.  ........................9
SECTION 3.09.  Contracts.  ..................................................9
SECTION 3.10.  Litigation.  ................................................10
SECTION 3.11.  Compliance with Laws and Court Orders.  .....................10
SECTION 3.12.  Aircraft and Leases.  .......................................10
SECTION 3.13.  Insurance Coverage. .........................................11
SECTION 3.14.  Licenses and Permits.  ......................................11
SECTION 3.15.  Selling Documents.  .........................................12
SECTION 3.16.  Finders' Fees.  .............................................12
SECTION 3.17.  True Sale.  .................................................12
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                                   ARTICLE 4
                    REPRESENTATIONS AND WARRANTIES OF BUYER

SECTION 4.01.  Existence and Power.  .......................................12
SECTION 4.02.  Authorization.  .............................................13
SECTION 4.03.  Governmental Authorization.  ................................13
SECTION 4.04.  Noncontravention.  ..........................................13
SECTION 4.05.  Litigation.  ................................................13
SECTION 4.06.  Licenses and Permits.........................................13
SECTION 4.07.  Finders' Fees.  .............................................13
SECTION 4.08.  True Sale.  .................................................13

                                   ARTICLE 5
                              COVENANTS OF SELLER

SECTION 5.01.  Conduct of the Business.  ...................................14
SECTION 5.02.  Access to Information; Confidentiality.  ....................14
SECTION 5.03.  Notices of Certain Events.  .................................15
SECTION 5.04.  Taxes and Other Costs.  .....................................15
SECTION 5.05.  Maintenance Reserves.  ......................................16

                                   ARTICLE 6
                               COVENANTS OF BUYER

SECTION 6.01.  Confidentiality. ............................................16

                                   ARTICLE 7
                         COVENANTS OF BUYER AND SELLER

SECTION 7.01.  Best Efforts; Further Assurances.  ..........................17
SECTION 7.02.  Certain Filings.  ...........................................18
SECTION 7.03.  Public Announcements.  ......................................18

                                   ARTICLE 8
                                   CONDITIONS

SECTION 8.01.  Conditions to Obligations of Buyer and Seller.  .............18
SECTION 8.02.  Conditions to Obligation of Buyer.  .........................18
SECTION 8.03.  Conditions to Obligation of Seller.  ........................22

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                                   ARTICLE 9
                           SURVIVAL; INDEMNIFICATION

SECTION 9.01.  Survival.  ..................................................23
SECTION 9.02.  Indemnification.  ...........................................23
SECTION 9.03.  Procedures.  ................................................24

                                   ARTICLE 10
                                  TERMINATION

SECTION 10.01.  Grounds for Termination.  ..................................24
SECTION 10.02.  Effect of Termination.......................................25

                                   ARTICLE 11
                                 MISCELLANEOUS

SECTION 11.01.  Warranties and Disclaimers..................................25
SECTION 11.02.  Notices.....................................................26
SECTION 11.03.  Amendments and Waivers......................................27
SECTION 11.04.  Expenses.  .................................................28
SECTION 11.05.  Successors and Assigns.  ...................................28
SECTION 11.06.  Governing Law.  ............................................28
SECTION 11.07.  Jurisdiction.  .............................................28
SECTION 11.08.  WAIVER OF JURY TRIAL........................................29
SECTION 11.09.  Counterparts; Third Party Beneficiaries.....................29
SECTION 11.10.  Entire Agreement.  .........................................29
SECTION 11.11.  Non Solicitation.  .........................................29
SECTION 11.12.  Captions.  .................................................29

SCHEDULE 3.03.............................Seller Required Governmental Actions
SCHEDULE 3.05.........................................Seller Required Consents
SCHEDULE 3.08.............................................Material Liabilities
SCHEDULE 3.09........................................................Contracts
SCHEDULE 3.14.................................Seller Required Business Permits
SCHEDULE 4.03..............................Buyer Required Governmental Actions
SCHEDULE 4.06...........................................Buyer Required Permits

EXHIBIT A..................................................................A-1
EXHIBIT B..................................................................B-1
EXHIBIT A-1...............................................................A1-1
EXHIBIT C..................................................................C-1
EXHIBIT D..................................................................D-1

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                            ASSET PURCHASE AGREEMENT

     ASSET PURCHASE AGREEMENT dated as of March 19, 1999 between MSA II, a
Delaware Business Trust ("Buyer"), and GE CAPITAL MIETFINANZ GMBH & CO. KG,
("Seller").

                             W I T N E S S E T H :

     WHEREAS, Buyer desires to purchase certain aircraft and related assets
from Seller and Seller desires to sell such assets to Buyer, upon the terms and
subject to the conditions hereinafter set forth;

     The parties hereto agree as follows:

                                   ARTICLE 1
                                  DEFINITIONS

     SECTION 1.01. Definitions The following terms, as used herein, have the
following meanings:

     "Aircraft" means, either collectively or individually, as applicable, the
aircraft listed on Exhibit A-1, each with the manufacturer's serial number as
set forth on Exhibit A-1, including (i) the airframe, (ii) the Engines and
(iii) all appliances, parts, accessories, instruments, navigational and
communications equipment, furnishings, modules, components and other items of
equipment installed in or furnished with the Aircraft on the Delivery Date,
except that, with respect to Lessee Furnished Equipment, references herein to
an "Aircraft" shall be deemed to refer only to such interest in Lessee
Furnished Equipment as is held by Seller or the lessor of the Aircraft thereof
under the applicable Lease. References to the "Aircraft" shall, where the
context requires, include the Manuals and Technical Records.

     "Affiliate" means, with respect to any Person, any other Person directly
or indirectly controlling, controlled by, or under common control with such
other Person.

     "Business Day" means any day on which the banks in New York, London and
Amsterdam are open for business.
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     "Buyer Permits" means all licenses, contracts or certificates directly
related to the acquisition or ownership of the Purchased Assets.

     "Contract" means the Lease Documents and any contract, agreement, lease,
sublease, license, commitment, sales or purchase order or other instrument
binding upon Seller.

     "Damages" means damage, loss, liability and expense, including, without
limitation, reasonable expenses of investigation and reasonable attorneys' fees
and expenses in connection with any action, suit or proceeding.

     "Deed of Conveyance" shall, in respect of each Aircraft, mean the deed of
conveyance and transfer of possession to be executed by Seller and Buyer on the
Delivery Date for such Aircraft, substantially in the form of Exhibit B hereto,
pursuant whereto legal title to such Aircraft shall be transferred by the
Seller to the Buyer in accordance with the applicable provisions of Dutch law.

     "Data" means the information set out in Exhibit A, including, without
limitation, the assumptions set forth therein regarding aircraft condition and
lease terms and the liabilities being transferred.

     "Delivery Date" means, with respect to each Aircraft, the date on which
Buyer obtains title to such Aircraft and the related Purchased Assets in
accordance with this Agreement.

     "Engines" means, with respect to each Aircraft, the engines listed on
Exhibit A-1 and each replacement engine leased with such Aircraft to the Lessee
under the applicable Lease, together with all equipment and accessories
belonging to, installed in or appurtenant to such engines or, with respect to
all Aircraft, all such engines together with such equipment and accessories.

     "Indemnified Party" means the party seeking indemnification pursuant to
Article 9 hereof.

     "Indemnifying Party" means the party against whom indemnity is sought
pursuant to Article 9 hereof.

     "Intercompany Leases" means any aircraft lease agreement entered into
either between Seller and one of its affiliates or between Seller and any
Person other than the Lessee.

     "Lease" means, with respect to each Aircraft, the aircraft lease agreement
dated January 16, 1998 relating to such Aircraft between Mulheim and the
Lessee,

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together with all supplements and amendments thereto, pursuant to which such
Aircraft is leased to such Lessee.

     "Lease Documents" means, with respect to each Aircraft, the Lease and all
other agreements (including any side letters, assignment of warranties or
option agreements) delivered in connection with, or relating to, the Lease of
such Aircraft, other than Intercompany Leases that will be terminated on the
Delivery Date of such Aircraft as disclosed to Buyer.

     "Lease Novation" means, with respect to each Aircraft, the Assignment,
Assumption and Amendment Agreement dated as of the date hereof by and among
Mulheim, Buyer and Lessee, attached hereto as Annex A and B.

     "Lessee" means, with respect to each Aircraft, KLM Cityhopper B.V., a
Dutch corporation and its successors and permitted assignees.

     "Lessee Furnished Equipment" means, with respect to each Aircraft, any
appliances, parts, accessories, instruments, navigational and communications
equipment, furnishings, modules, components and other items of equipment,
installed in or furnished with such Aircraft on the Delivery Date which in
accordance with the terms of the Lease for such Aircraft can be removed by the
Lessee for such Aircraft without the Lessor's consent.

     "Lien" means, with respect to any property or asset, any mortgage, lien,
pledge, charge, security interest, encumbrance or other adverse claim of any
kind in respect of such property or asset including any Eurocontrol and other
air traffic control charges which may result in proceedings against the
Aircraft. For the purposes of this Agreement, a Person shall be deemed to own
subject to a Lien any property or asset which it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to such property or
asset.

     "Maintenance Reserves" means the cash amounts held by the Seller as
specified in Exhibit A-1 as "Maintenance Reserves" less in the case of the
aircraft listed on Exhibit A-1 with manufacturer's serial number 20233, any
cost incurred in the overhaul of the engine before the relevant Delivery Date,
provided that such cost does not exceed $450,000.

     "Manuals and Technical Records" means, with respect to each Aircraft, all
records, logs, technical data and manuals relating to the maintenance and
operation of such Aircraft (including all documents defined as "Aircraft
Documentation" under the Lease), which the Lessee with respect to such Aircraft

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is required by the terms of the Lease therefor to return to the Lessor
thereunder upon the expiration or termination of the term of such Lease.

     "Manufacturer" means, with respect to each Aircraft, the manufacturer of
such Aircraft as specified in the relevant Lease Documents.

     "Mulheim" means, Mulheim Aircraft Finance I B.V., a Netherlands
corporation.

     "Permits" means each license or certificate directly related to the
Seller's ownership of the Purchased Assets.

     "Permitted Liens" means (i) the rights conferred by the Lease Documents;
(ii) any Liens which are "permitted liens" under the applicable Lease other
than a Lien created by Seller; or (iii) Liens which do not materially detract
from the value of such Aircraft, or materially interfere with any present or
intended use of such Aircraft.

     "Person" means an individual, corporation, partnership, limited liability
company, association, statutory business trust, common law trust or other
entity or organization, including a government or political subdivision or an
agency or instrumentality thereof.

     "Property Tax" means, any personal property taxes, excise, use, value
added, recording, documentary, conveyancing and similar levies, charges and
fees, withholdings, imposts, levies, customs or other duties, together with any
interest, penalty, addition to tax or additional amount imposed by a Taxing
Authority responsible for the imposition of such tax (domestic or foreign).

     "Purchased Assets" means all of Seller's and Mulheim's right, title and
interest in, to and under each of the Aircraft on an "AS IS, WHERE IS" basis,
the Lease Documents, the Maintenance Reserves and the Security Deposits.

     "Purchase Price" means                                 Dollars
             less an amount equal to the value of any amounts (including any
rent, additional rent, insurance premiums or other amounts) received by Seller
in respect of each Aircraft with respect to the period from and including
August 21, 1998 to the applicable Delivery Date.

     "Required Consents" means each Contract and Permit requiring a consent or
other action by any Person as a result of the execution, delivery and
performance of this Agreement.

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     "Security Deposits" means, with respect to each Aircraft, the cash amounts
and security deposits in the form of commitment fees paid by the Lessee for the
benefit of the lessor under the relevant Lease as security for obligations of
such Lessee under such Lease and related Lease Documents as specified in
Exhibit A-1 as "Security Deposits".

     "Tax" means any net income, alternative or add-on minimum tax, gross
income, gross receipts, sales, use, ad valorem, value added, transfer,
franchise, profits, license, registration, recording, documentary,
conveyancing, gains, withholding on amounts paid to or by Seller, payroll,
employment, excise, severance, stamp, occupation, premium, property,
environmental or windfall profit tax, custom, duty or other tax, governmental
fee or other like assessment or charge of any kind whatsoever, together with
any interest, penalty addition to tax or additional amount imposed by any
governmental authority (domestic or foreign) responsible for the imposition of
any such tax (a "Taxing Authority").

     "Transfer Tax" means all excise, sales, use, value added, stamp,
recording, documentary, conveyancing, franchise, property, transfer, gains or
similar taxes and fees, withholdings, imposts, levies, customs or other duties,
together with any penalties, fines, interest thereon or addition to tax or
additional amount imposed by a Taxing Authority responsible for the imposition
of such tax (domestic or foreign).

     "Trust Agreement" means the amended and restated trust agreement dated
February 23, 1999 constituting Buyer.

                                   ARTICLE 2
                               PURCHASE AND SALE

     SECTION 2.01. Purchase and Sale. Upon the terms and subject to the
conditions of this Agreement, Buyer agrees to purchase and to take delivery of
title to the Purchased Assets from Seller and Seller agrees to sell, convey,
transfer, assign and deliver, or cause to be sold, conveyed, transferred,
assigned and delivered, to Buyer or an entity designated and wholly- owned by
Buyer, free and clear of all Liens, other than Permitted Liens, the Purchased
Assets, and including, without limitation, all right, title and interest of
Seller in, to and under:

          (a) title to the Aircraft;

          (b) all of Seller's and Mulheim's rights, claims, credits, causes of
     action or rights of set-off against third parties relating to the
     Purchased Assets, including, without limitation, rights under
     manufacturers' and vendors' warranties and service life policies,
     excluding any claims, causes

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     of action or rights (other than relating to warranties given by the
     Manufacturer) the Seller or Mulheim has or may have against the
     Manufacturer or the trustees in bankruptcy of the Manufacturer and that
     exists on the date of this Agreement or a Delivery Date;

          (c) all transferable licenses, permits or other governmental
     authorization affecting, or relating in any way to, each Purchased Asset,
     including without limitation the items listed on Schedule 3.14; and

          (d) all Manuals and Technical Records.

     SECTION 2.02. Assignment of Contracts and Rights. Anything in this
Agreement to the contrary notwithstanding, this Agreement shall not constitute
an agreement to assign any Purchased Asset or any claim or right or any benefit
arising thereunder or resulting therefrom if such assignment, without the
consent of a third party thereto, would constitute a breach or other
contravention of such Purchased Asset or in any way materially adversely affect
the rights of Buyer or Seller thereunder. Seller and Buyer agree that prior to
delivery of the Aircraft, Seller and Mulheim shall terminate the leasing
arrangements observed (but not documented) between them with respect to the
Aircraft and Buyer shall receive evidence reasonably satisfactory to it that
such arrangements have been validly terminated. Seller and Buyer agree that
Mulheim and Buyer shall enter into a Lease Novation with respect to each
Aircraft with the Lessee. Seller shall procure that Mulheim shall execute and
deliver the Lease Novation with respect to each Aircraft.

     SECTION 2.03. Payment of Purchase Price. On each Delivery Date Buyer will
pay 50% of the Purchase Price and any other sums payable by Buyer hereunder in
cash by wire transfer to such bank account as Seller may designate in writing
at least three Business Days prior to the date of payment, provided that if
there is only one Delivery Date the Buyer will pay 100% of the Purchase Price
on such Delivery Date. All payments hereunder shall be made in U.S. dollars by
2:00 p.m. New York time and in immediately available funds so that the
recipient receives credit in New York for the full amount of such payment on
each Delivery Date.

     SECTION 2.04. Inspection. Prior to the applicable Delivery Date therefor,
Buyer or its designee shall be given an opportunity to inspect each Aircraft
(including the Manuals and Technical Records relating to such Aircraft), such
inspection to be at Buyer's expense. Seller shall, to the extent it is able to,
provide or cause to be provided all reasonable assistance necessary to enable
Buyer or its designee to complete such inspection promptly. Buyer acknowledges
and agrees that such inspection shall take place at a time and location and in
such

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a manner as shall not disrupt the operation of such Aircraft by the Lessee.
Buyer shall indemnify and hold harmless Seller and its Affiliates from and
against any and all Damages incurred or arising by reason of death or injury to
any person or damage to any Aircraft or any other property, arising out of
inspection of any Aircraft conducted pursuant to the provisions of this Section
except to the extent such Damages are caused directly by the wilful misconduct
of any Person other than the Buyer or its designee or agents.

     SECTION 2.05. Delivery. Seller and Buyer or its designee shall execute the
Deed of Conveyance with respect to each of the Aircraft on or before March 31,
1999 at such time as the Aircraft is located at such place as is mutually
agreed between the parties. In addition, on or prior to the applicable Delivery
Date of each Aircraft, Seller shall cause Mulheim to execute a Lease Novation
with respect to each Aircraft and shall transfer and deliver or cause to be
transferred and delivered to Buyer the Lease Documents, the Maintenance
Reserves and the Security Deposits related to such Aircraft. At each Delivery
Date each Aircraft shall be in the possession of the applicable Lessee pursuant
to the relevant Lease Novation or Lease (or may be located at an aircraft
maintenance facility if permitted under the Lease, Lease Documents or Lease
Novation) and, in any case, Seller shall have no obligation physically to
deliver such Aircraft to Buyer or its designee.

                                   ARTICLE 3
                    REPRESENTATIONS AND WARRANTIES OF SELLER

     Seller represents and warrants to Buyer as of the date hereof and as of
each Delivery Date (except that the representation and warranties made as of
each Delivery Date with respect to Purchased Assets shall not apply to
Purchased Assets that have previously been delivered to and accepted by Buyer)
that:

     SECTION 3.01. Corporate Existence and Power. Seller is duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
organization and has all corporate powers and all governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business in respect of the Aircraft as now conducted. Seller has heretofore
delivered to Buyer true and complete copies of the certificate of incorporation
and bylaws of Seller as currently in effect.

     SECTION 3.02. Corporate Authorization. The execution, delivery and
performance by Seller of this Agreement, and the Deeds of Conveyance and the
consummation of the transactions contemplated hereby and thereby are within

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Seller's corporate powers and have been duly authorized by all necessary
corporate and other action on the part of Seller. This Agreement constitutes a
valid and binding agreement of Seller enforceable in accordance with its terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or affecting creditors' rights generally and by
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.

     SECTION 3.03. Governmental Authorization. The execution, delivery and
performance by Seller of this Agreement and the consummation of the
transactions contemplated hereby require no action by or in respect of, or
filing with, any governmental body, agency or official other than compliance
with the matters set forth on Schedule 3.03 hereto.

     SECTION 3.04. Noncontravention. The execution, delivery and performance by
Seller of this Agreement and the consummation of the transactions contemplated
hereby do not and will not (i) violate the certificate of incorporation or
bylaws of Seller, (ii) assuming compliance with the matters referred to in
Section 3.03, violate any applicable law, rule, regulation, judgment,
injunction, order or decree, (iii) assuming the obtaining of all Required
Consents, constitute a default under or give rise to any right of termination,
cancellation or acceleration of any right or obligation of Seller or to a loss
of any benefit relating to the Purchased Assets to which Seller is entitled
under any provision of any agreement or other instrument binding upon Seller or
by which any of the Purchased Assets is or may be bound or (iv) result in the
creation or imposition of any Lien on any Purchased Asset, other than Permitted
Liens.

     SECTION 3.05. Required Consents. Schedule 3.05 sets forth the Required
Consents.

     SECTION 3.06. Data. The Data and related information heretofore delivered
to Buyer is accurate and complete as of the date of this Agreement and
correctly describes the Purchased Assets as of the date of this Agreement.

