AVTEAM INC, S-1, 1997-03-24

AVTEAM INC
S-1, 1997-03-24
INDUSTRIAL MACHINERY & EQUIPMENT

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 24, 1997.
REGISTRATION NO. 333-
================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------

AVTEAM, INC.
(Exact name of registrant as specified in its charter)
---------------------

<TABLE>
<S> <C> <C>
FLORIDA 5088 65-0313187
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>

3230 EXECUTIVE WAY
MIRAMAR, FLORIDA 33025
(954) 431-2359
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

DONALD A. GRAW
PRESIDENT AND CHIEF EXECUTIVE OFFICER
AVTEAM, INC.
3230 EXECUTIVE WAY
MIRAMAR, FLORIDA 33025
(954) 431-2359
(Name, address, including zip code, and telephone number, including
area code, of agent for service)

COPIES TO:

<TABLE>
<C> <C>
ANDREW HULSH, ESQ. JEFFREY M. STEIN, ESQ.
NOEL H. NATION, ESQ. KING & SPALDING
BAKER & MCKENZIE 191 PEACHTREE STREET
701 BRICKELL AVENUE, SUITE 1600 ATLANTA, GA 30303-1763
MIAMI, FL 33131-2827 (404) 572-4600
(305) 789-8900
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
promptly as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
---------------------

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
========================================================================================================
TITLE OF EACH CLASS OF SECURITIES TO PROPOSED MAXIMUM AGGREGATE AMOUNT OF
BE REGISTERED OFFERING PRICE (1)(2) REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A Common Stock, par value $.01
per share......................... $62,100,000 $18,818.18
========================================================================================================
</TABLE>

(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(o) under the Securities Act of 1933.
(2) Includes 675,000 shares of Class A Common Stock which may be purchased by
the Underwriters pursuant to an over-allotment option.
---------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(C) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(C), MAY DETERMINE.
================================================================================
<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED MARCH 24, 1997

4,500,000 Shares

AVTEAM, INC.

Class A Common Stock
($.01 par value)

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

Of the shares of Class A Common Stock ("Class A Common Stock") offered hereby
(the "Offering"), 3,033,000 shares are being sold by AVTEAM, Inc. ("AVTEAM" or
the "Company") and 1,467,000 shares are being sold by the Selling Stockholder
named herein under "Principal and Selling Stockholders" (the "Selling
Stockholder"). The Company will not receive any of the proceeds of shares sold
by the Selling Stockholder. Prior to the Offering, there has been no public
market for the Class A Common Stock. It is anticipated that the initial public
offering price will be between $10.00 and $12.00 per share. For information
relating to the factors to be considered in determining the initial offering
price to the public, see "Underwriting."

The Company has applied for listing of the Class A Common Stock on the Nasdaq
National Market under the symbol "AVTM."

FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH
AN
INVESTMENT IN THE CLASS A COMMON STOCK, SEE "RISK FACTORS" ON PAGE 7 HEREIN.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND PROCEEDS TO SELLING
PUBLIC COMMISSIONS COMPANY(1) STOCKHOLDER
---------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Per Share............................................ $ $ $ $
Total(2)............................................. $ $ $ $
</TABLE>

(1) Before deduction of expenses payable by the Company, estimated at $750,000.
(2) The Company has granted the Underwriters an option, exercisable for 30 days
from the date of this Prospectus, to purchase a maximum of 675,000
additional shares of Class A Common Stock to cover over-allotments of
shares. If the option is exercised in full, the total Price to Public will
be $ , Underwriting Discounts and Commissions will be $ ,
and Proceeds to Company will be $ .

The shares of Class A Common Stock are offered by the several Underwriters
when, as and if delivered to and accepted by the Underwriters and subject to
their right to reject orders in whole or in part. It is expected that the shares
of Class A Common Stock will be ready for delivery on or about ,
1997, against payment in immediately available funds.

CREDIT SUISSE FIRST BOSTON DILLON, READ & CO. INC.

Prospectus dated , 1997.
<PAGE> 3

[PHOTOGRAPH]

"AVTEAM" and the circular design logo are service marks of the Company for
which registration has been applied. All other service marks, trademarks or
trade names referred to in this Prospectus are the property of their respective
owners.

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

CERTAIN PERSON PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE CLASS A COMMON
STOCK OFFERED HEREBY, INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS,
SYNDICATE SHORT COVERING TRANSACTIONS AND PENALTY BIDS. FOR A DESCRIPTION OF
THESE ACTIVITIES, SEE "UNDERWRITING."

2
<PAGE> 4

PROSPECTUS SUMMARY

The following information is qualified in its entirety by, and should be
read in conjunction with, the more detailed information, including "Risk
Factors" and the Financial Statements and the Notes thereto, appearing elsewhere
in this Prospectus. Unless otherwise indicated, all information in this
Prospectus (i) assumes no exercise of the Underwriters' over-allotment option
and (ii) reflects the automatic conversion upon the closing of this offering of
all outstanding shares of convertible voting preferred stock into an aggregate
of 1,480,000 shares of Class A Common Stock and all outstanding shares of
convertible non-voting preferred stock into an aggregate of 220,000 shares of
Class B Common Stock. See "Underwriting" and "Description of Capital Stock."

THE COMPANY

GENERAL

AVTEAM is an international aftermarket supplier of aircraft engines, engine
parts and airframe components ("Engines and Components"). The Company has
historically focused on the purchase and resale of Engines and Components for
the Pratt & Whitney JT8D series of engines, which power approximately 40% of the
world's commercial aviation fleet. The Company works with its international
network of industry contacts to identify and evaluate Engines and Components and
surplus aircraft for potential acquisition. Engines and Components are either
made available for immediate resale or repaired by FAA-licensed repair
facilities and then resold. Surplus aircraft are always disassembled and sold as
parts by the Company. The Company resells Engines and Components to other
aftermarket suppliers, independent repair facilities, aircraft operators and
original equipment manufacturers. Since its inception, the Company has
substantially increased its revenue base, broadened the range of products and
services offered and taken consistent steps to ensure the quality of its
products and services. From $3.9 million in 1993, the Company's net sales
reached $34.0 million in 1996 and the Company supplied over 600 customers
worldwide. In November 1996, the Company became the first aftermarket supplier,
and was one of only seven aftermarket suppliers worldwide as of March 1, 1997,
to have received quality accreditation from the Airline Suppliers Association.

The Company believes that the annual worldwide aftermarket for Engines and
Components is approximately $10.0 billion, of which approximately $1.0 billion
represents sales and leases of JT8D Engines and Components. The aftermarket for
Engines and Components is highly fragmented, with a limited number of
well-capitalized companies selling a broad range of products and numerous
smaller competitors serving distinct market niches. The Company believes that
the following factors will contribute to the continued growth of the aftermarket
for Engines and Components and will accelerate the trend towards consolidation
in the industry: (i) growth in air transit activity; (ii) increase in size and
age of the worldwide commercial aircraft fleet; (iii) aircraft operators' demand
for full service suppliers; and (iv) increased regulatory scrutiny.

BUSINESS STRATEGY

The Company believes that its industry experience and capabilities position
it to expand its market presence in the growing aftermarket for Engines and
Components. The Company intends to build upon its success and exploit favorable
industry dynamics by: (i) capitalizing on its international sourcing network;
(ii) continuing its commitment to quality leadership; (iii) broadening its
product line; (iv) increasing sales to aircraft operators by providing
value-added services; and (v) pursuing strategic acquisitions.

Capitalize on International Sourcing Network. The Company believes that
purchasing Engines and Components on a timely basis and at favorable prices is
critical. Although there are well-developed channels for distribution of Engines
and Components by aftermarket suppliers, there is no consistent, reliable and
organized market for aftermarket suppliers to acquire their inventory.
Accordingly, the Company has developed a sourcing network of independent agents
operating throughout the world that assists management in identifying available
products and facilitates quick evaluation of products and execution of
purchasing decisions. The Company believes that the Offering will enhance its
industry recognition and facilitate larger purchases on advantageous terms.
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<PAGE> 5

Continue Commitment to Quality Leadership. The Company emphasizes
adherence to high quality standards at each stage of its operations (product
acquisition, overhaul, documentation, inventory control and delivery). Of the
approximately 2,500 distributors offering parts to civil aviation purchasers,
the Company was the first aftermarket supplier to meet the voluntary
accreditation quality system standard of the Airline Suppliers Association, as
recommended by the Federal Aviation Administration ("FAA").

Broaden Product Line. The Company plans to expand its product line to
include higher thrust models of the JT8D series of engines and other high thrust
engines, such as the CFM56 engine. The Company believes that the Offering will
provide it with the capital to be one of the few aftermarket suppliers able to
compete in this market segment. The CFM56 has been in service since 1982 and an
aftermarket in this engine has begun to emerge. The installed base of these
engines is expected to approximate the size of the current installed base of the
JT8D within the next five years. In February 1997, the Company acquired two
CFM56 engines, which may be sold as whole engines or used to provide the Company
with its initial inventory of CFM56 engine parts. The Company also plans to
increase its availability of airframe components as it continues to acquire
surplus aircraft for disassembly and additional supply of engine inventory.

Increase Sales to Aircraft Operators by Providing Value-Added
Services. The Company believes that aircraft operators' increased demand for
full service creates considerable opportunities for larger, well-capitalized
aftermarket suppliers. The Company intends to take advantage of this trend and
differentiate itself from other aftermarket suppliers by providing a full range
of products and services, including expanding its borescoping services, a full
range of on-wing maintenance services, engine leasing and engine management
services. The Company expects the Offering to provide it with sufficient capital
to purchase the inventory and attract the personnel necessary to sell a broader
array of products and services directly to aircraft operators.

Pursue Strategic Acquisitions. The Company's facilities, management
information systems and management structure have been designed to support
future growth and to enable the Company to benefit from the trend towards
industry consolidation. The Company intends to use a portion of the proceeds
from the Offering to selectively acquire companies that complement its existing
business.

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

The Company began operations in 1992 and is headquartered in southeast
Florida, which provides convenient access to major aviation services companies.
The Company's principal executive offices are located at 3230 Executive Way,
Miramar, Florida 33025, and its telephone number is (954) 431-2359.
4
<PAGE> 6

THE OFFERING

<TABLE>
<S> <C>
Class A Common Stock offered by:
The Company........................................ 3,033,000 shares
The Selling Stockholder............................ 1,467,000 shares
-----------
Total(a)................................... 4,500,000 shares
===========
Common Stock to be outstanding after the Offering:
Class A Common Stock............................... 9,513,000 shares
Class B Common Stock............................... 220,000 shares
-----------
Total(a)(b)................................ 9,733,000 shares
===========
Use of Proceeds...................................... Repayment of outstanding indebtedness, payment
of accrued compensation and for working
capital and general corporate purposes,
including the purchase of surplus aircraft and
Engines and Components for the Company's
inventory and the funding of the acquisition
of complementary businesses.
Voting Rights........................................ Each share of Class A Common Stock is entitled
to one vote on all matters submitted to a vote
of stockholders. The shares of Class B Common
Stock have no voting rights, except as
provided under Florida law. In all other
respects, the shares of Class A Common Stock
and Class B Common Stock are identical. See
"Description of Capital Stock."
Proposed Nasdaq National Market Symbol............... AVTM
</TABLE>

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

(a) In the event the over-allotment option is exercised in full, the total
number of shares of Class A Common Stock and the total number of shares of
Class B Common Stock to be outstanding after the Offering would be
10,188,000 and 220,000, respectively.
(b) Does not include 600,000 shares of Class A Common Stock reserved for
issuance upon the exercise of stock options which may be granted under the
Company's 1996 Stock Option Plan. See "Management -- 1996 Stock Option
Plan."
5
<PAGE> 7

SUMMARY FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1994 1995 1996
---------- ---------- ----------
<S> <C> <C> <C>
STATEMENTS OF INCOME DATA:
Net sales.................................................. $ 9,062 $ 18,299 $ 34,047
Gross profit............................................... $ 2,689 $ 6,451 $ 9,829
Income from operations..................................... $ 748 $ 1,289 $ 5,483
Net income................................................. $ 754 $ 1,098 $ 3,882
PRO FORMA STATEMENTS OF INCOME DATA:
Pro forma net income(1).................................... $ 468 $ 681 $ 2,146
========== ========== ==========
Pro forma net income per common equivalent share(1)........ $ 0.10 $ 0.14 $ 0.38
========== ========== ==========
Weighted average number of common equivalent shares
outstanding(2)........................................... 4,607,223 4,905,540 5,618,182
========== ========== ==========
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1996
---------------------------
ACTUAL AS ADJUSTED(3)
------- -----------------
(UNAUDITED)
<S> <C> <C>
BALANCE SHEET DATA:
Working capital............................................. $17,582 $44,195
Inventory................................................... 12,926 12,926
Total assets................................................ 22,302 48,750
Total debt.................................................. 3,596 131
Total stockholders' equity.................................. 15,097 45,375
</TABLE>

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

(1) Reflects the effect on historical financial statements assuming, for all
periods presented, the Company had been treated as a C Corporation rather
than an S Corporation for federal and state income tax purposes. See Note 5
of Notes to Financial Statements.
(2) Reflects the effect, using the treasury stock method, on weighted average
shares outstanding of 1,480,000 shares of Class A Convertible Preferred
Stock and 220,000 shares of Class B Convertible Preferred Stock for all
periods presented. All such shares of Class A and Class B Preferred Stock
will be converted into Class A Common Stock and Class B Common Stock,
respectively, upon consummation of the Offering. See "Certain
Transactions -- The Clipper Group Private Placement" and Note 2 "Pro Forma
Net Income Per Common Equivalent Share" of Notes to Financial Statements.
(3) Adjusted to reflect the sale of 3,033,000 shares of Class A Common Stock
offered by the Company hereby at an assumed initial public offering price
of $11.00 per share (after deducting underwriting discounts and commissions
and estimated offering expenses payable by the Company) and the application
of the net proceeds to the Company from the Offering as set forth herein.
See "Use of Proceeds."
6
<PAGE> 8

RISK FACTORS

An investment in the Class A Common Stock involves a high degree of risk.
In addition to the other information in this Prospectus, the following risk
factors should be considered carefully in evaluating the Company and its
business before purchasing shares of the Class A Common Stock offered hereby.
This Prospectus contains forward-looking statements the accuracy of which is
subject to many risks and uncertainties. The Company's actual results may differ
significantly from the results discussed in the forward-looking statements.
Factors that might cause such a difference include, but are not limited to, the
following risk factors.

DEPENDENCE ON THE JT8D ENGINE

The Company's business, financial condition and results of operations are
dependent upon the aftermarket for JT8D Engines and Components. Approximately
91% and 94% of the Company's net sales during 1995 and 1996, respectively,
consisted of sales of JT8D Engines and Components and 74% of the Company's
inventory at December 31, 1996 consisted of JT8D Engines and Components.
Aircraft utilizing JT8D engines have been in service since the early 1960s.
Aircraft utilizing older engines are generally more expensive to maintain and to
operate, due primarily to higher fuel usage. Noise and other regulations in many
countries also significantly increase the cost of operating aircraft utilizing
older engines. Specifically, most JT8D engines will need to be hush-kitted or
removed from service in the United States and European Union by 1999 and 2002,
respectively. A decline in passenger confidence in older aircraft could also
lead to a decline in the aftermarket for JT8D Engines and Components. Any of
these factors could cause the unanticipated retirement of aircraft utilizing
JT8D engines. Any significant decline in the aftermarket for JT8D engines would
have a material adverse effect on the Company's business, financial condition
and results of operations. See "Business -- Regulation."

IMPACT OF GOVERNMENT REGULATION; DEPENDENCE ON THIRD PARTY REPAIR FACILITIES

The aviation industry is highly regulated by the FAA and similar regulatory
agencies of other countries. Before Engines and Components are installed on an
aircraft, they must meet certain standards as to their condition and have
appropriate documentation, and aircraft must also meet standards with respect to
noise, emissions and maintenance. While the Company's operations are not
currently regulated directly by the FAA, both the independent facilities that
repair and overhaul the Company's products and aircraft operators that
ultimately utilize the Company's products are subject to extensive regulation.
In addition, the Company is currently subject to a voluntary accreditation
program recommended by the FAA applicable to aftermarket parts suppliers and
intends to expand the services that it provides to include activities that will
require the Company to obtain FAA certification.

The Company is dependent on third-party FAA-licensed repair facilities to
perform repair services to bring aircraft engines held for resale and Engines
and Components into airworthiness condition. The limited number of such repair
facilities has on occasion resulted in long turnaround times for the repair and
overhaul of aircraft engines and parts and such delays may continue to occur. In
addition, the FAA has recently increased its scrutiny of third-party repair
facilities and this increased scrutiny may result in fewer FAA-licensed repair
facilities and longer turnaround times.

The repair facilities utilized by the Company are responsible for
inspecting and certifying Engines and Components to be of serviceable quality.
The Company does not have direct control over the quality of repair performed by
such repair facilities or the accuracy of airworthiness condition designated by
such facility. It is possible that Engines and Components could pass inspection
by the Company, be sold by the Company and incorporated into an aircraft, and
subsequently be determined to be unsafe or in need of further repair. In such
event, the FAA has the authority to take actions which may include the grounding
of an aircraft which contains such parts. Additionally, the customer who
purchased such Engines or Components could demand a replacement Engine or
Component. While the Company has insurance coverage to cover related losses, the
effect of such a development on passenger confidence and customer relations
could have a material adverse

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<PAGE> 9

effect upon the Company. See "Business -- Products" and "Business -- Regulation"
and "Business -- Insurance."

Standards established by the FAA and other regulatory agencies relating to
the operation and maintenance of aircraft have significant effects on aircraft
operators and the composition of their fleets. Noise and emission regulations,
and additional maintenance requirements for older aircraft may increase the cost
of operating aircraft utilizing JT8D engines, which could lead to a decline in
the demand for the products and services provided by the Company.

The inability of the Company to supply its customers with Engines and
Components on a timely basis, or any occurrence of the Company providing
products subsequently determined unsafe, may adversely affect the Company's
relationships with its customers and have a material adverse effect on its
business, financial condition and results of operations. There can also be no
assurance that new and more stringent government regulations will not be adopted
in the future or that any such new regulations, if enacted, would not have a
direct or indirect adverse impact on the Company. See "Business -- Products" and
"Business -- Regulation."

POTENTIAL FLUCTUATIONS IN OPERATING RESULTS; DEPENDENCE ON AVIATION INDUSTRY

The Company has a limited operating history upon which an evaluation of the
Company and its prospects can be based. The Company may experience significant
fluctuations in its operating results in the future, both on an annual and a
quarterly basis, caused by various factors, many of which are beyond the control
of the Company. These factors include: general economic conditions; specific
economic conditions affecting the commercial aviation industry; the
availability, timing and price of aircraft engines and parts and airframe
components; the size and timing of customer orders; and the mix of products sold
and services provided by the Company.

The demand for aftermarket Engines and Components is seasonal, with
increased demand during the summer months. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Seasonality." In
addition, the commercial aviation industry is cyclical and has been subject to
periodic fluctuations in its operating results. The Company has not operated
during a significant downturn in the aviation industry. During such a downturn,
there may be reduced overall demand for Engines and Components, lower selling
prices for the Company's products, and increased credit risk associated with
doing business with industry participants. Factors such as fuel prices may
affect the commercial aviation industry and the aftermarket for older model
aircraft engines and parts. Increases in fuel prices may cause a decline in air
travel, and older, typically less fuel-efficient aircraft (into which the
Company's products are most often placed) become less desirable as fuel prices
increase.

The Company obtains its supply of Engines and Components principally by
purchasing surplus aircraft and parts inventory. There can be no assurance that
Engines and Components required by the Company's customers will be available on
acceptable terms or at the times required by the Company or that economic and
other factors which affect the aviation industry will not have a material
adverse effect on the Company. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Results of Operations" and
"Business -- Industry Overview."

MANAGEMENT OF GROWTH

The rapid growth experienced by the Company to date has placed, and could
continue to place, significant demands on the Company's administrative,
operational and financial resources. The Company expects to broaden its product
line and services and may in the future undertake acquisitions that could
present further challenges to and demands upon the Company's resources. There
can be no assurance that the Company will be able to anticipate business demand
accurately, attract and retain the personnel required or

8
<PAGE> 10

manage any such growth successfully, and the failure to do so could have a
material adverse effect on the Company. The Company's growth strategy includes
the acquisition of complementary businesses. As the aftermarket supply industry
continues to consolidate, the Company expects to face increasing competition
from other companies for available acquisition opportunities. There can be no
assurance that suitable acquisition candidates will be available, that financing
for such acquisitions will be obtainable on terms acceptable to the Company,
that such acquisitions can be consummated or that acquired businesses can be
integrated successfully into the Company's operations. Further, the Company's
results of operations in fiscal quarters immediately following a material
acquisition may be materially adversely affected while the Company integrates
that acquired business into its existing operations. Any acquisition, depending
on its size, could result in the use of a significant portion of the Company's
available cash, or if such acquisition is made utilizing the Company's
securities, could result in significant dilution to the Company's stockholders.
There are no current agreements or negotiations with respect to any material
acquisitions.

CUSTOMER CONCENTRATION

The Company's net sales to its five largest customers accounted for 52% and
41% of total net sales during 1995 and 1996, respectively. Approximately 21% and
8% of the Company's net sales during 1995 and 1996, respectively, were made to
Pratt & Whitney. The Company anticipates that Pratt & Whitney's recent decision
to provide engine repair and rebuilding services may result in increased
concentration of the Company's net sales to Pratt & Whitney. Dallas Aerospace, a
division of Banner Aerospace, has also been a significant purchaser of aircraft
engines and parts, accounting for 13% and 16% of net sales during 1995 and 1996,
respectively. The loss of, or significant curtailments of purchases by, any of
the Company's significant customers could have a material adverse effect upon
the Company. See "Business -- Customers" and "-- Relationship with Pratt &
Whitney."

RELATIONSHIP WITH PRATT & WHITNEY

Pratt & Whitney is the manufacturer of the JT8D engine and has significant
influence upon the aviation industry in general and the aftermarket for the JT8D
engine in particular. Accordingly, any adverse development in the Company's
relationship with Pratt & Whitney may be perceived as material and adverse to
the Company. Pratt & Whitney may in the future seek to perform internally
certain or all of the services which the Company performs or to compete with the
Company as a supplier of aftermarket Engines and Components, which could have a
material adverse effect upon the Company. Also, any recall or recommended
grounding by Pratt & Whitney of the JT8D engine could have a material adverse
effect on the Company. See "Business -- Customers" and "-- Relationship with
Pratt & Whitney."

PRODUCT LIABILITY

The commercial aviation industry periodically experiences catastrophic
losses which may exceed insurance policy limits. The Company currently has in
force aviation products insurance, with coverage limits for each occurrence and
in the aggregate which it believes to be in amounts and on terms that are
generally consistent with industry practice. To date, the Company has not
experienced any aviation-related claims, and has not experienced any product
liability claims related to its products or business operations. However, an
uninsured or partially insured claim, or a claim for which third-party
indemnification is not available, could have a material adverse effect upon the
Company. See "Business -- Insurance."

COMPETITION

The aftermarket for Engines and Components is highly fragmented, with a
limited number of well-capitalized companies selling a broad range of products
and numerous smaller competitors serving distinct market niches, and is
characterized by intense competition. Certain of the Company's competitors have
substantially greater financial, marketing and other resources than the Company.
In addition, OEMs, aircraft maintenance providers, leasing companies and
FAA-licensed repair facilities may vertically integrate in the aftermarket
supply industry, thereby significantly increasing competition. There are
established competitors that provide many of the services the Company intends to
offer, many of whom have substantially greater

9
<PAGE> 11

financial, marketing and other resources than the Company. There can be no
assurance that the Company will continue to compete effectively against present
and future competitors or that competitive pressures will not have a material
adverse effect on the Company. See "Business -- Competition."

DEPENDENCE ON KEY PERSONNEL

The Company's success is substantially dependent on the performance,
contributions and expertise of its executive officers and key employees. The
Company's success to date has been significantly dependent on the contributions
of Donald Graw, its President and Chief Executive Officer, and Jaime Levy, its
Executive Vice President, each of whom has entered into an employment agreement
with the Company expiring December 1999. The Company does not carry substantial
key man life insurance on its executive officers. The Company is also dependent
on its ability to attract, retain and motivate additional personnel, especially
in management. The loss of the services of any of its executive officers or
other key employees or the Company's inability to attract, retain or motivate
the necessary personnel could have a material adverse effect on the Company. See
"Management."

CONTROL BY CERTAIN STOCKHOLDERS

After the Offering, 37.1% of the outstanding shares of Class A Common Stock
will be owned by Leon Sragowicz, Donald Graw, Jaime Levy and Richard Preston
(the "Existing Common Stockholders") (34.7% if the Underwriters' over-allotment
option is exercised in full) and 15.6% of the outstanding shares of Class A
Common Stock will be beneficially owned by certain affiliates of The Clipper
Group acting together ("The Clipper Group") (14.5% if the Underwriters'
over-allotment option is exercised in full). The Existing Common Stockholders
and The Clipper Group, if they were to act together, would have the power to
elect all of the members of the Company's Board of Directors, amend the Amended
and Restated Articles of Incorporation of the Company (the "Articles") and the
Amended and Restated Bylaws of the Company (the "Bylaws") and effect or preclude
fundamental corporate transactions involving the Company, including the
acceptance or rejection of proposals relating to a merger of the Company or the
acquisition of the Company by another entity. Accordingly, the Existing Common
Stockholders and The Clipper Group are able to exert significant influence over
the Company, including the ability to control decisions on all matters on which
stockholders are entitled to vote. See "Principal and Selling Stockholders,"
"Description of Capital Stock" and "Certain Transactions -- The Clipper Group
Private Placement."

FACTORS INHIBITING TAKEOVER

Certain provisions of the Company's Articles and Bylaws may delay or
prevent a takeover attempt that a stockholder might consider in its best
interest. These provisions establish certain advance notice procedures for
stockholder proposals to be considered at the stockholders' meetings and provide
that only the Board of Directors may call special meetings of the stockholders.
In addition, the Board can authorize and issue shares of Preferred Stock with
voting or conversion rights that could adversely affect the voting or other
rights of holders of the Class A Common Stock. The terms of the Preferred Stock
that might be issued could potentially prohibit the Company's consummation of
any merger, reorganization, sale of substantially all of its assets, liquidation
or other extraordinary corporate transaction without the approval of the holders
of the outstanding shares of the Preferred Stock. Furthermore, certain
provisions of the Florida Business Corporation Act may have the effect of
delaying or preventing a change in control of the Company. See "Description of
Capital Stock."

NO PRIOR PUBLIC MARKET; DETERMINATION OF INITIAL PUBLIC OFFERING PRICE;
VOLATILITY OF CLASS A COMMON STOCK PRICE

Prior to the Offering, there has been no public market for the Class A
Common Stock, and there can be no assurance that an active trading market will
develop or be sustained. The initial public offering price will be determined by
negotiations between the Company and the Underwriters based on several factors
and may not be indicative of the market price of the Class A Common Stock after
the Offering. The market price of the Class A Common Stock is likely to be
highly volatile and may be significantly affected by factors such as

10
<PAGE> 12

actual or anticipated fluctuations in the Company's results of operations and
other factors. In addition, the stock market has from time to time experienced
significant price and volume fluctuations which could affect the market price of
the Class A Common Stock offered hereby. These broad market fluctuations may
adversely affect the market price of the Class A Common Stock. See
"Underwriting."

DILUTION

The initial public offering price of the Class A Common Stock offered
hereby is substantially higher than the net tangible book value per share of the
Class A Common Stock. Therefore, purchasers of Class A Common Stock offered
hereby will incur an immediate and substantial dilution, and may incur
additional dilution upon the exercise of outstanding stock options. See
"Dilution."

SHARES ELIGIBLE FOR FUTURE SALE

Sales of a substantial number of shares of Class A Common Stock in the
public market following the Offering could adversely affect the market price for
the Class A Common Stock. On the date of this Prospectus, no shares other than
the 4,500,000 shares offered hereby will be eligible for sale in the public
market. All directors and officers of the Company have agreed with the
Underwriters not to sell or otherwise dispose of any shares of Common Stock for
a period of 180 days after the date of this Prospectus without the prior written
consent of Credit Suisse First Boston Corporation ("CSFBC"). Beginning 180 days
after the date of this Prospectus, assuming that CSFBC does not consent to any
sales prior to such time, an additional 3,533,000 shares subject to such
agreements will become eligible for sale in the public market, subject to
compliance with the provisions of Rule 144 under the Securities Act of 1933, as
amended (the "Securities Act"). Of such 3,533,000 shares, 2,033,000 shares are
held by Mr. Sragowicz, the Company's Chairman of the Board, 500,000 shares are
held by Mr. Graw, the President and Chief Executive Officer and a director of
the Company, 500,000 shares are held by Mr. Levy, the Executive Vice President
and a director of the Company, and 500,000 shares are held by Mr. Preston, the
Secretary and a director of the Company, each of whom are "affiliates" of the
Company within the meaning of Rule 144, and may, therefore, only be sold by
Messrs. Sragowicz, Graw, Levy and Preston in the public market in compliance
with the volume limitations and other requirements of Rule 144. Beginning
December 6, 1998, an additional 1,480,000 shares of Class A Common Stock will
become eligible for sale in the public market. Rule 144 was recently amended to
reduce the holding period for restricted securities, including such 3,533,000
shares of Class A Common Stock, from two years to one year. Accordingly, as a
result of this amendment, which will become effective on April 27, 1997, such
shares will become eligible for resale under Rule 144 on a date which is exactly
one year earlier than the dates described above. See "Shares Eligible for Future
Sale" and "Underwriting."

USE OF PROCEEDS

The net proceeds to the Company from the Offering are estimated (at an
assumed initial public offering price of $11.00 per share and after deducting
underwriting discounts and commissions and estimated offering expenses payable
by the Company) to be approximately $30.3 million ($37.2 million if the
Underwriters' over-allotment option is exercised in full). The Company intends
to use the net proceeds of the Offering as follows: (a) an aggregate of $20.2
million to repay outstanding indebtedness of the Company consisting of (i)
approximately $17.1 million of indebtedness expected to be outstanding under a
$20.0 million revolving credit facility maturing in May 1998 (the "Credit
Facility") with NationsBank, N.A. (South) ("NationsBank"), which bears interest
at NationsBank's prime rate, and (ii) approximately $3.1 million of indebtedness
outstanding pursuant to loans and advances from the Existing Common Stockholders
which have been used for working capital and general corporate purposes, of
which approximately $1.6 million bears interest at a fluctuating rate tied to
the prevailing rate as established by the Internal Revenue Service, and the
remaining $1.5 million is noninterest bearing, all of which indebtedness matures
upon the consummation of the Offering; (b) an aggregate of approximately $0.4
million to pay accrued compensation to certain officers of the Company; and (c)
the balance of approximately $9.7 million for working capital and general
corporate purposes including, among other things, the purchase of surplus
aircraft and Engines and Components for the

11
<PAGE> 13

Company's inventory and the funding of the acquisition of complementary
businesses, although there are no current agreements or negotiations with
respect to any such acquisitions.

Pending use of the net proceeds as described above, the Company will invest
the net proceeds in investment grade, interest-bearing securities. The Company
will not receive any proceeds from the sale of Class A Common Stock by the
Selling Stockholder.

DIVIDEND POLICY

The Company anticipates that following the completion of the Offering
earnings will be retained for use in developing and growing its business and
therefore does not anticipate paying any cash dividends in the foreseeable
future. Any future determination to pay cash dividends will be at the discretion
of the Board of Directors and will be dependent upon the Company's financial
condition, results of operations, capital requirements, restrictions in
financing arrangements and such other factors as the Board of Directors deems
relevant. The Company's ability to pay dividends or make distributions to
stockholders is also restricted by the terms of the Credit Facility.

12
<PAGE> 14

CAPITALIZATION

The following table sets forth the capitalization of the Company as of
December 31, 1996 and as adjusted to give effect to (i) the sale of 3,033,000
shares of Class A Common Stock offered by the Company hereby at an assumed
initial public offering price of $11.00 per share (after deducting underwriting
discounts and commissions and estimated offering expenses payable by the
Company) and the application of the net proceeds to the Company from the
Offering as set forth herein and (ii) the conversion of all outstanding shares
of Class A Preferred Stock and Class B Preferred Stock into an aggregate of
1,480,000 shares of Class A Common Stock and 220,000 shares of Class B Common
Stock, respectively. See "Use of Proceeds." This table should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the Financial Statements and Notes thereto
included in this Prospectus.

<TABLE>
<CAPTION>
DECEMBER 31, 1996
---------------------
ACTUAL AS ADJUSTED
------- -----------
(IN THOUSANDS)
<S> <C> <C>
Notes payable to bank and current portion of capital lease
obligation................................................ $ 473 $ 69
======= =======
Capital lease obligation.................................... $ 62 $ 62
Notes payable-stockholders.................................. 3,061 --
Stockholders' equity(1):
Preferred stock, par value $.01 per share:
20,000,000 shares authorized; 1,480,000 shares of Class
A Preferred Stock and 220,000 shares of Class B
Preferred Stock issued and outstanding (actual) and no
shares outstanding (as adjusted)...................... 17 --
Class A Common Stock, $.01 par value:
77,000,000 shares authorized; 5,000,000 shares
outstanding (actual) and 9,513,000 shares outstanding
(as adjusted)......................................... 50 95
Class B Common Stock, $.01 par value:
3,000,000 shares authorized; no shares outstanding
(actual) and 220,000 shares outstanding (as
adjusted)............................................. -- 2
Additional paid-in capital.................................. 14,611 44,859
Retained earnings........................................... 419 419
------- -------
Total stockholders' equity........................ 15,097 45,375
------- -------
Total capitalization.............................. $18,220 $45,437
======= =======
</TABLE>

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

13
<PAGE> 15

DILUTION

Net tangible book value per common equivalent share is equal to the
Company's tangible assets less total liabilities, divided by the total number of
shares of Common Stock outstanding. After giving effect to (i) the conversion of
all outstanding shares of Class A Preferred Stock and Class B Preferred Stock
into an aggregate of 1,480,000 shares of Class A Common Stock and 220,000 shares
of Class B Common Stock, respectively, but not giving effect to the sale of the
shares of Class A Common Stock offered hereby, the net tangible book value of
the Company as of December 31, 1996 would have been approximately $15.1 million,
or $2.25 per common equivalent share. After giving effect to the sale of
3,033,000 shares of Class A Common Stock offered by the Company hereby at an
assumed initial public offering price of $11.00 per share and after deducting
underwriting discounts and commissions and estimated offering expenses payable
by the Company (resulting in estimated net proceeds of $30.3 million), the net
tangible book value of the Company as of December 31, 1996 would have been
approximately $45.4 million, or $4.66 per share. This represents an immediate
increase of $2.41 per share to existing stockholders and an immediate dilution
of $6.34 per share to purchasers of shares of Class A Common Stock in the
Offering. The following table illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share............. $11.00
Net tangible book value per common equivalent share at
December 31, 1996...................................... $2.25
Increase attributable to the Offering..................... 2.41
-----
Net tangible book value per share after the Offering........ 4.66
------
Dilution per share to purchasers in the Offering............ $ 6.34
======
</TABLE>

The following table summarizes, on a pro forma basis as of December 31,
1996 the number of shares of Class A Common Stock acquired from the Company, the
aggregate cash consideration paid and the average price per share paid by the
existing stockholders and to be paid by investors purchasing shares of Class A
Common Stock from the Company in the Offering (at an assumed initial public
offering price of $11.00 per share) and before deducting underwriting discounts
and commissions and estimated offering expenses payable by the Company:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
-------------------- --------------------- PRICE PER
NUMBER PERCENT AMOUNT PERCENT SHARE
---------- ------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C>
Current Stockholders(1)(2)
Class A............................. 6,480,000 67% $13,138,000 27% $ 2.03
Class B............................. 220,000 2 1,540,000 3 7.00
New investors......................... 3,033,000 31 33,363,000 70 11.00
---------- --- ----------- ---
Total............................... 9,733,000 100% $48,041,000 100%
========== === =========== ===
</TABLE>

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

(1) Does not include 600,000 shares of Class A Common Stock reserved for
issuance upon the exercise of stock options which may be granted under the
Company's 1996 Stock Option Plan. See "Management -- 1996 Stock Option
Plan."
(2) The donation by Mr. Sragowicz at the time of the Offering will reduce the
number of shares held by current stockholders to 5,233,000 shares, or
approximately 54% of the total shares of Common Stock outstanding, and will
increase the number of shares held by new investors to 4,500,000 shares, or
approximately 46% of the total shares of Common Stock outstanding after the
Offering.

14
<PAGE> 16

SELECTED FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The following selected financial data for the years ended December 31,
1994, 1995 and 1996 and as of December 31, 1995 and 1996 are derived from the
Financial Statements of the Company, which have been audited by Ernst & Young
LLP, independent certified public accountants, and are included in this
Prospectus. The following selected financial data for the year ended December
31, 1993 and as of December 31, 1994 are derived from the Financial Statements
of the Company, which have been audited by Ernst & Young LLP, independent
certified public accountants, and are not included in this Prospectus. The
following selected financial data for the year ended December 31, 1992 is
derived from unaudited financial statements prepared by the Company. The
selected financial data should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Financial Statements of the Company and Notes thereto included in this
Prospectus.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------
1992 1993 1994 1995 1996
----------- ------ ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENTS OF INCOME DATA:
Net sales............................. $2,166(1) $3,891 $ 9,062 $ 18,299 $ 34,047
Cost of sales......................... 1,558 3,489 6,373 11,848 24,218
------ ------ ---------- ---------- ----------
Gross profit.......................... 608 402 2,689 6,451 9,829
Operating expenses:
Selling, general and
administrative(2)................ 599 588 1,081 2,601 3,462
Officers' compensation.............. -- -- 860 2,561 884
------ ------ ---------- ---------- ----------
Total operating expense............... 599 588 1,941 5,162 4,346
------ ------ ---------- ---------- ----------
Income (loss) from operations......... $ 9 $ (186) $ 748 $ 1,289 $ 5,483
====== ====== ========== ========== ==========
Net income (loss)..................... $ 9 $ (50) $ 754 $ 1,098 $ 3,882
====== ====== ========== ========== ==========
PRO FORMA STATEMENTS OF INCOME DATA:
Pro forma net income(3)............... $ 468 $ 681 $ 2,146
========== ========== ==========
Pro forma net income per common
equivalent share(3)................. $ 0.10 $ 0.14 $ 0.38
========== ========== ==========
Weighted average number of common
equivalent shares outstanding(4).... 4,607,223 4,905,540 5,618,182
========== ========== ==========
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------
1994 1995 1996
------ ------- -------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Working capital............................................. $2,433 $ 2,312 $17,582
Inventory................................................... 2,771 8,563 12,926
Total assets................................................ 6,439 13,793 22,302
Total debt.................................................. 350 3,287 3,596
Total stockholders' equity.................................. 2,634 2,613 15,097
</TABLE>

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

(1) Includes certain net sales from a joint venture.
(2) From inception and until July 21, 1994, the Company consigned all of its
inventory to Turbine Engine Sales Group, Inc. ("Turbine"), and paid Turbine
compensation equal to one half of the gross profit on consigned materials
sold. The Company had no facilities and limited staffing during this period.
Accordingly, income (loss) from operations prior to 1995 may not reflect the
full level of operating expenses necessary to support the Company's
operations during such periods.
(3) Reflects the effect on historical statements of operations data, assuming,
for all periods presented, the Company had been treated as a C Corporation
rather than an S Corporation for federal and state income tax purposes. See
Note 5 of Notes to Financial Statements.
(4) Reflects the effect, using the treasury stock method, on weighted average
shares outstanding of 1,480,000 shares of Class A Convertible Preferred
Stock and 220,000 shares of Class B Convertible Preferred Stock for all
periods presented. All such shares of Class A and Class B Preferred Stock
will be converted into Class A Common Stock and Class B Common Stock,
respectively, upon consummation of the Offering. See "Certain
Transactions -- The Clipper Group Private Placement" and Note 2 "Pro Forma
Net Income Per Common Equivalent Share" of Notes to Financial Statements.

15
<PAGE> 17

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following should be read in conjunction with the Financial Statements
of the Company and the Notes thereto, and other financial information included
elsewhere in this Prospectus. This Prospectus contains certain statements
regarding future trends, the accuracy of which is subject to many risks and
uncertainties. Such trends, and their anticipated impact on the Company, could
differ materially from those discussed in this Prospectus. Factors that could
cause or contribute to such differences include, but are not limited to, those
discussed in "Risk Factors" and elsewhere in this Prospectus.

OVERVIEW

The Company's net sales and its sales practices have been substantially
affected by the amount of capital available to acquire its inventory of Engines
and Components. In developing its business, the Company has emphasized the rapid
sale of whole engines rather than obtaining maximum profit margins on each
particular sale. The Company anticipates that the Offering will enable the
Company to continue to build its inventory to support increased sales and
improve its profit margins by selling its inventory on a more strategic basis to
capitalize on the fluctuations in demand for Engines and Components caused by
seasonal and other factors. See "Risk Factors" and "-- Seasonality."

In order to enable the Company to sell Engines and Components which it did
not have the capital to acquire, the Company entered into an agreement on
September 5, 1995, with Parati Corporation ("Parati") providing for Parati's
acquisition of new and surplus aircraft engines for disassembly and resale by
the Company (the "Parati Agreement"). The Parati Agreement provides for an equal
sharing of gross profits between the Company and Parati following the recovery
by Parati of all costs borne by Parati and the recovery by the Company of all
overhaul costs borne by the Company. Accordingly, since such date, the Company's
cost of sales include the portion of the gross profit due Parati from the sale
of engine parts of the two disassembled aircraft engines subject to the Parati
Agreement. The Company does not intend to utilize the Parati Agreement or
similar agreements to acquire Engines or Components in the future. Net sales
under the Parati Agreement were approximately $1,925,000 and $224,000 in 1996
and 1995, respectively. The cost of the engines acquired by Parati under the
Parati Agreement was $1,675,000 and the cost of the unsold parts owned by Parati
was $727,000 as of December 31, 1996. See "Certain Transactions -- Parati
Agreement."

Until July 21, 1994, the Company consigned all of its inventory to Turbine
Engine Sales Group, Inc. ('Turbine"), which procured, managed, warehoused and
sold inventory and collected a fee equal to 50% of the Company's gross profit on
the material. On July 21, 1994, the Company acquired all of the assets and
retained certain personnel formerly employed by Turbine. The Company's operating
expenses for the periods prior to this transaction may not be comparable to
those incurred in periods after this transaction.

The Company records whole engines held for resale at the lower of cost or
market. Gross margin on whole engine sales has fluctuated significantly from
period to period, and can be expected to do so in the future, as a result of the
conditions and circumstances under which whole engines are sold. See
"-- Seasonality."

Engine components acquired by the Company are initially recorded at cost.
Cost of sales relative to engine components shipped are recorded during the
first three to six months following disassembly of the related whole engine at
the Company's standard ratio of cost of sales to net sales for engine components
from such engine types. Thereafter, management evaluates the remaining engine
components, estimates future sales and related overhaul costs and, if necessary,
adjusts the ratio of costs of sales to net sales on a prospective basis.
Thereafter, the Company records the cost of each engine component sold at the
time the related net sales are recognized, based on such ratios.

Following the Offering, the Company plans to expand its product line to
include higher thrust models of the JT8D series of engines and other high thrust
engines, such as the CFM56 engine. These higher thrust engines are more
expensive than the engines historically sold by the Company. As the Company's
net sales

16
<PAGE> 18

increase, the related operating expenses will increase at a lower rate, thereby
creating higher operating margins.

On December 6, 1996, the Company amended its employment agreements with
Donald Graw and Jaime Levy. The rate of compensation for each of them was
reduced from the prior level of 20% of adjusted net income as defined in such
agreements (approximately $430,000 and $1,260,000, respectively, for each of
them in 1994 and 1995), to provide for annual base salaries of $260,000 and
$220,000 for Messrs. Graw and Levy, respectively, for an initial term of three
years expiring December 1999. See "Management -- Employment Agreements."

In connection with The Clipper Group Private Placement, the Company
terminated its status as an S Corporation and became subject to federal and
state income taxes. Historically, the Company did not record a provision for
income taxes as a result of its S Corporation status for 1994 and 1995 and
recorded a $310,000 net benefit for income taxes in 1996.

RESULTS OF OPERATIONS

The following table sets forth for the periods indicated certain items
contained in the Company's statements of operations expressed as a percentage of
net sales:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
--------------------
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Net sales................................................... 100% 100% 100%
Cost of sales............................................... 70 65 71
--- --- ---
Gross profit................................................ 30 35 29
Operating expenses:
Selling, general and administrative....................... 12 14 10
Officers' compensation.................................... 10 14 3
--- --- ---
Total operating expenses.......................... 22 28 13
--- --- ---
Income from operations...................................... 8 7 16
Interest expense, net....................................... -- (1) (2)
Net income.................................................. 8 6 11(*)
</TABLE>

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

(*) Includes a one-time charge against earnings in the third quarter of 1996 in
the approximate amount of $1.2 million for the write-off of the costs
associated with a public offering which was withdrawn in August 1996 due to
market conditions.

Year Ended December 31, 1996 compared to Year Ended December 31, 1995

Net Sales. Net sales increased 85.8% to $34.0 million in 1996 from $18.3
million in 1995. This increase is primarily due to an increase in sales of
engine components related to a substantial increase in available inventory for
sale. In addition, average unit prices of the 21 whole engines sold in 1996
increased to $535,000, compared with $250,000 for the 22 whole engines sold in
1995. This unit price increase was primarily attributable to a change in the
product mix of whole engines to more expensive, higher thrust JT8D engines.

Gross Profit. Gross profit increased 50.8% to $9.8 million in 1996 from
$6.5 million in 1995. Gross margin decreased to 28.8% in 1996 from 35.3% in
1995. The margin decline is attributable to higher margins from the sale of
engines acquired in a bulk purchase by the Company and sold in 1995 and an
increase in sales of certain engine parts subject to gross profit sharing under
the Parati Agreement.

Selling, General and Administrative Expense. Selling, general and
administrative expense increased 34.6% to $3.5 million in 1996 from $2.6 million
in 1995. This increase is primarily attributed to increased personnel expense
resulting from additional staffing, increased facility expense associated with
the May 1995 relocation to the 50,000 square foot operations center and the
equipping of the disassembly facility during the

17
<PAGE> 19

early part of the first quarter of 1996. Selling, general and administrative
expense declined as a percentage of net sales to 10.2% in 1996 from 14.2% in
1995.

Officers' Compensation. Officers' compensation decreased 65.4% to $0.9
million in 1996 from $2.6 million in 1995. Such expense declined as a percentage
of net sales to 2.6% in 1996 from 14.2% in 1995. These changes reflect the
effect of amendments to the employment agreements of Messrs. Graw and Levy on
December 6, 1996, and a one-time bonus to Messrs. Graw and Levy in the amount of
$1.2 million in 1995. See "Management -- Employment Agreements."

Net Interest Expense. Net interest expense increased to $757,000 in 1996
from $191,000 in 1995. Such expense increased as a percentage of net sales to
2.2% in 1996 from 1.0% in 1995. The increase is a result of the Company's
increased borrowing to support the purchase of substantially more inventory.

Year Ended December 31, 1995 compared to Year Ended December 31, 1994

Net sales. Net sales increased to $18.3 million in 1995 from $9.1 million
in 1994. The Company increased its inventory in 1995 through borrowings under
its former loan facility, which was established in December 1994. Increased
sales also resulted from the commencement of the Pratt & Whitney relationship
and a 57% increase in whole engine sales, coupled with sales of more expensive
Series JT8D aircraft engines. See "Business -- Relationship with Pratt &
Whitney" and "-- Customers." The Company also had net sales of consigned Boeing
727 rotable and expendable parts of $2.0 million in 1995 compared with $1.2
million in 1994. See "Business -- Customers."

Gross profit. Gross profit increased to $6.5 million in 1995 from $2.7
million in 1994. Gross margin increased to 35.3% in 1995 from 29.7% in 1994,
primarily as a result of the sale of engines acquired in a bulk purchase in 1995
partially offset by the increase in lower margin consignment sales and the
commencement of sales under the Parati Agreement.

Selling, general and administrative expense. Selling, general and
administrative expense increased to $2.6 million in 1995 from $1.1 million in
1994, and such expense increased as a percentage of net sales to 14.2% in 1995
from 11.9% in 1994. These increases resulted primarily from the full year effect
during 1995 of initiating direct operations (previously performed by Turbine
until July 21, 1994), including increases in personnel costs of $1.0 million and
facility expense of $496,000.

Officers' compensation. Officers' compensation increased to $2.6 million
in 1995 from $860,000 in 1994, and such expense increased as a percentage of net
sales to 14.2% in 1995 from 9.5% in 1994. This increase primarily resulted from
increased net income which was the basis for determining the compensation of the
two senior executives under the employment agreements then in effect and a
one-time bonus in the fourth quarter of 1995 of $1.2 million in consideration of
the reduction of the rate of compensation for future periods.

Net interest expense. Net interest expense was $191,000 in 1995 compared
to $6,000 of interest income in 1994, due to borrowings under bank facilities to
support inventory growth.

LIQUIDITY AND CAPITAL RESOURCES

Historically, the Company's primary sources of liquidity have been from
financing activities and cash flow generated by operations and, to a lesser
extent, from consignment sales and sales under the Parati Agreement. Net cash
provided by financing activities, derived primarily from bank lines of credit
and advances from stockholders, was $2.3 million and $6.4 million during 1995
and 1996, respectively. The Company also obtained airframe components on
consignment and may enter into other consignment arrangements in the future. The
Company is planning to launch a program in conjunction with third-party
financing sources for leasing whole aircraft engines which may increase its
working capital requirements.

On February 20, 1997, the Company obtained from NationsBank a Credit
Facility which provides working capital of up to $20.0 million with interest at
either the lender's prime rate or LIBOR plus 2.75% per annum, as determined by
the Company at the time of each advance, subject to an availability calculation
based on the eligible borrowing base. The eligible borrowing base includes
certain receivables and inventories

18
<PAGE> 20

of the Company. The Credit Facility also permits NationsBank to issue letters of
credit on behalf of the Company of up to $5.0 million, and the aggregate
principal amount of any letters of credit so issued will reduce amounts
available under the Credit Facility. The Credit Facility matures in May 1998 and
the term of any letters of credit issued thereunder must expire prior to May
1999. At March 6, 1997, the Company had outstanding approximately $7.5 million
and additional availability of approximately $4.1 million under the Credit
Facility.

On December 6, 1996, the Company issued and sold convertible voting
preferred stock and convertible non-voting preferred stock to The Clipper Group
for an aggregate purchase price of $11.9 million. The net proceeds of this sale
($11.4 million) were applied toward the payment of certain distributions to the
Company's stockholders in respect of earnings by the Company prior to the change
in its status from an S Corporation to a C Corporation for federal and state
income tax purposes, the repayment of advances to the Company from Messrs.
Sragowicz and Preston, the repayment of loans from Barnett Bank of South
Florida, N.A. to the Company, accrued bonuses payable to Messrs. Graw and Levy
and the purchase by the Company of surplus aircraft and Engines and Components.
The convertible voting preferred stock will convert into Class A Common Stock
and the convertible non-voting preferred stock will convert into Class B Common
Stock upon the consummation of the Offering. See "Certain Transactions -- The
Clipper Group Private Placement."

The Company has established a capital expenditure budget of approximately
$2.9 million during 1997, including approximately $2.0 million for additional
engine tooling in the Company's disassembly operations, approximately $250,000
for enhancements to the Company's management information systems, approximately
$200,000 to complete warehouse improvements, approximately $200,000 for
additional leasehold improvements related to planned increases in personnel and
approximately $250,000 for additional equipment to be utilized by the Company's
field service subsidiary.

The Company's principal working capital requirements relate to the
acquisition of inventory and carrying of receivables. The Company believes that
current levels of working capital, the proceeds to the Company of the Offering
and amounts available under the Credit Facility will enable it to meet its
liquidity requirements for the next twelve months.

SEASONALITY

The Company believes that demand for aftermarket aircraft engines and parts
is seasonal, with increased demand during the summer months. This seasonality
exists because aircraft engine performance is directly related to ambient
temperature (as temperatures rise it is more difficult for aircraft engines to
perform properly). As a result, certain aircraft engines are removed from
service during the summer months due to the failure of those particular aircraft
engines to comply with exhaust gas temperature limitations. Aircraft engines of
the same type and model can have different performance capabilities. The summer
months also include peak travel periods during which aircraft utilization levels
are high. In addition, the timing of whole aircraft engines sold, which have a
substantially greater purchase price than the installed parts and components,
may cause significant fluctuations in the Company's quarterly operating results.
The Company has in the past and may in the future experience substantial
quarterly fluctuations in sales as a result of these seasonal effects. See "Risk
Factors -- Limited Operating History; Potential Fluctuations in Operating
Results."

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BUSINESS

GENERAL

AVTEAM is an international aftermarket supplier of Engines and Components.
The Company has historically focused on the purchase and resale of Engines and
Components for the Pratt & Whitney JT8D series of engines, which power
approximately 40% of the world's commercial aviation fleet. The Company works
with its international network of industry contacts to identify and evaluate
Engines and Components and surplus aircraft for potential acquisition. Engines
and Components are either made available for immediate resale or repaired by
FAA-licensed repair facilities and then resold. Surplus aircraft are always
disassembled and sold as parts by the Company. The Company resells Engines and
Components to other aftermarket suppliers, independent repair facilities,
aircraft operators and original equipment manufacturers. Since its inception,
the Company has substantially increased its revenue base, broadened the range of
products and services offered and taken consistent steps to ensure the quality
of its products and services. From $3.9 million in 1993, the Company's net sales
reached $34.0 million in 1996 and the Company supplied over 600 customers
worldwide. In November 1996, the Company became the first aftermarket supplier,
and was one of only seven aftermarket suppliers worldwide as of March 1, 1997,
to have received quality accreditation from the Airline Suppliers Association.

INDUSTRY OVERVIEW

Growth in Air Transit Activity. According to Boeing's 1997 Market Outlook,
global air travel will increase approximately 75% by the year 2006, and the
number of passenger and cargo aircraft in service will increase by approximately
48%. The Company believes that growth in air transit activity will continue to
increase the demand for aftermarket Engines and Components.

Increase in Size and Age of Worldwide Commercial Aircraft Fleet. Increased
demand for air travel and the need for aircraft operators to reduce operating
and capital costs have prompted many airlines to extend the useful life of older
equipment. The installation of FAA-approved hush-kits and extended life
maintenance programs have increased the useful life of aircraft utilizing JT8D
engines for many operators. In addition, many second-tier foreign and domestic
aircraft operators are increasing their fleets through the acquisition of less
expensive used aircraft, which typically require more maintenance and
replacement parts than new aircraft.

Aircraft Operators' Demand for Full Service Suppliers. Cost considerations
are causing aircraft operators to reduce the size of their spare parts
inventories, while cost and quality concerns cause them to maintain
relationships with a more limited number of approved suppliers. As a result,
many airlines today require full-service suppliers that provide a broad array of
products and services.

Increased Regulatory Scrutiny. Increased regulatory attention to the
aftermarket parts industry has created opportunities for suppliers with the
infrastructure and quality systems to satisfy increased regulatory standards. In
September 1996, the FAA issued an advisory circular recommending voluntary
industry oversight and accreditation of aftermarket parts suppliers. In response
to regulatory scrutiny, aircraft operators have increased their documentation
requirements for products purchased in the aftermarket. The Company believes
that regulatory scrutiny will continue to increase, forcing aftermarket parts
suppliers to meet higher quality standards, which may strain the resources of
smaller competitors.

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<PAGE> 22

BUSINESS STRATEGY

The Company believes that its industry experience and capabilities position
it to expand its market presence in the growing aftermarket for Engines and
Components. The Company intends to build upon its success and take advantage of
favorable industry dynamics by: (i) capitalizing on its international sourcing
network; (ii) continuing its commitment to quality leadership; (iii) broadening
its product line; (iv) increasing sales to aircraft operators by providing
value-added services; and (v) pursuing strategic acquisitions.

Broaden Product Line. The Company plans to expand its product line to
include higher thrust models of the JT8D series of engines and other high thrust
engines, such as the CFM56 engine. The Company believes that the Offering will
provide it with the capital to be one of the few aftermarket suppliers able to
compete in this market segment. The CFM56 has been in service since 1982 and an
active aftermarket in this engine has begun to emerge. The installed base of
these engines is expected to approximate the size of the current installed base
of the JT8D within the next five years. In February 1997, the Company acquired
two CFM56 engines, which may be sold as whole engines or used to provide the
Company with its initial inventory of CFM56 engine parts. The Company also plans
to increase its availability of airframe components as it continues to acquire
surplus aircraft for disassembly and additional supply of engine inventory.

PRODUCTS

The Company's product line includes Engines and Components for all models
of the JT8D series and airframe components for McDonnell Douglas DC-9 and Boeing
707 and 727 aircraft. Although production of most models of the JT8D ceased in
1987, the JT8D engine continues to power approximately 40% of the world's
commercial aircraft. Since there currently is no cost-effective replacement for
the JT8D engine with which to power existing narrow-body aircraft, operators
continue to maintain their older engines. The Company believes that there will
be continuing demand for JT8D products. The Company intends to expand its
product line to include Engines and Components for higher thrust engines, such
as the CFM56

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<PAGE> 23

manufactured by CFM International, which are owned by approximately 210
companies worldwide. In February 1997, the Company acquired two CFM56 engines,
which may be sold as whole engines or used to provide the Company with its
initial inventory of CFM56 engine parts. The following chart indicates the
Company's estimate of the number of JT8D and CFM56 engines currently in service,
as well as the principal types of aircraft utilizing such engines.

<TABLE>
<CAPTION>
NUMBER
ENGINE TYPE IN SERVICE AIRCRAFT APPLICATION
- ----------- ---------- ----------------------------
<S> <C> <C>
Pratt & Whitney
JT8D-7-17......................................... 10,300 DC-9, B727, B737
-200.............................................. 2,700 B727, MD-80
CFM International
CFM56-3, -5....................................... 5,500 B737, A319, A320, A321, A340
</TABLE>

Engines and Components are classified within the industry as "factory new",
"new surplus", "overhauled", "serviceable" and "as removed". A new engine or
part is one that has never been installed. Factory new Engines or Components are
purchased from manufacturers or their authorized distributors. New surplus parts
are purchased from excess stock of airlines, repair facilities or other
suppliers. An overhauled Engine or Component is one which has been completely
disassembled, inspected, repaired, reassembled and tested by an FAA-licensed
repair facility. An Engine or Component is classified as serviceable if it is
repaired by an FAA-licensed repair facility rather than being completely
disassembled and overhauled. An Engine or Component may also be classified as
serviceable if it is removed by the operator while operating under an approved
maintenance program, is functional and meets the manufacturer's time and cycle
restrictions applicable to the part. A new, overhauled or serviceable
designation indicates that the engine or part can be immediately placed in
service on an aircraft. An Engine or Component in "as removed" condition
requires functional testing, repair or overhaul by an FAA-licensed repair
facility prior to being returned to service in an aircraft and is classified as
"non-serviceable."

Engine Components. The Company's inventory of engine components consists
primarily of parts for the JT8D series of engines and includes a broad selection
of over 4,000 items. The Company obtains most of its components by purchasing
and disassembling engines. The Company prices individual components based upon
their classification, condition and general level of availability in the
aftermarket. Greater than 80% of the Company's engine components inventory is
purchased in "as removed" condition and therefore requires repair. FAA-licensed
repair facilities specialize in different inspection and overhaul procedures and
the Company has an approved vendor list consisting of over 40 FAA-licensed
repair facilities. See "Risk Factors -- Impact of Government Regulation;
Dependence on Third-Party Repair Facilities."

Prior to January 1996, third parties disassembled the surplus aircraft
engines purchased by the Company to stock the Company's engine parts inventory,
which often resulted in long delays in receiving the disassembled parts. In
January 1996, the Company designed and equipped a disassembly facility for JT8D
engines, with flexibility to accommodate substantial growth in volume and
expansion into other types of aircraft engines, and hired personnel to conduct
engine disassembly operations. As a result, the Company has significantly
improved aircraft engine disassembly turnaround time.

Whole Engines. The Company purchases either serviceable engines for
immediate resale or non-serviceable engines that are repaired for the Company by
FAA-licensed repair facilities and then resold. In certain cases, the Company
specifies the workscope of repair based on the specifications of its customers.
The Company uses engine parts from its inventory to minimize the repair costs to
benefit its customers. Prices for engines depend on the level of thrust,
availability of the engine type at time of sale and the buyer's circumstances.
In the event that an aircraft requires a replacement engine, a customer may be
willing to pay a premium for a serviceable engine which can be delivered
immediately.

Airframe Components. The Company's sales of airframe components have
consisted primarily of sales of rotable and expendable airframe components for
727 and 707 aircraft consigned to the Company. A rotable is a component which is
removed periodically as mandated by an operator's maintenance procedure or on an
"as needed" basis and is typically repaired or overhauled and reused an
indefinite number of times. Sales of

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<PAGE> 24

rotable airframe components include avionics equipment (for example, fuel and
altitude indicators) and actuators (for example, devices that perform certain
mechanical functions). The Company also provides a full range of DC-9 rotable
airframe components which it acquired through the purchase of four DC-9 aircraft
in November 1996. An expendable is a part sold as new which cannot be repaired
for further use (for example, a bolt or rivet). To date, the Company's sales of
airframe components have arisen primarily from consignment sales. However, the
Company expects to increase its inventory of airframe components as part of its
growth strategy.

SERVICES

Field Services. The Company offers engine borescoping services, a
diagnostic procedure utilizing a video camera attached to the end of a thin tube
which is inserted into engine sections to analyze the condition of an engine
without disassembly. The service is performed by a Company technician certified
by the OEM. The Company also utilizes its borescoping capabilities to evaluate
substantially all engines which the Company has the opportunity to purchase. In
February 1997, the Company, through its newly-formed subsidiary AVTEAM Aviation
Field Services, Inc. ("AAFS"), entered into a 40-month lease of approximately
5,300 square feet in Dallas, Texas, from which it will conduct expanded
borescope, repair and other service operations. AAFS has applied to the FAA for
certification to perform a full range of on-wing maintenance services, including
the replacement of a limited number of engine parts and components. In March
1997, AAFS entered into a licensing agreement with Pratt & Whitney pursuant to
which Pratt & Whitney has designated AAFS as an approved source of borescope,
repair and certain on-wing maintenance services for Pratt & Whitney engines (the
"Pratt & Whitney Field Services Agreement"). See " -- Relationship with Pratt &
Whitney." As of March 20, 1997, the Company has hired eight additional employees
with an average of 22 years of industry experience to perform these activities.

Engine Management Services. The Company intends to offer engine management
services to its customers. Services provided by the Company would include
arranging for volume discounts and competitive bids for third party services,
preparing workscopes for the repair of engines, monitoring engines through the
entire repair process and providing cost-effective replacement parts. By
offering engine management services, the Company would be able to leverage the
expertise it has developed in managing the repair of engines which it has
acquired.

Engine Leasing Services. The Company intends to offer operating leases of
aircraft engines in its inventory to airlines. Under such leases, the Company
would retain the potential benefit and assume the risk of the residual value of
the engine. By leasing commercial aircraft engines, the Company would be better
able to control its future supply of Engines and Components, and will also be
creating a customer base for its engine parts for the duration of the lease.

QUALITY ASSURANCE

The Company adheres to stringent quality control standards and procedures
in the purchase and sale of its products. In November 1996, the Airline
Suppliers Association, an FAA-recognized independent quality assurance
organization, accredited the Company as an aftermarket supplier after the
completion of an extensive facilities audit and numerous meetings with the
Company's management. The Company was the first aftermarket supplier, and was
only one of seven aftermarket suppliers worldwide as of March 1, 1997, to have
received such accreditation.

Because aircraft operators require a readily available and identifiable
source of inventory meeting regulatory requirements, the Company has implemented
a total quality assurance program. This program consists of numerous quality
procedures, including the following:

- Inspection procedures mandating that procured engines, parts and
components be traceable to an approved source

- Detailed inspections of overhauled engines, parts and components

- Training and supervision of personnel to properly carry out the total
quality assurance program

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<PAGE> 25

- On-going quality review board meetings conducted by senior management to
oversee the total quality assurance program

In addition, as part of its total quality assurance program, the Company
has implemented a repair facility performance monitoring program which requires
each FAA-licensed repair facility used by the Company to perform a self-audit of
its operations on a regular basis and to submit to a facility audit performed by
an independent quality assurance organization retained by the Company.

PURCHASING

The Company's business is substantially dependent on its purchasing
activities because its net sales are directly influenced by the level of
inventory available for sale. Accordingly, senior management of the Company
takes a significant role in identifying, negotiating and acquiring surplus
aircraft and Engines and Components. Because the size of the Company's inventory
is critical to its results of operations and because there is no organized
market to procure surplus inventory, the Company's operations are materially
dependent on the success of management in identifying potential sources of
inventory and effecting timely purchases at acceptable prices. In order to
acquire inventory effectively, the Company's purchasing procedures include:

- Deploying field personnel to identify potentially available surplus
aircraft and Engines and Components

- Appointing representatives domestically and abroad to identify purchase
opportunities

- Purchasing for cash rather than seeking extended payment terms

- Maintaining a streamlined review process in order to make timely offers

- Involving senior management in negotiating and closing purchases

The Company historically acquired its inventories of Engines and Components
primarily through the purchase of surplus aircraft and engines and engine parts
inventories and acquired its airframe component inventory on a consignment
basis. The Company's experience is that, while consignments are a means to
obtain inventory with a minimum commitment of capital, outright purchases
generally result in higher gross margins on sales of such inventory.
Accordingly, the Company is seeking to increase its outright purchase of
airframe components to supplement its consignment inventory. "Bulk" purchase
opportunities often arise when airlines, in order to reduce expenses or change
fleet, sell large amounts of inventory in a single transaction. The Company has
completed two large bulk inventory purchases since 1992 and believes that the
proceeds of the Offering will allow it to aggressively pursue additional bulk
inventory purchase opportunities.

SALES AND MARKETING

The majority of the Company's day-to-day sales are accomplished through its
sales force, which currently consists of 11 employees, supplemented by eight
consultants and domestic and international representatives for attracting and
maintaining relationships with customers. The Company is a member of various
trade and business organizations which provides appropriate industry exposure.

The Company advertises its available inventories held for sale on the
Inventory Locator System "ILS," an aviation parts information network which
enables approximately 2,300 buyers, including major airlines and repair
facilities, to access the Company's inventory. The Company is able to market all
available Engines and Components through the ILS and customers can locate the
Company's inventory noting quantities, part numbers, and condition. Customers
may request quotes for any specific part through direct electronic interface
with the Company. Pricing information is not available on ILS and the Company
bases its pricing for particular parts on its extensive industry knowledge.

RELATIONSHIP WITH PRATT & WHITNEY

In June 1995, the Company entered into a strategic supply arrangement with
Pratt & Whitney, the manufacturer of the JT8D engine, pursuant to a Surplus
Parts Supply Agreement (the "Pratt & Whitney Supply Agreement"). The Pratt &
Whitney Supply Agreement is a three-year agreement which designates

24
<PAGE> 26

the Company as the worldwide sole-source supplier of aftermarket engine parts
for the JT8D series of engines to Pratt & Whitney for the resale directly to
airlines, repair facilities (including its own repair facilities) and other
customers. The Company believes that it was selected by Pratt & Whitney
primarily because of the Company's extensive JT8D engine parts and components
inventory. In 1996, Pratt & Whitney entered into the aircraft engine maintenance
business with the opening of a new facility dedicated to the repair of JT8D
engines. This new 100,000 square foot facility is expected to have the capacity
to repair and overhaul up to 200 JT8D engines per year, and the Company
anticipates that Pratt & Whitney will continue to purchase Engines and
Components from the Company for this facility. The Pratt & Whitney Supply
Agreement established pricing at specified percentages of the current catalog
price for new engine parts, subject to adjustment for cycles expended on
life-limited engine parts. For sales of parts to Pratt & Whitney, the Company's
warranty includes the repair or replacement of such parts at the Company's
expense up to the later of one year after the commencement of the use of the
part or 18 months after delivery of the part to Pratt & Whitney. The Pratt &
Whitney Supply Agreement is subject to termination by either party upon six
months' prior written notice or upon notice of an event of default. See "Risk
Factors -- Relationship with Pratt & Whitney" and "-- Customer Concentration."

In connection with the Pratt & Whitney Field Services Agreement, AAFS is
recognized by Pratt & Whitney as an approved source of borescope, repair and
certain on-wing maintenance services for Pratt & Whitney engines. The Company
believes that AAFS was selected by Pratt & Whitney primarily because of the
significant industry experience of AAFS' employees in performing these field
services. Pratt & Whitney has agreed to list AAFS in engine manuals as an
approved source of such field services, direct inquiries for such field services
to AAFS and provide on-going qualification training to AAFS' employees. In
return, Pratt & Whitney is entitled to a fee based on AAFS' revenues related to
such field services. The Pratt & Whitney Field Services Agreement expires
December 1999. As of the date of this Prospectus, the Company was one of only
three companies worldwide recognized by Pratt & Whitney as an approved source of
these field services.

MANAGEMENT INFORMATION SYSTEMS

The Company's management information system includes a customized inventory
information technology system which is fully integrated with the Company's
accounting system and assists management in planning, operating and controlling
its business activities.

The information system contains the most current information regarding each
item in the Company's inventory. By accessing the information system through a
bar code scanner, the Company can document: (i) full traceability to the
FAA-approved point of origin for any part (whether to the OEM, an approved agent
of the OEM or an FAA-licensed repair facility); (ii) the aircraft or engine from
which the part originated; (iii) the availability and condition of parts in the
Company's inventory and, if at an FAA-licensed repair facility, when such parts
are due to be returned; (iv) the sales history regarding the type of parts sold
to the Company's customers (including dates and sales prices); (v) the status of
customer orders; and (vi) any relevant purchase commitments. The information
system also provides time and usage cycles for life-limited parts.

The information system has an automatic interface that transfers sales and
customer accounts receivable transactions to the primary accounting records and
subsidiary ledger. Purchase and sales commitment data, real-time inventory
levels, recording of inventory movements and current assessment of supply and
demand for various parts are the subject of daily reports to management.

The Company is in the process of upgrading its management information
system. The upgrade will include a state-of-the-art document scanning and
retrieval system, thereby allowing for improved accuracy and faster retrieval of
inventory traceability documents that must accompany all sales for regulatory
compliance. The upgrade will also increase the capacity of its management
information system to accommodate higher inventory levels and additional users.

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<PAGE> 27

REGULATION

The aviation industry is highly regulated in the United States by the FAA
and in other countries by similar regulatory agencies. These regulations are
designed to insure that all aircraft and aviation equipment are continuously
maintained in proper condition for the safe operation of aircraft. While the
Company's operations are not currently regulated directly by the FAA, both the
independent facilities that repair and overhaul the Company's products and the
independent operators that purchase the Company's products are subject to
extensive regulation. Accordingly, the Company must consider the regulatory
requirements of its customers and provide them with Engines and Components that
comply with airworthiness standards established by the FAA and the OEMs,
together with required documentation which enables these customers to comply
with other applicable regulatory requirements. The inspection, maintenance and
repair procedures for the various types of aircraft and aviation equipment are
prescribed by regulatory authorities and can be performed only by FAA-licensed
repair facilities utilizing certified technicians. Compliance with the
applicable FAA and OEM standards are required prior to installation of a part on
an aircraft. The Company only utilizes FAA-licensed repair facilities to repair
and certify aircraft engines and parts. Upon receipt of FAA-certification, the
Company also intends to expand the range of services that it offers to include
on-wing engine maintenance consisting of the repair and replacement of a limited
number of engine parts and components.

In June 1996, the FAA articulated a series of changes in the FAA's
inspection policies to enhance its oversight of aircraft operators that rely on
third-party maintenance. The effect on the Company of such changes to the FAA's
inspection policies may be to reduce the number of third-party maintenance
providers that provide services to the Company. To date, the Company's
operations have not been materially adversely effected as a result of such
regulations.