     SECTION 3.07. Absence of Certain Changes. Since the date of this
Agreement, the management of the Purchased Assets has been conducted in the
ordinary course consistent with past practices and there has not been:

          (a) any event, occurrence, development or state of circumstances or
     facts which has had or could be reasonably be expected to have a material
     adverse effect on the physical condition of the Aircraft, the terms of any
     Lease or other Lease Documents or the terms of any non-cash Security
     Deposits and there are no litigation proceedings in respect of any

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     of the Aircraft that are pending or, to the reasonable knowledge of Seller
     threatened, which might materially detract from the value of the Aircraft
     or materially interfere with the present use of the Aircraft; or

          (b) any transaction or commitment made, or any contract or agreement
     entered into, by Seller relating to any Purchased Asset (including the
     acquisition or disposition of any assets) or any relinquishment (other
     than as a result of any applicable insolvency law) by Seller of any
     contract or other right, in either case, related to the Purchased Assets,
     other than transactions and commitments in the ordinary course of business
     consistent with past practices and those contemplated by this Agreement.

     SECTION 3.08. No Undisclosed Material Liabilities. There are no
liabilities related to a Purchased Asset of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, and there
is no existing condition, situation or set of circumstances which could
reasonably be expected to result in such a liability, other than:

          (a) the Lease Documents and any liabilities and obligations arising
     thereunder with respect to any period following the Delivery Date;

          (b) liabilities disclosed on Schedule 3.08; and

          (c) other undisclosed liabilities which, individually or in the
     aggregate, are not material.

     SECTION 3.09. Contracts. (a) Except for the leasing arrangements with
respect to the Aircraft between Mulheim and Seller which will be terminated on
or prior to the Delivery Date, the Contracts disclosed in Schedule 3.09, and
contracts or agreements relating to the transfer of each Aircraft on the
applicable Delivery Date which have been disclosed to and approved by Buyer
(acting reasonably), Seller is not a party to or bound by any oral or written
agreements or waivers relating to the Purchased Assets. Seller has delivered to
Buyer true and complete copies of (i) the portions of the Contracts disclosed
in Schedule 3.09 that relate to the Purchased Assets and (ii) the Contracts and
agreements otherwise disclosed to and approved by Buyer to the extent they
relate to the Purchased Assets.

     (b) Each Contract disclosed in any Schedule to this Agreement or required
to be disclosed pursuant to this Section is a valid and binding agreement of
Seller, as applicable (except as disclosed in such Schedule), and is in full
force and effect, and none of Seller or, to the knowledge of Seller, any other
party

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thereto is in default or breach in any material respect under the terms of any
such Contract, and, to the knowledge of Seller, no event or circumstance has
occurred that, with notice or lapse of time or both, would constitute any event
of default thereunder. True and complete copies of each such Contract have been
delivered to Buyer.

     SECTION 3.10. Litigation. There is no action, suit, investigation or
proceeding pending against or, to the knowledge of Seller, threatened against
or affecting, any Purchased Asset before any court or arbitrator or any
governmental body, agency or official or which challenges or seeks to prevent,
enjoin, alter or materially delay the transactions contemplated by this
Agreement.

     SECTION 3.11. Compliance with Laws and Court Orders. Seller is not in
violation of, has not violated, nor has been given notice of any violation of,
nor to the knowledge of Seller is under investigation with respect to the
Purchased Assets nor to the knowledge of Seller has been threatened to be
charged with any violation of, any law, rule, regulation, judgment, injunction,
order or decree applicable to the Purchased Assets.

     SECTION 3.12. Aircraft and Leases. (a) Seller is the sole legal and
beneficial owner of the Aircraft, which Aircraft are free and clear of all
Liens other than Permitted Liens and upon consummation of the transactions
contemplated hereby, Buyer will have directly or indirectly, as applicable,
acquired good and marketable title in and to each of the Aircraft, free and
clear of all Liens, except for Permitted Liens;

     (b) no Event of Default (as defined in the applicable Lease) has occurred
and is continuing under either Lease; no payment failure or failure to maintain
insurance has occurred which with the giving of notice or passage of time or
both would become an Event of Default (as so defined) under any Lease; and, to
the best of the knowledge of Seller, no other event which with the giving of
notice or passage of time or both would become an Event of Default (as so
defined) under such Lease has occurred;

     (c) there are no outstanding airworthiness directives or similar demands
from any governmental, semi-governmental or public authority or instrumentality
or any other Person having authority in respect of the applicable Aircraft
being delivered on the Delivery Date requiring any mandatory work or other
mandatory action to be taken or the mandatory expenditure of any money in
respect thereof (except those which the Manufacturer or the Lessee have agreed
in writing to perform entirely at such Person's expense) and that have not been
complied with by Seller and, to the best of Seller's knowledge, by the Lessee,
as applicable;

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     (d) all liabilities for Taxes, Transfer Taxes and other governmental,
quasi-governmental and other charges, including all Euro control and other air
traffic control charges with regard to the Aircraft which are due for payment
(whether or not indemnified by the applicable Lessee) have been paid or will be
paid prior to the applicable Delivery Date;

     (e) (i) there are no material claims which can be asserted by the Lessee
against Seller, Mulheim or the applicable Aircraft arising out of the
applicable Lease Documents, (ii) the Lease Documents are in full force and
effect in accordance with the terms thereof and (iii) from the date of this
Agreement there have been no waivers of Seller's or Mulheim's rights in effect
under such Lease Documents except as contemplated by the applicable Lease
Novation or otherwise disclosed in writing to and agreed to by Buyer in writing
nor has Seller or Mulheim increased any of their respective obligations under
such Lease Documents without the written consent of Buyer;

     (f) to Seller's knowledge, no unrepaired damage, destruction or other
casualty loss has occurred in respect of any Aircraft;

     (g) other than as set out in the Lease Documents there are no options to
purchase any Aircraft, or extend or terminate any Leases; and

     (h) to the best of the Seller's knowledge there have been no modifications
to any Aircraft since delivery to the Lessee other than as required or
permitted under the Lease Documents.

     SECTION 3.13. Insurance Coverage. Seller has furnished to Buyer a list of,
and true and complete copies of, all insurance policies relating to the
Aircraft. There is no claim by Seller pending under any of the insurance
policies or bonds relating to the Aircraft as to which coverage has been
questioned, denied or disputed by the underwriters of such policies or bonds or
in respect of which such underwriters have reserved their rights. All premiums
due and payable under all such policies and bonds have been paid and Seller has
otherwise complied fully with the terms and conditions of all such policies and
bonds. Such policies and bonds are of the type and in amounts customarily
carried by Persons conducting businesses similar to Seller's business with
respect to the Aircraft. Seller does not know of any threatened termination of,
premium increase with respect to, or material alteration of coverage under, any
of such policies or bonds.

     SECTION 3.14. Licenses and Permits. Schedule 3.14 correctly describes the
Permits together with the name of the government agency or entity issuing such
Permit. Except as set forth on Schedule 3.14, (i) the Permits are valid and in
full force and effect, (ii) Seller is not in default, and to the best of the
Seller's

                                      11
<PAGE>

knowledge no condition exists that with notice or lapse of time or both would
constitute a default, under the Permits and (iii) none of the Permits will be
terminated or impaired or become terminable, in whole or in part, as a result
of the transactions contemplated hereby. Upon consummation of such
transactions, Buyer will, assuming the related Required Consents have been
obtained prior to the relevant Delivery Date, have all of Seller's right, title
and interest in all of the Permits held by Seller except to the extent
disclosed on Schedule 3.14 hereto, in which case Buyer shall be entitled to the
benefit of the Permits disclosed on Schedule 3.14 hereto through the
arrangements established by Buyer and Seller with respect thereto.

     SECTION 3.15. Selling Documents. None of the documents or information
delivered to Buyer in connection with the transactions contemplated by this
Agreement, including, without limitation, the Data, contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained therein not misleading.

     SECTION 3.16. Finders' Fees. There is no investment banker, broker, finder
or other intermediary which has been retained by or is authorized to act on
behalf of Seller who might be entitled to any fee or commission in connection
with the transactions contemplated by this Agreement.

     SECTION 3.17. True Sale. The transfer of the rights, title and interest in
and to the Purchased Assets pursuant to the terms hereof constitutes a
transaction in the ordinary course of business of Seller and Seller intends
that such transfer of such rights, title and interest shall constitute a true
sale thereof.

                                   ARTICLE 4
                    REPRESENTATIONS AND WARRANTIES OF BUYER

     Buyer represents and warrants to Seller as of the date hereof and as of
each Delivery Date that:

     SECTION 4.01. Existence and Power. Buyer is a business trust duly formed,
validly existing and in good standing under the laws of Delaware and has all
necessary powers and all material governmental and regulatory licenses,
authorizations, permits, consents and approvals required to carry on its
activities as now conducted.

     SECTION 4.02. Authorization. The execution, delivery and performance by
Buyer of this Agreement and the consummation of the transactions

                                      12
<PAGE>

contemplated hereby are within the powers of Buyer and have been duly
authorized by all necessary action on the part of Buyer. This Agreement
constitutes a valid and binding agreement of Buyer enforceable in accordance
with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally and by general principles of equity, regardless of whether
considered in a proceeding in equity or at law.

     SECTION 4.03. Governmental Authorization. The execution, delivery and
performance by Buyer of this Agreement and the consummation of the transactions
contemplated hereby require no material action by or in respect of, or material
filing with, any governmental or regulatory body, agency or official other than
compliance with the matters set forth on Schedule 4.03 hereto.

     SECTION 4.04. Noncontravention. The execution, delivery and performance by
Buyer of this Agreement and the consummation of the transactions contemplated
hereby do not and will not (i) violate the Trust Agreement or any other
agreement binding on Buyer or (ii) assuming compliance with the matters
referred to in Section 4.03, violate any applicable material law, rule,
regulation, judgment, injunction, order or decree.

     SECTION 4.05. Litigation. There is no action, suit, investigation or
proceeding pending against, or to the knowledge of Buyer threatened against or
affecting, Buyer before any court or arbitrator or any governmental body,
agency or official which in any manner challenges or seeks to prevent, enjoin,
alter or materially delay the transactions contemplated by this Agreement.

     SECTION 4.06. Licenses and Permits. Except as set forth on Schedule 4.06
as of the Delivery Date of the applicable Aircraft, (i) the Buyer Permits have
been obtained and are valid and in full force and effect and (ii) Buyer is not
in default, and no condition exists that with notice or lapse of time or both
would constitute a default, under the Buyer Permits.

     SECTION 4.07. Finders' Fees. There is no investment banker, broker, finder
or other intermediary which has been retained by or is authorized to act on
behalf of Buyer who might be entitled to any fee or commission from Seller or
any of its Affiliates upon consummation of the transactions contemplated by
this Agreement.

     SECTION 4.08. True Sale. The transfer of the rights, title and interest in
and to the Purchased Assets pursuant to the terms hereof constitutes a
transaction in the ordinary course of business of Buyer, and Buyer intends that
such transfer of such rights, title and interest shall constitute a true sale
thereof.

                                      13
<PAGE>

                                   ARTICLE 5
                              COVENANTS OF SELLER

     Seller agrees that:

     SECTION 5.01. Conduct of the Business. From the date hereof until the
respective Delivery Date, Seller shall manage the Purchased Assets in the
ordinary course of its business consistent with past practice. Without limiting
the generality of the foregoing, from the date hereof, Seller will not take or
agree or commit to take any action that would make any representation or
warranty of Seller hereunder inaccurate in any respect at, or as of any time
prior to, each Delivery Date or omit or agree or commit to omit to take any
action necessary to prevent any such representation or warranty from being
inaccurate in any respect at any such time.

     SECTION 5.02. Access to Information; Confidentiality. (a) From the date
hereof until the last Delivery Date, Seller will (i) give or cause to be given
to Buyer, its counsel, auditors and other authorized representatives full
access to the extent related to the Purchased Assets to the offices,
properties, books and records of Seller relating to the Purchased Assets, (ii)
furnish or cause to be furnished to Buyer, its counsel, financial advisors,
auditors and other authorized representatives such financial and operating data
and other information relating to the Purchased Assets as such Persons may
reasonably request and (iii) instruct the employees, counsel, accountants and
financial advisors of Seller to cooperate with Buyer in its investigation of
the Purchased Assets. Any investigation pursuant to this Section shall be
conducted in such manner as not to interfere with the conduct of the business
of Seller. No investigation by Buyer or other information received by Buyer
shall operate as a waiver or otherwise affect any representation, warranty or
agreement given or made by Seller hereunder.

     (b) After the respective Delivery Date, Seller and its Affiliates will
hold, and will use their reasonable commercial efforts to cause their
respective officers, directors, employees, accountants, counsel, consultants,
advisors and agents to hold, in confidence, unless compelled to disclose by
judicial or administrative process or by other requirements of law, all
confidential documents and information concerning the Purchased Assets, except
to the extent that such information can be shown to have been (i) previously
known on a nonconfidential basis by Seller, (ii) in the public domain through
no fault of Seller or its Affiliates or (iii) later lawfully acquired by Seller
from sources other than those related to its prior ownership of the Purchased
Assets provided that Seller may disclose such information to its officers,
directors, employees, accountants, counsel, consultants, advisors and agents in
connection with the transactions contemplated by this Agreement so long as such
Persons are informed by Seller of the confidential

                                      14
<PAGE>

nature of such information and are directed by Seller to treat such information
confidentially. The obligation of Seller and its Affiliates to hold any such
information in confidence shall be satisfied if they exercise the same care
with respect to such information as they would take to preserve the
confidentiality of their own similar information.

     SECTION 5.03. Notices of Certain Events. Seller shall promptly notify
Buyer of:

          (a) any notice or other communication from any Person alleging that
     the consent of such Person is or may be required in connection with the
     transactions contemplated by this Agreement;

          (b) any notice or other communication from any governmental or
     regulatory agency or authority in connection with the transactions
     contemplated by this Agreement;

          (c) any actions, suits, claims, investigations or proceedings
     commenced or, to its knowledge threatened against, relating to or
     involving or otherwise affecting Seller or the Purchased Assets that, if
     pending on the date of this Agreement, would have been required to have
     been disclosed pursuant to Section 3.10 or that relate to the consummation
     of the transactions contemplated by this Agreement; and

          (d) as soon as Seller has knowledge of, the damage, destruction or
     other casualty of any Purchased Asset or part thereof or in the event that
     any Purchased Asset or part thereof becomes the subject of any proceeding
     or, to the knowledge of Seller, threatened proceeding for the taking
     thereof or any part thereof or of any right relating thereto by
     condemnation, eminent domain or other similar governmental action.

     SECTION 5.04. Taxes and Other Costs. Seller agrees to pay, and indemnify
and hold Buyer and its Affiliates harmless from, (i) any Transfer Taxes
imposed, levied or assessed against or upon Buyer or any of its Affiliates or
any of the Purchased Assets resulting from the execution of this Agreement or
the sale, delivery, assignment, novation, transfer and conveyance of the
Purchased Assets to Buyer, (ii) any Tax liability, whether owed or accrued,
relating to the period prior to the applicable Delivery Date the non-payment of
which would give rise to a Lien on any Purchased Asset, would otherwise
adversely affect the Purchased Assets, or would result in Buyer becoming liable
therefor, (iii) any and all Property Taxes levied with respect to the Purchased
Assets, whether owed or accrued, relating to the period prior to the applicable
Delivery Date and (iv) to the extent not paid by the Lessee, all Lessee and
other third party costs incurred in

                                      15
<PAGE>

connection with the consummation of the transactions contemplated hereby
including, without limitation, costs related to Lease Novations and payable to
the Lessee and Mulheim. Buyer agrees to cooperate with Seller to minimize the
amount of such Transfer Taxes.

     SECTION 5.05. Maintenance Reserves. Seller agrees to pay any amounts due
from the Seller to any Person relating to maintenance work performed on any
Aircraft, or obligation on the Seller to reimburse any amounts of Maintenance
Reserves arising with respect to any Aircraft, on or prior to the Delivery Date
of such Aircraft.

                                   ARTICLE 6
                               COVENANTS OF BUYER

     Buyer agrees that:

     SECTION 6.01. Confidentiality. Buyer and its Affiliates will hold, and
will use their best efforts to cause their respective officers, directors,
employees, accountants, counsel, consultants, advisors and agents to hold, in
confidence, unless compelled to disclose by judicial or administrative process
or by other requirements of law or disclosure requirements applicable to a
securitization of the Aircraft, all confidential documents and information
concerning the Purchased Assets or which Seller has furnished to Buyer or its
Affiliates in connection with the transactions contemplated by this Agreement,
except to the extent that such information can be shown to have been (i)
previously known on a nonconfidential basis by Buyer, (ii) in the public domain
through no fault of Buyer or (iii) later lawfully acquired by Buyer from
sources other than Seller; provided that Buyer may disclose such information to
its officers, directors, employees, accountants, counsel, consultants, advisors
and agents in connection with the transactions contemplated by this Agreement
and to rating agencies in connection with a securitization of the Aircraft so
long as such Persons are informed by Buyer of the confidential nature of such
information and are directed by Buyer to treat such information confidentially.
The obligation of Buyer and its Affiliates to hold any such information in
confidence shall be satisfied if they exercise the same care with respect to
such information as they would take to preserve the confidentiality of their
own similar information. If this Agreement is terminated, Buyer and its
Affiliates will, and will cause their respective officers, directors,
employees, accountants, counsel, consultants, advisors and agents to, destroy
or deliver to Seller, upon request, all documents and other materials, and all
copies thereof, obtained by Buyer or its Affiliates or on their behalf from
Seller in connection with this Agreement that are subject to such confidence
and any reports,

                                      16
<PAGE>

memoranda, data, information or other records prepared by Buyer on the basis of
such documents and other materials.

                                   ARTICLE 7
                         COVENANTS OF BUYER AND SELLER

     Buyer and Seller agree that:

     SECTION 7.01. Best Efforts; Further Assurances. (a) Subject to the terms
and conditions of this Agreement, Buyer and Seller will use their best efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary or desirable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement. Seller and Buyer
agree to execute and deliver, or cause to be executed and delivered, such other
documents, certificates, agreements and other writings and to take, or cause to
be taken, such other actions as may be necessary or desirable in order to
consummate or implement expeditiously the transactions contemplated by this
Agreement and to vest, or cause to be vested, in Buyer good and marketable
title to the Purchased Assets.

     (b) Seller hereby constitutes and appoints, effective for the applicable
Aircraft as of each Delivery Date, Buyer and its successors and assigns as the
true and lawful attorney of Seller with full power of substitution in the name
of Buyer, or with the prior written consent of the Seller, in the name of
Seller but for the benefit of Buyer, to institute and prosecute all proceedings
which Buyer may in its sole discretion deem proper in order to assert or
enforce any right, title or interest in, to or under such Aircraft, and to
defend or compromise any and all actions, suits or proceedings in respect of
such Aircraft so long as Buyer indemnifies and holds harmless Seller and its
Affiliates for any expenses, costs, action or loss brought by any Person as a
result of any action taken by Buyer in Seller's name or as Seller's true and
lawful attorney. Buyer shall be entitled to retain for its own account any
amounts collected pursuant to the foregoing powers, including any amounts
payable as interest in respect thereof.