In September 1996, the FAA issued an advisory circular to support the
implementation of a voluntary accreditation program for civil aircraft parts
suppliers. This accreditation program establishes quality standards applicable
to aftermarket suppliers, such as the Company, and designates FAA approved
organizations to perform quality assurance audits for initial accreditation of
aftermarket suppliers. Quality assurance audits are required on an on-going
basis to maintain accreditation. In November 1996, the Airline Suppliers
Association, an FAA-recognized independent quality assurance organization,
accredited the Company as an aftermarket supplier after the completion of an
extensive facilities audit and numerous meetings with the Company's management.
The Company was the first aftermarket supplier to receive such quality
accreditation, and was one of only seven aftermarket suppliers worldwide as of
March 1, 1997, to have received such quality accreditation. The FAA considers
that obtaining civil aircraft parts through accredited suppliers is a sound
safety practice. Parts procured from an accredited supplier convey assurance to
the purchaser that the quality is as stated and the appropriate documentation is
on a file at the supplier's place of business. Furthermore, accreditation
provides assurance that the supplier has implemented an appropriate quality
assurance system and has demonstrated the ability to maintain that system. The
Company believes that ongoing quality assurance audits and strict adherence to
its quality assurance system is essential to meeting the needs of its existing
and future customers.

Because the Company's sales consist largely of older series JT8D engines
and parts, regulations promulgated by the FAA governing noise emission standards
for older aircraft and the FAA's Aging Airplane Program Plan (the "Aging
Airplane Program") have a material impact on the market for the Company's
products. Substantially all of the aircraft powered by the JT8D engine must
install hush-kits pursuant to such noise emission standards or be phased out of
operation in the United States by December 31, 1999 and in the European Union by
April 1, 2002. The Aging Airplane Program requires aircraft operators to perform
structural modifications and inspections to address airframe fatigue and to
implement corrosion prevention and control programs, which increase the
operating and maintenance costs of JT8D-powered aircraft. Furthermore, the EPA
and the various agencies of the European Union have sought the adoption of
stricter standards limiting the emission of nitrous oxide from aircraft engines.
See "Risk Factors -- Dependence on the JT8D Engine." The Company believes that
notwithstanding the substantial costs imposed by noise emission standards and
the Aging Airplane Program on older aircraft powered by JT8D engines, estimated
by the

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<PAGE> 28

Company to average approximately $4 million per aircraft, certain aircraft
operators will continue to utilize older aircraft due to the substantially
greater cost of acquiring new replacement aircraft.

The core operations of the Company may in the future be subject to FAA or
other regulatory requirements. The Company closely monitors the FAA and industry
trade groups in an attempt to understand how possible future regulations might
impact the Company. See "Risk Factors -- Impact of Government Regulation;
Dependence on Third-Party Repair Facilities" and "-- Quality Assurance."

CUSTOMERS

The Company sells its products and provides its services primarily to
aftermarket suppliers of aircraft engines and parts, repair facilities, OEMs,
aircraft operators and others. While the Company sold aircraft engines and parts
and airframe components to over 600 different customers during 1996, sales of
products representing 8% and 16% of 1996 net sales were made to Pratt & Whitney
and Dallas Aerospace, a division of Banner Aerospace, respectively. Sales to
Dallas Aerospace during 1996 increased as a percentage of total sales
principally due to an increase in the Company's net sales of whole engines to
Dallas Aerospace. In addition, the Company's five largest customers accounted
for 52% and 41% of the Company's net sales during 1995 and 1996, respectively. A
small number of customers may account for a significant portion of the Company's
revenues from period to period due to the substantial cost of acquiring aircraft
engines and certain parts and a significant portion of the Company's sales are
expected to continue to be concentrated in a small number of customers. See
"Risk Factors -- Customer Concentration."

COMPETITION

The aftermarket for Engines and Components is highly fragmented, with a
limited number of well-capitalized companies selling a broad range of products;
and numerous smaller competitors serving distinct market niches and is
characterized by intense competition. The Company believes that range and depth
of inventories, full product traceability, product knowledge, quality, service
and price are the key factors in distinguishing the Company from other
aftermarket suppliers. Certain of the Company's competitors have substantially
greater financial, marketing and other resources than the Company. In addition,
OEMs, aircraft maintenance providers, leasing companies and FAA-licensed repair
facilities may vertically integrate in the supply industry, thereby
significantly increasing competition. There are established competitors that
provide many of the services the Company intends to offer, many of whom have
substantially greater financial, marketing and other resources than the Company.
See "Risk Factors -- Competition."

BACKLOG

The Company's backlog of unfilled orders at December 31, 1996 was
approximately $4.0 million compared to approximately $2.6 million at December
31, 1995. A substantial portion of the Company's backlog is typically scheduled
for delivery within 60 days. Moreover, variations in the size and delivery dates
of orders received by the Company, as well as changes in customers' delivery
requirements, may result in substantial backlog fluctuations from period to
period. Accordingly, the Company believes that backlog cannot be considered a
meaningful indicator of future financial results.

FACILITIES

The Company's corporate headquarters occupy a facility containing office,
warehouse and other operational space in Miramar, Florida, with an aggregate of
50,000 square feet under a lease with an initial term expiring in December 2000,
which may be extended at the Company's option until December 2005. The Company's
engine disassembly operation is located at another facility in the same office
park containing 18,500 square feet of office and warehouse space under a lease
with terms substantially similar to the lease for the Company's corporate
headquarters. The second lease may be extended at the Company's option for an
additional term which expires in July, 2005. Rent of $27,418 and $10,050 per
month is payable under the leases for the Company's headquarters and disassembly
facility, respectively. The Company's facilities are designed to allow efficient
processing, warehousing, and inventory management of substantially greater

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<PAGE> 29

volumes than currently handled. In February 1997, the Company entered into a
40-month lease of approximately 5,300 square feet in Dallas, Texas, where it
will conduct expanded borescoping and other field service operations. See Note 7
of Notes to the Financial Statements.

ENVIRONMENTAL MATTERS

The Company has registered its aircraft engine disassembly facility at
Miramar, Florida with the U.S. Environmental Protection Agency (the "EPA") and
the State of Florida Department of Environmental Protection as a potential small
quantity generator of hazardous materials. Following the disassembly of used
aircraft engines, the Company cleans engine parts with a mineral spirits based
solvent, resulting in the generation of certain waste materials which require
disposal. An EPA approved laboratory has reviewed the Company's cleaning
operations and determined that the cleaning solvent and the waste materials
generated during the cleaning operations are non-hazardous substances. The
Company is therefore not required to obtain permits for the generation,
handling, storage, transportation or disposal of the cleaning solvent or the
waste materials. The Company believes it is in material compliance with
applicable environmental laws and regulations.

INSURANCE

The Company is a named insured under policies which include the following
coverage: (i) products liability, including grounding, up to $100 million
(combined single limit and in the annual aggregate); (ii) personal property,
inventory and business income at the Company's two principal facilities with
blanket coverage up to $15 million; (iii) commercial general liability coverage
up to $5 million (combined single limit and in the aggregate); (iv)
hangarkeepers' liability (damages due to loss of aircraft occurring while such
aircraft is in the care, custody or control of the Company for safekeeping,
storage, service or repair) up to $5 million per aircraft or per occurrence; (v)
comprehensive general liability up to $2 million; (vi) employee benefit
liability up to $1 million for each claim and in the aggregate; (vii)
international commercial liability (including contractual liability) for bodily
injury or property damage up to $1 million; (viii) umbrella liability coverage
up to $4 million for each occurrence and in the aggregate; (ix) directors' and
officers' liability coverage up to $3 million; and (x) employment practices'
liability coverage up to $5 million. The Company believes that these coverages
are consistent with industry standards and adequate to insure against the
various liability risks of its business. See "Risk Factors -- Product
Liability."

EMPLOYEES

As of February 28, 1997, the Company had 43 full-time employees. None of
its employees are represented by a union. The Company has not experienced any
labor-related work stoppage and considers its relations with employees to be
good.

LEGAL PROCEEDINGS

The Company is not a party to any legal proceedings.

28
<PAGE> 30

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information concerning each of the
executive officers and directors of the Company.

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Leon Sragowicz............................. 66 Chairman of the Board
Donald A. Graw............................. 42 President, Chief Executive Officer and
Director
Jaime J. Levy.............................. 41 Executive Vice President and Director
Bryan Thomas McFarland..................... 43 Vice President -- Business Development
Mark S. Koondel............................ 49 Chief Financial Officer, Treasurer and
Assistant Secretary
Dallas Cobb................................ 52 Vice President -- Operations
Richard Preston............................ 51 Secretary and Director
Robert Munson.............................. 62 Director
Eugene P. Lynch............................ 35 Director
</TABLE>

Leon Sragowicz is a co-founder of the Company and has served as the
Chairman of the Board and a director since its inception in October 1991. For
more than the past five years, he has been an investor in a significant number
of closely held companies with businesses ranging from the export of
transportation equipment to Latin America to the ownership of real estate.

Donald A. Graw joined the Company in January 1994 and has served as its
Chief Executive Officer, President and a member of its Board of Directors since
that time. From February 1991 to November 1993, Mr. Graw served as Vice
President and Chief Operating Officer of Scamp Auto Rental I, Inc., a subsidiary
of Dollar Rent-A-Car System, Inc., with 42 retail locations throughout Florida.
From July 1982 to October 1990, Mr. Graw was employed by Diversified Services,
Inc., a franchisee of Budget Rent-A-Car starting as the Chief Financial Officer
and became the Executive Vice President in February 1989.

Jaime J. Levy joined the Company in July 1994 and has served as its
Executive Vice President and a member of its Board of Directors since that time.
From February 1991 to July 1994, he served as President of Turbine Engine
Technology Corp., an aircraft engine surplus parts company ("Turbine") which was
acquired by Messrs. Sragowicz and Preston in July 1994. From March 1986 to
January 1991, he served as the Director of Sales and Marketing for BET Air,
Inc., an aviation surplus parts company.

Bryan Thomas McFarland joined the Company in July 1994 as the Vice
President -- Technical Operations, and he became Vice President -- Business
Development in February 1997. From August 1992 to July 1994, he served as Vice
President -- Technical Operations of Turbine. Prior thereto, Mr. McFarland
served as the Quality Manager for International Aircraft Associates, a customer
sales manager for Aerothrust Corp. and a purchasing agent for Eastern Airlines.
He holds an Airframe and Powerplant license issued by the FAA.

Mark S. Koondel joined the Company in April 1996 as the Chief Financial
Officer and Treasurer of the Company. From November 1995 to April 1996, he
served as the Controller of AEC One Stop Group, Inc., a pre-recorded music
distributor. From November 1992 to October 1995, Mr. Koondel served as the Vice
President of Finance of Buenos Aires Embotelladora, S.A., a publicly-traded
Pepsi-Cola franchisee. From January 1985 to November 1992, he served as the
Controller of Florida Coca-Cola Bottling Co., Inc. Prior thereto, Mr. Koondel
worked in public accounting with Main Hurdman and Coopers & Lybrand for an
aggregate of seven years.

Dallas Cobb joined the Company in July 1995 as the Director of Airframe
Sales and he became Vice President -- Quality Assurance in September 1996. In
February 1997, Mr. Cobb was named Vice President -- Operations. From February
1980 to July 1995, Mr. Cobb served in various capacities with BET Air,

29
<PAGE> 31

Inc., including President, Vice President, General Manager and Marketing
Manager. From April 1968 to February 1980, Mr. Cobb served as Purchasing Agent
for Eastern Airlines, Inc.

Richard Preston is a co-founder of the Company and has served as the
Company's Secretary and a member of its Board of Directors since October 1991
and, until April 1996, as its Treasurer. For more than the past 20 years, he has
served as a partner in the public accounting firm of Gerson, Preston & Company,
P.A., located in Miami, Florida.

Robert Munson joined the Company's Board of Directors in January 1996. From
1992 to the present, Mr. Munson has been an independent consultant to various
companies in the commercial aviation industry. Mr. Munson served 33 years at
Pratt & Whitney, and was a Vice President of Pratt & Whitney during the period
from 1980 to 1992.

Eugene P. Lynch joined the Company's Board of Directors in December 1996.
Mr. Lynch is a Managing Director of The Clipper Group, L.P. He currently serves
on the Board of Directors of Owosso Corp., a corporation whose shares of common
stock are quoted on the Nasdaq National Market, and several other privately-held
companies.

Directors are elected annually to serve until the next annual meeting of
stockholders and until their successors are elected and qualified. Executive
officers are elected by and serve at the discretion of the Board of Directors.

OTHER KEY PERSONNEL

In addition to the executive officers and directors named above, certain
key personnel also contribute significantly to the management of the Company.

John Wachter joined the Company in August 1995 as Director of Powerplant
Sales. From March 1993 to August 1995, Mr. Wachter served as Senior Account
Executive for the AGES Group, L.P., a provider of aircraft, engine and support
services to the aviation industry. From November 1985 to February 1993, Mr.
Wachter served as Sales Account executive for the Airline Services Division of
Ryder System, Inc. He holds an Airframe and Powerplant license issued by the
FAA.

Efrain Salazar joined the Company in January 1994 as Director of Finance.
From October 1993 to July 1994, Mr. Salazar served as Director of Finance of
Turbine. From March 1991 to July 1993, Mr. Salazar served as Business Manager
for the Latin American Division of Harper Collins Publishing Co.

Michael A. Maier joined the Company as Director of Technical Services and
Engine Management in February 1997. He brings over 15 years of experience in the
aviation industry to the Company. Mr. Maier served as Product Line Engineer of
Aviall, Inc. from October 1990 to November 1995. He also served as Senior Flight
Test Engineer of McDonnell Douglas. Prior thereto, he served as Senior Project
Test Engineer of Pratt & Whitney from July 1982 to September 1988. Mr. Maier is
an active member of the American Society of Mechanical Engineers and the Society
of Flight Test Engineers.

John C. Eslinger joined the Company as President of AVTEAM Aviation Field
Services, Inc. in March 1997. He brings over 31 years of experience in the
aviation industry to the Company. Mr. Eslinger served as Manager of Technical
Training of Ryder Airlines Services from November 1989 to January 1997. Prior
thereto, he served as Analyst Aircraft Maintenance Quality Assurance of AMR
Services. Mr. Eslinger also served as Aircraft Mechanic for NHA Field Services,
Bell Helicopter and Beech Aircraft Corporation.

Paula Sparks joined the Company in March 1997 as Vice President of Quality
Assurance. For more than 21 years prior thereto, Ms. Sparks was employed by
Pratt & Whitney, most recently as Quality Assurance Manager. While at Pratt &
Whitney Overhaul and Repair, she held an ODAR certificate. Ms. Sparks is an
active member of the Quality Assurance Committee of the Airline Suppliers
Association and the A.S.Q.C.

Julio A. Menendez joined the Company in January 1995 as Field Services
Manager and, in February 1997, he was named Director of Business Development.
From December 1987 to January 1995,

30
<PAGE> 32

Mr. Menendez served as Field Service Supervisor for Aviall, Inc. He holds a
Airframe and Powerplant license issued by the FAA.

COMMITTEES OF THE BOARD OF DIRECTORS

The Company's Board of Directors has established an Executive Committee,
Audit Committee and Compensation Committee. The Executive Committee is
authorized, subject to Florida law, to exercise the power and authority of the
Board in the management of the business and affairs of the Company between
meetings of the full Board of Directors. The members of the Executive Committee
are Messrs. Graw, Levy, Lynch and Preston.

The Audit Committee is responsible for nominating the Company's independent
auditors for approval by the Board of Directors, reviewing the scope, results
and costs of the audit with the Company's independent auditors, and reviewing
the financial statements and accounting practices of the Company. The members of
the Audit Committee are Messrs. Lynch, Munson and Sragowicz.

The Compensation Committee is responsible for recommending compensation
decisions to the Board of Directors. The Members of the Compensation Committee
are Messrs. Lynch, Munson and Sragowicz.

COMPENSATION OF DIRECTORS

During 1996, directors did not receive compensation for serving as members
of the Board of Directors. Directors of the Company who are not officers or
employees of the Company ("Non-Employee Directors") will receive an annual fee
of $10,000. Directors are reimbursed for travel and other expenses relating to
attendance at meetings of the Board of Directors or committees.

EXECUTIVE COMPENSATION

The following table shows the cash and other compensation earned by Mr.
Graw and each other executive officer of the Company who earned in excess of
$100,000 for services rendered in all capacities to the Company (the "Named
Executive Officers") during 1996.

1996 SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------
NAME AND PRINCIPAL POSITION(S) SALARY BONUS
- ------------------------------ -------- -------
<S> <C> <C>
Donald A. Graw.............................................. $288,737 $ --
President and Chief Executive Officer
Jaime J. Levy............................................... 286,430 --
Executive Vice President
Bryan Thomas McFarland...................................... 80,000 40,000
Vice President -- Technical Operations
</TABLE>

EMPLOYMENT AGREEMENTS

On December 6, 1996, Messrs. Graw and Levy entered into employment
agreements (collectively, the "Employment Agreements") with the Company
providing for employment as the President and Chief Executive Officer and
Executive Vice President, respectively. The Employment Agreements provide that
Messrs. Graw and Levy will receive an annual base salary of $260,000 and
$220,000, respectively, for an initial term of three years expiring December,
1999, as well as the right to participate in the Company's 1996 Stock Option
Plan and the Key Executive Annual Incentive Plan. See "-- Incentive Plan." The
Employment Agreements contain confidentiality and noncompete provisions by
Messrs. Graw and Levy in favor of the Company. Upon termination without cause,
each Employee will be entitled to receive two years' annual base salary paid in
one lump sum.

31
<PAGE> 33

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee of the Board, consisting of Messrs. Lynch,
Sragowicz and Munson did not meet in 1996. The Compensation Committee's function
is to recommend to the Board of Directors compensation decisions for the
Company's executive officers and to administer the Company's 1996 Stock Option
Plan and the Key Executive Annual Compensation Plan. See " -- Committees of the
Board of Directors."

1996 STOCK OPTION PLAN

The Company's 1996 Stock Option Plan (the "Option Plan") became effective
on April 15, 1996. As of the date of this Prospectus, no options have been
granted. The purpose of the Option Plan is to attract and retain qualified
personnel, to provide additional incentives to employees, officers and
consultants of the Company and to promote the success of the Company's business.
A reserve of 600,000 shares of the Company's Class A Common Stock has been
established for issuance under the Option Plan. The Option Plan is administered
by the Compensation Committee of the Board of Directors. The Compensation
Committee has complete discretion to determine which eligible individuals are to
receive option grants, the number of shares subject to each such grant, the
status of any granted option as either an incentive stock option or a non-
statutory option, the vesting schedule to be in effect for the option grant and
the maximum term for which any granted option is to remain outstanding.

Each option granted under the Option Plan has a maximum term of ten years,
subject to earlier termination following the optionee's cessation of service
with the Company. Options granted under the Option Plan may be exercised only
for fully vested shares. The exercise price of incentive stock options and non-
statutory stock options granted under the Option Plan must be at least 100% and
85% of the fair market value of the stock subject to the option on the date of
grant, respectively (or 110% with respect to incentive stock options granted to
holders of more than 10% of the voting power of the Company's outstanding
stock). The Board or the Compensation Committee has the authority to determine
the fair market value of the stock. The purchase price is payable immediately
upon the exercise of the option. Such payment may be made in cash, in
outstanding shares of Class A Common Stock held by the participant, through a
promissory note payable in installments over a period of years or any
combination of the foregoing.

The Board of Directors may amend or modify the Option Plan at any time,
provided that no such amendment or modification may adversely affect the rights
and obligations of the participants with respect to their outstanding options or
vested shares without their consent. In addition, no amendment of the Option
Plan may, without the approval of the Company's stockholders: (i) modify the
class of individuals eligible for participation; (ii) increase the number of
shares available for issuance, except in the event of certain changes to the
Company's capital structure; or (iii) extend the term of the Option Plan. The
Option Plan will terminate on March 1, 2006, unless sooner terminated by the
Board.

INCENTIVE PLAN

The Company has adopted a Key Executive Annual Incentive Plan (the
"Incentive Plan"), pursuant to which key executives of the Company may receive
bonus compensation based on the Company's performance during any fiscal year, as
determined by the Compensation Committee of the Board of Directors (the
"Committee"). Under the Incentive Plan, the Company's President and Executive
Vice President and other executives designated by the Committee are assigned a
target award expressed as a percentage of base salary in varying amounts (not to
exceed 100% of base salary for the President and Chief Executive Officer and the
Executive Vice President and 50% of base salary for the other key executive
officers). The actual award is subject to achievement by the Company of minimum
levels of pre-tax income. The Committee has the authority to select participants
other than the President and Executive Vice President, to establish target
awards and to determine final awards in the event that the Company's operating
income is less than the levels established under the Incentive Plan during any
year the Incentive Plan remains in effect.

32
<PAGE> 34

CERTAIN TRANSACTIONS

THE CLIPPER GROUP PRIVATE PLACEMENT

On December 6, 1996, the Company issued and sold to The Clipper Group in a
private sale 1,480,000 shares of convertible voting preferred stock and 220,000
shares of convertible non-voting preferred stock for an aggregate purchase price
of $11,900,000 ("The Clipper Group Private Placement"). All of the outstanding
shares of convertible voting preferred stock will automatically convert into an
aggregate of 1,480,000 shares of Class A Common Stock and all of the outstanding
shares of convertible non-voting preferred stock will automatically convert into
an aggregate of 220,000 shares of Class B Common Stock upon the consummation of
the Offering. The Clipper Group has certain rights to require the Company to
register their shares of Common Stock under the Securities Act. See "Description
of Capital Stock -- Registration Rights" and "Shares Eligible for Future Sale."

PARATI AGREEMENT

On September 5, 1995, the Company entered into the Parati Agreement with
Parati, a corporation owned by Leon Sragowicz, the majority stockholder and the
Chairman of the Board of Directors of the Company, pursuant to which Parati,
among other things, was to purchase surplus aircraft engines for disassembly.
The Company handles all of the operational and administrative aspects of the
agreement and Parati remains the owner of the engine parts from the disassembled
aircraft engines purchased by Parati. Any profit remaining after recovery by
Parati of its cost of sales and by the Company of any overhaul costs are divided
equally by Parati and the Company.

Management believes that the agreements with Parati are on terms which are
no less favorable to the Company than those which would have been obtained from
independent third parties. Following the Offering, the Company does not intend
to utilize the Parati Agreement.

LOANS MADE BY EXISTING COMMON STOCKHOLDERS TO COMPANY

Mr. Sragowicz has loaned and advanced money to the Company on several
occasions for inventory acquisitions and general corporate purposes. Immediately
prior to the consummation of the Offering, the Company had outstanding
indebtedness to Mr. Sragowicz in the amount of $2,417,357, of which (i)
$1,084,878 bears interest at a fluctuating rate tied to the prevailing rate as
established by the Internal Revenue Service and (ii) the remaining $1,322,479 is
non-interest bearing. Upon the completion of the Offering, these loans will be
repaid to Mr. Sragowicz.

Mr. Preston has loaned and advanced money to the Company on several
occasions for inventory acquisitions and general corporate purposes. Immediately
prior to the consummation of the Offering, the Company had outstanding
indebtedness to Mr. Preston in the amount of $343,765, of which (i) $154,982
bears interest at a fluctuating rate tied to the prevailing rate as established
by the Internal Revenue Service and (ii) the remaining $188,783 is non-interest
bearing. Upon the completion of the Offering, these loans will be repaid to Mr.
Preston.

Messrs. Graw and Levy have each loaned and advanced money to the Company on
several occasions for inventory acquisitions and general corporate purposes.
Immediately prior to the consummation of the Offering, the Company had
outstanding indebtedness to each of them in the amount of $326,695 which bears
interest at a fluctuating rate tied to the prevailing rate as established by the
Internal Revenue Service. Upon the completion of the Offering, these loans will
be repaid to Messrs. Graw and Levy.

PAYMENT OF DEFERRED COMPENSATION TO EXECUTIVE OFFICERS

On December 12, 1996, the Company paid to each of Messrs. Graw and Levy a
bonus of $589,718 for services rendered in 1995. See "Management -- Employment
Agreements." Upon completion of the Offering, the Company will pay approximately
$187,000 to Mr. Graw and $119,000 to Mr. Levy for services rendered in 1996.

33
<PAGE> 35

AMOUNTS DUE TO COMPANY

Pursuant to the Employment Agreements, each of Messrs. Graw and Levy
exercised their options to purchase 500,000 shares of Class A Common Stock and,
as a result of the exercise of their options, incurred non-interest bearing
indebtedness to the Company in the aggregate amount of $809,638. All such
indebtedness was repaid in December 1996.

TAX INDEMNIFICATION AGREEMENTS

On December 6, 1996, the Company entered into the AVTEAM Tax Allocation and
Indemnification Agreements (the "Tax Indemnification Agreements") with each of
the Existing Common Stockholders relating to their respective income tax
liabilities and certain related matters. The Tax Indemnification Agreements
generally provide that the Existing Common Stockholders will be indemnified by
the Company with respect to federal and state income taxes (plus interest and
penalties) arising due to taxable income shifted from a C Corporation taxable
year to a taxable year in which the Company was an S Corporation, and that the
Company will be indemnified by the Existing Common Stockholders with respect to
federal and state income taxes (plus interest and penalties) arising due to
taxable income shifted from an S Corporation taxable year to a C Corporation
taxable year; provided, however, that only in the case of the Existing Common
Stockholders' obligation to indemnify the Company, such obligation shall be
limited to the tax benefit (if any) derived by the Existing Common Stockholders
due to the shift of taxable income from a taxable year in which the Company was
an S Corporation to a C Corporation taxable year. Any payment made by the
Company to the Existing Common Stockholders pursuant to the Tax Indemnification
Agreements may be considered by the Internal Revenue Service or the state taxing
authorities to be nondeductible by the Company for income tax purposes.

Following the Offering, the Company does not intend to enter into any
material transaction with officers or directors, or their family members,
without the approval of a majority of the directors who do not have an interest
in such transaction.

34
<PAGE> 36

PRINCIPAL AND SELLING STOCKHOLDERS

The following table set forth certain information concerning the beneficial
ownership of the Company's capital stock prior to the Offering and as adjusted
to give effect to the sale of shares of Class A Common Stock in the Offering, by
(i) each person known by the Company to own beneficially more than 5% of any
class of the Company's stock, (ii) each Named Executive Officer and director of
the Company, and (iii) all executive officers and directors of the Company as a
group. Unless otherwise specified, the named beneficial owner claims sole
investment and voting power as to the shares indicated. See "Description of
Capital Stock."

<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
---------------------------------------------------------------------------------
NUMBER OF SHARES % OF CLASS PRIOR NUMBER OF SHARES % OF CLASS
PRIOR TO OFFERING TO OFFERING OFFERED HEREBY AFTER OFFERING
------------------- ----------------- ------------------- -----------------
NAME(1) CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B CLASS A CLASS B
------- --------- ------- ------- ------- --------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Leon Sragowicz.................. 3,500,000 -- 54.0% -- -- -- 21.4% --
Richard Preston................. 500,000 -- 7.7 -- -- -- 5.3 --
Donald A. Graw.................. 500,000 -- 7.7 -- -- -- 5.3 --
Jaime J. Levy................... 500,000 -- 7.7 -- -- -- 5.3 --
Bryan Thomas McFarland.......... -- -- -- -- -- -- --
Mark S. Koondel................. -- -- -- -- -- -- --
Robert Munson................... -- -- -- -- -- -- --
Dallas Cobb..................... -- -- -- -- -- -- --
Eugene P. Lynch................. -- -- -- -- -- -- --
The Clipper Group(2)(3)(4)...... 1,480,000 220,000 22.8 100% -- -- 15.6 100%
All executive officers and
directors as a group (9
persons)...................... 5,000,000 -- 77.2 -- -- -- 37.1 --
SELLING STOCKHOLDER
- --------------------------------
Sragowicz Foundation, Inc....... -- -- -- -- 1,467,000(5) -- -- --
</TABLE>

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

(1) The address of each stockholder is the address of the Company, which is 3230
Executive Way, Miramar, Florida 33025.
(2) Includes shares beneficially owned by Clipper/Merchant Partners, L.P.,
Clipper Equity Partners I, L.P., and Clipper Capital Associates, L.P. (whose
address is 11 Madison Avenue, New York, New York 10010), and Clipper/Merban,
L.P. and Clipper/European Re, L.P. (whose address is c/o CITCO, De
Ruyterkade, 62, P.O. Box 812, Curacao, Netherlands Antilles).
(3) Clipper Capital Associates, L.P. is the general partner of all of The
Clipper Group partnerships. The general partner of Clipper Capital
Associates, L.P. is Clipper Capital Associates, Inc. Robert B. Calhoun is
the sole stockholder and a director of Clipper Capital Associates, Inc. As a
result, each of Mr. Calhoun, Clipper Capital Associates, L.P. and Clipper
Capital Associates, Inc. is deemed to beneficially own all shares of Class A
Common Stock and Class B Common Stock beneficially owned by The Clipper
Group.
(4) Merchant Capital, Inc., an affiliate of CSFBC, is a 99% limited partner of
Clipper/Merchant Partners, L.P. Credit Suisse Group, an affiliate of CSFBC,
is an indirect 99% limited partner of Clipper/Merban, L.P. CSFBC is acting
as one of the representatives of the underwriters of the Offering. None of
Clipper/ Merchant Partners, L.P., Clipper/Merban, L.P., CSFBC and Credit
Suisse Group is an affiliate of The Clipper Group or Clipper Capital
Associates, L.P.
(5) At the time of the Offering, Sragowicz Foundation, Inc., a charitable
organization, will receive the shares offered by it as a donation from Mr.
Sragowicz.

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<PAGE> 37

DESCRIPTION OF CAPITAL STOCK

After giving effect to the amendment of the Company's Articles to be filed
upon the closing of the Offering which will eliminate all authorized convertible
voting preferred stock and convertible non-voting preferred stock, the
authorized capital stock of the Company will consist of 100,000,000 shares of
capital stock, comprised of (i) 77,000,000 shares of Class A Common Stock, (ii)
3,000,000 shares of Class B Common Stock, (together with the Class A Common
Stock, the "Common Stock") and 20,000,000 shares of Preferred Stock, par value
$.01 per share (the "Preferred Stock"), issuable in one or more series as
hereinafter provided. As of the date of the Offering, an aggregate of 6,480,000
shares of Class A Common Stock and 220,000 shares of Class B Common Stock were
outstanding. No shares of Preferred Stock will be outstanding upon consummation
of the Offering.

The following statements are brief summaries of certain provisions relating
to the Company's Common Stock and Preferred Stock contained in the Company's
Articles and Bylaws.

CLASS A COMMON STOCK

The Class A Common Stock has no preemptive rights and no redemption,
sinking fund or conversion provisions. All shares of Class A Common Stock have
one vote on any matter submitted to the vote of stockholders. The Class A Common
Stock does not have cumulative voting rights. Upon any liquidation of the
Company, the holders of Class A Common Stock are entitled to receive, share for
share with the holders of Class B Common Stock on a pro rata basis, all assets
then legally available for distribution after payment of debts and liabilities
and preferences on preferred stock, if any. Holders of Class A Common Stock are
entitled to receive dividends share for share with the holders of shares of
Class B Common Stock on a pro rata basis when and as declared by the Board of
Directors out of funds legally available therefor (subject to the prior rights
of preferred stock, if any). All outstanding shares of Common Stock are fully
paid and nonassessable.

CLASS B COMMON STOCK

The Class B Common Stock has no preemptive rights and no redemption,
sinking fund or conversion provisions. Except as otherwise required by law, the
shares of Class B Common stock have no voting rights. Under Florida law, holders
of Class B Common Stock are permitted to vote on amendments to the Company's
Articles, if such amendments would, among other things, alter or change powers,
preferences, or special rights of such class.

Upon any liquidation of the Company, the holders of Class B Common Stock
are entitled to receive, share for share with the holders of shares of Class A
Common Stock on a pro rata basis, all assets then legally available for
distribution after payments of debts of liabilities and preferences on preferred
stock, if any. Holders of Class B Common Stock are entitled to receive dividends
for share with the holders of shares of Class A Common Stock when, as and if
declared by the Board of Directors out of funds legally available therefor
(subject to the prior rights of preferred stock, if any).

CONVERSION RIGHTS

Conversion of Class A Common Stock. Each holder of Class A Common Stock is
entitled at any time, if such holder has or is reasonably expected to have a
Regulatory Problem (as defined below), to convert any or all of the shares of
such holder's Class A Common Stock into an equal number of shares of Class B
Common Stock. A holder is deemed to have a "Regulatory Problem" when such holder
and such holder's affiliates would own, control or have power over a greater
quantity of securities of any kind of the Company than are permitted under any
applicable requirement of any governmental authority, or would not be able to
hold an investment or provide financing to the Company in compliance with any
applicable requirement of any governmental authority.

Conversion of Class B Common Stock. Each holder of Class B Common Stock is
entitled at any time to convert any or all of the shares of such holder's Class
B Common Stock into an equal number of shares of Class A Common Stock unless, as
a result of such conversion, such holder would have a Regulatory Problem.

36
<PAGE> 38

Conversion of Class B Common Stock Upon a Conversion Event.

(i) Each share of Class B Common Stock distributed, transferred or
sold in connection with any Conversion Event (as defined below) will, as of
the date of such Conversion Event, automatically be converted into and
represent the right to receive, and without any action on the part of any
party, an equal number of shares of Class A Common Stock. As of the
effective date of the Conversion Event, the rights of the holder of the
converted Class B Common Stock as such shall cease and the person or
persons in whose name or names the certificate or certificates for shares
of Class A Common Stock are to be issued upon such conversion shall be
deemed to have become the holder or holders of record of the shares of
Class A Common Stock represented thereby.

(ii) A "Conversion Event" shall mean the sale, distribution or
transfer of Class B Common Stock in connection with and pursuant to the
terms of (A) any public offering or public sale of securities of the
Company (including a public offering registered under the Securities Act
and a widely distributed public sale pursuant to Rule 144 thereunder or any
similar rule then in force), including any sale of such securities to a
person or persons acting as underwriter with respect to such offering, (B)
any sale of securities of the Company to a person or group of persons
(within the meaning of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), if, after such sale, such person or group of persons in
the aggregate would own or control securities of the Company (excluding any
securities being converted and disposed of in connection with such
conversion event) which possess in the aggregate the ordinary voting power
to elect a majority of the Company's directors, (C) any sale of securities
of the Company to a person or group of persons (within the meaning of the
Exchange Act) if, after such sale, such person or group or persons would
not, in the aggregate, own, control or have the right to acquire more than
two percent (2%) of the outstanding securities of any class of voting
securities of the Company, or (D) a merger, consolidation or similar
transaction involving the Company if, after such transaction, a person or
group of persons (within the meaning of the Exchange Act) in the aggregate
would own or control securities which possess in the aggregate the ordinary
voting power to elect a majority of the surviving corporation's directors
(provided that the transaction has been approved by the Company's Board of
Directors or a committee thereof).

PREFERRED STOCK

The Board of Directors has the authority to issue up to 20,000,000 shares
of Preferred Stock in one or more series and to fix the number of shares
constituting any such series, the voting powers, designation, preferences and
relative participation, optional or other special rights and qualifications,
limitations or restrictions thereof, including the dividend rights and dividend
rate, terms of redemption (including sinking fund provisions), redemption price
or prices, conversion rights and liquidation preferences of the shares
constituting any series, without any further vote or action by the shareholders.
The issuance of Preferred Stock by the Board of Directors could affect the
rights of the holders of Common Stock. For example, such issuance could result
in a class of securities outstanding that would have preferences with respect to
voting rights and dividends, and in liquidation, over the Common Stock, and
could (upon conversion or otherwise) enjoy all of the rights appurtenant to
Common stock.

The authority possessed by the Board of Directors to issue Preferred Stock
could potentially be used to discourage attempts by others to obtain control of
the Company through merger, tender offer, proxy contest or otherwise by making
such attempts more difficult to achieve or more costly. The Board of Directors
may issue the Preferred Stock with voting and conversion rights that could
adversely affect the voting power of the holders of Class A Common Stock. There
are no agreements or understandings for the issuance of Preferred Stock and the
Board of Directors has no present intention to issue Preferred Stock.

REGISTRATION RIGHTS

Under the terms of a Registration Rights Agreement dated as of December 6,
1996 and subject to certain conditions, The Clipper Group is entitled to certain
transferable registration rights with respect to their 1,480,000 shares of Class
A Common Stock and 220,000 shares of Class B Common Stock (collectively, the

37
<PAGE> 39

"Registrable Securities"). If the Company proposes to register any of its
securities under the Securities Act, either for its own account or on behalf of
the Company's stockholders, and such holders so request, the Company is required
to use its best efforts to include such holders' Registrable Securities in such
registration and to pay such stockholders' registration expenses, excluding
underwriting discounts and commission in connection with such registrations. If
the managing underwriter advises the Company that the number of securities
requested to be included in such registration would exceed the number which can
be sold in such offering without materially and adversely affecting the
offering, the Company must first include the securities the Company proposes to
sell, and then, the Registrable Securities requested to be included in such
registration by The Clipper Group. If the registration by the Company is on
behalf of the Company's stockholders, then the Company must first include the
securities that the Company's stockholders who requested such registration
propose to sell, and then, the Registrable Securities requested to be included
in such registration by The Clipper Group. In addition, subject to certain
conditions, the holders of 750,000 or more of the Registrable Securities may
require the Company, on not more than two occasions, to file a registration
statement under the Securities Act with respect to such Registrable Securities.
The Company has agreed to indemnify the holders of the Registrable Securities
against certain liabilities, including liabilities under the Securities Act, in
connection with the registration of their shares. See "Shares Eligible for
Future Sale."

The holders of Registrable Securities have agreed not to include any
Registrable Securities in the Offering and have agreed not to exercise their
respective registration rights for a period of 180 days following the effective
date of the Offering.

ANTI-TAKEOVER EFFECTS OF CERTAIN PROVISIONS OF FLORIDA LAW

The Company is subject to (i) the Florida Control Share Act, which
generally provides that shares acquired in excess of thresholds equaling 20%,
33% and more than 50% of a corporation's voting power will not possess any
voting rights unless such voting rights are approved by a majority vote of the
corporation's disinterested stockholders, and (ii) the Florida Fair Price Act
which generally requires approval by disinterested directors or supermajority
approval by stockholders for certain specified transactions between a
corporation and a holder of more than 10% of the outstanding shares of the
corporation (or their affiliates).

CERTAIN NOTICE AND VOTING PROVISIONS CONTAINED IN THE COMPANY'S ARTICLES OF
INCORPORATION AND BYLAWS

Certain provisions of the Articles and the Bylaws of the Company summarized
in the following paragraphs may be deemed to have an anti-takeover effect and
may delay, defer or prevent a tender offer or takeover attempt that a
stockholder might consider in its best interest, including those attempts that
might result in a premium over the market price for the shares held by
stockholders.

Special Meeting of Stockholders. The Articles provide that special
meetings of stockholders of the Company may be called only by the Board or upon
the written demand of the holders of not less than fifty percent of all votes
entitled to be cast on any issue proposed to be considered at a special meeting.
This provision will make it more difficult for stockholders to take actions
opposed by the Board and cannot be amended without the approval of less than
2/3 of the outstanding shares entitled to be cast on the issue.

Advance Notice Requirements for Stockholder Proposals and Director
Nominations. The Articles provide that stockholders seeking to bring business
before an annual meeting of stockholders, or to nominate candidates for election
as directors at an annual meeting of stockholders, must provide timely notice
thereof in writing. To be timely, a stockholder's notice must be delivered to or
mailed and received at the executive offices of the Company not less than 120
days nor more than 180 days prior to the first anniversary of the date of the
Company's notice of annual meeting provided with respect to the previous year's
annual meeting. The Articles also state that no stockholder actions may be taken
by written consent and specify certain requirements for a stockholder's notice
to be in proper written form. These provisions may preclude some stockholders
from bringing matters before the stockholders at an annual meeting or from
making nominations for directors at an annual meeting and cannot be amended
without the approval of less than 2/3 of the outstanding shares entitled to be
cast on the issue.

38
<PAGE> 40

SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Offering, there has not been any public market for securities
of the Company. No prediction can be made as to the effect, if any, that market
sales of shares or the availability of shares for sale will have on the market
price prevailing from time to time. Nevertheless, sales of substantial amounts
of Class A Common Stock in the public market could adversely affect the
prevailing market price.

Upon completion of the Offering, the Company will have outstanding
9,513,000 shares of Class A Common Stock and 220,000 shares of Class B Common
Stock. All 4,500,000 shares of Class A Common Stock (5,175,000 shares if the
Underwriters' over-allotment option is exercised in full) sold in the Offering
will be freely tradable without restriction or further registration under the
Securities Act, except that shares owned by "affiliates" of the Company
("Affiliates"), as that term is defined in Rule 144 under the Securities Act
("Rule 144"), may generally only be sold in compliance with applicable
provisions of Rule 144. The remaining 5,013,000 shares of Class A Common Stock
and 220,000 shares of Class B Common Stock (collectively, the "Restricted
Shares") held by existing stockholders upon completion of the Offering will be
"restricted" securities within the meaning of Rule 144 and may not be sold
except in compliance with the registration requirements of the Securities Act or
an applicable exemption under the Securities Act, including sales pursuant to
Rule 144.

All directors, officers and existing stockholders have agreed with the
Underwriters not to sell or otherwise dispose of any shares of Common Stock for
a period of 180 days after the date of this Prospectus without the prior written
consent of CSFBC. See "Underwriting." The Company may, without such consent,
grant options pursuant to the Option Plan and the existing stockholders may make
gifts of such stock to persons who agree to comply with the lock-up agreement.
Beginning 180 days after the date of this Prospectus, assuming that CSFBC does
not consent to any sales prior to such time, an additional 3,533,000 shares
subject to such agreements will become eligible for sale in the public market,
subject to compliance with the provisions of Rule 144 under the Securities Act.
Of such 3,533,000 shares, 2,033,000 shares are held by Mr. Sragowicz, the
Company's Chairman of the Board, 500,000 shares are held by Mr. Graw, the
President and Chief Executive Officer and a director of the Company, 500,000
shares are held by Jaime Levy, the Executive Vice President and a director of
the Company, and 500,000 shares are held by Mr. Preston, the Secretary and a
director of the Company, each of whom are "affiliates" of the Company within the
meaning of Rule 144, and may, therefore, only be sold by Messrs. Sragowicz,
Graw, Levy and Preston in the public market in compliance with the volume
limitations and other requirements of Rule 144. Beginning December 6, 1998, an
additional 1,480,000 shares of Class A Common Stock will become eligible for
sale in the public market. Rule 144 was recently amended to reduce the holding
period for restricted securities, including such 3,533,000 shares of Class A
Common Stock, from two years to one year. Accordingly, as a result of this
amendment, which will become effective on April 27, 1997, such shares will
become eligible for resale under Rule 144 on a date which is exactly one year
earlier than the dates described above. CSFBC may, in its sole discretion and at
any time without notice, waive the provisions of the lock-up agreements.

In general, under Rule 144, a person (or persons whose shares are
aggregated), including an Affiliate, who has beneficially owned Restricted
Shares for at least two years (including the holding period of certain prior
owners), will be entitled to sell in "restricted brokers' transactions" or to
market makers, within any three-month period commencing 90 days after the
Company becomes subject to the reporting requirements of Section 13 of the
Exchange Act , a number of Restricted Shares that does not exceed the greater of
(i) 1% of the then outstanding shares of Class A Common Stock (approximately
95,130 shares immediately after the Offering) or (ii) the average weekly trading
volume in the Class A Common Stock during the four calendar weeks immediately
preceding such sale, subject, generally, to the filing of a Form 144 with
respect to such sales and certain other limitations and restrictions. In
addition, a person (or person whose shares are aggregated), who is not deemed to
have been an Affiliate at any time during the 90 days immediately preceding the
sale and who has beneficially owned the Restricted Shares proposed to be sold
for at least three years, is entitled to sell such shares under Rule 144(k)
without regard to the limitations described above. Further, Rule 144A under the
Securities Act permits the immediate sale of restricted shares to certain
qualified institutional buyers without regard to the volume restrictions
described above.

39
<PAGE> 41

As of the date hereof, the Company has authorized an aggregate of up to
600,000 shares of Class A Common Stock for issuance pursuant to the Option Plan.
See "Management -- 1996 Stock Option Plan." The Company intends to file
registration statements under the Securities Act within approximately 90 days
after the date of this Prospectus to register up to 600,000 shares available for
issuance under the Option Plan. After the effective date of the applicable
registration statement, shares of Class A Common Stock issued under the Option
Plan will be immediately available for sale in the public market, subject in
certain cases to the lock-up restrictions described above and subject, in the
case of sales by Affiliates, to certain limitations and restrictions under Rule
144.

At the completion of the Offering, certain persons and entities will be
entitled to require the Company to register their shares of Common Stock under
the Securities Act under certain circumstances. See "Description of Capital
Stock -- Registration Rights."

40
<PAGE> 42

UNDERWRITING

Under the terms and subject to the conditions contained in an Underwriting
Agreement dated , 1997 (the "Underwriting Agreement") among the
Company and the underwriters named below (the "Underwriters"), for whom Credit
Suisse First Boston Corporation and Dillon, Read & Co. Inc. are acting as the
representatives (the "Representatives"), have severally but not jointly agreed
to purchase from the Company the following respective numbers of shares of Class
A Common Stock:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
- ----------- ---------
<S> <C>
Credit Suisse First Boston Corporation......................
Dillon, Read & Co. Inc......................................
---------
Total............................................. 4,500,000
=========
</TABLE>

The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will be obligated to purchase all of the shares of Class A Common
Stock (other than those shares covered by the over-allotment option described
below) if any are purchased. The Underwriting Agreement provides that, in the
event of a default by an Underwriter, in certain circumstances the purchase
commitments of non-defaulting Underwriters may be increased or the Underwriting
Agreement may be terminated.

The Company has granted to the Underwriters an option, expiring at the
close of business on the 30th day after the date of this Prospectus, to purchase
up to 675,000 additional shares of Class A Common Stock at the initial public
offering price less underwriting discounts and commissions, all as set forth on
the cover page of this Prospectus. Such option may be exercised only to cover
over-allotments, if any, in the sale of the shares of Class A Common Stock. To
the extent such option is exercised, each Underwriter will become obligated,
subject to certain conditions, to purchase approximately the same percentage of
such additional shares of Class A Common Stock as it was obligated to purchase
pursuant to the Underwriting Agreement.

The Company has been advised by the Representatives that the Underwriters
propose to offer the shares of Class A Common Stock to the public initially at
the public offering price set forth on the cover page of this Prospectus and,
through the Underwriters, to certain dealers at such price less a concession of
$ per share, and the Underwriters and such dealers may allow a discount
of $ per share on sales to certain other dealers. After the initial
public offering, the public offering price and concession and discount to
dealers may be changed by the Representatives.

The Representatives have informed the Company that they do not expect
discretionary sales by the Underwriters to exceed 5% of the shares being offered
hereby.

The Company, its officers and directors have agreed that they will not
offer, sell, contract to sell, announce their intention to sell, pledge or
otherwise dispose of, directly or indirectly, or, in the case of the Company,
file with the Commission a registration statement under the Securities Act
relating to any additional shares of the Company's Class A Common Stock or
securities convertible into or exchangeable or exercisable for any shares of the
Company's Class A Common Stock, without the prior written consent of Credit
Suisse First Boston Corporation for a period of 180 days after the date of this
Prospectus, except issuances pursuant to the exercise of employees stock options
granted under the Option Plan.

The Company agreed to indemnify the Underwriters against certain
liabilities, including civil liabilities under the Securities Act, or to
contribute to payments which the Underwriters may be required to make in respect
thereof.

Prior to the Offering, there has been no public market for the Class A
Common Stock. The initial public offering price for the shares of Class A Common
Stock will be negotiated between the Company and the Representatives. Among the
factors considered in determining the initial public offering price of the Class
A Common Stock were the Company's historic performance, estimates of the
business potential and earnings prospects of the Company and its industry in
general, an assessment of the Company's management, the market valuation of
companies in related businesses, the general condition of the equity securities
market and

41
<PAGE> 43

other relevant factors. There can be no assurance that the initial public
offering price of the Class A Common Stock will correspond to the price at which
the Class A Common Stock will trade in the public market subsequent to the
Offering, or that an active public market for the Class A Common Stock will
develop and continue after the Offering.

The Representatives, on behalf of the Underwriters, may engage in
over-allotment, stabilizing transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Securities Act of 1934,
as amended (the "Exchange Act"). Over-allotment involves syndicate sales in
excess of the offering size, which creates a syndicate short position.
Stabilizing transactions permit bids to purchase in the underlying security so
long as the stabilizing bids do not exceed a specified maximum. Syndicate
covering transactions involve purchases of the Class A Common Stock in the open
market after the distribution has been completed in order to cover syndicate
short positions. Penalty bids permit the Representatives to reclaim a selling
concession from a syndicate member when the Class A Common Stock originally sold
by such syndicate member are purchased in a syndicate covering transaction to
cover syndicate short positions. Such stabilizing transactions, syndicate
covering transactions and penalty bids may cause the price of the Class A Common
Stock to be higher than it would otherwise be in the absence of such
transactions. These transactions may be effected on The Nasdaq National Market
or otherwise and, if commenced, may be discontinued at any time.

The Company has applied for listing of the Class A Common Stock on The
Nasdaq National Market under the symbol "AVTM."

NOTICE TO CANADIAN RESIDENTS

RESALE RESTRICTIONS

The distribution of the Class A Common Stock in Canada is being made only
on a private placement basis exempt from the requirement that the Company and
the Selling Stockholder prepare and file a prospectus with the securities
regulatory authorities in each province where trades of the Class A Common Stock
are effected. Accordingly, any resale of the Class A Common Stock in Canada must
be made in accordance with applicable securities laws which will vary depending
on the relevant jurisdiction, and which may require resales to be made in
accordance with available statutory exemptions or pursuant to a discretionary
exemption granted by the applicable Canadian securities regulatory authority.
Purchasers are advised to seek legal advice prior to any resale of the Class A
Common Stock.

REPRESENTATIONS OF PURCHASERS

Each purchaser of the Class A Common Stock in Canada who receives a
purchase confirmation will be deemed to represent to the Company, the Selling
Stockholder and the dealer from whom such purchase confirmation is received that
(i) such purchaser is entitled under applicable provincial securities laws to
purchase such Class A Common Stock without the benefit of a prospectus qualified
under such securities laws, (ii) where required by law, that such purchaser is
purchasing as principal and not as agent, and (iii) such purchaser has reviewed
the text above under "-- Resale Restrictions."

RIGHTS OF ACTION AND ENFORCEMENT

The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
section 32 of the Regulation under the Securities Act (Ontario). As a result,
Ontario purchasers must rely on other remedies that may be available, including
common law rights of action for damages or rescission or rights of action under
the civil liability provisions of the U.S. federal securities laws.

All of the issuer's directors and officers as well as the experts named
herein and the Selling Stockholder may be located outside of Canada and, as a
result, it may not be possible for Ontario purchasers to effect service of
process within Canada upon the issuer or such persons. All or a substantial
portion of the assets of the issuer and such persons may be located outside of
Canada and, as a result, it may not be possible to satisfy a judgment against
the issuer or such persons in Canada or to enforce a judgment obtained in
Canadian courts against the issuer or such persons outside of Canada.

42
<PAGE> 44

NOTICE TO BRITISH COLUMBIA RESIDENTS

A purchaser of Class A Common Stock to whom the Securities Act (British
Columbia) applies is advised that such purchaser is required to file with the
British Columbia Securities Commission a report within ten days of the sale of
any Class A Common Stock acquired by such purchaser pursuant to the Offering.
Such report must be in the form attached to British Columbia Securities
Commission Blanket Order BOR #95/17, a copy of which may be obtained from the
Company. Only one such report must be filed in respect of Class A Common Stock
acquired on the same date and under the same prospectus exemption.

TAXATION AND ELIGIBILITY FOR INVESTMENT

Canadian purchasers of Class A Common Stock should consult their own legal
and tax advisors with respect to the tax consequences of an investment in the
Class A Common Stock in their particular circumstances and with respect to the
eligibility of the Class A Common Stock for investment by the purchaser under
relevant Canadian legislation.

LEGAL MATTERS

The validity of the Class A Common Stock offered hereby will be passed upon
for the Company by Baker & McKenzie. Certain legal matters in connection with
the Offering will be passed upon for the Underwriters by King & Spalding.

EXPERTS

The financial statements of the Company at December 31, 1995 and 1996, and
for each of the three years in the period ended December 31, 1996, appearing in
this Prospectus and Registration Statement, have been audited by Ernst & Young
LLP, independent certified public accountants, as set forth in their report
thereon appearing elsewhere herein and in the Registration Statement, and are
included in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 (together with all amendments
and exhibits thereto, the "Registration Statement") under the Securities Act
with respect to the shares of Class A Common Stock offered by this Prospectus.
This Prospectus, which constitutes part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement and the
exhibits and schedules thereto, certain parts of which have been omitted as
permitted by the rules and regulations of the Commission. For further
information with respect to the Company and the shares of Class A Common Stock
offered hereby, reference is hereby made to the Registration Statement,
including the exhibits and schedules thereto. Statements contained in this
Prospectus as to the contents of any contract, agreement or any other document
referred to herein are not necessarily complete and, where such contract,
agreement or other document is an exhibit to the Registration Statement,
reference is made to such exhibit for a complete description of the matter
involved, and each such statement is qualified in all respects by the provisions
of such exhibit. Copies of the Registration Statement, including the exhibits
and schedules thereto, may be inspected without charge at the public reference
facilities maintained by the Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's regional offices at Seven
World Trade Center, Suite 1300, New York, New York 10048 and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such material may also be
obtained from the Public Reference Branch of the Commission located at 450 Fifth
Street, N.W., Washington, D.C. 20549, upon payment of fees prescribed by the
Commission. The Registration Statement may also be obtained through the
Commission's URL at "http://www.sec.gov."

The Company intends to furnish its stockholders with annual reports
containing audited financial statements and a report thereon by its independent
public accountants and with quarterly reports for the first three quarters of
each fiscal year containing unaudited interim financial information.

43
<PAGE> 45

AVTEAM, INC.

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Certified Public Accountants.......... F-2
Balance Sheets.............................................. F-3
Statements of Income........................................ F-4
Statements of Changes in Stockholders' Equity............... F-5
Statements of Cash Flows.................................... F-6
Notes to Financial Statements............................... F-7
Report of Independent Certified Public Accountants
Concerning Turbine's Financial Statements................. F-15
Statements of Operations of Turbine......................... F-16
Statements of Cash Flow of Turbine.......................... F-17
Notes to Financial Statements of Turbine.................... F-18
</TABLE>

F-1
<PAGE> 46

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Stockholders
AVTEAM, Inc.

We have audited the accompanying balance sheets of AVTEAM, Inc. (the
"Company") as of December 31, 1996 and 1995, and the related statements of
income, stockholders' equity, and cash flows for each of the three years in the
period ended December 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of AVTEAM, Inc. at December 31,
1996 and 1995, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 1996, in conformity with
generally accepted accounting principles.

ERNST & YOUNG LLP

Miami, Florida
February 27, 1997

F-2
<PAGE> 47

AVTEAM, INC.

BALANCE SHEETS
(IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1995 1996
------- -------
<S> <C> <C>
ASSETS
Current assets:
Cash...................................................... $ -- $ --
Trade accounts receivable, less allowance for doubtful
accounts of $114 and $151, and allowance for sales
returns of $669 and $129, in 1995 and 1996,
respectively........................................... 4,661 6,881
Inventory................................................. 8,563 12,926
Prepaid expenses.......................................... 185 1,469
Deferred tax asset........................................ -- 388
------- -------
Total current assets.............................. 13,409 21,664
Property and equipment, net................................. 298 502
Deposits and other assets................................... 86 136
------- -------
Total assets...................................... $13,793 $22,302
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable to bank..................................... $ 3,156 $ 404
Accounts payable.......................................... 4,280 2,540
Accrued expenses.......................................... 487 1,047
Current portion of capital lease obligations.............. 48 69
Due to stockholders and affiliates........................ 3,126 22
------- -------
Total current liabilities......................... 11,097 4,082
Capital lease obligations, net of current portion........... 83 62
Notes payable -- stockholders............................... -- 3,061
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value, 20,000,000 shares
authorized, no shares issued or outstanding in 1995,
1,480,000 shares of Class A Preferred Stock and 220,000
shares of Class B Preferred Stock issued and
outstanding in 1996.................................... -- 17
Class A Common Stock, $.01 par value, 77,000,000 shares
authorized, 5,000,000 shares issued and outstanding.... 50 50
Class B Common Stock, $.01 par value, 3,000,000 shares
authorized, no shares issued and outstanding........... -- --
Additional paid-in capital................................ 3,271 14,611
Retained earnings......................................... -- 419
Notes receivable from officers............................ (708) --
------- -------
Total stockholders' equity........................ 2,613 15,097
------- -------
Total liabilities and stockholders' equity........ $13,793 $22,302
======= =======
</TABLE>

See accompanying notes.

F-3
<PAGE> 48

AVTEAM, INC.

STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------
1994 1995 1996
--------- --------- ---------
<S> <C> <C> <C>
Net sales................................................... $ 9,062 $ 18,299 $ 34,047
Cost of sales............................................... 6,373 11,848 24,218
--------- --------- ---------
Gross profit.............................................. 2,689 6,451 9,829
Operating expenses:
Selling, general and administrative....................... 1,081 2,601 3,462
Officers' compensation.................................... 860 2,561 884
--------- --------- ---------
1,941 5,162 4,346
--------- --------- ---------
Income from operations...................................... 748 1,289 5,483
Offering expenses........................................... -- -- (1,154)
Interest (expense) income, net.............................. 6 (191) (757)
--------- --------- ---------
Income before provision (credit) for income taxes........... 754 1,098 3,572
Provision (credit) for income taxes:
Current................................................... -- -- 78
Deferred.................................................. -- -- (388)
--------- --------- ---------
-- -- (310)
--------- --------- ---------
Net income.................................................. $ 754 $ 1,098 $ 3,882
========= ========= =========
UNAUDITED PRO FORMA INFORMATION
Income before provision (credit) for income taxes........... $ 754 $ 1,098 $ 3,572
Pro forma provision (credit) for income taxes:
Current................................................... 369 1,138 1,010
Deferred.................................................. (83) (721) 416
--------- --------- ---------
286 417 1,426
--------- --------- ---------
Pro forma net income........................................ $ 468 $ 681 $ 2,146
========= ========= =========
Pro forma net income per common equivalent share............ $ 0.10 $ 0.14 $ 0.38
========= ========= =========
Weighted average number of common equivalent shares
outstanding............................................... 4,607,223 4,905,540 5,618,182
========= ========= =========
</TABLE>

See accompanying notes.

F-4
<PAGE> 49

AVTEAM, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
CLASS A RETAINED NOTES
PREFERRED CLASS A COMMON ADDITIONAL EARNINGS RECEIVABLE
PREFERRED STOCK COMMON STOCK PAID-IN (ACCUMULATED FROM
SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT) OFFICERS TOTAL
--------- --------- --------- ------- ---------- ------------ ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1993........................ -- $ -- 4,000,000 $40 $ (39) $ (41) $ -- $ (40)
Stockholder advances
contributed to capital.... -- -- -- -- 3,040 -- -- 3,040
Net income.................. -- -- -- -- -- 753 -- 754
Distributions............... -- -- -- -- (407) (713) -- (1,120)
--------- ---- --------- --- ------- ------- ----- -------
Balance at December 31,
1994........................ -- -- 4,000,000 40 2,594 -- -- 2,634
Shares issued in connection
with stock option plan.... -- -- 1,000,000 10 1,609 -- $(708) 911
Net income.................. -- -- -- -- -- 1,098 -- 1,098
Distributions............... -- -- -- -- (932) (1,098) -- (2,030)
--------- ---- --------- --- ------- ------- ----- -------
Balance at December 31,
1995........................ -- -- 5,000,000 50 3,271 -- (708) 2,613
Issuance of Preferred Stock,
net of issuance costs of
$543...................... 1,700,000 17 -- -- 11,340 -- -- 11,357
Cash received for notes
receivable from
officers.................. -- -- -- -- -- -- 708 708
Net income.................. -- -- -- -- -- 3,882 -- 3,882
Distributions............... -- -- -- -- -- (3,463) -- (3,463)
--------- ---- --------- --- ------- ------- ----- -------
Balance at December 31,
1996........................ 1,700,000 $ 17 5,000,000 $50 $14,611 $ 419 $ -- $15,097
========= ==== ========= === ======= ======= ===== =======
</TABLE>

See accompanying notes.

F-5
<PAGE> 50

AVTEAM, INC.

STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1994 1995 1996
------- ------- -------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income.................................................. $ 754 $ 1,098 $ 3,882
Adjustments to reconcile net income to net cash (used in)
provided by operating activities:
Depreciation and amortization............................. 31 101 158
Bad debt expense.......................................... 69 145 50
Deferred tax credit....................................... -- -- (388)
Changes in operating assets and liabilities net of effects
from purchase of Turbine:
Trade accounts receivable.............................. (2,346) (2,112) (2,270)
Inventory.............................................. 747 (5,792) (4,363)
Prepaid expenses....................................... (12) (164) (1,284)
Deposits and other assets.............................. (40) (28) (50)
Accounts payable....................................... 1,591 2,540 (1,740)
Accrued expenses....................................... 125 362 559
Due to stockholders and affiliates..................... 590 916 (655)
------- ------- -------
Net cash (used in) provided by operating
activities...................................... 1,509 (2,934) (6,101)
INVESTING ACTIVITY
Purchases of property and equipment......................... (8) (103) (314)
------- ------- -------
Net cash used in investing activity............... (8) (103) (314)
FINANCING ACTIVITIES
Payments on note payable to related party................... (1,000) -- --
Payments on capital leases.................................. -- (22) (48)
Net proceeds from (payments on) notes payable............... 350 (350) 1,550
Net proceeds from (payments on) short-term line of credit... -- 3,156 (2,752)
Advances from stockholders.................................. 1,467 4,203 2,250
Payments of stockholders' advances.......................... (467) (2,671) (2,479)
Net proceeds from sale of preferred stock................... -- -- 11,357
Distributions............................................... (1,120) (2,030) (3,463)
------- ------- -------
Net cash provided by (used in) financing
activities...................................... (770) 2,286 6,415
------- ------- -------
Net (decrease) increase in cash................... 731 (751) --
Cash at beginning of year......................... 20 751 --
------- ------- -------
Cash at end of year............................... $ 751 $ -- $ --
======= ======= =======
SUPPLEMENTAL CASH FLOW DISCLOSURES
Interest paid............................................... $ 1 $ 145 $ 795
======= ======= =======
SCHEDULE OF NONCASH FINANCING AND INVESTING ACTIVITIES
Transfer of assets from consignee as repayment of
receivable:
Inventory................................................. $ 214 $ -- $ --
Property and equipment.................................... 166 -- --
Prepaid expenses.......................................... 9 -- --
Deposits and other assets................................. 18 -- --
------- ------- -------
$ 407 $ -- $ --
======= ======= =======
Notes receivable from officers offset against amounts due to
stockholders.............................................. $ -- $ 912 $ 708
======= ======= =======
Shareholder advances converted to notes payable............. $ -- $ -- $ 1,511
======= ======= =======
Stockholder advances contributed to capital................. $ 3,040 $ -- $ --
======= ======= =======
Office furniture and equipment acquired under capital
leases.................................................... $ -- $ 153 $ 48
======= ======= =======
</TABLE>

See accompanying notes.

F-6
<PAGE> 51

AVTEAM, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996

1. BUSINESS

AVTEAM, Inc., (the "Company"), was incorporated in Florida in 1991. The
Company is an international aftermarket supplier of aircraft engines, engine
parts and airframe components. The Company supplies its products to other
aftermarket suppliers, independent repair facilities, aircraft operators and
original equipment manufacturers.

Prior to July 21, 1994, pursuant to a consignment agreement with Turbine
Engine Sales Group, Inc. ("Turbine"), Turbine disassembled engines purchased by
the Company and warehoused, managed and sold the parts in exchange for a
commission equal to 50% of the gross profit on the parts sold. On July 21, 1994,
the Company's stockholders acquired all of the capital stock of Turbine and the
consignment agreement was terminated. Also on July 21, 1994, in a purchase
transaction, the Company forgave $407,000 due from Turbine in exchange for
substantially all of Turbine's assets consisting of inventory ($214,000);
property and equipment ($166,000); prepaid expenses ($9,000); and deposits and
other assets ($18,000), at net book value, which approximated fair market value.
Turbine was subsequently dissolved. Turbine's results of operations are included
in the accompanying statement of operations beginning July 22, 1994. Pro forma
results of operations are not materially different from reported results.

2. SIGNIFICANT ACCOUNTING POLICIES

INVENTORY

Inventory of aircraft engines is stated at the lower of specific cost
(including overhaul costs) or market. Initially, cost of sales of engine parts
from disassembled engines are recognized based on margins realized from recently
sold, similar groups of engine parts. Once the remaining parts have been fully
inspected and their condition has been determined, the cost of subsequent sales
of engine parts from that engine are determined using the relationship of the
remaining costs of that engine to estimated sales. Cost of sales for individual
parts purchased for resale are reflected based on the specific identification
method.

REVENUE RECOGNITION

Sales are recognized when aircraft engines, engine parts and airframe
components are shipped or a service is performed.

The Company enters into consignment arrangements in which it warehouses
items, determines sales prices, arranges for shipment to customers, and collects
accounts receivable. The Company reflects sales under such arrangements in net
sales and the cost of such sales in cost of sales, since the Company bears the
risk of ownership once the items are sold.

WARRANTIES AND PRODUCT RETURNS

The Company does not provide service warranties in addition to those
provided by overhaul facilities and as a result does not record accruals for
warranties. The Company has established programs which, under specific
conditions, enable its customers to return inventory. The effect of these
returns is estimated based on a percentage of sales and historical experience
and sales are recorded net of a provision for estimated returns.

F-7
<PAGE> 52

AVTEAM, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

PROPERTY AND EQUIPMENT

Property and equipment (including assets under capital leases) is carried
at cost and is depreciated using accelerated and straight-line methods over the
lesser of the lease terms or the estimated useful lives of the assets. The lives
used are as follows:

<TABLE>
<S> <C>
Office furniture and equipment.............................. 3-7 years
Warehouse and transport equipment........................... 5-7 years
Leasehold improvements...................................... 3-5 years
</TABLE>

CONCENTRATION OF CREDIT RISK

Accounts receivable are primarily from domestic and foreign passenger
airlines, freight and package carriers, charter airlines, aircraft leasing
companies and service providers to such companies. The Company performs ongoing
evaluations of its trade accounts receivable customers, monitors its exposure
for credit losses and sales returns and does not require collateral.

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

PRO FORMA STATEMENTS OF INCOME INFORMATION

In conjunction with the closing of the private offering of its preferred
stock on December 6, 1996, the Company terminated its status as an S
corporation. Pro forma net income reflects adjustments for income taxes which
would have been recorded if the Company had not been an S corporation prior to
December 6, 1996 for all periods presented (see Note 5).

PRO FORMA NET INCOME PER COMMON EQUIVALENT SHARE

Pro forma net income per common equivalent share is calculated using the
weighted average number of common shares and common equivalent shares
outstanding during the periods presented. Pursuant to the requirements of the
Securities and Exchange Commission, common equivalent shares issued at prices
below the estimated public offering price during the 12 months immediately
preceding the date of the initial filing of the registration statement have been
included in the calculation of common equivalent shares, using the treasury
stock method, as if they were outstanding for all periods presented. The
preferred shares issued on December 6, 1996 are considered to be common
equivalent shares and, accordingly, have been included in the calculation of
weighted average number of common equivalent shares outstanding for all periods
presented.

3. ACCOUNTS RECEIVABLE

On November 8, 1995, the Company entered into a Limited Recourse Receivable
Discount Facility Agreement with a bank (the "Agreement") under which the bank
agreed to purchase certain trade receivables older than 30 days, with a maximum
maturity of 100 days, for the principal amount of the trade receivables less a
discount rate of LIBOR plus 1/4% (5.88% at December 31, 1995). The Agreement
provided that the aggregate principal amount of uncollected purchased
receivables could not exceed $10,000,000 at any one time, provided for the
purchase of a maximum of $60,000,000 of receivables over the term of the
Agreement and included certain recourse provisions related to returned inventory
only. The Agreement expired on November 1, 1996.

F-8
<PAGE> 53

AVTEAM, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

In 1995, the Company sold trade receivables under the Agreement with a
carrying amount of approximately $714,000 for approximately $704,000. In 1996,
the Company sold trade receivables under the Agreement with a carrying amount of
approximately $5,272,000 for approximately $5,204,000.

4. OFFERING EXPENSES

During 1996, the Company initiated a public offering of its common stock.
Due to uncertain market conditions, the Company decided to withdraw the
offering. As a result, the costs associated with the offering were charged
against earnings in 1996.

5. INCOME TAXES

HISTORICAL

Concurrent with the December 6, 1996 private placement (see Note 14), the
Company's S corporation election was terminated, making it subject to corporate
income taxes. The financial statements reflect a net income tax benefit of
approximately $310,000 for the year ended December 31, 1996, comprised of the
following two significant components:

- A net tax benefit of $388,000 representing the net deferred tax asset
recognized for the cumulative temporary differences between the carrying
amounts of assets and liabilities for financial reporting and tax
reporting purposes as of December 6, 1996.

- Current period expense of approximately $78,000 pertaining to the
Company's income before taxes of approximately $254,000 subject to
taxation for the period from December 6, 1996 to December 31, 1996.

Deferred income taxes reflect the net tax effect of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax assets as of December 31, 1996 are as follows (in
thousands):

<TABLE>
<S> <C>
Allowance for doubtful accounts............................. $ 54
Allowance for sales returns................................. 47
Depreciation................................................ 11
Accrued compensation........................................ 156
Uniform inventory capitalization............................ 120
----
Net deferred tax benefit.......................... $388
====
</TABLE>

The reconciliation of the expected income tax expense for the period from
December 6 to December 31, 1996 computed on income of approximately $254,000
before taxes at federal statutory rates is as follows:

<TABLE>
<S> <C>
Tax at federal statutory rate............................... 34.00%
State & local income taxes, net of federal tax benefit...... 3.52
Deferred tax benefit........................................ (164.30)
Permanent difference........................................ 3.85
Other....................................................... .60
-------
(122.33)%
=======
</TABLE>

For the years ended December 31, 1994 and 1995, the Company elected S
corporation status and was not subject to income tax.

On December 6, 1996, the date of the termination of S corporation status,
the Company declared a cash distribution to the stockholders. The distribution,
paid prior to January 1, 1997, was determined based on the

F-9
<PAGE> 54

AVTEAM, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Company's accumulated adjustment account, as defined in the Internal Revenue
Code, calculated through the date of termination of the Company's S corporation
status.

Also on December 6, 1996, the Company entered into a tax allocation and
indemnification agreement with the existing common stockholders relating to
their respective income tax liabilities and certain related matters. The tax
indemnification agreements generally provide that the existing common
stockholders will be indemnified by the Company with respect to federal and
state income taxes (plus interest and penalties) arising due to taxable income
shifted from a C Corporation taxable year to a taxable year in which the Company
was an S Corporation, and that the Company will be indemnified by the existing
common stockholders with respect to federal and state income taxes (plus
interest and penalties) arising due to taxable income shifted from an S
Corporation taxable year to a C Corporation taxable year.

PRO FORMA

The pro forma provision for income taxes for the three years ended December
31, 1996, reflects the income tax expense which would have been recorded by the
Company if the Company had been taxed as a C corporation for all periods
presented.

Significant components of the Company's pro forma deferred tax assets as of
December 31, 1995, and 1996 are as follows (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
------------
1995 1996
---- ----
<S> <C> <C>
Allowance for doubtful accounts............................. $ 43 $ 54
Allowance for sales returns................................. 252 47
Depreciation................................................ 7 11
Accrued compensation........................................ 503 156
Uniform inventory capitalization............................ -- 120
---- ----
$805 $388
==== ====
</TABLE>

The pro forma income tax provision (credit) differs from the amounts
computed by applying the federal statutory rate of 34% to income before income
taxes as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1994 1995 1996
----- ----- -----
<S> <C> <C> <C>
Tax at federal statutory rate............................... 34.00% 34.00% 34.00%
State income taxes, net of federal benefit.................. 3.61 3.63 3.63
Permanent differences....................................... .32 .30 2.30
----- ----- -----
37.93% 37.93% 37.93%
===== ===== =====
</TABLE>

F-10
<PAGE> 55

AVTEAM, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

6. PROPERTY AND EQUIPMENT

Property and equipment consists of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
------------
1995 1996
---- ----
<S> <C> <C>
Office furniture and equipment.............................. $184 $203
Warehouse and transport equipment........................... 209 532
Leasehold improvements...................................... 34 54
---- ----
427 789
Less accumulated depreciation and amortization.............. (129) (287)
---- ----
$298 $502
==== ====
</TABLE>

7. LEASES

On April 1, 1995, the Company entered into a lease agreement for new
warehouse and office space under an operating lease which expires on June 30,
2000. In addition, effective January 1, 1996, the Company signed a lease
agreement for additional warehouse and office space under an operating lease
which expires on December 31, 2000. Future minimum lease payments by year and in
the aggregate under operating leases are as follows (in thousands):

Rent expense for the years ended December 31, 1994, 1995 and 1996 was
approximately $35,000, $266,000 and $390,000, respectively.

The Company has entered into various capital leases for office furniture,
computer equipment, and warehouse and transportation equipment expiring in
various years through 1999. Equipment under capitalized lease obligations had an
original cost of approximately $153,000 and $201,000 at December 31, 1995 and
1996 and accumulated amortization was approximately $26,000 and $75,000 at
December 31, 1995 and 1996, respectively.

Future minimum lease payments by year and in the aggregate under these
capital leases were as follows at December 31, 1996 (in thousands):

<TABLE>
<S> <C>
1997........................................................ $ 75
1998........................................................ 55
1999........................................................ 29
----
Total minimum lease payments...................... 159
Less amounts representing interest at 15.8%................. (28)
----
Present value of net minimum lease payments under
capital leases (including current portion of
$69)............................................. $131
====
</TABLE>

8. RELATED PARTY TRANSACTIONS

On September 5, 1995, the Company entered into an agreement (the "Parati
Agreement") with Parati, Inc. ("Parati"), a corporation wholly-owned by the
Chairman of the Board of the Company, which provides

F-11
<PAGE> 56

AVTEAM, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

that Parati will purchase up to $10 million of certain aftermarket engines and
up to $40 million of new engines and that the Company will oversee, disassemble
and handle all of the operational and administrative aspects related to such
engines. The Parati Agreement further provides that all proceeds from the sale
of engines or parts will be divided equally between Parati and the Company after
payment to Parati of amounts equal to Parati's investment in such engines less
overhaul costs incurred by the Company on behalf of Parati. Overhaul costs are
incurred on a component basis and are not incurred until a customer is
interested in purchasing a component upon its overhaul. The Company is
reimbursed for overhaul costs through a reduction of the Company's payable to
Parati regardless of whether such parts have been sold. In 1995 and 1996, the
Company recorded sales under this agreement of approximately $224,000 and
$1,925,000 with a gross profit of approximately $45,000 and $395,000,
respectively. As of December 31, 1995 approximately $169,000 was owed to Parati
according to the Parati Agreement and as of December 31, 1996, Parati owed the
Company $343,000 for unreimbursed overhaul costs.

The Company purchased accounting services totaling $38,000 for each of the
two years ending December 31, 1994 and 1995 and approximately $10,000 for 1996
from a firm that is owned in part by a stockholder of the Company.

Management believes that compensation received from or paid to related
parties under the Parati Agreement and in connection with purchased accounting
services, described above, materially approximate those which would have been
received from or paid to non-affiliated third parties.

At December 31, 1995 and 1996, due to stockholders and affiliates consist
of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
---------------
1995 1996
------ -----
<S> <C> <C>
Non-interest bearing advances due to stockholder with no
fixed or determinable due dates(a)........................ $1,620 $ --
Accrued officers' compensation.............................. 1,337 365
Due to (from) Parati........................................ 169 (343)
------ -----
$3,126 $ 22
====== =====
</TABLE>

At December 31, 1996, notes payable-stockholders consist of the following
(in thousands):

<TABLE>
<S> <C>
Non-interest bearing notes payable to stockholders due
within sixty days of the consummation of an initial public
offering or during the second fiscal quarter of 2,000,
whichever is earlier(a)................................... $1,511
Notes payable to stockholders bearing interest at 40% of the
original issue discount as calculated under the Internal
Revenue Code (6.57% at December 31, 1996) and due either
within sixty days of the consummation of an initial public
offering or during the second fiscal quarter of 2,000,
whichever is earlier(b)................................... 1,550
------
$3,061
======
</TABLE>

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

(a) On December 6, 1996, in conjunction with the private placement (see Note
14), the Company agreed to convert the outstanding balance of advances due
to stockholders to notes payable.
(b) On December 6, 1996, in conjunction with the private placement (see Note
14), the existing common stockholders agreed to lend a portion of the
previously undistributed S corporation earnings to the Company.

F-12
<PAGE> 57

AVTEAM, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

9. NOTES PAYABLE TO BANK

On May 12, 1995, the Company executed a revolving line of credit agreement
with a bank. This line of credit was amended on September 29, 1995 and again on
June 13, 1996. The available borrowing base is generally based upon 75% to 85%
of eligible accounts receivable (depending on age of accounts receivable and the
Company's net worth) and 25% to 50% of eligible inventory (depending on age of
inventory), up to the maximum borrowing facility of $10,000,000. Principal
payments are made upon collection of accounts receivable, which are primarily
due within 30 days, and interest is payable monthly at prime plus 3/4% (9.5%
and 9.0% at December 31, 1995 and 1996, respectively). The loan is guaranteed by
the certain stockholders and is secured by substantially all of the assets of
the Company. At December 31, 1995 and 1996, approximately $2,561,000, and
$7,010,000 was available under this revolving line of credit agreement,
respectively.

On February 20, 1997, the Company obtained a new credit facility which
provides working capital of up to $20.0 million with interest at either the
lender's prime rate or LIBOR plus 2.75% per annum, as determined by the Company
at the time of each advance, subject to its availability calculation based on
the eligible borrowing base. The eligible borrowing base includes certain
receivables and inventories of the Company. The credit facility also permits the
bank to issue letters of credit on behalf of the Company of up to $5.0 million,
and the aggregate principal amount of any letters of credit so issued will
reduce amounts available under the credit facility. The credit facility matures
in May 1998 and the term of any letters of credit issued thereunder must expire
prior to May 1999.

10. EMPLOYMENT AGREEMENTS

Effective January 1, 1994, the Company entered into employment agreements
with two key employees which were amended on December 31, 1995, as described in
the following paragraph. Under the terms of the original agreements, each
employee received through December 31, 1995 compensation equal to 20% of
Adjusted Net Income, as defined in such agreements. Additionally, each of these
key employees were granted options to purchase shares equivalent to up to 10% of
the Company's outstanding common shares at a price equal to the Company's book
value on the last day of the month subsequent to the exercise of such options.
On January 1, 1995, 33% of the options were exercised in exchange for
noninterest bearing notes receivable from the officers totaling approximately
$259,000.

On December 31, 1995, the employment agreements' terms were amended to (1)
reduce, effective January 1, 1996, the amount of Adjusted Net Income each of
these two officers may receive as compensation from 20% to 5%, effective January
1, 1996; (2) to pay an additional aggregate one time bonus of approximately
$1,179,000 to these officers and (3) to change the exercise price of the
unexercised options to the fair market value of the Company's Class A Common
Stock as of the exercise date. The employees exercised their remaining options
on December 31, 1995 in return for noninterest bearing notes receivable from the
officers payable on demand at any time after May 31, 1996, totaling
approximately $1,360,000. On the same day, approximately $912,000 of these notes
from officers were offset against amounts due to the officers, resulting in an
outstanding balance on notes receivable from officers totalling $707,000, which
was repaid on December 12, 1996.

On December 6, 1996, the two key employees entered into the Amended and
Restated Employment Agreements (collectively, the "Employment Agreements") with
the Company. The Employment Agreements provide that the two key employees will
receive an annual base salary of $260,000 and $220,000, respectively, for an
initial term of three years expiring December 1999, as well as the right to
participate in the Company's 1996 Stock Option Plan (see Note 14) and the
Incentive Plan (as defined below). Upon termination without cause, the two key
employees will be entitled to receive two years' base salary.

The Company adopted a Key Executive Annual Incentive Plan (the "Incentive
Plan"), pursuant to which key executives of the Company may receive bonus
compensation based on the Company's performance during any fiscal year, as
determined by the Compensation Committee of the Board of Directors (the
"Committee"). Under the Incentive Plan, the Company's President and Chief
Executive Officer and

F-13
<PAGE> 58

AVTEAM, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Executive Vice President and other key executives designated by the Committee
are assigned a target award expressed as a percentage of base salary in varying
amounts (not to exceed 100% of the base salary for the President and Chief
Executive Officer and the Executive Vice President and 50% for other key
executives). The actual award is subject to achievement by the Company of
minimum levels of pre-tax income. The Committee has the authority to select
participants other than the President and Chief Executive Officer and the
Executive Vice President, to establish target awards and to determine final
awards in the event that the Company's operating income is less than the level's
established under the Incentive Plan during any year the Incentive Plan remains
in effect.

11. SIGNIFICANT CUSTOMERS

Pratt & Whitney accounted for 21% and 8% of the Company's sales for the
years ended December 31, 1995 and 1996, respectively. Accounts receivable from
Pratt & Whitney accounted for 28% and 4% of total accounts receivable at
December 31, 1995 and 1996, respectively.

Dallas Aerospace accounted for 32%, 13% and 16% of sales for the years
ended December 31, 1994, 1995 and 1996, respectively and 42%, 24% and 11% of
total accounts receivable at December 31, 1994, 1995 and 1996, respectively.

12. CONSIGNMENT SALES

The Company has an agreement with an airline to sell certain consigned
inventory. Net sales include approximately $733,000, $2,032,000 and $1,295,000
in 1994, 1995 and 1996, respectively, related to this agreement.

13. GEOGRAPHIC AREA INFORMATION

The Company had export sales for the year ended December 31, 1995 and 1996
of approximately $2,422,000 and $1,252,000, respectively, primarily to customers
in Latin America.

14. STOCKHOLDERS' EQUITY

On March 21, 1996, the Company amended and restated its Articles of
Incorporation pursuant to which each $1 par value outstanding share of Class A
Common Stock was converted to 4,000 shares of Class A Common Stock at a per
share par value of $.01. In addition, the Company authorized 20,000,000 shares
of $.01 per share par value preferred stock and increased the number of
authorized Class A Common Stock to 80,000,000 shares. On December 5, 1996, the
authorized shares of Common Stock was amended to be 77,000,000 shares of Class A
Common Stock and 3,000,000 shares of Class B Common Stock. All references in the
financial statements to number of shares, per share amounts and market prices of
the Company's Common Stock have been retroactively restated to reflect the
effect of the stock conversion and the newly authorized preferred stock and
Class A Common Stock and Class B Common Stock.

On April 12, 1996, the Company adopted the 1996 Stock Option Plan (the
"Option Plan") which allows a maximum of 600,000 shares of the Company's Class A
Common Stock to be available to provide incentives to employees, officers and
consultants of the Company. The exercise price of incentive stock options and
non-statutory stock options are to be determined by the Compensation Committee
of the Board of Directors but will be at least 100% and 85% of the fair market
value of the stock subject to the option on the date of grant, respectively (or
110% with respect to incentive stock options granted to holders of more than 10%
of the voting power of the Company's outstanding stock).

On December 6, 1996, the Company sold to a group of limited partnerships
(the "Clipper Group") in a private placement transaction an aggregate of
1,480,000 shares of Class A Preferred Stock and 220,000 shares of Class B
Preferred Stock for an aggregate purchase price of $11,900,000 pursuant to a
Stock Purchase Agreement. Two of the limited partnerships are affiliates of
Credit Suisse First Boston Corporation. Pursuant to the Company's Second Amended
and Restated Articles of Incorporation, all of such shares of Class A Preferred
Stock will automatically convert into an aggregate of 1,480,000 shares of Class
A Common Stock and all of such shares of Class B Preferred Stock will
automatically convert into an aggregate of 220,000 shares of Class B Common
Stock upon the consummation of an initial public offering. The Clipper Group has
transferable registration rights for their shares of Common Stock.

F-14
<PAGE> 59

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Stockholders
AVTEAM, Inc.

We have audited the accompanying statements of operations and cash flows of
Turbine Engine Sales Group, Inc. ("Turbine") for the year ended December 31,
1993 and the period from January 1, 1994 through July 21, 1994. These financial
statements are the responsibility of Turbine's management. Our responsibility is
to express an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the result of operations and cash flows of Turbine
Engine Sales Group, Inc. for the year ended December 31, 1993 and the period
from January 1, 1994 through July 21, 1994, in conformity with generally
accepted accounting principles.

ERNST & YOUNG LLP

Miami, Florida
January 30, 1996

F-15
<PAGE> 60

TURBINE ENGINE SALES GROUP, INC.

STATEMENTS OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
PERIOD FROM
JANUARY 1,
YEAR ENDED 1994 THROUGH
DECEMBER 31, JULY 21,
1993 1994
------------ ------------
<S> <C> <C>
Net sales................................................... $2,147 $846
Cost of sales............................................... 2,417 575
------ ----
(270) 271
Commission revenues......................................... 559 480
------ ----
289 751
Operating expenses:
Selling, general, and administrative...................... 933 664
Officers' compensation.................................... 135 84
------ ----
1,068 748
------ ----
Income (loss) from operations............................... (779) 3
Interest expense, net....................................... (64) (29)
------ ----
Net loss.......................................... $ (843) $(26)
====== ====
</TABLE>

See accompanying notes.

F-16
<PAGE> 61

TURBINE ENGINE SALES GROUP, INC.

STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED JANUARY 1,
DECEMBER 31, 1994 THROUGH
1993 JULY 21, 1994
------------ -------------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss.................................................... $(843) $ (26)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization............................. 40 22
Bad debt expense (recovery)............................... 27 (1)
Changes in operating assets and liabilities:
Trade accounts receivable.............................. 197 (489)
Inventory.............................................. 151 205
Prepaid expenses....................................... 32 7
Accounts payable....................................... 571 311
Accrued expenses....................................... 13 2
----- -----
Net cash provided by operating activities......... 188 31
INVESTING ACTIVITY
Purchases of property and equipment......................... (21) (18)
----- -----
Net cash used in investing activity......................... (21) (18)
----- -----
FINANCING ACTIVITIES
Payments on note payable to stockholders.................... (20) (49)
Payments on notes payable................................... -- (119)
----- -----
Net cash used in financing activities....................... (20) (168)
Net (decrease) increase in cash............................. 147 (155)
Cash at beginning of period................................. 36 183
----- -----
Cash at end of period....................................... $ 183 $ 28
----- -----
SUPPLEMENTAL CASH FLOW DISCLOSURES
Interest paid............................................... $ 3 $ 32
===== =====
</TABLE>

See accompanying notes.

F-17
<PAGE> 62

TURBINE ENGINE SALES GROUP, INC.

NOTES TO FINANCIAL STATEMENTS
JULY 21, 1994

1. BUSINESS

Turbine Engine Sales Group, Inc. ("Turbine" or the "Company") was
incorporated in Florida in 1992 and dissolved prior to 1995. Turbine was an
after market supplier of aircraft engines and parts and airframe components to
aircraft maintenance providers, manufacturers and airlines.

On May 4, 1992, Turbine entered into a consignment agreement (the
"Consignment Agreement") with an unrelated company, AVTEAM, Inc., formerly known
as Interstar Trading Corporation, ("AVTEAM"). Under the terms of the agreement,
AVTEAM would purchase aircraft engines and deliver them to Turbine on a
consignment basis and Turbine would disassemble the aircraft engines and sell
the parts. Profits were divided 50% to AVTEAM and 50% to Turbine after repayment
to AVTEAM of its total investment.

On July 21, 1994, the two stockholders of AVTEAM purchased all of the
outstanding common stock of Turbine and Turbine transferred all assets and
liabilities to AVTEAM as repayment of amounts due.

2. SIGNIFICANT ACCOUNTING POLICIES

INVENTORY

Inventory of aircraft engines is stated at the lower of specific cost
(including overhaul costs) or market. Cost of sales for engine parts and
airframe components are determined based on a ratio of expected sales per engine
to the purchase cost of the used engines plus overhaul costs.

REVENUE RECOGNITION

Sales are recognized when aircraft engines and parts and airframe
components are shipped or a service is performed.

PROPERTY AND EQUIPMENT

Property and equipment is carried at cost and is depreciated using
accelerated methods over the estimated useful lives of the assets. The lives
used are as follows:

<TABLE>
<S> <C>
Office furniture and equipment.............................. 5-7 years
Warehouse and transport equipment........................... 5-7 years
Leasehold improvements...................................... 5 years
</TABLE>

INCOME TAXES

The Company is organized as an S Corporation under the provisions of the
Internal Revenue Code, which provides that the corporation's taxable income is
taxable to the stockholders rather than at the corporate level. Had the Company
been subject to income taxes during the periods presented, no income tax benefit
for the losses incurred would have been reported in any of these periods since
realization of the related deferred tax asset would not have been reasonably
assured. Accordingly, a pro forma provision for income taxes has not been
presented for the periods presented.

CONCENTRATION OF CREDIT RISK

Accounts receivable are primarily from aircraft maintenance providers,
manufacturers and airlines. The Company performs ongoing evaluations of its
trade accounts receivable customers and monitors its exposure for credit losses
and sales returns and does not require collateral.

F-18
<PAGE> 63

TURBINE ENGINE SALES GROUP, INC.

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

3. LEASES

In April 1993, the Company entered into a lease agreement for warehouse and
office space under an operating lease which expires in April 1997. Rent expense
for the year ended December 31, 1993 and the period ended July 21, 1994 was
$92,000 and $47,000, respectively.

4. NOTES PAYABLE TO RELATED PARTIES

Interest expense of $64,000 and $32,000 for the year ended December 31,
1993 and the period ended July 21, 1994, respectively, represents interest on
notes due to stockholders bearing interest at 10% per annum payable
semi-annually.

F-19
<PAGE> 64

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

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF
THE COMPANY SINCE SUCH DATE.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 7
Use of Proceeds....................... 11
Dividend Policy....................... 12
Capitalization........................ 13
Dilution.............................. 14
Selected Financial Data............... 15
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 16
Business.............................. 17
Management............................ 29
Certain Transactions.................. 32
Principal Stockholders................ 35
Description of Capital Stock.......... 36
Shares Eligible For Future Sale....... 39
Underwriting.......................... 41
Notice to Canadian Residents.......... 42
Legal Matters......................... 43
Experts............................... 43
Additional Information................ 43
Index to Financial Statements......... F-1
</TABLE>

------------------
UNTIL , 1997 (25 DAYS AFTER THE COMMENCEMENT OF THE OFFERING),
ALL DEALERS EFFECTING TRANSACTIONS IN THE SHARES, WHETHER OR NOT PARTICIPATING
IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN
ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
======================================================

AVTEAM, INC.
4,500,000 SHARES
CLASS A COMMON STOCK
($.01 PAR VALUE)
PROSPECTUS
CREDIT SUISSE FIRST BOSTON

DILLON, READ & CO. INC.
- ------------------------------------------------------
<PAGE> 65

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth an itemized statement of certain estimated
expenses incurred in connection with the issuance and distribution of the
securities being registered, other than underwriting discounts and commissions:

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 18,818
NASD filing fee............................................. 6,710
Nasdaq National Market listing fee.......................... 50,000
Blue Sky fees and expenses..................................
Printing and engraving expenses.............................
Legal fees and expenses.....................................
Accounting fees and expenses................................
Registrar and Transfer Agent's fees and expenses............
Miscellaneous...............................................
--------
Total............................................. $750,000
========
</TABLE>

All amounts except the Securities and Exchange Commission registration fee,
the NASD filing fee and NASDAQ National Market listing fee are estimated. The
Company intends to pay all expenses of registration with respect to shares being
sold by the Selling Stockholders hereunder, with the exception of underwriting
discounts and commissions.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Company has authority under the Florida Business Corporation Act to
indemnify all directors and officers to the extent provided in such statute. The
Company's Amended and Restated Articles of Incorporation provide that the
Company shall indemnify its directors to the fullest extent permitted by law
either now or hereafter. The Company has also entered into an agreement with
each of its directors and certain of its officers wherein it has agreed to
indemnify each of them to the fullest extent permitted by law.

At present, there is no pending litigation or proceeding involving a
director or officer of the Company as to which indemnification is being sought,
nor is the Company aware of any threatened litigation that may result in claims
for indemnification by any officer or director.

Pursuant to the Underwriting Agreement filed as Exhibit 1.01 to this
Registration Statement, the Underwriters have agreed to indemnify the directors,
officers and controlling persons of the Company against certain civil
liabilities that may be incurred in connection with this offering, including
certain liabilities under the Securities Act.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

On January 1, 1995, pursuant to the terms of certain stock options granted
by the Company, certain executive officers of the Company acquired an aggregate
of 71.35 shares of the then outstanding Class A Common Stock, par value $1.00
per share, for an aggregate as evidenced by certain promissory notes each in the
amount of $259,097. Such securities were issued pursuant to exemptions set forth
in Sections 3(b) and 4(2) of the Securities Act. The recipients of the shares of
Class A Common Stock represented their intentions to acquire the securities for
investment only and not with a view to sell the securities in connection with
any distribution thereof and appropriate restrictive legends were affixed to the
share certificates.

On December 31, 1995, pursuant to the terms of certain stock options
granted by the Company, certain executive officers of the Company acquired an
aggregate of 178.65 shares of the then outstanding Class A Common Stock, par
value $1.00 per share, as evidenced by certain promissory notes in the aggregate
amount

II-1
<PAGE> 66

of $1,120,245. Such securities were issued pursuant to exemptions set forth in
Sections 3(b) and 4(2) of the Securities Act. The recipients of the shares of
Class A Common Stock represented their intentions to acquire the securities for
investment only and not with a view to sell the securities in connection with
any distribution thereof and appropriate restrictive legends were affixed to the
share certificates.

In March 1996, the Company amended and restated its Articles of
Incorporation, pursuant to which each share of the then outstanding class of
Class A Common Stock, par value $1.00 per share, was converted into 4,000 shares
of the currently outstanding class of Class A Common Stock, par value $.01 per
share. The Company issued an aggregate of 5,000,000 shares of Class A Common
Stock to the stockholders of the Company for no additional consideration in
connection with such share conversion.

On December 6, 1996, the Company issued and sold 1,480,000 shares of
convertible voting preferred stock and 220,000 shares of convertible non-voting
preferred stock to The Clipper Group for an aggregate purchase price of $11.9
million in reliance upon Sections 3(b) and 4(2) of the Securities Act. The
Clipper Group represented their intentions to acquire the securities for
investment only and not with a view to sell the securities in connection with
any distribution thereof and appropriate restrictive legends were affixed to the
share certificates. The Clipper Group had adequate access to information about
the Registrant. The Registrant believes that The Clipper Group were accredited
investors as defined in Rule 501 promulgated under the Securities Act.

No underwriting discounts or commissions were paid in connection with any
of the foregoing transactions.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- ------- -------
<C> <S> <C>
1.1 -- Form of Underwriting Agreement*
3.1 -- Third Amended and Restated Articles of Incorporation of
Registrant*
3.2 -- Second Amended and Restated By-Laws of Registrant*
4.1 -- Specimen Certificate for the Class A Common Stock
5.1 -- Opinion of Baker & McKenzie*
10.1 -- Loan Agreement dated February 19, 1997 between Registrant
and NationsBank, N.A. (South)
10.2 -- Surplus Parts Supply Agreement dated June 12, 1995 between
Registrant and United Technologies Corporation (confidential
treatment of certain portions of Exhibit 10.02 has been
granted by the Commission)
10.3 -- Letter Agreement dated September 5, 1995 between Registrant
and Parati Corporation
10.4 -- Amended and Restated Employment Agreement dated December 6,
1996 between Registrant and Donald A. Graw
10.5 -- Amended and Restated Employment Agreement dated December 6,
1996 between Registrant and Jaime J. Levy
10.6 -- AVTEAM Tax Allocation and Indemnification Agreement dated
December 5, 1996 between Registrant and Donald A. Graw
10.7 -- Lease Agreement dated December 28, 1994 between Registrant
and Sunbeam Properties, Inc.
10.8 -- Lease Agreement dated November 13, 1995 between Registrant
and Sunbeam Properties, Inc.
10.9 -- Indemnification Agreement between Registrant and Donald A.
Graw effective as of April 12, 1996
10.10 -- Indemnification Agreement between Registrant and Jaime J.
Levy effective as of April 12, 1996
10.11 -- Indemnification Agreement between Registrant and Mark S.
Koondel effective as of April 12, 1996
</TABLE>

II-2
<PAGE> 67
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- ------- -------
<C> <S> <C>
10.12 -- Indemnification Agreement between Registrant and Leon
Sragowicz effective as of April 12, 1996
10.13 -- Indemnification Agreement between Registrant and Robert
Munson effective as of April 12, 1996
10.14 -- Indemnification Agreement between Registrant and Richard
Preston effective as of April 12, 1996
10.15 -- Indemnification Agreement between Registrant and Dallas Cobb
effective as of March 20, 1997
10.16 -- Indemnification Agreement between Registrant and Bryan
Thomas McFarland effective as of March 20, 1997
10.17 -- Indemnification Agreement between Registrant and Eugene P.
Lynch dated effective as of March 20, 1997
10.18 -- AVTEAM, Inc. 1996 Stock Option Plan
10.19 -- AVTEAM, Inc. Key Executive Annual Incentive Plan
10.20 -- Stock Purchase Agreement dated December 6, 1996 between
Registrant and The Clipper Group
10.21 -- Registration Rights Agreement dated December 6, 1996 between
Registrant and The Clipper Group
10.22 -- AVTEAM Tax Allocation and Indemnification Agreement dated
December 5, 1996 between Registrant and Leon Sragowicz
10.23 -- AVTEAM Tax Allocation and Indemnification Agreement dated
December 5, 1996 between Registrant and Richard Preston
10.24 -- AVTEAM Tax Allocation and Indemnification Agreement dated
December 5, 1996 between Registrant and Jaime J. Levy
23.1 -- Consent of Baker & McKenzie (included in Exhibit 5.01)*
23.2 -- Consent of Ernst & Young LLP
24.1 -- Powers of Attorney (as set forth on the signature page of
the Registration Statement)
27.1 -- Financial Data Schedule
</TABLE>

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

* To be filed by amendment.

(b) Financial Statement Schedules:

<TABLE>
<CAPTION>
SCHEDULE
NUMBER SCHEDULE
- ----------- --------
<C> <S> <C>
Schedule II -- Valuation and Qualifying Accounts for the Years Ended
December 31, 1994, 1995 and 1996
</TABLE>

ITEM 17. UNDERTAKINGS

The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the underwriting agreements, certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such

II-3
<PAGE> 68

indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.

The undersigned Registrant hereby undertakes:

(1) That for purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus filed
as part of the registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of the registration statement as of the time it was declared
effective.

(2) That for the purposes of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

(3) To provide to the Underwriters at the closing specified in the
Underwriting Agreement certificates in such denominations and registered in
such names as required by the Underwriters to permit prompt delivery to
each purchaser.

(4) That insofar as indemnification for liabilities arising under the
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described in Item 14 hereof, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

II-4
<PAGE> 69

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended (the
"Securities Act"), the Registrant has caused this Form S-1 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Miramar, Florida, on the 24th day of March, 1997.

AVTEAM, INC.

By: /s/ DONALD A. GRAW
------------------------------------
Donald A. Graw
President and Chief Executive
Officer

Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated. Each person whose signature appears below hereby authorizes
Donald A. Graw and Mark S. Koondel, and each of them acting individually with
full power of substitution, to file one or more amendments, including
post-effective amendments, to this Registration Statement or to file a new
registration statement pursuant to Rule 462(b) of the Securities Act for the
purpose of registering additional shares of Common Stock, which amendments may
make such changes, or new registration statement may contain such information,
as Donald A. Graw and Mark S. Koondel deem appropriate, and each person whose
signature appears below, individually and in each capacity stated below, hereby
appoints Donald A. Graw and Mark S. Koondel, and each of them acting
individually with full power of substitution, as Attorney-in-Fact to execute his
name and on his behalf, to file any such amendments to this Registration
Statement or any such new registration statement.

<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<C> <S> <C>

/s/ LEON SRAGOWICZ Chairman of the Board, March 24, 1997
- ----------------------------------------------------- Director
Leon Sragowicz

/s/ DONALD A. GRAW President, Chief March 24, 1997
- ----------------------------------------------------- Executive Officer,
Donald A. Graw Director (Principal
Executive Officer)

/s/ MARK S. KOONDEL Chief Financial Officer, March 24, 1997
- ----------------------------------------------------- Treasurer, Assistant
Mark S. Koondel Secretary (Principal
Financial and
Accounting Officer)

/s/ JAIME J. LEVY Executive Vice March 24, 1997
- ----------------------------------------------------- President, Director
Jaime J. Levy

/s/ BRYAN THOMAS MCFARLAND Vice March 24, 1997
- ----------------------------------------------------- President -- Business
Bryan Thomas McFarland Development

/s/ DALLAS COBB Vice President -- March 24, 1997
- ----------------------------------------------------- Operations
Dallas Cobb
</TABLE>

II-5
<PAGE> 70
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<C> <S> <C>

/s/ RICHARD PRESTON Secretary, Director March 24, 1997
- -----------------------------------------------------
Richard Preston

/s/ ROBERT MUNSON Director March 24, 1997
- -----------------------------------------------------
Robert Munson

/s/ EUGENE P. LYNCH Director March 24, 1997
- -----------------------------------------------------
Eugene P. Lynch
</TABLE>

II-6
<PAGE> 71

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Stockholders
AVTEAM, Inc.

We have audited the financial statements of AVTEAM, Inc. as of December 31,
1995 and 1996, and for each of the three years in the period ended December 31,
1996, and have issued our report thereon dated February 27, 1997 (included
elsewhere in this Registration Statement). Our audits also included the
financial statement schedule listed in Item 16(b) of this Registration
Statement. This schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits.

In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.

ERNST & YOUNG LLP

Miami, Florida
February 27, 1997

S-1
<PAGE> 72

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

AVTEAM, INC.
DECEMBER 31, 1996
(IN THOUSANDS)

<TABLE>
<CAPTION>
BALANCE AT CHARGED TO BALANCE
BEGINNING COSTS AND AT END OF
DESCRIPTION OF YEAR EXPENSES DEDUCTIONS YEAR
----------- ---------- ---------- ------------ ---------
<S> <C> <C> <C> <C>
Year ended December 31, 1994
Deducted from asset accounts:
Allowance for doubtful accounts........................ $ -- $ 69 $ 16(1) $ 53
Allowance for sales returns............................ -- 162 -- 162
---- ---- ---- ----
Total........................................... $ -- $231 $ 17 $215
==== ==== ==== ====
Year Ended December 31, 1995
Deducted from asset accounts:
Allowance for doubtful accounts........................ $ 53 $145 $ 84(1) $114
Allowance for sales returns............................ 162 669 162(2) 669
---- ---- ---- ----
Total........................................... $215 $814 $202 $783
==== ==== ==== ====
Year Ended December 31, 1996
Deducted from asset accounts:
Allowance for doubtful accounts........................ $114 $ 50 $ 13(1) $151
Allowance for sales returns............................ 669 129 669(2) 129
---- ---- ---- ----
Total........................................... $783 $179 $202 $280
==== ==== ==== ====
</TABLE>

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

(1) Uncollectible accounts written off, net of recoveries.
(2) Application of credit memos against reserve.

S-2
<PAGE> 73

EXHIBIT INDEX

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
- ------- ------- ------------
<C> <C> <S> <C>
4.1 -- Specimen Certificate for the Class A Common Stock
10.1 -- Loan Agreement dated as of February 19, 1997 between
Registrant and NationsBank, N.A. (South)
10.2 -- Surplus Parts Supply Agreement dated June 12, 1995 between
Registrant and United Technologies Corporation (confidential
treatment of certain portions of Exhibit 10.02 has been
granted by the Commission)
10.3 -- Letter Agreement dated September 5, 1995 between Registrant
and Parati Corporation
10.4 -- Amended and Restated Employment Agreement dated December 6,
1996 between Registrant and Donald A. Graw
10.5 -- Amended and Restated Employment Agreement dated December 6,
1996 between Registrant and Jaime J. Levy
10.6 -- AVTEAM Tax Allocation and Indemnification Agreement dated
December 5, 1996 between Registrant and Donald A. Graw
10.7 -- Lease Agreement dated December 28, 1994 between Registrant
and Sunbeam Properties, Inc.
10.8 -- Lease Agreement dated November 13, 1995 between Registrant
and Sunbeam Properties, Inc.
10.9 -- Indemnification Agreement between Registrant and Donald A.
Graw effective as of April 12, 1996
10.10 -- Indemnification Agreement between Registrant and Jaime J.
Levy effective as of April 12, 1996
10.11 -- Indemnification Agreement between Registrant and Mark S.
Koondel effective as of April 12, 1996
10.12 -- Indemnification Agreement between Registrant and Leon
Sragowicz effective as of April 12, 1996
10.13 -- Indemnification Agreement between Registrant and Robert
Munson effective as of April 12, 1996
10.14 -- Indemnification Agreement between Registrant and Richard
Preston effective as of April 12, 1996
10.15 -- Indemnification Agreement between Registrant and Dallas Cobb
effective as of March 20, 1997
10.16 -- Indemnification Agreement between Registrant and Bryan
Thomas McFarland effective as of March 20, 1997
10.17 -- Indemnification Agreement between Registrant and Eugene P.
Lynch effective as of March 20, 1997
10.18 -- AVTEAM, Inc. 1996 Stock Option Plan
10.19 -- AVTEAM, Inc. Key Executive Annual Incentive Plan
10.20 -- Stock Purchase Agreement dated December 6, 1996 between
Registrant and The Clipper Group
10.21 -- Registration Rights Agreement dated December 6, 1996 between
Registrant and The Clipper Group
10.22 -- AVTEAM Tax Allocation and Indemnification Agreement dated
December 5, 1996 between Registrant and Leon Sragowicz
10.23 -- AVTEAM Tax Allocation and Indemnification Agreement dated
December 5, 1996 between Registrant and Richard Preston
10.24 -- AVTEAM Tax Allocation and Indemnification Agreement dated
December 5, 1996 between Registrant and Jaime J. Levy
23.2 -- Consent of Ernst & Young LLP
24.1 -- Powers of Attorney (as set forth on the signature page of
the Registration Statement)
27.1 -- Financial Data Schedule
</TABLE>

<PAGE> 1
[LOGO] Exhibit 4.1

AVTEAM, INC.

INCORPORATED UNDER THE LAWS OF THE STATE OF FLORIDA

[NUMBER] [SHARES]

CLASS A COMMON STOCK CLASS A COMMON STOCK

SEE REVERSE FOR
CERTAIN DEFINITIONS

CUSIP
THIS CERTIFIES THAT

IS THE OWNER OF

FULLY PAID AND NON-ASSESSABLE SHARES OF THE CLASS A COMMON STOCK,
PAR VALUE $.01 PER SHARE, OF

AVTEAM, INC.

transferable on the books of the Corporation by the holder hereof in person or
by duly authorized attorney upon surrender of this Certificate properly
endorsed. This Certificate is not valid until countersigned by the Transfer
Agent and registered by the Registrar.

WITNESS the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.

CERTIFICATE OF STOCK

Dated:

/s/ Donald A. Graw

PRESIDENT AND CHIEF EXECUTIVE OFFICER

/s/ Richard Preston

SECRETARY

[CORPORATE SEAL]

COUNTERSIGNED AND REGISTERED:
AMERICAN STOCK TRANSFER & TRUST COMPANY
TRANSFER AGENT AND REGISTRAR

BY
AUTHORIZED SIGNATURE
<PAGE> 2
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.

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

UNIF GIFT MIN ACT -- _______________ Custodian _________________
(Cust) (Minor)

under Uniform Gifts to Minors Act _________________________
(State)

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

For Value Received, ______________________________________ hereby sell, assign
and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE

______________________________________

________________________________________________________________________________

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

________________________________________________________________________________

__________________________________________________________Shares of Class A
Common Stock represented by the within Certificate, and do hereby irrevocably
constitute and appoint

_______________________________________________________________________ Attorney
to transfer the said shares on the books of the within named Corporation with
full power of substitution in the premises.

Dated ______________________________

________________________________________________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

SIGNATURE(S) GUARANTEED: _______________________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS
AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE
MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.

<PAGE> 1
Exhibit 10.1

LOAN AGREEMENT

by and between

NATIONSBANK, N.A. (SOUTH)

and

AVTEAM, INC.

<PAGE> 2

TABLE OF CONTENTS

<TABLE>
ARTICLE 1
<S> <C>
DEFINITIONS AND REFERENCE TERMS................................... 1

ARTICLE 2
LOANS............................................................. 9
2.01 Loan................................................... 9
2.02 Revolving Credit Feature............................... 10
2.03 Borrowing Base......................................... 10
2.04 Letter of Credit Subfeature............................ 12
2.05 Procedure for Advances................................. 12
2.06 Libodollar Advances.................................... 13
2.07 Conditions Precedent................................... 14

ARTICLE 3
REPRESENTATIONS AND WARRANTIES.................................... 15
3.01 Good Standing.......................................... 15
3.02 Authority and Compliance............................... 15
3.03 Binding Agreement...................................... 16
3.04 Litigation............................................. 16
3.05 No Conflicting Agreements.............................. 16
3.06 Ownership of Assets.................................... 16
3.07 Taxes.................................................. 16
3.08 Financial Statements................................... 16
3.09 Place of Business...................................... 17
3.10 Environmental Matters.................................. 17
3.11 Receivables............................................ 17
3.12 Inventory.............................................. 18
3.13 Federal Reserve Regulations............................ 19
3.14 Consents, Etc.......................................... 19
3.15 Governmental Authorizations............................ 19
3.16 Title to Properties.................................... 19
3.17 Solvent................................................ 20
3.18 Subsidiaries........................................... 20
3.19 Shareholders........................................... 20
3.20 Indebtedness........................................... 20
3.21 Contingent Liabilities................................. 20
3.22 Incorporation of Representations and Warranties........ 20
3.23 Material Contracts..................................... 20
3.24 Use of Proceeds........................................ 20
3.25 Pension and Welfare Plans.............................. 21
</TABLE>

<PAGE> 3

<TABLE>
<S> <C>
3.26 Tax Returns and Payment....................................... 21
3.27 Labor Matters................................................. 21
3.28 Multi-Employer Pension Plan Amendments Act of 1980............ 22
3.29 Investment Company Act of 1940; Public Utility
Holding Company Act of 1935................................. 22
3.30 Employment and Other Agreements............................... 22
3.31 Air Carrier................................................... 22
3.32 Continuation of Representation and Warranties................. 22

ARTICLE 4
AFFIRMATIVE COVENANTS.............................................. 22
4.01 Financial Condition........................................... 22
4.02 Financial Statements and Other Information.................... 23
4.03 Insurance..................................................... 25
4.04 Existence and Compliance...................................... 25
4.05 Adverse Conditions or Events.................................. 25
4.06 Taxes and Other Obligations................................... 26
4.07 Maintenance................................................... 26
4.08 Notification.................................................. 26
4.09 Potential Contingent Liabilities.............................. 26
4.10 Subsidiaries.................................................. 26
4.11 Non-Use Commitment Fee........................................ 26
4.12 Additional Fee................................................ 27
4.13 Compliance with Laws.......................................... 27
4.14 Visitation Rights............................................. 27
4.15 ERISA......................................................... 27
4.16 Payment of Indebtedness....................................... 28
4.17 Parts Agreement............................................... 28
4.18 Subsidiary.................................................... 28
4.19 Purchase of Engines and Propellers............................ 28
4.20 Lock Box...................................................... 28
4.21 Bank Account.................................................. 28

ARTICLE 5
NEGATIVE COVENANTS................................................. 28
5.01 Liens......................................................... 29
5.02 Borrowings.................................................... 29
5.03 Character of Business......................................... 29
5.04 Additional Negative Covenants................................. 29
5.05 ERISA Compliance.............................................. 30

ARTICLE 6
DEFAULT............................................................ 31
</TABLE>

<PAGE> 4

<TABLE>
<S> <C>
6.01 ..............................................................31
6.02 ..............................................................31
6.03 ..............................................................31
6.04 ..............................................................31
6.05 ..............................................................31
6.06 ..............................................................31
6.07 ..............................................................31
6.08 ..............................................................31
6.09 ..............................................................32
6.10 ..............................................................32
6.11 ..............................................................32
6.12 ..............................................................32
6.13 ..............................................................32
6.14 ..............................................................32
6.15 ..............................................................32
6.16 ..............................................................32

ARTICLE 7
REMEDIES UPON DEFAULT..............................................33

ARTICLE 8
NOTICES............................................................34

ARTICLE 9
COSTS, EXPENSES AND ATTORNEY'S FEES................................35

ARTICLE 10
MISCELLANEOUS......................................................35
10.01 Cumulative Rights and No Waiver...............................35
10.02 Applicable Law................................................35
10.03 Amendment.....................................................36
10.04 Documents.....................................................36
10.05 Partial Invalidity............................................36
10.06 Indemnification...............................................36
10.07 Survivability.................................................36
10.08 Field Audit...................................................36
10.09 Jurisdiction, Service of Process..............................36
10.10 Course of Dealing.............................................37
10.11 Successors and Assigns........................................37
10.12 Net Payments..................................................37
10.13 Further Assurances............................................38
10.14 Counterparts..................................................38
10.15 Resurrection of Borrower's Obligations........................38

</TABLE>

iii

<PAGE> 5

<TABLE>

<S> <C>
10.16 Equitable Relief...............................................38
10.17 Ambiguity or Conflict..........................................38

ARTICLE 11
PARTIAL RELEASES....................................................39

ARTICLE 12
ARBITRATION.........................................................39
12.01 SPECIAL RULES..................................................39
12.02 RESERVATION OF RIGHTS..........................................40

ARTICLE 13
NO ORAL AGREEMENT...................................................40

ARTICLE 14
CROSS-DEFAULT/CROSS-COLLATERAL......................................40

EXHIBIT 2.03(b)..............................................................42

EXHIBIT 2.05.................................................................43

EXHIBIT 2.06(b)..............................................................45

EXHIBIT 4.02(d)..............................................................47

EXHIBIT 3.18.................................................................50

EXHIBIT 3.19.................................................................51

EXHIBIT 3.20.................................................................52

EXHIBIT 3.21.................................................................53

EXHIBIT 3.30.................................................................54

EXHIBIT 4.02(c)..............................................................55

EXHIBIT 11...................................................................59

EXHIBIT 11(a)................................................................61

AFFIDAVIT FOR EXECUTION OF LOAN AGREEMENT
WITHOUT THE STATE OF FLORIDA........................................62

</TABLE>

iv
<PAGE> 6

NATIONSBANK, N.A. (SOUTH)
LOAN AGREEMENT

This Loan Agreement (the "Agreement") dated as of the 19th day of
February, 1997, by and between NATIONSBANK, N.A. (SOUTH), a national banking
association, and the Borrower described below:

In consideration of the Loan or Loans described below and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, Bank and Borrower agree as follows:

ARTICLE 1
DEFINITIONS AND REFERENCE TERMS

In addition to any other terms defined herein, the following terms
shall have the meaning set forth with respect thereto:

ACCOUNTING TERMS. All accounting terms not specifically
defined or specified herein shall have the meanings generally attributed to such
terms under generally accepted accounting principles ("GAAP"), as in effect from
time to time, consistently applied.

ACCOUNTS. Accounts shall mean all "accounts" (as defined in
the UCC) now owned or hereafter acquired by Borrower, and shall also mean and
include all accounts receivable, contract rights, book debts, notes, drafts and
other obligations or indebtedness owing to Borrower arising from the sale, lease
or exchange of goods or other property by it and/or the performance of services
by it (including any such obligation which might be characterized as an account,
contract right or general intangible under the Uniform Commercial Code in effect
in any jurisdiction) and all of Borrower's rights in, to and under all purchase
orders for goods, services or other property, and all of Borrower's rights to
any goods, services or other property represented by any of the foregoing
(including returned or repossessed goods and unpaid sellers' rights of
rescission, replevin, reclamation and rights to stoppage in transit) and all
monies due to or to become due to Borrower under all contracts for the sale,
lease or exchange of goods or other property and/or the performance of services
by it (whether or not yet earned by performance on the part of Borrower), in
each case whether now in existence or hereafter arising or acquired, including,
without limitation, the right to receive the proceeds of said purchase orders
and contracts and all collateral security and guarantees of any kind given by
any Person with respect to any of the foregoing.

ADVANCE. Advance means the principal amount of sums advanced
by Bank to or for the benefit of Borrower.

AFFILIATE. Affiliate means any Person (other than a
Subsidiary) which directly or indirectly through one or more intermediaries
controls, or is controlled by or is under common

<PAGE> 7

control with, Borrower, or five percent (5%) or more of the equity interest of
which is held beneficially or of record by, Borrower. The term "control" means
the possession, directly or indirectly, of the power to cause the direction of
the management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.

APPLICABLE MARGIN. Applicable Margin means: (a) in the case
of the LIBOR Basis, two hundred seventy-five (275) basis points, and (b) in the
case of the Prime Rate Basis, zero percent (0%).

AUTHORIZED SIGNATORY. Authorized Signatory means any one of
Donald A. Graw, Jaime J. Levy or Mark S. Koondel.

BANK. NATIONSBANK, N.A. (SOUTH), its successors, assigns and
affiliates.

BORROWER. AVTEAM, INC., a Florida corporation.

BORROWER'S ADDRESS. 3230 Executive Way, Miramar,
Florida 33025.

BORROWING DATE. Borrowing Date means the day as of which an
Advance is made.

BUSINESS DAY. Business Day means, if the applicable day
relates to a prime rate advance, a day on which banks are not authorized or
required to be closed in Fort Lauderdale, Florida, and if the applicable day
relates to any LIBOR Advance, a day on which dealings are carried on in the
London interbank market.

CAPITAL EXPENDITURE. Capital Expenditure shall mean any
expenditure by a Person which is or is required to be capitalized on its balance
sheet for financial reporting purposes in accordance with GAAP including,
without limitation, the incurring by such Person of any capitalized lease
obligations.

CHATTEL PAPER. Chattel Paper shall have the meaning ascribed
to said term in Section 679.105 of the Florida Statutes.

CLIPPER AGREEMENT. Clipper Agreement shall mean, individually
and collectively, the following: (i) that certain Stock Purchase Agreement dated
December 6, 1996, among Borrower and The Clipper Group; (ii) Shareholders'
Agreement among the Borrower, the shareholders of the Borrower and Clipper
Capital Partners, L.P., as Purchaser Representatives; and (iii) Registration
Rights Agreement among the Borrower and the investors identified thereon.

CODE. Code shall mean the Internal Revenue Code of 1986, as
the same may be from time to time hereafter modified or amended.

<PAGE> 8

COLLATERAL. Collateral means all present and future: Accounts,
Inventory and all Products thereof, reserves, balances, deposits, property of
Borrower and each Subsidiary coming into the possession of Bank, General
Intangibles, Instruments, Chattel Paper, Documents, Equipment, Items and Money
and all Proceeds thereof in which Borrower and each Subsidiary now has and
hereafter acquires any rights of any kind and nature whatsoever, wherever
located and regardless of in whose possession.

COMMITMENT. Commitment shall mean the agreement of Bank to
make Advances hereunder during the term of the commitment pursuant to the terms
and subject to the conditions herein expressed.

COMMITMENT AMOUNT. Commitment Amount shall mean the aggregate
principal amount of Advances which Bank agrees to make available and are
permitted to be outstanding at any one time hereunder, up to the amount set
forth in Section 2.01.

CONTINGENT LIABILITY. Contingent Liability shall mean, without
duplication, as to any Person: (a) any guaranty Obligation of that Person; and
(b) any direct or indirect recourse obligation or liability, contingent or
otherwise, of that Person: (i) in respect of any letter of credit, bond or
similar instrument issued for the account of that Person or as to which that
Person is otherwise liable for reimbursement of drawings, (ii) to purchase any
materials, supplies or other property from, or to obtain the services of,
another Person if the relevant contract or other related document or obligation
requires that payment for such materials, supplies or other property, or for
such services, shall be made if delivery of such materials, supplies or other
property is not made or tendered, or such services are never performed or
tendered, or (iii) incurred pursuant to any interest rate swap or similar
agreement. The amount of any Contingent Liability shall be deemed equal to the
maximum reasonably anticipated liability in respect thereof.

CONTRACT AMOUNT. Contract Amount means the amount of
principal of an Advance selected by Borrower to bear interest at the Libodollar
Rate.

CONTRACT DATE. Contract Date means the date upon which an
Interest Period begins with respect to an outstanding Advance.

DEFAULT. Default means any event or condition which, with the
giving of notice or the passage of time, or both, would become an Event of
Default.

DEFAULT RATE. Default Rate means that certain rate of
interest described in the Note as applicable upon a Default.

DOCUMENTS. Documents shall have the meaning ascribed to said
term in Section 679.015 of the Florida Statutes and shall include all bills of
lading, airway bills, dock warrants, dock receipts, warehouse receipts or orders
for the delivery of goods, and also any other document which

3
<PAGE> 9

in the regular course of business or financing is treated as adequately
evidencing that the person in possession of it is entitled to receive, hold and
dispose of the document and the goods it covers.

DOLLARS. Dollars and the symbol $ means lawful money of the
United States of America.

EQUIPMENT. Equipment shall have the meaning ascribed to said
term in Section 678.109 of the Florida Statutes and shall include all of the
Borrower's goods, machinery, equipment, fixed assets, rolling stock, fixtures,
furniture, office equipment, tools, parts and other items of personal property
of every kind and description, now owned or hereafter acquired by the Borrower,
wheresoever located, together with all additions, attachments, accessions,
parts, replacements and substitutions thereof.

ERISA. ERISA means the Employment Retirement Income Security
Act of 1974, as same may be amended from time to time, together with the
regulations thereunder.

EVENT OF DEFAULT. Event of Default shall have the meaning set
forth in Article 6 hereof.

GENERAL INTANGIBLES. General Intangibles shall have the
meaning ascribed to said term in Section 679.106 of the Florida Statutes and
shall include, without limitation, any personal property other than goods,
Accounts, Inventory, Equipment, Chattel Paper and Instruments, including all
franchises, licenses, leases and subleases whereby Borrower leases to another
any of Borrower's Inventory or Equipment, contracts, permits and authorizations
of governmental agencies and others, tradenames, trademarks, service marks,
patents, copyrights, intellectual property and all other intangible property of
the Borrower.

HAZARDOUS MATERIALS. Hazardous Materials include all materials
defined as hazardous or biohazardous wastes or substances under any local, state
or federal environmental laws, rules or regulations, and petroleum, petroleum
products, oil and asbestos.

INDEBTEDNESS. Indebtedness of any Person shall mean (a) all
indebtedness for borrowed money or for the deferred purchase price of any asset
or services (other than accounts payable to trade creditors under customary
trade credit terms) for which the Person is liable as principal, (b) all
indebtedness (excluding unaccrued finance charges) secured by a lien on property
owned or being purchased by the Person, whether or not such indebtedness shall
have been assumed by the Person, (c) all capitalized lease obligations
(excluding unaccrued finance charges) of the Person, (d) any arrangement
(commonly described as a sale-and-leaseback transaction) with any financial
institution or other lender or investor providing for the leasing to the Person
of property which at the time has been or is to be sold or transferred by the
Person to the lender or investor, or which has been or is being acquired from
another Person by the lender or investor for the purpose of leasing the property
to the Person, (e) all obligations of partnerships or joint ventures in respect
of which the Person is primarily or secondarily liable as a partner or joint
venturer (provided that in

<PAGE> 10

any event for purposes of determining the amount of the Indebtedness, the full
amount of such obligations, without giving effect to the Contingent Liability or
contributions of other participants in the partnership or joint venture, shall
be included), (f) any arrangement commonly known as a take or pay contract, (g)
all redeemable preferred stock of such Person valued at the greater of its
voluntary or involuntary liquidation preference plus accrued and unpaid
dividends, and (h) any Contingent Liability of the Borrower or a Subsidiary.

INSTRUMENTS. Instruments shall have the meaning ascribed to
said term in Section 679.105 of the Florida Statutes.

INTEREST PAYMENT DATE. Interest Payment Date means: (i) with
respect to a Libodollar Advance, the last day of each Interest Period applicable
to such Advance; and (ii) with respect to any Advances or portions thereof which
at any time are not Libodollar Advances, quarterly on the tenth (10th) day of
each calendar quarter commencing April 10, 1997.

INTEREST PERIOD. Interest Period means, in the case of a
Libodollar Advance, the period beginning on a Borrowing Date or a Contract Date,
as may be applicable, and ending for each Libodollar Advance, one (1), two (2)
or three (3) months thereafter, and thereafter each successive one (1), two (2)
or three (3) months as the Borrower shall request hereunder, commencing on the
last day of the immediately preceding Interest Period, and ending one (1), two
(2) or three (3) months thereafter as the Borrower may elect.

The determination of Interest Periods in the case of
a Libodollar Advance shall be subject to the following provisions: (i) each
Interest Period occurring after the initial Interest Period shall commence on
the day on which the next preceding Interest Period expires, (ii) if any
Interest Period would otherwise commence or expire on a day which is not a
Business Day, the Interest Period shall commence or expire, as the case may be,
on the next succeeding Business Day (and interest shall accrue and be payable
for the period of such extension), unless, in the case of an expiration of an
Interest Period for a Libodollar Advance, the next Business Day shall fall in
the next succeeding calendar month, in which event the last day of the Interest
Period shall be the immediately preceding Business Day, which is also a Business
Day, (iii) any Interest Period which begins on the last Business Day of any
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of a calendar month, (iv) no Interest Period shall extend beyond
the Maturity Date, and (v) no Interest Period shall extend beyond the date upon
which payment or prepayment of the Loan is required hereunder (including,
without limitation, mandatory prepayments and voluntary prepayments after notice
thereof has been given), unless the aggregate amount of the Loan is equal to or
in excess of the amount of any such payment or prepayment. Each Advance shall
therefore bear interest commencing on the date it is made and continuing until
but not including the date it is paid, if timely paid as provided herein.

INVENTORY. Inventory means all inventory of whatsoever name,
nature, kind or description now owned and hereafter acquired, present and
future, by Borrower and any Subsidiary,

<PAGE> 11

wherever located, including, without limitation, all contract rights with
respect thereto and documents representing the same, all goods held for sale or
lease or to be furnished under contracts of service, finished goods, work in
process, raw materials, materials used or consumed by Borrower and any
Subsidiary and including such inventory as is temporarily out of the Borrower's
or any Subsidiary's custody or possession, including inventory on the premises
of others and items in transit and including any returns and repossessions upon
any accounts, documents, instruments or chattel paper relating to replacements
therefor, and all additions and accessions thereto, and all ledgers, books of
account, records, computer printouts, computer runs and other computer-prepared
information relating to any of the foregoing.

LIBODOLLAR ADVANCE. Libodollar Advance means an Advance which
the Borrower requests be made as a Libodollar Advance in accordance herewith,
and which bears interest at the Libodollar Rate.

LIBODOLLAR RATE. Libodollar Rate means at the time any
determination thereof is to be made and for any Interest Period, an interest
rate per annum (computed on the actual number of days elapsed over a 360-day
year) equal to the sum of (i) the Applicable Margin plus (ii) the quotient of
the LIBOR divided by the sum of 1.00 minus the Libodollar Reserve Requirement.

LIBODOLLAR RATE TRANCHE. Libodollar Rate Tranche means a
Tranche bearing interest, at all times during an Interest Period applicable to
such Tranche, at a fixed rate of interest determined by reference to the
Libodollar Rate.

LIBODOLLAR RESERVE REQUIREMENT. Libodollar Reserve Requirement
means, on any day, that percentage (expressed as a fraction) which is in effect
on such day, as specified by the Board of Governors of the Federal Reserve
System (or any successor governmental body), and applied for determining the
maximum reserve requirements (including, without limitation, basic,
supplemental, marginal and emergency reserves) under Regulation D with respect
to "Eurocurrency liabilities" as currently defined in Regulation D, or under any
similar future regulation with respect to Eurocurrency liabilities or
Eurocurrency fundings. Each determination by the Bank of the Libodollar Reserve
Requirement shall, in the absence of manifest error, be binding and conclusive.
The Libodollar Reserve Requirement is currently 0%; Bank will notify Borrower
promptly when it learns of a change in the Requirement.

LIBOR. LIBOR means, with respect to any Interest Period for a
Libodollar Advance, the interest rate per annum as determined by Bank at which
deposits in Dollars are generally available to the Bank in the London interbank
market with maturities comparable to the Interest Period to be applicable to
such Libodollar Advance, determined prior to 11:00 a.m. Eastern Standard Time on
the date which is two (2) Business Days prior to the commencement of such
Interest Period. All determinations, estimates, assumptions of allocations and
the like required for the determination of the LIBOR shall be made by the Bank
in good faith, but determinations thereof shall be final, binding and conclusive
on the Borrower absent manifest error.

<PAGE> 12

LOAN(S). Loan(s) means collectively any and all loans
heretofore or hereafter made by Bank to the Borrower.

LOAN DOCUMENTS. Loan Documents means this Loan Agreement and
any and all promissory notes executed by Borrower in favor of Bank and all other
documents, instruments, guarantees, certificates and agreements executed and/or
delivered by Borrower, any Subsidiary, any guarantor or third party in
connection with any Loan.

MATERIAL ADVERSE EFFECT. Material Adverse Effect means a
material adverse effect (as determined in Bank's sole but reasonable discretion)
upon: (i) the business, assets, operating ability or condition (financial or
otherwise) of Borrower and any Subsidiary taken as a whole; or (ii) the ability
of Borrower and any Subsidiary to repay the Obligation or other Indebtedness or
otherwise perform their obligations under the Loan Documents.

MATURITY DATE. Maturity Date means May 31, 1998, or a sooner
Default.

NOTE. Note means the Promissory Note executed by the Borrower
in favor of Bank dated even date herewith in the original principal amount of
Twenty-Five Million Dollars ($25,000,000), together with all modifications,
renewals or substitutions thereof.

OBLIGATION. Obligation means the aggregate of outstanding
indebtedness under the Note, and any outstanding principal indebtedness of
Borrower to Bank arising in connection with any agreement not evidenced by the
Note, however arising, including any outstanding amounts due Bank under any
security agreement executed by Borrower in connection with this Agreement, any
outstanding amount advanced or incurred by Bank to enforce, protect, preserve or
maintain its rights with respect to, or by reason of Borrower's failure to
comply with any agreement contained in the Note or this Agreement, and all of
Bank's expenses, as described in this Agreement, together with all accrued and
unpaid interest on all of the foregoing, all computed and payable in Dollars.

PARTS AGREEMENT. Parts Agreement shall have the meaning set
forth in Paragraph 4.17 hereof.

PBGC. PBGC means the Pension Benefit Guaranty Corporation and
any entity succeeding to any or all of its functions under ERISA.

PERMITTED LIENS shall mean: (i) Liens (if any) granted to Bank
for the benefit of Bank to secure the Obligation; (ii) Liens permitted pursuant
to Paragraph 5.01 below; (iii) pledges or deposits made to secure payment of
worker's compensation insurance (or to participate in any fund in connection
with workers' compensation insurance), unemployment insurance, pensions or
social security programs; (iv) Liens imposed by mandatory provisions of law such
as for materialmen's, mechanics', warehousemen's and other like Liens arising in
the ordinary course of business, securing Indebtedness whose payment is not more
than thirty (30) days past due (any landlord's lien must be subordinated to the
Obligation); (v) Liens for taxes, assessments and

<PAGE> 13

governmental charges or levies imposed upon a Person or such Person's income or
profits or property, if the same are not yet due and payable or if the same are
being contested in good faith and as to which adequate cash reserves have been
provided; (vi) involuntary Liens which are stayed within thirty (30) days after
the imposition thereof and do not adversely affect the Collateral in Bank's sole
but reasonable discretion; or (vii) Liens arising from good faith deposits in
connection with tenders, bids, contracts (other than for the payment of money),
leases, pledges or deposits to secure public or statutory obligations and
deposits to secure (or in lieu of) surety, stay, appeal or custom bonds and
deposits to secure the payment of taxes, assessments, custom duties or other
similar charges.

PERSON. Person means any natural person, entity, corporation,
limited liability partnership or company, unincorporated organization, trust,
joint-stock company, joint venture, association, company, partnership, or
government, or any agency or political subdivision of any government.

PRIME RATE. Prime Rate means the interest rate (but not
necessarily the best or lowest rate charged borrowing customers of Bank) set by
Bank from time to time as its prime rate.

PRIME RATE ADVANCE. Prime Rate Advance means an Advance which
the Borrower requests to be made as a Prime Rate Advance or which is reborrowed
as a Prime Rate Advance, in accordance with this Agreement, and which bears
interest at the Prime Rate.

RECEIVABLES. Receivables means all Accounts and all other
obligations for the payment of money under General Intangibles, whether or not
such Receivables are specifically assigned.

REPORTABLE EVENT. Reportable Event shall have the meaning
given to such term in ERISA.

SOLVENT. Solvent means, with respect to any Person on a
particular date, that on such date (i) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (ii) the present fair
saleable value of the assets of such Person is not less than the amount that
will be required to pay the probable liability of such Person on its debts as
they become absolute and matured, (iii) such Person is able to realize upon its
assets and pay its debts and other liabilities, Contingent Liabilities and other
commitments as they mature in the normal course of business, (iv) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature, and (v) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which such Person is
engaged. In computing the amount of contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount which, in light of
all the facts and

<PAGE> 14

circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.

SUBSIDIARY. Subsidiary means any Person in which Borrower or a
wholly-owned Subsidiary may own, directly or indirectly, an equity interest of
more than fifty percent (50%), during the term of this Agreement, as well as all
Subsidiaries and other Persons from time to time included in the consolidated
financial statements of Borrower.

TERM. Term shall mean the period during which the Loan is
scheduled to be outstanding hereunder, commencing on the date hereof and ending
on the Maturity Date.

TERMINATION EVENT. Termination Event shall have the meaning
set forth in ERISA.

The Clipper Group. The Clipper Group shall mean, jointly and
severally, Clipper Capital Associates, L.P., Clipper/Merchant Partners, L.P.,
Clipper/Merban, L.P., Clipper Equity Partners I, L.P., Clipper/European Re, L.P.

TRANCHE. Tranche means that portion of the principal amount of
the Loan that bears interest at the same rate, and in the case of a Libodollar
Rate Tranche, for the same Interest Period.

ARTICLE 2
LOANS

2.01 LOAN.

(a) Bank hereby agrees to make (or has made) a loan or loans
to Borrower in the aggregate principal amount of Twenty-Five Million Dollars
($25,000,000). The obligation to repay the loan is evidenced by the Note.

(b) Provided all of the conditions for Advances are met, Bank
shall make the Loan to Borrower or disburse to third parties as Borrower may
direct, commencing on the date hereof, until the Maturity Date.

(i) Principal and interest outstanding under
each Note shall be payable in accordance with such Note.

(ii) All other notes which may subsequently
become a part of the Obligation shall be paid in accordance with the terms
thereof.

(iii) If any payment of principal of, or interest
on, the Loan shall become due on a day which is not a Business Day, such payment
shall be made on the next succeeding

<PAGE> 15

Business Day; provided, however, that interest shall continue to accrue until
payment is actually received.

(iv) The business records of Bank shall be
conclusive as to the date and amount of any Advance hereunder and any payment or
prepayment of interest or principal thereof, absent manifest error.

(d) The Commitment shall end upon the close of business (5:00
p.m.) on the day prior to the Maturity Date, unless there shall have sooner
occurred an Event of Default under this Agreement, in which event, Bank may
immediately accelerate the Loan without prior notice to Borrower; provided,
however, that, notwithstanding the foregoing, this Agreement shall continue in
full force and effect until the Obligation is paid in full and the Commitment
has been terminated.

(e) The outstanding principal balance under the Note as of any
day shall be the outstanding principal balance as of the beginning of the day,
plus any Advances made pursuant hereto charged to the account on that day
(exclusive of interest) and less any payments of principal credited to the
account on that day. Each Advance shall therefore bear interest commencing on
the date it is made and continuing until but not including the date it is paid,
if timely paid as provided herein.

(f) Any payment of principal or interest or both not made when
due shall itself bear interest on the principal and interest amount of the
payment at the Default Rate, commencing on the due date, until payment,
maturity, or the occurrence of an Event of Default. After maturity of a Note or
the occurrence of an Event of Default hereunder or thereunder, interest shall
accrue on the entire outstanding balance of principal and interest at the
Default Rate.

2.02 REVOLVING CREDIT FEATURE. The Loan provides for a revolving
line of credit under which, provided the provisions of this Agreement are in
compliance and provided no Event of Default exists hereunder, Borrower may from
time to time, borrow, repay and re-borrow funds. Each borrowing shall be
evidenced by a request for advance and a compliance certificate, both in form
and substance required by Bank.

2.03 BORROWING BASE.

(a) Borrowings under the Loan shall be limited to the
"Borrowing Base". Subject to the terms and conditions thereof, and provided
Borrower is not in default under the Loan Documents or any other agreement
between Bank and Borrower, Borrower may borrow, repay and reborrow advances
under the Loan up to the maximum amount of the Note.

(b) Any Advances made under the Note shall be limited to the
amount available under the Borrowing Base. As set forth herein, "Borrowing Base"
shall include: (i) eighty percent (80%) of all eligible accounts receivable; and
(ii) fifty percent (50%) of Borrower's eligible inventory. Only outstanding
accounts receivable and inventory in which the Bank has obtained a

<PAGE> 16

first perfected security interest shall be included in the Borrowing Base
calculation, which calculations shall exclude: (A) any portion of accounts
receivable which are greater than one hundred twenty (120) days from invoice
date; provided, however, that with respect to those accounts identified on
EXHIBIT 2.03(b) attached hereto, the one hundred twenty (120) days shall be
amended to read one hundred fifty (150) days; (B) the portion of any account to
the extent there are any accounts payable due to the account debtor; (C) foreign
receivables not backed by a letter(s) of credit confirmed by NationsBank or
another major United States bank acceptable to NationsBank in NationsBank's sole
discretion (receivables from foreign subsidiaries of United States corporations
that are guaranteed (pursuant to a guaranty satisfactory to NationsBank) by the
United States parent will, provided the other criteria are satisfied, be allowed
in the Borrowing Base); (D) all inventory held outside the continental United
States; (E) inventory which does not constitute a component of commercial
passenger and cargo jet-powered aircraft (excluding regional aircraft) with the
capacity for a minimum of one hundred (100) passengers (or the equivalent if
retrofitted for cargo); (F) airframe materials to the extent such constitute in
excess of fifty percent (50%) of the Borrower's inventory in the Borrowing Base
(i.e., engines and engine components must constitute at least fifty percent
(50%) of Borrower's inventory in the Borrowing Base); (F) all accounts which
Bank may, from time to time, deem ineligible because of any bankruptcy filing
associated with the account debtor; and (G) all accounts due from related or
affiliated entities of Borrower. As used herein, the term "related or affiliated
entities of Borrower" shall include, without limitation, any person,
corporation, partnership, trust, association or other organization which either
directly or indirectly owns or controls any ownership interest in the Borrower,
or in which the Borrower, either directly or indirectly, owns or controls any
ownership interest.

The foregoing calculations shall be calculated in
accordance with a Borrowing Base certificate in the form attached hereto and
made a part hereof as EXHIBIT 4.02(c) which shall be submitted to Bank on a
monthly basis within ten (10) days following each month end, unless more
frequently requested by Bank or provided by the Borrower, and shall contain such
information related to the Borrowing Base as deemed necessary by Bank. In the
event the outstanding principal balance on the Loan exceeds the Borrowing Base,
Borrower shall immediately pay the Bank an amount equal to such excess. Failure
to make such payment shall constitute a default under the Loan.

(c) Notwithstanding anything herein to the contrary, the
amount available under the Borrowing Base shall not exceed Twenty Million
Dollars ($20,000,000) until such time as Borrower has provided evidence
satisfactory to NationsBank that The Clipper Group had invested an additional
Nine Million One Hundred Thousand Dollars ($9,100,000) in cash equity in the
Borrower.

(d) Upon written notice from Borrower to Bank, Borrower shall
have the right to permanently reduce the amount available under the Loan. Once
reduced as aforesaid, the amount available under the Loan shall not be increased
without the written consent of the Bank, which consent shall be in the Bank's
sole discretion.

<PAGE> 17

2.04 LETTER OF CREDIT SUBFEATURE. As a subfeature under the Loan,
Bank may, from time to time, issue letters of credit for the account of Borrower
(each, a "Letter of Credit" and collectively, "Letters of Credit"); provided,
however, that the form and substance of each Letter of Credit shall be subject
to approval by Bank in its sole discretion; and provided further that the
aggregate undrawn amount of all outstanding Letters of Credit shall not at any
time exceed Five Million Dollars ($5,000,000). Each Letter of Credit shall be
issued for a term not to exceed three hundred sixty-five (365) days, as
designated by Borrower, provided, however, that no Letter of Credit shall have
an expiration date subsequent to one (1) year after the Maturity Date. In the
event the Loan has matured, then the Borrower shall secure all outstanding
Letters of Credit with cash collateral deposited with the Bank. The undrawn
amount of all Letters of Credit plus any and all amounts paid by Bank in
connection with drawings under any Letter of Credit for which the Bank has not
been reimbursed shall be reserved under the Loan and shall not be available for
advances thereunder. Each draft paid by Bank under a Letter of Credit shall be
deemed an advance under the Loan and shall be repaid in accordance with the
terms of the Loan; provided however, that if the Loan is not available for any
reason whatsoever, at the time any draft is paid by Bank, or if advances are not
available under the Loan in such amount due to any limitation of borrowing set
forth herein, then the full amount of such drafts shall be immediately due and
payable, together with interest thereon, from the date such amount is paid by
Bank to the date such amount is fully repaid by Borrower, at that rate of
interest applicable to advances under the Loan. In such event, Borrower agrees
that Bank, at Bank's sole discretion may debit Borrower's deposit account with
Bank for the amount of such draft.

In conjunction with the issuance of any Letter(s) of Credit,
Borrower shall execute and deliver to Bank any documentation then utilized by
Bank to evidence the issuance of a Letter(s) of Credit.

Borrower shall pay, if applicable, all fees and charges
customarily charged by Bank in connection with the issuance, confirmation,
amendment and other actions with respect to a Letter of Credit as are
customarily charged by Bank with regard to letters of credit.

2.05 PROCEDURE FOR ADVANCES. Any request for an Advance must be
received by Bank prior to: (a) 12:00 noon Eastern Standard Time on a Business
Day, in the case of a Libodollar Advance which is two (2) Business Days prior to
the Borrowing Date, (b) in the case of a Prime Rate Advance, prior to 12:00 noon
on the Borrowing Date, and if each of the other conditions precedent to such
Advance have been satisfied, the Advance will be available prior to 2:00 p.m.
Eastern Standard Time, as the case may be, on such Borrowing Date. Unless Bank
is notified otherwise by Borrower in a signed writing which is accepted and
agreed to by Bank, Bank shall cause the amount of any Advance requested by
Borrower to be paid to the credit of Borrower's deposit account with Bank.

All requests for Advance shall be in the form attached hereto
as EXHIBIT 2.05, and be signed by an Authorized Signatory. Any notice delivered
or given by the Borrower to Bank as provided shall be irrevocable and binding
upon the Borrower upon receipt by Bank. Each Advance

12
<PAGE> 18

shall be in a minimum amount of One Hundred Thousand Dollars ($100,000) in the
case of a Libodollar Advance and Fifty Thousand Dollars ($50,000) in the case of
a Prime Rate Advance.

2.06 LIBODOLLAR ADVANCES.

(a) Any principal of a Libodollar Advance and, to the extent
permitted by law, interest thereon, which is not paid when due and as to which
Borrower has not made a Request for Interest Period in compliance herewith shall
become a Prime Rate Advance, except upon the occurrence of an Event of Default,
whereupon such Loan shall, at Bank's option, bear interest at the Default Rate.