     SECTION 7.02. Certain Filings. Seller and Buyer shall cooperate with one
another (i) in determining whether any action by or in respect of, or filing
with, any governmental body, agency, official or authority is required, or any
actions, consents, approvals or waivers are required to be obtained from
parties to any material contracts, in connection with the consummation of the
transactions contemplated by this Agreement and (ii) in taking such actions or
making any

                                      17
<PAGE>

such filings, furnishing information required in connection therewith and
seeking timely to obtain any such actions, consents, approvals or waivers.

     SECTION 7.03. Public Announcements. The parties agree to consult with each
other before issuing any press release or making any public statement with
respect to this Agreement or the transactions contemplated hereby and, except
as may be required by applicable law, any listing agreement with any national
securities exchange or by any disclosure obligation in connection with a
securitization of the Aircraft, will not issue any such press release or make
any such public statement prior to such consultation.

                                   ARTICLE 8
                                   CONDITIONS

     SECTION 8.01. Conditions to Obligations of Buyer and Seller. On each
Delivery Date the obligations of Buyer and Seller to deliver and pay for each
Purchased Asset are subject to the satisfaction of the following conditions:

          (a) No provision of any applicable law or regulation and no judgment,
     injunction, order or decree shall prohibit the consummation of the
     delivery of and payment for such Purchased Asset.

          (b) All actions by or in respect of or filings with any governmental
     body, agency, official or authority required to permit the delivery of and
     payment for such Purchased Asset and specified on either Schedule 3.03
     hereto or Schedule 4.03 hereto shall have been taken, made or obtained.

     SECTION 8.02. Conditions to Obligation of Buyer. The obligation of Buyer
to pay for each Purchased Asset is subject to the satisfaction of the following
further conditions:

          (a) On each Delivery Date (i) Seller shall have performed in all
     material respects all of its obligations hereunder required to be
     performed by it on or prior to the applicable Delivery Date and (ii) the
     representations and warranties of Seller contained in this Agreement and
     in any certificate or other writing delivered by Seller pursuant hereto,
     shall be true, as if made at and as of such date. On each Delivery Date
     Buyer shall have received a certificate signed by an authorized signatory
     of Seller and dated as of such Delivery Date to the foregoing effect.

                                      18
<PAGE>

          (b) On each Delivery Date there shall not be threatened, instituted
     or pending any action or proceeding by any Person before any court or
     governmental authority or agency, domestic or foreign, (i) seeking to
     restrain, prohibit or otherwise interfere with the ownership or operation
     by Buyer or any of its Affiliates of any Aircraft or to compel Buyer or
     any of its Affiliates to dispose of any Aircraft or (ii) seeking to
     require divestiture by Buyer or any of its Affiliates of any Aircraft.

          (c) On each Delivery Date there shall not have been any action taken,
     or any statute, rule, regulation, injunction, order or decree proposed,
     enacted, enforced, promulgated, issued or deemed applicable to the
     purchase of the Purchased Assets, by any court, government or governmental
     authority or agency, domestic or foreign, that, in the reasonable judgment
     of Buyer could, directly or indirectly, result in any of the consequences
     referred to in clauses 8.02(b)(i) and 8.02(b)(ii) above.

          (d) On each Delivery Date Buyer shall have received an opinion of
     German counsel to Seller, dated such Delivery Date, substantially in the
     form attached hereto as Exhibit C.

          (e) By the applicable Delivery Date Seller shall have received all
     Required Consents and all consents, authorizations or approvals from the
     governmental agencies referred to in Section 3.03 or 3.14, in each case in
     form and substance reasonably satisfactory to Buyer, and no such consent,
     authorization or approval shall have been revoked or made subject to
     conditions which, in the reasonable opinion of Buyer, could affect the
     full force and effect thereof.

          (f) Buyer shall have received on the applicable Delivery Date a
     certificate setting forth the determination of an independent insurance
     advisor with respect to the applicable Aircraft satisfactory to Buyer in
     its sole discretion and to the effect that the insurance policies or bonds
     relating to such Aircraft are of the type customarily carried by owners of
     similar Aircraft.

          (g) On or prior to the applicable Delivery Date, Buyer shall have
     received a report on the physical inspection of the relevant Aircraft in
     form and substance reasonably satisfactory to Buyer in its sole
     discretion.

          (h) On or prior to each Delivery Date a Lease Novation in form and
     substance satisfactory to Buyer in its sole discretion shall have been
     entered into with respect to the relevant Aircraft by Buyer or its
     designee, Mulheim and the Lessee and such agreement shall be in full force
     and

                                      19
<PAGE>

     effect and an original thereof shall have been delivered to Buyer along
     with copies of any other Lease Documents for the relevant Aircraft.

          (i) Within 14 days after each Delivery Date the applicable Aircraft
     shall have been registered in the public registry for the registration of
     aircraft at Rotterdam, The Netherlands reflecting, to the extent permitted
     under the laws of such state of registration, Buyer's or its designee's
     ownership thereof or such other action shall have been taken with respect
     to such registration and ownership as shall be satisfactory to Buyer.

          (j) On each Delivery Date there shall be delivered to Buyer, (1) an
     opinion from counsel to Buyer in the applicable state of registration and,
     if different, from counsel in the jurisdiction whose law is stated to
     govern in each of the following documents, to the effect that the
     applicable Lease Documents and Lease Novation are legal, valid and binding
     under the applicable laws of such state of registration and jurisdiction;
     and (2) an opinion from counsel to Buyer in the applicable state of
     registration to the effect that (i) Buyer or its designee, as applicable
     shall be recognized as the owner of the applicable Aircraft under the laws
     of such jurisdiction; (ii) it is not necessary for Buyer or its designee
     as applicable, to qualify to do business in such jurisdiction as a result
     of ownership of such Aircraft to exercise remedies under the applicable
     Lease or otherwise; (iii) payments due under the applicable Lease are not
     subject to withholding or similar tax or the Lessee is obligated to pay
     and hold the lessor harmless from such withholding tax under the Lease
     Documents; (iv) no filings or registrations other than those which have
     already been made or are in the process of being made and are referenced
     in such opinion are necessary to record or perfect Buyer's (or, if
     applicable, the Lessor's) interest in such Aircraft in such jurisdiction;
     or (v) upon the expiration or other valid termination of the Lease, and
     subject to compliance with the laws of such jurisdiction, the lessor would
     be entitled and able under the laws of such jurisdiction to receive
     redelivery of such Aircraft, repossess such Aircraft and export such
     Aircraft from such jurisdiction;

          (k) A Deed of Conveyance executed by Seller and Buyer and certified
     copies of each of the documents relating to Seller's title to the
     applicable Aircraft evidencing the chain of title from the Manufacturer to
     Seller shall have been received in a form reasonably satisfactory to
     Buyer.

          (l) On each Delivery Date Buyer shall have received originals or
     copies of certificates evidencing the insurance required to be maintained
     pursuant to the applicable Lease Documents and Lease Novation (which

                                      20
<PAGE>

     insurance shall name the owner of the Aircraft and each other Person
     required to be so named pursuant to the Lease Documents and Lease Novation
     as additional insureds and shall name the owner of the Aircraft as Loss
     Payee under the relevant policies), together with a letter of undertaking
     in terms reasonably acceptable to Buyer issued by the brokers through whom
     the insurances of such Aircraft shall have been placed if such a letter is
     required to be provided to the lessor pursuant to the applicable Lease.

          (m) On each Delivery Date, Buyer shall have received a copy of the
     valid certificate of airworthiness (export or otherwise) for such Aircraft
     issued by the appropriate air authority as in effect immediately prior to
     the Delivery Date of such Aircraft.

          (n) On such Delivery Date, Buyer shall have received a copy of the
     valid certificate of registration for such Aircraft issued by the
     appropriate Air Authority as in effect immediately prior to the Delivery
     Date of such Aircraft.

          (o) All representations, warranties, indemnities (except the
     indemnity for Transfer Taxes provided in Section 5.04 hereof) and
     undertakings of Seller hereunder are capable of being assigned by Buyer to
     a special purpose securitization vehicle or vehicles.

          (p) On the first Delivery Date Buyer shall have received all
     documents it may reasonably request relating to the existence of Seller
     and the authority of Seller for this Agreement, all in form and substance
     reasonably satisfactory to Buyer.

          (q) On each Delivery Date, Buyer shall have received an opinion of
     Seller's New York counsel, dated the applicable Delivery Date,
     substantially in the form attached hereto as Exhibit D.

     SECTION 8.03. Conditions to Obligation of Seller. On the applicable
Delivery Date, the obligation of Seller to deliver each Purchased Asset is
subject to the satisfaction of the following further conditions:

          (a) (i) Buyer shall have performed in all material respects all of
     its obligations hereunder required to be performed by it on or prior to
     such Delivery Date and (ii) the representations and warranties of Buyer
     contained in this Agreement and in any certificate or other writing
     delivered by Buyer pursuant hereto shall be true in all material respects
     at and as of such Delivery Date, as if made at and as of such date. On
     each

                                      21
<PAGE>

     Delivery Date, Seller shall have received a certificate signed by an
     executive officer of Buyer to the foregoing effect.

          (b) Seller shall have received an opinion of Richards, Layton &
     Finger, special Delaware counsel to Buyer, dated the first Delivery Date
     (and, if Seller requests, in a form acceptable to the Seller dated as of
     any subsequent Delivery Date), to the effect specified in Section 4.01 and
     the first sentence of Section 4.02. Seller shall also have received an
     opinion of Davis Polk & Wardwell, counsel to Buyer, in a form acceptable
     to the Seller dated the first Delivery Date (and, if Seller requests,
     dated as of any subsequent Delivery Date) to the effect specified in the
     second sentence of Section 4.02, and, with respect to matters of United
     States federal and New York law, to the further effect specified in
     Section 4.03. In rendering such opinions, such counsel may rely upon
     certificates of public officers and, as to matters of fact, upon
     certificates of officers of Buyer, copies of which opinions and
     certificates shall be contemporaneously delivered to Seller.

          (c) Buyer shall have received all consents, authorizations or
     approvals from governmental agencies referred to in Section 4.03, in each
     case in form and substance reasonably satisfactory to Seller, and no such
     consent, authorization or approval shall have been revoked.

          (d) Seller shall have received all documents it may reasonably
     request relating to the existence of Buyer and the authority of Buyer for
     this Agreement, all in form and substance reasonably satisfactory to
     Seller.

          (e) Any purchasing entity that Buyer designates to take delivery of
     any Aircraft shall, on the applicable Delivery Date, be duly organized and
     validly existing and in good standing under its jurisdiction of
     organization and shall have all necessary power and authority to carry out
     Buyer's obligations hereunder with respect to such Aircraft and to
     consummate the transactions with respect to such Aircraft contemplated
     hereby.

                                      22
<PAGE>

                                   ARTICLE 9
                           SURVIVAL; INDEMNIFICATION

     SECTION 9.01. Survival. The representations and warranties of the parties
hereto contained in this Agreement or in any certificate or other writing
delivered pursuant hereto or in connection herewith shall survive until the
third anniversary of the last Delivery Date; provided that the covenants,
agreements, representations and warranties contained in Section 5.04(ii) and
(iii) shall survive until expiration of the statute of limitations applicable
to the matters covered thereby (giving effect to any waiver, mitigation or
extension thereof), if later. Notwithstanding the preceding sentence, any
representation or warranty in respect of which indemnity may be sought under
this Agreement shall survive the time at which it would otherwise terminate
pursuant to the preceding sentence, if written notice of the inaccuracy thereof
giving rise to such right of indemnity shall have been given to the party
against whom such indemnity may be sought prior to such time.

     SECTION 9.02. Indemnification. (a) Seller hereby indemnifies Buyer and its
Affiliates against and agrees to hold each of them harmless from any and all
Damages incurred or suffered by Buyer or any of its Affiliates arising out of:

          (i) any misrepresentation or breach of warranty, covenant or
     agreement made or to be performed by Seller pursuant to this Agreement; or

          (ii) the ownership, leasing, use or operation of the Aircraft on or
     prior to the applicable Delivery Date including, without limitation,
     liabilities in respect of maintenance work performed on the Aircraft on or
     prior to the applicable Delivery Date;

     provided that Seller shall not be liable under Section 9.02(a)(i) unless
the aggregate amount of Damages with respect to all matters referred to in
Section 9.02(a)(i) (determined without regard to any materiality qualification
contained in any representation, warranty or covenant giving rise to the claim
for indemnity hereunder) exceeds $       .

     (b) Buyer hereby indemnifies Seller and its Affiliates against and agrees
to hold each of them harmless from any and all Damages incurred or suffered by
Seller or any of its Affiliates arising out of:

          (i) any misrepresentation or breach of warranty, covenant or
     agreement made or to be performed by Buyer pursuant to this Agreement; or

                                      23
<PAGE>

          (ii) the ownership, leasing, use or operation of the Aircraft
     following the applicable Delivery Date (including, without limitation,
     liabilities in respect of maintenance work performed on the Aircraft after
     the Delivery Date) unless such Damages are attributable to an incident
     which occurred on or prior to such Delivery Date;

     provided that (A) Buyer shall not be liable under Section 9.02(b)(i)
unless the aggregate amount of Damages with respect to all matters referred to
in Section 9.02(b)(i) (determined without regard to any materiality
qualification contained in any representation, warranty or covenant giving rise
to the claim for indemnity hereunder) exceeds $       .

     SECTION 9.03. Procedures. The Indemnified Party agrees to give prompt
written notice to Indemnifying Party of the assertion of any claim, or the
commencement of any suit, action or proceeding in respect of which indemnity
may be sought under such Section. The Indemnifying Party may at the request of
the Indemnified Party participate in and control the defense of any such suit,
action or proceeding at its own expense. The Indemnifying Party shall not be
liable under Section 9.02 for any settlement effected without its consent of
any claim, litigation or proceeding in respect of which indemnity may be sought
hereunder.

                                   ARTICLE 10
                                  TERMINATION

     SECTION 10.01. Grounds for Termination. This Agreement may be terminated:

     (a) at any time prior to the first Delivery Date by mutual written
agreement of Seller and Buyer;

     (b) at any time prior to the first Delivery Date by either Seller or Buyer
if consummation of the transactions contemplated hereby would violate any
nonappealable final order, decree or judgment of any court or governmental body
having competent jurisdiction; or

     (c) at any time after March 31, 1999 (or such other period as may be
agreed in writing by the parties) by Buyer if the Aircraft have not been
delivered to Buyer on or before such date.

                                      24
<PAGE>

     The party desiring to terminate this Agreement pursuant to clause 10.01(b)
shall give notice of such termination to the other party.

     SECTION 10.02. Effect of Termination. If this Agreement is terminated as
permitted by Section 10.01, such termination shall be without liability of
either party (or any stockholder, director, officer, employee, agent,
consultant or representative of such party) to the other party to this
Agreement; provided that if such termination shall result from the (i) willful
failure of either party to fulfill a condition to the performance of the
obligations of the other party, (ii) failure to perform a covenant of this
Agreement or (iii) breach by either party hereto of any representation or
warranty or agreement contained herein, such party shall be fully liable for
any and all Damages incurred or suffered by the other party as a result of such
failure or breach. The provisions of Sections 5.02(b), 5.04, 6.01, 7.03, 11.04,
11.05, 11.06, 11.07 and 11.08 shall survive any termination hereof pursuant to
Section 10.01.

                                   ARTICLE 11
                                 MISCELLANEOUS

     SECTION 11.01. Warranties and Disclaimers. THE AIRCRAFT SHALL BE SOLD IN
"AS IS, WHERE IS" CONDITION AT DELIVERY AND, EXCEPT AS PROVIDED IN SECTION 9.01
AND 11.01, SELLER MAKES NO WARRANTIES, GUARANTEES, OR REPRESENTATIONS OF ANY
KIND, EITHER EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, THAT SHALL SURVIVE
DELIVERY BY SELLER TO BUYER HEREUNDER. BUYER WAIVES, RELEASES AND RENOUNCES ALL
GUARANTEES, WARRANTIES, REPRESENTATIONS, OBLIGATIONS, COVENANTS AND LIABILITIES
OF SELLER, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY
NON- CONFORMITY OR DEFECT IN THE AIRCRAFT, INCLUDING WITHOUT LIMITATION, ANY
IMPLIED WARRANTY OF FITNESS FOR USE OR MERCHANTABILITY OR USE FOR A PARTICULAR
PURPOSE, ANY LIABILITY ARISING FROM STRICT LIABILITY IN TORT, PRODUCTS
LIABILITY, IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF
DEALING OR USAGE OF TRADE, AIRWORTHINESS OR LOSS OF USE, PROFIT OR OTHER
CONSEQUENTIAL DAMAGES OR WITH RESPECT TO ANY LESSEE. Nothing in the foregoing
is intended to limit the specific provisions of this Agreement or the rights
and remedies of Buyer specifically provided for in this Agreement.

     Seller shall to the extent that it is legally able to extend to Buyer the
rights and benefits, to the extent that the same are not extinguished by the
sale of the

                                      25
<PAGE>

Aircraft, of any warranties, service life policies and patent indemnities of
any Manufacturer and any maintenance and overhaul agencies of and for each of
the Aircraft which Seller may have. Seller to the extent that it is legally
able to also hereby grants to Buyer rights of subrogation relating to any claim
which Seller may have under such warranties concerning the Aircraft. Seller
shall take such action as Buyer may reasonably request and as may be reasonably
necessary to secure such rights and protection for Buyer.

     SECTION 11.02. Notices. Any notice, request or information required or
permissible under this Agreement will be in writing and in English. Notices
will be delivered in person or sent by fax, letter (mailed airmail, certified
and return receipt requested), or by expedited delivery addressed to the
parties as set forth below in this Section. In the case of a fax, notice will
be deemed received upon the date set forth on the confirmation of receipt
produced by the sender's fax machine immediately after the fax is sent. In the
case of a mailed letter, notice will be deemed received on the tenth (10th) day
after mailing. In the case of a notice sent by expedited delivery, notice will
be deemed received on the date of delivery set forth in the records of the
person which accomplished the delivery. If any notice is sent by more than one
of the above listed methods, notice will be deemed received on the earliest
possible date in accordance with the above provisions. Notices will be
addressed as follows:

     if to Buyer, to:

          MSA II
          c/o Cabot Aircraft Services
          Regus House
          Harcourt Road
          Dublin 2
          Ireland
          Attention: Mr. Kieran O'Keefe
          Fax: 353-1-402 9496

          with a copy to:

          Davis Polk & Wardwell
          1 Frederick's Place
          London EC2R 8AB
          Attention: Mr. Tom Reid
          Fax: 44-171-418 1400

          and

                                      26
<PAGE>

          Morgan Stanley & Co. International Limited
          25 Cabot Square
          Canary Wharf
          London E14 4QA
          Attention: Mr. Scott Peterson
          Fax: 44-171-425 4328

     if to Seller, to:

          GE Capital Mietfinanz Gmbh & Co. KG
          Wilhemstrasse 20
          D-45468 Mulheim an der Ruhr
          Attention: Klaus Reicherts
          Fax: 49 208 3009 666

          with a copy to:

          GE Capital Services (EEF) Limited
          Meridian Trinity Square
          23/59 Staines Road
          Hounslow
          Middlesex TW3 3HF
          Attention: Legal Director
          Fax: 44-181-754 2170

or to such other address as the parties hereto shall from time to time
designate in writing to the other party.

     SECTION 11.03. Amendments and Waivers. (a) Any provision of this Agreement
may be amended or waived if, but only if, such amendment or waiver is in
writing and is signed, in the case of an amendment, by each party to this
Agreement, or in the case of a waiver, by the party against whom the waiver is
to be effective.

     (b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.