(b) Upon timely request for Advance in respect of a Libodollar
Advance, on the date two (2) Business Days prior to the commencement of the
Interest Period, Bank shall determine (which determination, absent manifest
error, shall be final and conclusive) the Libodollar Rate which shall be
applicable to the Libodollar Advance for the next Interest Period and shall
promptly give notice thereof (in writing, by telecopy or by telephone promptly
confirmed in writing) to the Borrower. The form of Request for Interest Period
is attached hereto and made a part hereof as EXHIBIT 2.06(b).

(d) No Interest Period for a Libodollar Advance made pursuant
to this Article shall extend beyond the Maturity Date.

(e) The Borrower shall evidence the Borrower's request for the
Advance by forwarding the Request for Advance in the appropriate one of the
forms of EXHIBIT 2.05 attached hereto. If Borrower fails to give Bank the
request for Advance on a timely basis or if for any reason determination of
Interest Period for any Advance is not timely concluded, without fault of Bank,
or if for any reason, without fault of Bank, the Borrower's selection of an
Interest Period is not available for a particular Advance, said Advance shall be
made as a Prime Rate Advance.

(f) In the event the Borrower shall: (i) fail to borrow any
Libodollar Advance, after having given notice of its intention to borrow in
accordance with subparagraph 2.06(e) above (whether by reason of the election of
the Borrower not to proceed or the nonfulfillment of any of the conditions set
forth in this Agreement); or (ii) pay any Libodollar Advance in whole or in part
(including a prepayment upon a Default) on any day other than on the Payment
Date for such Advance, the Borrower agrees to pay to the Bank upon the earlier
of Bank's demand or the Maturity Date, an amount sufficient to compensate the
Bank for all losses and out-of-pocket expenses directly relating to such failure
or prepayment, as applicable, as reasonably determined by the Bank on the basis
of its own standard practices, which absent manifest error, shall be deemed
correct. In the case of a Libodollar Advance, such loss or expense subject to
reimbursement shall include, without limitation, an amount equal to the present
value of the excess, if any, as reasonably determined by

<PAGE> 19

the Bank, of: (A) the amount of interest that would have accrued on the
principal amount so prepaid or not borrowed for the period from the date of such
prepayment or failure to borrow (such date being hereinafter referred to as the
"Breakage Date") to the last day of the then current Interest Period for such
Advance (or, in the case of a failure to borrow, the Interest Period for such
Advance that would have commenced on the date of such failure) at the rate of
interest applicable to such Advance under the terms of this Agreement over (B)
the amount of interest that the Bank would have earned had it invested the
entire amount of funds so prepaid or the entire amount of funds acquired to
effect, fund or maintain the Loan not borrowed, as the case may be, in U.S.
Government Treasury Securities with a maturity comparable to such period or
Interest Period. The present value of such excess shall be calculated by
discounting such excess from the end of such period or Interest Period to the
Breakage Date at the interest rate expressly borne by such U.S. Government
Treasury Securities or, if none, the effective interest rate on such Securities.

2.07 CONDITIONS PRECEDENT. The obligation of Bank to make the
Advances under Loan is subject to the following additional conditions precedent:

(a) NO DEFAULT. On the effective date of this Agreement, and
at the date of each Advance after giving effect to the Advance hereunder,
Borrower shall have observed and performed all the terms, conditions, agreements
and provisions set forth herein, on its part to be observed or performed, the
warranties of Borrower contained herein or in any instrument or certificate
executed by Borrower and delivered in connection herewith shall be true and
correct in all material respects, and no Default or Event of Default shall have
occurred and be continuing.

(b) OPINIONS OF COUNSEL. On the date of the Closing, Bank
shall have received from counsel for the Borrower, a favorable opinion (in form
and substance satisfactory to Bank), dated the closing date.

(c) LOAN DOCUMENTS. On the date of Closing, all of the
Loan Documents shall have been executed by the Borrower and delivered to Bank.

(d) LITIGATION. There shall be no order, injunction, decree,
judgment or verdict prohibiting or restraining Bank from making the Loan, or
Borrower or any Subsidiary from performing its obligations hereunder as of the
date of each Advance.

(e) REQUEST FOR ADVANCE. At the time of the requested Advance
hereunder, Borrower shall have timely delivered to Bank prior to the Borrowing
Date the Request for Advance in the form attached as EXHIBIT 2.05, signed by an
Authorized Signatory of Borrower. There shall be no exceptions for material
litigation reflected therein in connection with any Advance.

(f) CLOSING. Closing, execution and delivery of the Loan
Documents shall have been held no later than March 1, 1997.

<PAGE> 20

(g) DOCUMENTS. This Agreement, all exhibits hereto, and the
other Loan Documents must be simultaneously executed and delivered to Bank at
Closing together with the Collateral.

(h) COMMITMENT LETTER. On the date of Closing, all the
conditions set forth in the commitment letter from Bank to Borrower dated
January 22, 1997, shall have been satisfied or waived in writing by the Bank.

(i) FEE. Borrower shall have paid to Bank the non-refundable
structuring fee in the amount of One Hundred Eighty-Five Thousand Dollars
($185,000).

(j) INSURANCE. Borrower shall have delivered to Bank evidence
of the insurance required pursuant to this Agreement.

(k) BORROWING BASE CERTIFICATE. On the date of closing, the
Borrower shall deliver to the Bank a Borrowing Base Certificate in the form of
EXHIBIT 4.02(c) attached hereto effective as of January 31, 1997.

(l) FAA FILING. Prior to any Advance with respect to any
aircraft engine having at least 750 rate takeoff horsepower or equivalent or any
aircraft propeller capable of absorbing 750 or more rated takeoff shaft
horsepower, Borrower shall be required to: (i) grant to Bank a perfected
security interest therein including, without limitation, filing all applicable
security filings with the Federal Aviation Administration; (ii) provide to the
Bank a lien search satisfactory to the Bank and from a search firm satisfactory
to Bank (Dixie Aire shall be deemed acceptable) that such Collateral is free and
clear of any encumbrances; and (iii) provide to Bank a post-closing lien search
indicating that liens other than the Bank's lien has been released. The Bank
acknowledges that engines having at least 750 rate takeoff horsepower or
equivalent or any aircraft propeller capable of absorbing 750 or more rated
takeoff shaft horsepower which are located outside the United States may not
constitute a perfected security interest.

ARTICLE 3
REPRESENTATIONS AND WARRANTIES

Borrower hereby represents and warrants to Bank as follows:

3.01 GOOD STANDING. Borrower and each Subsidiary are corporations,
duly organized, validly existing and in good standing under the laws of their
respective states of incorporation and have the power and authority to own their
respective property and to carry on their respective business in each
jurisdiction in which each does business.

3.02 AUTHORITY AND COMPLIANCE. Borrower and each Subsidiary have
full power and authority to execute and deliver the Loan Documents and to
incur and perform the obligations provided for therein, all of which have been
duly authorized by all proper and necessary action of

<PAGE> 21

the appropriate governing body of Borrower and each Subsidiary. No consent or
approval of any public authority or other third party is required as a condition
to the validity of any Loan Document, and Borrower and each Subsidiary are in
compliance with all laws and regulatory requirements to which they are subject.

3.03 BINDING AGREEMENT. This Agreement and the other Loan
Documents executed by Borrower and each Subsidiary constitute valid and
legally binding obligations of Borrower and each Subsidiary, enforceable in
accordance with their terms.

3.04 LITIGATION. There is no proceeding involving Borrower or any
Subsidiary pending or, to the knowledge of Borrower, threatened before any court
or governmental authority, agency or arbitration authority, except as disclosed
to Bank in writing and acknowledged by Bank prior to the date of this Agreement.

3.05 NO CONFLICTING AGREEMENTS. There is no charter, bylaw, stock
provision, shareholder agreement or other document pertaining to the
organization, power or authority of Borrower or any Subsidiary and no provision
of any existing agreement, mortgage, indenture or contract binding on Borrower
or any Subsidiary or affecting any of their respective properties, which would
conflict with or in any way prevent the execution, delivery or carrying out of
the terms of this Agreement and the other Loan Documents.

3.06 OWNERSHIP OF ASSETS. Borrower and each Subsidiary have good
title to their assets, and their assets are free and clear of liens, except the
Permitted Liens and those granted to Bank.

3.07 TAXES. All taxes and assessments due and payable by Borrower
and each Subsidiary have been paid or are being contested in good faith by
appropriate proceedings and the Borrower and each Subsidiary have filed all tax
returns which it is required to file.

3.08 FINANCIAL STATEMENTS. The financial statements of Borrower and
each Subsidiary heretofore delivered to Bank including, without limitation, the
Borrower's annual statement dated December 31, 1995, and Borrower's interim
statement dated September 30, 1996, have been prepared in accordance with GAAP
applied on a consistent basis throughout the period involved and fairly present
Borrower's and each Subsidiary's financial condition as of the date or dates
thereof, and there has been no material adverse change in Borrower's or any
Subsidiary's financial condition or operations since the most recent financial
statement of the Borrower and each Subsidiary furnished to Bank. To the best of
Borrower's knowledge, all factual information furnished by Borrower and each
Subsidiary to Bank in connection with this Agreement and the other Loan
Documents is and will be accurate and complete in all material respects on the
date as of which such information is delivered to Bank and is not and will not
be incomplete by the omission of any material fact necessary to make such
information not misleading. All financial projections represent the Borrower's
best estimate of Borrower's future financial performance and such assumptions
are reasonable and believed by Borrower to be fair in light of current business
conditions.

<PAGE> 22

3.09 PLACE OF BUSINESS. Borrower's chief executive office is
located at 3230 Executive Way, Miramar, Florida 33025.

3.10 ENVIRONMENTAL MATTERS. The conduct of Borrower's and each
Subsidiary's business operations do not and will not violate any federal laws,
rules or ordinances for environmental protection, regulations of the
Environmental Protection Agency and any applicable local or state law, rule,
regulation or rule of common law and any judicial interpretation thereof
relating primarily to the environment or Hazardous Materials and Borrower will
not use or permit any other party to use any Hazardous Materials at any of
Borrower's and/or any Subsidiary's places of business or at any other property
owned by Borrower and/or any Subsidiary except such materials as are incidental
to Borrower's or any Subsidiary's normal course of business, maintenance and
repairs and which are handled in compliance with all applicable environmental
laws. Borrower agrees to permit Bank, its agents, contractors and employees to
enter and inspect any of Borrower's and each Subsidiary's places of business or
any other property of Borrower and/or each Subsidiary at any reasonable times
upon three (3) days prior notice for the purposes of conducting an environmental
investigation and audit (including taking physical samples) to insure that
Borrower and each Subsidiary is complying with this covenant and Borrower shall
reimburse Bank on demand for the costs of any such environmental investigation
and audit. Borrower shall provide Bank, its agents, contractors, employees and
representatives with access to and copies of any and all data and documents
relating to or dealing with any Hazardous Materials used, generated,
manufactured, stored or disposed of by Borrower's and each Subsidiary's business
operations within five (5) days of the request therefore.

3.11 RECEIVABLES. Borrower and each Subsidiary shall take any and
all steps as Bank may request to create and maintain in Bank's favor a valid and
first security interest in and pledge of, all Receivables, whether now existing
or created from time to time hereafter. With respect to all Receivables:

(a) Borrower and each Subsidiary shall, at Bank's request
following an Event of Default, execute and deliver to Bank an assignment or
assignments of any or all of Borrower's and each Subsidiary's Receivables
accompanied by copies of invoices and evidences of shipment or delivery and any
other documents in Borrower's possession concerning same as Bank may reasonably
require for purposes of assisting Bank in the realization upon such Receivables;

(b) Borrower shall, at Bank's request, deliver to Bank all
copies of invoices and evidences of shipment or delivery and any other documents
in Borrower's and each Subsidiary's possession concerning accounts receivable
that are reflected upon any schedule or borrowing base certificate or the like,
furnished to the Bank, as Bank may reasonably request for purposes of assisting
Bank in the conduct of any audit of accounts receivable;

(c) absolute title to the Collateral, free and clear of all
liens, encumbrances and security interests other than Permitted Liens shall be
vested in Borrower and each Subsidiary;

<PAGE> 23

(d) neither Borrower nor any Subsidiary shall enter into or
allow any other agreements, notices, financing statements, or other matters
which will in any way impair or affect Bank's first lien upon, security interest
in and pledge of such Collateral; and

(e) other than those ineligible Receivables identified on line
34 of the Borrowing Base Certificate, each Receivable represented to Bank:

(i) shall represent a valid and legally
enforceable indebtedness, according to its terms and as represented by the
assigned invoice;

(ii) to the best of Borrower's knowledge, shall
be a Receivable as to what the account debtor shall be liable for and shall make
payment of the amount expressed in such invoice and according to its terms;

(iii) to the best of Borrower's knowledge, shall
be subject to no dispute or claim by the account debtor as to price, terms,
quality, quantity, delay in shipment, offsets, counterclaims, contra-accounts or
any other defense of any other kind and character;

(iv) to the best of Borrower's knowledge, shall
not be subject to discounts, deductions, allowances, offsets, returns, or
special terms of payment, except such as are shown on the face of the invoice
and the receivable aging;

(v) shall not represent a delivery of goods upon
"consignment", "guaranteed sale", "sale or return", "payment on reorder" or
similar terms;

(vi) shall not be subject to any prohibition or
limitation upon assignment; and

(vii) shall be free and clear of all claims,
demands, liens and encumbrances of any kind whatsoever.

3.12 INVENTORY. With respect to Inventory, Borrower warrants and
represents:

(a) the same shall be free and clear of all liens and
encumbrances other than the Permitted Liens and Borrower and each Subsidiary
shall be the absolute owner thereof;

(b) that Borrower shall grant a perfected security interest to
the Bank of all Inventory maintained in the United States, the Borrower and each
Subsidiary shall immediately notify the Bank in writing and shall grant to the
Bank a perfected security interest in such Inventory within five (5) days of
such Inventory being brought into a state in which the Bank does not have a
perfected security interest in the Inventory. Within ten (10) days following the
Bank's request, Borrower and each Subsidiary will advise the Bank in writing of
the address at which the Inventory is located.

<PAGE> 24

(c) Borrower shall defend Bank's security interest in the
Inventory against any claims or demands of third parties and will promptly pay,
when due, all taxes or assessments levied on account of the Inventory; and

(d) Bank shall have a perfected security interest in the
Collateral at all times during the Term.

3.13 FEDERAL RESERVE REGULATIONS.

(a) Neither Borrower nor any Subsidiary is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
of the United States);

(b) no part of the Advances shall be used to purchase or carry
any such margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock; and

(c) no part of the Advances shall be used for any purpose that
violates, or which is inconsistent with, the provisions of Regulation T, G, U or
X of said Board of Governors.

3.14 CONSENTS, ETC. No consent, approval, authorization of, or
registration (other than the filing of a UCC-1 with the Secretary of State, the
Aircraft Security Agreement filing with the Federal Aviation Administration and
UCC-1 filings in states in which the Borrower maintains inventory), declaration
or filing with any governmental authority (federal, state or local, domestic or
foreign) is required in connection with the execution or delivery by Borrower or
any Subsidiary of the Loan Documents or the performance of or compliance with
the terms, provisions and conditions hereof or thereof.

3.15 GOVERNMENTAL AUTHORIZATIONS. All authorizations, consents,
approvals, licenses, and permits required under applicable law or regulation for
the ownership or operation of the property owned or operated by Borrower and the
Subsidiaries or for the conduct of the business in which Borrower and the
Subsidiaries are engaged have been duly issued (or if not issued, the failure to
have obtained same are of an immaterial nature and would not have a material
adverse effect on Borrower or the Subsidiaries) and are in full force and effect
and neither Borrower nor any of the Subsidiaries is in default under any order,
decree, rule and regulation, closing agreement or other decision or instrument
of any Governmental Authority, which default could reasonably be expected to
have a Material Adverse Effect.

3.16 TITLE TO PROPERTIES. Borrower and each Subsidiary have good
and marketable fee title to all real property, and good and marketable title to
all other property (including leases) and assets reflected in the financial
statements delivered to the Bank or purported to have been acquired

<PAGE> 25

by Borrower and each Subsidiary subsequent to such date, except the property or
assets sold or otherwise disposed of by Borrower subsequent to such date in the
ordinary course of business. All of the property and assets of any kind of
Borrower and each Subsidiary are free from any liens, except the Permitted Liens
and as otherwise set forth on their financial statement delivered to the Bank.
Borrower and each Subsidiary enjoy peaceful and undisturbed possession under all
of the leases under which it is operating, none of which contains any unusual or
burdensome provisions that could reasonably be expected to have a Material
Adverse Effect. All of such leases are valid, subsisting and in full force and
effect and none of such leases is in default and no event has occurred which
with the passage of time or the giving of notice or both would constitute a
default under any thereof. Borrower and each Subsidiary possess all material
patents, patent rights, licenses, trademarks, trademark rights, trade name,
trade name rights, and copyrights that may be required to conduct its business
as now conducted, all without known conflict with the rights of others.

3.17 SOLVENT. Borrower is, on a consolidated basis, and after the
consummation of the loans contemplated in this Agreement, and after having given
effect to all indebtedness incurred and liens created by Borrower and each
Subsidiary in connection herewith, will be Solvent.

3.18 SUBSIDIARIES. The Subsidiaries of Borrower are all as
reflected on EXHIBIT 3.18 hereto.

3.19 SHAREHOLDERS. All classes of shareholders of the Borrower and
each Subsidiary are reflected on EXHIBIT 3.19 hereto.

3.20 INDEBTEDNESS. All Indebtedness of the Borrower and each
Subsidiary (other than trade payables in the ordinary course of business) are
reflected on EXHIBIT 3.20 hereto.

3.21 CONTINGENT LIABILITIES. All contingent liabilities of the
Borrower and each Subsidiary are reflected on EXHIBIT 3.21 hereto.

3.22 INCORPORATION OF REPRESENTATIONS AND WARRANTIES. Without
limiting the representations and warranties hereunder, the representations and
warranties made by the Borrower to The Clipper Group pursuant to the Clipper
Agreement are incorporated herein by reference and made a part hereof but shall
only be deemed made as of the date of the Clipper Agreement. A breach by the
Borrower of any representation or warranty under the Clipper Agreement shall
constitute a breach of a representation or warranty hereunder.

3.23 MATERIAL CONTRACTS. Neither the execution and delivery of
the Loan Documents nor the consummation of the transaction contemplated by the
Clipper Agreement shall constitute a default or right of termination under any
agreement to which the Borrower or any Subsidiary is a party.

3.24 USE OF PROCEEDS. The proceeds of the Loan shall be used solely
to refinance the existing credit facility in favor of Barnett Bank, N.A. and
finance the short term working capital

<PAGE> 26

needs and general corporate needs of the Borrower and to support the issuance of
letter(s) of credit (which will reduce amounts available under the Loan).

3.25 PENSION AND WELFARE PLANS. Each Pension Plan and Welfare Plan
complies with ERISA and all other applicable statutes and governmental rules and
regulations; no Reportable Event has occurred and is continuing with respect to
any Pension Plan; neither Borrower nor any Subsidiary of Borrower nor any ERISA
Affiliate has withdrawn from any Multi-Employer Plan in a "complete withdrawal"
or a "partial withdrawal" as defined in Sections 4203 or 4205 of ERISA,
respectively; neither Borrower nor any Subsidiary nor any ERISA Affiliate has
entered into an agreement pursuant to Section 4204 of ERISA; neither Borrower
nor any Subsidiary nor any ERISA Affiliate has in the past contributed to or
currently contributes to a Multi-Employer Plan; neither Borrower nor any
Subsidiary nor any ERISA Affiliate has any withdrawal liability with respect to
a Multi-Employer Plan; no steps have been instituted by Borrower or any
Subsidiary or any ERISA Affiliate to terminate any Pension Plan; no condition
exists or event or transaction has occurred in connection with any Pension Plan,
Multi-Employer Plan or Welfare Plan which could result in the incurrence by
Borrower or any Subsidiary or any ERISA Affiliate of any liability, fine or
penalty; and neither Borrower nor any Subsidiary nor any ERISA Affiliate is a
"contributing sponsor" as defined in Section 4001(a)(13) of ERISA of a
"single-employer plan" as defined in Section 4001(a)(15) of ERISA which has two
(2) or more contributing sponsors at least two (2) of whom are not under common
control. Neither Borrower nor any Subsidiary nor any ERISA Affiliate has any
liability with respect to any Welfare Plan.

3.26 TAX RETURNS AND PAYMENT. Borrower and its Subsidiaries have
filed all federal, state, local and other tax returns which are required to be
filed and have paid all taxes which have become due pursuant to such returns and
all other taxes, assessments, fees and other governmental charges upon Borrower
and its Subsidiaries and upon their respective properties, assets, income and
franchises which have become due and payable by Borrower or any of its
Subsidiaries, except those wherein the amount, applicability or validity are
being contested by Borrower or any such Subsidiary by appropriate proceedings
being diligently conducted in good faith and in respect of which adequate
reserves in accordance with GAAP have been established. All material tax
liabilities of Borrower and its Subsidiaries were adequately provided for as of
December 31, 1996, and are now so provided for on the books of Borrower and its
Subsidiaries. There is no known proposed, asserted or assessed tax deficiency
against Borrower or any of its Subsidiaries which, if adversely determined,
could reasonably be expected to have a Material Adverse Effect.

3.27 LABOR MATTERS. Neither Borrower nor any Subsidiary is a
party to any pending or threatened labor dispute. There are no pending or
threatened strikes or walkouts relating to any labor contract to which Borrower
or any Subsidiary is subject. Hours worked and payments made to the employees of
Borrower and its Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable law dealing with such matters. All
payments due from Borrower or any Subsidiary, or for which any claim may be made
against any of them, in respect of wages, employee health and welfare insurance
and/or other benefits have been paid or accrued as a liability on their
respective books. The consummation of the transactions contemplated by the
Transaction

<PAGE> 27

Documents will not give rise to a right of termination or right of renegotiation
on the part of any union under any collective bargaining agreement to which
Borrower or any Subsidiary is a party or by which Borrower or any Subsidiary is
bound.

3.28 MULTI-EMPLOYER PENSION PLAN AMENDMENTS ACT OF 1980. Borrower
and each Subsidiary is in compliance with the Multi-Employer Pension Plan
Amendments Act of 1980, as amended ("MEPPAA"), and neither Borrower nor any
Subsidiary has any liability for pension contributions pursuant to MEPPAA.

3.29 INVESTMENT COMPANY ACT OF 1940; PUBLIC UTILITY HOLDING
COMPANY ACT OF 1935. Borrower is not an "investment company" as that term is
defined in, and is not otherwise subject to regulation under, the Investment
Company Act of 1940, as amended. Borrower is not a "holding company" as that
term is defined in, and is not otherwise subject to regulation under, the Public
Utility Holding Company Act of 1935, as amended.

3.30 EMPLOYMENT AND OTHER AGREEMENTS. Except for the employment
agreements and the other agreements described in SCHEDULE 3.30 attached hereto,
true, complete and accurate copies of which have been delivered to Bank, there
are no: (a) employment agreements covering the management of Borrower or any
Subsidiary; (b) collective bargaining agreements or other labor agreements
covering any employees of Borrower or any Subsidiary; or (c) agreements for
managerial, consulting or similar services to which Borrower or any Subsidiary
is a party or by which Borrower or any Subsidiary is bound.

3.31 AIR CARRIER. Borrower is not, and during the Term shall not
be, an air carrier holding an air carrier operating certificate issued by the
Federal Aviation Administration.

3.32 CONTINUATION OF REPRESENTATION AND WARRANTIES. All
representations and warranties made under this Agreement shall be deemed to be
made at and as of the date hereof and at and as of the date of any Advance.

ARTICLE 4
AFFIRMATIVE COVENANTS

Until full payment and performance of all Obligations of Borrower under
the Loan Documents and the termination of any obligation of the Bank to make any
Advances, Borrower and each Subsidiary shall maintain the following covenants,
conditions and restrictions:

4.01 FINANCIAL CONDITION. Maintain at all times Borrower's and each
Subsidiary's financial condition as follows, determined in accordance with GAAP
applied on a consistent basis throughout the period involved except to the
extent modified by the following definitions:

(a) A maximum Total Indebtedness ratio of 3.0:1;
provided, however, the ratio shall be 3.25:1 through the quarter ending June 30,
1997. In addition, in the event The Clipper

<PAGE> 28

Group has not invested the additional equity of Nine Million One Hundred
Thousand Dollars ($9,100,000) by March 31, 1997, then the ratio shall be 3.25:1
for the quarter ending March 31, 1997. The Total Indebtedness ratio shall be
calculated as follows: Borrower's total funded debt (which shall include all
borrowed money, indebtedness evidenced by notes [exclusive of accrued interest
on shareholder debt], indentures or similar instruments, capitalized lease
obligations, contingent liabilities, unfunded pension liabilities, existing and
future shareholder debt) divided by (net income [exclusive of non-operating
income] + interest expense + taxes + depreciation + amortization). The foregoing
shall be tested quarterly on a rolling four (4) quarter basis. With respect to
the Borrower's third fiscal quarter ending September 30, 1996, the net income
shall add back in and, thus, include the amount of One Million One Hundred
Fifty-Four Thousand Dollars ($1,154,000) representing a non-recurring charge.

(b) Borrower shall limit annual aggregate Capital Expenditures
to an amount not to exceed One Million Dollars ($1,000,000) in the aggregate
during any fiscal year.

(d) The Bank shall be permitted to perform (for the benefit of
the Bank) inventory and accounts receivable field audits which must be
satisfactory to the Bank. Such audits shall be at the Borrower's expense
provided Borrower shall not be responsible for the expense more than once in any
twelve (12) month period commencing February 1, 1997, unless the Borrower shall
be in Default.

4.02 FINANCIAL STATEMENTS AND OTHER INFORMATION. Maintain a
system of accounting satisfactory to Bank and in accordance with GAAP applied on
a consistent basis throughout the period involved, permit Bank's officers or
authorized representatives to visit and inspect Borrower's and each Subsidiary's
books of account and other records at such reasonable times and as often as Bank
may desire, and pay the reasonable fees and disbursements of any accountants or
other agents of Bank selected by Bank for the foregoing purposes. The foregoing
shall include, without limitation, the Bank's performing a field audit of
Borrower's and each Subsidiary's assets and systems. Unless written notice of
another location is given to Bank, Borrower's books and records will be located
at Borrower's chief executive office set forth above (and with respect to each
Subsidiary, the address provided by the Borrower to the Bank in writing). All
financial statements called for below shall be prepared in form and content
acceptable to Bank and by independent certified public accountants acceptable to
Bank.

In addition, Borrower shall comply with the following:

(a) ANNUAL STATEMENTS. Borrower shall provide Bank with annual
audited financial statements on a consolidated and consolidating basis for the
Borrower and each of its wholly-owned Subsidiaries (together with any management
letter provided to the Borrower by the Borrower's principal accounting firm), in
conformity with generally accepted accounting principles

<PAGE> 29

applied on a consistent basis, within ninety (90) days of fiscal year end, to be
prepared by and bear the unqualified opinion of a Certified Public Accountant
acceptable to Bank without any impermissible qualification. As used herein,
"impermissible qualification" means relative to the opinion of any independent
public accountant as to any financial statement of Borrower that said opinion
contains no qualification or exception to any such opinion or certification: (i)
which is of a "going concern" or similar nature; (ii) which relates to the
limitation on the scope of examination of matters relevant to such financial
statements; (iii) which relates to the treatment or classification of any item
in such financial statement in which, as a condition to its removal, would
require an adjustment to such item, the effect of which would be to cause the
Borrower (or any Subsidiary) to be in default of any of the financial covenants
under any of the Loan Documents; or (iv) which is otherwise unacceptable to the
Bank in the Bank's sole discretion, acting reasonably.

(b) QUARTERLY STATEMENTS. Borrower shall provide Bank (on an
accrual basis) with company prepared quarterly financial statements (on a
consolidated and consolidating basis for the Borrower and each of its
Subsidiaries) in conformity with generally accepted accounting principles
applied on a consistent basis, within forty-five (45) days of the end of each
quarter. In addition, Borrower shall deliver to Bank quarterly with each
quarterly financial statement a management discussion and analysis of the
financial condition and results of operation of the Borrower, in form and
substance satisfactory to the Bank.

(c) BORROWING BASE. Borrower shall provide Bank a monthly
borrowing base certificate in the form attached hereto as EXHIBIT 4.02(c) within
ten (10) days following each month end and a quarterly accounts receivable aging
and listing, inventory listing (with location) and accounts payable aging and
listing (all in form reasonably acceptable to Bank) together with the quarterly
statement required in subparagraph 4.02(b) above.

(d) COMPLIANCE CERTIFICATE. All required financial statements
must be accompanied by a Certificate of Compliance in the form attached hereto
as EXHIBIT 4.02(d), signed by an officer of the corporation. The foregoing
Certificate of Compliance shall also include the Borrower's calculation of all
financial covenants.

(e) BUDGET. Borrower shall provide Bank an annual budget
prepared on a quarterly basis within forty-five (45) days after each fiscal year
end, together with any subsequent revisions.

(f) SUBSIDIARY STATEMENTS AND TAX RETURNS. Cause each
Subsidiary which is not consolidated with the Borrower to deliver to Bank: (i)
updated financial statements on or prior to ninety (90) days following the
Borrower's fiscal year end; and (ii) a copy of their annual federal income tax
return within ten (10) days following filing. Tax returns must be filed within
the time established by federal law, including the provisions of federal law
regarding extensions of time for filing.

24
<PAGE> 30

(g) SEC FILINGS. Borrower shall provide to Bank a copy of all
Securities and Exchange Commission filings and reporting requirements (if
applicable) within ten (10) days following filing.

(h) ADDITIONAL INFORMATION. Furnish to Bank promptly such
additional information, reports and statements respecting the business
operations and financial condition of Borrower and each Subsidiary,
respectively, from time to time, as Bank may reasonably request.

4.03 INSURANCE. Maintain insurance with responsible insurance
companies on such of its properties, in such amounts and against such risks as
is customarily maintained by similar businesses operating in the same vicinity,
specifically to include fire and extended coverage insurance covering all
assets, business interruption insurance, workers compensation insurance and
liability insurance, all to be with such companies and in such amounts as are
satisfactory to Bank and with respect to insurance on the Collateral, to contain
a mortgagee clause naming Bank as a loss payee or an additional insured (as
applicable) as its interest may appear and providing for at least 30 days prior
notice to Bank of any cancellation, nonrenewal or modification thereof.
Satisfactory evidence of such insurance will be supplied to Bank prior to
funding under the Loan(s) and 30 days prior to each policy renewal. Coinsurance
provisions are not permitted in any insurance policies. Further, each insurance
policy provided to Bank by the Borrower shall be written by an insurer having
not less than "A-XII" Best's Rating according to the most current edition of
Best's Key Rating Guide. The address for notices to Bank shall be set forth in
each policy as follows:

NationsBank of Texas
TX1-609-03-01
P.O. Box 830632
Dallas, TX 75283

Re: Obligor Number _______________

4.04 EXISTENCE AND COMPLIANCE. Maintain its existence, good
standing and qualification to do business, where required and comply with all
laws, regulations and governmental requirements including, without limitation,
environmental laws applicable to it or to any of its property, business
operations and transactions.

4.05 ADVERSE CONDITIONS OR EVENTS. Advise Bank in writing within
ten (10) days of: (a) any condition, event or act which comes to its attention
that would or might materially adversely affect Borrower's or any Subsidiary's
financial condition or operations, the Collateral, or Bank's rights under the
Loan Documents; (b) any litigation filed by or against Borrower or any
Subsidiary which, in Borrower's good faith estimate, may reasonably be expected
to aggregate a liability to the Borrower and each Subsidiary of Twenty Thousand
Dollars ($20,000) or more in the aggregate; (c) any event that has occurred that
would constitute an Event of Default under any Loan Documents; and (d) any
uninsured or partially uninsured loss through fire, theft, liability or property
damage in excess of an aggregate of Ten Thousand Dollars ($10,000).

<PAGE> 31

4.06 TAXES AND OTHER OBLIGATIONS. Pay all of their respective
taxes, assessments and other obligations, including, but not limited to taxes,
costs or other expenses arising out of this transaction, as the same become due
and payable, except to the extent the same are being contested in good faith by
appropriate proceedings in a diligent manner.

4.07 MAINTENANCE. Maintain all of their respective tangible
property in good condition and repair and make all necessary replacements
thereof, and preserve and maintain all licenses, trademarks, privileges,
permits, franchises, certificates and the like necessary for the operation of
their respective business.

4.08 NOTIFICATION. Borrower shall immediately advise Bank in
writing of: (a) any and all enforcement, cleanup, remedial, removal, or other
governmental or regulatory actions instituted, completed or threatened pursuant
to any applicable federal, state, or local laws, ordinances or regulations
relating to any Hazardous Materials affecting Borrower's and/or any Subsidiary's
business operations; (b) all claims made or threatened by any third party
against Borrower or any Subsidiary relating to damages, contribution, cost
recovery, compensation, loss or injury resulting from any Hazardous Materials.
Borrower shall immediately notify Bank of any remedial action taken by Borrower
or any Subsidiary with respect to Borrower's or any Subsidiary's business
operations; and (c) the occurrence of any Default or Event of Default of which
the Borrower or any Subsidiary has knowledge.

4.09 POTENTIAL CONTINGENT LIABILITIES. Borrower shall inform Bank
within ten (10) days of any actual or potential contingent liabilities in excess
of One Hundred Thousand Dollars ($100,000) in the aggregate with respect to
either Borrower or any Subsidiary.

4.10 SUBSIDIARIES. The following shall be applicable to each
Subsidiary (whether or not acquired with the proceeds of the Loan):

(a) The Borrower shall cause each Subsidiary to guarantee
the Obligation upon terms and conditions acceptable to Bank;

(b) The Borrower shall collaterally assign (or cause a
Subsidiary to collaterally assign, if applicable) to the Bank the Borrower's (or
Subsidiary's) interest in each Subsidiary upon terms and conditions acceptable
to the Bank; and

(c) Borrower shall cause each Subsidiary to pledge all of such
Subsidiary's assets to the Bank upon terms and conditions acceptable to the Bank
which may include, without limitation, an opinion of counsel acceptable to the
Bank.

4.11 NON-USE COMMITMENT FEE. Borrower shall pay to the Bank a
non-use commitment fee in the amount of three-eights of one percent (0.375%) of
any unused portion of the Loan based

<PAGE> 32

on the average daily unused portion of the committed portion of the Loan, which
amount shall accrue and be due and payable quarterly on the tenth (10th) day of
each calendar quarter.

4.12 ADDITIONAL FEE. Borrower shall pay to Bank an additional sum
of Forty-Six Thousand Two Hundred Fifty Dollars ($46,250) to the extent Borrower
elects to increase the Borrower Base available Loan amount from Twenty Million
Dollars ($20,000,000) to Twenty-Five Million Dollars ($25,000,000), which fee
shall be prorated based upon the amount of time remaining to the Maturity Date,
rounded up to the end of the month.

4.13 COMPLIANCE WITH LAWS. Borrower and each Subsidiary shall duly
observe, conform and comply with all laws, decisions, judgments, rules,
regulations and orders of all governmental authorities relative to the conduct
of its or his business, its or his properties, and assets, except those being
contested in good faith by appropriate proceedings diligently pursued; and
obtain, maintain and keep in full force and effect all governmental licenses,
authorizations, consents and permits necessary to the proper conduct of the
business of the Borrower and each Subsidiary.

4.14 VISITATION RIGHTS. Permit any authorized representative of the
Bank from time to time, upon reasonable notice to the Borrower and during normal
business hours, to examine and copy the records and books of, and visit and
inspect the properties of, the Borrower or any of its Subsidiaries, and to
discuss the affairs and finances of the Borrower or any of its Subsidiaries with
any of their respective officers or directors, and at the expense of the Bank so
long as no Default exists, independent public accountants. In addition to the
foregoing, Borrower shall assist Bank in examining the Borrower's Inventory
whether at the Borrower's Address or otherwise.

4.15 ERISA. Borrower shall furnish to Bank:

(a) As soon as available and in any event within fifteen (15)
days after Borrower knows or has reason to know that any Termination Event has
occurred, a statement of a senior officer of the Borrower describing the
Termination Event and the action which the Borrower proposes to take so that the
Termination Event shall not be continuing;

(b) Promptly after receipt of request therefor by the Bank,
copies of each annual report filed by the Borrower or any of its Subsidiaries
pursuant to Section 104 of ERISA with respect to each Plan (including, to the
extent required by Section 103 of ERISA, the related financial and actuarial
statements and opinions and other supporting statements, certifications,
schedules and information referred to in said Section 103) and each annual
report, if any, required to be filed with respect to each Plan under Section
4065 of ERISA;

(c) Promptly and after receipt thereof by the Borrower or any
of its Subsidiaries from the Pension Benefit Guaranty Corporation, copies of
each notice received by such party of the Pension Benefit Guaranty Corporation's
intent to terminate any Plan or to have a Trustee appointed to administer any
Plan; and

<PAGE> 33

(d) Promptly after such request, any other documents and
information relating to any Plan that the Bank may reasonably request from time
to time.

4.16 PAYMENT OF INDEBTEDNESS. Borrower shall pay all of its
Indebtedness and obligations promptly and in accordance with normal terms and
comply in all respects with all agreements, indentures, mortgages or documents
binding on it; and, unless being contested in good faith (for which Bank may
require the posting of a bond acceptable to the Bank), pay and discharge or
cause to be paid and discharged promptly all taxes, assessments and governmental
charges or levies imposed upon it or upon its property or upon any part thereof,
before the same shall become in default, as well as all claims for labor,
materials and supplies or otherwise which, if unpaid, might become a Lien upon
such properties or any part thereof.

4.17 PARTS AGREEMENT. Advise Bank in writing within ten (10) days
of any notice of cancellation, default or alleged breach of the Surplus Parts
Supply Agreement between Borrower and United Technologies Corporation ("Parts
Agreement").

4.18 SUBSIDIARY. The Subsidiary identified on EXHIBIT 3.18 attached
hereto does not and, until the provisions of Paragraph 4.10 are complied with,
will not contain any assets. Borrower shall, on or prior to March 7, 1997,
comply with the provisions of Paragraph 4.10 with respect to the Subsidiary
identified on EXHIBIT 3.18 attached hereto.

4.19 PURCHASE OF ENGINES AND PROPELLERS. Prior to the purchase of
any engine having at least 750 rate takeoff horsepower or equivalent or any
aircraft propeller capable of absorbing 750 or more rated takeoff shaft
horsepower, the Borrower shall: (a) comply with the requirements of
subparagraphs (i), (ii) and (iii) of Paragraph 2.07(l) hereof; and (b) forward
to the Bank the requested form of partial release with respect to such
Inventory.

4.20 LOCK BOX. Upon request of the Bank, the Borrower agrees to
enter into a lock box agreement reasonably acceptable to the Bank wherein all
the Borrower's Receivables shall be deposited.

4.21 BANK ACCOUNT. For Collateral purposes, the Borrower
covenants to maintain Borrower's primary depository accounts with the Bank.

ARTICLE 5
NEGATIVE COVENANTS

Until full payment and performance of all Obligations of Borrower under
the Loan Documents and the termination of any obligation of the Bank to make any
Advances, neither Borrower nor any Subsidiary will, without the prior written
consent of Bank (and without limiting any requirement of any other Loan
Documents):

<PAGE> 34

5.01 LIENS. Incur, create or permit to exist any pledge, security
interest, lien, charge or other encumbrance of any nature whatsoever on any of
Borrower's or any Subsidiary's property (including the Collateral), whether now
owned or hereafter acquired, other than the Permitted Liens and purchase money
security interests and capital leases not to exceed One Million Dollars
($1,000,000) in the aggregate during any twelve (12) month period.

5.02 BORROWINGS. Other than trade payables in the ordinary course
of business, create, incur, assume or become liable in any manner for any
indebtedness, direct or indirect (for borrowed money, deferred payment for the
purchase of assets, capital lease payments, as surety or guarantor for the debt
for another, or otherwise) other than purchase money security interests and
capital leases not to exceed One Million Dollars ($1,000,000) in the aggregate
during any twelve (12) month period and the existing shareholder debt in the
approximate amount of Four Million Seven Hundred Seventy-Six Thousand Dollars
($4,776,000), together with accrued interest thereon (provided such shareholder
debt is fully subordinated to the Bank pursuant to a subordination agreement
acceptable to the Bank in the Bank's sole discretion).

5.03 CHARACTER OF BUSINESS. Change the general character of
business as conducted at the date hereof, or engage in any type of business not
reasonably related to its business as presently conducted.

5.04 ADDITIONAL NEGATIVE COVENANTS. During the Term of the Loan,
neither the Borrower nor any Subsidiary shall:

(a) repurchase, redeem or retire any of its stock;

(b) make investments, acquisitions or enter into
transactions with or in any affiliate, third party, Subsidiary, joint venture,
persons or securities; provided, however, Borrower shall be permitted to make
investments in Borrower's Subsidiaries to the extent Borrower and each
Subsidiary have complied with the provisions of Paragraph 4.10 hereof;

(c) make investments other than U.S. Government and
Federal Agency Obligations, Certificates of Deposit from federally insured banks
and commercial paper rated A1-P1, all with maturities not to exceed six (6)
months;

(d) guarantee, endorse or assume debt, except in the
normal course of business;

(e) merge with or acquire the assets, stock or ownership
interest of another entity, without the prior written consent of the Bank;

(f) sell, lease, assign, or otherwise dispose of or
transfer any assets, except in the ordinary course of business;

<PAGE> 35

(g) make, permit or suffer any change in the ownership,
control or management of any Subsidiary whereby the Borrower does not own and
control at least fifty-one percent (51%) of all ownership and voting stock of
the Subsidiary;

(h) make, permit or suffer any change in the ownership,
control or management of Borrower and/or any Subsidiary whether by agreements,
shareholder agreements or otherwise or enter into any agreement of merger, sale
of assets or other agreement which would: (x) be in violation of any applicable
law or regulation; and/or (y) have the effect of a change of control of Borrower
or its assets, whereby the existing shareholders of the Borrower do not
maintain, in the aggregate, at least fifty-one percent (51%) of the ownership
and voting control of the Borrower.

(i) make, permit or suffer any change in senior
management of the Borrower whereby Donald A. Graw and Jaime J. Levy fail to
remain active in the daily operations of the Borrower;

(j) other than the Permitted Liens, grant, suffer or permit
any contractual or non-contractual lien or security interest in its assets, or
fail to promptly pay when due all lawful claims, whether for labor, materials or
otherwise;

(k) amend the Clipper Agreement without the prior written
consent of the Bank;

(l) pay dividends or make distributions; or

(m) accept returned goods following an Event of Default
except as contemplated by the Parts Agreement.

5.05 ERISA COMPLIANCE. If Borrower, any Subsidiary or any ERISA
Affiliate shall have any Pension Plan, Borrower, such Subsidiary or such ERISA
Affiliate, as the case may be, shall comply with all requirements of ERISA
relating to such Pension Plan. Without limiting the generality of the foregoing,
Borrower will not, and it will not cause or permit any Subsidiary or any ERISA
Affiliate to:

(a) permit any Pension Plan maintained by Borrower, any
Subsidiary of Borrower or any ERISA Affiliate to engage in any nonexempt
"prohibited transaction", as such term is defined in Section 4975 of the Code;

(b) permit any Pension Plan maintained by Borrower, any
Subsidiary or any ERISA Affiliate to incur any "accumulated funding deficiency",
as such term is defined in Section 302 of ERISA, 29 U.S.C. Section 1082, whether
or not waived;

(c) terminate any Pension Plan in a manner which could
result in the imposition of a Lien on any Property of Borrower, any Subsidiary
or any ERISA Affiliate pursuant to Section 4068 of ERISA, 29 U.S.C. Section
1368; or

<PAGE> 36

(d) take any action which would constitute a complete or
partial withdrawal from a Multi-Employer Plan within the meaning of Sections
4203 or 4205 of Title IV of ERISA.

ARTICLE 6
DEFAULT

The occurrence of any of the following as they relate to the Borrower
or any Subsidiary shall constitute an Event of Default:

6.01 Failure to pay principal or interest or any other payment due
to Bank (or Bank's affiliates) under any note or collateral security document
executed in connection with the Loan, whether parent or subsidiary, or to other
creditors within ten (10) days following the date due.

6.02 Failure to perform any covenant or agreement of the Borrower
or any Subsidiary contained in this Agreement within ten (10) days following
notice of the default (other than a monetary default, a default under Section
4.01 hereof or a default under Article 5 hereof for which no notice or right to
cure shall be applicable).

6.03 Failure to perform any other obligation imposed upon Borrower
or any Subsidiary by the Loan Documents within the time period specified, or as
may be specified by the Bank.

6.04 Any representation, warranty, statement or certificate made by
Borrower or any Subsidiary determined by Bank to be untrue in any material
respect.

6.05 Violation, termination (other than in accordance with its
terms) or default following any applicable cure period of any agreement or
contract with Bank (or its affiliates) or other lenders or under any other
material agreement involving Borrower.

6.06 Filing of any petition for adjudication as a bankrupt or for
reorganization, whether voluntary or involuntary; the appointment of a receiver
or trustee or other similar officer with respect to any substantial part of
their property; a general assignment for the benefit of creditors; any other
insolvency proceeding, any dissolution or liquidation or winding up of the
affairs of the Borrower or any Subsidiary which, with respect to any involuntary
filing, is not dismissed within thirty (30) days following filing.

6.07 A default under any agreement Borrower or any Subsidiary may
have with the Bank (or its affiliates) which is not cured within any applicable
cure period shall constitute a default under the Loan and a default under the
Loan which is not cured within any applicable period shall constitute a default
under any other agreement between Bank (or its affiliates) and Borrower.

6.08 (a) A final judgment, other than a final judgment in
connection with any condemnation, and including any judgment or other final
determination of any contest is entered

<PAGE> 37

against Borrower that (i) adversely affects the value, use or operation of the
collateral; (ii) adversely affects, or may reasonably adversely affect, the
validity, enforceability or priority of the lien or security interest created by
any Loan Document in the Bank's sole judgment; or both; or (b) execution of
other final process issues thereon with respect to the collateral; and (c)
Borrower does not discharge the same or provide for its discharge in accordance
with its terms, or procure a stay of execution therein, in any event within
thirty (30) days of entry.

6.09 Any federal, state or local tax lien or any claim of lien for
labor, materials or any other lien or encumbrance of any nature whatsoever is
recorded against the Borrower or any Subsidiary or against the Borrower's or any
Subsidiary's assets and is not removed by payment or transferred to substitute
security in the manner provided by law within ten (10) days after it is recorded
in accordance with applicable law, or is not contested by Borrower or any
Subsidiary.

6.10 Borrower or any Subsidiary shall cease to exist or to be
qualified to do or transact business in the State in which the Borrower's or any
Subsidiary's assets are located to the extent required under applicable law, or
shall be dissolved or shall be a party to a merger or consolidation, or shall
sell all or substantially all of its assets.

6.11 Any sale, conveyance, transfer, assignment or other
disposition of all or any part (other than in the ordinary course of the
Borrower's and Subsidiary's business) of the Borrower's assets or any
Subsidiary's assets or any ownership interest in: (i) Borrower whereby the
existing shareholders of the Borrower do not maintain a majority ownership and
voting interest in the Borrower; and/or (ii) any Subsidiary whereby the Borrower
does not maintain a majority ownership and voting interest in such Subsidiary.

6.12 Borrower or any Subsidiary shall default under any obligation
imposed by any indemnity whether contained within any of the Loan Documents, the
Hazardous Waste Certification, or otherwise.

6.13 If at any time the Bank shall reasonably deem itself insecure
or shall determine that there has been a material change in the financial
condition or prospects of Borrower or any Subsidiary and such is not cured to
the satisfaction of the Bank within ten (10) days following notice.

6.14 The results of any field audit performed by Bank are not
satisfactory to the Bank, as determined in the Bank's sole discretion, acting
reasonably.

6.15 A default following any applicable grace period by Borrower
under any agreement between Borrower and The Clipper Group.

6.16 A Termination Event has occurred; or a trustee shall be
appointed to administer any Plan or Plans under Section 4042 of ERISA; or the
Pension Benefit Guaranty Corporation shall institute proceedings to terminate or
to have a trustee appointed to administer, any Plan or Plans, and the proceeding
shall not be dismissed within thirty (30) days; or a voluntary notice of intent
to

<PAGE> 38

terminate is filed under Section 4041 of ERISA which would, in the opinion of
Bank, have a material adverse effect on the financial condition of the Borrower
and its Subsidiaries taken as a whole; or, with respect to any Plan as to which
the Borrower or any Subsidiary may have any liability, there shall exist a
deficiency in the Plan assets available to satisfy the benefits guaranteeable
under ERISA with respect to the Plan which is material to the financial
condition of the Borrower and such Subsidiary taken as a whole, and (a) steps
are undertaken to terminate the Plan, or (b) the Plan is terminated, or (c) any
Reportable Event which presents a material risk of termination with respect to
the Plan shall occur.

ARTICLE 7
REMEDIES UPON DEFAULT

If an Event of Default shall occur Bank may declare this Agreement in
default and all amounts owing under this Agreement and all other Obligations
owing by Borrower to Bank shall upon demand by Bank immediately become due and
payable (notwithstanding that the maturity date or dates expressed in any
evidence of such indebtedness may be otherwise) and Bank may foreclose Bank's
lien or security interest in the Collateral in any way permitted by law, and
Bank shall have, without limitation, the remedies of a secured party under the
Uniform Commercial Code as enacted in Florida as of the date hereof. Bank may
thereupon enter Borrower's and each Subsidiary's premises without legal process,
but in accordance with applicable laws and without incurring liability other
than liability to Borrower arising out of Bank's gross negligence or willful
misconduct, and remove the Collateral to such place as Bank may deem advisable,
or Bank may require Borrower and each Subsidiary to make the Collateral
available to Bank at Borrower's and each Subsidiary's place of business and,
with or without having the Collateral at the time or place of sale, Bank may
sell or otherwise dispose of all or any part of the Collateral whether in its
then condition or after further preparation or processing, either at public or
private sale or at any broker's board, with or without notice and with or
without advertisement, in lots or in bulk, for cash or for credit, at any time
or place, in one or more sales, and upon such terms and conditions as Bank may
elect but in all events in accordance with applicable laws. At any such sale
Bank may be the purchaser. If any Inventory shall require rebuilding, repairing,
maintenance, preparation, or is in process or other unfinished state, Bank shall
have the right, at Bank's option, to do such rebuilding, repairing, preparation,
processing or completing of manufacturing, for the purpose of putting the
Inventory in such saleable form as Bank shall deem appropriate.

If after receipt of any payment of or any part of the Obligation, the
Bank is for any reason compelled to surrender such payment to any person because
such payment is determined to be void or voidable as preference, impermissible
setoff, or a diversion of trust funds, or for any other reason, this Agreement
shall continue in full force and the Borrower shall remain liable to Bank for
the amount of such payment surrendered. The provisions of this Section shall be
and remain effective notwithstanding any contrary action which may have been
taken by the Bank in reliance upon such payment, and any such contrary action so
taken shall be without prejudice to the Bank's rights under this Agreement and
shall be deemed to have been conditioned upon such payment having become

<PAGE> 39

final and irrevocable. The provisions of this Section shall survive the
termination of this Agreement until all periods for such surrender have ended
without such action having been instituted.

Borrower hereby makes, constitutes and appoints Bank (and all persons
designated by Bank) the true and lawful agent and attorney-in-fact of Borrower
with full power of substitution: (a) if an Event of Default has occurred, to
receive, open and dispose of all mail addressed to Borrower relating to the
Collateral; (b) if an Event of Default has occurred, to notify and direct the
United States Post Office authorities by notice given in the name of Borrower
and to sign on behalf of Borrower, to change the address for delivery of all
mail addressed to Borrower relating to the Collateral to an address to be
designated by Bank, and to cause such mail to be delivered to such designated
address where Bank may open all such mail and remove therefrom any notes,
checks, acceptances, drafts money orders or other instruments included in the
Collateral in which Bank has a security interest under the terms of this
Agreement, with full power to endorse the name of Borrower upon any such notes,
checks, acceptances, drafts, money orders, instruments or other documents
relating to the Collateral or security of any kind and to effect the deposit and
collection thereof, and Bank shall have the further right and power to endorse
the name of Borrower on any documents relating to the Collateral; (c) to sign
the name of Borrower to drafts against its lessees or other debtors, to notices
to such lessees or other debtors, to assignments and notices of assignments,
financing statements or other public records or notices and all other
instruments and documents; (d) to do any and all things necessary and take such
actions in the name and on behalf of Borrower to carry out the intent of this
Agreement, including, without limitation, the grant of the security interest
granted under this Agreement and to perfect and protect the security interest
granted to Bank in respect of the Collateral and the Bank's rights created under
this Agreement. Borrower agrees that neither Bank nor any of its agents,
designees or attorneys-in-fact will be liable for any acts of commission or
omission (other than for acts of commission or omission which constitute gross
negligence or willful misconduct as determined by a court of competent
jurisdiction in a final, nonappealable order), or for any error of judgment or
mistake of fact or law in respect to the exercise of the power of attorney
granted under this Article. The power of attorney granted under this Article
shall be irrevocable during the Term of this Agreement.

ARTICLE 8
NOTICES

All notices, requests or demands which any party is required or may
desire to give to any other party under any provision of this Agreement must be
in writing delivered to the other party at the following address:

Borrower: AVTEAM, INC.
3230 Executive Way
Miramar, Florida 33025
Attention: Donald A. Graw

Bank: NationsBank, N.A. (South)

<PAGE> 40

One Financial Plaza, 10th Floor
Fort Lauderdale, Florida 33394
Attention: Financial Strategies Group

or to such other address as any party may designate by written notice to the
other party. Each such notice, request and demand shall be deemed given or made
as follows:

8.01 If sent by hand delivery, upon delivery.

8.02 If sent by mail, upon the earlier of the date of receipt or
five (5) days after deposit in the U.S. Mail, first class postage prepaid.

8.03 If sent by overnight express mail, one (1) business day
following mailing, postage prepaid.

ARTICLE 9
COSTS, EXPENSES AND ATTORNEY'S FEES

Borrower shall pay to Bank immediately upon demand the full amount of
all costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of Bank's in-house counsel if permitted by
applicable law), incurred by Bank in connection with (a) negotiation and
preparation of this Agreement and each of the Loan Documents (not to exceed
Thirty-Five Thousand Dollars [$35,000] plus costs), and (b) Bank's continued
administration thereof.

ARTICLE 10
MISCELLANEOUS

Borrower and Bank further covenant and agree as follows, without
limiting any requirement of any other Loan Document:

10.01 CUMULATIVE RIGHTS AND NO WAIVER. Each and every right granted
to Bank under any Loan Document, or allowed it by law or equity shall be
cumulative of each other and may be exercised in addition to any and all other
rights of Bank, and no delay in exercising any right shall operate as a waiver
thereof, nor shall any single or partial exercise by Bank of any right preclude
any other or future exercise thereof or the exercise of any other right.
Borrower expressly waives any presentment, demand, protest or other notice of
any kind, including but not limited to notice of intent to accelerate and notice
of acceleration. No notice to or demand on Borrower in any case shall, of
itself, entitle Borrower to any other or future notice or demand in similar or
other circumstances.

10.02 APPLICABLE LAW. This Loan Agreement and the rights and
obligations of the parties hereunder shall be governed by and interpreted in
accordance with the laws of Florida and applicable United States federal law.

<PAGE> 41

10.03 AMENDMENT. No modification, consent, amendment or waiver of
any provision of this Loan Agreement, nor consent to any departure by Borrower
therefrom, shall be effective unless the same shall be in writing and signed by
an officer of Bank, and then shall be effective only in the specified instance
and for the purpose for which given. This Loan Agreement is binding upon
Borrower, its successors and assigns, and inures to the benefit of Bank, its
successors and assigns; however, no assignment or other transfer of Borrower's
rights or obligations hereunder shall be made or be effective without Bank's
prior written consent, nor shall it relieve Borrower of any obligations
hereunder. There is no third party beneficiary of this Loan Agreement.

10.04 DOCUMENTS. All documents, certificates and other items
required under this Loan Agreement to be executed and/or delivered to Bank shall
be in form and content satisfactory to Bank and its counsel.

10.05 PARTIAL INVALIDITY. The unenforceability or invalidity of any
provision of this Loan Agreement shall not affect the enforceability or validity
of any other provision herein and the invalidity or unenforceability of any
provision of any Loan Document to any person or circumstance shall not affect
the enforceability or validity of such provision as it may apply to other
persons or circumstances.

10.06 INDEMNIFICATION. Except to the extent caused by the Bank's
gross negligence or willful misconduct, Borrower shall indemnify, defend and
hold Bank and its successors and assigns harmless from and against any and all
claims, demands, suits, losses, damages, assessments, fines, penalties, costs or
other expenses (including reasonable attorneys' fees and court costs) arising
from or in any way related to any of the transactions contemplated hereby and
the operation of the Borrower's business including, but not limited to, the
payment of "Taxes" (as hereinafter defined). The Borrower's obligations under
this paragraph shall survive the repayment of the Loan and any deed in lieu of
foreclosure or foreclosure of any Deed to Secure Debt, Deed of Trust, Security
Agreement or Mortgage securing the Loan.

10.07 SURVIVABILITY. All covenants, agreements, representations and
warranties made herein or in the other Loan Documents shall survive the making
of the Loan and shall continue in full force and effect so long as the Loan is
outstanding or the obligation of the Bank to make any advances under the Loan
shall not have expired.

10.08 FIELD AUDIT. The Bank shall be permitted to perform (for the
benefit of the Bank) inventory and accounts receivable field audits which must
be satisfactory to the Bank. Such audits shall be at the Borrower's expense (not
to exceed Six Hundred Fifty Dollars [$650] per day plus out-of-pocket expenses)
provided Borrower shall not be responsible for the expense more than once in any
twelve (12) month period commencing February 1, 1997, unless the Borrower shall
be in default.

<PAGE> 42

10.09 JURISDICTION, SERVICE OF PROCESS.

(a) Any suit, action or proceeding against Borrower with
respect to this Agreement, the Note, the Loan Documents or any judgment entered
by any court in respect of any thereof shall be brought in the courts of Broward
County in the State of Florida or in the U.S. District Court for the Southern
District of Florida as Bank (in its sole discretion) may elect, and Borrower
hereby accepts the nonexclusive jurisdiction of those courts for the purpose of
any suit, action or proceeding.

(b) In addition, Borrower hereby irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement, the Note, the Loan Documents or any judgment entered
by any court in respect of any thereof brought in the State of Florida, and
hereby further irrevocably waives any claim that any suit, action or proceeding
brought in the State of Florida has been brought in an inconvenient forum.
Borrower hereby further agrees that if any such suit, action or proceeding is
pending in more than one jurisdiction, Bank's selection of the forum shall be
binding upon the parties hereto.

10.10 COURSE OF DEALING. No course of dealing between Bank and
Borrower or any Subsidiary shall be effective to amend, modify or change any
provision of this Agreement.

10.11 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
Borrower and each Subsidiary and shall inure to the benefit of the Bank, and
their respective heirs, personal representatives, trustees, estates, successors
and assigns; provided, that the Borrower may not assign any of its rights
hereunder without the prior written consent of the Bank, which consent may be
withheld in the Bank's sole discretion. The Bank may, without the consent of the
Borrower or any other Person, assign, negotiate, hypothecate, or grant
participations in this Agreement or in any of its rights and security under this
Agreement and each of the other documents contemplated to be executed in
conjunction herewith. The Borrower and each Subsidiary shall accord full
recognition to any such assignment, and all rights and remedies of the Bank in
connection with the interest so assigned shall be as fully enforceable by such
assignee as they were by the Bank before such assignment. In connection with any
proposed assignment, the Bank may disclose to the proposed assignee any
information that the Borrower or any Subsidiary is required to deliver to the
Bank pursuant to this Agreement.

10.12 NET PAYMENTS. All payments by the Borrower under this
Agreement and the Note shall be made without set-off or counterclaim and in such
amounts as may be necessary in order that all payments, after deduction or
withholding for or on account of any present or future taxes, levies, imposts,
duties, or other charges of whatsoever nature imposed by any government or any
political subdivision or taxing authority thereof including, without limitation,
documentary and intangible taxes (collectively, the "Taxes") shall not be less
than the amounts otherwise specified to be paid under this Agreement and the
Note. Notwithstanding anything to the contrary contained in this Paragraph
10.12, the Borrower shall not be liable for the payment of any tax on or
measured by net income imposed on the Bank pursuant to the income tax laws of
the United States or any of the United States or any political subdivision
thereof. The Borrower shall pay all Taxes when due (and

<PAGE> 43

indemnify the Bank against any liability therefor) and shall promptly (and in
any event not later than thirty [30] days thereafter) furnish to the Bank any
certificates, receipts and other documents which may be required (in the
judgment of Bank) to establish any tax credit to which the Bank may be entitled.
The obligations of the Borrower under this Paragraph 10.12 shall survive the
termination of this Agreement and the repayment of the Loan, but such
obligations shall terminate as to any claim or liability for Taxes for which the
Borrower is responsible pursuant to this Paragraph 10.12 on the same date that
any such claim or liability for Taxes is barred by any applicable statute of
limitations.

10.13 FURTHER ASSURANCES. Borrower will at its own cost and expense
execute and deliver to Bank, at any time and from time to time, any and all
further agreements, documents and instruments, and take any and all further
actions which may be required under applicable law, or which Bank may from time
to time reasonably request, in order to effectuate the intent of the
transactions contemplated by this Agreement and the other Loan Documents,
including all such actions to establish, preserve, protect and perfect the
estate, right, title and interest of the Bank to the Collateral including that
which is not Collateral on the date hereof.

10.14 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and same instrument.

10.15 RESURRECTION OF BORROWER'S OBLIGATIONS. To the extent that
Bank receives any payment on account of any of Borrower's Obligations, and any
such payment(s) or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, subordinated and/or required to be repaid
to a trustee, receiver or any other Person under any bankruptcy act, state or
Federal law, common law or equitable cause, then, to the extent of such
payment(s) received, Borrower's Obligations or part thereof intended to be
satisfied and any and all Liens upon or pertaining to any property or assets of
Borrower and theretofore created and/or existing in favor of Bank as security
for the payment of such Borrower's Obligations shall be revived and continue in
full force and effect, as if such payment(s) had not been received by Bank and
applied on account of Borrower's Obligations.

10.16 EQUITABLE RELIEF. Borrower recognizes that, in the event
Borrower fails to perform, observe or discharge any of Borrower's Obligations
under this Agreement, any remedy at law may prove to be inadequate relief to
Bank; the Borrower agrees that Bank, if Bank so requests, shall be entitled to
temporary and permanent injunctive relief in any such case without the necessity
of proving actual damages.

10.17 AMBIGUITY OR CONFLICT. In the event of an ambiguity or
conflict of terms between any of the provisions of the Note, Security Agreement,
any Loan Document and this Agreement, the terms of this Agreement shall be
deemed to amend and control all of the other agreements; and, to the extent that
any of the agreements are silent, each shall supplement the others; provided,
however, in the event of any conflict between the terms of this Agreement, the
Security Agreement, any Loan

<PAGE> 44

Document, the Note and any of them, the terms which, in Bank's sole discretion,
grant Bank the greater protection with respect to the prospect of payment of the
Note, or in any other manner are of greater benefit to Bank, shall control. All
other provisions of contemporaneous or previous agreements and understandings
between Borrower, and Bank relating to the commitment of Bank and the Note in
conflict with any expressed provision hereof shall be merged into this Agreement
and be extinguished and of no further force and effect.

ARTICLE 11
PARTIAL RELEASES

In conjunction with Paragraph 2.07(l) of this Agreement, the Bank
agrees, provided no Default exists hereunder, to execute partial releases of the
engines which are the subject of such filing and deliver such releases in escrow
to a mutually-acceptable escrow agent (Dixie Aire shall be deemed to be an
acceptable escrow agent) pursuant to a mutually-agreeable escrow agreement
whereby the Borrower may sell such engines in the ordinary course of the
Borrower's business provided: (i) no Default exists hereunder; and (ii) Borrower
remains in compliance with the Borrowing Base. Upon Bank's receipt of the
executed Affidavit in the form of EXHIBIT 11 attached hereto signed by an
Authorized Signatory and provided no Default exists hereunder, Bank agrees to
release the engine(s) which are the subject of the Affidavit pursuant to the
Authorization to Release in the form of EXHIBIT 11(a) attached hereto.

ARTICLE 12
ARBITRATION

ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES HERETO INCLUDING,
BUT NOT LIMITED TO, THOSE ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
RELATED AGREEMENTS OR INSTRUMENTS, INCLUDING ANY CLAIM BASED ON OR ARISING FROM
AN ALLEGED TORT, SHALL BE DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH
THE FEDERAL ARBITRATION ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW),
THE RULES OF PRACTICE AND PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES
OF JUDICIAL ARBITRATION AND MEDIATION SERVICES, INC. (J.A.M.S.), AND THE
"SPECIAL RULES" SET FORTH BELOW. IN THE EVENT OF ANY INCONSISTENCY, THE SPECIAL
RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED IN ANY
COURT HAVING JURISDICTION. ANY PARTY TO THIS AGREEMENT MAY BRING AN ACTION,
INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY
CONTROVERSY OR CLAIM TO WHICH THIS AGREEMENT APPLIES IN ANY COURT HAVING
JURISDICTION OVER SUCH ACTION.

12.01 SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE
CITY OF FORT LAUDERDALE, FLORIDA, AND ADMINISTERED BY ENDISPUTE, INC.,
D/B/A ENDISPUTE/J.A.M.S. WHO WILL APPOINT AN ARBITRATOR; IF
ENDISPUTE/J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING

<PAGE> 45

THE ARBITRATION, THEN THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE.
ALL ARBITRATION HEARINGS WILL BE COMMENCED WITHIN NINETY (90) DAYS OF
THE DEMAND FOR ARBITRATION.

12.02 RESERVATION OF RIGHTS. NOTHING IN THIS AGREEMENT SHALL BE
DEEMED TO: (A) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF
LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS AGREEMENT; OR (B) BE A
WAIVER BY THE BANK OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C. SEC. 91 OR ANY
SUBSTANTIALLY EQUIVALENT STATE LAW; OR (C) LIMIT THE RIGHT OF THE BANK HERETO
(I) TO EXERCISE SELF-HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF, OR (II)
TO FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL, OR (III) TO
OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED
TO) INJUNCTIVE RELIEF OR THE APPOINTMENT OF A RECEIVER. THE BANK MAY EXERCISE
SUCH SELF-HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL
OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION
PROCEEDING BROUGHT PURSUANT TO THIS AGREEMENT. AT BANK'S OPTION, FORECLOSURE
UNDER A DEED OF TRUST OR MORTGAGE MAY BE ACCOMPLISHED BY ANY OF THE FOLLOWING:
THE EXERCISE OF A POWER OF SALE UNDER THE DEED OF TRUST OR MORTGAGE, OR BY
JUDICIAL SALE UNDER THE DEED OF TRUST OR MORTGAGE, OR BY JUDICIAL FORECLOSURE.
NEITHER THIS EXERCISE OF SELF-HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE
OF AN ACTION FOR FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES SHALL
CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN ANY
SUCH ACTION, TO ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING
RESORT TO SUCH REMEDIES.

ARTICLE 13
NO ORAL AGREEMENT

THIS WRITTEN LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

ARTICLE 14
CROSS-DEFAULT/CROSS-COLLATERAL

An Event of Default hereunder or under any of the documents evidencing
or securing the Loan shall constitute an Event of Default under any other
indebtedness (now or hereafter existing) of the Borrower or any Subsidiary to
Bank. Further, all collateral for the Loan shall also secure any other
indebtedness (now or hereafter existing) of the Borrower or any Subsidiary to
Bank, and any

<PAGE> 46

collateral pledged by the Borrower or any Subsidiary to Bank to secure such
other indebtedness shall also secure the Loan. Any default under any document
evidencing or securing such other indebtedness following any applicable cure
period, whether by the Borrower or any Subsidiary, shall constitute an Event of
Default hereunder.

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

WITNESS: BORROWER:

AVTEAM, INC., a Florida corporation

By: (SEAL)
- ------------------------------ --------------------------------
Name:
- ------------------------------ --------------------------------
Title:
- ------------------------------ --------------------------------

BANK:

NATIONSBANK, N.A. (SOUTH), a national banking
association

<PAGE> 47

EXHIBIT 2.03(b)

Pratt & Whitney

Greenwich Air Services

Gas Turbine Corporation

Dallas Aerospace

AeroThrust Corporation

Interturbine -- Dallas

Interturbine TEAM

Chromalloy Dallas

Specialized Overhaul Services

Chromalloy Gas Turbine Corp.

<PAGE> 48

EXHIBIT 2.05

Request for Advance

I, ________________________________, Authorized Signatory for AVTEAM,
INC. ("Borrower"), pursuant to the provisions of that certain Loan Agreement
dated effective as of February 19, 1997, (as amended, modified, or supplemented
from time to time, the "Loan Agreement") between Borrower and NATIONSBANK, N.A.
(SOUTH) ("Bank"), hereby certify that:

1. Borrower hereby requests an Advance in the aggregate principal
amount of $__________ to be made on ______________________________, 19____. The
Interest Period hereby selected by the Borrower for the Advance shall be (check
applicable box):

[ ] PRIME interest rate option on the amount of $________________.

[ ] LIBOR interest rate option on the amount of
$_________________, under a one (1) month interest period at a
quoted rate of ____% to mature on ___________________, 19___.

[ ] LIBOR interest rate option on the amount of
$_________________, under a two (2) month interest period at a
quoted rate of ____% to mature on _________________, 19___.

[ ] LIBOR interest rate option on the amount of
$_________________, under a three (3) month interest period at
a quoted rate of ____% to mature on ______________________,
19___.

The proceeds of the Advance shall be disbursed into the
Borrower's account with Bank. The forgoing instructions shall be irrevocable as
provided in the Loan Agreement.

2. All representations and warranties of the Borrower made in the Loan
Agreement are true and correct in all material respects as of the date hereof as
if made on the date hereof, with and after giving effect to the application of
the proceeds of the Advance in connection with which this Request for Advance is
given.

3. There does not exist and will not exist on the date of the requested
Advance, both before and after giving effect to the requested Advance, a Default
or an Event of Default.

4. All conditions precedent in the Loan Agreement to the funding of the
requested Advance have been met.

5. Following the funding of this Advance, the Borrower will remain in
compliance with the Borrowing Base contemplated by Paragraph 2.03(b) of the Loan
Agreement.

<PAGE> 49

6. The proceeds of the requested advance will be used for the purposes
set forth in the Loan Agreement.

7. Terms used in this Request for Advance, not otherwise defined or
limited herein, are used as defined in the Loan Agreement.

Done and executed on the _____day of __________________________, 19___.

---------------------------------------------
Authorized Signatory under the Loan Agreement

<PAGE> 50

EXHIBIT 2.06(b)

Request for Interest Period

I,__________________________ , Authorized Signatory for AVTEAM, INC.
("Borrower"), pursuant to the provisions of that certain Loan Agreement dated
effective as of February 19, 1997, (as amended, modified, or supplemented from
time to time, the "Loan Agreement") between Borrower and NATIONSBANK, N.A.
(SOUTH) ("Bank"), hereby certify that:

1. Borrower hereby applies for an interest rate or interest period
conversion effective on _____________________, 19___. The following outstanding
funds under the (check applicable box):

[ ] PRIME interest rate option on the amount of $________________.

[ ] LIBOR interest rate option on the amount of
$_________________, under a one (1) month interest period at a
quoted rate of ____% to mature on ___________________, 19___.

[ ] LIBOR interest rate option on the amount of
$_________________, under a two (2) month interest period at a
quoted rate of ____% to mature on _________________, 19___.

[ ] LIBOR interest rate option on the amount of
$_________________, under a three (3) month interest period at
a quoted rate of ____% to mature on ______________________,
19___.

The foregoing instructions shall be irrevocable as provided in
the Loan Agreement.

3. There does not exist and will not exist on the date of the requested
Advance, both before and after giving effect to the requested Advance, a Default
or an Event of Default.

4. All conditions precedent in the Loan Agreement to the funding of the
requested Advance have been met.

<PAGE> 51

5. The proceeds of the requested advance will be used for the purposes
set forth in the Loan Agreement.

6. Terms used in this Request for Interest Period, not otherwise
defined or limited herein, are used as defined in the Loan Agreement.

Done and executed on the ____ day of ________________________, 199____.

---------------------------------------------
Authorized Signatory under the Loan Agreement

<PAGE> 52

EXHIBIT 4.02(d)

Certificate of Compliance

I, _____________________________, Authorized Signatory for AVTEAM, INC.
("Borrower") under the Loan Agreement (as amended, modified, or supplemented
from time to time, the "Loan Agreement") between Borrower and NATIONSBANK, N.A.
(SOUTH) ("Bank"), dated effective as of February 19, 1997, do hereby certify
that:

1. This Compliance Certificate is furnished pursuant to the Loan
Agreement and is made as of _________________________, 19___; unless otherwise
defined herein, terms used in this Compliance Certificate have the meanings
assigned to such terms in the Loan Agreement.

2. As of the date of this Compliance Certificate, no Default or Event
of Default has occurred and is continuing.

3. Borrower and each Subsidiary is in compliance with all requirements,
covenants and agreements of Borrower and each Subsidiary contained in the Loan
Agreement including, without limitation, the Borrowing Base. Borrower warrants
and represents that the calculations set forth on EXHIBIT A hereto accurately
represent the financial condition of the Borrower as of the dates set forth
therein (and as of the date hereof if not otherwise specified) and the
calculations are computed in compliance with the financial covenants required
pursuant to the Loan Agreement.

4. The most recent financial statements furnished by Borrower and each
Subsidiary pursuant to the Loan Agreement fairly present the financial condition
of Borrower and each Subsidiary as of the respective dates thereof.

5. There has not been any material adverse change in the financial
condition of Borrower from that reflected on, and as of the date of, the
financial statement most recently furnished to Bank.

6. There is no pending or, to the best of Borrower's knowledge,
threatened material litigation against Borrower or any Subsidiary which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect.

7. Neither Borrower nor any Subsidiary is a party to any agreement or
instrument or subject to any other order, rule, regulation or other restriction
materially and adversely affecting Borrower's or any Subsidiary's properties,
assets or financial condition, or Borrower's or any Subsidiary's ability to
perform the agreements contained in the Loan Agreement.

<PAGE> 53

Done and executed on the ____ day of ________________________, 199___.

---------------------------------------------
Authorized Signatory under the Loan Agreement

<PAGE> 54

EXHIBIT A
to Compliance Certificate

<PAGE> 55

EXHIBIT 3.18

Subsidiaries

AVTEAM Field Services, Inc.

<PAGE> 56

EXHIBIT 3.19

Shareholders

<TABLE>
<CAPTION>
Common Preferred Preferred
Class A Class A Class B
------- --------- ---------
<S> <C> <C> <C>
Leon Sragowicz 3,500,000
Richard Preston 500,000
Donald Graw 500,000
Jaime Levy 500,000
Clipper/Merchant Partners, L.P. 509,890
Clipper Equity Partners I, L.P. 382,418
Clipper/Merban, L.P. 287,890 220,000
Clipper Capital Associates, L.P. 42,857
Clipper/European Re, L.P. 254,945
--------- --------- -------
5,000,000 1,480,000 220,000

</TABLE>

<PAGE> 57

EXHIBIT 3.20

Indebtedness

<TABLE>
<S> <C> <C>
To Shareholders

Leon Sragowicz $ 3,423,735.00
Richard Preston 488,962.00
Donald Graw 463,875.00
Jaime Levy 395,406.00
--------------
$ 4,771,978.00
</TABLE>

<TABLE>
<S> <C>
CAPITAL LEASES

#4212 Coastal Leasing 18,408.68
#4343 Coastal Leasing 9,231.61
#4215 Coastal Leasing 17,550.61
#6371 Coastal Leasing 26,215.25
#6555 Coastal Leasing 6,678.15
#6594 Coastal Leasing 15,063.42
STEEL CASE 36,376.72
--------------
TOTAL $ 4,901,502.44

</TABLE>

<PAGE> 58

EXHIBIT 3.21

Contingent Liabilities

NONE

<PAGE> 59

EXHIBIT 3.30

Employment Agreement

1. Amended and Restated Employment Agreement dated December 5,
1996, between the Borrower and Donald A. Graw.

2. Amended and Restated Employment Agreement dated December 5,
1996, between the Borrower and Jaime J. Levy.

<PAGE> 60

EXHIBIT 4.02(c)

BORROWING BASE CERTIFICATE NO._____________

Status as of______________________

In accordance with the terms of the Loan Agreement between NATIONSBANK, N.A.
(SOUTH) and AVTEAM, INC. dated effective February 19, 1997, we hereby
represent and warrant as follows:

<TABLE>

ACCOUNTS RECEIVABLE
<S> <C>
1. Beginning Balance (Line 5 of Last Report) $
------------
2. Plus: Net Credit Sales as of _______________
------------

3. Less: Cash Remittances as of ________________
------------

4. Less: Other A/R Reductions as of _____________ (Detail attached)
------------

5. ENDING BALANCE
------------
6. Less: Ineligible Accounts Receivable (Line 35 below)
------------
7. ELIGIBLE ACCOUNTS RECEIVABLE
------------
8. Times: Accounts Receivable Advance Rate 80%
------------
9. ACCOUNTS RECEIVABLE AVAILABILITY $
------------
INVENTORY

10. Beginning Balance (Line 14 of the Last Report) $
------------
11. Plus: Purchases as of _________________
------------
12. Less: Cost of Sales as of _________________
------------
13. Plus/Minus: Adjustments as of ________________ (Detail attached)
------------
14. ENDING BALANCE
------------
15. Less: Ineligible Inventory (Line 40 below)
------------
16. ELIGIBLE INVENTORY
------------
17. Times: Inventory Advance Rate 50%
------------
18. INVENTORY AVAILABILITY $
------------
TOTAL BORROWING BASE AVAILABILITY

</TABLE>

<PAGE> 61

19. AVAILABILITY (Sum of lines 9 and 18) $
------------
LOAN ACTIVITY

20. Beginning Balance (Line 25 of the Last Report) $
------------
21. Less: Principal Payments as of _______________
------------
22. Plus: Principal Advances as of _______________
------------
23. Plus/Minus: Change in Outstanding Letters of Credit as of ________
------------
24. Plus/Minus: Adjustments as of ______________ (Detail attached)
------------
25. ENDING BALANCE $
------------
AVAILABILITY

26. Calculated Availability (Line 19 above) $
------------
27. Less: Ending Loan Balance (Line 25 above)
------------
28. NET AVAILABILITY $
------------
INELIGIBLE ACCOUNTS RECEIVABLE

29. Outstanding in Excess of 120 Days (All) $
------------
30. Less: Preapproved Outstanding Between 120-150 Days
------------
31. Receivables with Offsetting Accounts Payable
------------
32. Foreign Accounts Receivable (Less than 120 Days)
------------
33. Less: Approved Foreign Accounts Receivable
------------
34. Plus: Other Ineligible Accounts Receivable (see SCHEDULE A
attached hereto and made a part hereof)
------------
35. TOTAL INELIGIBLE ACCOUNTS RECEIVABLE $
------------
INELIGIBLE INVENTORY

36. Engine Material Inventory of Aircraft with Capacity of Less than 100 $
------------
37. Airframe Material Inventory in Excess of 50% of Total Inventory
------------
38. Inventory Held Outside of Continental United States
------------
39. Other Ineligible Inventory
------------
40. TOTAL INELIGIBLE INVENTORY $
------------

</TABLE>

56
<PAGE> 62

SCHEDULE A TO BORROWING BASE CERTIFICATE

(See Line 34)

57
<PAGE> 63

CERTIFICATION TO BORROWING BASE CERTIFICATE

This certificate is furnished to the Bank by the Borrower in accordance
with its obligations under the Loan Agreement dated as of February 19, 1997. The
undersigned does hereby certify that (a) the computation of the Borrowing Base
set forth above complies with all the applicable provisions of the Loan
Agreement; (b) the data has been prepared from the books of account and records
of the Borrower in accordance with GAAP and represents fairly and accurately the
status of the Borrower's accounts as of the dates referenced herein; (c) the
inventory value is based on the fair market value of such inventory or the
actual cost, whichever is lower; (d) the Borrower holds title to such inventory
free and clear of any liens or other security interests except that created by
the aforesaid Loan Agreement; and (e) the goods are held for sale to others. The
Borrower further reaffirms the representations, warranties, and covenants
contained in the Loan Agreement, and represents and warrants that the
information set forth above is true and complete.

BORROWER:

AVTEAM, INC., a Florida corporation

By:
---------------------------------
Print Name:
-------------------------
Title: Authorized Signatory
-----------------------------

<PAGE> 64

EXHIBIT 11

AFFIDAVIT

STATE OF )
-------------------------- ) SS:
COUNTY OF )
-------------------------- )

THE UNDERSIGNED, being duly sworn, hereby makes the following
representations and warranties to NationsBank, N.A. (South), its successors and
assigns:

1. This Affidavit is being delivered in connection with the Loan
Agreement ("Agreement") dated February 19, 1997, between AVTEAM, INC.
("Borrower") and NATIONSBANK, N.A. (SOUTH) ("Lender").

2. The undersigned is an Authorized Signatory under the Agreement.

3. That the undersigned as the _______________________ of Borrower has
knowledge of all the business affairs of Borrower.

4. The undersigned hereby requests that the following engines be
released from the lien of the Agreement: ______________________________________
("Engines").

5. No "Default" or Event of Default" (as such terms are defined in the
Agreement) has occurred or is continuing under the Agreement.

6. The Engines have been sold by Borrower in the ordinary course of the
Borrower's business. A copy of the executed purchase order is attached hereto as
EXHIBIT A.

7. Following the partial release of the Engines, Borrower will continue
to be in compliance with the Borrowing Base requirements set forth in the
Agreement.

IN WITNESS WHEREOF, Borrower has caused this Affidavit to be sworn,
executed and sealed this _____ day of __________________________, 19___.

---------------------------------
Print Name:

<PAGE> 65

STATE OF )
-------------------------- ) SS:
COUNTY OF )
-------------------------- )

I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State aforesaid and in the County aforesaid to take
acknowledgments, the foregoing instrument was acknowledged before me by
___________________________, the ____________ of AVTEAM, INC., a Florida
corporation, freely and voluntarily under authority duly vested in him by said
corporation and that the seal affixed thereto is the true corporate seal of said
corporation. He is personally known to me or who has produced _________________
__________ as identification.

WITNESS my hand and official seal in the County and State last
aforesaid this ______ day of ________________________________________, 199 ____.

---------------------------------------------
Notary Public, State of ____________ at Large

---------------------------------------------
Typed, printed or stamped name

My Commission Expires:

<PAGE> 66

EXHIBIT 11(a)

AUTHORIZATION TO RELEASE

THE UNDERSIGNED authorizes Dixie Aire to release from escrow the
partial releases being held by Dixie Aire with respect to the following engines:

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

and to record such partial releases.

NATIONSBANK, N.A. (SOUTH)

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

<PAGE> 67

AFFIDAVIT FOR EXECUTION OF LOAN AGREEMENT
WITHOUT THE STATE OF FLORIDA

COMMONWEALTH OF THE BAHAMAS )
) SS:
CITY OF NASSAU )

BEFORE ME, the undersigned Notary Public, duly authorized in the
Commonwealth and City aforesaid to administer oaths and take acknowledgments,
personally appeared the undersigned, to me well known and to me known to be the
persons described as witnesses to the foregoing Loan Agreement and who witnessed
the execution and delivery of the foregoing Loan Agreement, and who, first being
duly sworn by me did each depose, say and acknowledge before me that they were
present at the time that the said Loan Agreement was executed, that they saw the
same executed and delivered by ______________________________, and that the
other subscribing witness was likewise present and witnessed the execution and
delivery of the foregoing Loan Agreement, to a representative of NationsBank,
N.A. (South) at the City of ________________, County of _______________________,
State of __________________________, on the date written below via Federal
Express by delivery to Federal Express in the State and County above written in
accordance with the Sender's copy/receipt of a Federal Express airbill attached
as "Exhibit A".

------------------------------------------------
Subscribing Witness
Print Name:
-------------------------------------
Address:
---------------------------------------

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

------------------------------------------------
Subscribing Witness
Print Name:
-------------------------------------
Address:
---------------------------------------

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

SWORN TO AND SUBSCRIBED before me and acknowledged to me this
________day of ____________________, 1997.

(SEAL)
-------------------------------------------------
Notary Public, Commonwealth of the Bahamas
Printed Name:
-----------------------------------
Address:
----------------------------------------

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

My Commission Expires:
My Commission No. is:

<PAGE> 1
EXHIBIT 10.2

SURPLUS PARTS SUPPLY AGREEMENT dated as of June 12, 1995
between INTERSTAR TRADING CORPORATION, doing business as AVTEAM, a
corporation organized under the laws of Florida ("Supplier"), and
UNITED TECHNOLOGIES CORPORATION, a corporation organized under the
laws of Delaware, acting through its Pratt & Whitney Group,
Surplus Materials Management Organization ("SMMO").

SMMO is a dealer in surplus gas turbine engine parts and wishes to
arrange for a sole source, to the extent provided in this Agreement, for its
future requirements of Parts (as defined below). Supplier is a dealer in gas
turbine aero engine parts and has access to a supply of Parts. Supplier and
SMMO wish to enter into an arrangement under which Supplier will be a supplier
of Parts to SMMO, on the terms and subject to the conditions set forth below.

Therefore, in consideration of the mutual promises and subject to the
conditions contained herein, the parties agree as follows:

ARTICLE I - DEFINITIONS

For purposes of this Agreement, the following capitalized terms will have
the meanings specified below:

1.1. "Engines" means Pratt & Whitney model JT8D-7, JT8D-9, JT8D-15,
JT8D-15A, JT8D-17, JT8D-17A, JT8D-17R, JT8D-209, JT8D-217A, JT8D-217C and
JT8D-219 gas turbine aero engines.

1.2. "FAA" means the U.S. Federal Aviation Administration.

1.3. "Manufacturer's Manual" means the most current version of the
manual published by the type certificate holder relating to the airworthiness
and overhaul and repair standards for a Part.

1.4. "New Surplus Parts" means newly manufactured, unused parts for
Engines, including newly manufactured, unused quick engine change and engine
buildup parts for use with Engines.

1.5. "Overhaul Specification" for a part means the overhaul
requirements specified for such part by the applicable Manufacturer's Manual and
other applicable FAA approved technical data, service bulletins and
airworthiness directives.

<PAGE> 2
2

1.6. "Overhauled Part" means a part for an Engine (including quick
engine change and engine buildup parts for use with an Engine) that has been
overhauled in accordance with the criteria set forth in the documentation
described in Section 1.5 and that meets the applicable Overhaul Specification
for such part.

1.7. "Part" means New Surplus Parts, Overhauled Parts, Repairable
Parts, Repaired Parts and Serviceable Parts.

1.8. "Pratt & Whitney" means the Pratt & Whitney Group of United
Technologies Corporation.

1.9. "Repair Specification" for a part means the repair requirements
specified for such part by the applicable Manufacturer's Manual and other
applicable FAA approved technical data and such additional repair requirements
as SMMO may establish for the repair of such Part.

1.10. "Repairable Part" means a part that has been removed from an
Engine (including quick engine change and engine buildup parts for use with an
Engine), requires repair or overhaul prior to reinstallation and can be
economically repaired or overhauled to meet the applicable Repair Specification
or Overhaul Specification for such part.

1.11. "Repaired Part" means a part for an Engine (including quick
engine change and engine buildup parts for use with an Engine) that has been
repaired in accordance with the criteria set forth in the documentation
described in Section 1.9 and that meets the applicable Repair Specification for
such part.

1.12. "Requirements Purchase Order/Forecast" means a document issued by
SMMO describing its requirements of New Surplus Parts, Overhauled Parts,
Repairable Parts, Repaired Parts and Serviceable Parts for each month during the
period covered by such document. Each Requirements Purchase Order/Forecast will
specify the category (i.e. New Surplus, Overhauled, Repairable, Repaired and
Serviceable) by Engine model, serial number, required monthly quantity and
required delivery date of each Part listed in the document.

1.13. "Serviceable Part" means a part for an Engine (including quick
engine change and engine buildup parts for use with an Engine) that has been
inspected and determined to be usable in the overhaul of an Engine by an FAA
approved Federal Airworthiness Regulation Part 145 or 121 repair source.

1.14. "SMMO" has the meaning set forth in the preamble to this
Agreement.

1.15. "Trigger Date" means each date on which Supplier's cumulative
invoices issued to SMMO for Parts sold to

<PAGE> 3
3

SMMO by Supplier equal or exceed $500,000, $1,000,000, $1,500,000 and
$2,000,000.

ARTICLE II - SALES OF PARTS TO SMMO

2.1. [Intentionally omitted]

2.2. Not later than June 30, 1995, SMMO will provide Supplier with a
Requirements Purchase Order/Forecast for September, October and November, 1995.
Thereafter, SMMO will provide Requirements Purchase Order/Forecasts on a
monthly basis so that Supplier will at all times during the term of this
Agreement have a Requirements Purchase Order/Forecast covering a period of three
calendar months commencing 60 days after the date of each Requirements Purchase
Order/Forecast (or the period to the end of the term of this Agreement if such
period to the end of the term of this Agreement if such period is less than five
months from the date of the Requirements Purchase Order/Forecast). Each
Requirements Purchase Order/Forecast will have the legal effect of a purchase
order with respect to the Parts indicated for the first calendar month covered
by such Requirements Purchase Order/Forecast, but will be considered a forecast
only of anticipated Parts needs for the second and third calendar month covered
by such Requirements Purchase Order/Forecast. SMMO may, by delivery of a
subsequent monthly Requirements Purchase Order/Forecast, change the type,
quantity or delivery schedule specified for any Parts in the forecast portion of
any earlier monthly Requirements Purchase Order/Forecasts.

2.3. [Intentionally omitted]

<PAGE> 4

2.4. Supplier will deliver all Parts that it so agrees to deliver for
the first calendar month covered by each Requirements Purchase Order/Forecast,
together with the documentation for such Parts required by Section 4.3, to SMMO,
f.o.b. Supplier's Florida facility, on the delivery date specified for such Part
in such Requirements Purchase Order/Forecast. After proper and timely delivery
of conforming Parts and such documentation, Supplier will invoice SMMO for the
price of such Parts as provided in Article III.

2.5. Provided that Supplier continues to perform all its obligations
under this Agreement, SMMO agrees it will not, until the first day of the
calendar month before the calendar month in which SMMO requires delivery of
particular Parts, order from any other vendor that portion of SMMO's
requirements for such Parts that Supplier does not commit to deliver to SMMO.

2.6. Supplier acknowledges its understanding that SMMO does not
currently overhaul or repair Engines but that SMMO is in the process of entering
the business of overhauling and repairing Engines and, accordingly, that SMMO is
unlikely to have significant requirements for Parts until such time as SMMO has
been successful in its efforts to enter such business.

ARTICLE III - PRICING AND INVOICING

3.1. Attachment A sets forth the prices for Parts sold by Supplier to
SMMO that are specified by SMMO in its Requirements Purchase Order/Forecast. If
SMMO agrees to purchase from Supplier Parts other than those specified in SMMO's
Requirements Purchase Order/Forecast, the price for such Parts will be
determined by negotiation at the time of such agreement.

3.2. Notwithstanding the provisions of Section 3.1, Supplier agrees
that as long as this Agreement is in effect, the price that Supplier charges
SMMO for Parts sold pursuant to this Agreement will not be greater than the
price that Supplier charges any other customer to which Supplier sells
comparable quantities of comparable Parts under any other

<PAGE> 5
5

long term parts supply agreement with similar terms and conditions. In the
event that Supplier charges any other customer comparable quantities of
comparable Parts under any other long term parts supply agreement with similar
terms and conditions a price that is less than the price that Supplier charges
SMMO for comparable Parts hereunder, the price for the Parts that Supplier sells
to SMMO pursuant to this Agreement will be reduced to such lower price both
prospectively for as long as Supplier is charging any other customer such lower
price and retrospectively to the earliest date on which Supplier charged such
lower price and Supplier will promptly refund to SMMO all amounts paid by SMMO
to Supplier that will allow SMMO, or its representative to review such
documentation as is reasonably required to assure compliance with the terms of
this Section 3.2.

3.3. Supplier will invoice SMMO each month for the conforming Parts
delivered by Supplier in accordance with the terms of this Agreement. Payment
terms for all such invoices will be net 120 days after the date of SMMO's
receipt of Supplier's invoice and all payments will be made in U.S. Dollars.

ARTICLE IV - COOPERATIVE ACTIVITIES

4.1. The parties agree that within six months after the commencement of
this Agreement, and annually thereafter, the parties will participate in a
formal review of their performance under this Agreement at a location selected
by SMMO.

4.2. Supplier will obtain and maintain in force throughout the term of
this Agreement all certifications, licenses and other approvals of the FAA, the
Joint Airworthiness Authority and all other airworthiness authorities that are
required to enable SMMO to deliver to its customers Parts sold to SMMO by
Supplier.

4.3. Supplier agrees that it will meet or exceed SMMO's quality
requirements for the Parts sold by Supplier under this Agreement as specified by
SMMO in shipping documents, purchase orders, internal engineering notices,
Manufacturer's Manuals or otherwise. Supplier's obligation to deliver Parts to
SMMO hereunder will include the delivery of such documentation (which may
include, but not be limited to, Certificates of Conformance and FAA Form
8130's) as SMMO may require to assure SMMO that the Parts conform to the
requirements of this Agreement and such documentation as SMMO requires to
enable it to deliver such Parts to its customers. In addition, with respect to
all Parts delivered by Supplier to SMMO under this Agreement, Supplier will
provide SMMO with documentation confirming the identity of the original
equipment type certificate holder, that such Parts

<PAGE> 6

were manufactured under the original equipment type certificate holder's
approved manufacturing quality assurance system and that such Parts were
maintained or repaired in accordance with the original equipment type
certificate holder's instructions for continued airworthiness.

4.4. Supplier and SMMO will install an electronic data interface or
other mutually acceptable method for communicating Parts requirements, delivery
commitments, invoices and other information relevant to the parties' performance
under this Agreement. Supplier will provide SMMO with weekly reports of the
status of Parts that Supplier has committed to deliver and will make available
daily performance updates in a format and level of detail acceptable to SMMO.

4.5. Supplier will, without charge to SMMO, maintain at such facility
or facilities as SMMO and Supplier agree, a representative to participate in
business meetings relating to this Agreement, to coordinate shipments and
deliveries to provide information regarding the status of Parts ordered by SMMO
and to coordinate other matters arising under this Agreement. Supplier will
also provide, without charge to SMMO, upon such sufficient prior notification as
the parties agree, representatives for participation in meetings with SMMO
customers at such locations as SMMO and Supplier from time to time agree.

4.6. [Intentionally omitted]

<PAGE> 7
7

4.7 From time to time, SMMO may acquire from sources other than
Supplier Parts that are excess to SMMO's requirements. Supplier agrees that,
at the request of SMMO from time to time during the term of this Agreement,
Supplier will purchase such excess Parts at prices and upon terms to be
negotiated in good faith between Supplier and SMMO.

ARTICLE V - INSPECTION

Supplier hereby grants to SMMO and its authorized representatives the
right to inspect and to test the materials and workmanship of the Parts at all
times. Notwithstanding any prior inspection or payment for the Parts delivered
by Supplier to SMMO pursuant to this Agreement, SMMO will have the right to
reject any Parts that do not conform to the requirements of this Agreement.
SMMO may exercise this right of rejection at any time within 30 days after
Supplier has delivered Parts that SMMO determines to be nonconforming. In the
event that SMMO rejects a Part, SMMO will either return the rejected Part to
Supplier, transportation collect (declared at full value unless Supplier
advises otherwise) for credit or refund at SMMO's option, or in the case of a
rejected Overhauled Part or Repaired Part, will itself overhaul or repair the
rejected Overhauled Part or Repaired Part as provided in Section 6.1, and
Supplier will not replace such Part without written instructions from SMMO.
SMMO's rights under this Article V are in addition to its rights under Section
6.1 below and to its rights otherwise existing under applicable law.

ARTICLE VI - WARRANTIES

6.1 The warranties and remedies for Parts delivered by Supplier to
SMMO under this Agreement, will include those set forth below:

(a) Supplier warrants that the Parts delivered by Supplier to SMMO
under this Agreement will be free from defect in workmanship and material, in
strict conformance with the requirements for such Parts set forth in this
Agreement (including the applicable Overhaul Specification in the case of
Overhauled Parts or the applicable Repair Specification in the case of Repaired
Parts), merchantable and fit for the purpose for which they are intended by
SMMO and its customer. Supplier further warrants that none of the Parts
delivered by Supplier under this Agreement will be or include any so called
"unapproved parts", "unauthorized parts" or "PMA parts", i.e. parts that have
not been manufactured by, or in accordance with a license from, the original
equipment type certificate holder. Supplier agrees to repair or re-

<PAGE> 8
8

place, at SMMO's option and without cost to SMMO, any Part delivered by
Supplier which SMMO determines to be not in accordance with this warranty
within the later of (i) one year after commencement of use of the Part by the
ultimate user thereof or (ii) 18 months after the date of delivery of the Part
by Supplier. SMMO may also, with the written agreement of Supplier, overhaul
or repair any Part delivered to SMMO that Supplier considers to have been
overhauled or repaired but that SMMO determines to be not in accordance with
this warranty and set off its customary invoice price for such overhaul or
repair work against any amounts due Supplier or invoice Supplier for such price
or accept any Part with an equitable reduction in price.

(b) Supplier warrants to SMMO that Supplier will convey good title
to all Parts delivered by Supplier hereunder, free from all claims, liens,
encumbrances and other charges of any kind.

(c) Supplier agrees that all warranties of Supplier covering Parts
delivered under this Agreement will extend to, and be for the benefit of, SMMO
and its customers and will survive the expiration or termination of this
Agreement. Transportation charges for the return of nonconforming Parts to
Supplier and the risk of loss thereof will be borne by Supplier.

6.2 The warranties and remedies for Parts sold by SMMO to Supplier
under this Agreement, will be as set forth below:

(a) SMMO warrants to Supplier that at the time of delivery by SMMO,
all Parts delivered by SMMO to Supplier pursuant to Section 4.6 or 4.7 will be
free from defects caused solely by SMMO's handling of such Parts and SMMO makes
no other warranties whatsoever with respect to the quality of such Parts.
SMMO's liability and Supplier's remedy under this warranty are limited to the
repair or replacement, at SMMO's election, of Parts returned to SMMO which are
shown to SMMO's reasonable satisfaction not to have conformed with this
warranty at the time of delivery of such Parts to Supplier; provided that
written notice of the nonconformity will have been given by Supplier to SMMO
within one year after the date of delivery of such a Part by SMMO.
Transportation charges for the return of nonconforming Parts to SMMO and the
risk of loss thereof will be borne by SMMO.

(b) SMMO warrants to Supplier that SMMO has taken no action to
create a claim, lien, charge or encumbrance on any of the Parts delivered by
SMMO to Supplier pursuant to Section 4.6 or 4.7 (other than any security
interest SMMO may have as a matter of law to secure payment for such Parts).
SMMO's liability and Supplier's remedy under this warranty are limited to the
removal of any title defect created by

<PAGE> 9
9

SMMO or, at the election of SMMO, to the replacement of the Parts, title to
which SMMO has encumbered.

(c) THE FOREGOING WARRANTIES BY SMMO ARE EXCLUSIVE AND ARE GIVEN
AND ACCEPTED IN LIEU OF (i) ANY AND ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE AND (ii) ANY OBLIGATION, LIABILITY, RIGHT,
CLAIM OR REMEDY IN CONTRACT, TORT OR STRICT LIABILITY, WHETHER OR NOT ARISING
FROM SMMO'S NEGLIGENCE, ACTUAL OR IMPUTED, AGAINST SMMO, ITS DIRECTORS, OFFICERS
OR EMPLOYEES. SMMO DOES NOT WARRANT ANY PARTS THAT WERE NOT ORIGINALLY
MANUFACTURED BY PRATT & WHITNEY. THE REMEDIES PROVIDED TO SUPPLIER WILL BE
LIMITED TO THOSE PROVIDED HEREIN TO THE EXCLUSION OF ANY AND ALL OTHER REMEDIES
INCLUDING, WITHOUT LIMITATION, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES.
NO AGREEMENT VARYING OR EXTENDING THE FOREGOING WARRANTIES OF SMMO, REMEDIES OF
SUPPLIER OR THIS LIMITATION WILL BE BINDING UPON SMMO UNLESS IN WRITING, SIGNED
BY A DULY AUTHORIZED OFFICER OF SMMO.

ARTICLE VII - DELAYS IN DELIVERY

The parties recognize that in view of the nature of the relationship
rated by this Agreement, the failure of Supplier to make timely deliveries
hereunder would result in damages to SMMO that would be significant and that
may be difficult to quantify. Therefore, in the event that Supplier fails to
make timely delivery of a Part that Supplier has committed to deliver pursuant
to Section 2.3, together with the documentation required by Section 4.3, in
accordance with the terms of this Agreement and, as a result of such failure
SMMO is required to purchase a substitute Part (which may be a new Part to
substitute for a New Surplus, Overhauled, Repairable, Repaired or Serviceable
Part), Supplier will pay as damages to SMMO an amount in cash equal to the
difference between the price paid by SMMO for such substitute Part (even if
such substitute Part shall be a new Part) and the price that Supplier agreed to
sell the delayed Part to SMMO pursuant to this Agreement.

ARTICLE VII - TITLE, RISK OF LOSS AND TAXES

8.1. Title and risk of loss to all Parts sold pursuant to this
Agreement will pass (a) in the case of Parts sold to SMMO, upon delivery of
such Parts F.O.B. Supplier's Florida facility and (b) in the case of Parts sold
to Supplier, when SMMO places such Parts in the hands of a shipper at SMMO's
facility.

8.2. All taxes, imposts, duties and other governmental charges
arising from the sale or delivery of Parts to or by SMMO pursuant to this
Agreement will be paid by Supplier.

<PAGE> 10

ARTICLE IX - FINANCIAL STATUS OF SUPPLIER

If, while this Agreement is in effect, (a) Supplier admits in writing
its inability to pay its debts, (b) a receiver or trustee is appointed for any
of Supplier's property, (c) Supplier is adjudicated a bankrupt, (d) application
for reorganization under any bankruptcy or similar law is filed by or against
Supplier and is not dismissed within 30 days, (e) Supplier becomes insolvent or
makes an assignment for the benefit of creditors or takes or attempts to take
the benefit of any insolvency law, (f) an execution is issued pursuant to a
judgment rendered against Supplier, (g) Supplier becomes unable or refuses to
make timely payment to SMMO or any other division, subsidiary or affiliate of
SMMO or (h) a change in control of Supplier or any of Supplier's operations
should occur, SMMO may at its option terminate this Agreement by giving
Supplier written notice of such termination. Such termination will be
effective upon delivery of such notice and SMMO will thereupon by relieved of
any further obligations to Supplier under this Agreement.

ARTICLE X - COMPLIANCE WITH LAW

In the performance of this Agreement, Supplier will comply with all
applicable federal, state and local laws, and Supplier will indemnify SMMO and
its stockholders, directors, officers, employees and customers against any and
all liabilities due to Supplier's failure so to comply. Without limiting the
generality of the foregoing, Supplier certifies that the Parts to be delivered
by Supplier to SMMO under this Agreement will be produced in compliance with the
Fair Labor Standards Act of 1938 (29 U.S.C. Sections 201-219), as amended, and
with the provisions of all other applicable laws relating to labor relations,
minimum wages, hour of employment and other terms and conditions of employment.

ARTICLE XI - TERM AND TERMINATION

11.1. This Agreement will become effective when both parties have
executed it and will remain in effect until the third anniversary of the date of
this Agreement. SMMO will have the option to renew this Agreement for an
additional two year period by delivering to Supplier a written notice of SMMO's
intention to renew this Agreement not later than 180 days before the expiration
of the initial term of this Agreement.

11.2. This Agreement is subject to termination for any reason by
either party at any time, which termination will become effective 180 days from
the delivery of written notice to the other party. In the event of a
termination under this Section 11.2, all deliveries that Supplier has com-
<PAGE> 11
11

mitted to make pursuant to Section 2.3 prior to the effectiveness of the notice
of termination will be completed by Supplier in accordance with the terms and
conditions of this Agreement.

ARTICLE XII - PROPRIETARY INFORMATION AND INVENTIONS

12.1. For purposes of this Agreement, the term "Proprietary
Information" shall mean all technical information, designs, manufacturing
processes, know-how, business forecasts and other information and ideas
disclosed by or on behalf of either party to the other in writing or other
tangible or machine readable form and market "proprietary" or, if not in
writing, identified as proprietary at the time of disclosure and reduced to
writing within 30 days thereafter. The term Proprietary Information will also
include the terms of this Agreement and each Requirements Purchase
Order/Forecast, whether or not marked "proprietary".

12.2. Each party agrees not to use any Proprietary Information of the
other party other than for the purposes described in this Agreement and not to
disclose any such Proprietary Information to any third party. Each party
further agrees to treat all Proprietary Information of the other party with the
same degree of care that the receiving party treats its own proprietary
information but in no event with less than reasonable care. Each party will
restrict the Propriety Information of the other party only to those of its
employees who have a need to know such information, and then only to the extent
of such need to know.

12.3. Notwithstanding the foregoing, nothing herein shall restrict
either party's right to use or to disclose any information which: (i) is known
to such party prior to the date of this Agreement; (ii) is or becomes publicly
known other than because of disclosure by the receiving party; (iii)
disclosed to such party without restriction by a third party who had a right
to disclose it; (iv) is disclosed by the other party to a third party without
any obligation of nondisclosure required thereof; or (v) is independently
developed by such party.

12.4. Supplier agrees that it will not disclose to any third party
that it has entered into this Agreement without the prior specific written
consent of SMMO, which consent SMMO will not unreasonably withhold.

12.5. Each party's obligations under this Article XII will survive
the expiration or termination of this Agreement.

<PAGE> 12
12

ARTICLE XIII - INSURANCE

Supplier agrees that it will

(a) obtain and maintain in effect aviation product liability
insurance with available limits of not less than $100,000,000 per occurrence
combined limit;

(b) cause its aviation product liability insurers to endorse all
policies for such insurance to name SMMO as an additional insured; and

(c) provide to SMMO for review and approval certificates of such
insurance which shall (i) be kept current throughout the term of this
Agreement; (ii) provide that Supplier's aviation product liability insurance
will be primary to any other insurance that may be collectible by any
additional insured; (iii) provide that if any of Supplier's aviation product
liability policies are canceled or not renewed, if for any reason whatsoever
any substantial change is made in coverage that affects the interest of any
additional insured or if such policy is allowed to lapse because of nonpayment
of premiums, such cancellation, nonrenewal, change or lapse will not be
effective as to such additional insured until 30 days after SMMO's receipt of
written notice from Supplier's insurer of such cancellation, change or lapse.

ARTICLE XIV - NOTICES

All notices and other communications authorized hereunder will be
given in writing either by personal delivery or by registered or certified
mail, return receipt requested, or by SITA or telecopier, addressed as follows:

In the case of Supplier, to

Interstar Trading Corporation
d/b/a AVTEAM
3230 Executive Way
Miramar, Florida 33025
___ Attention: Mr. Donald A. Graw

In the case of SMMO, to

United Technologies Corporation
Pratt & Whitney Group
Surplus Materials Management Organization
550 Research Parkway
Meriden, Connecticut 06450
Attention: Sales Manager

The date upon which any such notice is so personally delivered or if the notice
is given by mail, the third business
<PAGE> 13
13

day after mailing, or if by SITA or telecopier the first business day following
the date sent with an electronic confirmation, will be deemed to be the date of
delivery of such notice, irrespective of the date appearing therein.

ARTICLE XV - DEFAULTS

For purposes of this Agreement, an "Event of Default" will be
considered to have occurred if any party (the "defaulting party") fails to
perform any material term or condition of this Agreement and continues such
failure for 30 days after written notice of such default is given to the
defaulting party. If an Event of Default occurs, the nondefaulting party will
have the right to terminate this Agreement upon written notice to the
defaulting party and if the nondefaulting party so exercises this right, the
nondefaulting party will be relieved of all its further obligations under this
Agreement (other than the obligation to pay for all conforming Parts delivered
before the delivery of the notice of termination). Any decision by the
nondefaulting party to exercise or to waive its right to terminate this
Agreement will not relieve the defaulting party from its liability for damages
incurred by such nondefaulting party due to such breach except to the extent
that such liability or any portion thereof is specifically waived in writing.

ARTICLE XVI - MISCELLANEOUS

16.1. This Agreement will be interpreted in accordance with, and the
construction thereof will be governed by, the internal substantive laws of the
State of Connecticut. Captions as used in this Agreement are for convenience
of reference only and will not be deemed or construed as in any way limiting or
extending the language of the provisions to which such captions may refer.

16.2. Except as hereinafter further provided, this Agreement
constitutes the entire agreement of the parties with respect to the subject
matter hereof and supersedes all prior written or oral agreements,
understandings, presentations, negotiations and correspondence between them.
Additional or inconsistent printed terms appearing on, or attached to,
Supplier's responses to Requirements Purchase Order/Forecasts or otherwise will
not apply to transactions under this Agreement. Supplier agrees that the
"Pratt & Whitney Terms and Conditions of Purchase (Volume 91-A)" will apply to
all sales of Parts by Supplier to SMMO pursuant to this Agreement as if such
Terms and Conditions of Purchase were set forth in full herein except that in
the case of any inconsistency between the terms of this Agreement and such
Terms and Conditions of Purchase, the terms of this Agreement will prevail.
<PAGE> 14
14

16.3. Neither party hereto will by act, delay, omission or otherwise
be deemed to have waived any of its rights or remedies hereunder unless such
waiver is in writing and signed by the party's authorized representative. No
waiver, express or implied, by either party of any breach or default by the
other party hereunder will be deemed or construed to be a consent or waiver to
or of any other breach or default. Failure to complain of any act or failure
to act of a party or to declare a party in default hereunder, irrespective of
how long such a failure continues, will not constitute a waiver of any rights
of the non-defaulting party.

16.4. This Agreement may be executed in counterparts, each of which
will be deemed an original but all of which will constitute one and the same
instrument.

16.5. If one or more of the provisions contained in this Agreement is
for any reason held to be invalid, illegal or unenforceable in any respect in
any jurisdiction, such invalidity, illegality or unenforceability will not
affect any other provision of this Agreement or the application of such
provision in any other jurisdiction or to other circumstances as to which it is
not invalid, illegal or uneforceable and this Agreement will be construed as if
such invalid, illegal or unenforceable provision, to the extent of the
invalidity, illegality or unenforceability, had never been contained in it. In
addition, the parties will in good faith endeavor to reach agreement on a
provision to replace the offending provision, which, as nearly as possible,
will reflect the intent of the original provision.

16.6. This Agreement will not be amended, supplemented or modified by
any course of dealing, course of performance or usage of trade, and may be
amended, supplemented or modified only by a written instrument duly executed by
the parties' authorized representatives.

16.7. This Agreement may not be assigned by either party, in whole or
in part, without the prior written consent of the other party, except that
Supplier's consent will not be required for any assignment by SMMO to another
division, subsidiary or affiliate of SMMO.

16.8. The rights and remedies of SMMO described in this Agreement are
cumulative and additional to any other rights or remedies that SMMO may have
under applicable law.

16.9. Nothing in this Agreement is intended to create a partnership,
joint venture, principal-agent relationship or any other legal relationship
between the parties other than that of a buyer and seller.
<PAGE> 15
15

IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
executed by an authorized officer as of the date first above written.

INTERSTAR TRADING CORPORATION
d/b/a AVTEAM

By /s/ Donald A. Graw
-------------------------------------
Name: Donald A. Graw
Title: President and Chief
Executive Officer

UNITED TECHNOLOGIES CORPORATION

By /s/ William A. Kerr
-------------------------------------
Name: William A. Kerr
Title: Vice President
Pratt & Whitney Group,
Aftermarket Operations

<PAGE> 1
Exhibit 10.3

[AVTEAM LETTERHEAD]

September 5, 1995

Parati Corporation
166 Bal Bay
Bal Harbor, Fl. 33154

Re: Dash 200 Engines

Dear Sirs:

The purpose of this letter is to outline our proposal for working with you on
he purchase and sale of new and used dash 200 engines (the "Engines") and
spare parts (the "Spare Parts").

I. Used Engines

Parati Corporation ("Parati") shall provide up to U.S.$10,000,000 for the
purchase of used Engines. At this time Parati has already provided U.S.
$10,000,000 for the purchase of used Engines. At this time Parati has already
provided U.S.1,675,000 for the purchase of such Engines.

II. New Engines

Parati shall provide up to U.S.$40,000,000 for the purchase of new Engines,
when (i) an agreement has been executed with Pratt & Whitney for the supply of
such Engines, and (ii) when agreements have been executed with airlines for the
supply of used Engines, or exchanged for new Engines.

III. Modus Operandi

AvTeam shall:

(i) provide the support services to identify airlines and
other sellers and buyers who want to buy or sell new and used Engines
and Spare Parts;

(ii) invoice and collect all payments made and received on behalf of
Parati;

(iii) supervise the work by third party service providers who overhaul
the Engines or dismantle them for the Spare Parts; and

CORPORATE HEADQUARTERS
Miramar Park of Commerce
3230 Executive Way - Miramar, Florida 33025
Phone: (305) 431-2FLY (431-2359) - Fax: (305) 433-7800 - Sita: MIATECR
<PAGE> 2
(iv) coordinate the receipt and delivery of all Engines and Spare
Parts on behalf of Parati.

Parati shall be the owner of all the used and new Engines and Spare Parts which
are acquired and sold by AvTeam on behalf of Parati. Any transactions
involving the Engines and Spare Parts shall require the prior approval of
Parati in writing, and the implementation of transactions shall be
accomplished by mutual agreement of the parties.

IV. Term of Letter Agreement

The term of this Letter Agreement shall be for a period of one year ending on
December 31, 1996, automatically renewable for equal periods of one year, ending
successively on December 31 of each year unless either party terminates this
Letter Agreement in writing thirty days prior to the end of any such one year
period.

V. Division of Profits

Parati shall receive its total investment (including all costs and other
expenses that it may have incurred) in the acquisition and/or sale of the
Engines and Spare Parts, before the distribution of any profits. Any profit
remaining after the recuperation by Parati of its total investment shall be
divided 50/50 by Parati and Interstar Trading Corp.

If you are in agreement with the above proposal, please indicate your agreement
by signing the enclosed copy of this letter.

Sincerely yours,

/s/ Donald Graw
- ---------------------------
Donald Graw
President

Agreed: September 5, 1995
Parati Corporation

/s/ Leon Sragowicz
- ---------------------------
Leon Sragowicz
President

<PAGE> 1
Exhibit 10.4

THE AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT

This Amended and Restated Executive Employment Agreement ("Restated
Agreement") is made and effective this ____ day of December, 1996, between
AVTEAM, INC., a Florida corporation ("Company"), and DONALD A. GRAW
("Employee").

Recitals

The Company and Employee entered into an Employment Agreement dated
January 1, 1994 (the "Graw Agreement"), which was subsequently amended
effective January 1, 1996 by Amendment No. 1 thereto and by Amendments No. 2
and No. 3 thereto dated as of April 12, 1996. The Company and Employee now
wish to amend and restate the employment relationship between the Company and
Employee by terminating the Graw Agreement and Amendments No. 1, No. 2 and No.
3 thereto, and replacing the same with the terms and conditions set forth below
as of the date first written above.

Agreements

In consideration of the mutual covenants contained herein, and for
other good and valuable consideration, receipt of which is acknowledged by the
parties, the Company and Employee agree as follows:

1. Termination of Graw Agreement and Amendments No. 1,
No. 2 and No. 3: The Graw Agreement and Amendments No. 1, No. 2 and No. 3
thereto are hereby terminated in their entirety without any further liability
to either party, except with respect to any provisions thereof which expressly
survive termination.

2. Term of Employment: The Company employs Employee and
Employee accepts employment with the Company for a period of three years
beginning on the Effective Date of this Restated Agreement as set forth above
("Initial Employment Term"). This Restated Agreement shall be renewed
automatically for an additional one-year period on the third anniversary date
and on each subsequent one-year anniversary date unless the Company's Board of
Directors notifies Employee in writing or Employee notifies the Company's Board
of Directors in writing that such renewal shall not take place. Said notice
shall be given not less than ninety (90) days prior to any such anniversary
date.

In the event of any extension of this Restated Agreement for
one or more consecutive one (1) year terms, the terms of this Restated
Agreement shall be deemed to continue in effect for the term of such extension
("Extended Employment Term"). The Initial Employment Term and the Extended
Employment Term will be collectively referred to as the "Employment Term,"
unless otherwise specified by the Company's Board of Directors. Any Extended
<PAGE> 2

Employment Term must be in writing, signed by the Chairman of the Board of
Directors of the Company.

3. Duties of Employee: Employee shall serve as
the President of the Company throughout the Employment Term. In his capacity
as President, Employee shall be the chief executive officer of the Company,
shall preside at all meetings of the shareholders and the Board of Directors
(if he shall be a member of the board), shall have general and active
management of the business and affairs of the Company and shall see that all
orders and resolutions of the Board of Directors are carried into effect.

4. Exclusive Services: Employee's services
shall be exclusive to the Company, and Employee shall devote such portion of
his productive time and attention to the business of the Company as shall be
reasonably necessary to carry out his duties during the Employment Term.
Employee shall not engage in any other businesses, duties, or pursuits
whatsoever, or directly or indirectly render any services of a business,
commercial, or professional nature to any other person or organization, whether
for compensation or otherwise, unless such activity is fully disclosed to the
Company and approved by the Company's Board of Directors. This Restated
Agreement shall not be interpreted to prohibit Employee from making passive
personal investments or conducting private business affairs if such activities
do not materially interfere with the services required under this Restated
Agreement.

5. Non-Competition:

To induce the Company to enter into this Restated Agreement, Employee agrees
that:

A. Defined Terms: The principal business of the
Company is valued-added reselling of aftermarket jet engines, jet
engine components and new and used aircraft material to other
suppliers of aftermarket engines and components, aircraft engine and
component manufacturers and their affiliates, overhaul facilities,
international and regional air carriers and operators, and leasing
companies (the "Business"). The region serviced by the Company is a
geographic area which currently includes the United States of America
(the "Region"). Employee's employment with the Company will bring
Employee into close contact with the members and other customers of
the Company and with the trade secrets and other confidential affairs
of the Company. The Company has a significant interest in protecting
its proprietary interest in, and the good will associated with, the
foregoing. As used in this Section 5, the term "Restricted Period"
means the period of three years following termination of Employee's
employment with the Company (whether for cause, upon expiration of the
employment period or otherwise).

2
<PAGE> 3

other individual or representative capacity, engage or
participate in or acquire, hold, or retain any interest in any
business which is competitive with the Business of the Company in any
location, or any business selling to or doing business with the
Company, unless such participation or interest is fully disclosed to
the Company and approved by a majority of the Company's Board of
Directors. The foregoing notwithstanding, Employee may acquire, hold
or retain equity ownership of any publicly held company, provided that
such equity ownership does not exceed five percent (5%) of the issued
and outstanding shares of the voting stock of such company.

C. Restricted Period: During the Restricted
Period, unless the Company and Employee shall otherwise agree in
writing, Employee shall not, (i) compete directly with the Company in
the Region; (ii) enter into the employ of, or render any services to,
as an independent contractor or otherwise, any person or entity
engaged in the Business (or any aspect thereof) in competition with
the Company in the Region; (iii) become interested, as an individual,
partner, co-venturer, shareholder, officer, director, employee,
principal, agent, trustee or in any other relationship or capacity, in
any person or entity engaged in the Business (or any aspect thereof)
in competition with the Company in the Region; or (iv) on his own
behalf or on behalf of or as an employee or agent of any other person
or business, contact or approach any person or business wherever
located, with a view to selling or assisting others to sell products
or services substantially competing with the Business. The Company
and Employee shall meet periodically to review the kinds of businesses
each deems to be in competition with the Company in the Region. They
shall seek to reach agreement as to such kinds of businesses solely
for the purposes of this Restated Agreement. Any such agreement shall
not be indicative of what business or businesses may be in competition
with the Company for any other purpose. In the event such periodic
reviews do not occur, competing kinds of businesses shall be those
contemplated by the term "Business" in Subsection 5.A.

D. Enforceability: If any portion of Section 5
is held to be illegal, unenforceable, void, or voidable, the remainder
shall remain in full force and effect, and Section 5 shall be deemed
altered and amended to the minimum extent necessary to bring it within
the legal requirements of enforceability.

6. Unique Services: Employee hereby represents and agrees that
the services to be performed under the terms of this Restated Agreement
are of a special, unique, unusual, extraordinary, and intellectual character
that gives them a peculiar value, the loss of which cannot be reasonably or
adequately compensated in damages in any action at law. Employee, therefore,
expressly agrees that the Company, in addition to any rights or remedies that
the Company might possess, shall be entitled to injunctive and other equitable
relief to prevent or remedy a breach of this Restated Agreement by Employee.

3
<PAGE> 4

7. Indemnification: The Company shall defend Employee
against all claims made against Employee, and it shall indemnify Employee for
all losses sustained by Employee, in direct consequence of the discharge of
Employee's duties on the Company's behalf, including any claim brought against,
or any loss sustained by, Employee in his role as an officer or employee of the
Company based on a claim that any of the Company's products or services
infringe a third party patent, copyright or trade secret; provided, that
Employee promptly notifies the Company in writing of any such claim, gives the
Company full authority for the conduct of such defense and participates in and
aids the Company's counsel by giving whatever time, information, expertise and
assistance is reasonably requested for such defense. Employee agrees to
indemnify and hold the Company and its shareholders harmless, individually and
collectively, from and against any liabilities, claims, costs, or expenses
(including shareholders) as a result of actions by Employee in excess of his
authority as set forth herein.

8. Confidential Information: Employee acknowledges that
in his employment hereunder, and during prior period of employment with the
Company, he has occupied and will continue to occupy a position of trust and
confidence. During the period of Employee's employment hereunder and the
Restricted Period thereafter, Employee shall not, except as may be required to
perform his duties hereunder or as required by applicable law, without
limitation in time or until such information shall have become public other
than by Employee's unauthorized disclosure, disclose to others or use, whether
directly or indirectly, any Confidential Information regarding the Company.
"Confidential Information" shall mean information about the Company, and its
respective clients and customers that is not disclosed by the Company that was
learned by Employee in the course of his employment by the Company, including
(without limitation) any proprietary knowledge, trade secrets, data, formulae,
information and client and customer lists, pricing policies, suppliers, market
strategies, product development concepts and all papers, resumes, and records
(including computer records) of the documents containing such Confidential
Information. Employee acknowledges that such Confidential Information is
specialized, unique in nature and of great value to the Company, and that such
information gives the Company a competitive advantage. The Employee agrees to
deliver or return to the Company, at the Company's request at any time or upon
termination or expiration of his employment or as soon thereafter as possible,
all documents, computer tapes and disks, records, lists, data, drawings,
prints, notes and written information (and all copies thereof) furnished by the
Company or prepared by the Employee during the term of his employment by the
Company.

4
<PAGE> 5

9. Compensation:

A. Salary: The Company shall pay Employee an
annual base salary of $ 260,000.00 ("Salary"), payable in equal
biweekly or bi-monthly installments in accordance with the normal
payroll procedures of the Company or at such other time or times as
Employee and the Company shall agree. Except as otherwise provided
herein, the Company's obligation to pay Employee's Salary under this
Restated Agreement shall cease as of the date of termination of
Employee's employment.

B. Incentive Compensation: Employee shall be
eligible to participate in the Company's 1996 Incentive Compensation
Plan.

C. Stock Options: Employee shall be eligible to
participate in the Company's 1996 Stock Option Plan on the terms and
conditions established by the Board of Directors of the Company.

10. Tax Withholding: The Company shall have the right to
deduct or withhold from the compensation due to Employee hereunder any and all
sums required for any and all federal, social security, state and local taxes,
assessments or charges now applicable or that may be enacted and become
applicable in the future.

11. Employee Benefits:

A. Vacation Time and Sick Leave: Employee shall
be entitled to (4) weeks of vacation and fifteen (15) days of sick
leave without loss of compensation each year during the Employment
Term. For the purposes of this paragraph, a year shall begin on the
effective date of this Restated Agreement as set forth above. In the
event that Employee takes vacation time or sick leave in excess of the
minimum numbers set forth in this paragraph, the Board of Directors
shall determine whether or not Employee shall receive compensation for
such excess days. Unless otherwise established by the Company's Board
of Directors, in the event that Employee does not for any reason take
the total amount of vacation time authorized during any year, he shall
be deemed to have waived any entitlement to vacation time for that
year. Sick days may not be accumulated.

B. Additional Benefits: Employee shall be
entitled to all employment benefits made available to other employees
of the Company and its affiliates, commensurate with Employee's
position and title with the Company and the Employee's work location.
Such benefits shall include, but are not limited to, such health
insurance, disability insurance, life insurance, pension, and
retirement plans as are adopted from time to time by the Company.

5
<PAGE> 6

12. Termination of Restated Agreement:

A. Termination for Cause: The Company may
terminate Employee's employment under this Restated Agreement for
"Cause," at any time, but only in the event of (a) Employee's
conviction of a felony (provided, however, that following indictment
for a felony, and prior to conviction, the Company may, without
limiting or modifying in any other way its obligations under this
Restated Agreement, suspend Employee from the performance of his
duties hereunder), or (b) a determination by the Company's Board of
Directors, acting reasonably and in good faith, that Employee has (1)
neglected his material duties or performed his material duties in an
incompetent manner, (2) committed fraudulent or dishonest actions, or
(3) deliberately injured or attempted to injure the Company; provided,
however, that Employee shall not be deemed to have been terminated for
Cause unless and until there shall have been delivered to him a copy
of a resolution duly adopted by the affirmative vote of not less than
a majority of the entire membership of the Board of Directors of the
Company, finding that, in the good faith opinion of such board, he was
guilty of or had engaged in conduct constituting Cause as set forth
herein and specifying the particulars thereof in detail.

B. Effect of Termination for Cause: In the
event of termination of Employee for cause as set forth in Subsection
12.A, or a voluntary termination by Employee in breach of this
Restated Agreement without the consent of the Company, Employee shall
have no right to any bonuses, salaries, benefits or entitlements other
than those required by law or specifically provided under the terms of
the applicable plan document. Payment of any further bonuses or other
salaries claimed by Employee will be in the sole and absolute
discretion of the Company, and Employee shall have no entitlement
thereto.

C. Disability and Death: If, during the
Employment Term, Employee should die or suffer any physical or mental
illness that renders him incapable of fulfilling his obligations under
this Restated Agreement, and such incapacity exists or may reasonably
be expected to exist for more than ninety (90) calendar days in the
aggregate, the Company may, upon five (5) calendar days written notice
to Employee, terminate this Restated Agreement. The determination of
the Company that Employee is incapable of fulfilling his obligations
under this Restated Agreement shall be final and binding. In the
event of termination under this Subsection 12.C, Employee, or his
estate, shall be entitled to an amount equal to six (6) months' Salary
and any other accrued compensation, plus such additional benefits, if
any, as may be approved by the Company's Board of Directors.
Employee, or his estate, shall, upon termination under the terms of
this Subsection 12.C, be further entitled to additional compensation,
to be calculated on a pro rata basis according to the number of
accrued vacation days, if any, not taken by Employee during the year
defined for the purposes of vacation, in which Employee was
terminated.

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<PAGE> 7

D. Voluntary Termination by Employee at the End
of the Employment Term: In the event of voluntary termination by
Employee at the end of the Initial Employment Term, or any Extended
Employment Term, Employee shall be entitled only to those amounts that
have accrued to the date of termination or are expressly payable under
the terms of the Company's applicable benefit plans or are required by
applicable law. The Company may, in its sole and absolute discretion,
confer such other benefits or payments as it determines, but Employee
shall have no entitlement thereto.

E. Termination by Employer at the End of the
Employment Term: In the event that Employee's employment is
terminated by the Company at the end of the Initial Employment Term or
any Extended Employment Term as a result of the Company's notice
specified in Section 2 above, Employee shall be treated as in
Subsection 12.D.

F. Termination by Employer During the Employment
Term: In the event of termination by the Employer other than at the
end of the Initial Employment Term or Extended Employment Term, other
than for cause under Subsection 12.A, Employee shall be entitled to
two (2) year's base salary (at Employee's then current base) payable
upon such termination.

G. Confidentiality: Nothing in this Section 12
shall affect the rights of the parties under Section 5 above.

H. Payment of Accrued Compensation at
Termination: Notwithstanding anything to the contrary, any accrued
compensation payable to Employee, including any severance benefits,
payable to Employee at the time of his termination, may be allocated
at the option of Employee to the purchase of shares in the Company
under employee stock options granted under Subsection 9.C, to the
extent permitted by law and in accordance with the Company's Stock
Option Plan.

13. Assignment of Intellectual Property Rights:

A. Definition of "Inventions": As used herein,
the term "Inventions" shall mean all inventions, discoveries,
improvements, trade secrets, formulas, techniques, data, programs,
systems, specifications, documentation, algorithms, flow charts, logic
diagrams, source codes, processes, and other information, including
works-in-progress, whether or not subject to patent, trademark,
copyright, trade secret, or mast work protection, and whether or not
reduced to practice, which are made, created, authored, conceived, or
reduced to practice by Employee, either alone or jointly with others,
during the period of employment with the Company and for one year
following the termination of Employee's employment with the Company
which (1) relate to the actual or anticipated business, activities,
research, or investigations of the Company, or (2) result from or is
suggested by work performed by Employee for the Company (whether or
not made or

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<PAGE> 8

conceived during normal working hours or on the premises of the
Company), or (3) which result, to any extent, from use of the
Company's premises or property.

B. Work for Hire: Employee expressly
acknowledges that all copyrightable aspects of the Inventions are to
be considered "works made for hire" within the meaning the Copyright
Act of 1976, as amended (the "Act"), and that the Company is to be
"author" within the meaning of such Act for all purposes. All such
copyrightable works, as well as all copies of such works in whatever
medium fixed or embodied, shall be owned exclusively by the Company as
of its creation, and Employee hereby expressly disclaims any and all
interest in any of such copyrightable works and waives any right of
droit morale or similar rights.

C. Assignment: Employee acknowledges and agrees
that all Inventions constitute trade secrets of the Company or the
member of the Company, as applicable, and shall be the sole property
of the Company, as applicable or any other entity designated by the
Company. In the event that title to any or all of the Inventions or
any part or element thereof, may not, by operation of law, vest in the
Company, as applicable, or such Inventions may be found as a matter of
law not to be "works made for hire" within the meaning of the Act,
Employee hereby conveys and irrevocably assigns to the Company, as
applicable, without further consideration, all his right, title and
interest, throughout the universe and in perpetuity, in all Inventions
and all copies of them, in whatever medium fixed or embodied, and in
all written records, graphics, diagrams, notes, or reports relating
thereto in Employee's possession or under his control, including, with
respect to any of the foregoing, all rights of copyright, patent,
trademark, trade secret, mask work, and any and all other proprietary
rights therein, the right to modify and create derivative works, the
right to invoke the benefit of any priority under any international
convention and all rights to register and renew same.

D. Proprietary Notices; No Filings; Waiver of
Moral Rights: Employee acknowledges that all Inventions shall at the
sole option of the Company bear the Company's patent, copyright,
trademark, trade secret, and mask work notices. Employee agrees not
to file any patent, copyright, or trademark applications relating to
any Invention, except with prior written consent of an authorized
representative of the Company. Employee hereby expressly disclaims
any and all interest in any Inventions and waives any right of
droit morale or similar rights, such as rights of integrity or the
right to be attributed as the creator of the Invention.

E. Further Assurances: Employee agrees to
assist the Company, or any party designated by the Company, promptly
on the Company's request, whether before or after the termination of
employment however such termination may occur, in perfecting,
registering, maintaining, and enforcing, in any jurisdiction, the
Company's rights in the Inventions by performing all acts and
executing all documents and instruments deemed

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<PAGE> 9

necessary or convenient by the Company, including, by way of
illustration and not limitation:

a. Executing assignments, applications,
and other documents and instruments in connection with (1)
obtaining patents, copyrights, trademarks, mask works, or
other proprietary protections for the Inventions and (2)
confirming the assignment to the Company of all right, title,
and interest in the Inventions or otherwise establishing the
Company's exclusive ownership rights therein.

b. Cooperating in the prosecution of
patent, copyright, trademark and mask work applications, as
well as in the enforcement of the Company's rights in the
Inventions, including, but not limited to, testifying in court
or before any patent, copyright, trademark or mask work
registry office, or any other administrative body.

Employee will be reimbursed for all out-of-pocket
costs incurred in connection with the foregoing, if such assistance is
requested by the Company after the termination of employment. In
addition, to the extent that, after the termination of employment for
whatever reason, Employee's technical expertise shall be required in
connection with the fulfillment of the aforementioned obligations, the
Company will compensate Employee at a reasonable rate for the time
actually spent by Employee at the Company's request rendering such
assistance.

F. Power of Attorney: Employee hereby
irrevocably appoints the Company to be his Attorney-in-Fact in his
name and on his behalf to execute any document and to take any action
and generally to use his name for the purpose of giving to the Company
the full benefit of the assignment provisions set forth above.

G. Consent to Use of Name: The Company reserves
the right (but shall not have the obligation) to publicize Employee's
name and background in connection with the marketing of the Inventions
or the enforcement of the Company's rights therein. Employee is
responsible for supplying to the Company his resume or curriculum
vitae for such purposes. Employee agrees that the Company shall have
the sole control over the type style, type size, or placement of his
name on any materials, or over the final content of any biography used
in said material.

H. Disclosure of Inventions: Employee will make
full and prompt disclosure to the Company of all Inventions subject to
assignment to the Company, and all information relating thereto in
Employee's possession or under his control as to possible applications
and use thereof.

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<PAGE> 10

I. No Violation of Third Party Rights: Employee
represents, warrants, and covenants that he:

a. will not, in the course of
employment, infringe upon or violate any proprietary rights of
any third party (including, without limitation, any third
party confidential relationships, patents, copyrights, mask
works, trade secrets, or other proprietary rights);

b. is not a party to any conflicting
agreements with third parties which will prevent him from
fulfilling the terms of employment and the obligations of this
Restated Agreement;

c. does not have in his possession any
confidential or proprietary information or documents belonging
to others and will not disclose to the Company, use, or induce
the Company to use, any confidential or proprietary
information or documents of others; and

d. agrees to respect any and all valid
obligations which he may now have to prior employers or to
others relating to confidential information, inventions, or
discoveries which are the property of those prior employers or
others, as the case may be.

Employee has supplied or shall promptly supply to the
Company a copy of each written agreement to which Employee is subject
(other than any agreement to which the Company is a party) which
includes any obligation of confidentiality, assignment of Inventions,
or non-competition.

Employee agrees to indemnify and save harmless the
Company from any loss, claim, damage, costs or expenses of any kind
(including without limitation, reasonable attorney's fees) to which
the Company may be subjected by virtue of a breach by Employee of the
foregoing representations, warranties, and covenants.

J. Obligations Upon Termination: In the event
of any termination of his employment, for whatever reason, Employee
will promptly (1) deliver to the Company all physical property, discs,
documents, notes, printouts, and all copies thereof and other
materials in Employee's possession or under Employee's control
pertaining to the business of the Company, including, but not limited
to, those embodying or relating to the Inventions and the Confidential
Information (as defined in Sections 8 and 13.A herein), (2) deliver to
the Company's patent department or legal department or other person
designated by the Company all notebooks and other data relating to
research or experiments or other work conducted by Employee in the
scope of employment or any Inventions made, created,

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<PAGE> 11

authored, conceived, or reduced to practice by Employee, either alone
or jointly with others, and (3) make full disclosure relating to any
Inventions.

If Employee would like to keep certain property, such
as material relating to professional societies or other
non-confidential material, upon the termination of employment with the
Company, he agrees to discuss such issues with the Company. Where
such a request does not put Confidential Information of the Company at
risk, the Company will customarily grant the request.

Upon termination of employment with the Company,
Employee's obligations under this Section 13 shall survive and the
Employee shall, if requested by the Company, reaffirm Employee's
recognition of the importance of maintaining the confidentiality of
the Company's Confidential Information and reaffirm all of the
Employee's obligations set forth in this Section 13.

14. Life Insurance: The Company may, in its sole
discretion, purchase such life insurance policies as it deems necessary or
appropriate, naming Employee as the insured and the Company as beneficiary.
Employee hereby agrees to submit to any reasonable medical examination required
for the purchase of such insurance.

15. Notices: Any notices to be given hereunder by either
party to the other shall be in writing and may be transmitted by personal
delivery or by certified mail, return receipt requested. Mailed notices shall
be addressed to the parties as follows:

If notice is to the Company, to:

AVTEAM, INC.
Miramar Park of Commerce
3230 Executive Way
Miramar, Florida 33025
Attn: Chairman, Board of Directors

with copy to:

Baker & McKenzie
701 Brickell Avenue, Suite 1600
Miami, Florida 33131
Attn: Noel H. Nation, Esq.

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<PAGE> 12

If notice is to Employee, to:

Donald A. Graw
6211 N.W. 98th Drive
Parkland, Florida 33076

Either party may change its address by written notice in
accordance with this Section 15. Notices delivered personally shall be deemed
communicated as of the dates of actual receipt; mailed notices shall be deemed
communicated as of forty-eight (48) hours after the date of mailing.

16. Arbitration: Any controversy between the parties
involving the construction or application of any of the terms, provisions or
conditions of this Restated Agreement or in any way connected with Employee's
employment with the Company, including but not limited to, breach of this
Restated Agreement, termination or discharge, claims of age, gender, race or
disability discrimination, sexual harassment or civil rights violations shall,
within thirty days of the written notice to the other party, be submitted to
final and binding arbitration as follows:

A. The arbitration shall be held in Miami,
Florida.

B. The arbitration shall be conducted by one
arbitrator, who is a member of the American Arbitration Association
("AAA") and in accordance with the rules of the AAA then in effect,
subject to the specific exceptions set out in Subsection 16.C, unless
both parties agree otherwise. The arbitrator shall be chosen from a
panel of persons with knowledge of and experience in employment and
employment law issues.

C. Notwithstanding any rule of the AAA to the
contrary, (l) the parties shall be entitled to conduct discovery
(i.e., investigation of facts through deposition and other means)
which shall be governed by the Florida Rules of Civil Procedure then
in effect; (2) the arbitrator shall have all power and authority
relating to such discovery as are allowed under the Florida Rules of
Civil Procedure; (3) the arbitrator shall apply Florida substantive
law; (4) at the election and at the expense of either party, a Court
Reporter may record the hearing and such recording will be the
official record of the proceeding; and (5) the arbitrator shall
specify the basis for, and the type of damage award, if any, entered.

D. The arbitrator's authority to order discovery
and enter judgment shall be final and binding. It may be enforced
through an order of a court of competent jurisdiction. Such judgment
may be reviewed by a court only on the grounds of bias, improper
conduct of the arbitrator, abuse of discretion, or violation of public
policy.

Notwithstanding the foregoing agreement to arbitrate,
either party may apply to any court of competent jurisdiction for
temporary restraining orders, preliminary

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<PAGE> 13

injunctions, permanent injunctions, or other extraordinary relief, to
remedy any actual or threatened unauthorized disclosure of
confidential information or unauthorized use, copying, marketing, or
distribution of confidential information. Such application shall be
made before the arbitrator is appointed and assumes his or her
responsibilities. The seeking of injunctive relief shall not operate
to prejudice the rights of the parties to arbitrate their disputes.

17. Attorneys' Fees and Costs: If either party fails to
perform its respective obligations under this Restated Agreement, and the other
party is thereby required to incur attorneys' fees or other fees or costs,
including but not limited to the costs of arbitration, the party so incurring
such fees and costs shall be entitled to the payment of those fees and costs by
the breaching party.

18. Entire Agreement: This Restated Agreement supersedes
any and all other agreements, either oral or in writing, between the parties
hereto with respect to the employment of Employee by the Company and contains
all of the covenants and agreements between the parties with respect to that
employment in any manner whatsoever. Each party to this Restated Agreement
acknowledges that no representations, inducements, promises, or agreements,
oral or written, have been made by any party, or anyone acting on behalf of any
party, which are not embodied herein, and that no other agreement, statement,
or promise not contained in this Restated Agreement shall be valid or binding
on either party.

19. Modifications: Any modification of this Restated
Agreement shall be effective only if it is in writing and signed by both
parties.

20. Effect of Waiver: The failure of either party to
insist on strict compliance with any of the terms, covenants, or conditions of
this Restated Agreement by the other party shall not be deemed a waiver of that
term, covenant, or condition, nor shall any waiver or relinquishment of any
right or power at any one time or times be deemed a waiver or relinquishment of
that right or power for all or any other times.

21. Partial Invalidity: If any provision of this
Restated Agreement is held by a court of competent jurisdiction to be invalid,
void, or unenforceable, the remaining provisions shall nevertheless continue in
full force without being impaired or invalidated in any way, unless such
partial invalidity materially affects the intent of the parties.

22. Governing Law: This Restated Agreement shall be
governed by and construed in accordance with the laws of the State of Florida.

23. Assignability: The rights and duties of either party
hereunder shall not be assignable by either party, except that this Restated
Agreement and all rights and obligations hereunder may be assigned by the
Company to, and be assumed by, any corporation or other

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<PAGE> 14

business entity which succeeds to all or substantially all of the assets and
business of the Company through merger, consolidation, acquisition of assets,
or other corporate reorganization.

24. Survival: The covenants, agreements, representations
and warranties contained in or made pursuant to this Restated Agreement shall
survive Employee's termination of employment irrespective of any investigation
made by or on behalf of any party.

IN WITNESS WHEREOF, the parties have executed this Restated Agreement
effective as of the day and year first above written.

AVTEAM, INC.

By:__________________________________
Name:_____________________
Title:_______________________________

EMPLOYEE:

_____________________________________
Donald A. Graw

<PAGE> 1

Exhibit 10.5

THE AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT

This Amended and Restated Executive Employment Agreement ("Restated
Agreement") is made and effective this 6th day of December, 1996, between
AVTEAM, INC. a Florida corporation ("Company"), and JAIME J. LEVY ("Employee").

Recitals

The Company and Employee entered into an Employment Agreement dated
January 1, 1994 (the "Levy Agreement"), which was subsequently amended
effective January 1, 1996 by Amendment No. 1 thereto and by Amendments No. 2
and No. 3 thereto dated as of April 12, 1996. The Company and Employee now
wish to amend and restate the employment relationship between the Company and
Employee by terminating the Levy Agreement and Amendments No. 1, No. 2 and No.
3 thereto, and replacing the same with the terms and conditions set forth below
as of the date first written above.

Agreements

In consideration of the mutual covenants contained herein, and for
other good and valuable consideration, receipt of which is acknowledged by the
parties, the Company and Employee agree as follows:

1. Termination of Levy Agreement and Amendments No. 1,
No. 2 and No. 3: The Levy Agreement and Amendments No. 1, No. 2 and No. 3
thereto are hereby terminated in their entirety without any further liability
to either party, except with respect to any provisions thereof which expressly
survive termination.

2. Term of Employment: The Company employs Employee and
Employee accepts employment with the Company for a period of three years
beginning on the Effective Date of this Restated Agreement as set forth above
("Initial Employment Term"). This Restated Agreement shall be renewed
automatically for an additional one-year period on the third anniversary date
and on each subsequent one-year anniversary date unless the Company's Board of
Directors or Chief Executive Officer notifies Employee in writing or Employee
notifies the Company's Chief Executive Officer or Board of Directors in writing
that such renewal shall not take place. Said notice shall be given not less
than ninety (90) days prior to any such anniversary date.

3. Duties of Employee: Employee shall serve as the
Executive Vice President of the Company throughout the Employment Term. In his
capacity as Executive Vice President, Employee shall act under the direction of
the President and in the absence or disability of the President shall perform
the duties and exercise the powers of the President. He shall perform such
other duties and have such other powers as the president or the Board of
Directors may from time to time prescribe.

4. Exclusive Services: Employee's services shall be
exclusive to the Company, and Employee shall devote such portion of his
productive time and attention to the business of the Company as shall be
reasonably necessary to carry out his duties during the Employment Term.
Employee shall not engage in any other businesses, duties, or pursuits
whatsoever, or directly or indirectly render any services of a business,
commercial, or professional nature to any other person or organization, whether
for compensation or otherwise, unless such activity is fully disclosed to the
Company and approved by the Company's Board of Directors. This Restated
Agreement shall not be interpreted to prohibit Employee from making passive
personal investments or conducting private business affairs if such activities
do not materially interfere with the services required under this Restated
Agreement.