     SECTION 11.04. Expenses. Except as otherwise provided herein, all costs
and expenses incurred in connection with this Agreement shall be paid by the
party incurring such cost or expense.

                                      27
<PAGE>

     SECTION 11.05. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the prior consent of each other party hereto, except that (i) Buyer may
transfer or assign, in whole or from time to time in part, to one or more of
its Affiliates, the right to purchase all or a portion of the Purchased Assets,
but no such transfer or assignment will relieve Buyer of its obligations
hereunder and (ii) Buyer may transfer or assign the benefit of Seller's
representations, warranties, covenants and indemnity obligations (except the
indemnities for Transfer Taxes provided in Section 5.04 hereof) to a special
purpose entity or entities established in connection with a securitization of
the Aircraft.

     SECTION 11.06. Governing Law. This agreement shall be governed by and
construed in accordance with the law of the State of New York.

     SECTION 11.07. Jurisdiction. Except as otherwise expressly provided in
this Agreement, the parties hereto agree that any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or
in connection with, this Agreement or the transactions contemplated hereby may
be brought in the United States District Court for the Southern District of New
York or any other New York State court sitting in New York City, and each of
the parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and 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 such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 11.02 shall
be deemed effective service of process on such party.

     SECTION 11.08. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

     SECTION 11.09. Counterparts; Third Party Beneficiaries. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party

                                      28
<PAGE>

hereto shall have received a counterpart hereof signed by the other party
hereto. No provision of this Agreement is intended to confer upon any Person
other than the parties hereto any rights or remedies hereunder.

     SECTION 11.10. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter of this
Agreement.

     SECTION 11.11. Non Solicitation. In consideration of the considerable
expense to be incurred by Buyer in connection with the transactions
contemplated by this Agreement, neither Seller nor any of its officers,
directors, agents or representatives will (i) engage in any negotiation with
another person regarding the sale or transfer of any Purchased Assets or
similar transaction; or (ii) provide any non public information relating to the
Purchased Assets to any person that may be interested in any transaction of the
nature contemplated by this Agreement in each case prior to the termination of
this Agreement pursuant to Section 10.01.

     SECTION 11.12. Captions. The captions herein are included for convenience
of reference only and shall be ignored in the construction or interpretation
hereof.

                                      29
<PAGE>

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

                                      MSA II

                                      By: /s/ Stowell Kelner
                                         --------------------------------------
                                         Name:  Stowell Kelner
                                         Title: Signatory Trustee

                                      GE CAPITAL MIETFINANZ GMBH &
                                      CO. KG

                                      By: /s/ Peter Curtiss
                                         --------------------------------------
                                         Name:  Peter Curtiss
                                         Title: Authorized Signatory

                                      30EXECUTION COPY

                            ASSET PURCHASE AGREEMENT

                                   dated as of

                                 August 6, 1999

                                      among

                                     MSA IV,

                                      MSA V

                                       and

                     INTERNATIONAL LEASE FINANCE CORPORATION

<PAGE>

                                TABLE OF CONTENTS

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

                                                                            PAGE

                                    ARTICLE 1
                                   DEFINITIONS

SECTION 1.01.  Definitions.....................................................1

                                    ARTICLE 2
                                PURCHASE AND SALE

SECTION 2.01.  Purchase and Sale. .............................................7
SECTION 2.02.  Assignment of Contracts and Rights.  ...........................7
SECTION 2.03.  Payment of Purchase Price. .....................................8
SECTION 2.04.  Inspection.  ...................................................8
SECTION 2.05.  Delivery.  .....................................................9
SECTION 2.06.   Purchase Price Adjustment.  ...................................9
SECTION 2.07.  Payment of Adjustment of Purchase Price.  .....................10
SECTION 2.08.  Buyer Deposit..................................................12
SECTION 2.09.  Manufacturer's Payments........................................13

                                    ARTICLE 3
                    REPRESENTATIONS AND WARRANTIES OF SELLER

SECTION 3.01.  Corporate Existence and Power. ................................13
SECTION 3.02.  Corporate Authorization.  .....................................13
SECTION 3.03.  Governmental Authorization.  ..................................14
SECTION 3.04.  Noncontravention.  ............................................14
SECTION 3.05.  Required Consents.  ...........................................14
SECTION 3.06.  Data.      ....................................................14
SECTION 3.07.  Absence of Certain Changes.  ..................................14
SECTION 3.08.  No Undisclosed Material Liabilities.  .........................15
SECTION 3.09.  Contracts.  ...................................................15
SECTION 3.10.  Litigation.  ..................................................15
SECTION 3.11.  Compliance with Laws and Court Orders.  .......................15
SECTION 3.12.  Aircraft and Leases.  .........................................16
SECTION 3.13.  Insurance Coverage. ...........................................17
SECTION 3.14.  Licenses and Permits.  ........................................18
SECTION 3.15.  Selling Documents.  ...........................................18
SECTION 3.16.  Finders' Fees.  ...............................................18
SECTION 3.17.  True Sale.  ...................................................18

<PAGE>

                                                                            PAGE

                                    ARTICLE 4
                  REPRESENTATIONS AND WARRANTIES OF EACH BUYER

SECTION 4.01.  Existence and Power.  .........................................19
SECTION 4.02.   Authorization.  ..............................................19
SECTION 4.03.  Governmental Authorization.  ..................................19
SECTION 4.04.  Noncontravention.  ............................................19
SECTION 4.05.  Litigation.  ..................................................19
SECTION 4.06.  Licenses and Permits...........................................19
SECTION 4.07.  Finders' Fees.  ...............................................20
SECTION 4.08.  True Sale.  ...................................................20
SECTION 4.09.  Buyer Designees................................................20

                                    ARTICLE 5
                               COVENANTS OF SELLER

SECTION 5.01.  Conduct of the Business.  .....................................20
SECTION 5.02.  Access to and Provision of Information; Confidentiality.  .....20
SECTION 5.03.  Notices of Certain Events.  ...................................22
SECTION 5.04.  Taxes and Other Costs.  .......................................22
SECTION 5.05.  Maintenance Reserves.  ........................................23
SECTION 5.06.  Certain Additional Aircraft and Rental Agreements..............23

                                    ARTICLE 6
                             COVENANTS OF EACH BUYER

SECTION 6.01.  Confidentiality. ..............................................23

                                    ARTICLE 7
                       COVENANTS OF EACH BUYER AND SELLER

SECTION 7.01.  Best Efforts; Further Assurances.  ............................24
SECTION 7.02.  Certain Filings.  .............................................25
SECTION 7.03.  Public Announcements.  ........................................25
SECTION 7.04.  Substitute Aircraft............................................25
SECTION 7.05.  Allocation of Purchase Price...................................25

                                    ARTICLE 8
                                   CONDITIONS

SECTION 8.01.  Conditions to Obligations of Each Buyer and Seller.  ..........26
SECTION 8.02.  Conditions to Obligation of Buyer.  ...........................26

<PAGE>

                                                                            PAGE

SECTION 8.03.  Conditions to Obligation of Seller.  ..........................30

                                    ARTICLE 9
                            SURVIVAL; INDEMNIFICATION

SECTION 9.01.  Survival.  ....................................................32
SECTION 9.02.  Indemnification.
                           ...................................................32
SECTION 9.03.  Procedures.  ..................................................33

                                   ARTICLE 10
                                   TERMINATION

SECTION 10.01.  Grounds for Termination.  ....................................33
SECTION 10.02.  Effect of Termination.........................................35
SECTION 10.03.  Breakage Costs Upon Termination or Failure to
                          Transfer Aircraft.  (a) ............................35
SECTION 10.04.  Repayment of Purchase Price and Hedging Breakage
                          Costs Upon Failure to Transfer the B737-300
                          Aircraft MSN 24449.  ...............................36

                                   ARTICLE 11
                                  MISCELLANEOUS

SECTION 11.01.  Warranties and Disclaimers....................................37
SECTION 11.02.  Notices   ....................................................37
SECTION 11.03.  Amendments and Waivers........................................39
SECTION 11.04.  Expenses.  ...................................................40
SECTION 11.05.  Successors and Assigns.  .....................................40
SECTION 11.06.  Governing Law.  ..............................................40
SECTION 11.07.  Jurisdiction.  ...............................................40
SECTION 11.08.  WAIVER OF JURY TRIAL..........................................41
SECTION 11.09.  Counterparts; Third Party Beneficiaries.......................41
SECTION 11.10.  Entire Agreement.  ...........................................41
SECTION 11.11.  Bulk Sales Laws.  ............................................41
SECTION 11.12.  Non Solicitation.  ...........................................41
SECTION 11.13.  Captions.  ...................................................42

EXHIBIT A....................................................................A-1
EXHIBIT A-1................................................................A-1-1
EXHIBIT A-2................................................................A-2-1

<PAGE>

                                                                            PAGE

EXHIBIT B....................................................................B-1
EXHIBIT C....................................................................C-1
EXHIBIT D....................................................................D-1

<PAGE>

                            ASSET PURCHASE AGREEMENT

           ASSET PURCHASE AGREEMENT dated as of August 6, 1999 among MSA IV, MSA
V, each a Delaware Business Trust (each a "Buyer" and together the "Buyers"),
and INTERNATIONAL LEASE FINANCE CORPORATION, a California corporation
("Seller").

                              W I T N E S S E T H :

           WHEREAS, Seller conducts a business which owns and leases
commercial aircraft;

           WHEREAS, the Buyers desire to purchase certain aircraft and related
assets from Seller and Seller desires to sell such assets to the Buyers, upon
the terms and subject to the conditions hereinafter set forth;

           The parties hereto agree as follows:

                                    ARTICLE 1
                                   DEFINITIONS

           SECTION 1.01.  Definitions

            (a) The following terms, as used herein, have the following
meanings:

           "Aircraft" means, either collectively or individually, as applicable,
the aircraft listed on Exhibits A-1 and A-2, each with the manufacturer's serial
number as set forth on Exhibit A-1, including (i) the airframe, (ii) the Engines
and (iii) all appliances, parts, accessories, instruments, navigational and
communications equipment, furnishings, modules, components and other items of
equipment installed in or furnished with the Aircraft on the Delivery Date,
except that, with respect to Lessee Furnished Equipment, references herein to an
"Aircraft" shall be deemed to refer only to such interest in Lessee Furnished
Equipment as is held by the owner of the Aircraft therein under the applicable
Lease. References to the "Aircraft" shall, where the context requires, include
the Manuals and Technical Records.

           "Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such other Person.

<PAGE>

           "Assignment of Warranties" means, with respect to each Aircraft, the
assignment, reasonably satisfactory in form and substance to the applicable
Buyer and Seller, by Seller to the applicable Buyer or its designee of Seller's
right, title and interest in and to certain Manufacturer's warranties, with
respect to such Aircraft, together with the Manufacturer's consent to such
assignment.

           "Contract" means any contract, agreement, lease, sublease, license,
commitment, sales or purchase order or other instrument binding upon Seller.

           "control" (including, with its correlative meanings, "controlled by"
and "under common control with") means possession, directly or indirectly, of
the power to direct or cause the direction of management or policies (whether
through ownership of securities or partnership or other ownership interests, by
contract or otherwise).

           "Custody and Loan Agreement" means the Amended and Restated Custody
and Loan Agreement dated as of the date hereof among Morgan Stanley Aircraft
Finance, a Delaware business trust, MSA V, the "MSAF Lessors" (as defined
therein) and Seller.

           "Data" means the information set out in Exhibit A, including, without
limitation, the assumptions set forth therein regarding aircraft condition and
lease terms and the liabilities being transferred, such as unearned revenue,
accrued and unpaid taxes and deferred taxes and all contracts, instruments and
other documentation delivered from Seller to each Buyer and returned by each
Buyer marked "seen by Buyer".

           "Delivery Date" means, with respect to each Aircraft, the date on
which the applicable Buyer obtains title to such Aircraft and the related
Purchased Assets in accordance with this Agreement.

           "Deposit Rebate" means, with respect to each Aircraft, the amount
specified opposite such Aircraft on Exhibits A-1 and A-2 as the "Buyer Deposit"
plus interest accrued from and including the date hereof to but excluding the
Delivery Date of such Aircraft at the rate of One Month LIBOR (compounded
daily).

           "Engines" means, with respect to each Aircraft, the engines leased
with such Aircraft to the Lessee under the applicable Lease, together with all
equipment and accessories belonging to, installed in or appurtenant to such
engines or, with respect to all Aircraft, all such engines together with such
equipment and accessories.

                                       2

<PAGE>

           "Independent Referee" shall be John Howitt, or if John Howitt is
unavailable or unwilling to act as the Independent Referee hereunder, a person
appointed by John Howitt.

           "Intercompany Leases" means any aircraft lease agreement entered into
either between Seller and one of its Affiliates or between Affiliates of Seller.

           "Lease" means, with respect to each Aircraft, (A) the aircraft lease
agreement relating to such Aircraft between Seller or its Affiliate and the
applicable Lessee, identified on Exhibit A, together with all supplements and
amendments thereto, pursuant to which such Aircraft is leased to such Lessee or
(B) the aircraft lease agreement relating to such Aircraft between Seller and
the applicable Lessee entered into subsequent to the date hereof, together with
all supplements and amendments thereto or (C) the aircraft lease agreements
relating to the B737-400 Aircraft MSN 26291 and the B767-300ER Aircraft MSN
24875 between Buyer or its designee and the applicable Lessee, together with all
supplements and amendments thereto.

           "Lease Documents" means, with respect to each Aircraft, the Lease and
all other agreements (including any side letters, assignment of warranties or
option agreements) delivered in connection with, or relating to, the Lease of
such Aircraft other than Intercompany Leases that will be terminated on the
Delivery Date of such Aircraft.

           "Lease Novation" means, with respect to each Aircraft, a lease
novation agreement, assignment agreement and lessee acknowledgment, assignment
and amendment agreement, or any other agreement or instrument reasonably
satisfactory in form and substance to the applicable Buyer and Seller to be
entered into between Seller (or the applicable lessor), the applicable Buyer (or
its nominee) and the applicable Lessee on or prior to the Delivery Date of such
Aircraft and to be effective upon such Delivery Date pursuant to which such
Aircraft will be leased by the applicable Buyer (or its nominee) directly or
indirectly to the applicable Lessee and the applicable Lease Documents will be
novated with the applicable Buyer or its nominee as the new lessor thereunder,
subject to the rights of the Lessee with respect to Seller (or the applicable
lessor) for the period prior to the Delivery Date.

           "Lessee" means, with respect to each Aircraft, the lessee of such
Aircraft as identified on Exhibit A-1.

           "Lessee Furnished Equipment" means, with respect to each Aircraft,
any appliances, parts, accessories, instruments, navigational and communications
equipment, furnishings, modules, components and other items of equipment,

                                       3

<PAGE>

installed in or furnished with such Aircraft on the Delivery Date which in
accordance with the terms of the Lease for such Aircraft can be removed by the
Lessee for such Aircraft and not be replaced with the same item of equal or
greater value or utility.

           "Lien" means, with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest, encumbrance or other adverse claim of
any kind in respect of such property or asset. For the purposes of this
Agreement, a Person shall be deemed to own subject to a Lien any property or
asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such property or asset.

           "MSA IV Trust Agreement" means the trust agreement dated July 28,
1999 constituting MSA IV.

           "MSA V Trust Agreement" means the trust agreement dated August 4,
1999 constituting MSA V.

           "Maintenance Reserves" means, at the time of calculation, with
respect to each Aircraft, any cash maintenance accruals, maintenance funds or
maintenance reserves or the like or cash amounts defined as "Supplemental Rent"
or "Reserves" held by the lessor under the applicable Lease in relation to
airframes, Engines, auxiliary power units, or landing gear.

           "Manuals and Technical Records" means, with respect to each Aircraft,
all records, logs, technical data and manuals relating to the maintenance and
operation of such Aircraft (including all documents defined as "Aircraft
Documentation" under the Lease), which the Lessee with respect to such Aircraft
is required by the terms of the Lease therefor to return to the lessor
thereunder upon the expiration or termination of the term of such Lease.

           "Manufacturer" means, with respect to each Aircraft, the manufacturer
of such Aircraft as specified in the relevant Lease Documents.

           "One Month LIBOR" means the per annum London interbank offered rate
for one month U.S. dollar deposits as displayed on page "3750" on the Telerate
Monitor (or replacement service) at approximately 11:00 a.m. London time.

           "Person" means an individual, corporation, partnership, limited
liability company, association, statutory business trust, common law trust or
other entity or

                                       4

<PAGE>

organization, including a government or political subdivision or an agency or
instrumentality thereof.

           "Portfolio Delivery Deadline" means September 30, 1999.

           "Property Tax" means, any personal property taxes, excise, use, value
added, recording, documentary, conveyancing and similar levies, charges and
fees, withholdings, imposts, levies, customs or other duties, together with any
interest, penalty, addition to tax or additional amount imposed by a Taxing
Authority responsible for the imposition of such tax (domestic or foreign).

           "Purchase Price" means, with respect to each Aircraft, the amount
specified opposite such Aircraft as the "Base Purchase Price" on Exhibit A-1 or
Exhibit A-2, as the case may be.

           less:

               (i) the Deposit Rebate; and

               (ii) an amount equal to the value of any amounts (including any
          rent, additional rent, insurance premiums or other amounts (including
          in respect of B767-300ER Aircraft MSN 25132 only, Maintenance Reserves
          and excluding in respect of A330-300 Aircraft MSN 54 only, all prepaid
          rentals received by Seller with respect to the period up to December
          1999) received by Seller in respect of such Aircraft with respect to
          the period from and including the earlier of (1) the Delivery Date and
          (2) August 10, 1999 (or August 17, 1999 if Seller confirms in writing
          to Buyer that it is prepared to deliver such Aircraft on or prior to
          August 10, 1999 but such Aircraft is located at the time of such
          confirmation in a jurisdiction that local counsel has advised in
          writing possesses a possible Transfer Tax risk if the Aircraft were to
          be delivered);

           plus:

               an amount equal to interest on the Base Price for such
           Aircraft less the deduction specified in clause (ii) above, if any,
           from and including August 10, 1999 to but excluding the Delivery Date
           at One Month LIBOR compounded for each day in such period.

For the avoidance of doubt, any cash Maintenance Reserves held by Seller with
respect to any Aircraft on the Delivery Date of such Aircraft shall be for
Seller's account.

                                       5

<PAGE>

           "Security Deposits" means, at the time of calculation, with respect
to each Aircraft, all cash amounts, security deposits in the form of prepayments
of rent, letters of credit and guarantees paid by or issued on behalf of the
Lessee for the benefit of the lessor under the relevant Lease as security for
obligations of such Lessee under such Lease and related Lease Documents.

           "Servicing Agreement" means the Amended and Restated Servicing
Agreement dated as of the date hereof among Seller, MSA V, MSA IV, Morgan
Stanley Aircraft Finance, a Delaware business trust and the other entities party
thereto.

           "Tax" means any net income, alternative or add-on minimum tax, gross
income, gross receipts, sales, use, ad valorem, value added, transfer,
franchise, profits, license, registration, recording, documentary, conveyancing,
gains, withholding on amounts paid to or by Seller, payroll, employment, excise,
severance, stamp, occupation, premium, property, environmental or windfall
profit tax, custom, duty or other tax, governmental fee or other like assessment
or charge of any kind whatsoever, together with any interest, penalty, addition
to tax or additional amount imposed by any governmental authority responsible
for the imposition of any such tax (domestic or foreign) (a "Taxing Authority").