5. Non-Competition:

To induce the Company to enter into this Restated Agreement, Employee agrees
that:

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<PAGE> 3

B. Period of Employment: During the term of
Employee's employment hereunder, Employee shall not, directly
or indirectly, either as an employee, employer, consultant, agent,
principal, partner, stockholder, corporate officer, director, or in
any other individual or representative capacity, engage or participate
in or acquire, hold, or retain any interest in any business which is
competitive with the Business of the Company in any location, or its
shareholders or any business selling to or doing business with the
Company, unless such participation or interest is fully disclosed to
the Company and approved by a majority of the Company's Board of
Directors. The foregoing notwithstanding, Employee may acquire, hold
or retain equity ownership of any publicly held company, provided that
such equity ownership does not exceed five percent (5%) of the issued
and outstanding shares of the voting stock of such company.

6. Unique Services: Employee hereby represents and agrees
that the services to be performed under the terms of this Restated Agreement
are of a special, unique, unusual, extraordinary, and intellectual character
that gives them a peculiar value, the loss of which cannot be reasonably or
adequately compensated in damages in any action at law. Employee, therefore,
expressly agrees that the Company, in addition to any rights or remedies that
the Company might possess, shall be entitled to injunctive and other equitable
relief to prevent or remedy a breach of this Restated Agreement by Employee.

3
<PAGE> 4

9. Compensation:

A. Salary: The Company shall pay Employee an
annual base salary of $ 220,00.00 ("Salary"), payable in equal
biweekly or bi-monthly installments in accordance with the normal
payroll procedures of the Company or at such other time or times as
Employee and the Company shall agree. Except as otherwise provided
herein, the Company's obligation to pay Employee's Salary under this
Restated Agreement shall cease as of the date of termination of
Employee's employment.

B. Incentive Compensation: Employee shall be
eligible to participate in the Company's 1996 Incentive Compensation
Plan.

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<PAGE> 5

C. Stock Options: Employee shall be eligible to
participate in the Company's 1996 Stock Option Plan on the terms and
conditions established by the Board of Directors of the Company.

11. Employee Benefits:

A. Vacation Time and Sick Leave: Employee shall
be entitled to four (4) weeks of vacation and fifteen (15) days of
sick leave without loss of compensation each year during the
Employment Term. For the purposes of this paragraph, a year shall
begin on the effective date of this Restated Agreement as set forth
above. In the event that Employee takes vacation time or sick leave
in excess of the minimum numbers set forth in this paragraph, the
Board of Directors shall determine whether or not Employee shall
receive compensation for such excess days. Unless otherwise
established by the Company's Board of Directors, in the event that
Employee does not for any reason take the total amount of vacation
time authorized during any year, he shall be deemed to have waived any
entitlement to vacation time for that year. Sick days may not be
accumulated.

12. Termination of Restated Agreement:

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<PAGE> 6

G. Confidentiality: Nothing in this Section 12
shall affect the rights of the parties under Section 5 above.

6
<PAGE> 7

13. Assignment of Intellectual Property Rights:

7
<PAGE> 8

right to invoke the benefit of any priority under any international
convention and all rights to register and renew same.

E. Further Assurances: Employee agrees to
assist the Company, or any party designated by the Company, promptly
on the Company's request, whether before or after the termination of
employment however such termination may occur, in perfecting,
registering, maintaining, and enforcing, in any jurisdiction,
the Company's rights in the Inventions by performing all acts
and executing all documents and instruments deemed necessary or
convenient by the Company, including, by way of illustration and not
limitation:

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<PAGE> 9

I. No Violation of Third Party Rights: Employee
represents, warrants, and covenants that he:

b. is not a party to any conflicting
agreements with third parties which will prevent him from
fulfilling the terms of employment and the obligations of this
Restated Agreement;

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<PAGE> 10

If notice is to the Company, to:

AVTEAM, INC.
Miramar Park of Commerce
3230 Executive Way
Miramar, Florida 33025
Attn: Chairman, Board of Directors

10
<PAGE> 11

with copy to:

Baker & McKenzie
701 Brickell Avenue, Suite 1600
Miami, Florida 33131
Attn: Noel H. Nation, Esq.

If notice is to Employee, to:

Jaime J. Levy
18111 N.W. 16th Street
Pembroke Pines, Florida 33029

A. The arbitration shall be held in Miami, Florida.

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<PAGE> 12

Notwithstanding the foregoing agreement to arbitrate,
either party may apply to any court of competent jurisdiction for
temporary restraining orders, preliminary injunctions, permanent
injunctions, or other extraordinary relief, to remedy any actual or
threatened unauthorized disclosure of confidential information or
unauthorized use, copying, marketing, or distribution of confidential
information. Such application shall be made before the arbitrator is
appointed and assumes his or her responsibilities. The seeking of
injunctive relief shall not operate to prejudice the rights of the
parties to arbitrate their disputes.

18. Entire Agreement: This Restated Agreement supersedes any
and all other agreements, either oral or in writing, between the parties hereto
with respect to the employment of Employee by the Company and contains all of
the covenants and agreements between the parties with respect to that
employment in any manner whatsoever. Each party to this Restated Agreement
acknowledges that no representations, inducements, promises, or agreements,
oral or written, have been made by any party, or anyone acting on behalf of any
party, which are not embodied herein, and that no other agreement, statement,
or promise not contained in this Restated Agreement shall be valid or binding
on either party.

19. Modifications: Any modification of this Restated
Agreement shall be effective only if it is in writing and signed by both
parties.

20. Effect of Waiver: The failure of either party to insist
on strict compliance with any of the terms, covenants, or conditions of this
Restated Agreement by the other party shall not be deemed a waiver of that
term, covenant, or condition, nor shall any waiver or relinquishment of any
right or power at any one time or times be deemed a waiver or relinquishment of
that right or power for all or any other times.

21. Partial Invalidity: If any provision of this Restated
Agreement is held by a court of competent jurisdiction to be invalid, void, or
unenforceable, the remaining provisions shall nevertheless continue in full
force without being impaired or invalidated in any way, unless such partial
invalidity materially affects the intent of the parties.

22. Governing Law: This Restated Agreement shall be governed
by and construed in accordance with the laws of the State of Florida.

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<PAGE> 13

business entity which succeeds to all or substantially all of the assets and
business of the Company through merger, consolidation, acquisition of assets,
or other corporate reorganization.

IN WITNESS WHEREOF, the parties have executed this Restated Agreement
effective as of the day and year first above written.

AVTEAM, INC.

By:___________________________________
Donald A. Graw
President and Chief Executive
Officer

EMPLOYEE:

______________________________________
Jaime J. Levy

<PAGE> 1

Exhibit 10.6

AVTEAM TAX ALLOCATION AND
INDEMNIFICATION AGREEMENT

THIS AVTEAM TAX ALLOCATION AND INDEMNIFICATION AGREEMENT is entered
into as of this 5th day of December, 1996 between Donald A. Graw
("Stockholder"), and AVTEAM, INC., a Florida corporation, formerly known as
Interstar Trading Corporation (the "Company").

W I T N E S S E T H :

WHEREAS, Stockholder owns 500,000 shares of the sole class of stock
in the Company, constituting ___ percent of the total outstanding shares of
stock in the Company;

WHEREAS, pursuant to that certain Stock Purchase Agreement by and
among the Company and the persons listed on the signature pages thereto (the
"Purchasers"), dated as of December 5, 1996, the Purchasers will purchase
shares of the newly-authorized preferred stock of the Company and, in
connection therewith, the Company's subchapter S corporation status will be
terminated;

WHEREAS, such termination, under Code Section 1362(e), will result in
the Company's 1996 calendar tax year being divided in two (2) separate tax
years, the first of which begins on January 1, 1996 and ends on the day
immediately preceding the day such termination is effective (the "1996 S Short
Year") and the second of which begins on the day such termination is effective
and ends on December 31, 1996 (the "1996 C Short Year"); and

WHEREAS, since its inception the Company has made, is making or will
make distributions payable to Stockholder in amounts intended to equal the
amount of the Company's accumulated adjustments account, as that term is
defined in Code Section 1368(e)(1), calculated taking into account all items of
income, gain, deduction, loss and credit through the last day of the Company's
1996 S Short Year; and

WHEREAS, on December 3, 1996, the Board of Directors of the Company
executed a resolution of the directors (the "Resolution"), a copy of which is
attached hereto as Exhibit A, by which certain distributions will be made to
Stockholder (collectively, the "Distributions") determined based on
Stockholder's pro rata share (based on Stockholder's share ownership reflected
in Schedule A) of both (A) $795,229, which is the amount of the Company's
undistributed U.S. federal taxable income as reported by the Company on Form
1120S for the Company's 1995 tax year and (B) $4,120,000, which is the
estimated amount of the Company's U.S. federal taxable income for its 1996 S
Short Year; and

WHEREAS, the amount of the Distributions, although intended to equal
Stockholder's pro rata share of such taxable income for the Company's 1995 tax
year and its 1996 S Short Year, may, in fact, be less or more than such
amounts; and
<PAGE> 2

WHEREAS, the Company and Stockholder have determined it to be in their
mutual best interests to set forth in this Agreement certain provisions
designed to adjust such Distributions in order to achieve the intended results
of the Distributions totaling the amount of Stockholder's pro rata share of the
Company's U.S. federal taxable income for the Company's 1995 tax year and its
1996 S Short Year; and

WHEREAS, as an inducement to the Purchasers to purchase preferred
stock of the Company, the Company and the Stockholder have entered into this
Agreement.

NOW, THEREFORE, in consideration of the mutual promises contained
herein, Stockholder and the Company hereby agree as follows:

SECTION 1. DEFINITIONS. For purposes of this Agreement:

1.1 "Additional Amounts" means any interest, penalties or
additions to tax imposed or assessed by the Internal Revenue Service (the
"Service") or any other taxing authority, as a result of any liability for
Taxes, as defined herein.

1.2 "Additional Taxes" means, for any Pre-Closing Date Period, as
that term is defined herein, the excess of (i) the product of (A) forty percent
(40%) and (B) the amount of income of the Company taxable to Stockholder under
Code Section 1366 as reported for federal income tax purposes on the Company's
Forms 1120S for the 1995 tax year or its 1996 S Short Year, as the case may be,
calculated after taking into account any adjustment by the Service or any other
taxing authority to such reported amounts (other than a Stockholder Adjustment)
constituting a "determination" within the meaning of Code Section 1313 or
comparable provision of state law over (ii) an amount equal to the product of
(x) forty percent (40%) and (y) the amount of income of the Company taxable to
the Stockholder as reported on the Company's Forms 1120S for the 1995 tax year
or its 1996 S Short Year.

1.3 "Audit" means any audit, investigation or exam by the Service
or any other taxing authority.

1.4 "Company Adjustment" means any adjustment by the Service or
any other taxing authority of income, gain, deduction, loss, credit or other
allowance (i) that causes any item of net income of the Company that was taken
into account and reported by the Company on its Forms 1120S for federal income
tax purposes for the 1995 tax year or its 1996 S Short Year to be included in
taxable income in a Post-Closing Date Period and not to be included in taxable
income in a Pre-Closing Date period or that causes any deduction, loss, credit
or other allowance of the Company, which deduction, credit or other allowance
has the effect of reducing taxable income that was taken into account and
reported by the Company on its Form 1120 for federal income tax purposes in a
Post-Closing Date Period, to be taken into account in a Pre-Closing Date Period
and not to be taken into account in a Post-Closing Date Period, and/or (ii)
which results in Taxes and/or Additional Amounts in respect thereof being
imposed on Company as a

2
<PAGE> 3

result of the Company not qualifying as an S corporation for any period prior
to the end of the 1996 S Short Year.

1.5 "Indemnitee" means the party, whether the Company or
Stockholder, as the context indicates and as the case may be, entitled to
receive an indemnification payment from the other party pursuant to this
Agreement; provided, however, that if Stockholder shall be the Indemnitee, all
rights of the Indemnitee under Section 5 hereof may be exercised only by the
Stockholder Representative.

1.6 "Indemnitor" means the party, whether the Company or
Stockholder, as the context indicates and as the case may be, obligated to
indemnify the other party pursuant to this Agreement; provided, however, that
if Stockholder shall be the Indemnitor, all rights of the Indemnitor under
Section 5 hereof may be exercised only by the Stockholder Representative.

1.7 "Post-Closing Date Period" means any taxable year of the
Company ending after the first day of the 1996 C short tax year.

1.8 "Pre-Closing Date Period" means any taxable year of the
Company ending before the first day of the 1996 C short tax year .

1.9 "Stockholder Adjustment" means any adjustment by the Service
or any other taxing authority of income, gain, deduction, loss, credit or other
allowance that causes any item of net income of the Company that was taken into
account and reported by the Company on its Form 1120 for federal income tax
purposes in a Post-Closing Date Period, to be included in taxable income in a
Pre-Closing Date Period and not to be included in taxable income in a
Post-Closing Date Period or that causes any deduction, loss, credit or other
allowance of the Company, which deduction, loss, credit or other allowance has
the effect of reducing taxable income that was taken into account and reported
by the Company on its Forms 1120S for federal income tax purposes for the 1995
tax year or its 1996 S Short Year, to be taken into account in a Post-Closing
Date Period and not to be taken into account in a Pre-Closing Date Period.

1.10 "Stockholder Representative" means Leon Sragowicz, or such
other shareholder of the Company which all of the shareholders listed on
Schedule A designate to the Company as the Shareholder Representative.

1.11 "Tax Claim" means any written or oral claim or notice by the
Service or any other taxing authority for Taxes and/or Additional Amounts
including, without limitation, an assessment for Taxes.

1.12 "Taxes" means U.S. federal income tax and state and local
income taxes and other state and local taxes based on or measured by net
income, including franchise taxes.

3
<PAGE> 4

SECTION 2. AGREEMENT TO MAKE ADDITIONAL DISTRIBUTIONS TO STOCKHOLDER.

2.1 The Company agrees to promptly pay to Stockholder the excess
of (a) the amount of Stockholder's pro rata share, based on Stockholder's share
ownership reflected in Schedule A, of the Company's taxable income for
Company's 1995 tax year and its 1996 S Short Year as reported on its Forms
1120S, which pro rata share shall be calculated based on Stockholder's
percentage of share ownership in the Company reflected in Schedule A, over (b)
the sum of (i) amount of Distributions made to Stockholder pursuant to the
Resolution and any other distributions to Stockholder by Company in respect of
its 1995 tax year and its 1996 S Short Year, and (ii) any amount payable by the
Company to Stockholder under the terms of Section 4 hereof.

2.2 Stockholder agrees to promptly pay to the Company the excess
of (a) the amount of the Distributions made to Stockholder pursuant to the
Resolution and any other distributions to Stockholder by Company in respect of
its 1995 tax year and its 1996 S Short Year, over (b) the sum of (i) the amount
of Stockholder's pro rata share based on Stockholder's share ownership
reflected in Schedule A of the Company's taxable income for the Company's 1995
tax year and its 1996 S Short Year as reported on its Forms 1120S, which pro
rata share shall be calculated based on Stockholder's percentage of share
ownership in the Company reflected in Schedule A, and (ii) any amount payable
by Stockholder to the Company under Section 3 hereof by reason of any Company
Adjustment under Subsection 1.4(i) hereof (but not by reason of any Company
Adjustment under Subsection 1.4(ii) hereof).

SECTION 3. STOCKHOLDER INDEMNIFICATION OF THE COMPANY.

3.1 Stockholder agrees to promptly indemnify the Company, as
provided for and limited by this Section 3, for the Stockholder Indemnification
Amount (as determined under Section 3.2 hereof) that results from a Company
Adjustment, and this Section 3 shall apply to each successive Company
Adjustment.

3.2 The Stockholder Indemnification amount that results from a
Company Adjustment shall equal the excess of (i) the amount of the Taxes and
Additional Amounts paid by the Company computed taking into account such
Company Adjustment, over (ii) the amount of the Taxes and Additional Amounts
paid by the Company computed without taking into account such Company
Adjustment.

3.3 Notwithstanding the foregoing Subsections 3.1 and 3.2, the
Stockholder Indemnification Amount with respect to any Company Adjustment under
Subsection 1.4(i) hereof shall not exceed the excess of (i) the amount of any
net reduction in the liability for Taxes and Additional Amounts of Stockholder,
including amounts that have been or will be refunded or credited to
Stockholder, directly attributable to such Company Adjustment, over (ii) costs,
including legal and accounting fees, incurred by Stockholder and reasonably
attributable to or incurred in connection with the determination of such
Company Adjustment. For purposes of

4
<PAGE> 5

clarity, the limitation in this Section 3.3 shall not apply to any Company
Adjustment under Subsection 1.4(ii) hereof.

3.4 The amount payable by Stockholder to the Company pursuant to
Section 3.1 shall be grossed up so as to provide the Company with an amount
that, on an after-tax basis and reflecting the tax consequences to the Company,
equals the amount of Taxes and Additional Amounts for which Stockholder is
obligated to indemnify the Company pursuant to this Agreement.

SECTION 4. COMPANY INDEMNIFICATION OF STOCKHOLDER.

4.1 Company agrees to promptly indemnify Stockholder, as provided
for by this Section 4, for the amount of (i) any Taxes and Additional Amounts
paid by Stockholder as a result of any Stockholder Adjustment (and this Section
4 shall apply to each successive Stockholder Adjustment), plus (ii) any
Additional Taxes and any related Additional Amounts paid by Stockholder as a
result of any adjustment by the Service or any other taxing authority which is
not the result of a Stockholder Adjustment.

4.2 The amount payable by the Company to Stockholder pursuant to
Section 4.1 shall be grossed up so as to provide Stockholder with an amount
that, on an after-tax basis and reflecting the tax consequences to Stockholder,
equals the amount of Taxes, Additional Taxes and Additional Amounts for which
the Company is obligated to indemnify Stockholder pursuant to this Agreement.

4.3 To the extent that an indemnification obligation arises
pursuant to this Section 4 as a result of a Stockholder Adjustment in respect
of an increase in Stockholder's pro rata share of the taxable income of the
Company for the 1996 S Short Year (i) such amount shall be paid by the Company
to Stockholder in accordance with Section 6.1 hereof, and (ii) Stockholder
shall immediately loan an amount equal to sixty percent (60%) of such amount to
the Company, and such loan shall be evidenced by a promissory note
substantially in the form of Exhibit B hereto (the "Note"), provided, however,
that the provisions of this subparagraph (ii) shall not apply to any such
indemnification obligation that arises after the date of (i) the consummation
by the Company of the sale of its common stock at a price equal to at least
Nine Dollars ($9.00) per share in an underwritten initial public offering
registered under the Securities Act or 1933 (as amended or any similar federal
law then in force) that results in net proceeds to the Company of at least
Twenty Five Million Dollars ($25,000,000); or (2) at any time during the second
fiscal quarter of the year 2000 if the Company has a net income for the fiscal
year ended December, 1999 in an amount greater then $10,000,000, so long as the
Company does not incur any additional indebtedness in order to repay the Note.

SECTION 5. CONSENT PROVISIONS.

5.1 Stockholder shall not initiate, effect or permit any
Stockholder Adjustment

5
<PAGE> 6

(through an amended tax return or otherwise) without the written consent of the
Company. Company shall not initiate, effect or settle upon any Company
Adjustment (through an amended tax return or otherwise) without the written
consent of the Stockholder Representative.

5.2 If an Audit is commenced or a Tax Claim is made against
Stockholder with respect to any amount of income, gain, deduction, loss or
credit of the Company included by Stockholder under Code Section 1366,
Stockholder shall promptly notify the Company in writing of that Audit or Tax
Claim. If an Audit is commenced or a Tax Claim is made with respect to the
Company, the Company shall promptly notify Stockholder in writing of that Audit
or Tax Claim. The person against whom the Audit is commenced or Tax Claim is
made shall promptly provide all correspondence to the other person under this
Agreement, with respect to such Audit or Tax Claim.

5.3 Indemnitor shall have the right at its option upon timely
notice to Indemnitee to assume control of the proceedings in connection with
any Audit or the defense of any suit, action or proceeding with respect to any
Tax Claim at its own expense and with its own counsel, provided its counsel is
reasonably satisfactory to Indemnitee.

5.4 Notwithstanding anything herein to the contrary, if Indemnitor
exercises the option of Section 5.3, (i) Indemnitor shall not agree to any
settlement with respect to any Taxes or Additional Amounts without Indemnitee's
consent if the effect of the settlement would be an increase in the liability
of Indemnitee (or any of its affiliates) for any Taxes or Additional Amounts
and if the Indemnitor would not be liable under this Agreement to pay
Indemnitee the full amount of that increase in liability for Taxes and any
related Additional Amounts, (ii) Indemnitor shall keep Indemnitee informed of
all material developments and events relating to such Audit or Tax Claim, and
(iii) Indemnitee shall have the right to participate in, but not to control,
the defense of any Audit or Tax Claim.

5.5 Indemnitor shall not agree to any settlement without
Indemnitee's express prior written consent which shall not be unreasonably
withheld. Indemnitor and Indemnitee shall fully cooperate with each other in
their efforts to litigate, defend or otherwise attempt to resolve any
proceeding.

SECTION 6. PAYMENT DATES.

6.1 Any payment due pursuant to Section 4 of this Agreement shall
be made not later than thirty (30) days after receipt by the Company of written
notice from Stockholder stating that any Taxes, Additional Taxes and Additional
Amounts, for or with respect to which Stockholder is entitled to
indemnification hereunder, have been paid by Stockholder.

6.2 Any payment due pursuant to Section 3 of this Agreement shall
be made not later than thirty (30) days after receipt by Stockholder of written
notice from the Company stating that any Taxes and Additional Amounts for or
with respect to which the Company is entitled to indemnification hereunder have
been paid, provided, however, that except with respect to a

6
<PAGE> 7

Company Adjustment under Section 1.4(ii) and except as provided below, any such
payment shall not be required to be made earlier than seven (7) days after
Stockholder shall receive a refund or credit for the amount of any reduction in
the liability of Stockholder for Taxes and any related Additional Amounts that
are attributable to a Company Adjustment giving rise to the payment in
question. Stockholder shall use his best efforts to file and diligently
prosecute any claim necessary to obtain any refund attributable to a Company
Adjustment within thirty (30) days after receipt by Stockholder of the written
notice referred to above, but in all events prior to the expiration of the
relevant statute of limitations (unless such statute of limitations has expired
on or before the receipt of such notice). In the event that such statute of
limitations expires on a date more than ten (10) days after receipt of such
notice from the Company and Stockholder fails to properly file a claim for
refund prior to the expiration of such statute of limitations, the provision
contained in this Section 6.2 shall not apply.

6.3 Any notice under this Section 6 with respect to a required
indemnification payment shall include an accurate and reasonably detailed
description, including correspondence, work papers, etc., of the adjustment by
the subject taxing authority to taxable income, gain, deduction loss, or credit
of Indemnitee. Any indemnification payment required to be made hereunder that
is not made when due shall bear interest until paid at the prime rate published
by Citibank, N.A.

6.4 The amount of any Taxes, Additional Taxes or Additional
Amounts, as the case may be, with respect to which Indemnitee has received a
payment from Indemnitor pursuant to this Agreement which are subsequently
refunded or credited to Indemnitee by the subject taxing authority (the
"Refunded Amount") shall be reimbursed to Indemnitor by Indemnitee within
thirty (30) days of Indemnitee receiving such credit or refund. The amount of
any Refunded Amount not paid by Indemnitee to Indemnitor within the time period
prescribed by this Section 6.4 shall bear interest at the prime rate published
by Citibank, N.A.

6.5 The obligation of the Company or Stockholder to make a payment
under Section 3 or Section 4 of this Agreement shall be subject to the
Indemnitee providing Indemnitor with evidence reasonably satisfactory to
Indemnitor of the amount of the indemnification so claimed.

SECTION 7. TRANSFER OF ASSETS; TERM.

Company's obligations under this Agreement shall continue and survive
notwithstanding any agreement of merger, acquisition, consolidation, asset
transfer or similar reorganization. Stockholder and the Company intend that
the rights and obligations of each party to this Agreement shall be in force
until all statutes of limitation for any tax adjustment which may give rise to
indemnification under this Agreement shall have expired.

7
<PAGE> 8

SECTION 8. NOTICES.

Any notice, demand, claim or other communication under this Agreement
shall be in writing and shall be deemed to have been given upon the delivery or
mailing thereof, as the case may be, if delivered personally or sent by
certified mail, return receipt requested, postage prepaid, to the other party
at the following address (or at another address a party may specify by notice
to the other party):

If to Stockholder, to: Leon Sragowicz
166 Bal Bay Drive
Bal Harbor Village
Miami, FL

If to the Company, to: AVTEAM, INC.
3230 Executive Way
Miramar, Florida 33025

SECTION 9. GOVERNING LAW.

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

SECTION 10. COUNTERPARTS.

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

SECTION 11. ASSIGNMENTS.

This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns.

8
<PAGE> 9

SECTION 12. AMENDMENT AND MODIFICATION.

This Agreement may be amended, modified or supplemented only by a
written agreement executed by the parties hereto and the Purchasers.

SECTION 13. THIRD PARTY BENEFICIARY.

The parties hereto agree and understand that the Purchasers are third
party beneficiaries of this Agreement.

SECTION 14. ENTIRE AGREEMENT.

This Agreement embodies the entire agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are no
representations, promises, warranties, covenants or undertakings other than
those expressly set forth or referred to herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to the
subject matter contained herein, including without limitation the S Corporation
Tax Allocation and Indemnification Agreement dated April 12, 1996, by and
between the Company and Stockholder, and the July 5, 1996 Addendum to such
Agreements, which Agreement and Addendum are hereby rescinded and canceled.

IN WITNESS WHEREOF, the undersigned have executed this Agreement
effective as of the day and year first above written.

AVTEAM, INC.:

By:___________________________________
Name:_________________________
Title:________________________________

STOCKHOLDER:

______________________________________

9
<PAGE> 10

SCHEDULE A

SHAREHOLDERS OF AVTEAM, INC.

<TABLE>
<CAPTION>
Number of Shares
Shareholder of Common Stock
----------- ---------------
<S> <C>
Leon Sragowicz 3,500,000

Donald A. Graw 500,000

Jaime J. Levy 500,000

Richard Preston 500,000

</TABLE>

<PAGE> 1
EXHIBIT 10.7

Miramar Park of Commerce

BUSINESS LEASE

THIS LEASE, entered into this 28th day of December, 1994 between
Sunbeam Properties, Inc., hereinafter called the Lessor, party of the first
part, and Interstar Trading Corp d/b/a Turbine Engine Technology, Corp. of the
County of Dade and State of Florida hereinafter called the Lessee or tenant,
party of the second part:

WITNESSETH, That the said Lessor does this day Lease unto said Lessee,
and said Lessee does hereby hire and take as tenant 3230 Executive Way, Miramar,
FL 33025 (46,803 square feet as shown on Exhibit "A" attached) situate in
Miramar, Florida, (the Premises) to be used and occupied by the Lessee as
warehouse and distribution for turbine engines and offices ancillary thereto
and for no other purposes or uses whatsoever without the express written
consent of Lessor, said consent not to be unreasonably withheld or delayed, for
the term of Five (5) years and Three (3) months beginning the 1st day of April,
1995, and ending the 30th day of June, 2000, at and for the agreed rental
payable as follows:

$0.00 for the period from April 1, 1995 thru June 30, 1995;

$18,301.12 per month plus State Sales Tax from July 1, 1995 thru June 30, 1996;

$21,798.67 per month plus State Sales Tax from July 1, 1996 thru June 30, 1997;

$22,670.62 per month plus State Sales Tax from July 1, 1997 thru June 30, 1998;

$23,577.44 per month plus State Sales Tax from July 1, 1998 thru June 30, 1999;

$24,520.54 per month plus State Sales Tax from July 1, 1999 thru June 30, 2000;

Such payments are in addition to all other payments to be made under this Lease
by Lessee, including but not limited to those described in Paragraph 28.

Lessee hereby deposits $63,710.12 with Lessor for the following:
July 1 thru 31, 1995 Rent: $18,301.12
Lessee's Proportionate Share
of July 1 thru 31, 1995 Expenses (per Paragraph 28): $ 4,066.92
Sales Tax: $ 1,342.00
Security Deposit: $40,000.00
----------
Total: $63,710.12

Said security deposit shall be refunded at the expiration of this Lease
provided Lease is in good standing at that time.

In the event that term of this Lease begins or ends on other than the first or
last day of a month, rent for such month(s) shall be prorated on a per diem
basis. In the event that any monthly rental payment due hereunder is not
received by Lessor by the fifth (5th) day of any month, said payment shall bear
a late charge of ten percent (10%) of the monthly payment which shall be then
due and payable.

All payments to be made to the Lessor on the first day of each and every month
in advance without demand at the office of Sunbeam Properties, 1401 79th St.
Causeway in the City of Miami, Florida 33141 or at such other place and to such
other person, as the Lessor may from the time to time designate in writing.

The following express stipulations and conditions are made a part of this Lease
and are hereby assented to by the Lessee:

FIRST: The Lessee shall not assign this Lease, nor sub-let the
Premises, or any part thereof nor use the same, or any part thereof, nor permit
the same, or any part thereof, to be used for any other purpose than as above
stipulated, nor make any alterations therein, and all additions thereto,
without the written consent of the Lessor, said consent not to be unreasonably
withheld or delayed, and all additions, fixtures, or improvements which may be
made by Lessee, except movable office furniture, shall become the property of
the Lessor and remain upon the Premises as a part thereof, and be surrendered
with the Premises at the termination of this Lease.

SECOND: All personal property placed or moved in the premises above
described shall be at the risk of the Lessee or owner thereof, and Lessor shall
not be liable for any damage to said personal property, or to the Lessee
arising from the bursting or leaking of water pipes, or from any at of
negligence of any co-tenant or occupants of the building or of any other person
whomsoever.

THIRD: That the Lessee shall promptly execute and comply with all
statutes, ordinances, rules, orders, regulations and requirements of the
Federal, State and City Government and of any and all their Departments and
Bureaus applicable to said Premises, for the correction, prevention, and
abatement of nuisances or other grievances, in, upon, or connected with said
Premises during said term; and shall also promptly comply with and execute all
rules, orders and regulations of the Southeastern Underwriters Association for
the prevention of

<PAGE> 2
fires, at its own cost and expense.

FOURTH: In the event the Premises shall be destroyed or so damaged or
injured by fire or other casualty during the life of this Lease, whereby the
same shall be rendered untenantable, then the Lessor shall have the right to
render said Premises tenantable by repairs within 160 days therefrom. If said
Premises are not rendered tenantable within said time, it shall be optional
with either party hereto to cancel this Lease, and in the event of such
cancellation the rent shall be paid only to the date of such fire or casualty.
The cancellation herein mentioned shall be evidenced in writing.

FIFTH: The prompt payment of the rent for said Premises upon the dates
named, and the faithful observance of the rules and regulations printed upon
this Lease, and which are hereby made a part of this covenant, and of such
other and further rules or regulations as may be hereafter made by the Lessor,
are the conditions, upon which the Lease is made and accepted and any failure
on the part of the Lessee to comply with the terms of said Lease, or any of
said rules and regulations now in existence, or which may be hereafter
prescribed by the Lessor, shall at the option of the Lessor, work a forfeiture
of this Lease, and all of the rights of the Lessee hereunder, and thereupon the
Lessor, his agents or attorneys, shall have the right to enter said Premises,
and remove all persons therefrom forcibly or otherwise, and the Lessee thereby
expressly waives any and all notice required by law to terminate tenancy, and
also waives any and all legal proceedings to recover possession of said
Premises, and expressly agrees that in the event of a violation of any of the
terms of this Lease, or of said rules and regulations, now in existence, or
which may hereafter be made, said Lessor, his agent or attorneys, may
immediately re-enter said Premises and dispossess Lessee without legal notice
or the institution of any legal proceedings whatsoever.

SIXTH: If the Lessee shall abandon or vacate said Premises before the
end of the term of this Lease, or shall suffer the rent to be in arrears, the
Lessor may, at his option, forthwith cancel this Lease or he may enter said
Premises as the agent of the Lessee, by force or otherwise, without being
liable in any way therefor, and relet the Premises with or without any
furniture that may be therein, as the agent of the Lessee, at such price and
upon such terms and for such duration of time as the Lessor may determine, and
receive the rent therefor, applying the same to the payment of the rent due by
these presents, and if the full rental herein provided shall not be realized by
Lessor over and above the expenses to Lessor in such re-letting, the said
Lessee shall pay any deficiency, and if more than the full rental is realized
Lessor will pay over to said Lessee the excess of demand.

SEVENTH: Lessee agrees to pay the cost of collection and ten percent
attorney's fee on any part of said rental that may be collected by suit or by
attorney, after the same is past due.

EIGHTH: The Lessee agrees that it will pay all charges for rent, gas,
electricity, or other illumination, and for all water used on said Premises,
and should said charges for rent, light or water herein provided for at any
time remain due and unpaid for the space of five days after the same shall have
become due, the Lessor may at its option consider the said Lessee tenant at
sufferance and immediately re-enter upon said Premises and the entire rent
for the rental period then next ensuing shall at once be due and payable and
may forthwith be collected by distress or otherwise.

NINTH: The said Lessee hereby pledges and assigns to the Lessor all
the furniture, fixtures, goods, and chattels of said Lessee, which shall or may
be brought or put on said Premises as security for the payment of the rent
herein reserved, and the Lessee agrees that the said lien may be enforced by
distress foreclosure or otherwise at the election of the said Lessor, and does
hereby agree to pay attorney's fees of ten percent of the amount so collected
or found to be due, together with all costs and charges therefore incurred or
paid by Lessor.

TENTH: <INTENTIONALLY DELETED>

ELEVENTH: The Lessor, or any of its agents, shall have the right to enter
said Premises during all reasonable hours, to examine the same to make such
repairs, additions or alterations as may be deemed necessary for the safety,
comfort, or preservation thereof, or of said building, or to exhibit said
Premises, and to put or keep upon the doors or windows thereof a notice "FOR
RENT" at any time within thirty (30) days before the expiration of this Lease.
The right of entry shall likewise exist for the purpose of removing placards,
signs, fixtures, alterations, or additions, which do not conform to this Lease,
or to the rules and regulations of the building.

TWELFTH: Lessee hereby accepts the Premises in the condition they are in
at the beginning of this Lease and agrees to maintain said Premises in the
same condition, order and repair as they are at the commencement of said term,
excepting only reasonable wear and tear arising from the use thereof under this
Lease, and to make good to said Lessor immediately upon demand, any damage to
water apparatus, or electric lights, or any fixtures, applicances or
appurtenances of said Premises, or of the building, caused by any act or
neglect of Lessee, or of any person or persons in the employ or under the
control of the Lessee.

THIRTEENTH: (a) It is expressly agreed and understood by and between the
parties to this Lease, that the Lessor shall not be liable for any damage or
injury by water, which may be sustained by the said tenant or other person or
for any other damage or injury resulting from the carelessness, negligence, or
improper conduct on the part of any other tenant or agents, or employees, or by
reason of the breakage, leakage, or obstruction of the water, sewer or soil
pipes, or other leakage in or about the said building.
<PAGE> 3
(b) Except for Lessor's negligence or intentional acts and
except as may be specifically provided elsewhere in this Lease, Lessor shall
not be liable for any damage or injury to any person or property whether it be
to the person or property of the Leasee, its employees, agents, invitees,
licensees or guests by reason of if Leasee's occupancy of the Premises or
because of fire, flood, windstorm, water, acts of God or third parties or for
any other reason beyond the control of Lessor. Lessee agrees to indemnify and
save harmless Lessor from and against any and all loss, damage, claim demand,
liability or expense, including reasonable attorney's fees at trial and upon
appeal, by reason of damage to person or property which may arise or be claimed
to have arisen as a result of Lessee's occupancy or use of the Premises,
Building and/or property of which the Premises is a part by Lessee, its
employees, agents, invitees, licensees or guests, or in connection therewith,
or in any way arising on account of any injury or damage caused to any person
or property on or in the Premises.

FOURTEENTH: If the Lessee shall become insolvent or if bankruptcy
proceedings shall be begun by or against the Lessee, before the end of said term
the Lessor is hereby irrevocably authorized at its option, to forthwith cancel
this Lease, as for a default. Lessor may elect to accept rent from such
receiver, trustee, or other judicial officer during the term of their occupancy
in their fiduciary capacity without effecting Lessor's rights as contained in
this Lease, but no receiver, trustee or other judicial officer shall ever have
any right, title or interest in or to the above described Premises by virtue of
this Lease.

FIFTEENTH: Lessee hereby waives and renounces for itself and
family any and all homestead and exemption rights he may have now or
hereafter, under or by virtue of the constitution and laws of the State of
Florida, or of any other state, or of the United States, as against the
payment of said rental or any portion hereof, of any other obligation or damage
that may accrue under the terms of this Lease.

SIXTEENTH: This Lease shall bind the Lessee and its assigns or
successors, and the heirs, assigns, administrators, legal representatives,
executors or successors as the case may be, of the Lessee.

SEVENTEENTH: It is understood and agreed between the parties hereto
that time is of the essence of this Lease and this applies to all terms and
conditions contained herein.

EIGHTEENTH: It is understood and agreed between the parties hereto
that written notice mailed or delivered to the Premises Leased hereunder shall
constitute sufficient notice to the Lessee and written notice mailed or
delivered to the office of the Lessor shall constitute sufficient notice to the
Lessor, to comply with the terms of this Lease.

NINETEENTH: The rights of the Lessor under the foregoing shall be
cumulative, and failure on the part of the Lessor to exercise promptly any
rights given hereunder shall not operate to forfeit any of the said rights.

TWENTIETH: It is further understood and agreed between the parties
hereto that any charges against the Lessee by the Lessor for services or for
work done on the Premises by order of the Lessee or otherwise accruing under
this Lease shall be considered as rent due and shall be included in any lien
for rent due and unpaid.

TWENTY-FIRST: (a) It is hereby understood and agreed that any signs
or advertising to be used, including awnings, in connection with the Premises
leased hereunder shall be first submitted to the Lessor for approval before
installation of same.

(b) Lessee may install an eighteen inch (18") high by
four-foot (4') wide sign on the glass panel over its front door. Said sign
shall be white vinyl and surface-applied and shall be subject to Lessor's
reasonable approval. The defined copy area is attached as Exhibit "D-1".

(c) Lessee shall also be given the opportunity to have
shared signage on a monument sign to be installed by Lessor in front of the
building. Lessee's portion of the sign to be installed by Lessor. The copy
and graphics shall be in Lessee's corporate colors. A conceptual example of
such signage is attached as Exhibit "D-2". Lessee shall reimburse Lessor
$1,800.00 for such signage.

TWENTY-SECOND: All personal property placed or moved in the Premises
and tenant improvements to the Premises shall be at the risk of Lessee or the
owner thereof, and Lessor shall not be liable to Lessee for damages to same
unless caused by or due to gross negligence of Lessor, Lessor's agents or
employees. Lessee agrees to obtain liability insurance containing a single
limit of not less than $500,000.00 for both property and bodily injury, at
its own cost. Lessee consents to provide Lessor with a Certificate of
Insurance, as above described, naming Lessor as additional insured and
favoring the Lessor with a thirty (30) day notice of cancellation.

TWENTY-THIRD: Lessee is responsible for the maintenance and repair of
the Premises, including but not limited to plate glass windows, all doors, all
interior plumbing, the electrical and any items which the Lessee installs or has
others install. If Lessee or any agent employed by Lessee damages the roof,
the repair of said roof will be Lessee's sole responsibility. Lessee shall, at
its own cost and expense, enter into a regularly scheduled preventive
maintenance/service contract with a maintenance contractor reasonably approved
by Lessor, for servicing all heating and air conditioning systems and equipment
within the Premises. Such contract must become effective within thirty (30)
days of the date Lessee takes possession of the Premises.
<PAGE> 4
TWENTY-FOURTH: Lessee represents and warrants that Robert Mortenson of
Robert-Mortenson & Associates, Inc. is the only broker due a commission, fee or
other sum which is now or in the future may be due and payable with regard to
leasing, acquisition or other such matters related to the Demised Premises.
Said fee shall be paid by Lessor. Lessor and Lessee agree to indemnify and
hold each other harmless from any and all liability for the payment of any
other such commissions, fees and other sums.

TWENTY-FIFTH: Lessor agrees to maintain the roof, landscaping,
irrigation system, the exterior of the building the adjacent lake bank,
lighting, loading areas, parking areas, sidewalks and driveways, and to keep
the common areas reasonably clean of debris and to provide proper supervision
and security of such areas as necessary. Lessee agrees to pay in addition to
the rent set forth herein, Lessee's Proportionate Share of such costs (which
costs include a management fee of five percent (5%).

TWENTY-SIXTH: Lessor shall pay all taxes, assessments and levies
charged or assessed by any governmental authority, (hereinafter collectively
referred to as Taxes) upon its property in the building and Lessee's Premises
and Land, buildings or Premises in or upon which the Lessee's Premises are
located, and shall cause all-risk insurance to be maintained thereon in amounts
not to exceed the full replacement cost of the improvements constituting the
building from time to time. Lessee agrees to pay as additional rent, without
relief from valuation or appraisement laws, Lessee's Proportionate share of any
such taxes, of any premiums payable in respect of such insurance coverage,
and of any premiums payable in respect of public liability insurance and rental
insurance maintained by or for the Lessor in respect of the land and building.

TWENTY-SEVENTH: Lessee recognizes that the Premises are subject to
that certain Declaration of Protective Covenants and Restrictions for Miramar
Park of Commerce. Under the Declaration, Sunbeam Properties, Inc. currently
enforces the Declaration and operates and maintain the Common Area referred to
therein. The Lessee agrees to pay on behalf of Lessor, Lessee's Proportionate
Share of any and all maintenance or other assessments imposed by Sunbeam
Properties, Inc. (or its successor) on the Lessor as owner of the building as
provided in the Declaration. "Lessee's Proportionate Share" shall be the
fraction or ratio of the floor area of the Lessee's Premises divided by the
total floor area of the building.

TWENTY-EIGHTH: (a) Lessee shall pay $4,066.92 per month plus State
Sales Tax as an estimate of Lessee's Proportionate Share of the expenses
described in Paragraphs 25, 26 and 27. Said payment is in addition to all
other sums to be paid by Lessee including but not limited to rent. On an
annual basis, Lessor shall notify Lessee what the actual expenses were over the
previous calendar year and within ten (10) days of such notice, Lessee shall
pay (or receive a reimbursement) for the difference, if any, plus State Sales
Tax, between what Lessee paid as an estimate and the actual expenses. Lessee's
share for a partial calendar year at the beginning or and of the term of this
Lease shall be prorated on aa per diem basis. In the event that Lessor adjusts
its estimate of the expenses described in Paragraphs 25, 26 and 27 to more
accurately reflect the actual expenses incurred, Lessee's monthly estimated
payment of its Proportionate Share of such expenses shall be appropriately
adjusted.

(b) Notwithstanding anything to the contrary contained
herein, Lessee's estimated payments towards Lessee's Proportionate Share of
Expenses paid for July 1, 1995 thru December 31, 1995 shall not be subject to
adjustment as described in Paragraph 28(a) above.

(c) Notwithstanding anything to the contrary contained
hereinabove, Lessee's Proportionate Share of Expenses described in Paragraphs
25 and 27 shall not unreasonably exceed what is typical of similar quality
buildings located in first class business parks in Southwest Broward County.
This limitation on Lessee's Proportionate Share of Expenses shall exclude any
increases due to Force Majeure, utility costs, theft, vandalism or reasonable
increases in security. This limitation shall not apply to Lessee's
Proportionate share of real estate taxes and insurance as described in
Paragraph 26.
<PAGE> 5

(d) Notwithstanding anything to the contrary contained
herein, Lessee shall have no obligations to pay its Proportionate Share of
Expenses from April 1, 1995 thru June 30, 1995.

TWENTY-NINTH: (a) If the whole or any substantial part of the
Premises should be taken for any public or quasi-public use under governmental
law, ordinance or regulation, or by right of eminent remain, or by private
purchase in lieu thereof and the taking would prevent or materially interfere
with the use of the Premises for the purpose of which they are then being used,
this Lease shall terminate and the rent shall be abated during the unexpired
portion of this Lease, effective when the physical taking shall occur.

(b) If part of the Premises shall be taken for any
public or quasi-public use under any governmental law, ordinance or regulation,
or by right of eminent domain, or by private purchase in lieu thereof, and this
Lease is not terminated as provided in the subparagraph above, this Lease shall
not terminate but the rent payable hereunder during the unexpired portion of
this Lease shall be reduced to such extent as may be fair and reasonable under
all of the circumstances and Lessor shall undertake to restore the Premises to
a condition suitable for the Lessee's use, as near to the condition thereof
immediately prior to such taking as is a reasonably feasible under all the
circumstances.

(c) In the event of any such taking or private
purchase in lieu thereof, Lessor and Lessee shall each be entitled to receive
and retain such separate awards and/or portion of lump sum awards as may be
allocated to their respective interest in any condemnation proceedings;
provided that Lessee shall not be entitled to receive any award for Lessee's
loss of its Leasehold

<PAGE> 6
interest, the right to such award being hereby assigned by Lessee to Lessor.

THIRTIETH: Should Lessee hold over and remain in possession of the
Premises at the expiration of any term hereby created, Lessee shall, by virtue
of this paragraph, become a Lessee by the month at twice the Rent per month of
the last monthly installment of Rent above provided to be paid, which said
monthly tenancy shall be subject to all the conditions and covenants of this
Lease as though the same had been a monthly tenancy instead of a tenancy as
provided herein, and Lessee shall give to Lessor at least thirty (30) days'
written notice of any intention to remove from the Premises, and shall be
entitled to ten (10) days' notice from Lessor in the event Lessor desires
possession of the Premises; provided, however, that said Lessee by the month
shall not be entitled to ten (10) days' notice in the event the said Rent is
not paid in advance without demand, the usual ten (10) days' written notice
being hereby expressly waived.

THIRTY-FIRST: Notwithstanding anything to the contrary contained
elsewhere in this Lease, Lessor, at Lessor's option, at any time and from time
to time during the term of this Lease, may require that Lessee move to other
comparable space within the Miramar Park of Commerce upon giving Lessee sixty
(60) days advance written notice of such move. The substituted space shall
have approximately the same dimensions as the Premises. Base rent for the
substituted space shall be the lesser of the per square foot base rent
applicable under the Lease or the per square foot base rent for the substituted
space at the time Lessor serves written notice and request of Lessee to move to
the substituted space, whereupon Lessee shall continue to Lease the substituted
space upon the other terms and conditions as are herein provided. Lessor shall
pay for the cost of moving Lessee into the substituted space as well as the
cost of improving the substituted space to approximately the same interior
design and functionability as the Premises. Notwithstanding the
foregoing, If Lessee does not desire to move to the substituted space, then
Lessee shall have the right to terminate this Lease by giving Lessor written
notice of termination within fifteen (15) days after Lessee receives (from
Lessor) such notice to move. If Lessee so terminates this Lease, the
termination shall be effective upon the expiration of sixty (60) days
from the date of Lessor's notice to move, and upon the effective date of such
termination Lessee shall surrender possesion of the Premises to Lessor.

THIRTY-SECOND: Lessee shall be entitled to the use of eighty (80)
parking spaces on an unassigned, nonreserved basis. In its normal
course of business, Lessee will not cause more than said number of parking
spaces to be occupied at any one time by its employee or invitees.

THIRTY-THIRD: Lessee, its successors and assigns shall comply with the
Hazardous Materials Standard for the Miramar Park of Commerce attached hereto
as Exhibit "B"

THIRTY-FOURTH: Radon is a naturally occurring radioactive gas that,
when it has accumulated in a building in sufficient quantities, may
present health risks to persons who are exposed to it over time. Levels of
radon that exceed federal and state guidelines have been found in buildings in
Florida. Additional information may be obtained from your county public health
unit.
<PAGE> 7

THIRTY-FIFTH: In any case, where either party hereunto is required to
do any act, except the payment of rent or other money, the term for
the performance thereof shall be extended by a period equal to any delay
caused by or resulting from acts of God, the elements, weather, war, civil
commotion, fire or other casualty, strikes, lockouts, labor disturbances,
inability to procure labor or materials, failure of power, government
regulations or other causes beyond such party's reasonable control, whether
such time be designated by a fixed date, a fixed time or a "reasonable time".

THIRTY-SIXTH: Lessor's Improvements. Lessor agrees to complete at no
cost to Lessee the improvements described in Exhibit "C" and to
provide a Certificate of Occupancy for the Premises on or before April 1, 1995.
All of the improvements to be completed by Lessor including but not limited to
the restrooms, shall meet current ADA code. Lessor represents that the
building of which the Premises is a part to handicap accessible. All of
Lessor's Improvements shall come with a one (1) year warranty to cover
latent defects, nonconformity with the plans approved by Lessee and faulty
design. In addition, the air conditioning compressor(s) serving the Premises
shall carry a five (5) year warranty. In the event a Certificate of Occupancy
is issued for the Premises on a date other than April 1, 1995, Lessee and
Lessor agree to make the appropriate adjustments to the lease dates and rental
schedules described in this Lease. Such adjustments shall be verified in
writing.

THIRTY-SEVENTH: Right of First Refusal on Contiguous Space. Lessor
grants to Lessee, subject to the conditions outlined therein, an ongoing right
of first refusal to lease and occupy additional space that is contiguous to the
Premises. Upon Lessor's notification to Lessee of space availability,
Lessee shall have three (3) business days in which to exercise it's right
hereunder to lease the additional contiguous space at rental rate and on lease
terms acceptable to Lessor. In the event Lessor has an offer to lease such
contiguous space from a third party, Lessee may lease such space on the same
terms and conditions offered by the third party. Lessee's
right-of-first refusal is subject to Lessee having the same or better financial
condition as it had on the date of this Lease. In the event Lessee does not
sign and return to Lessor the lease for such space within three (3) business
days of receipt of a same from Lessor, Lessee shall be deemed to have waived
this right of first refusal. Notwithstanding anything to the
contrary, this right of first refusal is contingent upon there being no
defaults by Lessee under this Lease at such time.

THIRTY-EIGHTH: Renewal Option. Provided that there are no defaults
under this Lease at the time that the option herein set forth is exercised by
Lessee,

<PAGE> 8
this Lease may be renewed or extended for one (1) additional term of five (5)
years by Lessee giving written notice to Lessor of its interest to renew not
less than six (6) months prior to the expiration of the then current term. All
conditions and covenants of the Lease shall continue in full force and effect
during such additional term except that:

(a) Lessor's Improvements (Paragraph 36), and
Lessee's Right of First Refusal on Continguous Space (Paragraph 37) shall be
null and void;

(b) the monthly rent described in the Witnesseth
Paragraph on page 1 of this Lease shall be as follows:

$25,501.36 per month plus State Sales Tax from July 1, 2000 thru June 30, 2001;

$26,521.41 per month plus State Sales Tax from July 1, 2001 thru June 30, 2002;

$27,582.27 per month plus State Sales Tax from July 1, 2002 thru June 30, 2003;

$28,685.56 per month plus State Sales Tax from July 1, 2003 thru June 30, 2004;

$29,832.98 per month plus State Sales Tax from July 1, 2004 thru June 30, 2005;

THIRTY-NINTH: Puchase Cancellation Option. In the event Lessee closes
a transaction with Lessor for the purchase of land at the Miramar Park of
Commerce and constructs a building on such land, then Lessee may cancel this
Lease without penalty, so long as there are no defaults thereunder, upon giving
Lessor one-hundred eighty (180) days prior written notice. Said cancellation
shall be subject to Lessee obtaining a certificate of occupancy for said
building. Notwithstanding anything to the contrary contained hereinabove, this
Purchase Cancellation Option is subject to Lessee having been a tenant in good
standing under this Lease for a minimum of three (3) lease years.

IN WITNESS WHEREOF, the parties hereto have hereunto executed this
instrument for the purpose herein expressed, the day and year above written.

Signed, sealed and delivered in the presence of:

LESSOR: SUNBEAM PROPERTIES, INC.

/s/ Nancy Kwok /s/ Andrew L. Ansin
- ----------------------------------- -----------------------------------------
Witness Sign Name Andrew L. Ansin, Vice President

Nancy Kwok 12/30/94
- ----------------------------------- -----------------------------------------
Witness Print Name Date

/s/ Thomas J. Gomez
- -----------------------------------
Witness Print Name

Thomas J. Gomez
- -----------------------------------
Witness Print Name

LESSEE: Interest Trading Corp. d/b/a
Turbine Engine Technology, Corp.
--------------------------------

/s/ Jim Levy /s/ Donald A. Graw
- ----------------------------------- ------------------------------------
Witness Sign Name Sign

Jim Levy Donald A. Graw
- ----------------------------------- ------------------------------------
Witness Print Name Print

/s/ Robert Mortensen President & CEO
- ----------------------------------- ------------------------------------
Witness Sign Name Title

Robert Mortensen 12/28/94
- ----------------------------------- ------------------------------------
Witness Print Name Date

<PAGE> 1

EXHIBIT 10.8

Miramar Park of Commerce

BUSINESS LEASE

THIS LEASE, entered into this 13th day of November, 1995 between Sunbeam
Properties, Inc., hereinafter called the Lessor, party of the first part, and
Interstar Trading Corp. d/b/a AVTEAM (successor to Interstar Trading Corp.
d/b/a Turbine Engine Technology, Corp.) of the County of Dade and State of
Florida hereinafter called the Lessee or tenant, party of the second part:

WITNESSETH, That the said Lessor does this day Lease unto said Lessee, and
said Lessee does hereby hire and take as tenant 3820 Executive Way, Miramar, FL
33025 (218,309 square feet as shown on Exhibit "A" attached) situate in Miramar,
Florida, (the Premises) to be used and occupied by the Lessee as a warehouse and
for the disassembly of turbine engines and offices ancillary thereto and for no
other purposes or uses whatsoever without the express written consent of Lessor,
said consent not to be unreasonably withheld or delayed, for the term of Five
(5) years beginning the 1st day of January, 1996, and ending the 31st day of
December, 2000, at and for the agreed rental payable as follows:

$0.00 for the period from January 1, 1996 thru March 31, 1996;

$7,943.45 per month plus State Sales Tax from April 1, 1996 thru December 31,
1996;

$8,261.18 per month plus State Sales Tax from January 1, 1997 thru December 31,
1997;

$8,591.63 per month plus State Sales Tax from January 1, 1998 thru December 31,
1998;

$8,935.30 per month plus State Sales Tax from January 1, 1999 thru December 31,
1999;

$9,292.71 per month plus State Sales Tax from January 1, 2000 thru December 31,
2000;

Such payments are in addition to all other payments to be made under this Lease
by Lessee, including but not limited to those described in Paragraph 28.

Lessee hereby deposits $15,049.62 with Lessor for the following:
April 1 thru 30, 1996 Rent: $ 7,943.45
Lessee's Proportionate Share
of April 1 thru 30, 1996 Expenses (per Paragraph 28): $ 1,542.42
Sales Tax: $ 563.75
Security Deposit: $ 5,000.00
----------
Total: $15,049.62

Said security deposit shall to be refunded at the expiration of this Lease
provided Lease is in good standing at that time.

In the event the term of this Lease begins or ends on other than the first or
last day of a month, rent for such month(s) shall be prorated on a per diem
basis. In the event that any monthly rental payment due hereunder is not
received by Lessor by the fifth (5th) day of any month, said payment shall bear
a later charge of ten percent (10%) of the monthly payment which shall be then
due and payable.

The following express stipulations and conditions are made a part of this Lease
and are hereby assented to by the Lessee:

FIRST: The Lessee shall not assign this Lease, nor sub-let the Premises,
or any part thereof nor use the same, or any part thereof, nor permit the same,
or any part thereof, to be used for any other purpose than as above stipulated,
nor make any alterations therein, and all additions thereto, without the written
consent of the Lessor, said consent not to be unreasonably withheld or delayed,
and all additions, fixtures, or improvements which may be made by Lessee, except
movable office furniture, shall become the property of the Lessor and remain
upon the Premises as a part thereof, and be surrendered with the Premises at the
termination of this Lease.

SECOND: All personal property placed or moved in the Premises above
described shall be at the risk of the Lessee or owner thereof, and Lessor shall
not be liable for any damage to said personal property, or to the Lessee arising
from the bursting or looking of water pipes, or from any act of negligence of
any co-tenant or occupants of the building or of any other person whomsoever.

Fourth: In the event the Premises shall be destroyed or so damaged or
injured by fire or other casualty during the life of this Lease, whereby the
same shall be rendered untenantable, then the Lessor shall have the right to
render said Premises tenantable by repairs within said time, it shall be
optional with either party hereto to cancel this Lease, and in the event of
such cancellation the rent shall be paid only to the date of such fire or
casualty. The cancellation herein mentioned shall be evidenced in writing.

Fifth: The prompt payment of the rent for said Premises upon the
dates named, and the faithful observance of the rules and regulations printed
upon this Lease, and which are hereby made a part of this covenant, and of such
other and further rules or regulations as may be hereafter made by the Lessor,
are the conditions, upon which the Lease is made and accepted and any failure
on the part of the Lessee to comply with the terms of said Lease, or any of
said rules and regulations now in existence, or which may be hereafter
prescribed by the Lessor, shall at the option of the Lessor, work a forfeiture
of this Lease, his agents or attorneys, shall have the right to enter said
Premises, and remove all persons therefrom forcibly or otherwise, and the
Lessee thereby expressly waives any and all notice required by law to terminate
tenancy, and also waives any and all legal proceedings to recover possession of
said Premises, and expressly agree that in the event of a violation of any of
the terms of this Lease, or of said rules and regulations, now in existence, or
which may hereafter be made, said Lessor, his agent or attorneys, may
immediately re-enter said Premises and dispossess Lessee without legal notice or
the institution of any legal proceedings whatsoever.

Sixth: If the Lessee shall abandon or vacate said Premises before the
end of the term of this Lease, or shall suffer the rent to be in arrears, the
Lessor may, at his option, forthwith cancel this Lease or he may enter said
Premises as the agent of the Lessee, by force or otherwise, without being
liable in any way therefor, and relate the Premises with or without any
furniture that may be therein, as the agent of the Lessee, at such price and
upon such terms and for such duration of time as the Lessor may determine, and
receive the rent therefor, applying the same to the payment of the rent due by
these presents, and if the full rental herein provided shall not be realized by
Lessor over and above the expenses to Lessor in such re-letting, the said
Lessee shall pay any deficiency, and if more than the full rental in realized
Lessor will pay over to said Lessee the excess of demand.

Seventh: Lessee agree to pay the cost of collection and ten percent
attorney's fee on any part of said rental that may be collected by suit or by
attorney, after the same is past due.

Eighth: The Lessee agrees that it will pay all charges for rent, gas,
electricity or other illumination, and for all water used on said Premises, and
should said charges for rent, light or water herein provided for at any time
remain due and unpaid for the space of five days after the same shall have
become due, the Lessor may at its option consider the said Lessee tenant at
sufferance and immediately re-enter upon said Premises and the entire rent for
the rental period then next ensuing shall at once be due and payable and may
forthwith be collected by distress or otherwise.

Ninth: The said Lessee hereby pledges and assigns to the Lessor all
the furniture, fixtures, goods, and chattels of said Lessee, which shall or may
be brought or put on said Premises as security for the payment of the rent
herein reserved, and the Lessee agrees that the said lien may be enforced by
distress foreclosure or otherwise at the election of the said Lessor, and does
hereby agree to pay attorney's fees of ten percent of the amount so collected
or found to be due, together with all costs and charges therefore incurred or
paid by Lessor.

Tenth: (Intentionally Deleted)

Eleventh: The Lessor, or any of its agents, shall have the right to
enter said Premises during all reasonable hours, to examine the same to make
such repairs, additions or alterations as may be deemed necessary for the
safety, comfort, or preservation thereof, or of said building, or to exhibit
said Premises, and to put or keep upon the doors or windows thereof a notice
"For Rent" at the time within thirty (30) days before the expiration of this
Lease. The right of entry shall likewise exist for the purpose of removing
placards, signs, fixtures, alterations, or additions, which do not conform to
this Lease, or to the rules and regulations of the building.

Twelfth: Lessee hereby accepts the Premises in the condition they are
in at the beginning of this Lease and agrees to maintain said Premises in the
same condition, order and repair as they are at the commencement of said term,
excepting only reasonable wear and tear arising from the use thereof under this
Lease, and to make good to said Lessor immediately upon demand, any damage to
water apparatus, or electric lights, or any fixtures, appliances or
appurtenances of said Premises, or of the building, caused by any act or
neglect of Lessee, or of any person or persons in the employ or under the
control of the Lessee.

Thirteenth: (a) It is expressly agreed and understood by and
between the parties to this Lease, that the Lessor shall not be liable for any
damage or injury by water, which may be sustained by the said tenant or other
person or for any other damage or injury resulting from the carelessness,
negligence, or improper conduct on the part of any other tenant or agents, or
employees, or by reason of the breakage, leakage, or obstruction of the water,
sewer or soil pipes, or other leakage in or about the said building.

<PAGE> 3
(b) Except for Lessor's negligence or intentional acts and
except as may be specifically provided elsewhere in this Lease, Lessor shall not
be liable for any damage or injury to any person or property whether it be to
the person or property of the Lessee, its employees, agents, invitees, licensees
or guests by reason of Lessee's occupancy of the Premises or because of fire,
flood, windstorm, water, acts of God or third parties or for any other reason
beyond the control of Lessor. Lessee agrees to indemnify and save harmless
Lessor from and against any and all loss, damage, claim demand, liability or
expense, including reasonable attorney's fees at trial and upon appeal, by
reason of damage to person or property which may arise or be claimed to have
arisen as a result of Lessee's occupancy or use of the Premises, Building and/or
property of which the Premises is a part by Lessee, its employees, agents,
invitees, licensees or guests, or in connection therewith, or in any way arising
on account of any injury or damage caused to any person or property on or in the
Premises.

FOURTEENTH: If the Lessee shall become insolvent or if bankruptcy
proceedings shall be begun by or against the Lessee, before the end of said term
the Lessor is hereby irrevocably authorized at its option, to forthwith cancel
receiver, trustee, or other judicial officer during the term of their occupancy
in their fiduciary capacity without effecting Lessor's rights as contained in
this Lease, but no receiver, trustee or other judicial officer shall ever have
any right, title or interest in or to the above described Premises by virtue of
this Lease.

FIFTEENTH: Lessee hereby waives and renounces for itself and family any
and all homestead and exemption rights he may have now or hereafter, under or by
virtue of the constitution and laws of the State of Florida, or of any other
state, or of the United States, as against the payment of said rental or any
portion hereof, or any other obligation or damage that may accrue under the
terms of this Lease.

SIXTEENTH: This Lease shall bind the Lessee and its assigns or successors,
and the heirs, assigns, administrators, legal representatives, executors or
successors as the case may be, of the Lessee.

SEVENTEENTH: It is understood and agreed between the parties hereto that
time is of the essence of this Lease and this applies to all terms and
conditions contained herein.

EIGHTEENTH: It is understood and agreed between the parties hereto that
written notice mailed or delivered to the Premises Leased hereunder shall
constitute sufficient notice to the Lessee and written notice mailed or
delivered to the office of the Lessor shall constitute sufficient notice to the
Lessor, to comply with the terms of this Lease.

TWENTIETH: It is further understood and agreed between the parties hereto
that any charges against the Lessee by the Lessor for services or for work done
on the Premises by order of the Lessee or otherwise accruing under this Lease
shall be considered as rent due and shall be included in any lien for rent due
and unpaid.

TWENTY-FIRST: (a) It is hereby understood and agreed that any signs or
advertising to be used, including awnings, in connection with the Premises
leased hereunder shall be first submitted to the Lessor for approval before
installation of same.

(b) Lessee may install an eighteen inch (18") high by
four-foot (4') wide sign on the glass panel over its front door. Said sign shall
be white vinyl and surface-applied and shall be subject to Lessor's reasonable
approval. The defined copy area is attached as Exhibit "D-1".

(c) Lessee shall also be given the opportunity to have
shared signage on a monument sign to be installed by Lessor in front of the
building. Lessee's portion of the sign shall be installed by Lessor. The copy
and graphics shall be in Lessee's corporate colors. A conceptual example of such
signage is attached as Exhibit "D-2". Lessee shall reimburse Lessor $1,800.00
for such signage.

TWENTY-SECOND: All personal property placed or moved in the Premises and
tenant improvements to the Premises shall be at the risk of Lessee or the owner
thereof, and Lessor shall not be liable to Lessee for damages to same unless
caused by or due to gross negligence of Lessor, Lessor's agents or employees.
Lessee agrees to obtain liability insurance containing a single limit of not
less than $500,000.00 for both property and bodily injury, at its own cost.
Lessee consents to provide Lessor with a Certificate of Insurance, as above
described, naming Lessor as additional insured and favoring the Lessor with a
thirty (30) day notice of cancellation.

TWENTY-THIRD: Lessee is responsible for the maintenance and repair of the
Premises, including but not limited to plate glass windows, all doors, all
interior plumbing, the electrical and any items which the Lessee installs or has
others install. If Lessee or any agent employed by Lessee damages the roof, the
repair of said roof will be Lessee's sole responsibility. Lessee shall, at its
own cost and expense, enter into a regularly scheduled preventive
maintenance/service contract with a maintenance contractor reasonably approved
by Lessor, for servicing all heating and air conditioning systems and equipment
within the Premises. Such contract must become effective within thirty (30) days
of the date Lessee takes possession of the Premises.
<PAGE> 4
TWENTY-FOURTH: Lessee represents and warrants that Robert Mortensen of
Robert Mortensen & Associates, Inc. is the only broker due a commission, fee or
other sum which is now or in the future may be due and payable with regard to
leasing, acquisition or other such matters related to the Demised Premises.
Said fee shall be paid by Lessor. Lessor and Lessee agree to indemnify and
hold each other harmless from any and all liability for the payment of any
other such commissions, fees and other sums.

TWENTY-FIFTH: Lessor agrees to maintain the roof, landscaping,
irrigation system, the exterior of the building, the adjacent lake bank,
lighting, loading areas, parking areas, sidewalks and driveways, and to keep
the common areas reasonably clean of debris and to provide proper supervision
and security of such areas as necessary. Lessee agrees to pay in addition to
the rent set forth herein, Lessee's Proportionate Share of such costs (which
costs include a management fee of five percent (5%)).

TWENTY-SIXTH: Lessor shall pay all taxes, assessments and levies
charged or assessed by any governmental authority, (hereinafter collectively
referred to as Taxes) upon its property in the building and Lessee's Premises
and land, buildings or Premises in or upon which the Lessee's Premises are
located, and shall cause all-risk insurance to be maintained thereon in amounts
not to exceed the full replacement cost of the improvements constituting the
building from time to time. Lessee agrees to pay as additional rent, without
relief from valuation or appraisement laws, Lessee's Proportionate Share of any
such taxes, of any premiums payable in respect of such insurance coverage, and
of any premium payable in respect of public liability insurance and rental
insurance maintained by or for the Lessor in respect of the land and building.

TWENTY-SEVENTH: Lessee recognizes that the Premises are subject to that
certain Declaration of Protective Covenants and Restrictions for Miramar Park
of Commerce. Under the Declaration, Sunbeam Properties, Inc. currently
enforces the Declaration and operates and maintains the Common Area referred to
therein. The Lessee agrees to pay on behalf of Lessor, Lessee's Proportionate
Share of any and all maintenance or other assessments imposed by Sunbeam
Properties, Inc. (or its successor) on the Lessor as owner of the building as
provided in the Declaration. "Lessee's Proportionate Share" shall be the
fraction or ratio of the floor area of the Lessee's Premises divided by the
total floor area of the building.

TWENTY-EIGHTH: (a) Lessee shall pay $1,542.42 per month plus State
Sales Tax as an estimate of Lessee's Proportionate Share of the expenses
described in Paragraphs 25, 26 and 27. Said payment is in addition to all
other sums to be paid by Lessee including but not limited to rent. On an
annual basis, Lessor shall notify Lessee what the actual expenses were over the
previous calendar year and within ten (10) days to such notice, Lessee shall
pay (or receive a reimbursement) for the difference, if any, plus State Sales
Tax, between what Lessee paid as an estimate and the actual expenses. Lessee's
share for a partial calendar year at the beginning or end of the term of this
Lease shall be prorated on a per diem basis. In the event that Lessor adjusts
its estimate of the expenses described in Paragraphs 25, 26 and 27 to more
accurately reflect the actual expenses incurred, Lessee's monthly estimated
payment of its Proportionate Share of such expenses shall be appropriately
adjusted.

(b) <INTENTIONALLY DELETED>

(c) Notwithstanding anything to the contrary contained
hereinabove, Lessee's Proportionate Share of Expenses described in Paragraphs
25 and 27 shall not unreasonably exceed what is typical for similar quality
buildings located in first class business parks in Southwest Broward County.
This limitation on Lessee's Proportionate Share of Expenses shall exclude any
increases due to Force Majeure, utility costs, theft, vandalism or reasonable
increases in security. This limitation shall not apply to Lessee's
Proportionate share of real estate taxes and insurance as described in
Paragraph 26.

(d) Notwithstanding anything to the contrary contained
herein, Lessee shall have no obligation to pay its Proportionate Share of
Expenses from January 1, 1996 through March 31, 1996.

TWENTY-NINTH: (a) If the whole or any substantial part of the
Premises should be taken for any public or quasi-public use under governmental
law, ordinance or regulation, or by right of eminent domain, or by private
purchase in lieu thereof and the taking would prevent or materially interfere
with the use of the Premises for the purpose of which they are then being used,
this Lease shall terminate and the rent shall be abated during the unexpired
portion of this Lease, effective when the physical taking shall occur.

(b) If part of the Premises shall be taken for any
public or quasi-public use under any governmental law, ordinance or regulation,
or by right of eminent domain, or by private purchase in lieu thereof, and this
Lease is not terminated as provided in the Subparagraph above, this Lease shall
not terminate but the rent payable hereunder during the unexpired portion of
this Lease shall be reduced to such extent as may be fair and reasonable under
all of the circumstances and Lessor shall undertake to restore the Premises to
a condition suitable for the Lessee's use, as near to the condition thereof
immediately prior to such taking as is a reasonably feasible under all the
circumstances.

(c) In the event of any such taking or private purchase
in lieu thereof, Lessor and Lessee shall each be entitled to receive and retain
such separate awards and/or portion of lump sum awards as may be allocated to
their respective interest in any condemnation proceedings; provided that Lessee
shall not be entitled to receive any award for Lessee's loss of its Leasehold
interest, the right to such award being hereby assigned by Lessee to Lessor.

THIRTIETH: Should Lessee hold over and remain in possession of the
<PAGE> 5
Premises at the expiration of any term hereby created, Lessee shall, by virtue
of this paragraph, become a Lessee by the month at twice the Rent per month of
the last monthly installment of Rent above provided to be paid, which said
monthly tenancy shall be subject to all the conditions and covenants of this
Lease as though the same had been a monthly tenancy instead of a tenancy as
provided herein, and Lessee shall give to Lessor at least thirty (30) days'
written notice of any intention to remove from the Premises, and shall be
entitle to ten (10) days' notice from Lessor in the event Lessor desires
possession of the Premises; provided, however, that said Lessee by the month
shall not be entitled to ten (10) days' notice in the event the said Rent is
not paid in advance without demand, the usual ten (10) days' written notice
being hereby expressly waived.

THIRTY-FIRST: Notwithstanding anything to the contrary contained
elsewhere in this Lease, Lessor, at Lessor's option, at any time and from time
to time during the term of this Lease, may require that Lessee move to other
comparable space within the Miramar Park of Commerce upon giving Lessee sixty
(60) days advance written notice of such move. The substituted space shall
have approximately the same dimensions as the Premises. Base rent for the
substituted space shall be the lesser of the per square foot base rent
applicable under the Lease or the square foot base rent for the substituted
space at the time Lessor serves written notice and request of Lessee to move to
the substituted space, whereupon Lessee shall continue to Lease the substituted
space upon the other terms and conditions as are herein provided. Lessor shall
pay for the cost of moving Lessee into the substituted space as well as the
cost of improving the substituted space to approximately the same interior
design and functionability as the Premises. Notwithstanding the foregoing, If
Lessee does not desire to move to the substituted space, then Lessee shall have
the right to terminate this Lease by giving Lessor written notice of
termination within fifteen (15) days after Lessee receives (from Lessor) such
notice to move. If Lessee so terminates this Lease, the termination shall be
effective upon the expiration of sixty (60) days from the date of Lessor's
notice to move, and upon the effective date of such termination Lessee shall
surrender possession of the Premises to Lessor.