           "Transfer Tax" means all excise, sales, use, value added, stamp,
recording, documentary, conveyancing, franchise, property, transfer, gains or
similar taxes and fees, withholdings, imposts, levies, customs or other duties,
together with any penalties, fines, interest thereon or addition to tax or
additional amount imposed by a Taxing Authority responsible for the imposition
of such tax (domestic or foreign).

            (b)  Each of the following terms is defined in the Section set forth
opposite such term:

     Term                                                 Section
     Adjustment Cut-off Date                               2.06(a)
     Adjustment Report                                     2.06(a)
     Buyer Permits                                         4.06
     Damage Related Adjustment                             2.06(a)
     Damages                                               9.02
     Hedging Transaction                                  10.03
     Indemnified Party                                     9.03
     Indemnifying Party                                    9.03
     Minimum Transfer Condition                           10.01(b)
     Permits                                               3.14

                                       6

<PAGE>

     Term                                                 Section
     Permitted Liens                                       3.12(a)
     Purchased Assets                                      2.01
     Required Consents                                     3.05

                                    ARTICLE 2
                                PURCHASE AND SALE

           SECTION 2.01. Purchase and Sale. Upon the terms and subject to the
conditions of this Agreement, each of the Buyers agrees to purchase, assume and
accept from Seller and Seller agrees to sell, convey, transfer, assign and
deliver, or cause to be sold, conveyed, transferred, assigned and delivered, to
each of the Buyers or an entity designated and wholly-owned by each such Buyer,
free and clear of all Liens, other than Permitted Liens, all of Seller's right,
title and interest in, to and under the Aircraft (MSA V to purchase each of the
Aircraft listed on Exhibit A-1 and MSA IV to purchase the Aircraft listed on
Exhibit A-2) on an "AS IS, WHERE IS" basis, the Lease Documents, and, subject to
the terms of the Custody and Loan Agreement, the Security Deposits (together,
the "Purchased Assets"), and including, without limitation, all right, title and
interest of Seller in, to and under:

               (a) all of Seller's rights against third parties relating to the
          Purchased Assets, including, without limitation, rights under
          manufacturers' and vendors' warranties and service life policies;

               (b) all transferable licenses, permits or other governmental
          authorization affecting, or relating solely to, each Purchased Asset,
          including without limitation the items listed on Schedule 3.14; and

               (c) all Manuals and Technical Records.

           SECTION 2.02. Assignment of Contracts and Rights. Anything in this
Agreement to the contrary notwithstanding, this Agreement shall not constitute
an agreement to assign any Purchased Asset or any claim or right or any benefit
arising thereunder or resulting therefrom if such assignment, without the
consent of a third party thereto, would constitute a breach or other
contravention of such Purchased Asset or in any way adversely affect the rights
of the applicable Buyer or Seller thereunder. Seller and each Buyer agree that
they shall enter into a Lease Novation with respect to each Aircraft (other than
the B737-400 Aircraft MSN 26291 and B767-300 ER Aircraft MSN 24875 - in respect
of which MSA V or its designee shall have entered into a Lease directly with the
applicable Lessee on or prior to the applicable Delivery Date) with the
applicable Lessee.

                                        7

<PAGE>

           SECTION 2.03. Payment of Purchase Price. (a) On each Delivery Date
with respect to each Aircraft (other than the B737-300 Aircraft MSN 24449, as
described in subsection (b) below) , the Purchase Price for such Aircraft and
any other sums payable by either party hereunder shall be paid in cash by wire
transfer to such bank account as the party receiving such sum may designate in
writing at least three business days prior to the date of payment without
deduction for withholding or value added taxes.

            (b) On August 10, 1999, MSA IV shall pay the Purchase Price for the
B737-300 Aircraft MSN 24449 to Seller and Seller shall transfer all of its
beneficial ownership interest in such Aircraft including, without limitation,
the right to receive rents, additional rents, insurance premiums and other
amounts (but excluding the right to receive cash Maintenance Reserves) with
effect from August 10, 1999. On the Delivery Date for such Aircraft, which shall
occur on or prior to April 30, 2000, Seller shall deliver title to such Aircraft
and the related Purchased Assets to MSA IV.

            (c) All payments under this Section 2.03 shall be made in U.S.
dollars by 2:00 p.m. (Eastern Standard Time) and in immediately available funds
so that the recipient receives credit in New York for the full amount of such
payment on the due date. The Purchase Price shall be subject to adjustment as
provided in Section 2.06.

           SECTION 2.04. Inspection. Prior to the applicable Delivery Date
therefor, the applicable Buyer or its designee shall be given an opportunity to
inspect the Aircraft to be delivered (including the Manuals and Technical
Records therefor), such inspection to be at such Buyer's expense. Seller shall
provide all reasonable assistance necessary to enable such Buyer or its designee
to complete such inspection promptly. Such Buyer acknowledges that such
inspection shall take place at a time and location and in such a manner as shall
not disrupt the operation of such Aircraft by the applicable Lessee.

           Each Buyer shall indemnify and hold harmless Seller from and against
any and all Damages arising by reason of death or injury to any person employed,
engaged by or acting on behalf of Buyer, arising out of the inspection of any
Aircraft to be purchased by such Buyer conducted pursuant to the provisions of
this Section except to the extent such Damages relate to the willful misconduct
of Seller.

           SECTION 2.05. Delivery. Seller shall deliver its executed bill of
sale to MSA V or its designee with respect to each of the Aircraft listed on
Exhibit A-1 as close as practicable to the time of delivery by MSA V of the
Purchase Price for such Aircraft. Seller shall deliver its executed bill of sale
to MSA IV or its

                                        8

<PAGE>

designee with respect to the B737-300 Aircraft MSN 24449 on the Delivery Date
for such Aircraft, which shall occur on or prior to April 30, 2000. In addition,
on or prior to the applicable Delivery Date of each Aircraft, Seller shall
execute a Lease Novation with respect to each Aircraft (and, if relevant, a
purchase option novation agreement) (other than the B737-400 Aircraft MSN 26291
and B767- 300 ER Aircraft MSN 24875 - in respect of which MSA V or its designee
shall have entered into a Lease directly with the applicable Lessee) and shall
transfer and deliver to the applicable Buyer the Lease Documents, the
Maintenance Reserves, and, subject to the terms of the Custody and Loan
Agreement, the Security Deposits related to such Aircraft. At each Delivery Date
each Aircraft shall be in the possession of the applicable Lessee pursuant to
the relevant Lease Novation or Lease (or shall be in the possession of a
sublessee or located at an aircraft maintenance facility, in each case as
permitted under the Lease, Lease Documents or Lease Novation) and, in any case,
Seller shall have no obligation to physically deliver such Aircraft to the
applicable Buyer or its designee.

           SECTION 2.06. Purchase Price Adjustment. (a) If any of the Data with
respect to any Aircraft are materially incorrect or incomplete in any respect on
the relevant Delivery Date (except for any normal wear and tear to the Aircraft
from the date hereof to such Delivery Date), the applicable Buyer and Seller
agree to adjust the Purchase Price for the relevant Aircraft upwards or
downwards, as the case may be. Such Buyer's rights to a downward adjustment in
the Purchase Price for any Aircraft shall be without prejudice to its right to
reject any Aircraft pursuant to Section 7.04. As promptly as practicable after
each Delivery Date, and in any case no later than 30 days after the last
Delivery Date (the "Adjustment Cut-off Date"), the applicable Buyer may cause to
be prepared and delivered to Seller an adjustment report substantially in the
form attached hereto as Exhibit B (the "Adjustment Report") setting forth such
Buyer's calculation of any Purchase Price adjustment for the relevant Aircraft.
If the material inaccuracy or omission in the Data for any Aircraft relates to
any damage, destruction or other casualty of such Aircraft or part thereof which
has been repaired to such Buyer's reasonable satisfaction prior to final
determination of the aggregate Purchase Price adjustment pursuant to Section
2.06(a) or (c), then the portion of the downward adjustment in the Purchase
Price for such Aircraft that is related to such damage (the "Damage Related
Adjustment") shall be reduced by an amount equal to the amount, if positive, of
the Damage Related Adjustment less any expense or loss incurred by such Buyer in
connection with such repair or damage.

            (b) If Seller disagrees with the applicable Buyer's calculation of
any Purchase Price adjustment delivered pursuant to Section 2.06(a), Seller may,
within 30 days after delivery of the relevant Adjustment Report, deliver a
notice to such Buyer disagreeing with such calculation and setting forth
Seller's calculation of such amount (including any adjustments in Seller's favor
which are not set

                                        9

<PAGE>

forth in such Buyer's Adjustment Report). Any such notice of disagreement shall
specify those items or amounts as to which Seller disagrees, and Seller shall be
deemed to have agreed with all other items and amounts contained in the
Adjustment Report.

            (c) If any notices of disagreement shall be duly delivered pursuant
to Section 2.06(b), the applicable Buyer and Seller shall, during the 15 days
following the date of delivery of such notice of disagreement, use their best
efforts to reach agreement on all disputed items or amounts in order to
determine a mutually acceptable adjustment to the Purchase Price. If Buyer only
disagrees with certain amounts set forth in Seller's notice of disagreement,
then Buyer will be deemed to have agreed with all other items and amounts
contained in the Seller's notice of disagreement. If during such period the
applicable Buyer and Seller are unable to reach such agreement, they shall
promptly thereafter cause the Independent Referee promptly to review this
Agreement, the Data and the disputed items or amounts for the purpose of
calculating the adjustment to the Purchase Price. The Independent Referee is
authorized to engage third party experts as necessary to aid in such review, the
identity and necessity of which shall be agreed by Seller and the applicable
Buyer. In making such calculation, the Independent Referee shall consider only
those items or amounts as to which Seller has disagreed or which Seller has
presented as an adjustment in Seller's favor and as to which the applicable
Buyer has disagreed. The Independent Referee shall deliver to such Buyer and
Seller, as promptly as practicable, a report setting forth its calculation of
the adjustment to the Purchase Price of the relevant Aircraft. Such report shall
be final and binding upon such Buyer and Seller. The cost of such review and
report (and any experts) shall be borne equally by such Buyer and Seller.

            (d) The applicable Buyer and Seller agree that they will, and agree
to cause their respective independent accountants and technical staff or
consultants to, cooperate and assist in the preparation of any adjustment to the
Purchase Price, including without limitation, the making available to the extent
necessary of books related to the Purchased Assets, records related to the
Purchased Assets, work papers related to the Purchased Assets and personnel.

           SECTION 2.07. Payment of Adjustment of Purchase Price. (a) Seller
shall pay to MSA V or MSA V shall pay to Seller, as an adjustment to the
Purchase Price for all of the Aircraft listed on Exhibit A-1, in the manner and
with interest as provided in Section 2.07(d), either (i) the aggregate net
amount resulting from MSA V's Adjustment Reports delivered pursuant to Section
2.06(a) if no notices of disagreement with respect thereto are delivered
pursuant to Section 2.06(b); or (ii) if any such notices of disagreement are
delivered, the aggregate net amount resulting from non-disputed Adjustment
Reports and, with respect to any disputed

                                       10

<PAGE>

Adjustment Reports, (A) the adjustment amounts therefor ultimately agreed by MSA
V and Seller pursuant to Section 2.06(c) or (B) in the absence of such
agreement, the adjustment amounts for such disputed Adjustment Reports
ultimately reported in the Independent Referee's calculation delivered pursuant
to Section 2.06(c); provided no party shall be obligated to pay any adjustment
amount unless (i) the aggregate amount for which such party is liable exceeds
$500,000 (in which case such party shall pay the total aggregate adjustment
amount) or (ii) the aggregate adjustment amount for which such party is liable
is $500,000 or less, but the adjustment amount for any individual Aircraft
exceeds $100,000, (in which case such party shall pay the total adjustment
amount for each such individual Aircraft) and provided further that, the
determination of the aggregate and individual Aircraft adjustment amounts for
which Seller is liable shall be unaffected by any subsequent reimbursement of a
portion of such amounts from MSA V to Seller pursuant to Section 2.07(d) below.
If less than all of the Aircraft are transferred by the Portfolio Delivery
Deadline but the Minimum Transfer Condition is satisfied or waived in writing by
MSA V, then the $500,000 amounts referred to in the preceding sentence shall be
reduced to an amount equal to the product of $500,000 and a fraction, the
denominator of which is the aggregate Base Price of all the Aircraft listed on
Exhibit A-1 and the numerator of which is the aggregate Base Price of the
Aircraft transferred by the Portfolio Delivery Deadline.

            (b) Seller shall pay to MSA IV or MSA IV shall pay to Seller, as an
adjustment of the Purchase Price for the B737-300 Aircraft MSN 24449, in the
manner and with interest as provided in Section 2.07(c), either (i) the
aggregate net amount resulting from MSA IV's Adjustment Report for such Aircraft
delivered pursuant to Section 2.06(a) if no notices of disagreement with respect
thereto are delivered pursuant to Section 2.06(b); or (ii) if a notice of
disagreement is delivered, (A) the adjustment amounts therefor ultimately agreed
by MSA IV and Seller pursuant to Section 2.06(c) or (B) in the absence of such
agreement, the adjustment amounts for such disputed Adjustment Report ultimately
reported in the Independent Referee's calculation delivered pursuant to Section
2.06(c); provided no party shall be obligated to pay any adjustment amount
unless the adjustment amount for such Aircraft exceeds $100,000 (in which case
such party shall pay the total adjustment amount for such Aircraft) and provided
further that, the determination of the adjustment amount for such Aircraft for
which Seller is liable shall be unaffected by any subsequent reimbursement of a
portion of such amount from MSA IV to Seller pursuant to Section 2.07(d) below.

            (c) Any payment pursuant to Section 2.07(a) or (b) shall be made at
a mutually convenient time and place within 10 days after the aggregate adjusted
Purchase Price has been finally determined by delivery by the applicable Buyer
or

                                       11

<PAGE>

Seller, as the case may be, of a certified or official bank check payable in
immediately available funds to the other party or by causing such payments to be
credited or wire transferred to such account of such other party as may be
designated by such other party. The amount of any payment to be made pursuant to
this Section 2.07 shall bear interest from and including the relevant Delivery
Date to but excluding the date of payment at a rate equal to One Month LIBOR.

           (d) If all or any portion of a downward adjustment amount paid
pursuant to Section 2.07(c) relates to any damage, destruction or other casualty
of an Aircraft or part thereof which is repaired or otherwise compensated for to
the applicable Buyer's reasonable satisfaction following final determination of
the aggregate adjustment amount pursuant to Section 2.06 but prior to the
redelivery of such Aircraft under the applicable Lease, then such Buyer shall
reimburse to Seller the amount, if positive, of the Damage Related Adjustment
less any expense or loss incurred by such Buyer in connection with such repair
or damage (with interest at a rate equal to One Month LIBOR from and including
the date of payment pursuant to Section 2.07(c) above to but excluding the date
of reimbursement).

           SECTION 2.08. Buyer Deposit. Immediately following execution of this
Agreement, each Buyer shall deposit with Seller with respect to each Aircraft to
be purchased by such Buyer cash in an amount equal to the "Buyer Deposit" amount
specified opposite each Aircraft on Exhibits A-1 and A-2, respectively. If any
Aircraft listed on Exhibit A-1 shall not be delivered to MSA V by the Portfolio
Delivery Deadline as a direct or indirect result of MSA V's failure to perform
its obligations under this Agreement, MSA V shall forfeit the applicable Buyer
Deposit to Seller. If any Aircraft listed on Exhibit A-1 shall not be delivered
to MSA V by the Portfolio Delivery Deadline for any reason other than as a
direct or indirect result of MSA V's failure to perform its obligations under
this Agreement, Seller shall repay promptly the applicable Buyer Deposit to MSA
V plus interest accrued on such Buyer Deposit (at the rate of One Month LIBOR
(compounded daily) from and including the date hereof to but excluding the date
of repayment). If the B737-300 Aircraft MSN 24449 shall not be delivered to MSA
IV by April 30, 2000, Seller shall repay promptly the applicable Buyer Deposit
to MSA IV.

           SECTION 2.09. Manufacturer's Payments. (a) MSA V shall be entitled to
receive amounts equal to the Manufacturer Payments set forth opposite certain of
the Aircraft on Exhibit A-1 on the relevant Delivery Date. Other than the
payments by the Manufacturers with respect to the          Aircraft        and
the      Aircraft           that are referred to in subsection (b) below, any
additional payments by Manufacturers in respect of any Aircraft in excess of

                                       12

<PAGE>

the amount set forth for such Aircraft on Exhibit A-1 shall be for the benefit
of Seller.

           (b) (i) On August 10, 2000, Seller shall pay to MSA V or its designee
          , in respect of payments by the Manufacturer for the          Aircraft
       (regardless of whether or not Seller has received payment from the
Manufacturer); provided, that MSA V has taken delivery of such Aircraft by such
date and (ii) on January 15, 2000, Seller shall pay to MSA V or its designee
        , in respect of payments by the Manufacturer for the          Aircraft
          (regardless of whether or not Seller has received payment from the
Manufacturer).

                                    ARTICLE 3
                    REPRESENTATIONS AND WARRANTIES OF SELLER

           Seller represents and warrants to each Buyer as of the date hereof
and as of each Delivery Date (except that (i) the representation and warranties
made as of each Delivery Date with respect to Purchased Assets shall not apply
to Purchased Assets that have previously been delivered to and accepted by such
Buyer and (ii) the representation and warranties contained in Section 3.12(b),
(c), (d), (e), (f) and (g) shall apply only to the Purchased Assets to be
purchased on such Delivery Date) that:

           SECTION 3.01. Corporate Existence and Power. Seller is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate powers and all governmental
licenses, authorizations, permits, consents and approvals required to carry on
its business as now conducted other than (i) such licenses, authorizations,
permits, consents and approvals, the absence of which would not have a material
adverse effect on any Aircraft and (ii) such matters as are set forth on
Schedule 3.01 hereto. Seller has heretofore delivered to each Buyer true and
complete copies of the certificate of incorporation and bylaws of Seller as
currently in effect.

           SECTION 3.02. Corporate Authorization. The execution, delivery and
performance by Seller of this Agreement and the consummation of the transactions
contemplated hereby are within Seller's corporate powers and have been duly
authorized by all necessary corporate action on the part of Seller. This
Agreement constitutes a valid and binding agreement of Seller.

           SECTION 3.03. Governmental Authorization. The execution, delivery and
performance by Seller of this Agreement and the consummation of the transactions
contemplated hereby do not require Seller to take any action by or in respect
of, or make any filing with, any governmental body, agency or official

                                       13

<PAGE>

other than actions or filings that have already been taken or made or will be
taken or made by Seller.

           SECTION 3.04. Noncontravention. The execution, delivery and
performance by Seller of this Agreement and the consummation of the transactions
contemplated hereby do not and will not (i) violate the certificate of
incorporation or bylaws of Seller, (ii) violate any applicable law, rule,
regulation, judgment, injunction, order or decree, (iii) assuming the obtaining
of all Required Consents, constitute a default under or give rise to any right
of termination, cancellation or acceleration of any right or obligation of
either Buyer or to a loss of any benefit relating to the Purchased Assets to
which Seller is entitled under any provision of any agreement or other
instrument binding upon Seller or by which any of the Purchased Assets is or may
be bound or (iv) result in the creation or imposition of any Lien on any
Purchased Asset, other than Permitted Liens.

           SECTION 3.05. Required Consents. Schedule 3.05 sets forth each
Contract and Permit requiring a consent or other action by any Person as a
result of the execution, delivery and performance of this Agreement (the
"Required Consents").