THIRTY-SECOND: Lessee shall be entitled to the use of twenty-three
(23) parking spaces on an unassigned, nonreserved basis. In its normal course
of business, Lessee will not cause more than said number of parking spaces to
be occupied at any one time by its employees or invitees.

THIRTY-THIRD: Lessee, its successors and assigns shall comply with the
Hazardous Materials Standard for the Miramar Park of Commerce attached hereto
as Exhibit "B".

THIRTY-FOURTH: Radon is a naturally occurring radioactive gas that,
when it has accumulated in a building in sufficient quantities, may present
health risks to persons who are exposed to it over time. Levels of radon that
exceed federal and state guidelines have been found in buildings in Florida.
Additional information may be obtained from your county public health unit.

THIRTY-FIFTH: In any case, where either party hereto is required to do
any act, except the payment of rent or other money, the term for the performance
thereof shall be extended by a period equal to any delay caused by or resulting
from acts of God, the elements, weather, war, civil commotion, fire or other
casualty, strikes, lockouts, labor disturbances, inability to procure labor or
materials, failure of power, government regulations or other causes beyond such
party's reasonable control, whether such time be designated by a fixed date, a
fixed time or a "reasonable time".

THIRTY-SIXTH: Lessor's Improvements. Lessor agrees to complete at no
cost to Lessee the improvements described in Exhibit "C" and to provide a
Certificate of Occupancy for the Premises on or before January 1, 1996. All of
the improvements to be completed by Lessor including but not limited to the
restrooms, shall meet current ADA code. Lessor represents that the building of
which the Premises is a part is handicap accessible. All of Lessor's
Improvements shall come with a one (1) year warranty to cover latent defects
nonconformity with the plans approved by Lessee and faulty design. In
addition, the air conditioning compressor(s) serving the Premises shall carry a
five (5) year warranty. In the event a Certificate of Occupancy is issued for
the Premises on a date other than January 1, 1996, Lessee and Lessor agree to
make the appropriate adjustments to the lease dates and rental schedules
described in this Lease. Such adjustments will continue to provide that the
first three (3) months of this Lease are rent free, that the lease expiration
date will remain as December 31, 2000 and the expiration date of the Lease
Renewal Term described in Paragraph 38 shall remain as July 31, 2005. Such
adjustments shall be verified in writing.

THIRTY-SEVENTH: Right of First Refusal on Contiguous Space. Lessor
grants to Lessee, subject to the conditions outlined herein, an ongoing right
of first refusal to lease and occupy additional space that is contiguous to the
Premises. Upon Lessor's notification to Lessee of space availability, Lessee
shall have three (3) business days in which to exercise it's right hereunder to
lease the additional contiguous space at rental rate and on lease terms
acceptable to Lessor. In the event Lessor has an offer to lease such
contiguous space from a third party, Lessee may lease such space on the same
terms and conditions offered by the third party. Lessee's right-of-first
refusal is subject to Lessee having the same or better financial condition as
it had on the date of this Lease. In the event Lessee does not sign and return
to Lessor the lease for such space within three (3) business days of receipt of
a same from Lessor, Lessee shall be deemed to have waived this right of first
refusal. Notwithstanding anything to the contrary, this right of first refusal
is contingent upon there being no defaults by Lessee under this Lease at such
time.

THIRTY-EIGHTH: Renewal Option. Provided that there are no defaults
under
<PAGE> 6
this Lease at the time that the option herein set forth is exercised by Lessee,
this Lease may be renewed or extended for one (1) additional term of four (4)
years and seven (7) months by Lessee giving written notice to Lessor of its
interest to renew not less than six (6) months prior to the expiration of the
then current term. All conditions and covenants of the Lease shall continue in
full force and effect during such additional term except that:

(a) Lessor's Improvements (Paragraph 36), and Lessee's
Right of First Refusal on Contiguous Space (Paragraph 37) shall be null and
void;

(b) the monthly rent described in the Witnesseth
Paragraph on page 1 of this Lease shall be as follows:

$9,664.42 per month plus State Sales Tax from January 1, 2001 thru December 31,
2001;

$10,051.00 per month plus State Sales Tax from January 1, 2002 thru December 31,
2002;

$10,453.03 per month plus State Sales Tax from January 1, 2003 thru December 31,
2003;

$10,871.15 per month plus State Sales Tax from January 1, 2004 thru December 31,
2004;

$11,305.00 per month plus State Sales Tax from January 1, 2005 thru July 31,
2005;

THIRTH-NINTH: Purchase Cancellation Option. In the event Lessee closes
a transaction with Lessor for the purchase of land at the Miramar Park of
Commerce and constructs a building on such land, then Lessee may cancel this
Lease without penalty, so long as there are no defaults thereunder, upon
giving Lessor one-hundred eighty (180) days prior written notice. Said
cancellation shall be subject to Lease obtaining a certificate of occupancy for
said building. Notwithstanding anything to the contrary contained hereinabove,
this Purchase cancellation option is subject to Lessee having been a tenant in
good standing under this Lease for a minimum of three (3) lease years.

IN WITNESS WHEREOF, the parties hereto have hereunto executed this
instrument for the purpose herein expressed, the day and year above written.

Signed, sealed and delivered in the purpose of:

LESSOR: SUNBEAM PROPERTIES, INC.

/s/ David Garrett /s/ Andrew L. Ansin, V.P
- ---------------------------------- ------------------------------------------
Witness Sign Name Andrew L. Ansin, Vice President

David Garrett 11/13/95
- ---------------------------------- ------------------------------------------
Witness Print Name Date

/s/ John Wachter
- ----------------------------------
Witness Sign Name

John Wachter
- ----------------------------------
Witness Print Name

LESSEE: INTEREST TRADING CORP. d/b/a
AVTEAM (successor to Interstar Trading
Corp. d/b/a Turbine Engine Technology,
Corp.)

/s/ David Garrett /s/ Donald A. Graw
- ---------------------------------- ------------------------------------------
Witness Sign Name Sign

David Garrett Donald A. Graw
- ---------------------------------- ------------------------------------------
Witness Print Name Print

/s/ John Wachter President and CEO
- ---------------------------------- ------------------------------------------
Witness Sign Name Title

John Wachter 11/13/95
- ---------------------------------- ------------------------------------------
Witness Print Name Date

<PAGE> 1

Exhibit 10.9

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (the "Agreement") is effective as of
April 12, 1996 between AVTEAM, INC., a Florida corporation (the Company"), and
Donald A. Graw (the "Indemnitee").

WITNESSETH:

WHEREAS, it is essential to the Company to retain and attract as
directors and officers the most capable persons available;

WHEREAS Indemnitee is a [officer director] of the Company;

WHEREAS, both the Company and Indemnitee recognize the increased risk
of litigation and other claims being asserted against directors and officers of
public companies in today's environment; and

WHEREAS, in recognition of Indemnitee's need for substantial
protection against personal liability in order to enhance Indemnitee's
continued service to the Company in an effective manner and in part to provide
Indemnitee with specific contractual assurance that the indemnification
protection provided by the Articles of Incorporation of the Company, as amended
(the "Articles of Incorporation"), and Amended and Restated Bylaws of the
Company (the "Bylaws") will be available to Indemnitee (regardless of, among
other things, any amendment to or revocation of such Articles of Incorporation
and Bylaws or any change in the composition of the Company's Board of
Directors or acquisition transaction relating to the Company), and in order to
induce Indemnitee to continue to provide services to the Company as a director
and officer thereof, the Company wishes to provide in this Agreement for the
indemnification of and the advancing of expenses to Indemnitee to the fullest
extent (whether partial or complete) permitted by law and as set forth in this
Agreement, and, to the extent insurance is maintained, for the continued
coverage of Indemnitee under the Company's directors and officers' liability
insurance policies.

NOW, THEREFORE, in consideration of the premises and of Indemnitee
continuing to serve the Company directly or, at its request, another
enterprise, and intending to be legally bound hereby, the parties agree as
follows:

1. CERTAIN DEFINITIONS.

(a) Change in Control: shall be deemed to have occurred if (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended), other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or a
corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company,
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act),
directly or indirectly of securities of the Company representing twenty percent
(20%) or more of the total voting power represented
<PAGE> 2

by the Company's then outstanding Voting Securities, or (ii) during any period
of two (2) consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the Company and any new director whose
election by the Board of Directors or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof, or (iii) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would
result in the Voting Securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into Voting Securities of the surviving entity) at least eighty
percent (80%) of the total voting power represented by the Voting Securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation, or the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company (in one transaction or a series of transactions) of all or
substantially all the Company's assets.

(b) Claim: any threatened, pending or completed action, suit,
proceeding or alternate dispute resolution mechanism, or any inquiry, hearing
or investigation, whether conducted by the Company or any other party, that
Indemnitee in good faith believes might lead to the institution of any such
action, suit, proceeding or alternate dispute resolution mechanism, whether
civil, criminal, administrative, investigative or other.

(c) Expenses: include attorneys' fees and all other costs, travel
expenses, fees of experts, transcript costs, filing fees, witness fees,
telephone charges, postage, delivery service fees, expenses and obligations of
any nature whatsoever paid or incurred in connection with investigating,
defending, being a witness in or participating in (including on appeal), or
preparing to defend, be a witness in or participate in any Claim relating to
any Indemnifiable Event.

(d) Indemnifiable Event: any event or occurrence that takes place
either prior to or after the execution of this Agreement related to the fact
that Indemnitee is or was a director, officer, employee, agent or fiduciary of
the Company, or is or was serving at the request of the Company as a director,
officer, employee, trustee, agent or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise,
or by reason of anything done or not done by Indemnitee in any such capacity.

(e) Potential Change in Control: shall be deemed to have occurred
if (i) the Company enters into an agreement or arrangement, the consummation of
which would result in the occurrence of a Change in Control; (ii) any person
(including the Company) publicly announces an intention to take or to consider
taking actions which if consummated would constitute a

- 2 -
<PAGE> 3

Change in Control; (iii) any person, other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company acting in such
capacity or a corporation owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their ownership of
stock of the Company, who is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing ten percent (10%) or more
of the combined voting power of the Company's then outstanding Voting
Securities, increases his beneficial ownership of such securities by five
percent (5%) or more over the percentage so owned by such person on the date
hereof; or (iv) the Board of Directors adopts a resolution to the effect that,
for purposes of this Agreement, a Potential Change in Control has occurred.

(f) Reviewing Party: any appropriate person or body consisting of
a member or members of the Company's Board of Directors or any other person or
body appointed by the Board who is not a party to the particular Claim for
which Indemnitee is seeking indemnification, or Independent Legal Counsel.

(g) Independent Legal Counsel: Independent Legal Counsel shall
refer to an attorney, selected in accordance with the provisions of Section 3
hereof, who shall not have otherwise performed services for the Company or
Indemnitee within the last five years (other than in connection with seeking
indemnification under this Agreement). Independent Legal Counsel shall not be
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the
Company or Indemnitee in an action to determine Indemnitee's rights under this
Agreement, nor shall Independent Legal Counsel be any person who has been
sanctioned or censured for ethical violations of applicable standards of
professional conduct.

(h) Voting Securities: any securities of the Company which vote
generally in the election of directors.

2. BASIC INDEMNIFICATION ARRANGEMENT.

(a) In the event Indemnitee was, is or becomes a party to or
witness or other participant in, or is threatened to be made a party to or
witness or other participant in, a Claim by reasons of (or arising in part out
of) an Indemnifiable Event, the Company shall indemnify Indemnitee to the
fullest extent permitted by law as soon as practicable but in any event no
later than thirty (30) days after written demand is presented to the Company,
against any and all Expenses, judgments, fines, penalties and amounts paid in
settlement (including all interest, assessments and other charges paid or
payable in connection with or in respect of such Expenses, judgments, fines,
penalties or amounts paid in settlement) of such Claim and any federal, state,
local or foreign taxes imposed on the Indemnitee as a result of the actual or
deemed receipt of any payments under this Agreement (including the creation of
the trust referred to in Section 4 hereof). If so requested by Indemnitee,
the Company shall advance (within five (5) business days

- 3 -
<PAGE> 4

of such request) any and all Expenses to Indemnitee (an "Expense Advance").
Notwithstanding anything in this Agreement to the contrary and except as
provided in Section 5, prior to a Change in Control Indemnitee shall not be
entitled to indemnification pursuant to this Agreement in connection with any
Claim initiated by Indemnitee against the Company or any director or officer of
the Company unless the Company has joined in or consented to the initiation of
such Claim.

(b) Notwithstanding the foregoing, (i) the obligations of the
Company under Section 2(a) shall be subject to the condition that the Reviewing
Party shall not have determined (in a written opinion, in any case in which the
Independent Legal Counsel referred to in Section 3 hereof is involved) that
Indemnitee would not be permitted to be indemnified under applicable law, and
(ii) the obligation of the Company to make an Expense Advance pursuant to
Section 2(a) shall be subject to the condition that, if, when and to the extent
that the Reviewing Party determines that Indemnitee would not be permitted to
be so indemnified under applicable law, the Company shall be entitled to be
reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all
such amounts theretofore paid; provided, however, that if Indemnitee has
commenced legal proceedings in a court of competent jurisdiction to secure a
determination that Indemnitee should be indemnified under applicable law, any
determination made by the Reviewing Party that Indemnitee would not be
permitted to be indemnified under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any Expense
Advance until a final judicial determination is made with respect thereto (as
to which all rights of appeal therefrom have been exhausted or lapsed).
Indemnitee's obligation to reimburse the Company for Expense Advances shall be
unsecured and no interest shall be charged thereon. If there has not been a
Change in Control, the Reviewing Party shall be selected by the Board of
Directors, and if there has been such a Change in Control, (other than a Change
in Control which has been approved by a majority of the Company's Board of
Directors who were directors immediately prior to such Change in Control) the
Reviewing Party shall be the Independent Legal Counsel referred to in Section 3
hereof. If there has been no determination by the Reviewing Party or if the
Reviewing Party determines that Indemnitee substantively would not be permitted
to be indemnified in whole or in part under applicable law, Indemnitee shall
have the right to commence litigation in any court in the State of Florida
having subject matter jurisdiction thereof and in which venue is proper seeking
an initial determination by the court or challenging any such determination by
the Reviewing Party or any aspect thereof, or the legal or factual bases
therefor and the Company hereby consents to service of process and to appear in
any such proceeding. Any determination by the Reviewing Party otherwise shall
be conclusive and binding on the Company and Indemnitee.

3. CHANGE IN CONTROL. The Company agrees that if there is a
Change in Control of the Company (other than a Change in Control which has been
approved by a majority of the Company's Board of Directors who were directors
immediately prior to such Change in Control) then Independent Legal Counsel
shall be selected by Indemnitee and approved by the Company (which approval
shall not be unreasonably withheld) and such Independent Legal

- 4 -
<PAGE> 5

Counsel shall determine whether the officer or director is entitled to
indemnity payments and Expense Advances under this Agreement or any other
agreement of Articles of Incorporation or Bylaws of the Company now or
hereafter in effect relating to Claims for Indemnifiable Events. Such
Independent Legal Counsel, among other things, shall render its written opinion
of the Company and Indemnitee as to whether and to what extent the Indemnitee
will be permitted to be indemnified. The Company agrees to pay the reasonable
fees of the Independent Legal Counsel and to indemnify fully such Independent
Legal Counsel against any and all expenses (including attorneys' fees), claims,
liabilities and damages arising out of or relating to this Agreement or the
engagement of Independent Legal Counsel pursuant hereto.

4. ESTABLISHMENT OF TRUST. In the event of a Potential Change in
Control, the Company shall, upon written request by Indemnitee, create a trust
for the benefit of Indemnitee and from time to time upon written request of
Indemnitee shall fund such trust in an amount sufficient to satisfy any and all
Expenses reasonably anticipated at the time of each such request to be incurred
in connection with investigating, preparing for and defending any Claim
relating to an Indemnifiable Event, and any and all judgments, fines, penalties
and settlement amounts of any and all Claims relating to an Indemnifiable
Event from time to time actually paid or claimed, reasonably anticipated or
proposed to be paid. The amount or amounts to be deposited in the trust
pursuant to the foregoing funding obligation shall be determined by the
Reviewing Party, in any case in which the Independent Legal Counsel referred to
above is involved. The terms of the trust shall provide that upon a Change in
Control (i) the trust shall not be revoked or the principal thereof invaded,
without the written consent of Indemnitee, (ii) the trustee shall advance,
within five (5) business days of a request by Indemnitee, any and all Expenses
to indemnitee (and Indemnitee hereby agrees to reimburse the trust under the
circumstances under which Indemnitee would be required to reimburse the Company
under Section 2(b) of this Agreement), (iii) the trust shall continue to be
funded by the Company in accordance with the funding obligation set forth
above, (iv) the trustee shall promptly pay to Indemnitee all amounts for which
Indemnitee shall be entitled to indemnification pursuant to this Agreement or
otherwise, and (v) all unexpended funds in such trust shall revert to the
Company upon a final determination by the Reviewing Party or a court of
competent jurisdiction, as the case may be, that Indemnitee has been fully
indemnified under the terms of this Agreement. The trustee shall be chosen by
Indemnitee. Nothing in this Section 4 shall relieve the Company of any of its
obligations under this Agreement. All income earned on the assets held in the
trust shall be reported as income by the Company for federal, state, local and
foreign tax purposes.

5. INDEMNIFICATION FOR ADDITIONAL EXPENSES. The Company shall
indemnify Indemnitee against any and all expenses (including attorneys' fees)
and, if requested by Indemnitee, shall (within five business days of such
request) advance such expenses to Indemnitee, which are incurred by Indemnitee
in connection with any claim asserted against or in connection with any action
brought by Indemnitee for (i) indemnification or advance payment of Expenses by
the Company under this Agreement or any other agreement or Certificate of

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<PAGE> 6

Incorporation or Bylaws of the Company now or hereafter in effect relating to
Claims for Indemnifiable Events and/or (ii) recovery under any directors' and
officers' liability insurance policies maintained by the Company, regardless of
whether Indemnitee ultimately is determined to be entitled to such
indemnification, advance expense payment or insurance recovery, as the case may
be.

6. PARTIAL INDEMNITY, ETC. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the Expenses, judgment, fines, penalties and amounts paid in
settlement of a Claim but not, however, for all of the total amount thereof,
the Company shall nevertheless indemnify Indemnitee for the portion thereof to
which Indemnitee is entitled. Moreover, notwithstanding any other provision of
this Agreement, to the extent that Indemnitee has been successful on the merits
or otherwise in defense of any or all Claims relating in whole or in party an
Indemnifiable Event or in defense of any issue or matter therein, including
dismissal without prejudice, Indemnitee shall be indemnified against all
Expenses incurred in connection therewith.

7. DEFENSE TO INDEMNIFICATION, BURDEN OF PROOF AND PRESUMPTIONS.
It shall be a defense to any action brought by the Indemnitee against the
Company to enforce this Agreement (other than an action brought to enforce a
claim for expenses incurred in defending a claim in advance of its final
disposition where the required undertaking has been tendered to the Company)
that the Indemnitee has not met the standards of conduct that make it
permissible under the Florida Business Corporation Act for the Company to
indemnify the Indemnitee for the amount claimed. In connection with any
determination by the Reviewing Party or otherwise as to whether the Indemnitee
is entitled to be indemnified hereunder, the burden of providing such a defense
shall be on the Company. Neither the failure of the Company (including its
Board of Directors, independent legal counsel, or its stockholders) to have
made a determination prior to the commencement of such action by the Indemnitee
that Indemnification of the claimant is proper under the circumstances because
he or she has met the applicable standard of conduct set forth in the Florida
Business Corporation Act, nor an actual determination by the Company (including
its Board of Directors, independent legal counsel, or its stockholders) that
the Indemnitee had not met such applicable standard of conduct, shall be a
defense to the action or create a presumption that the Indemnitee has not mete
the applicable standard of conduct. For purposes of this Agreement, the
termination of any claim, action, suit or proceeding, by judgment, order,
settlement (whether with or without court approval) or conviction, or upon a
plea of nolo contendere, or its equivalent, shall not create a presumption that
Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification is not
permitted by applicable law.

8. NON-EXCLUSIVITY, ETC.. The rights of Indemnitee hereunder
shall be in addition to any other rights Indemnitee may have under the
Certificate of Incorporation or Bylaws of the Company or the Florida Business
Corporation Act or otherwise. To the extent that

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<PAGE> 7

a change in the Florida Business Corporation Act (whether by statute or
judicial decision) permits greater indemnification by agreement than would be
afforded currently under the Certificate of Incorporation and Bylaws of the
Company and this Agreement, it is the intent of the parties hereto that
Indemnitee shall enjoy by this Agreement the greater benefits so afforded by
such change.

9. NO CONSTRUCTION AS EMPLOYMENT AGREEMENT. Nothing contained
herein shall be construed as giving Indemnitee any right to be retained in the
employ of the Company or any of its subsidiaries.

10. LIABILITY INSURANCE. To the extent the Company maintains an
insurance policy or policies providing directors' and officers' liability
insurance, Indemnitee shall be covered by such policy or policies, in
accordance with its or their terms, to the maximum extent of the coverage
available for any Company director or officer.

11. PERIOD OF LIMITATIONS. No legal action shall be brought and
no cause of action shall be asserted by or in the right of the Company or any
affiliate of the Company against Indemnitee, Indemnitee's spouse, heirs,
executors, administrators or personal or legal representatives after the
expiration of two years from the date of accrual of such cause of action, and
any claim or cause of action of the Company or its affiliate shall be
extinguished and deemed released unless asserted by the timely filing of a
legal action within such two-year period; provided, however, that if any
shorter period of limitations is otherwise applicable to any such cause of
action such shorter period shall govern.

12. AMENDMENTS, ETC. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.

13. SUBROGATION. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all papers required and shall do
everything that may be necessary to secure such rights, including the execution
of such documents necessary to enable the Company effectively to bring suit to
enforce such rights.

14. NO DUPLICATION OF PAYMENTS. The Company shall not be liable
under this Agreement to make any payment in connection with any claim made
against Indemnitee to the extent Indemnitee has otherwise actually received
payment (under any insurance policy, Articles of Incorporation or Bylaws of the
Company or otherwise) of the amounts otherwise indemnifiable hereunder.

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<PAGE> 8

15. BINDING EFFECT, ETC. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors, assigns, including any direct or indirect successor by
purchase, merger, consolidation or otherwise to all or substantially all of the
business and/or assets of the Company, spouses, heirs, and personal and legal
representatives. The Company shall require and cause any successor (whether
direct or indirect by purchase, merger, consolidation or otherwise) to all,
substantially all, or a substantial part, of the business and/or assets of the
Company, by written agreement in form and substance satisfactory to Indemnitee,
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent that the Company would be required to perform if no such
succession had taken place. This Agreement shall continue in effect regardless
of whether Indemnitee continues to serve as a director and officer of the
Company or of any other enterprise at the Company's request.

16. SEVERABILITY. The provisions of this Agreement shall be
severable in the event that any of the provisions hereof (including any
provision within a single section, paragraph of sentence) are held by a court
of competent jurisdiction to be invalid, void or otherwise unenforceable, and
the remaining provisions shall remain enforceable to the fullest extent
permitted by law. Furthermore, to the fullest extent possible, the provisions
of this Agreement (including, without limitation, each portion of this
Agreement containing any provision held to be invalid, void or otherwise
unenforceable, that is not itself invalid, void or unenforceable) shall be
construed so as to give effect to the intent manifested by the provision held
invalid, illegal or unenforceable.

17. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida applicable to
contracts made and to be performed in such state without giving effect to the
principles of conflicts of laws.

IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of ______________.

AVTEAM, INC., a Florida corporation
By:__________________________________
Name:________________________________
Title:_______________________________

_____________________________________
Donald A. Graw

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<PAGE> 1

Exhibit 10.10

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (the "Agreement") is effective as of
April 12, 1996 between AVTEAM, INC., a Florida corporation (the Company"), and
Jaime J. Levy (the "Indemnitee").

WITNESSETH:

WHEREAS, it is essential to the Company to retain and attract as
directors and officers the most capable persons available;

WHEREAS Indemnitee is an officer and director of the Company;

WHEREAS, both the Company and Indemnitee recognize the increased risk
of litigation and other claims being asserted against directors and officers of
public companies in today's environment; and

1. CERTAIN DEFINITIONS.

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(h) Voting Securities: any securities of the Company which vote
generally in the election of directors.

2. BASIC INDEMNIFICATION ARRANGEMENT.

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9. NO CONSTRUCTION AS EMPLOYMENT AGREEMENT. Nothing contained
herein shall be construed as giving Indemnitee any right to be retained in the
employ of the Company or any of its subsidiaries.

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<PAGE> 8

IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of ______________.

AVTEAM, INC., a Florida corporation
By:__________________________________
Name:________________________________
Title:_______________________________

_____________________________________
Jaime J. Levy

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<PAGE> 1

Exhibit 10.11

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (the "Agreement") is effective as of
April 12, 1996 between AVTEAM, INC., a Florida corporation (the Company"), and
Mark S. Koondel (the "Indemnitee").

WITNESSETH:

WHEREAS, it is essential to the Company to retain and attract as
directors and officers the most capable persons available;

WHEREAS Indemnitee is an officer and director of the Company;

WHEREAS, both the Company and Indemnitee recognize the increased risk
of litigation and other claims being asserted against directors and officers of
public companies in today's environment; and

1. CERTAIN DEFINITIONS.

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(h) Voting Securities: any securities of the Company which vote
generally in the election of directors.

2. BASIC INDEMNIFICATION ARRANGEMENT.

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9. NO CONSTRUCTION AS EMPLOYMENT AGREEMENT. Nothing contained
herein shall be construed as giving Indemnitee any right to be retained in the
employ of the Company or any of its subsidiaries.

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<PAGE> 8

IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of ______________.

AVTEAM, INC., a Florida corporation
By:__________________________________
Name:________________________________
Title:_______________________________

_____________________________________
Mark S. Koondel

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<PAGE> 1

Exhibit 10.12

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (the "Agreement") is effective as of
April 12, 1996 between AVTEAM, INC., a Florida corporation (the Company"), and
Leon Sragowicz (the "Indemnitee").

WITNESSETH:

WHEREAS, it is essential to the Company to retain and attract as
directors and officers the most capable persons available;

WHEREAS Indemnitee is a director of the Company;

WHEREAS, both the Company and Indemnitee recognize the increased risk
of litigation and other claims being asserted against directors and officers of
public companies in today's environment; and

1. CERTAIN DEFINITIONS.

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(h) Voting Securities: any securities of the Company which vote
generally in the election of directors.

2. BASIC INDEMNIFICATION ARRANGEMENT.

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9. NO CONSTRUCTION AS EMPLOYMENT AGREEMENT. Nothing contained
herein shall be construed as giving Indemnitee any right to be retained in the
employ of the Company or any of its subsidiaries.

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<PAGE> 8

IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of ______________.

AVTEAM, INC., a Florida corporation
By:__________________________________
Name:________________________________
Title:_______________________________

_____________________________________
Leon Sragowicz

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<PAGE> 1

Exhibit 10.13

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (the "Agreement") is effective as of
April 12, 1996 between AVTEAM, INC., a Florida corporation (the Company"), and
Robert Munson (the "Indemnitee").

WITNESSETH:

WHEREAS, it is essential to the Company to retain and attract as
directors and officers the most capable persons available;

WHEREAS Indemnitee is a director of the Company;

WHEREAS, both the Company and Indemnitee recognize the increased risk
of litigation and other claims being asserted against directors and officers of
public companies in today's environment; and

1. CERTAIN DEFINITIONS.

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(h) Voting Securities: any securities of the Company which vote
generally in the election of directors.

2. BASIC INDEMNIFICATION ARRANGEMENT.

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9. NO CONSTRUCTION AS EMPLOYMENT AGREEMENT. Nothing contained
herein shall be construed as giving Indemnitee any right to be retained in the
employ of the Company or any of its subsidiaries.

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<PAGE> 8

IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of ______________.

AVTEAM, INC., a Florida corporation
By:__________________________________
Name:________________________________
Title:_______________________________

_____________________________________
Robert Munson

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<PAGE> 1

Exhibit 10.14

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (the "Agreement") is effective as of
April 12, 1996 between AVTEAM, INC., a Florida corporation (the Company"), and
Richard Preston (the "Indemnitee").

WITNESSETH:

WHEREAS, it is essential to the Company to retain and attract as
directors and officers the most capable persons available;

WHEREAS Indemnitee is an officer and director of the Company;

WHEREAS, both the Company and Indemnitee recognize the increased risk
of litigation and other claims being asserted against directors and officers of
public companies in today's environment; and

1. CERTAIN DEFINITIONS.

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(h) Voting Securities: any securities of the Company which vote
generally in the election of directors.

2. BASIC INDEMNIFICATION ARRANGEMENT.

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9. NO CONSTRUCTION AS EMPLOYMENT AGREEMENT. Nothing contained
herein shall be construed as giving Indemnitee any right to be retained in the
employ of the Company or any of its subsidiaries.

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<PAGE> 8

IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of ______________.

AVTEAM, INC., a Florida corporation
By:__________________________________
Name:________________________________
Title:_______________________________

_____________________________________
Richard Preston

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<PAGE> 1

Exhibit 10.15

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (the "Agreement") is effective as of
March 20, 1997 between AVTEAM, INC., a Florida corporation (the Company"), and
Dallas Cobb (the "Indemnitee").

WITNESSETH:

WHEREAS, it is essential to the Company to retain and attract as
directors and officers the most capable persons available;

WHEREAS Indemnitee is an officer of the Company;

WHEREAS, both the Company and Indemnitee recognize the increased risk
of litigation and other claims being asserted against directors and officers of
public companies in today's environment; and

1. CERTAIN DEFINITIONS.

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(h) Voting Securities: any securities of the Company which vote
generally in the election of directors.

2. BASIC INDEMNIFICATION ARRANGEMENT.

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9. NO CONSTRUCTION AS EMPLOYMENT AGREEMENT. Nothing contained
herein shall be construed as giving Indemnitee any right to be retained in the
employ of the Company or any of its subsidiaries.

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<PAGE> 8

IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of ______________.

AVTEAM, INC., a Florida corporation
By:__________________________________
Name:________________________________
Title:_______________________________

_____________________________________
Dallas Cobb

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<PAGE> 1

Exhibit 10.16

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (the "Agreement") is effective as of
March 20, 1997 between AVTEAM, INC., a Florida corporation (the Company"), and
Bryan Thomas McFarland (the "Indemnitee").

WITNESSETH:

WHEREAS, it is essential to the Company to retain and attract as
directors and officers the most capable persons available;

WHEREAS Indemnitee is an officer of the Company;

WHEREAS, both the Company and Indemnitee recognize the increased risk
of litigation and other claims being asserted against directors and officers of
public companies in today's environment; and

1. CERTAIN DEFINITIONS.

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(h) Voting Securities: any securities of the Company which vote
generally in the election of directors.

2. BASIC INDEMNIFICATION ARRANGEMENT.

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9. NO CONSTRUCTION AS EMPLOYMENT AGREEMENT. Nothing contained
herein shall be construed as giving Indemnitee any right to be retained in the
employ of the Company or any of its subsidiaries.

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<PAGE> 8

IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of ______________.

AVTEAM, INC., a Florida corporation
By:__________________________________
Name:________________________________
Title:_______________________________

_____________________________________
Bryan Thomas McFarland

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<PAGE> 1

Exhibit 10.17

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (the "Agreement") is effective as of
March 20, 1997 between AVTEAM, INC., a Florida corporation (the Company"), and
Eugene P. Lynch (the "Indemnitee").

WITNESSETH:

WHEREAS, it is essential to the Company to retain and attract as
directors and officers the most capable persons available;

WHEREAS Indemnitee is a director of the Company;

WHEREAS, both the Company and Indemnitee recognize the increased risk
of litigation and other claims being asserted against directors and officers of
public companies in today's environment; and

1. CERTAIN DEFINITIONS.

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(h) Voting Securities: any securities of the Company which vote
generally in the election of directors.

2. BASIC INDEMNIFICATION ARRANGEMENT.

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9. NO CONSTRUCTION AS EMPLOYMENT AGREEMENT. Nothing contained
herein shall be construed as giving Indemnitee any right to be retained in the
employ of the Company or any of its subsidiaries.

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IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of ______________.

AVTEAM, INC., a Florida corporation
By:__________________________________
Name:________________________________
Title:_______________________________

_____________________________________
Eugene P. Lynch

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<PAGE> 1

Exhibit 10.18

AVTEAM, INC.

1996 STOCK OPTION PLAN

1. PURPOSE.

The AVTEAM, INC. 1996 Stock Option Plan (the "Plan") is
intended to provide to officers, directors, key employees and consultants of
the Corporation an opportunity to acquire a proprietary interest in the
Corporation, to encourage such key individuals to remain in the employ of or to
contract with the Corporation, and to attract and retain new employees,
consultants, and directors with outstanding qualifications. Pursuant to the
Plan, the Corporation may grant to officers, directors, consultants, and key
employees of the Corporation options to purchase shares of common stock of the
Corporation upon such terms and conditions as provided herein.

2. DEFINITIONS.

(a) "Affiliate" shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations that includes the Corporation
if each of such corporations, other than the last corporation in the chain,
owns at least 50% of the total voting power of one of the other corporations.

(b) "Board" shall mean the Board of Directors of the
Corporation.

(d) "Committee" shall mean the committee appointed by the
Board to administer the Plan, or if no such committee is appointed, the Board.

(e) "Common Stock" shall mean the Class A Common Stock,
par value $.01 per share of the Corporation.

(f) "Consultant" shall mean any person who, or any
employee of any firm which, is engaged by the Company or any Affiliate to
render consulting services and is compensated for such consulting services, and
any non- employee director of the Company whether compensated for such services
or not.

(g) "Corporation" shall mean AVTEAM, INC., a Florida
corporation.

<PAGE> 2

(h) "Effective Date" shall mean April 15, 1996.

(i) "Employee" shall mean any individual who is employed,
within the meaning of Section 3401 of the Code and the regulations thereunder,
by the Corporation or by any Affiliate. For purposes of the Plan and only for
purposes of the Plan, and in regard to Nonstatutory Stock Options but not for
Incentive Stock Options, a Consultant or director of the Corporation or any
Affiliate shall be deemed to be an Employee, and service as a Consultant or
director with the Corporation or any Affiliate shall be deemed to be
employment, but no Incentive Stock Option shall be granted to a Consultant or
director who is not an employee of the Corporation or any Affiliate within the
meaning of Section 3401 of the Code and the regulations thereunder. In the
case of a non-employee director or Consultant, the provisions governing when a
termination of employment has occurred for purposes of the Plan shall be set
forth in the written stock option agreement between the Optionee and the
Corporation, or, if not so set forth, the Committee shall have the discretion
to determine when a termination of "employment" has occurred for purposes of
the Plan.

(j) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.

(k) "Exercise Price" shall mean the price per Share at
which an Option may be exercised, as determined by the Committee and as
specified in the Optionee's stock option agreement.

(l) "Fair Market Value" shall mean the value of each Share
as determined by the Board.

(m) "Incentive Stock Option" shall mean an Option of the
type described in Section 422(b) of the Code.

(n) "Nonstatutory Stock Option" shall mean an Option of
the type not described in Section 422(b) or 423(b) of the Code.

(o) "Option" shall mean an option to purchase Common Stock
granted pursuant to the Plan.

(p) "Optionee" shall mean any person who holds an Option
pursuant to the Plan.

(q) "Plan" shall mean this stock option plan as it may be
amended from time to time.

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<PAGE> 3

(r) "Purchase Price" shall mean at any particular time the
Exercise Price times the number of Shares for which an Option is being
exercised.

(s) "Share" shall mean one share of authorized Common
Stock.

3. ADMINISTRATION.

(a) The Committee.

(i) The Board may administer the Plan or appoint a
Committee to administer the Plan. The Committee shall consist of not less than
two members who may also be members of the Board. Members of the Board or the
Committee who are either eligible for Options or have been granted Options may
vote on any matters affecting the administration of the Plan or the grant of
any Options pursuant to the Plan, except that no such member shall act upon the
granting of an Option to himself or herself, but any such member may be counted
in determining the existence of a quorum at any meeting of the Committee and
shall be excluded in determining unanimity of an act in writing, for any action
which is taken with respect to the granting of an Option to such member.

(ii) If the Corporation registers any class of any
equity security pursuant to Section 12 of the Exchange Act, from the effective
date of such registration until six months after the termination of such
registration, the Plan shall be administered by a Committee of directors which
shall consist of not less than two members, who during the one year prior to
service as an administrator of the Plan, shall not have been granted or awarded
equity securities pursuant to the Plan or any other plan of the Corporation or
any of its Affiliates except as permitted under Rule 16b-3 under the Exchange
Act which provides that participation in a formula plan meeting the conditions
of Rule 16(b)(3)(c)(2)(ii) or in an ongoing securities acquisition plan meeting
the conditions in Rule 16(b)(3)(d)(2)(i) shall not disqualify a member of the
Committee from serving as an administrator of the Plan. In addition, an
election to receive an annual retainer fee in either cash or an equivalent
amount of securities, or partly in cash and partly in securities, shall not
disqualify a member of the Committee from serving as an administrator of the
Plan.

The Board may from time to time designate individuals as
ineligible to participate in the Plan for a specified period in order to become
eligible to be a member of the Committee.

(b) Powers of the Committee.

Subject to the provisions of the Plan, the Committee shall
have the authority, in its discretion and on behalf of the Corporation:

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<PAGE> 4

(i) to grant Options;

(ii) to determine the Exercise Price per Share of
Options to be granted;

(iii) to determine the Employees to whom, and the
time or times at which, Options shall be granted and the number of Shares for
which an Option will be exercisable;

(iv) to interpret the Plan;

(v) to prescribe, amend, and rescind rules and
regulations relating to the Plan;

(vi) to determine the terms and provisions of each
Option granted and, with the consent of the holder thereof, modify or amend
each Option;

(vii) to accelerate or defer, with the consent of the
Optionee, the exercise date of any Option;

(viii) to authorize any person to execute on behalf of
the Corporation any instrument required to effectuate the grant of an Option
previously granted by the Committee;

(ix) with the consent of the Optionee, to reprice,
cancel and regrant, or otherwise adjust the Exercise Price of an Option
previously granted by the Committee; and

(x) to make all other determinations deemed necessary
or advisable for the administration of the Plan.

The Board shall have the authority to determine, upon
review of relevant information, the Fair Market Value of the Common Stock,
subject to the provisions of the Plan and irrespective of whether the Board has
appointed a Committee to administer the Plan. The Board may delegate this
authority to the Committee.

(d) Committee's Interpretation of the Plan.

The interpretation and construction by the Committee
of any provision of the Plan or of any Option granted hereunder shall be final
and binding on all parties claiming an interest in an Option granted under the
Plan. No member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any Option.

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<PAGE> 5

(e) All Committee Actions to be in Writing.

Any and all actions of the Committee taken in exercise
of the powers granted to it in this Section 3 shall be in writing.

4. PARTICIPATION.

(a) Eligibility.

The Optionees shall be such persons as the Committee
may select from among the Employees, provided that Consultants are not eligible
to receive Incentive Stock Options.

(b) Ten Percent Shareholders.

Any Employee who owns Stock possessing more than 10%
of the total combined voting power of all classes of outstanding stock of the
Corporation or any Affiliate shall not be eligible to receive an Option unless:

(i) the Exercise Price of the Shares subject to such
Option when granted is at least 110% of the Fair Market Value of such Shares,
and

(ii) such Option by its terms is not exercisable
after the expiration of five years from the date of grant.

For purposes of Section 4(b), in determining stock
ownership, an Employee shall be considered as owning the stock owned, directly
or indirectly, by or for his or her brothers and sisters, spouse, ancestors,
and lineal descendants. Stock owned, directly or indirectly, by or for a
corporation, partnership, estate, or trust shall be considered as being owned
proportionately by or for its shareholders, partners, or beneficiaries,
respectively. Stock with respect to which such Employee or any other person
holds an Option shall be disregarded.

(d) Outstanding Stock.

For purposes of Section 4(b), the term "outstanding
stock" shall include all stock actually issued and outstanding immediately
after the grant of the Option to the Optionee but shall not include any share
for which an Option is exercisable by any person.

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<PAGE> 6

5. SHARES.

(a) Shares Subject to This Plan.

The aggregate number of Shares which may be issued
upon exercise of Options under the Plan shall not exceed 600,000 shares of
Common Stock, subject to adjustment pursuant to Section 9 hereof.

(b) Options Not to Exceed Shares Available.

The number of Shares for which an Option is
exercisable at any time shall not exceed the number of Shares remaining
available for issuance under the Plan. If any Option expires or is terminated,
the number of Shares for which such Option was exercisable may be made
exercisable pursuant to other Options under the Plan. The limitations
established by this Section 5(b) shall be subject to adjustment in the manner
provided in Section 9 hereof upon the occurrence of an event specified therein.

6. TERMS AND CONDITIONS OF OPTIONS.

(a) Stock Option Agreements.

Options shall be evidenced by written stock option
agreements between the Optionee and the Corporation in such form as the
Committee shall from time to time determine. No Option or purported Option
shall be a valid and binding obligation of the Corporation unless so evidenced
in writing.

(b) Number of Shares.

Each stock option agreement shall state the number of
Shares for which the Option is exercisable and shall provide for the adjustment
thereof in accordance with Section 9 hereof. In no event shall the number of
shares subject to an Option or Options granted to any single Optionee exceed,
in the aggregate, in any one calendar year 200,000 shares.

An Optionee may not exercise his or her Option for any
Shares until the Option, in regard to such Shares, has vested. Each stock
option agreement shall include a vesting schedule which shall show when the
Option becomes exercisable provided, each Option shall vest at a rate of at
least twenty percent (20%) per year over a period of five (5) years with the
first 20% becoming exercisable on the first anniversary of the date the Options
were granted. The vesting schedule shall not impose upon the Corporation or
any Affiliate any obligation to

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<PAGE> 7

retain the Optionee in its employ or under contract for any period or otherwise
change the employment-at-will status of an Optionee who is an employee of the
Corporation or any Affiliate.

(d) Lapse of Options.

Each stock option agreement shall state the time or
times when the Option covered thereby lapses and becomes unexercisable in part
or in full. An Option shall lapse on the earliest of the following events
(unless otherwise determined by the Committee and reflected in an option
agreement):

(i) The tenth anniversary of the date of granting the
Option;

(ii) The first anniversary of the Optionee's death;
(iii) The first anniversary of the date the Optionee
ceases to be an Employee due to total and permanent disability;

(iv) On the date provided in Section 6(h)(i), unless
with respect to a Nonstatutory Stock Option, the Committee otherwise extends
such period before the applicable expiration date;

(v) On the date provided in Section 9 for a
transaction described in such Section;

(vi) The date the Optionee files or has filed against
him or her a petition in bankruptcy; or

(vii) The expiration date specified in an Optionee's
stock option agreement.

(e) Exercise Price.

Each stock option agreement shall state the Exercise
Price for the Shares for which the Option is exercisable. Subject to Section
4(b), the Exercise Price of an Incentive Stock Option and a Nonstatutory Stock
Option shall, when granted, be not less than 100% and 85% of the Fair Market
Value of the Shares for which the Option is exercisable, respectively, and not
less than the par value of the Shares.

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<PAGE> 8

(f) Medium and Time of Payment.

The Purchase Price shall be payable in full in cash
upon the exercise of an Option but the Committee may allow the Optionee to pay
the Purchase Price:

(i) by surrendering Shares in good form for transfer,
owned by the Optionee and having a Fair Market Value on the date of exercise
equal to the Purchase Price; or

(ii) in any combination of such consideration or such
other consideration and method of payment for the issuance of Shares to the
extent permitted under applicable law as long as the sum of the cash so paid,
the Fair Market Value of the Shares so surrendered, and the amount of any Note
equals the Purchase Price.

The Committee or a stock option agreement may
prescribe requirements with respect to the exercise of Options, including the
submission by the Optionee of such forms and

documents as the Committee may require and, the delivery by the Optionee of
cash sufficient to satisfy applicable withholding requirements. The Committee
may vary the exercise requirements and procedures from time to time to
facilitate, for example, the broker-assisted exercise of Options.

(g) Nontransferability of Options.

During the lifetime of the Optionee, the Option shall
be exercisable only by the Optionee or the Optionee's conservator or legal
representative and shall not be assignable or transferable except pursuant to a
qualified domestic relations order as defined by the Code. In the event of the
Optionee's death, the Option shall not be transferable by the Optionee other
than by will or the laws of descent and distribution.

(h) Termination of Employment Other than by Death or
Disability.

(i) If an Optionee ceases to be an Employee for any
reason other than his or her death or disability, the Optionee shall have the
right, subject to the provisions of this Section 6, to exercise any Option held
by the Optionee at any time within thirty (30) days after his or her
termination of employment, but not beyond the otherwise applicable term of the
Option and only to the extent that on such date of termination of employment
the Optionee's right to exercise such Option had vested.

(ii) For purposes of this Section 6(h), the
employment relationship shall be treated as continuing intact while the
Optionee is an active employee of the Corporation or any Affiliate, or is on
military leave, sick leave, or other bona fide leave of absence to be
determined in the sole discretion of the Committee. The preceding sentence
notwithstanding, in the case of

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<PAGE> 9

an Incentive Stock Option, employment shall be deemed to terminate on the
date the Optionee ceases active employment with the Corporation or any
Affiliate, unless the Optionee's reemployment rights are guaranteed by statute
or contract.

(i) Death of Optionee.

If an Optionee dies while an Employee, or after
ceasing to be an Employee but during the period while he or she could have
exercised an Option under Section 6(h), any Option granted to the Optionee may
be exercised, to the extent it had vested at the time of death and subject to
the Plan, at any time within 12 months after the Optionee's death, by the
executors or administrators of his or her estate or by any person or persons
who acquire the Option by will or the laws of descent and distribution, but not
beyond the otherwise applicable term of the Option.

(j) Disability of Optionee.

If an Optionee ceases to be an Employee due to
becoming totally and permanently disabled within the meaning of Section
22(e)(3) of the Code, any Option granted to the Optionee may be exercised to
the extent it had vested at the time of cessation and, subject to the Plan, at
any time within 12 months after the Optionee's termination of employment, but
not beyond the otherwise applicable term of the Option.

(k) Rights as a Shareholder.

An Optionee, or a transferee of an Optionee, shall
have no rights as a shareholder of the Corporation with respect to any Shares
for which his or her Option is exercisable until the date of the issuance of a
stock certificate for such Shares. No adjustment shall be made for dividends,
ordinary or extraordinary or whether in currency, securities, or other
property, distributions, or other rights for which the record date is prior to
the date such stock certificate is issued, except as provided in Section 9
hereof.

(l) Modification, Extension, and Renewal of Options.

Within the limitations of the Plan, the Committee may
modify, extend or renew outstanding Options or accept the cancellation of
outstanding Options for the granting of new Options in substitution therefor.
Notwithstanding the preceding sentence, no modification of an Option shall,
without the consent of the Optionee, alter or impair any rights or obligations
under any Option previously granted.

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<PAGE> 10

(m) Other Provisions.

The stock option agreements authorized under the Plan
may contain such other provisions which are not inconsistent with the terms of
the Plan, including, without limitation, restrictions upon the exercise of the
Option, as the Committee shall deem advisable.
Without limiting the generality of the foregoing, a
stock option agreement under the Plan may provide for accelerated vesting upon
specified corporate events (e.g., events specified in Section 9 hereof) or for
waiver of the option termination provision of Section 9(c) hereof, but in no
event may an option term be extended beyond the date indicated in Section 8.

7. $100,000 PER YEAR LIMITATION ON VESTING OF ISOs.

In accordance with section 422(d) of the Code, to the extent
that the Fair Market Value of Shares (determined for each Share as of the date
of grant of the Option covering such Share) subject to Options granted under
this Plan (or any other plan of the Corporation or any Affiliate) which are
designated as Incentive Stock Options and which become exercisable by an
Optionee for the first time during a single calendar year exceeds $100,000, the
Option(s) (or portion thereof) covering such Shares shall be recharacterized
(to the extent of such excess over $100,000) as a Nonstatutory Stock Option(s).
In determining which Option(s) shall be treated as Nonstatutory Stock Options
under the preceding sentence, the Options shall be taken into account in the
order granted, with the result that a later granted Option shall be
recharacterized as a Nonstatutory Stock Option prior to such recharacterization
of a previously granted Option.

8. TERM OF PLAN.

Options may be granted pursuant to the Plan until ten years
following the Effective Date, and all Options which are outstanding on such
date shall remain in effect until they are exercised or expire by their terms.
The Plan shall expire for all purposes on March 1, 2006.

9. RECAPITALIZATION, TAKEOVERS, AND LIQUIDATIONS.

(a) Reorganizations.

The number of Shares covered by the Plan, as provided
in Section 5 hereof, and the number of Shares for which each Option is
exercisable shall be proportionately adjusted for any increase or decrease in
the number of issued Shares resulting from the payment of a Common Stock
dividend, a stock split, a reverse stock split, a stock dividend,
recapitalization, combination or reclassification of the Corporation's stock or
any other event which results in an increase or decrease in the number of
issued Shares effected without receipt

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<PAGE> 11

of consideration by the Corporation, and the Exercise Price shall be
proportionately increased in the event the number of Shares subject to such
Option are decreased and shall be proportionately decreased in the event the
number of Shares subject to such Option are increased. For the purposes of
this paragraph, conversion of any convertible securities of the Corporation
shall not be deemed to have been "effected without receipt of consideration."
Adjustments shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided herein,
no issuance by the Corporation of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
subject to an Option.

(b) Liquidation.

In the event of the dissolution or liquidation of the
Corporation, each Option shall terminate immediately prior to the consummation
of such action. The Committee shall notify the Optionee not less than fifteen
(15) days prior to the proposed consummation of a pending dissolution or
liquidation, and the Option shall be exercisable as to all Shares which are
vested prior to expiration until immediately prior to the consummation of such
action.

Except as otherwise expressly provided in an
Optionee's stock option agreement, in the event of (i) a proposed merger of the
Corporation with or into another corporation, as a result of which the
Corporation is not the surviving corporation and (ii) the Option is not assumed
or an equivalent option substituted by the successor corporation or a parent or
subsidiary of the successor corporation, then in such case each Option shall
terminate immediately prior to the consummation of such transaction. The
Committee shall notify the Optionee not less than fifteen (15) days prior to
the proposed consummation of such transaction, and the Option shall be
exercisable as to all Shares which are vested prior to expiration and until
immediately prior to the consummation of such transaction.

(d) Determination by Committee.

All adjustments described in this Section 9 shall be
made by the Committee, whose determination shall be conclusive and binding on
all persons.

(e) Limitation on Rights of Optionee.

Except as expressly provided in this Section 9, no
Optionee shall have any rights by reason of any payment of any stock dividend,
stock split or reverse stock split or any other increase or decrease in the
number of shares of stock of any class, or by reason of any reorganization,
consolidation, dissolution, liquidation, merger, exchange, split-up or reverse

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<PAGE> 12

split-up, or spin-off of assets or stock of another corporation. Any issuance
by the Corporation of Shares, Options or securities convertible into Shares or
Options shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number or Exercise Price of the Shares for which an Option
is exercisable. Notwithstanding the foregoing, if the Corporation shall enter
into a transaction affecting the Corporation's capital stock or distributions
to the holders of its capital stock for which a revision in the terms of each
Option is not required pursuant to this Section 9, the Committee shall have the
right, but not the obligation, to revise the terms of each Option in a manner
the Committee, in its sole discretion, deems fair and reasonable given the
transaction involved. If necessary or appropriate in connection with such
transaction, the Committee may declare that any Option shall terminate as of a
date fixed by the Committee and give each Optionee the right to exercise his
Option in whole or in part, including exercise as to Shares to which the Option
would not otherwise be exercisable.

(f) No Restriction on Rights of Corporation.

The grant of an Option shall not affect or restrict in
any way the right or power of the Corporation to make adjustments,
reclassifications, reorganizations, or changes of its capital or business
structure, or to merge or consolidate, or to dissolve, liquidate, sell, or
transfer all or any part of its business or assets.

10. SECURITIES LAW REQUIREMENTS.

(a) Legality of Issuance.

No Share shall be issued upon the exercise of any
Option unless and until the Corporation has determined that:

(i) The Corporation and the Optionee have taken all
actions required to exempt the issuance of the Shares from the registration
requirements under the Securities Act of 1933, as amended (the "Act"), or the
Corporation and the Optionee shall determine that the registration requirements
of the Act do not apply to such exercise;

(ii) Any applicable listing requirement of any stock
exchange on which the Common Stock is listed has been satisfied; and

(iii) Any other applicable provision of state or
Federal law has been satisfied.

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<PAGE> 13

(b) Restrictions on Transfer; Representations of Optionee; Legends.

Regardless of whether the offering and sale of Shares
has been registered under the Act or has been registered or qualified under the
securities laws of any state, the Corporation may impose restrictions upon the
sale, pledge, or other transfer of such Shares, including the placement of
appropriate legends on stock certificates, if, in the judgment of the
Corporation and its counsel, such restrictions are necessary or desirable in
order to achieve compliance with the provisions of the Act, the securities laws
of any state, or any other law. If the sale of Shares is not registered under
the Act and the Corporation shall determine that the registration requirements
of the Act apply to such sale, but an exemption is available which requires an
investment representation or other representation, the Optionee shall be
required, as a condition to purchasing Shares by exercise of his or her Option,
to represent that such Shares are being acquired for investment, and not with a
view to the sale or distribution thereof, except in compliance with the Act,
and to make such other representations as are deemed necessary or appropriate
by the Corporation and its counsel. Stock certificates evidencing Shares
acquired pursuant to an unregistered transaction to which the Act applies shall
bear a restrictive legend substantially in the following form and such other
restrictive legends as are required or deemed advisable under the Plan or the
provisions of any applicable law:

"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR QUALIFIED
UNDER THE SECURITIES LAWS OF ANY STATE. THESE SHARES HAVE BEEN ACQUIRED
FOR INVESTMENT AND NOT WITH A VIEW TO OR FOR SALE IN CONNECTION WITH ANY
DISTRIBUTION THEREOF, AND MAY NOT BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED
OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION UNDER THE ACT
AND/OR QUALIFICATION UNDER ANY APPLICABLE STATE SECURITIES LAWS, OR WITHOUT
AN OPINION OF COUNSEL ACCEPTABLE TO THE CORPORATION AND ITS COUNSEL THAT
SUCH REGISTRATION OR QUALIFICATION IS NOT REQUIRED."

Any determination by the Corporation and its counsel in connection with any of
the matters set forth in this Section 10 shall be conclusive and binding on all
persons.

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<PAGE> 14

The Corporation may, but shall not be obligated to,
register or qualify the sale of Shares under the Act or any other applicable
law. In connection with any such registration or qualification, the
Corporation shall provide each Optionee with such information required pursuant
to all applicable laws and regulations.

(d) Exchange of Certificates.

If, in the opinion of the Corporation and its
counsel, any legend placed on a stock certificate representing Shares sold
hereunder is no longer required, the Optionee or the holder of such certificate
shall be entitled to exchange such certificate for a certificate representing
the same number of Shares but lacking such legend.

11. EXERCISE OF UNVESTED OPTIONS.

The Committee may grant any Optionee the right to exercise
any Option prior to the complete vesting of such Option. Without limiting the
generality of the foregoing, the Committee may provide that if an Option is
exercised prior to having completely vested, the Shares issued upon such
exercise shall remain subject to vesting at the same rate as under the Option
so exercised and shall be subject to a right, but not an obligation, of
repurchase by the Corporation with respect to all unvested Shares if the
Optionee ceases to be an Employee for any reason. For the purposes of
facilitating the enforcement of any such right of repurchase, at the request of
the Committee, the Optionee shall enter into the Joint Escrow Instructions with
the Corporation and deliver every certificate for his or her unvested Shares
with a stock power executed in blank by the Optionee and by the Optionee's
spouse, if required for transfer.

12. AMENDMENT OF THE PLAN.

The Board or the Committee may, from time to time,
terminate, suspend or discontinue the Plan, in whole or in part, or revise or
amend it in any respect whatsoever including, but not limited to, the adoption
of any amendment(s) deemed necessary or advisable to qualify the Options under
rules and regulations promulgated by the Securities and Exchange Commission
with respect to Employees who are subject to the provisions of Section 16 of
the Securities Exchange Act of 1934, as amended, or to correct any defect or
supply any omission or reconcile any inconsistency in the Plan or in any Option
granted thereunder, without approval of the shareholders of the Corporation,
but without the approval of the Corporation's shareholders, no such revision or
amendment shall:

(i) Increase the number of Shares subject to the
Plan, other than any increase pursuant to Section 9;

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<PAGE> 15

(ii) Materially modify the requirements as to
eligibility for participation in the Plan;

(iii) Materially increase the benefits accruing to
Optionees under the Plan;

(iv) Extend the term of the Plan; or

(v) Amend this Section 12 to defeat its purpose.

No amendment, termination or modification of the Plan shall affect any Option
theretofore granted in any material adverse way without the consent of the
Optionee.

13. APPLICATION OF FUNDS.

The proceeds received by the Corporation from the sale of
Common Stock pursuant to the exercise of an Option shall be used for general
corporate purposes.

14. APPROVAL OF SHAREHOLDERS.

The Plan shall be subject to approval by the affirmative
vote of the holders of a majority of all classes of the outstanding shares
present and entitled to vote at the first meeting of shareholders of the
Corporation following the adoption of the Plan or by written consent, and in no
event later than one (1) year following the Effective Date. Prior to such
approval, Options may be granted but shall not be exercisable. Any amendment
described in Section 12 (i) to (iv) shall also be subject to approval by the
Corporation's shareholders.

15. WITHHOLDING OF TAXES.

In the event the Corporation or an Affiliate determines that
it is required to withhold Federal, state, or local taxes in connection with
the exercise of an Option or the disposition of Shares issued pursuant to the
exercise of an Option, the Optionee or any person succeeding to the rights of
the Optionee, as a condition to such exercise or disposition, may be required
to make arrangements satisfactory to the Corporation or the Affiliate to enable
it to satisfy such withholding requirements. Alternatively, the Corporation
may issue or transfer Shares net of the number of Shares sufficient to satisfy
withholding tax requirements. For withholding tax purposes, the Shares will be
valued on the date the withholding obligation is incurred.

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<PAGE> 16

16. RIGHTS AS AN EMPLOYEE.

Neither the Plan nor any Option granted pursuant thereto
shall be construed to give any person the right to remain in the employ of the
Corporation or any Affiliate, or to affect the right of the Corporation or any
Affiliate to terminate such individual's employment at any time with or without
cause. The grant of an Option shall not entitle the Optionee to, or disqualify
the Optionee from, participation in the grant of any other Option under the
Plan or participation in any other benefit plan maintained by the Corporation
or any Affiliate.

17. DISAVOWAL OF REPRESENTATIONS, UNDERTAKINGS OR CREATION OF
IMPLIED RIGHTS.

In adopting and maintaining this Plan and granting options
hereunder, neither the Corporation nor any Affiliate makes any representations
or undertakings with respect to the initial qualification or treatment of
Options under federal or state tax or securities laws. The Corporation and
each Affiliate expressly disavows the creation of any rights in Employees,
Optionees, or beneficiaries of any obligations on the part of the Corporation,
any Affiliate or the Committee, except as expressly provided herein.

18. INSPECTION OF RECORDS.

Copies of the Plan, records reflecting each Optionee's
Option, and any other documents and records which an Optionee is entitled by
law to inspect shall be open to inspection by the Optionee and his or her duly
authorized representative at the office of the Committee at any reasonable
business hour.

19. INFORMATION TO OPTIONEES.

Each Optionee shall be provided with such information
regarding the Corporation as the Committee from time to time deems necessary or
appropriate; provided however, that each Optionee shall at all times be
provided with such information as is required to be provided from time to time
pursuant to applicable regulatory requirements, including, but not limited to,
any applicable requirements of the Securities and Exchange Commission and other
state securities agencies.

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EXHIBIT A

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.

NONSTATUTORY STOCK OPTION AGREEMENT

This Stock Option Agreement is made and entered into this ____ day of
__________, 199_, pursuant to the AVTEAM, INC. 1996 Stock Option Plan (the
"Plan"). The Committee administering the Plan has selected
____________________ ____ ("the Optionee") to receive the following grant of a
nonstatutory stock option ("Stock Option") to purchase shares of the common
stock of AVTEAM, INC. (the "Corporation"), on the terms and conditions set
forth below to which Optionee accepts and agrees:

1. Stock Options Granted:

Number of Shares Subject to Option ______
Date of Grant ______
Vesting Commencement Date ______
Exercise Price Per Share ______
Expiration Date ______

2. The Stock Option is granted pursuant to the Plan to purchase
the number of shares of authorized but unissued common stock of the Corporation
specified in Section 1 hereof (the "Shares"). The Stock Option shall expire,
and all rights to exercise it shall terminate on the Expiration Date, except
that the Stock Option may expire earlier as provided in the Plan. The number
of Shares subject to the Stock Option granted hereunder shall be adjusted as
provided in the Plan. This Stock Option is intended by the Corporation and the
Optionee to be a Nonstatutory Stock Option and does not qualify for any special
tax benefits to the Optionee and is not subject to Section 7 of the Plan.

3. The Stock Option shall be exercisable in all respects in
accordance with the terms of the Plan which are incorporated herein by this
reference. Optionee acknowledges having received and read a copy of the Plan.

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<PAGE> 18

4. Optionee shall have the right to exercise the Stock Option
in accordance with the following schedule:

(a) The Stock Option may not be exercised in whole or in
part at any time prior to the end of the first full calendar year following the
Vesting Commencement Date.

(b) Optionee may exercise the Stock Option as to 20% of
the Shares at the end of the first full calendar year following the Vesting
Commencement Date.

(c) Optionee may exercise the Stock Option as to an
additional 20% of the Shares at the end of each full calendar year thereafter
following the Vesting Commencement Date.

(d) The right to exercise the Stock Option shall be
cumulative. Optionee may buy all, or from time to time any part, of the
maximum number of Shares which are exercisable under the Stock Option, but in
no case may Optionee exercise the Stock Option with regard to a fraction of a
Share, or for any share for which the Stock Option is not exercisable.

5. The Optionee agrees to comply with all laws, rules, and
regulations applicable to the grant and exercise of the Stock Option and the
sale or other disposition of the common stock of the Corporation received
pursuant to the exercise of such Stock Option.

6. The Stock Option is conditioned upon the Optionee's
representation, which Optionee hereby confirms as of the date of this Agreement
and which Optionee must confirm as of the date of any exercise of all or any
part of the Stock Option, that:

(a) Optionee understands that both this Stock Option and
any shares purchased upon its exercise are securities, the issuance of which
require compliance with state and Federal securities laws;

(b) Optionee understands that neither the Options nor
the Shares have been registered under the Securities Act of 1933 (the "Act") in
reliance upon a specific exemption contained in the Act which depends upon
Optionee's bona fide investment intention in acquiring these securities; that
Optionee's intention is to hold these securities for Optionee's own benefit for
an indefinite period; that Optionee has no present intention of selling or
transferring any part thereof (recognizing that the Stock Option is not
transferable) and that certain restrictions may exist on transfer of the Shares
issued upon exercise of the Stock Option;

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<PAGE> 19

(c) Optionee understands that the Shares issued upon
exercise of this Stock Option, in addition to other restrictions on transfer,
must be held indefinitely unless subsequently registered under the Act, or
unless an exemption from registration is available; that Rule 701 and Rule 144,
two exemptions from registration which may be available, are only available
after the satisfaction of certain conditions and require the presence of a U.S.
public market for such Shares; that no certainty exists that a U.S. public
market for the Shares will exist, and that otherwise Optionee may have to sell
the Shares pursuant to another exemption from registration which exemption may
be difficult to satisfy; and

(d) The Corporation shall not be under any obligation to
issue any Shares upon the exercise of this Stock Option unless and until the
Corporation has determined that:

(i) it and Optionee have taken all actions required
to register such Shares under the Securities Act, or to perfect an exemption
from the registration requirements thereof;

(ii) any applicable listing requirement of any
stock exchange on which such Shares are listed has been satisfied; and

(iii) all other applicable provisions of state and
Federal law have been satisfied.

IN WITNESS WHEREOF, each of the parties hereto has executed this
Stock Option Agreement, in the case of the Corporation by its duly authorized
officer, as of the date and year written above.

OPTIONEE AVTEAM, INC.

By:______________________ By:______________________
(signature) (signature)

Its:_____________________ Its:______________________
(Type or Print Name) (Type or Print Name)

Address: _________________________________

_________________________________

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EXHIBIT B

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED,
OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF
UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.

INCENTIVE STOCK OPTION AGREEMENT

This Stock Option Agreement is made and entered into this ____ day of
__________, 199_, pursuant to the AVTEAM, INC. 1996 Stock Option Plan (the
"Plan"). The Committee administering the Plan has selected ___________________
___ ("the Optionee") to receive the following grant of an incentive stock
option ("Stock Option") to purchase shares of the common stock of AVTEAM, INC.
(the "Corporation"), on the terms and conditions set forth below to which
Optionee accepts and agrees:

1. Stock Options Granted:

Number of Shares Subject to Option ______
Date of Grant ______
Vesting Commencement Date ______
Exercise Price Per Share ______
Expiration Date ______

4. Optionee shall have the right to exercise the Stock Option
in accordance with the following schedule:

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<PAGE> 21

(a) The Stock Option may not be exercised in whole or in
part at any time prior to the end of the first full calendar year following the
Vesting Commencement Date.

(b) Optionee may exercise the Stock Option as to 20% of
the Shares at the end of the first full calendar year following the Vesting
Commencement Date.

(c) Optionee may exercise the Stock Option as to an
additional 20% of the Shares at the end of each full calendar year thereafter
following the Vesting Commencement Date.

(d) The right to exercise the Stock Option shall be
cumulative. Optionee may buy all, or from time to time any part, of the
maximum number of shares which are exercisable under the Stock Option, but in
no case may Optionee exercise the Stock Option with regard to a fraction of a
Share, or for any Share for which the Stock Option is not exercisable.

(a) Optionee understands that both this Stock Option and
any Shares purchased upon its exercise are securities, the issuance of which
require compliance with state and Federal securities laws;

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<PAGE> 22

(d) The Corporation shall not be under any obligation to
issue any shares upon the exercise of this Stock Option unless and until the
Corporation has determined that:

(i) it and Optionee have taken all actions
required to register such Shares under the Securities Act, or to perfect an
exemption from the registration requirements thereof;

(ii) any applicable listing requirement of any
stock exchange on which such Shares are listed has been satisfied; and

(iii) all other applicable provisions of state
and Federal law have been satisfied.

IN WITNESS WHEREOF, each of the parties hereto has executed this
Stock Option Agreement, in the case of the Corporation by its duly authorized
officer, as of the date and year written above.

OPTIONEE AVTEAM, INC.

By:_____________________ By:______________________
(signature) (signature)

Its:____________________ Its:_____________________
(Type or Print Name) (Type or Print Name)

Address: _________________________________

_________________________________

<PAGE> 1
Exhibit 10.19

AVTEAM, INC.

KEY EXECUTIVE ANNUAL INCENTIVE PLAN

This Key Executive Annual Incentive Plan ("Plan") is established by
AVTEAM, Inc. ("Company") effective as of the effectiveness of a registration
statement of the Company filed in connection with an initial public offering of
the Common Stock of the Company for any fiscal year of the Company beginning on
or after January 1, 1996, with respect to those key executives who are selected
for participation in the Plan for such fiscal year.

1. PURPOSE

The purpose of the Plan is to promote the interests of the
Company by providing incentives and rewards to key senior executives who are
largely responsible for the management, growth and profitability of the
Company.

2. ADMINISTRATION

The Plan will be administered by a Committee consisting of at
least two members appointed by the Company's Board of Directors. The Committee
shall consist solely of "outside directors" as defined in section 162(m) of the
Internal Revenue Code of 1986. The Committee may adopt rules and regulations
consistent with the Plan's purpose and the intent to comply with said section
162(m), if applicable. Decisions of the Committee, including any matter of
Plan interpretation or fact finding, shall be final and binding on all persons
who have or claim an interest in the Plan.

3. ELIGIBILITY AND PARTICIPATION

A. ELIGIBLE OFFICERS. The executive officers eligible to
participate in the Plan are the Chief Executive Officer of the Company, the
Executive Vice President of the Company and such other key executive(s) as
determined by the Committee.

B. PARTICIPATION. Eligible executives shall participate
in the Plan for a given fiscal year only if approved for participation by the
Committee and will not be eligible for an award for any year unless explicitly
approved for such year.

C. TERMINATION OF EMPLOYMENT. The Committee has the
right, in its sole and absolute discretion, to withhold an award under the Plan
for any fiscal year if a participant's

- 1 -
<PAGE> 2
employment terminates for any reason, whether voluntarily or involuntarily,
prior to the end of such fiscal year.

- 2 -
<PAGE> 3

4. BONUS POOL

A. DETERMINATION OF BONUS POOL. The total amount of
bonuses available for payout for any fiscal year to the group of participating
executive officers shall be a specified percentage of the Company's income from
operations. In the event the Company meets the following targets for income
from operations, the bonus pool will consist of one hundred percent (100%) of
the base salary of eligible participants, not to exceed the specified
percentage of income from operations established by the Committee for such
fiscal year:

<TABLE>
<CAPTION>
Fiscal Year Operating Income Target
----------- -----------------------
<S> <C>
1996 $8 million
1997 $12 million
1998 $16 million
1999 $20 million
</TABLE>

For each fiscal year, the Committee shall establish additional targets
below those set forth above with corresponding percentages of base salary (not
to exceed 100%) which will be potentially payable if such targets are
satisfied. Such additional targets and percentages shall be established within
90 days of the beginning of any such fiscal year.

The Committee shall determine the specified percentage of income from
operations applicable for such fiscal year and the group of eligible key
executives within 90 days of the commencement of such fiscal year.

B. BONUSES. The bonuses shall be allocated to eligible
participants for each fiscal year in proportion to their base salaries,
provided, however, the Committee shall have the right to reduce or cancel any
bonus payment to an eligible participant if, in its sole discretion, the
Committee deems such action warranted based on the performance of the
particular executive, but any such reduction or cancellation shall not affect
or increase the bonus of any other eligible participant.

C. FORM OF PAYMENT. Bonuses shall be paid in cash no
later than 90 days after the end of the applicable fiscal year.

D. CERTIFICATION. Before any bonus is paid to an
executive officer under the Plan, the Committee shall certify in writing that
the performance targets have been met or the preconditions to receiving a bonus
have been satisfied.

- 3 -
<PAGE> 4

5. AMENDMENT AND TERMINATION.

The Company reserves the right to amend or terminate the Plan
at any time in whole or in part, subject to Section 6. Any amendment or
termination of the Plan shall be effective with respect to any amount which has
not yet been paid out, other than amounts which have been awarded and
determined by the Committee to be payable with respect to a fiscal year, but
have not yet been paid out following the end of a given fiscal year.

No provision of the Plan shall be deemed to constitute a commitment of
the Company to pay, or to confer any contractual or other rights upon a
participant to receive a bonus award for any one or more fiscal years or to
confer upon any participant any right to continue in the employ of the Company
or to constitute any contract or agreement of employment or to interfere in any
way with the right of the Company to terminate a participant's employment at
any time, with or without cause, but nothing contained herein shall affect any
contractual right of a participant pursuant to a written employment agreement.

7. AWARDS AND STOCKHOLDER APPROVAL

Neither the Plan, nor any award made hereunder, shall be
effective unless the Plan is approved by the Company's stockholders. In no
event shall any award be made under the Plan for any year after calendar year
1999. The Plan, awards under the Plan, and any amendment to the Plan which
would change the class of executives who are eligible to receive awards under
the Plan or the permissible amount of such awards shall be subject to approval
of the Company's stockholders in such manner and with such frequency as shall
be required under section 162(m).