           SECTION 3.06. Data. The Data and related information heretofore
delivered to each Buyer is accurate and complete as of the date of this
Agreement and correctly describes the Purchased Assets as of the date of this
Agreement.

           SECTION 3.07. Absence of Certain Changes. Since the date of this
Agreement, the management of the Purchased Assets has been conducted in the
ordinary course consistent with past practices and there has not been any event,
occurrence, development or state of circumstances or facts which has had or is
reasonably likely to have a material adverse effect on the physical condition of
the Aircraft, the terms of any Lease or other Lease Documents or the terms of
any Non-Cash Security Deposits and there are no developments affecting any of
the Aircraft or Lessees, individually or taken together, that are pending or, to
the knowledge of Seller threatened, which are reasonably likely to detract
materially from the value of the Aircraft, interfere materially with any present
or intended use of the Aircraft or affect materially and adversely the prospects
or marketability of such Aircraft.

           SECTION 3.08. No Undisclosed Material Liabilities. There are no
liabilities related to a Purchased Asset of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, and there
is no existing condition, situation or set of circumstances which could
reasonably be expected to result in such a liability, other than:

                                       14

<PAGE>

               (a) the Lease Documents and any liabilities and obligations
          arising thereunder with respect to any period following the Delivery
          Date;

               (b) liabilities disclosed on Schedule 3.08; and

               (c) other undisclosed liabilities which, individually or in the
          aggregate, are not material.

           SECTION 3.09. Contracts. (a) Except for the Contracts disclosed in
Schedule 3.09, and contracts or agreements relating to the transfer of each
Aircraft on the applicable Delivery Date which have been disclosed to and
approved by each Buyer, Seller is not a party to or bound by any oral or written
agreements or waivers relating to the Purchased Assets. Seller has delivered to
the applicable Buyer true and complete copies of (i) the portions of the
Contracts disclosed in Schedule 3.09 that relate to the Purchased Assets to be
purchased by such Buyer and (ii) the Contracts and agreements otherwise
disclosed to and approved by each Buyer to the extent they relate to the portion
of the Purchased Assets to be purchased by such Buyer.

            (b) Each Contract disclosed in any Schedule to this Agreement or
required to be disclosed pursuant to this Section is a valid and binding
agreement of Seller (except as disclosed in such Schedule), and is in full force
and effect, and none of Seller or, to the knowledge of Seller, any other party
thereto is in default or breach in any material respect under the terms of any
such Contract, and, to the knowledge of Seller, no event or circumstance has
occurred that, with notice or lapse of time or both, would constitute any event
of default thereunder.

           SECTION 3.10. Litigation. There is no action, suit, investigation or
proceeding pending, or, to the knowledge of Seller, threatened against or
affecting, any Purchased Asset before any court or arbitrator or any
governmental body, agency or official or which in any manner challenges or seeks
to prevent, enjoin, alter or materially delay the transactions contemplated by
this Agreement.

           SECTION 3.11. Compliance with Laws and Court Orders. Seller is not in
violation of, has not violated, and has not been given notice of any violation
of, nor to the knowledge of Seller is under investigation with respect to, nor
to the knowledge of Seller has been threatened to be charged with any violation
of, any law, rule, regulation, judgment, injunction, order or decree applicable
to the Purchased Assets.

           SECTION 3.12. Aircraft and Leases. (a) (i) Seller is the sole legal
and beneficial owner of the applicable Aircraft (except that (i) Seller does not
have legal title to the B737-300 Aircraft MSN 24449, (ii) on the date hereof,
Seller is

                                       15

<PAGE>

the sole beneficial owner of the B737-300 Aircraft MSN 24449 and (iii) on August
10, 1999, MSA IV shall be the sole beneficial owner of such Aircraft) and (ii)
Seller is the sole legal and beneficial owner of the lessor's interest under the
applicable Lease Documents (except that on August 10, 1999 MSA IV shall be the
sole beneficial owner of the lessor's interest under the applicable Lease
Documents), which Aircraft and which Lease Documents are free and clear of all
Liens other than (a) the rights conferred by the Lease Documents; (b) any Liens
for which the applicable Lessee is responsible or for which it is to indemnify
the lessor under the terms of the relevant Lease; (c) any Liens which are
"permitted liens" under the applicable Lease other than a Lien created by
Seller; or (d) Liens which do not materially detract from the value of such
Aircraft, or materially interfere with any present or intended use of such
Aircraft (collectively, the "Permitted Liens") and upon consummation of the
transactions contemplated hereby, MSA V will have directly or indirectly, as
applicable, acquired good and marketable title in and to each of the Aircraft
listed in Exhibit A-1 and MSA IV will have acquired good and marketable title in
and to the Aircraft listed in Exhibit A-2, in each case, free and clear of all
Liens, except for Permitted Liens;

            (b) no Event of Default (as defined in the applicable Lease) has
occurred and is continuing under any Lease, provided that with respect to Events
of Default that are violations of "non-discrimination" or similar provisions of
any Lease that affect the average of three independently appraised "base values"
of the Aircraft, this representation shall only be made to the extent of
Seller's knowledge; no payment failure or failure to maintain insurance has
occurred which with the giving of notice or passage of time or both would become
an Event of Default (as so defined) under any Lease; and, to the knowledge of
Seller, no other event which with the giving of notice or passage of time or
both would become an Event of Default (as so defined) under such Lease has
occurred;

            (c) there are no outstanding airworthiness directives or similar
demands from any governmental, semi-governmental or public authority or
instrumentality or any other Person having authority in respect of the
applicable Aircraft being delivered on the Delivery Date (not including
manufacturer's service bulletins or similar notices or demands) requiring any
mandatory work or other mandatory action to be taken or the mandatory
expenditure of any money in respect thereof (except those which the Manufacturer
or the Lessee have agreed in writing to perform entirely at such Person's
expense or those with respect to which Seller or Lessee have obtained waivers or
extensions or deferrals of the time by which the work is required to be
performed, the action is required to be taken or the expenditure is required to
be incurred) and that have not been complied with by Seller and, to the best of
Seller's knowledge, by the Lessee, as applicable;

                                       16

<PAGE>

            (d) all liabilities for taxes and other governmental,
quasi-governmental and other charges with regard to the Aircraft which are due
for payment (whether or not indemnified by the applicable Lessee) have been paid
or will be paid prior to the applicable Delivery Date;

            (e) (i) there are no claims known to Seller which can be asserted by
any Lessee against Seller, or the applicable Aircraft arising out of the
applicable Lease Documents, (ii) the Lease Documents are in full force and
effect in accordance with the terms thereof, (iii) from the date of this
Agreement there have been no waivers of Seller's rights in effect under such
Lease Documents except as contemplated by the applicable Lease Novation or
otherwise disclosed in writing to and agreed to by the applicable Buyer in
writing nor has Seller increased any of its obligations under such Lease
Documents without the written consent of the applicable Buyer and (iv) other
than as set forth in such Lease Novation, neither Seller nor the applicable
lessor has any continuing obligations to Lessee with respect to such Aircraft
and such Lessee has no continuing obligations to Seller or any Subsidiary
thereof or the applicable lessor with respect to such Aircraft;

            (f) to Seller's knowledge, no unrepaired damage, destruction or
other casualty loss or, to the best of Seller's knowledge, an event which with
the passage of time would result in unrepaired damage, destruction or casualty
loss, has occurred in respect of any Aircraft; and

            (g) there are no options to purchase any Aircraft, or extend or
terminate any Leases, which have been exercised by the relevant Lessee and not
notified in writing to the applicable Buyer.

           SECTION 3.13. Insurance Coverage. There is no claim by Seller pending
under any of the insurance policies or bonds relating to the Aircraft as to
which coverage has been questioned, denied or disputed by the underwriters of
such policies or bonds or in respect of which such underwriters have reserved
their rights. All premiums due and payable under all such policies and bonds
have been paid and Seller has otherwise complied fully with the terms and
conditions of all such policies and bonds. Seller does not know of any
threatened termination of, premium increase with respect to, or material
alteration of coverage under, any of such policies or bonds.

           SECTION 3.14. Licenses and Permits. Schedule 3.14 correctly describes
each license and certificate directly related to the ownership of the Purchased
Assets (the "Permits") together with the name of the government agency or entity
issuing such Permit. Except as set forth on Schedule 3.14, (i) the Permits are
valid and in full force and effect, (ii) Seller is not in default, and no
condition exists that with notice or lapse of time or both would constitute a
default, under

                                       17

<PAGE>

the Permits and (iii) none of the Permits will be terminated or impaired or
become terminable, in whole or in part, as a result of the transactions
contemplated hereby. Upon consummation of such transactions, each Buyer will,
assuming the related Required Consents have been obtained prior to the relevant
Delivery Date, have all of Seller's right, title and interest in all of the
Permits that relate to each Purchased Asset to be purchased by such Buyer and
are held by Seller except to the extent disclosed on Schedule 3.15 hereto, in
which case each such Buyer shall be entitled to the benefit of the Permits
disclosed on Schedule 3.15 hereto through the arrangements established by such
Buyer and Seller with respect thereto.

           SECTION 3.15. Selling Documents. None of the documents or information
delivered to the Buyers in connection with the transactions contemplated by this
Agreement, including, without limitation, the Data, contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained therein not misleading. The maintenance
projections relating to the Aircraft and the lease rental rate and term
projections for the re- lease and extension currently contemplated for each of
the B767-300ER Aircraft MSN 25132, the B757-200ER Aircraft MSN 24965 and the
A340-300 Aircraft MSN 94 provided to the Buyers are made in good faith and are
based upon reasonable assumptions, and Seller is not aware of any fact or set of
circumstances that would lead it to believe that such projections are incorrect
or misleading in any material respect on the date of this Agreement.

           SECTION 3.16. Finders' Fees. There is no investment banker, broker,
finder or other intermediary which has been retained by or is authorized to act
on behalf of Seller who might be entitled to any fee or commission in connection
with the transactions contemplated by this Agreement.

           SECTION 3.17. True Sale. The transfer of the rights, title and
interest in and to the Purchased Assets pursuant to the terms hereof constitutes
a transaction in the ordinary course of business of Seller and Seller intends
that such transfer of such rights, title and interest shall constitute a true
sale thereof.

                                    ARTICLE 4
                  REPRESENTATIONS AND WARRANTIES OF EACH BUYER

           Each Buyer, severally and not jointly, represents and warrants to
Seller as of the date hereof and as of each Delivery Date for each Aircraft to
be purchased by such Buyer that:

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<PAGE>

           SECTION 4.01. Existence and Power. Each Buyer is a statutory trust
duly formed, validly existing and in good standing under the laws of Delaware
and has all necessary powers and all material governmental licenses,
authorizations, permits, consents and approvals required to carry on its
activities as now conducted.

           SECTION 4.02. Authorization. The execution, delivery and performance
by each Buyer of this Agreement and the consummation of the transactions
contemplated hereby are within the powers of each Buyer and have been duly
authorized by all necessary action on the part of each Buyer. This Agreement
constitutes a valid and binding agreement of each Buyer.

           SECTION 4.03. Governmental Authorization. The execution, delivery and
performance by each Buyer of this Agreement and the consummation of the
transactions contemplated hereby do not require either Buyer to take any
material action in respect of, or make any material filing with, any
governmental body, agency or official other than actions or filings that have
already been taken or made or will be taken or made by such Buyer.

           SECTION 4.04. Noncontravention. The execution, delivery and
performance by each Buyer of this Agreement and the consummation of the
transactions contemplated hereby do not and will not (i) violate the MSA V Trust
Agreement or the MSA IV Trust Agreement, as the case may be, or (ii) violate any
applicable material law, rule, regulation, judgment, injunction, order or
decree.

           SECTION 4.05. Litigation. There is no action, suit, investigation or
proceeding pending against, or to the knowledge of either Buyer threatened
against or affecting, either Buyer before any court or arbitrator or any
governmental body, agency or official which in any manner challenges or seeks to
prevent, enjoin, alter or materially delay the transactions contemplated by this
Agreement.

           SECTION 4.06. Licenses and Permits. Except as set forth on Schedule
4.06 as of the Delivery Date of the applicable Aircraft, (i) each license or
certificate directly related to the ownership of the Purchased Assets (the
"Buyer Permits") is valid and in full force and effect and (ii) neither Buyer is
in default, and no condition exists that with notice or lapse of time or both
would constitute a default, under the Buyer Permits.

           SECTION 4.07. Finders' Fees. There is no investment banker, broker,
finder or other intermediary which has been retained by or is authorized to act
on behalf of either Buyer who might be entitled to any fee or commission from
Seller

                                       19

<PAGE>

or any of its Affiliates upon consummation of the transactions contemplated by
this Agreement.

           SECTION 4.08. True Sale. The transfer of the rights, title and
interest in and to the Purchased Assets pursuant to the terms hereof constitutes
a transaction in the ordinary course of business of each Buyer, and each Buyer
intends that such transfer of such rights, title and interest shall constitute a
true sale thereof.

           SECTION 4.09. Buyer Designees. Any entity that either Buyer shall
designate to purchase and take delivery of a Purchased Asset shall, as of the
applicable Delivery Date, be deemed to make representations and warranties to
Seller to the same effect as those made by each such Buyer pursuant to Sections
4.01-4.08 hereof relating to those matters applicable to such designated
purchaser.

                                    ARTICLE 5
                               COVENANTS OF SELLER

           Seller agrees that:

           SECTION 5.01. Conduct of the Business. From the date hereof until the
respective Delivery Date, Seller shall manage the Purchased Assets in the
ordinary course of its business consistent with past practice. Without limiting
the generality of the foregoing, from the date hereof, Seller will not take or
agree or commit to take any action that would make any representation or
warranty of Seller hereunder inaccurate in any respect at, or as of any time
prior to, each Delivery Date or omit or agree or commit to omit to take any
action necessary to prevent any such representation or warranty from being
inaccurate in any respect at any such time.

           SECTION 5.02. Access to and Provision of Information;
Confidentiality. (a) Seller will (i) give each Buyer, its counsel, financial
advisors, auditors and other authorized representatives full access to the
extent related to the Purchased Assets to be purchased by such Buyer to the
offices, properties, books and records of Seller relating to the Purchased
Assets to be purchased by such Buyer, (ii) furnish to each Buyer, its counsel,
financial advisors, auditors and other authorized representatives such financial
and operating data and other information relating to the Purchased Assets to be
purchased by such Buyer as such Persons may reasonably request, including
without limitation, such information as may be required by any relevant
regulatory authorities to be included in a public disclosure document relating
to the securitization of the Purchased Assets to be purchased by such Buyer (it
being understood that to the extent that commercially

                                       20

<PAGE>

sensitive financial or operating data or other information of Seller is
requested by such regulatory authorities, Seller may reasonably control (but
without unreasonable delay) the process of dealing with such regulatory
authorities with respect to such requests) and (iii) instruct the employees,
counsel, accountants and financial advisors of Seller to cooperate with each
Buyer in its investigation of the Purchased Assets to be purchased by such Buyer
and the securitization of the Purchased Assets to be purchased by such Buyer.
Any investigation pursuant to this Section shall be conducted in such manner as
not to interfere with the conduct of the business of Seller. Notwithstanding the
foregoing, neither Buyer shall have access to any confidential portions of any
agreement between Seller and a Manufacturer relating to the purchase by Seller
of any Purchased Assets, including, without limitation, the provisions which do
not continue with the Aircraft (including, without limitation, provisions
relating to purchase price or payment terms) No investigation by either Buyer or
other information received by either Buyer shall operate as a waiver or
otherwise affect any representation, warranty or agreement given or made by
Seller hereunder.

            (b) After the respective Delivery Date, Seller and its Affiliates
will hold, and will use their best efforts to cause their respective officers,
directors, employees, accountants, counsel, consultants, advisors and agents to
hold, in confidence, unless compelled to disclose by judicial or administrative
process or by other requirements of law, all confidential documents and
information concerning the Purchased Assets, except to the extent that such
information can be shown to have been (i) previously known on a nonconfidential
basis by Seller, (ii) in the public domain through no fault of Seller or its
Affiliates or (iii) later lawfully acquired by Seller from sources other than
those related to its prior ownership of the Purchased Assets provided that
Seller may disclose such information to its officers, directors, employees,
accountants, counsel, consultants, advisors and agents in connection with the
transactions contemplated by this Agreement and to the rating agencies in
connection with a securitization of the Aircraft so long as such Persons are
informed by Seller of the confidential nature of such information and are
directed by Seller to treat such information confidentially. The obligation of
Seller and its Affiliates to hold any such information in confidence shall be
satisfied if they exercise the same care with respect to such information as
they would take to preserve the confidentiality of their own similar
information.

           SECTION 5.03. Notices of Certain Events. Seller shall promptly notify
each of the Buyers of:

               (a) any notice or other communication from any Person alleging
          that the consent of such Person is or may be required in connection
          with the transactions contemplated by this Agreement;

                                       21

<PAGE>

               (b) any notice or other communication from any governmental or
           regulatory agency or authority in connection with the transactions
           contemplated by this Agreement;

            (c) any actions, suits, claims, investigations or proceedings
           commenced or, to its knowledge threatened against, relating to or
           involving or otherwise affecting Seller or the Purchased Assets that,
           if pending on the date of this Agreement, would have been required to
           have been disclosed pursuant to Section 3.10 or that relate to the
           consummation of the transactions contemplated by this Agreement; and

            (d) as soon as Seller has knowledge of, the damage, destruction or
           other casualty of any Purchased Asset or part thereof or in the event
           that any Purchased Asset or part thereof becomes the subject of any
           proceeding or, to the knowledge of Seller, threatened proceeding for
           the taking thereof or any part thereof or of any right relating
           thereto by condemnation, eminent domain or other similar governmental
           action.

           SECTION 5.04. Taxes and Other Costs. Seller agrees to pay, and
indemnify and hold each Buyer and its Affiliates harmless from, (i) any Transfer
Taxes imposed, levied or assessed against or upon each such Buyer or any of its
Affiliates or any of the Purchased Assets resulting from the execution of this
Agreement or the sale, delivery, assignment, novation, transfer and conveyance
of the Purchased Assets to such Buyer, (ii) any Tax liability, whether owed or
accrued, relating to the period prior to the applicable Delivery Date the non-
payment of which would give rise to a Lien on any Purchased Asset, would
otherwise adversely affect the Purchased Assets, or would result in such Buyer
becoming liable therefor and, without prejudice to Seller's obligations under
Section 9.02(a) hereof, for which Seller is primarily liable, (iii) any and all
Property Taxes levied with respect to the Purchased Assets, whether owed or
accrued, relating to the period prior to the applicable Delivery Date and,
without prejudice to Seller's obligations under Section 9.02(a) hereof, for
which Seller is primarily liable and (iv) to the extent not paid by the Lessees,
all Lessee costs incurred in connection with the consummation of the
transactions contemplated hereby including, without limitation, costs related to
Lease Novations.

           SECTION 5.05. Maintenance Reserves. Seller agrees to pay any amounts
due to any Person relating to maintenance work performed on any Aircraft, or
obligation to reimburse any amounts of Maintenance Reserves arising with respect
to any Aircraft, on or prior to the Delivery Date of such Aircraft.

                                       22

<PAGE>

           SECTION 5.06. Certain Additional Aircraft and Rental Agreements.
Without limitation of any of Seller's representations and warranties or other
agreements hereunder, Seller makes the undertakings specified in a letter
agreement among Seller and each Buyer dated the date hereof.

                                    ARTICLE 6
                             COVENANTS OF EACH BUYER

           Each Buyer agrees that:

           SECTION 6.01. Confidentiality. Each Buyer and its Affiliates will
hold, and will use their best efforts to cause their respective officers,
directors, employees, accountants, counsel, consultants, advisors and agents to
hold, in confidence, unless compelled to disclose by judicial or administrative
process or by other requirements of law or disclosure requirements applicable to
a securitization of the Aircraft, all confidential documents and information
concerning the Purchased Assets or which Seller has furnished to such Buyer or
its Affiliates in connection with the transactions contemplated by this
Agreement, except to the extent that such information can be shown to have been
(i) previously known on a nonconfidential basis by such Buyer, (ii) in the
public domain through no fault of such Buyer or (iii) later lawfully acquired by
such Buyer from sources other than Seller; provided that each Buyer may disclose
such information to its officers, directors, employees, accountants, counsel,
consultants, advisors and agents in connection with the transactions
contemplated by this Agreement and to rating agencies in connection with a
securitization of the Aircraft so long as such Persons are informed by such
Buyer of the confidential nature of such information and are directed by such
Buyer to treat such information confidentially. The obligation of each Buyer and
its Affiliates to hold any such information in confidence shall be satisfied if
they exercise the same care with respect to such information as they would take
to preserve the confidentiality of their own similar information. If this
Agreement is terminated, each Buyer and its Affiliates will, and will use their
best efforts to cause their respective officers, directors, employees,
accountants, counsel, consultants, advisors and agents to, destroy or deliver to
Seller, upon request, all documents and other materials, and all copies thereof,
obtained by such Buyer or its Affiliates or on their behalf from Seller in
connection with this Agreement that are subject to such confidence and any
reports, memoranda, data, information or other records prepared by such Buyer on
the basis of such documents and other materials.

                                       23

<PAGE>

                                    ARTICLE 7
                       COVENANTS OF EACH BUYER AND SELLER

           Each Buyer and Seller agree that:

           SECTION 7.01. Best Efforts; Further Assurances. (a) Subject to the
terms and conditions of this Agreement, each Buyer and Seller will use their
best efforts to take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary or desirable under applicable laws and regulations
to consummate the transactions contemplated by this Agreement. Seller and each
Buyer agree to execute and deliver such other documents, certificates,
agreements and other writings and to take such other actions as may be necessary
or desirable in order to consummate or implement expeditiously the transactions
contemplated by this Agreement and to vest in each Buyer good and marketable
title to each Purchased Asset to be purchased by such Buyer.

            (b) Seller hereby constitutes and appoints, effective for the
applicable Aircraft as of each Delivery Date, the applicable Buyer and its
successors and assigns as the true and lawful attorney of Seller with full power
of substitution in the name of such Buyer, or in the name of Seller but for the
benefit of such Buyer, to institute and prosecute all proceedings which such
Buyer may in its sole discretion deem proper in order to assert or enforce any
right, title or interest in, to or under such Aircraft, and to defend or
compromise any and all actions, suits or proceedings in respect of such Aircraft
so long as such Buyer indemnifies and holds harmless Seller for any expenses,
costs, action or loss brought by any Person as a result of any action taken by
such Buyer in Seller's name or as Seller's true and lawful attorney. Such Buyer
shall be entitled to retain for its own account any amounts collected pursuant
to the foregoing powers, including any amounts payable as interest in respect
thereof; provided, however, that if any amount collected by such Buyer relates
to amounts owed by such Person with respect to the Purchased Assets for the
period prior to the Delivery Date, then such Buyer will promptly provide such
amount (including, without limitation, any interest on such amount) to Seller.

           SECTION 7.02. Certain Filings. Seller and each Buyer shall cooperate
with one another (i) in determining whether any action by or in respect of, or
filing with, any governmental body, agency, official or authority is required,
or any actions, consents, approvals or waivers are required to be obtained from
parties to any material contracts, in connection with the consummation of the
transactions contemplated by this Agreement and (ii) in taking such actions or
making any such filings, furnishing information required in connection therewith
and seeking timely to obtain any such actions, consents, approvals or waivers.

                                       24

<PAGE>

           SECTION 7.03. Public Announcements. The parties agree to consult with
each other before issuing any press release or making any public statement with
respect to this Agreement or the transactions contemplated hereby and, except as
may be required by applicable law, any listing agreement with any national
securities exchange or by any disclosure obligation in connection with a
securitization of the Aircraft, will not issue any such press release or make
any such public statement prior to such consultation.

           SECTION 7.04. Substitute Aircraft. If before the applicable Delivery
Date any Aircraft suffers a material adverse change in its condition, or a Lease
Novation cannot be agreed with the applicable Lessee to the reasonable
satisfaction of either Seller or the applicable Buyer, such Buyer may reject
such Aircraft, such Aircraft shall no longer be an "Aircraft" hereunder (except
for purposes of Section 10.01(b)) and Seller and such Buyer will cooperate in
good faith to (i) select a substitute aircraft and related lease and enter into
a letter agreement in order to subject such aircraft to the terms and conditions
of this Agreement and (ii) make such other adjustments to the documentation and
deposits as agreed by such Buyer and Seller, provided, however, that such Buyer
shall be under no obligation to agree to any substitute aircraft and Seller
shall not be under any obligation to provide a substitute aircraft.

           SECTION 7.05. Allocation of Purchase Price. Seller and each Buyer
agree with, and agree to act and Seller agrees to cause AIG to act in accordance
with, the allocation of the aggregate Purchase Price among the Purchased Assets
as set forth on Exhibit A-1 in connection with the filing of all tax returns and
in the course of any tax audit, review or litigation relating thereto and to
take no position inconsistent with such allocation for all tax purposes.

                                    ARTICLE 8
                                   CONDITIONS

           SECTION 8.01. Conditions to Obligations of Each Buyer and Seller. On
each Delivery Date the obligations of Seller and MSA V to deliver and pay for
each Purchased Asset to be purchased by MSA V, and the obligations of MSA IV to
accept delivery of the B737-300 Aircraft MSN 24449 are subject to the
satisfaction of the following conditions:

               (a) No provision of any applicable law or regulation and no
          judgment, injunction, order or decree shall prohibit the consummation
          of the delivery of and payment for such Purchased Asset.

                                       25

<PAGE>

               (b) All actions by or in respect of or filings with any
          governmental body, agency, official or authority required to permit
          the delivery of and payment for such Purchased Asset shall have been
          taken, made or obtained.

           SECTION 8.02. Conditions to Obligation of Buyer. The obligation of
MSA V to pay for any Purchased Asset and MSA IV to take delivery of the B737-
300 Aircraft MSN 24449 is subject to the satisfaction of the following further
conditions:

               (a) On each Delivery Date (i) Seller shall have performed in all
          material respects all of its obligations hereunder required to be
          performed by it on or prior to the applicable Delivery Date and (ii)
          the representations and warranties of Seller contained in this
          Agreement and in any certificate or other writing delivered by Seller
          pursuant hereto, shall be true, as if made at and as of such date. On
          the first Delivery Date the applicable Buyer shall have received a
          certificate signed by an executive officer of Seller and dated as of
          the first Delivery Date to the foregoing effect. On each subsequent
          Delivery Date, Seller shall be deemed to have delivered to the
          applicable Buyer a certificate signed by the same executive officer of
          Seller dated as of the subsequent Delivery Date and to identical
          effect.

               (b) On each Delivery Date there shall not be threatened,
          instituted or pending any action or proceeding by any Person before
          any court or governmental authority or agency, domestic or foreign,
          (i) seeking to restrain, prohibit or otherwise interfere with the
          ownership or operation by either Buyer or any of its Affiliates of any
          Aircraft or to compel either Buyer or any of its Affiliates to dispose
          of any Aircraft or (ii) seeking to require divestiture by either Buyer
          or any of its Affiliates of any Aircraft.

               (c) On each Delivery Date there shall not have been any action
          taken, or any statute, rule, regulation, injunction, order or decree
          proposed, enacted, enforced, promulgated, issued or deemed applicable
          to the purchase of the Purchased Assets, by any court, government or
          governmental authority or agency, domestic or foreign, that, in the
          reasonable judgment of the applicable Buyer could, directly or
          indirectly, result in any of the consequences referred to in clauses
          8.02(b)(i) and 8.02(b)(ii) above.

               (d) On the first Delivery Date with respect to an Aircraft listed
          on Exhibit A-1, MSA V shall have received an opinion of a corporate or
          the general counsel to Seller, dated the first Delivery Date,
          substantially in the form attached hereto as Exhibit C. On each
          subsequent Delivery Date,

                                       26

<PAGE>

          such counsel shall be deemed to have delivered a bring-down opinion
          to MSA V dated as of the subsequent Delivery Date and to identical
          effect. On the Delivery Date with respect to the B737-300 Aircraft
          MSN 24449, MSA IV shall have received an opinion of a corporate or
          the general counsel to Seller, dated such Delivery Date,
          substantially in the form attached hereto as Exhibit C.

               (e) Each Buyer and Seller shall have agreed upon the Initial
          Approved Budgets (as defined in the Servicing Agreement) as soon as is
          practicable but in any event no later than November 10, 1999.

               (f) By the applicable Delivery Date Seller shall have received
          all Required Consents and all consents, authorizations or approvals
          from the governmental agencies referred to in Section 3.03 or 3.14 (in
          regards to Section 3.14 only with respect to the Aircraft to be
          delivered on such Delivery Date), in each case in form and substance
          reasonably satisfactory to the applicable Buyer, and no such consent,
          authorization or approval shall have been revoked.

               (g) The applicable Buyer shall have received on the applicable
          Delivery Date a certificate setting forth the determination of an
          independent insurance advisor with respect to the applicable Aircraft
          satisfactory to such Buyer in its sole discretion and to the effect
          that the insurance policies or bonds relating to such Aircraft are of
          the type customarily carried by owners of similar Aircraft.

               (h) On or prior to the applicable Delivery Date, the applicable
          Buyer shall have received a report on the physical inspection of the
          relevant Aircraft in form and substance satisfactory to such Buyer.

               (i) On each Delivery Date any non-cash Security Deposits shall
          have been reissued in the name of the applicable Buyer or its designee
          or, failing such reissue shall have been otherwise transferred to such
          Buyer or its designee so as, in such Buyer's sole discretion, to
          enable such Buyer or such designee to realize the benefits conferred
          thereby.

               (j) On each Delivery Date a Lease Novation shall have been
          entered into with respect to the relevant Aircraft (other than the
          B737-400 Aircraft MSN 26291 and B767-300 ER Aircraft MSN 24875 with
          respect to each of which a Lease shall have been entered into between
          MSA V or its designee and the applicable Lessee) by the applicable
          Buyer or its designee, Seller and the applicable Lessee and such
          agreement shall be in full force and effect and a fax thereof shall
          have been delivered to such

                                       27

<PAGE>

          Buyer along with copies of any other Lease Documents for the relevant
          Aircraft.

               (k) On each Delivery Date the applicable Aircraft shall have been
          registered in the applicable state of registration reflecting, to the
          extent permitted under the laws of such state of registration, the
          applicable Buyer's or its designee's ownership thereof or such other
          action shall have been taken with respect to such registration and
          ownership as shall be satisfactory to such Buyer, provided, that such
          registration or other action need not be effected prior to such
          Delivery Date if such registration or other action may, upon the
          written advice of counsel in the applicable state of registration, be
          effected after such Delivery Date without any prejudice to any right
          of Buyer as an owner or lessor of the Aircraft.

               (l) On each Delivery Date there shall be delivered to the
          applicable Buyer, (1) an opinion from counsel to such Buyer in the
          applicable state of registration and, if different, from counsel in
          the jurisdiction whose law is stated to govern in each of the
          following documents (which will be counsel to Seller in the case of
          California law), to the effect that the applicable Lease Documents and
          Lease Novation are legal, valid and binding under the applicable laws
          of such state of registration and jurisdiction; and (2) an opinion
          from counsel to such Buyer in the applicable state of registration to
          the effect that (i) such Buyer or its designee, as applicable shall be
          recognized as the owner of the applicable Aircraft under the laws of
          such jurisdiction; (ii) it is not necessary for such Buyer or its
          designee, as applicable, to qualify to do business in such
          jurisdiction as a result of ownership of such Aircraft to exercise
          remedies under the applicable Lease or otherwise; (iii) payments due
          under the applicable Lease are not subject to withholding or similar
          tax or, in the case of Leases where withholding tax applies in any
          relevant jurisdiction, the Lessee is obligated to pay and hold the
          lessor harmless from such withholding tax under the Lease Documents
          and the applicable Lease Novation; (iv) no filings or registrations
          other than those which have already been made or are in the process of
          being made and are referenced in such opinion are necessary to record
          or perfect such Buyer's (or, if applicable, the lessor's) interest in
          such Aircraft in such jurisdiction; and (v) upon the expiration or
          other valid termination of the Lease, and subject to compliance with
          the laws of such jurisdiction, the lessor would be entitled and able
          under the laws of such jurisdiction to receive redelivery of such
          Aircraft, repossess such Aircraft and export such Aircraft from such
          jurisdiction. All of the opinions required by this clause shall be at
          such Buyer's expense.

                                       28

<PAGE>

               (m) On each Delivery Date at a time as close as practicable to
          the time of delivery of payment for such Aircraft by Buyer an executed
          bill of sale from Seller to the applicable Buyer and certified copies
          of each of the documents relating to Seller's title to the applicable
          Aircraft evidencing the chain of title from the Manufacturer to Seller
          shall have been received in a form reasonably satisfactory to such
          Buyer.

               (n) On each Delivery Date the applicable Buyer shall have
          received originals or copies of certificates for the Aircraft being
          sold on such Delivery Date evidencing the insurance required to be
          maintained pursuant to the applicable Lease Documents and Lease
          Novation (which insurance shall name the owner of the Aircraft and
          each other Person required to be so named pursuant to the Lease
          Documents and Lease Novation as additional insureds and shall name the
          owner of the Aircraft as Loss Payee under the relevant policies),
          together with a letter of undertaking in terms reasonably acceptable
          to such Buyer issued by the brokers through whom the insurances of
          such Aircraft shall have been placed if such a letter is required to
          be provided to the lessor pursuant to the applicable Lease.

               (o) On each Delivery Date, the applicable Buyer shall have
          received a copy certified by Seller of the provisions of the original
          manufacturer purchase agreement applicable to the relevant Aircraft
          and available for the benefit of such Buyer or its designee after
          delivery of the Aircraft pursuant to the applicable Assignment of
          Warranties.

               (p) On each Delivery Date the Servicing Agreement shall be or
          remain a valid and binding obligation of Seller in full force and
          effect.

               (q) All representations, warranties, indemnities (except the
          indemnity for Transfer Taxes provided in Section 5.04 hereof and the
          indemnity with respect to "bulk sales," "bulk transfer" or similar
          laws provided in Section 12.11 hereof) and undertakings of Seller
          hereunder are capable of being assigned by either Buyer to a special
          purpose securitization vehicle or vehicles.

               (r) On each Delivery Date, MSA V shall have received, if
          applicable, the "Manufacturer Payment" for the relevant Aircraft as
          set forth opposite such Aircraft on Exhibit A-1.

               (s) On each Delivery Date the applicable Buyer shall have
          received all documents it may reasonably request relating to the
          existence

                                       29

<PAGE>

          of Seller and the authority of Seller for this Agreement, all in form
          and substance reasonably satisfactory to such Buyer.

               (t) On each of the first and the last Delivery Dates, the
          applicable Buyer shall have received an opinion of Seller's New York
          counsel, O'Melveny and Myers LLP, dated the applicable Delivery Date,
          substantially in the form attached hereto as Exhibit D.

           SECTION 8.03. Conditions to Obligation of Seller. On the applicable
Delivery Date, the obligation of Seller to deliver each Purchased Asset is
subject to the satisfaction of the following further conditions:

               (a) (i) The applicable Buyer shall have performed in all material
          respects all of its obligations hereunder required to be performed by
          it on or prior to such Delivery Date and (ii) the representations and
          warranties of such Buyer contained in this Agreement and in any
          certificate or other writing delivered by such Buyer pursuant hereto
          shall be true in all material respects at and as of such Delivery Date
          as if made at and as of such date. On the first Delivery Date for an
          Aircraft listed on Exhibit A-1, Seller shall have received a
          certificate signed by a controlling trustee of MSA V to the foregoing
          effect. On each subsequent Delivery Date, MSA V shall be deemed to
          have delivered a certificate signed by the same controlling trustee of
          MSA V dated as of the subsequent Delivery Date and to the identical
          effect. On the Delivery Date for the B737-300 Aircraft MSN 24449,
          Seller shall have received a certificate signed by a controlling
          trustee of MSA IV to the foregoing effect.

               (b) Seller shall have received an opinion of Richards, Layton &
          Finger, special Delaware counsel to MSA V and MSA IV, dated the first
          Delivery Date for an Aircraft listed on Exhibit A-1 (and, if Seller
          requests, dated as of any subsequent Delivery Date) and dated the
          Delivery Date for the B737-300 Aircraft MSN 24449, to the effect
          specified in Section 4.01 and the first sentence of Section 4.02.
          Seller shall also have received an opinion of Davis Polk & Wardwell,
          counsel to MSA V and MSA IV, dated the first Delivery Date for an
          aircraft listed on Exhibit A-1 (and, if Seller requests, dated as of
          any subsequent Delivery Date) and dated the Delivery Date for the
          B737-300 Aircraft MSN 24449 to the effect specified in the second
          sentence of Section 4.02, and, with respect to matters of United
          States federal and New York law, to the further effect specified in
          Section 4.03. In rendering such opinions, such counsel may rely upon
          certificates of public officers and, as to matters of fact, upon
          certificates of officers of each Buyer, copies of which opinions and
          certificates shall be contemporaneously delivered to Seller.

                                       30

<PAGE>

               (c) The applicable Buyer shall have received all consents,
          authorizations or approvals from governmental agencies referred to in
          Section 4.03, in each case in form and substance reasonably
          satisfactory to Seller, and no such consent, authorization or approval
          shall have been revoked.

               (d) Seller shall have received all documents it may reasonably
          request relating to the existence of the applicable Buyer and the
          authority of such Buyer for this Agreement, all in form and substance
          reasonably satisfactory to Seller.

               (e) Any purchasing entity that either Buyer designates to take
          delivery of any Aircraft shall, on the applicable Delivery Date, be
          duly organized and validly existing and in good standing under its
          jurisdiction of organization and shall have all necessary power and
          authority to carry out such Buyer's obligations hereunder with respect
          to such Aircraft and to consummate the transactions with respect to
          such Aircraft contemplated hereby (and, if Seller requests, Seller
          shall receive an opinion of counsel to such purchasing entity
          designated by Buyer concerning the same matters set forth in Section
          8.03 (b) above).

               (f) On each Delivery Date, the Servicing Agreement shall be or
          remain a valid and binding obligation of the applicable Buyer in full
          force and effect.

                                    ARTICLE 9
                            SURVIVAL; INDEMNIFICATION

           SECTION 9.01. Survival. The representations and warranties of the
parties hereto contained in this Agreement or in any certificate or other
writing delivered pursuant hereto or in connection herewith shall survive until
the third anniversary of the last Delivery Date; provided that the covenants,
agreements, representations and warranties contained in Section 5.04(ii) and
(iii) shall survive until expiration of the statute of limitations applicable to
the matters covered thereby (giving effect to any waiver, mitigation or
extension thereof), if later. Notwithstanding the preceding sentence, any
representation or warranty in respect of which indemnity may be sought under
this Agreement shall survive the time at which it would otherwise terminate
pursuant to the preceding sentence, if notice of the inaccuracy thereof giving
rise to such right of indemnity shall have been given to the party against whom
such indemnity may be sought prior to such time.

                                       31

<PAGE>

           SECTION 9.02. Indemnification. (a) Seller hereby indemnifies each
Buyer and each of its Affiliates against and agrees to hold each of them
harmless from any and all damage, loss, liability and expense (including,
without limitation, reasonable expenses of investigation and reasonable
attorneys' fees and expenses in connection with any action, suit or proceeding)
("Damages") incurred or suffered by either Buyer or any of its Affiliates
arising out of:

               (i) any misrepresentation or breach of warranty, covenant or
          agreement made or to be performed by Seller pursuant to this
          Agreement; or

               (ii) the ownership, leasing, use or operation of the Aircraft on
          or prior to the applicable Delivery Date including, without
          limitation, liabilities in respect of maintenance work performed on
          the Aircraft on or prior to the applicable Delivery Date;

          provided that Seller shall not be liable under Section 9.02(a)(i)
unless the aggregate amount of Damages with respect to all matters referred to
in Section 9.02(a)(i) (determined without regard to any materiality
qualification contained in any representation, warranty or covenant giving rise
to the claim for indemnity hereunder) exceeds $         .

            (b) Each Buyer, severally and not jointly, hereby indemnifies Seller
and its Affiliates against and agrees to hold each of them harmless from any and
all Damages incurred or suffered by Seller or any of its Affiliates arising out
of:

               (i) any misrepresentation or breach of warranty, covenant or
          agreement made or to be performed by such Buyer pursuant to this
          Agreement; or

               (ii) the ownership, leasing, use or operation of any Aircraft
          delivered to such Buyer following the applicable Delivery Date unless
          such Damages are attributable to an incident which occurred on or
          prior to such Delivery Date (including, without limitation,
          liabilities in respect of maintenance work performed on the Aircraft
          after the Delivery Date) or such Damages arise as a result of the
          wilful misconduct of Seller in its capacity as Servicer under the
          Servicing Agreement or directly result from a breach by Seller, in its
          capacity as Servicer, of the express terms and conditions of the
          Servicing Agreement;

          provided that (A) neither Buyer shall be liable under Section
9.02(b)(i) unless the aggregate amount of Damages with respect to all matters
referred to in Section 9.02(b)(i) with respect to such Buyer (determined without
regard to any

                                       32

<PAGE>

materiality qualification contained in any representation, warranty or covenant
giving rise to the claim for indemnity hereunder) exceeds $         .

           SECTION 9.03. Procedures. The party seeking indemnification under
Section 9.02 (the "Indemnified Party") agrees to give prompt notice to the party
against whom indemnity is sought (the "Indemnifying Party") of the assertion of
any claim, or the commencement of any suit, action or proceeding in respect of
which indemnity may be sought under such Section. The Indemnifying Party may at
the request of the Indemnified Party participate in and control the defense of
any such suit, action or proceeding at its own expense. The Indemnifying Party
shall not be liable under Section 9.02 for any settlement effected without its
consent of any claim, litigation or proceeding in respect of which indemnity may
be sought hereunder.

                                   ARTICLE 10
                                   TERMINATION

           SECTION 10.01.  Grounds for Termination.  This Agreement may be
terminated:

            (a) with respect to the Aircraft to be acquired by MSA V or MSA IV,
at any time prior to the first Delivery Date by mutual written agreement of
Seller and MSA V or MSA IV, as the case may be;

            (b) with respect to the Aircraft listed on Exhibit A-1 to be
acquired by MSA V, at any time after the Portfolio Delivery Deadline by MSA V if
at least 22 Aircraft (including any substitute aircraft that became designated
as an Aircraft pursuant to Section 7.04 hereof) representing 85% of the
aggregate Base Price of the Aircraft listed on Exhibit A-1 shall not have been
delivered by the Portfolio Delivery Deadline or such later date as may be agreed
to in writing by MSA V and Seller (clause (i) and (ii) together being, the
"Minimum Transfer Condition"), in which case MSA V and Seller agree to cooperate
in good faith to unwind all of the transactions between them contemplated by and
completed under this Agreement in order to put each such party in the place such
party would have been in had the transactions between them contemplated by this
Agreement never taken place and with as few consequences (financial, tax or
otherwise) to either party as reasonably possible; provided that each of MSA V
and Seller agree to cooperate in good faith at such time in apportioning
liability for the payment of any Transfer Taxes imposed, levied or assessed
against or upon Seller or any of the Purchased Assets resulting from the sale,
delivery, assignment, novation, transfer and conveyance of the Purchased Assets
back to Seller; provided further that Seller

                                       33
<PAGE>

shall pay to (or receive from) MSA V the amounts or enter into the arrangements
required under the terms of Section 10.03 hereof;

            (c) with respect to the Aircraft listed on Exhibit A-1 to be
acquired by MSA V, at any time after the Portfolio Delivery Deadline by MSA V if
(i) the B757-200ER Aircraft MSN 23767 has not been delivered by the Portfolio
Delivery Deadline and (ii) Seller has not paid to MSA V on the Portfolio
Delivery Deadline $          for each of the Aircraft listed on Exhibit A-3 that
were delivered to MSA V on or prior to the Portfolio Delivery Deadline.

            (d) with respect to the Aircraft listed on Exhibit A-1 to be
acquired by MSA V, at any time prior to the first Delivery Date by Seller or MSA
V if consummation of the transactions between them contemplated hereby would
violate any nonappealable final order, decree or judgment of any court or
governmental body having competent jurisdiction; or

            (e) with respect to the Aircraft listed on Exhibit A-2 to be
acquired by MSA IV, at any time prior to the Delivery Date for such Aircraft by
Seller or MSA IV if consummation of the transactions between them contemplated
hereby would violate any nonappealable final order, decree or judgment of any
court or governmental body having competent jurisdiction.

           The party desiring to terminate this Agreement pursuant to clause
10.01(d) or (e) shall give notice of such termination to the other party.

           SECTION 10.02. Effect of Termination. If this Agreement is terminated
as permitted by Section 10.01, such termination shall, except for any payments,
forfeitures or arrangements required pursuant to the terms of Section 10.03, be
without liability of either party (or any stockholder, director, officer,
employee, agent, consultant or representative of such party) to the other party
to this Agreement; provided that if such termination shall result from the (i)
willful failure of either party to fulfill a condition to the performance of the
obligations of the other party, (ii) failure to perform a covenant of this
Agreement or (iii) breach by either party hereto of any representation or
warranty or agreement contained herein, such party shall be fully liable for any
and all Damages incurred or suffered by the other party as a result of such
failure or breach. The provisions of Sections 5.02(b), 5.04, 6.01, 7.03, 10.02,
10.03, 11.04, 11.05, 11.06, 11.07 and 11.08 shall survive any termination hereof
pursuant to Section 10.01.

           SECTION 10.03. Breakage Costs Upon Termination or Failure to Transfer
Aircraft. (a) If less than all of the Aircraft listed on Exhibit A-1 are
transferred for any reason by the Portfolio Delivery Deadline, Seller shall (i)
pay to or receive from MSA V an amount (determined by MSA V in good faith) equal
to any loss

                                       34

<PAGE>

or cost incurred or gain realized by MSA V or any of MSA V's Affiliates as a
result of its terminating, liquidating, obtaining or re-establishing any
financial transaction or series of financial transactions entered into by MSA V
or any of MSA V's Affiliates to hedge its interest rate exposure arising in
connection with the funding of the aggregate Base Purchase Price for the
Aircraft (a "Hedging Transaction") or related trading position, (ii) enter into
one or a series of financial transactions with MSA V (or any Affiliate of MSA V
designated by MSA V) on terms identical in all material respects to the Hedging
Transactions sufficient to enable MSA V or any of MSA V's Affiliates to offset
its exposure under such Hedging Transactions or (iii) enter into such other
arrangement as the parties may agree.

           (b) MSA V shall provide Seller with the basis of its calculation of
the amount (determined by MSA V in good faith) of any loss or cost incurred (or
gain realized) by MSA V or any of MSA V's Affiliates as a result of its
terminating, liquidating, obtaining or reestablishing the Hedging Transactions.
Seller will have fifteen (15) days to notify MSA V if Seller determines in good
faith that such amount has been calculated incorrectly. If Seller does contest
such amount and MSA V and Seller are unable to reach agreement within fifteen
(15) days after receipt of Seller's notification, then the Independent Referee
shall determine such amount, using such third party experts as is necessary, the
cost of which determination (and any experts) shall be borne equally by MSA V
and Seller. Interest shall accrue on any amount ultimately paid to or by MSA V
pursuant to this Section at One Month LIBOR from and including the date of MSA
V's initial calculation of the amount payable to but excluding the date of
payment of the amount ultimately agreed by the parties or determined by the
Independent Referee.

           (c) To the extent that the Minimum Transfer Condition is satisfied or
waived in writing by MSA V but less than all the Aircraft are transferred,
Seller's obligations under this Section 10.03 shall be with respect to only such
portion of the Hedging Transactions as bears the same relationship to the value
of all Hedging Transactions as the Base Price for the Aircraft which failed to
transfer bears to the aggregate Base Price for all Aircraft listed on Exhibit
A-1.

           SECTION 10.04. Repayment of Purchase Price and Hedging Breakage Costs
Upon Failure to Transfer the B737-300 Aircraft MSN 24449. If, for any reason
beyond the control of Seller, Seller does not deliver title to the B737-300
Aircraft MSN 24449 to MSA IV on or prior to April 30, 2000, Seller shall:

           (a)  repay $           to MSA IV on April 30, 2000; and

                                       35

<PAGE>

           (b) (i) pay to or receive from MSA IV an amount (determined by MSA IV
in good faith) equal to any loss or cost incurred or gain realized by MSA IV or
any of MSA IV's Affiliates as a result of its terminating, liquidating,
obtaining or re- establishing any Hedging Transaction or related trading
position, (ii) enter into one or a series of financial transactions with MSA IV
(or any Affiliate of MSA IV designated by MSA IV) on terms identical in all
material respects to the Hedging Transactions sufficient to enable MSA IV or any
of MSA IV's Affiliates to offset its exposure under such Hedging Transactions or
(iii) enter into such other arrangement as the parties may agree. MSA IV and
Seller shall employ the procedures set forth in Section 10.03(b) to calculate
and agree any amounts (including any interest) due under this Section 10.04(b).

           For the avoidance of doubt, any amounts (including without
limitation, any rent and additional rent, insurance premiums or other amounts
but excluding cash Maintenance Reserves) received by MSA IV in respect of such
Aircraft with respect to the period from and including August 10, 1999 to and
including April 30, 2000, shall be retained for MSA IV's account. Any cash
Maintenance Reserves received by Seller with respect to the period from and
including August 10, 1999 to and including April 30, 2000 shall be retained for
Seller's account.

                                   ARTICLE 11
                                  MISCELLANEOUS

           SECTION 11.01. Warranties and Disclaimers. THE AIRCRAFT SHALL BE SOLD
IN "AS IS, WHERE IS" CONDITION AT DELIVERY AND, EXCEPT AS PROVIDED IN SECTION
9.01 AND 11.01, SELLER MAKES NO WARRANTIES, GUARANTEES, OR REPRESENTATIONS OF
ANY KIND, EITHER EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, THAT SHALL SURVIVE
DELIVERY BY SELLER TO THE APPLICABLE BUYER HEREUNDER. EACH BUYER WAIVES,
RELEASES AND RENOUNCES ALL GUARANTEES, WARRANTIES, REPRESENTATIONS, OBLIGATIONS,
COVENANTS AND LIABILITIES OF SELLER, EXPRESS OR IMPLIED, ARISING BY LAW OR
OTHERWISE, WITH RESPECT TO ANY NON-CONFORMITY OR DEFECT IN ANY AIRCRAFT
PURCHASED BY AND DELIVERED TO SUCH BUYER, INCLUDING WITHOUT LIMITATION, ANY
IMPLIED WARRANTY OF FITNESS FOR USE OR MERCHANTABILITY OR USE FOR A PARTICULAR
PURPOSE, ANY LIABILITY ARISING FROM STRICT LIABILITY IN TORT, PRODUCTS
LIABILITY, IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF
DEALING OR USAGE OF TRADE, AIRWORTHINESS OR LOSS OF USE, PROFIT OR OTHER
CONSEQUENTIAL DAMAGES OR WITH RESPECT TO ANY LESSEE. Nothing in the foregoing is
intended to limit the specific provisions of this

                                       36

<PAGE>

Agreement or the rights and remedies of either Buyer specifically provided for
in this Agreement.

           Seller shall extend to the applicable Buyer the rights and benefits,
to the extent that the same are not extinguished by the sale of the Aircraft, of
any warranties, service life policies and patent indemnities of any Manufacturer
and any maintenance and overhaul agencies of and for each of the Aircraft which
Seller may have. Seller also hereby grants to the applicable Buyer rights of
subrogation relating to any claim which Seller may have under such warranties
concerning each of the Aircraft. Seller shall take such action as the Buyers may
reasonably request and as may be reasonably necessary to secure such rights and
protection for the Buyers.

           SECTION 11.02. Notices. Any notice, request or information required
or permissible under this Agreement will be in writing and in English. Notices
will be delivered in person or sent by fax, letter (mailed airmail, certified
and return receipt requested), or by expedited delivery addressed to the parties
as set forth below in this Section. In the case of a fax, notice will be deemed
received upon the date set forth on the confirmation of receipt produced by the
sender's fax machine immediately after the fax is sent. In the case of a mailed
letter, notice will be deemed received on the tenth (10th) day after mailing. In
the case of a notice sent by expedited delivery, notice will be deemed received
on the date of delivery set forth in the records of the person which
accomplished the delivery. If any notice is sent by more than one of the above
listed methods, notice will be deemed received on the earliest possible date in
accordance with the above provisions. Notices will be addressed as follows:

           if to MSA V, to:

                     MSA V
                     c/o Cabot Aircraft Services Limited
                     Regus House
                     Harcourt Centre
                     Harcourt Road
                     Dublin 2
                     Ireland
                     Attention: Mr. Kieran O'Keefe
                     Fax: 353-1-402-9496

                                       37

<PAGE>

                     with a copy to:

                     Davis Polk & Wardwell
                     1 Frederick's Place
                     London EC2R 8AB
                     Attention: Mr. Tom Reid
                     Fax: 44-171-418-1400

                     and

                     Morgan Stanley & Co. International Limited
                     25 Cabot Square
                     Canary Wharf
                     London E14 4QA
                     Attention: Mr. Scott Peterson
                     Fax: 44-171-425-4328

           if to MSA IV, to:

                     MSA IV
                     c/o Cabot Aircraft Services Limited
                     Regus House
                     Harcourt Centre
                     Harcourt Road
                     Dublin 2
                     Ireland
                     Attention: Mr. Kieran O'Keefe
                     Fax: 353-1-402-9496

                     with a copy to:

                     Davis Polk & Wardwell
                     1 Frederick's Place
                     London EC2R 8AB
                     Attention: Mr. Tom Reid
                     Fax: 44-171-418-1400

                     and

                     Morgan Stanley & Co. International Limited
                     25 Cabot Square
                     Canary Wharf

                                       38

<PAGE>

                     London E14 4QA
                     Attention: Mr. Scott Peterson
                     Fax: 44-171-425-4328

           if to Seller, to:

                     International Lease Finance Corporation
                     1999 Avenue of the Stars
                     39th Floor
                     Los Angeles, CA 90067
                     Attention: Legal Department
                     Fax: 1-310-788-1990

or to such other address as the parties hereto shall from time to time designate
in writing to the other party.

           SECTION 11.03. Amendments and Waivers. (a) Any provision of this
Agreement may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed, in the case of an amendment, by each party to this
Agreement, or in the case of a waiver, by the party against whom the waiver is
to be effective.

            (b) No failure or delay by any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.

           SECTION 11.04. Expenses. Except as otherwise provided herein, all
costs and expenses incurred in connection with this Agreement shall be paid by
the party incurring such cost or expense.

           SECTION 11.05. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of each other party hereto, except that (i) each
Buyer may transfer or assign, in whole or from time to time in part, to one or
more of its Affiliates, such Buyer's right to purchase any Purchased Asset, but
no such transfer or assignment will relieve such Buyer of its obligations
hereunder or be contrary to any of the terms of the applicable Lease and (ii)
each Buyer may transfer or assign the benefit of Seller's representations,
warranties, covenants and

                                       39
<PAGE>

indemnity obligations (except the indemnities for Transfer Taxes provided in
Section 5.04 hereof, the indemnity in Section 5.04(iv) may be transferred but it
will only cover the sale of the Aircraft by Seller to the applicable Buyer and
not the subsequent securitization and any transfers or requirements in
connection therewith and for compliance with "bulk sales," "bulk transfer" or
similar laws provided in Section 12.11 hereof) to a special purpose entity or
entities established by it or by Morgan Stanley Dean Witter & Co. ("MSDW") or by
any entity controlled by MSDW in connection with a securitization of the
Aircraft.

           SECTION 11.06.  Governing Law.  This agreement shall be governed by
and construed in accordance with the law of the State of New York.

           SECTION 11.07. Jurisdiction. Except as otherwise expressly provided
in this Agreement, the parties hereto agree that any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby may be
brought in the United States District Court for the Southern District of New
York or any other New York State court sitting in New York City, and each of the
parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and 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 such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 11.02 shall be deemed
effective service of process on such party.

           SECTION 11.08. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

           SECTION 11.09. Counterparts; Third Party Beneficiaries. This
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. This Agreement shall become effective when each party
hereto shall have received a counterpart hereof signed by the other party
hereto. No provision of this Agreement is intended to confer upon any Person
other than the parties hereto any rights or remedies hereunder.

                                       40

<PAGE>

           SECTION 11.10. Entire Agreement. This Agreement constitutes the
entire agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter of this
Agreement.

           SECTION 11.11. Bulk Sales Laws. Each of the Buyers and Seller hereby
waive compliance by Seller with the provisions of the "bulk sales", "bulk
transfer" or similar laws of any state. Seller agrees to indemnify and hold each
Buyer harmless against any and all claims, losses, damages, liabilities, costs
and expenses incurred by each such Buyer or any of its Affiliates as a result of
any failure to comply with any such "bulk sales", "bulk transfer" or similar
laws.

           SECTION 11.12. Non Solicitation. In consideration of the considerable
expense to be incurred by each Buyer in connection with the transactions
contemplated by this Agreement, neither Seller nor any of its officers,
directors, agents or representatives will (i) engage in any negotiation with
another person regarding the sale or transfer of any Purchased Assets or similar
transaction; or (ii) provide any non public information relating to the
Purchased Assets to any person that may be interested in any transaction of the
nature contemplated by this Agreement, in each case from the date hereof until
the termination of this Agreement pursuant to Section 10.01.

           SECTION 11.13.  Captions.  The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.

                                       41

<PAGE>

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

                                         MSA IV

                                      By:   /s/ Scott Peterson
                                           --------------------------
                                           Name:  Scott Peterson
                                           Title: Controlling Trustee

                                         MSA V

                                      By:   /s/ Scott Peterson
                                           --------------------------
                                           Name:  Scott Peterson
                                           Title: Controlling Trustee

                                         INTERNATIONAL LEASE
                                         FINANCE CORPORATION

                                      By:   /s/ Steven F. Udvar-Hazy
                                           --------------------------
                                            Name:  Steven F. Udvar-Hazy
                                            Title: President and CEO

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