- 4 -

<PAGE> 1
Exhibit 10.20

STOCK PURCHASE AGREEMENT

DATED AS OF DECEMBER 6, 1996

AMONG

AVTEAM,INC.

AND

THE PURCHASERS NAMED HEREIN

<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I

AUTHORIZATION; PURCHASE AND SALE; PUT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.1 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.2 Purchase and Sale of the Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.3 Purchase and Sale of Additional Shares of Preferred Stock . . . . . . . . . . . . . . . . . . . . 2
Section 1.4 Separate Sales and Several Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

ARTICLE II

INITIAL CLOSING AND ADDITIONAL CLOSINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.1 Initial Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.2 Additional Closings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

ARTICLE III

COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3.1 Financial Statements and Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 3.2 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.3 Redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.4 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.5 Public Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.6 Inspection of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.7 Regulatory Compliance Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.8 Reservation of Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.9 Rights of Clipper Equity Partners as a Venture Capital Operating Company . . . . . . . . . . . 13
Section 3.10 Directors' and Officers' Liability Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.11 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.12 Indebtedness to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.13 Now Credit Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.14 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 3.15 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PURCHASERS . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.1 Investment Representation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.2 Organization and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 4.3 Authorization; No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

</TABLE>

(i)

<PAGE> 3

<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 4.4 Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 4.5 Further Representations by Foreign Purchasers . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 4.6 Status of Purchasers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 4.7 No Prior Dealings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 4.8 Bank Holding Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.1 Organization, Corporate Power and Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.2 Capital Stock and Related Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 5.3 Authorization; No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 5.4 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 5.5 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 5.6 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 5.7 Absence of Certain Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 5.8 Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 5.9 Tax Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 5.10 Litigation, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 5.11 Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 5.12 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 5.13 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 5.14 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 5.15 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 5.16 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 5.17 Environmental and Safety Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 5.18 Affiliate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 5.19 Employment and Management Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 5.20 Material Contracts; No Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 5.21 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 5.22 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.23 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

ARTICLE VI

DEFINED TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 6.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

ARTICLE VII

SURVIVAL AND INDEMNIFICATION; TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 7.1 Reliance on and Survival of Representations . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 7.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
</TABLE>

(ii)
<PAGE> 4

<TABLE>
<CAPTION>
Page
----
ARTICLE VIII

<S> <C> <C>
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 8.1 Fees, Expenses and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 8.2 Specific Performance and Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 8.3 Entire Agreement; Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 8.4 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 8.5 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 8.6 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 8.7 Descriptive Headings; Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 8.8 Governing Law; Consent to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 8.9 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 8.10 No Strict Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 8.11 Definition of Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

</TABLE>

(iii)

<PAGE> 5

LIST OF EXHIBITS AND SCHEDULES

<TABLE>
<CAPTION>
Exhibits
<S> <C> <C>
Exhibit A - Second Amended and Restated Articles of Incorporation
Exhibit B - Registration Rights Agreement
Exhibit C - Shareholders Agreement
Exhibit D - Opinion of Company's Counsel for Initial Closing
Exhibit E - Opinion of Company's Counsel for each Additional Closing
Exhibit F - Tax Allocation and Indemnification Agreement
Exhibit G - Opinion of Purchasers' Counsel
Exhibit H - Outstanding Indebtedness to Shareholders

Schedules

Schedule 1 - List of Purchasers
Schedule 3.12 - Indebtedness to be repaid to Shareholders
Schedule 5.2 - Capital Stock and Related Matters
schedule 5.3 - Authorization; No Conflict
Schedule 5.5 - No Material Adverse Change
Schedule 5.6 - Undisclosed Liabilities
Schedule 5.7 - Certain Developments
Schedule 5.8 - No Material Adverse Change
Schedule 5.9 - Taxes
Schedule 5.10 - Litigation
Schedule 5.12 - Consents
Schedule 5.18 - Affiliate Transactions
Schedule 5.19 - Employment and Management Agreements
Schedule 5.20 - Material Contracts
Schedule 5.21 - Intellectual Property

</TABLE>

(iv)
<PAGE> 6

EXECUTION COPY

STOCK PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT dated as of December 6, 1996 (this
"Agreement"), by and among AVTEAM, INC., a Florida corporation with principal
executive offices located at 3230 Executive Way, Miramar, Florida 33025 (the
"Company"), and the Persons listed on the signature pages hereto (collectively
referred to herein as the "Purchasers" and individually as a "Purchaser").

WITNESSETH:

WHEREAS, (i) to provide capital for the purchase of used aircraft
engines and parts, aircraft and other aviation components, (ii) to make a
Distribution to the Company's shareholders, (iii) to repay bank debt and, as
specified herein, certain advances from the Company's stockholders and (iv) to
provide working capital for the Company, the Company desires to issue and sell
to the Purchasers, upon the terms and subject to the conditions specified
herein, and the Purchasers desire to purchase from the Company, 1,700,000
shares of the Company's Preferred Stock (as defined in Section 1.1) for a
purchase price of $7.00 per share (or an aggregate purchase price of
$11,900,000);

WHEREAS, (i) to provide capital for the purchase of additional used
aircraft engines and parts, aircraft and other aviation components and (ii) to
provide additional working capital for the Company following the date hereof,
until June 30, 1997, at the election of the Company, the Company may issue and
sell to the Purchasers, upon the terms and subject to the conditions specified
herein, and the Purchasers desire to purchase from the Company, up to an
additional 1,300,000 shares of Preferred Stock for a purchase price of $7.00
per share (or an aggregate purchase price of up to $9,100,000); and

WHEREAS, except as otherwise indicated herein, all capitalized terms
used herein are defined in Section 6 hereof.

NOW, THEREFORE, in consideration of premises and the covenants
hereinafter contained, and the other agreements simultaneously executed and
delivered by the parties in connection herewith, it is agreed as follows:
<PAGE> 7

ARTICLE I

AUTHORIZATION; PURCHASE AND SALE; PUT

Section 1.1 Authorization. The Company hereby agrees to issue
and sell to the Purchasers an aggregate of 1,480,000 shares of its convertible
voting preferred stock, par value $.01 per share (the "Convertible Voting
Preferred Stock"), and, 220,000 shares of its convertible non-voting preferred
stock, par value $.01 per share (the "Convertible Non-Voting Preferred Stock"
and collectively, the "Preferred Stock"), having the rights, restrictions,
privileges, and preferences set forth in the Company's Second Amended and
Restated Articles of Incorporation attached as Exhibit A hereto (the "Second
Amended and Restated Articles"), which shares of Preferred Stock shall be
allocated among the Purchasers as provided on Schedule 1 hereto. The Board of
Directors of the Company has approved the Second Amended and Restated Articles
and the, Company has adopted and filed the Second Amended and Restated Articles
with the Secretary of State of the State of Florida.

Section 1.2 Purchase and Sale of the Securities. At the Initial
Closing, the Company shall sell to each Purchaser and, subject to the terms and
conditions set forth herein, each Purchaser shall purchase from the Company, the
shares of Preferred Stock set forth opposite such Purchaser's name on Schedule I
hereto (collectively, the "Initial Securities") at the purchase price set forth
on such Schedule (the "Purchase Price").

Section 1.3 Purchase, and Sale of Additional Shares of Preferred
Stock.

(a) Following the Initial Closing until the earlier of the
consummation of an Initial Public Offering by the Company and June 30, 1997,
subject to the terms and conditions set forth herein, the Company may elect to
issue and sell to the Purchasers and, subject to Section 1.3(c) hereof, the
Purchasers shall purchase from the Company up to an aggregate of 1,300,000
additional shares of preferred Stock (the "Additional Securities" and, together
with the Initial Securities, the "Securities") for a purchase price of $7.00
per share; provided that (i) the aggregate purchase price of such Additional
Securities to be so issued and sold by the Company at any one time shall be at
least $3,000,000 and (ii) the Purchasers shall not be obligated to effect the
purchase of Additional Securities more than once during any 60-day period.

2
<PAGE> 8

(b) If the Company elects to issue and sell Additional Securities
pursuant to Section 1.3(a) above, the Company shall notify the Purchaser
Representative in writing at least 15 days prior to the date the Company
desires to effect such issuance and sale, which notice shall specify the number
of Additional Securities to be sold and the date of the closing of the purchase
and sale of such Additional Securities (each, an "Additional Closing").

(c) At each Additional Closing, the Company shall sell to each
Purchaser and, subject to the terms and conditions set forth herein, each
Purchaser shall purchase from the Company, the aggregate number of Additional
Securities to be sold and issued by the Company at such time, multiplied by the
percentage of Initial Securities of such Purchaser set forth on Schedule I
hereto; provided, that if any Purchaser(s) shall not desire to purchase any
Additional Securities, required to be purchased by such Purchaser(s) at any
Additional Closing, the other Purchasers shall purchase the Additional
Securities required to be purchased by such Purchaser(s) on a pro rata basis;
and provided, further that the Additional Securities to be purchased by
Clipper/Merban, L.P. ("Clipper Merban") shall consist of Shares of Convertible
Voting Preferred Stock and/or Convertible Non-Voting Preferred Stock, as
determined by Clipper Merban.

Section 1.4 Separate Sales and Several Obligations. The sale of
the Securities to each Purchaser at a Closing hereunder shall constitute a
separate sale hereunder, and the obligations undertaken by each one (or more)
of the Purchaser(s) under this Agreement are several and not joint such that
the failure of any one (or more) of the Purchaser(s) to comply with its (or
their) obligations under this Agreement shall not give rise to any additional
duties or obligations, or any liability, of any other Purchaser(s) hereunder,
except as provided in Section 1.3(c) above.

ARTICLE II

INITIAL CLOSING AND ADDITIONAL CLOSINGS

Section 2.1 Initial Closing. The closing of the several purchases
and sales of the Initial Securities shall take place at the offices of Weil,
Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153 at 10:00 a.m.
(local time) on the date hereof, or at such other place as may be mutually
agreed to by the Company and the Purchaser Representative (the "Initial
Closing").

3
<PAGE> 9

(a) At the, Initial Closing, the Company shall take or
previously shall have taken, and shall deliver or cause to be
delivered to each Purchaser, the following actions and items:

(i) A certificate evidencing the Preferred Stock to be
purchased by such Purchaser registered in such Purchaser's or its
nominee's name.

(ii) Payment to Clipper Capital Partners, L.P. of a fee in
the aggregate amount of $400,000, minus all fees and expenses paid by
the Company pursuant to clause (a) of Section 8.1 hereof (the "Closing
Fee").

(iii) A certificate, dated as of the Initial Closing,
signed by the Secretary or Assistant Secretary of the Company
certifying (A) that attached thereto is a true and complete copy of
the Second Amended and Restated Articles and the amended Amended and
Restated By-Laws of the Company, (B) resolutions duly adopted by the
Board of Directors of the Company authorizing the execution, delivery
and performance of this Agreement, the Registration Rights Agreement,
the Shareholders Agreement and each other Transaction Document, the
issuance and sale of the Initial Securities and the consummation of
all other transactions contemplated by this Agreement and the other
Transaction Documents and (C) the incumbency of the officer of the
Company executing this Agreement and each other Transaction Document,

(iv) A registration rights agreement, in the form of
Exhibit B hereto (the "Registration Rights Agreement"), duly executed
and delivered by the Company and the Purchasers, which Registration
Rights Agreement shall be in full force and effect.

(v) A shareholders agreement, in the form of Exhibit C
hereto (the "Shareholders Agreement"), duly executed and delivered by
the Company, the Purchasers and each of the other shareholders of the
Company (collectively, the "Shareholders"); and all such action shall
have been taken as may be necessary to elect a Board of Directors of
the Company, effective upon the Initial Closing, in accordance with
the Shareholders Agreement.

(vi) Copies of executed second amended and restated
employment agreements between the Company and each of Donald A. Graw
and Jaime J. Levy on the terms described in the Company Prospectus
under the caption "Business - Employment Agreements", which second
amended and restated

4
<PAGE> 10

employment agreements shall provide that the salary-based compensation
provided for therein shall become effective upon the Initial Closing.

(vii) Evidence (in the form of a certified resolution of
the Board of Directors of the Company) of the declaration by the
Company's Board of Directors, in form satisfactory to the Purchasers,
of a dividend to the Company's shareholders.

(viii) An opinion of Baker & McKenzie, counsel for the
Company, in the form of Exhibit D hereto, which opinion shall be
addressed to each Purchaser and shall be dated the date of the Initial
Closing.

(ix) Copies of all third party and governmental consents,
approvals and filings, if any, required by the Company in connection
with the sale of the Initial Securities to be sold by the Company
pursuant to this Agreement (including, without limitation, all blue
sky law filings and waivers of all preemptive rights and rights of
first refusal, if any).

(x) A tax allocation and indemnification agreement in the
form attached hereto as Exhibit F (the "Tax Allocation and
Indemnification Agreement") duly executed and delivered by each of the
Company's shareholders and by the Company, which Tax Allocation and
Indemnification Agreement shall be in full force and effect and shall
supersede the tax allocation and indemnification agreement between the
Company and its shareholders in effect prior to the date hereof.

(xi) A table in the form attached hereto as Exhibit H
setting forth the outstanding indebtedness of the Company to certain
of its shareholders as of the date of the Initial Closing.

(b) At the Initial Closing, each Purchaser shall deliver,
or cause to be delivered, to the Company, the following items:

(i) Payment of the purchase price (applicable to such
Purchaser) by wire transfer of immediately available funds to an account
specified by the Company prior to the Initial Closing in the aggregate
amount set forth opposite such Purchaser's name on Schedule I hereto.

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<PAGE> 11

(ii) The Registration Rights Agreement, duty executed by
such Purchaser.

(ii) The Shareholders Agreement, duly executed by such
Purchaser.

(iv) Copies of all third party and governmental consents,
approvals and filings, if any, required in connection with the
purchase by the Purchasers of the Initial Securities pursuant to this
Agreement.

(v) An opinion of Weil, Gotshal & Manges LLP, counsel for
the Purchasers, in the form of Exhibit G hereto, which opinion shall
be addressed to the Company and shall be dated the date of the Initial
Closing.

Section 2.2 Additional Closings. Each Additional Closing
(if any) shall take place at the offices of Weil, Gotshal & Manges
LLP, 767 Fifth Avenue, New York, New York 10153 at 10:00 a.m. (local time) on
the date specified in the notice delivered by the Company to the Purchaser
Representative pursuant to Section 1.3(b), or at such other place as may be
mutually agreed to by the Company and the Purchaser Representative.

(a) At each Additional Closing, the obligation of the
Purchasers to purchase any Additional Securities shall be subject to the
following conditions:

(i) Each of the representations and warranties of the
Company contained in this Agreement and in any other Transaction
Document shall be true and correct in all material respects at and as
of the date of such Additional Closing as though made at and on such
date, except to the extent that any such representation or warranty
expressly relates to an earlier date, in which case, such
representation or warranty shall have been true and correct in all
material respects at and as of such earlier date.

(ii) The Company shall have performed and complied in all
material respects with the covenants in this Agreement and any other
Transaction Document required to be performed or complied with by it
at or prior to such Additional Closing.

(iii) There shall not have occurred any event or change
that has had or could reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect or has resulted or could
reasonably be expected to

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<PAGE> 12

result in, individually or in the aggregate, a material impairment of
the ability of the Company to perform any of its obligations under any
Transaction Document.

(b) At each Additional Closing, the Company shall take or
previously shall have taken, and shall deliver or cause to be delivered to each
Purchaser, the following actions and items:

(i) One or more certificates evidencing the Additional
Securities to be purchased by such Purchaser registered in such
Purchaser's or its nominee's name.

(ii) An Officer's Certificate, dated as of such Additional
Closing, certifying (A) resolutions duly adopted by the Board of
Directors of the Company authorizing the issuance and sale of the
Additional Securities to be sold at such Additional Closing, (B) that
there has not occurred any event or change that has had or could
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect since the date of the Initial Closing or has
resulted or could reasonably be expected to result in, individually or
in the aggregate, a material impairment of the ability of the Company
to perform any of its obligations under any Transaction Document, (C)
that the representations and warranties of the Company contained in
this Agreement and in any other Transaction Document are true and
correct in all material respects at and as of such Additional Closing
as though made at and as of such date, except to the extent that any
such representation or warranty expressly relates to an earlier date
(in which case the certification shall be to the effect that such
representation and warranty was true and correct in all material
respects at and as of such earlier date) and (D) that the Company has
performed and complied in all material respects with the covenants in
this Agreement and any other Transaction Document required to be
performed or complied with by it at or prior to such Additional
Closing.

(iii) An opinion of Baker & McKenzie, counsel for the
Company, in the form of Exhibit E hereto, which opinion shall be
addressed to each Purchaser and shall be dated the date of such
Additional Closing.

(iv) Copies of all third party and governmental consents,
approvals and filings, if any, required in connection with the sale of
the Additional Securities

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<PAGE> 13

(including, without limitation, all blue sky law filings and waivers
of all preemptive rights and rights of first refusal, if any).

(c) At each Additional Closing, each Purchaser shall
deliver, or cause to be delivered, to the Company the following items:

(i) payment of the purchase price (applicable to such
Purchaser) by wire transfer of immediately available funds to an
account specified by the Company prior to such Additional Closing in
an amount equal to (A) $7.00 multiplied by (B) the number of shares
required to be purchased by such Purchaser pursuant to Section 1.3(c).

(ii) Copies of all third party and governmental consents,
approvals and filings, if any, required in connection with the
purchase by the Purchasers of the Additional Securities pursuant to
this Agreement.

ARTICLE III

COVENANTS

The Company, or each of the Purchasers, as the case may be,
hereby covenants and agrees as follows:

Section 3.1 Financial Statements and Other Information. So
long as any Purchaser holds any of the Securities purchased hereunder or any of
the shares of Common Stock into which the Securities are converted, the Company
shall deliver to the Purchaser Representative such number of copies of the
following financial statements or reports as the Purchaser Representative
reasonably may request:

(a) within 30 days after the end of each monthly
accounting period in each fiscal year, a management report in form and
substance reasonably satisfactory to the Purchaser Representative.

(b) as soon as available, but in any event within 45 days
after the end of each of the first three fiscal quarters of each
fiscal year, (i) unaudited statements of operations, shareholders'
equity and cash flows of the Company for such quarterly period and for
the period from the beginning of the fiscal year to the end of such
quarter, and unaudited balance sheets of the

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<PAGE> 14

Company as of the end of such fiscal quarter, setting forth in each case
comparisons to the Company's annual budget and to the corresponding period in
the preceding fiscal year, and all such statements shall be prepared in
accordance with GAAP consistently applied, subject to the absence of footnote
disclosures and to normal year-end adjustments and (ii) management's discussion
and analysis of financial condition and results of operations.

(c) within 90 days after the end of each fiscal year, (i)
statements of operations, shareholders' equity and cash flows of the Company
for such fiscal year, and balance sheets of the Company as of the end of such
fiscal year, setting forth in each case comparisons to the Company's annual
budget and to the preceding fiscal year, all prepared in accordance with GAAP,
consistently applied, and accompanied by an opinion of an independent
accounting firm of recognized national standing acceptable to the Board of
Directors of the Company and (ii) management's discussion and analysis of
financial condition and results of operations;

(d) promptly after receipt thereof, any additional reports,
management letters or other detailed information concerning significant aspects
of the Company's operations or financial affairs given to the Company by its
independent accountants (and not otherwise contained in other materials
provided hereunder);

(e) when adopted by the Board of Directors of the Company, but no
more than 45 days after the beginning of each fiscal year, an annual budget
prepared on a quarterly basis for the Company for such fiscal year (displaying
anticipated statements of operations, shareholders' equity and cash flows and
balance sheets), and promptly upon preparation thereof any other significant
budgets prepared by the Company and any significant revisions of such annual or
other budgets;

(f) within 10 business days after the discovery or receipt of
notice of (i) any default under any agreement to which it is a party, (ii) any
condition or event which is reasonably likely to result in any liability under
any federal, state or local statute or regulation relating to public health and
safety, worker health and safety or pollution or protection of the environment,
or (iii) any other adverse change, event or circumstance affecting the Company
(including, without limitation, the filing of any material litigation against
the Company or the existence of any dispute with any Person which involves a

9
<PAGE> 15

reasonable likelihood of such litigation being commenced), in each
case where individually or in the aggregate such default, condition,
event, change or circumstance could reasonably be expected to have a
Material Adverse Effect, an Officer's Certificate specifying the
nature and period of existence thereof and what actions the Company
has taken and proposes to take with respect thereto; and

(g) with reasonable promptness, such other information
and financial data concerning the Company as any Person entitled to
receive information under this Section 3.1 may reasonably request.

The obligations of the Company under this Section 3.1 shall
automatically terminate upon the consummation by the Company of an Initial
Public Offering.

Section 3.2 Transactions with Affiliates. Except as set forth on
Schedule 5.18, so long as any Purchaser holds any of the Securities purchased
hereunder, the Company covenants and agrees that it shall not enter into or be a
party to any transaction with any Affiliate of the Company, except for
transactions in the ordinary course of business and pursuant to the reasonable
requirements of the Company's business and upon fair and reasonable terms that
are no less favorable to the Company than could be obtained at the time of such
transaction in a comparable arm's length transaction with a Person not an
Affiliate of the Company. If the Company enters into a transaction with any
Affiliate permitted by this Section 3.2, it shall promptly thereafter provide
written notice to the Purchaser Representative stating in reasonable detail the
material terms of such transaction.

The obligations of the Company under this Section 3.2 shall
automatically terminate upon the consummation of a Qualified Public Offering.

Section 3.3 Redemptions. So long as any Purchaser holds any of
the Securities purchased hereunder or any of the shares of Common Stock into
which the Securities are converted, the Company shall not redeem, purchase or
otherwise acquire, any of the Company's capital stock or other equity securities
(including, without limitation, warrants, options and other rights to acquire
such capital stock or other equity securities) other than on a pro rata basis,
unless consented to by the Purchaser Representative.

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<PAGE> 16

The obligations of the Company under this Section 3.3 shall
automatically terminate upon the consummation of a Qualified Public Offering.

Section 3.4 Use of Proceeds. The Company shall apply the proceeds
of the issuance and sale of the Securities to the Purchasers solely (a) to
purchase used aircraft engines and parts, aircraft and other aviation
components, (b) to make a Distribution to the Company's shareholders, (c) to
repay bank debt and certain advances from the Company's stockholders as
specified herein and (d) to provide working capital for the Company.

Section 3.5 Public Disclosures. The Company shall not disclose
any Purchaser's name or identity as an investor in the Company in any press
release or other public announcement or in any document or material filed with
any governmental entity, without the prior written consent of such Purchaser,
unless such disclosure is required by applicable law or governmental regulations
or by order of a court of competent jurisdiction, in which case prior to making
such disclosure the Company shall give written notice to such Purchaser
describing in reasonable detail the proposed content of such disclosure and
shall permit the Purchaser to review and comment upon the form and substance of
such disclosure. Notwithstanding the preceding sentence, without the prior
written consent of the Purchaser, the Company may disclose any Purchaser's name
or identity as an investor in the Company in any document or material filed by
the Company with the Securities and Exchange Commission, the New York State
Securities Bureau, the Department of Justice, the Federal Trade Commission, the
Federal Reserve Bank or similar regulatory body if such disclosure is required,
in the reasonable judgment of outside counsel to the Company, by applicable law
or governmental regulations or by order of a court of competent jurisdiction.

Section 3.6 Inspection of Property. So long as any Purchaser
holds any of the Securities purchased hereunder, the Company shall permit the
Purchaser Representative, its independent accountants and other representatives,
in a reasonable manner, upon reasonable notice and during normal business hours,
to (a) visit and inspect any of the properties of the Company, (b) examine the
corporate and financial records of the Company and (c) discuss the affairs,
finances and accounts of the Company with the directors and officers of the
Company and, upon five days' prior written notice to the Company, the Company's
independent public accountants. No investigation by any Purchaser or the
Purchaser Representative prior to or after the date of this Agreement shall
diminish or obviate any of the representations, warranties, covenants or
agreements of the Company contained in this Agreement.

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<PAGE> 17

The obligations of the Company under this Section 3.6 shall
automatically terminate upon the consummation of a Qualified Public Offering.

Section 3.7 Regulatory Compliance Cooperation. (a) So long as any
Purchaser holds any of the Securities purchased hereunder (or the Common Stock
into which the Securities are converted), before the Company enters into (or
proposes to enter into) any agreement providing for or otherwise seeks to effect
or consummate any merger, consolidation, recapitalization or other transaction
pursuant to which any Purchaser would be required to receive in respect of its
Securities any voting securities or securities convertible into or exercisable
or exchangeable for any voting securities, or redeems, purchases or otherwise
acquires, directly or indirectly, or converts or takes any action with respect
to the voting rights of, any shares of any class of its capital stock or any
securities convertible into or exchangeable for any shares of any class of its
capital stock, the Company shall give written notice of such pending action to
the Purchasers. Upon the written request of any Purchaser made within 10 days
after its receipt of any such notice stating that after giving effect to such
action such Purchaser would have a Regulatory Problem (as determined below), the
Company shall defer taking such action for such period (not to extend beyond 10
days after such Purchaser's receipt of the Company's original notice) as such
Purchaser requests to permit it and its Affiliates to reduce the quantity of the
Company's securities they own in order to avoid the Regulatory Problem. For
purposes of this Section 3.7, a Person shall be deemed to have a "Regulatory
Problem" when such Person and such Person's Affiliates would own, control or
have power over a greater quantity of securities of any kind issued by the
Company or any other entity than are permitted under any requirement of any
Governmental Authority. In any event, the Company shall not be obligated to
obtain or make any consents, approvals or filings that any Purchaser may require
from any Governmental Authority.

(b) The Company shall grant to any subsequent holder of
Securities that is a Purchaser Transferee, upon such holder's request, the same
rights granted to Purchasers pursuant to this Section 3.7.

Section 3.8 Reservation of Common Stock. The Company shall
at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the shares of Preferred Stock, such number of its shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding shares of Preferred Stock, and if at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient so to
reserve, and keep available Common Stock to effect the conversion

12
<PAGE> 18

of all such shares of Preferred Stock, the Company shall take such corporate
action necessary to increase its authorized but unissued shares of Common Stock
to such number of shares as shall be sufficient for such purpose.

Section 3.9 Rights of Clipper Equity Partners as a Venture Capital
Operating Company. (a) The Company hereby agrees that so long as Clipper Equity
Partners I, L.P. ("Clipper Equity Partners") owns or holds any equity
securities of the Company, it shall be entitled to (i) designate a
representative (which representative shall be any full-time employee of Clipper
Equity Partners or one of its Affiliates, or such other Person reasonably
satisfactory to the Company) to attend and participate on its behalf (without
any right to vote and whose presence shall not count in any determination of
the existence of a quorum) in all annual, regularly scheduled and special
meetings of the Board of Directors of the Company (including, without
limitation, meetings of any and all committees thereof), (ii) receive and have
access to the same information and materials which are made available and/or
disseminated to directors of the Company and, subject to any limitations set
forth therein, the same information and materials which the Purchaser
Representative is entitled to receive or to which the Purchaser Representative
is entitled to have access under Sections 3.1 and 3.6 of this Agreement, and
(iii) routinely consult with the Company's management at reasonable times and
on reasonable notice, provided that Clipper Equity Partners shall not be
entitled to the right specified in clause (i) above if any Investor Director(s)
(as defined in the Shareholders Agreement) is then serving on the Board of
Directors of the Company. The Company agrees to pay the reasonable
out-of-pocket expenses incurred by the representative referred to in this
Section 3.9 in connection with attending and/or participating in any meeting of
the Board and/or any committee thereof.

(b) The foregoing rights set forth in this Section 3.9 are
intended to satisfy the requirement of "management rights" described at 29
C.F.R. Section 2510.3-101(d)(3)(ii) for purposes of qualifying Clipper Equity
Partners as a "venture capital operating company" for purposes of the U.S.
Department of Labor "plan asset" regulations, at 29 C.F.R. Section
2510.3-101(d), and in the event such rights am not satisfactory for such
purpose, the Company and Clipper Equity Partners shall reasonably cooperate in
good faith to agree upon mutually satisfactory management rights which satisfy
such regulations.

The obligations of the Company under this Section 3.9 shall
automatically terminate upon the consummation of a Qualified Public Offering.

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<PAGE> 19

Section 3.10 Directors' and Officers' Liability Insurance. On or
prior to December 31, 1996 and, thereafter, for so long as any Investor
Director(s) (as defined in the Shareholders Agreement) is (are) serving on the
Board of Directors of the Company, the Company shall obtain and maintain
policies of directors' and officers' liability insurance reasonably satisfactory
to the Purchasers.

Section 3.11 Confidentiality. (a) From and after the date of the
Initial Closing, each Purchaser will hold, and require their respective
partners, officers, directors, representatives, advisors or consultants (the
"Representatives") to hold, in confidence all information furnished to any such
party by the Company in connection with the transactions contemplated by this
Agreement or the other Transaction Documents and to refrain from the use of any
Confidential Information for any purpose other than in connection with the
Transactions contemplated by this Agreement or the other Transaction Documents.
Moreover, each Purchaser agrees (i) to disclose Confidential Information only to
those representatives of such Purchaser who need access to such Confidential
Information for purposes of their review or participation in the evaluation of
the transactions contemplated by this Agreement or the other transaction
Documents and who are advised of this Agreement, and (ii) to take reasonable
precautions to ensure that such Representatives will act in accordance herewith.
No Confidential Information shall be supplied to any other person after the date
hereof unless such person either agrees to be bound by the terms of this
Agreement to the same extent as if a party hereto or enters into other
arrangements satisfactory to the Company. The term "person" as used in this
agreement shall be broadly interpreted to include, without limitation, any
corporation, company, partnership, or individual.

"Confidential Information" includes any information which is
non-public, confidential, proprietary or which constitutes trade secrets
concerning the Company or its assets, whether in written, graphic, oral, visual
or other tangible or intangible forms (collectively, the "Confidential
Information"), whether currently existing, proposed to exist or to be proposed
or to be done, developed or discovered in the future. The term "Confidential
Information" shall not include information which (i) is or becomes generally
available to the public (other than as a result of a disclosure by any
Purchaser or its Representatives), (ii) was known by, or available to, such
Purchaser on a non-confidential basis prior to the disclosure of such
information to each Purchaser by the Company, or (iii) although owned by the
Company, becomes available to each Purchaser on a non-confidential basis from a
source other than the Company; Provided, however, that such source is not bound
by a confidentiality agreement with the Company or any of its representatives
or is

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<PAGE> 20

otherwise prohibited from transmitting the information to each Purchaser or its
Representatives by a contractual, legal or fiduciary obligation of which each
Purchaser has knowledge.

(b) Each Purchaser shall maintain strict control over the making
of any copies or duplicates of any Confidential Information and all copies or
duplicates thereof and extracts therefrom in its possession or that of its
Representatives and shall return the same to the Company promptly upon request.
Any portion of the Confidential Information in the possession of any Purchaser
or its Representatives which is not so returned shall be held by such Purchaser
and kept subject to the terms of this Agreement or destroyed.

(c) Each Purchaser hereby acknowledges that the Company would
suffer irreparable harm in the event of any violation or breach by such
Purchaser of the terms and conditions hereof.

(d) In the event that any Purchaser is requested or required (by
oral questions, interrogatories, requests for information or documents,
subpoena, civil investigative demand, or other process) to disclose any
Confidential Information, each Purchaser shall provide the Company with prompt
notice of any such request or requirement so that the Company may seek an
appropriate protective order. If, failing the entry of a protective order, any
Purchaser is, in the opinion of its counsel, compelled to disclose any
Confidential Information, such Purchaser may disclose that portion of the
Confidential Information which its counsel advises such Purchaser that it is
compelled to disclose. In any event, each Purchaser shall not oppose action
by, and will cooperate with the Company, at the Company's expense, to obtain an
appropriate protective order or other reliable assurance that confidential
treatment will be accorded the Confidential Information. All references to
each Purchaser in this paragraph shall be deemed to include such Purchaser's
Representatives.

Section 3.12 Indebtedness to Shareholders. Except as set forth on
Schedule 3.12, the Company agrees that it will not repay any indebtedness to
any of its shareholders prior to the earlier of (a) 10 years after the date
hereof or (b) the date of a Qualified Public Offering, provided that such
indebtedness may be repaid by the Company at any time during the second fiscal
quarter of the year 2000 if the Company has net income for the fiscal year
ended December 31, 1999 in an amount greater than $10 million so long as the
Company does not incur any additional indebtedness in order to repay such
indebtedness to its shareholders.

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<PAGE> 21

Section 3.13 New Credit Agreement. The Company agrees that it
shall enter into a new credit facility with Barnett Bank of South Florida, N.A.
(the "Bank") or a similar lender of equal prominence on terms no less favorable
in any material respect to those set forth in the commitment letter dated June
14, 1996 between the Company and the Bank.

Section 3.14 Further Assurances. If at any time after the Initial
Closing any further action is necessary or desirable to carry out the purpose of
this Agreement or the other Transaction Documents, the Purchasers shall execute
and deliver any further instruments or documents and take all such necessary
action that may reasonably be requested by the other party.

Section 3.15 Tax Returns. The Company shall provide to Clipper
Capital as representative of the Purchasers the opportunity to review all Tax
Returns of the Company for 1996, and shall provide Clipper Capital a copy of the
completed Form 1120S (along with supporting work papers and schedules) of the
Company for the 1996 "S short year" (within the meaning of IRC Section 1362(e))
at least fifteen (15) days prior to the filing date. If proposed treatment of
a particular item of income, gain, deduction or loss, credit or allowance on the
Tax Returns is inconsistent with the treatment of such item in the prior years'
returns of the Company, and such treatment would cause a material impact on the
timing of the Company's income, gain, deduction, loss, credit or other allowance
for the 1996 S short year relative to subsequent tax years, then the Company
shall not change its historical treatment of such item unless it shall provide
Clipper Capital an opinion of counsel (which opinion and counsel shall be
reasonably satisfactory to Clipper Capital) that the proposed treatment is the
appropriate treatment of such item under applicable law and that a contrary
position would subject the Company to a tax adjustment by the IRS.

ARTICLE TV

REPRESENTATIONS AND WARRANTIES OF PURCHASERS

As a material inducement to the Company to enter into this Agreement
and issue and sell the Securities hereunder, each Purchaser, severally, and not
jointly, hereby represents and warrants that:

Section 4.1 Investment Representation. Each Purchaser understands
and acknowledges that (a) the Securities have not been registered under the
Securities

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<PAGE> 22

Act or under any state or foreign securities laws in reliance upon exemptions
provided thereunder and that such Securities may not be transferred or sold
except pursuant to the registration provisions of the Securities Act or
pursuant to an applicable exemption therefrom and pursuant to state or foreign
securities laws and regulations as applicable and are subject to restrictions
on transferability under the terms of the Shareholders Agreement and (b) the
representations and warranties contained herein are being relied upon by the
Company as a basis for the exemption of the offer and sale of the Securities
pursuant to this Agreement under the registration requirements of the
Securities Act and any applicable state or foreign securities laws. Each such
Purchaser is acquiring the Securities for the Purchaser's own account, except
that, in the case of Clipper Capital Associates, L.P. ("Clipper Capital"), such
Purchaser is acquiring a portion of the Securities as nominee for not more than
three individuals who are either "accredited investors" (as defined in Rule 501
promulgated under the Securities Act) or full-time employees of Clipper
Capital, for the purpose of investment and not with a view to, or for sale in
connection with, any distribution thereof in violation of the Securities Act.
Each Purchaser has had the opportunity to review the books and records of the
Company and has been furnished or provided access to such relevant information
that such Purchaser has requested. Each Purchaser is knowledgeable,
sophisticated and experienced in business and financial matters of the type
contemplated by the Transaction Documents and is able to bear the risks
associated with an investment in the Company. Each Purchaser has considered
the investment in the Securities and has had an opportunity to ask questions of
and receive answers from the officers of the Company about the Securities and
the business and financial condition of the Company sufficient to enable it to
evaluate the risks and merits of its investment in the Company. For purposes
of this Section 4.1 and Section 4.7 hereof, the term "Purchasers" shall include
the three individuals referred to in this Section 4.1.

Section 4.2 Organization and Power. Each Purchaser is a limited
partnership duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization. Each Purchaser possesses all requisite
partnership power and authority to carry out the transactions contemplated by
this Agreement and each other Transaction Document.

Section 4.3 Authorization: No Conflict. The execution, delivery
and performance of each of this Agreement, the Registration Rights Agreement,
the Shareholders Agreement and each other Transaction Document to which any
Purchaser is a party have been duly authorized by each of the Purchasers. Each
of this Agreement, the Registration Rights Agreement, the Shareholders Agreement
and

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<PAGE> 23

each other Transaction Document to which any Purchaser is a party have been
duly executed and delivered by each Purchaser and (assuming the due
authorization, execution and delivery by the other parties hereto and thereto)
constitutes a legal, valid and binding obligation of such Purchaser,
enforceable against such Purchaser in accordance with its respective terms.
Neither the execution and delivery by each Purchaser of this Agreement, the
Registration Rights Agreement and the Shareholders Agreement, nor the
compliance by such Purchaser with any of the provisions hereof or thereof, do
or will (with or without notice or lapse of time) (a) conflict with, or result
in a breach of, any provisions of the limited partnership agreement or other
organizational documents of such Purchaser, (b) conflict with, violate, result
in the breach of, or constitute a default under any note, bond, mortgage,
indenture, license, agreement or other obligation to which such Purchaser is a
party or by which such Purchaser or its properties or assets are bound or (c)
violate, conflict with or result in any breach or contravention of or require
any consent, authorization, approval, exemption or other action by or notice or
declaration to, or filing with, any court or administrative or governmental
body or agency or other Person pursuant to any applicable statute or any rule
or regulation of any governmental authority or any order or decree applicable
to such Purchaser.

Section 4.4 Brokerage. There are no claims for brokerage
commissions, finders' fees or similar compensation in connection with the
transactions contemplated by this Agreement or any other Transaction Document
for which the Company will have any liability or responsibility based on any
arrangement or agreement binding upon any Purchaser.

Section 4.5 Further Representations by Foreign Purchasers. If a
Purchaser is not a United States Person, such Purchaser hereby represents that
it has satisfied itself as to the observance of the laws of its jurisdiction in
connection with the transactions contemplated by this Agreement, including (a)
the legal requirements within its jurisdiction for the purchase of the
Securities, (b) any foreign exchange restrictions applicable to such purchase,
(c) any governmental or other consents that it may need to be obtained in
connection therewith and (d) the income tax and other tax consequences, if any,
that may be relevant to the purchase, holding, redemption, sale, conversion or
transfer of the Securities. Such Purchaser's subscription and payment for, and
its continued beneficial ownership of the Securities, will not violate any
applicable securities or other laws of its jurisdiction.

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<PAGE> 24

Section 4.6 Statement of Purchasers. Each of the Purchasers is
an accredited investor" within the meaning of Rule 501 promulgated under the
Securities Act. None of the Purchasers has been organized for the, purpose of
acquiring the Securities.

Section 4.7 No Prior Dealings. Neither the Purchasers nor any
person acting on their behalf (a) was a member of an underwriting syndicate or
a prospective purchaser for the Company's initial public offering of its Common
Stock pursuant to its Registration Statement on Form S-1 (No. 333-04426) or (b)
received any form of general Solicitation or general advertising for the offer
or sale of the Common Stock pursuant to such Registration Statement, including,
but not limited to, the following: (i) any advertisement, article, notice or
other communication published in any newspaper, magazine or similar media or
broadcast over television or radio; and (ii) any seminar or meeting whose
attendees had been invited by any general solicitation or general advertising.

Section 4.8 Bank Holding Apt. Clipper Merban and Clipper
Merchant Partners, L.P. represent that their ownership of the Company's capital
stock will not cause the Company to be subject to the Bank Holding Act of 1956,
as amended (the "Bank Holding Act"), and, if the Company becomes subject to the
Bank Holding Act solely as a result of such ownership, they will dispose of
such number of shares of capital stock of the Company as shall be necessary
such that the Company will not be subject to the Bank Holding Act.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

As a material inducement to the Purchasers to enter into this
Agreement and purchase the Securities hereunder, the Company hereby represents
and warrants that;

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<PAGE> 25

Section 5.1 Organization Corporate Power and Licenses. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Florida and is qualified to do business in every
jurisdiction in which its ownership of property or conduct of business requires
it to qualify, except where the failure to do so has not had and could not
reasonably be expected to have a Material Adverse Effect. The Company
possesses all requisite corporate power and authority and all material
licenses, permits and authorizations necessary to own and operate its
properties, to carry on its business as now conducted and presently proposed to
be conducted and to carry out the transactions contemplated by this Agreement
and the other Transaction Documents, except (a) in the case of licenses,
permits and authorizations necessary for the Company to own and operate its
property and carry on the Company's business, where the failure to possess such
licenses, permits and authorizations has not had and could not reasonably be
expected to have a Material Adverse Effect and (b) in the case of licenses,
permits and authorizations necessary for the Company to perform its obligations
under the Transaction Documents, where failure to obtain such authorizations
could not reasonably be expected to have a Material Adverse Effect or prejudice
in any material respect the rights of the Purchasers under any of the
Transaction Documents. The Company has previously furnished to Purchasers'
counsel correct and complete copies of the Company's charter documents and
bylaws reflecting all amendments made thereto and in effect prior to the date
of this Agreement.

Section 5.2 Capital Stock and Related Matters. (a) As of the
Initial Closing and immediately thereafter, the authorized capital stock of the
Company will be 100,000,000 shares consisting of (i) 77,000,000 shares of Class
A common stock, $.01 par value per share ("Class A Common Stock"), of which
5,000,000 shares will be issued and outstanding, (ii) 3,000,000 shares of Class
B common stock, $.01 par value per share ("Class B Common Stock" and, together
with the Class A Common Stock, the "Common Stock"), of which no shares will be
issued and outstanding, and (iii) 20,000,000 shares of preferred stock, $.01
par value per share, of which 3,000,000 shares have been designated as "Class A
Preferred Stock" and 2,000,000 shares have been designated as "Class B
Preferred Stock," and 1,480,000 shares of Class A Preferred Stock and 220,000
shares of Class B Preferred Stock will be issued and outstanding. The Company
does not have outstanding any stock or securities convertible or exchangeable
for any shares of its capital stock (other than the Securities issued and sold
pursuant to this Agreement) or containing any profit participation features, or
any rights or options to subscribe for or to purchase its capital stock or any
stock or securities convertible into or exchangeable for its capital stock or
any stock appreciation rights or phantom stock plans, except as set forth on

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<PAGE> 26

Schedule 5.2. The Company is not subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any shares of its
capital stock or any warrants, options or other rights to acquire its capital
stock, except as set forth on Schedule 5.2. All of the outstanding shares of
the Company's capital stock are, and upon the issuance and sale thereof in
accordance with this Agreement all of the outstanding Securities will be, and
upon issuance all shares of Common Stock issuable upon conversion of the
Preferred Stock will be, validly issued, fully paid and non-assessable.
Schedule 5.2(a) sets forth a true and correct list of all shareholders of the
Company (including the number of shares of each class held of record by each
such shareholder) immediately prior to the date of this Agreement.

(b) Except as set forth in the Shareholders Agreement,
there are no statutory or contractual preemptive rights or rights of first
refusal with respect to the issuance of the Securities hereunder or the Common
Stock issuable upon conversion of the Preferred Stock. Except as set forth on
Schedule 5.2 hereto, (i) the Company has not violated any applicable federal or
state securities laws in connection with the offer, sale or issuance of any of
its outstanding capital stock, and (ii) subject to the truth and accuracy of
the representations and warranties of each Purchaser set forth in Section 4.1,
the first sentence of Section 4.2 and Sections 4.6 and 4.7 hereof, the offer,
sale and issuance of the Securities hereunder does not require registration
under the Securities Act or any applicable state securities laws. To the best
of the Company's knowledge, there are no agreements which will survive the
Initial Closing among the Company's shareholders with respect to the voting or
transfer of the Company's capital stock or with respect to any other aspect of
the Company's affairs, except for the Shareholders Agreement.

Section 5.3 Authorization: No Conflict. (a) The execution,
delivery and performance of each of this Agreement, the Registration Rights
Agreement, the Shareholders Agreement and each other Transaction Document to
which the Company is a party has been duly authorized by the Company. Each of
this Agreement, the Registration Rights Agreement, the Shareholders Agreement
and each other Transaction Document to which the Company is a party has been
duly executed and delivered by the Company (assuming the due authorization,
execution and delivery by the Purchasers) and each constitutes a legal, valid
and binding obligation of the Company, enforceable against it in accordance
with its terms subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity principles. Except as
set forth on Schedule 5.3 hereto, the execution and delivery by the Company of
each of this Agreement, the Registration Rights Agreement, the

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Shareholders Agreement and each other Transaction Document to which the Company
is a party, the offering, sale and issuance of the Securities hereunder, and
the fulfillment of and compliance with the respective terms hereof and thereof
by the Company, do not and will not (with or without notice or lapse of time)
(i) conflict with or result in a breach of the terms, conditions or provisions
of, (ii) constitute a default under, (iii) result in the creation of any Lien
upon the Company's capital stock or assets pursuant to, (iv) give any third
party the right to modify, terminate or accelerate any obligation under, (v)
result in a violation of, or (vi) require any authorization, consent, approval,
exemption or other action by or notice or declaration to, or filing with, any
court or administrative or Governmental Agency (except authorizations,
consents, filings and approvals that are required under any foreign (as to
which the Company makes no representation) or state securities or "blue sky"
laws) pursuant to: (A) the Second Amended and Restated Articles or amended
Amended and Restated Bylaws of the Company; (B) any law, statute, rule or
regulation to which the Company is subject, or (C) any agreement, instrument,
order, judgment or decree to which the Company is subject, except where the
occurrence of any of the events or conditions specified in clauses (i) through
(vi) above (insofar as the same pertain to clauses (B) and (C) above) does not
and could not reasonably be expected to have a Material Adverse Effect.

(b) The offer, issuance and sale by the Company of the Initial
Securities has been, and of any Additional Securities will be on or prior to
each Additional Closing, duly authorized by the Company.

Section 5.4 Financial Statements. The Company has delivered or
made available to the Purchasers copies of (a) each registration statement
filed by the Company with the Securities and Exchange Commission, (b) the
audited balance sheet of the Company as of December 31, 1994 and December 31,
1995 and the related audited statements of operations, shareholders' equity and
cash flows of the Company for the years then ended and (c) the unaudited
balance sheet of the Company as at September 30, 1996 (the "Interim Balance
Sheet") and the related statements of operations, shareholders equity and cash
flows of the Company for the nine-month period then ended (such audited and
unaudited statements described in clauses (b) and (c) above, including the
related notes and schedules thereto, are referred to herein as the "Company
Financial Statements"). From and after the delivery pursuant to Section 3. 1
(c) of the audited balance sheet of the Company as of December 31, 1996 and the
related statements of operations, shareholders' equity and cash flows of the
Company for the year then ended, and the unaudited balance sheet of the Company
as of March 31, 1997 and the related statements of operations, shareholders'
equity and

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<PAGE> 28

cash flows of the Company for such fiscal quarter, the term "Company Financial
Statements" also shall include such balance sheets and statements. Each of the
Company Financial Statements is complete and correct in all material respects,
has been prepared in accordance with GAAP (subject to normal year-end
adjustments and supplemental footnotes in the case of the unaudited statements)
and is in conformity with the practices consistently applied by the Company
without modification of the accounting principles used in the preparation
thereof and presents fairly the financial position, results of operations and
cash flows of the Company as at the dates and for the periods indicated.

Section 5.5 No Material Adverse Change. Except as disclosed in
the Company Financial Statements or as set forth on Schedule 5.5, there has not
occurred any event or change that has had or could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect since
December 31, 1995.

Section 5.6 Absence of Undisclosed Liabilities. Except as set
forth on Schedule 5.6, the Company does not have any obligation or liability
(whether accrued, absolute, contingent, unliquidated or otherwise, whether or
not known to the Company whether due or to become due and regardless of when
asserted) arising out of transactions entered into at or prior to the Initial
Closing, or any action or inaction at or prior to the Initial Closing, or any
state of facts existing at or prior to the Initial Closing other than: (a)
obligations and liabilities set forth on the Company Financial Statements and
(b) obligations and liabilities which have arisen after the date of the Interim
Balance Sheet in the ordinary course of business.

Section 5.7 Absence of Certain Developments. Except as disclosed
in the Company Financial Statements or as set forth on Schedule 5.7, since
December 31, 1995, the Company has not:

(a) issued any notes, bonds or other debt securities or
any capital stock or other equity securities or any securities (other
than the Securities) convertible, exchangeable or exercisable into any
capital stock or other equity securities;

(b) borrowed any amount or incurred or become subject to
any liabilities, except liabilities incurred in the ordinary course of
business and liabilities under contracts entered into in the ordinary
course of business and borrowings under its existing lines of credit;

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<PAGE> 29

(c) discharged or satisfied any material Lien or paid any
material obligation or liability, other than in the ordinary course of
business;

(d) declared or made any payment or distribution of cash
or other property to its shareholders with respect to its capital
stock or other equity securities or purchased or redeemed any shares
of its capital stock or other equity securities (including, without
limitation, any warrants, options or other rights to acquire its
capital stock or other equity securities);

(e) mortgaged or pledged any of its properties or assets
or subjected them to any Lien, except for Permitted Liens and Liens
which have been discharged or satisfied prior to the date hereof;

(f) sold, assigned or transferred any of its tangible
assets, except in the ordinary course of business, or canceled any
debts or claims in excess of $1,000,000;

(g) sold, assigned or transferred any patents or patent
applications, trademarks, service marks, trade names, corporate names,
copyrights or copyright registrations, trade secrets or other
intangible assets, or disclosed any material proprietary confidential
information to any Person (other than any such disclosure in the
ordinary course of business operations or which disclosure was subject
to a confidentiality agreement, which in either case could not
reasonably be expected to have a Material Adverse Effect);

(h) suffered any extraordinary losses or waived any
rights of value in excess of $1,000,000, whether or not in the
ordinary course of business or consistent with past practice;

(i) made capital expenditures or commitments therefor that
aggregate materially in excess of budgeted amounts;

(j) made any loans or advances to, guarantees for the
benefit of, or any investments in (other than intercompany loans or
guarantees), any Persons in excess of $100,000 in the aggregate;

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<PAGE> 30

(k) suffered any damage, destruction or casualty loss
exceeding in the aggregate $100,000, whether or not covered by
insurance; or

(l) conducted its business or entered into any material
transaction other than in the ordinary course consistent with past
practice.

Section 5.8 Title to Properties. (a) Except as set forth
on Schedule 5.8, the Company has good and valid title to, or a valid leasehold
interest in, the properties and assets used by it, located on its premises or
reflected on the Interim Balance Sheet or acquired thereafter, free and clear
of all Liens, except for (i) properties and assets disposed of in the ordinary
course of business since the date of the Interim Balance Sheet, (ii) Permitted
Liens and (iii) inventory held under consignment.

(b) The Company's buildings, equipment and other tangible
assets (other than materials designated as scrap) are in good operating
condition in all material respects and are fit for use in the ordinary course
of business.

(c) The Company owns, or has a valid leasehold interest
in, all assets necessary for the conduct of its business as presently
conducted and as presently proposed to be conducted.

Section 5.9 Tax Representations (a) Except as set forth
in Schedule 5.9 hereto, the Company has filed all federal income Tax Returns,
and all other material Tax Returns which it is required to file under
applicable laws and regulations; all such Tax Returns are true and accurate in
all material respects and have been prepared in compliance with all applicable
laws and regulations; the Company has paid all Taxes due and owing by it
(whether or not such Taxes are required to be shown on a Tax Return) and has
withheld and paid over to the appropriate taxing authority aft Taxes which it
is required to withhold from amounts paid or owing to any employee,
stockholder, creditor or other third party, except where the amounts of such
unpaid Taxes or the amounts that have not been withheld and paid over do not,
in the aggregate, exceed $50,000; the accrual for Taxes on the Interim Balance
Sheet (excluding any amount recorded which is attributable solely to timing
differences between book and Tax income) would be adequate to pay all material
Tax liabilities of the Company if its current tax year were treated as ending
on the date of the Interim Balance Sheet; since December 31, 1995, the charges,
accruals and reserves for Taxes with respect to the Company (including any
provision

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<PAGE> 31

for deferred income taxes) reflected on the books of the Company are adequate
to cover any material Tax liabilities of the Company if its current tax year
were treated as ending on the date hereof; the federal income Tax Returns of
the Company have been filed through December 31, 1995, and, as of the date
hereof, none of such Tax Returns has been audited. To the best knowledge of
the Company, no claim has been made by a taxing authority in a jurisdiction
where the Company does not file tax returns that the Company is or may be
subject to taxation by that jurisdiction. To the best knowledge of the
Company, (i) there are no foreign, federal, state or local tax audits or
administrative or judicial proceedings pending or being conducted with respect
to the Company; (ii) no information related to Tax matters has been requested
by any foreign, federal, state or local taxing authority and no written notice
indicating an intent to open an audit or other review has been received by the
Company from any foreign, federal, state or local taxing authority; and (iii)
there are no material unresolved questions or claims concerning the Company's
Tax liability. No waivers of statutes of limitation have been given or
requested with respect to the Company in connection with any Tax Returns
covering the Company, except where such waiver would not have a Material
Adverse Effect. The Company has not executed or entered into a closing
agreement pursuant to IRC Section 7121 or any predecessor provision thereof or
any similar provision of state, local or foreign law; nor has the Company
agreed to or is required to make any adjustments pursuant to IRC Section 481(a)
or any similar provision of state, local or foreign law by reason of a change
in accounting method initiated by the Company. The Company also does not have
any knowledge that the IRS has proposed any such adjustment or change in
accounting method, or has any knowledge with respect to any application pending
with any taxing authority requesting permission for any changes in accounting
methods that relate to the business or operations of the Company. The Company
has not been a United States real property holding company within the meaning
of IRC Section 897(c)(2) during the applicable period specified in IRC Section
897(c)(1)(A)(ii).

(b) The Company has not made an election under IRC Section 341(f).
The Company is not liable for the Taxes of another Person. The Company is not
a party to any tax sharing agreement except as set forth on Schedule 5.9. The
Company has not made any payments nor is it obligated to make payments nor is
it a party to an agreement that could obligate it to make any payments that
would not be deductible under IRC Section 280G.

(c) At all times since its organization until immediately prior to the
Initial Closing, the Company has been an "S corporation" within the meaning of

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Section 1361(a)(1) of the Code (and any predecessor provision) for Federal
income tax purposes and under applicable provisions of Florida law.

Section 5.10 Litigation, Etc. Except as set forth on Schedule 5.10
hereto: there are no actions, suits, proceedings, orders, investigations or
claims pending or, to the knowledge of the Company (other than garnishment
proceedings involving certain employees of the Company), threatened against or
affecting the Company (or, to the knowledge of the Company, pending or
threatened against or affecting any of the officers, directors or employees of
the Company with respect to the businesses of the Company) at law or in equity,
or before or by any governmental department, commission, board, bureau, agency
or instrumentality (including, without limitation, any actions, suit,
proceedings or investigations with respect to the transactions contemplated by
this Agreement or any other Transaction Document) which seek to enjoin or
prevent the consummation of or otherwise relate specifically to the
transactions contemplated by the Transaction Documents or which have had or
could reasonably be expected to have a Material Adverse Effect; the Company is
not subject to any arbitration that could reasonably be expected to have a
Material Adverse Effect; there has not been any such action, suit, proceeding,
order, investigation or claim pending against or affecting the Company during
the past three years which has resulted in liabilities or payments in excess of
$100,000; the Company is not subject to any governmental investigations or
inquiries (including, without limitation, inquiries as to the qualification to
hold or receive any license or permit) which have had or could reasonably be
expected to have a Material Adverse Effect; and, to the knowledge of the
Company, there is no basis for any of the foregoing. The Company is not
subject to any judgment, order or decree of any court or other governmental
agency that requires or prohibits any conduct on the part of the Company that
affects its business in any material respect.

Section 5.11 Brokerage. There are no claims for brokerage
commissions, finders fees or similar compensation in connection with the
transactions contemplated by this Agreement or any other Transaction Document
based on any arrangement or agreement binding upon the Company. The Company
shall pay, and hold each Purchaser harmless against, any liability, loss or
expense (including, without limitation, reasonable attorneys' fees and
out-of-pocket expenses) arising in connection with any such claim.

Section 5.12 Consents. No action, consent, waiver, approval,
order, permit or authorization of, or declaration or filing with, or
notification to, any Person or Governmental Authority is or will be required to
be obtained or made by the

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Company in connection with the Company's execution, delivery and performance of
this Agreement or any other Transaction Document to which the Company is a
party, except (a) the filing of the Second Amended and Restated Articles with
the Secretary of State of Florida, (b) those actions, consents, waivers,
approvals and notices which are listed on Schedule 5.12 and (c) authorizations,
consents, filings and approvals that are required under any foreign (as to
which the Company makes no representation) or state securities or "blue sky"
laws.

Section 5.13 Insurance. The Company maintains valid policies of
insurance which (a) are issued by financially sound and reputable insurance
companies, (b) are sufficient for compliance by the Company with all applicable
requirements of law and all agreements to which the Company is subject, and (c)
provide coverage for the assets, properties, operations and employees of the
Company in at least such amounts and against at least such risks (but,
including in any event, "all-risk" casualty, public liability and product
liability) as are normally insured against in the same general geographic area
by companies engaged in the same or a similar business.

Section 5.14 Labor Matters. There are no strikes, lockouts or
slowdowns against the Company pending or, to the Company's knowledge,
threatened. The hours worked by and payment made to employees of the Company
have not been in violation of the Fair Labor Standards Act or any other
applicable Federal, state, local or foreign law dealing with such matters,
where such violations could reasonably be expected to result in a Material
Adverse Effect.

Section 5.15 Employee Benefit Plans. In connection with its
Plans, the Company and each of its ERISA Affiliates, if any, is in compliance
in all material respects with the applicable provisions of ERISA and the
regulations and published interpretations thereunder. No Reportable Event has
occurred, been waived or exists as to which the Company or any ERISA Affiliate
was required to file a report with the PBGC, and the present value of all
benefit liabilities under all Plans (based on those assumptions used to fund
such Plans) did not, as of the last annual valuation date applicable thereto,
exceed the value of the asses of all such Plans combined. The Company has not
incurred any Withdrawal Liability that could result in a Material Adverse
Effect. None of the Company or any ERISA Affiliate has received any
notification that any Multiemployer Plan is in reorganization or has been
terminated within the meaning of Title IV of ERISA, and no Multiemployer Plan is
reasonably expected to be in reorganization or to be terminated where such
reorganization or termination has resulted of could reasonably be expected to
result,

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<PAGE> 34

through increases in the contributions required to be made to such Plan or
otherwise, in a Material Adverse Effect.

Section 5.16 Compliance with Laws. Neither the Company nor any of
its material properties or assets, are in violation of, nor will the continued
operation of the Company's material properties and assets as currently
conducted or as presently proposed to be conducted violate any material law,
rule, regulation or statute or result in the default with respect to any
judgment, writ, injunction, decree or order of any Governmental Authority,
where such violation or default could reasonably be expected to result in a
Material Adverse Effect.

Section 5.17 Environmental and Safety Matters.

(a)(i) The property, assets and operations of the Company's business
are and have been in material compliance with all applicable Environmental and
Safety Laws, and the Company possesses and is in compliance with all licenses,
authorizations or permits required by any applicable Environmental and Safety
Laws; (ii) there are no Hazardous Substances stored or otherwise located in, on
or under any of the property or assets of the Company, except in compliance
with and as would not be expected to result in liability under any
Environmental and Safety Laws; and (iii) there have been no releases or
threatened releases of Hazardous Substances by the Company, on or under any
property currently or formerly owned or operated by the Company.

(b) None of the assets or operations of the Company is the subject
of any pending or, to the knowledge of the Company, threatened federal, state
or local investigation evaluating whether (i) any remedial action is needed to
respond to a release or threatened release of any Hazardous Substances into the
environment or (ii) any release or threatened release of any Hazardous
Substances into the environment is in contravention of any Environmental and
Safety Laws.

(c) The Company has not received any notice or claim, including,
but not limited to, a notice of potential liability under CERCLA, nor are there
pending or, to the knowledge of the Company, threatened lawsuits, actions or
proceedings against the Company or its assets or operations, with respect to
violations of or potential liability under any Environmental and Safety Laws or
in connection with the presence of or exposure to any Hazardous Substances or
any release or threatened release of any Hazardous Substances into the
environment.

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(d) There are no facts or circumstances or conditions known to and
relating to the Company, its current or former operations or facilities,
whether on-site or offsite, present or contingent, that could result in
material liability under any Environmental and Safety Laws.

Section 5.18 Affiliate Transactions. Except as set forth on
Schedule 5.18, no officer, director, employee, stockholder or Affiliate of the
Company or any individual related by blood, marriage or adoption to any such
individual or any entity in which any such Person or individual owns any
beneficial interest, is a party to any agreement, contract, commitment or
transaction with the Company or has any material interest in any material
property used by the Company.

Section 5.19 Employment and Management Agreements. Except as
disclosed on Schedule 5.19, there am no (a) employment agreements covering
management employees of the Company or other material agreements relating to
the compensation of management employees (including the issuance of securities
of the Company to management employees), (b) agreements for management or
consulting services to which the Company is a party or by which it is bound or
(c) collective bargaining agreements or other labor agreements covering any of
the employees of the Company.

Section 5.20 Material Contracts; No Defaults. Schedule 5.20 set
forth a complete and accurate list of all material written or oral material
contracts to which the Company is a party as of the date hereof ("Material
Contracts"). All Material Contracts are in full force and effect and are
valid, binding and enforceable in accordance with their terms subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles. The Company is not and, to the
Company's knowledge no other party is, in default in any manner under any
provision of (a) any indenture or other agreement or instrument evidencing
Indebtedness, or (b) any other agreement or instrument to which the Company is
a party or by which it or any of its properties or assets are or may be bound
(in the case of clause (b)) where such default could reasonably be expected to
result in a Material Adverse Effect. The Company has not received any written
or, to the knowledge of the Company, oral notice from any party to a Material
Contract that such party intends to terminate such Material Contract or that
the Company is in default thereunder.

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Section 5.21 Intellectual Property. (a) Except as set forth on
Schedule 5.21, the Company owns all right, title and interest to, or has the
right to use pursuant to a valid license, all Intellectual Property Rights
necessary for the operation of the business of the Company as presently
conducted, free and clear of all Liens, except (i) Permitted Liens or (ii)
where the failure to own or have the right to use any such Intellectual
Property Rights would not, individually or in the aggregate, have a Material
Adverse Effect.

(b) Except as set forth on Schedule 5.21, (i) there have been no
material claims made against the Company asserting the invalidity, misuse or
unenforceability of any of such Intellectual Property Rights, and to the
knowledge of the Company, there are no grounds for the same, (ii) the Company
has not received any notices of any infringement or misappropriation by, or
conflict with, any third party with respect to such Intellectual Property
Rights (including, without limitation, any demand or request that the Company
license any rights from a third party) which either his not been resolved prior
to the date hereof or if determined adversely to the Company could reasonably
be expected to have a Material Adverse Effect and (iii) to the knowledge of the
Company, the conduct of the Company's business has not infringed,
misappropriated or conflicted with and does not infringe, misappropriate or
conflict with any Intellectual Property Rights of any other Person, nor would
any future conduct as presently contemplated infringe, misappropriate or
conflict with any Intellectual Property Rights of any other Person. The
transactions contemplated by this Agreement will not have a Material Adverse
Effect on the Company's right, title and interest in and to the Intellectual
Property Rights.

Section 5.22 Disclosure. (a) All documents delivered by or on
behalf of the Company in connection with this Agreement and the other
Transaction Documents are true, complete, correct and authentic in all material
aspects. No representation or warranty by the Company contained in this
Agreement (including the Schedules hereto) or any other Transaction Document
and no statement contained in any certificate delivered by the Company to the
Purchasers pursuant to this Agreement contain any untrue statement or omits to
state a material fact necessary to make the statements contained herein or
therein not misleading when taken together in the light of the circumstances in
which they were made. There is no fact or information known to the Company
which the Company has not disclosed to the Purchasers in writing which the
Company presently believes has or could reasonably be, expected to have a
Material Adverse Effect, other than any changes in the prospects of the Company
which result from developments affecting general economic or industry
conditions.

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(b) The Company Prospectus as filed under the Securities Act
complied when so filed in all material respects with the Securities Act. At
the time the registration statement with respect to the Company Prospectus
became effective, such registration statement and the Company Prospectus, and
any supplements or amendments thereto, complied in all material respects with
the Securities Act, and the Company Prospectus did not contain any untrue
statement or omit to state a material fact necessary to make the statements
contained therein not misleading when taken together in the light of the
circumstances in which they were made.

Section 5.23 Subsidiaries. As of the date hereof, the Company has
no Subsidiaries

ARTICLE VI

DEFINED TERMS

Section 6.1 Definitions. For the purposes of this Agreement, the
following terms have the meanings set forth below:

"Additional Closing" shall have the meaning specified in Section 1.3(b)
hereof.

"Additional Securities" shall have the meaning specified in Section
1.3(a).

"Affiliate" of any particular Person shall mean any other Person
controlling, controlled by or under common control with such particular Person,
where "control" means the possession, directly or indirectly, of the power to
direct the management and policies of a Person whether through the ownership of
voting securities, contract or otherwise.

"Bank" shall have the meaning specified in Section 3.13 hereof.

"Bank Holding Act" shall have the meaning specified in Section 4.8
hereof.

"CERCLA" shall have the meaning specified in the definition of
"Environmental and Safety Laws".

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"Clipper Capital" shall have the meaning specified in Section 4.1
hereof,

"Clipper Equity Partners" shall have the meaning specified in Section
3.9(a) hereof.

"Clipper Merban" shall have the meaning specified in Section 1.3(c)
hereof.

"Closing" shall mean the Initial Closing or any Additional Closing.

"Closing Fee" shall have the meaning specified in Section 2.1(a)(ii)
hereof.

"Common Stock" shall have the meaning specified in Section 5.2 hereof.

"Company" shall have the meaning specified in the recitals hereof.

"Company Financial Statements" shall have the meaning specified in
Section 5.4 hereof.

"Company Prospectus" shall mean the prospectus of the Company dated
July 12, 1996 pursuant to which the Company proposed to offer 3,450,000 shares
of its common stock.

"Distribution" shall mean a distribution by the Company to Existing
Shareholders in the aggregate amount of $4,915,229 which represents (x) the
previously undistributed portion of the Company's Accumulated Adjustments
Account in the amount of $795,229 as shown on the Company's U.S. federal income
tax return on Form 1120S for the tax year ended December 31, 1995, plus (y) an
estimate of the Company's Accumulated Adjustments Account for the period
beginning on January 1, 1996 through the date of termination of the Company's
election as a subchapter S corporation, which amount is presently estimated at
$4,120,000. For purposes of this definition, "Accumulated Adjustments Account"
shall have the meaning set forth in subchapter S of the IRC.

"Environmental and Safety Laws" shall mean any and all applicable
current and future treaties, laws, regulations, enforceable requirements,
binding

33
<PAGE> 39

determinations, orders, decrees, judgments, injunctions, permits, approvals,
authorizations, licenses, permissions, notices or binding agreements issued,
promulgated or entered by any Governmental Authority, relating to the
environment, to employee health or safety as it pertains to the use or handling
of, or exposure to, Hazardous Substances, to preservation or reclamation of
natural resources, or to the management, release or threatened release of
contaminants or noxious odors, including the Hazardous Materials Transportation
Act, the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986
("CERCLA"), the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976 and the Hazardous and Solid Waste
Amendments of 1984, the Federal Water Pollution Control Act, as amended by the
Clean Water Act of 1977, the Clean Air Act of 1970 (to the extent it pertains
to the use or handling of, or exposure to, Hazardous Substances), as amended,
the Toxic Substances Control Act of 1976, the Occupational Safety and Health
Act of 1970, as amended, the Emergency Planning and Community Right-to-Know Act
of 1986, the Safe Drinking Water Act of 1974, as amended, and any similar or
implementing state law, and all amendments or regulations promulgated
thereunder.

"ERISA" shall mean the Employee Retirement Income Security Act of
1974, or any successor statute, together with the regulations thereunder, as
the same may be amended from time to time.

"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that was or is a member of a group of which the Company or any of
its Subsidiaries is a member and which is treated as a single employer under
IRC Section 414.

"GAAP" shall mean generally accepted accounting principles in the
United States, in effect from time to time.

"Governmental Authority" shall mean any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or regulatory
body.

"Hazardous Substances" shall mean any toxic, radioactive, caustic or
otherwise hazardous substance, material or waste, including petroleum, its
derivatives, by-products and other hydrocarbons, or any substance having any
constituent elements displaying any of the foregoing characteristics,
including, without limitation, polychlorinated biphenyls ("PCBs"), asbestos or
asbestos-containing

34
<PAGE> 40

material, and any substance, waste or material regulated under Environmental
and Safety Laws.

"Indebtedness" shall mean at a particular time, without duplication,
(i) any indebtedness for borrowed money or issued in substitution for or
exchange of indebtedness for borrowed money, (ii) any indebtedness evidenced by
any note, bond, debenture or other debt security, (iii) any indebtedness for
the deferred purchase price of property or services with respect to which a
Person is liable, contingently or otherwise, as obligor or otherwise (other
than trade payables and other current liabilities incurred in the ordinary
course of business), (iv) any commitment by which a Person assures a creditor
against loss (including, without limitation, contingent reimbursement
obligations with respect to letters of credit), (v) any indebtedness guaranteed
in any manner by a Person (including, without limitation, guarantees in the
form of an agreement to repurchase or reimburse), (vi) any obligations under
capitalized leases with respect to which a Person is liable, contingently or
otherwise, as obligor, guarantor or otherwise, or with respect to which
obligations a Person assures a creditor against loss, (vii) any indebtedness
secured by a Lien on a Person's assets and (viii) any unsatisfied obligation
for Withdrawal Liability to a Multiemployer Plan.

"Indemnifying Party" shall have the meaning specified in Section
7.2(a) hereof.

"Indemnitees" shall have the meaning specified in Section 7.2(a)
hereof.

"Initial Closing" shall have the meaning specified in Section 2.1
hereof.

"Initial Public Offering" shall mean the sale of the Company's common
stock in an initial public offering registered under the Securities Act.

"Initial Securities" shall have the meaning specified in Section 1.2
hereof

"Interim Balance Sheet" shall have the meaning specified in Section
5.4 hereof.

"Intellectual Property Rights", shall mean any U.S. or foreign:
patents, maskworks, trademarks, service marks, trade names, copyrights,
inventions, know-

35
<PAGE> 41

how, process specifications, trade secrets, technical information, designs,
utility models, software, databases, data, schematics, drawings, proprietary
rights and applications for registration of any of the foregoing.

"IRCC" shall mean the Internal Revenue Code of 1986, as amended, and
any reference to any particular IRC section shall be interpreted to include any
revision of or successor to that section regardless of how numbered or
classified.

"IRS" shall mean the United States Internal Revenue Service.

"Liens" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including, without limitation, any
conditional sale or other title retention agreement or lease in the nature
thereof), any sale of receivables with recourse against the Company, any of its
Subsidiaries or any of its Affiliates, any filing or agreement to file a
financing statement as debtor under the Uniform Commercial Code or any similar
statute other than to reflect ownership by a third party of property leased to
the Company or any of its Subsidiaries under a lease which is not in the nature
of a conditional sale or title retention agreement, or any subordination
arrangement in favor of another Person (other than any subordination arising in
the ordinary course of business).

"Loss" shall have the meaning specified in Section 7.2(a) hereof.

"Material Adverse Effect" shall mean any material adverse change in,
or effect on, the business, properties, results of operations, condition
(financial or otherwise) or prospects of the Company.

"Material Contracts" shall have the meaning specified in Section 5.20
hereof.

"Multiemployer Plan" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which the Company or any ERISA Affiliate (other
than one considered an ERISA Affiliate only pursuant to subsection (m) or (o)
of IRC Section 414) is making or accruing an obligation to make contributions,
or has within any of the preceding five plan years made or accrued an
obligation to make contributions.

"Officer's Certificate" shall mean a certificate signed by the
Company's chairman, president or its chief financial officer, stating that (i)
the officer signing such certificate has made or has caused to be made such
investigations as are

36
<PAGE> 42

necessary in order to permit him to verify the accuracy of the information set
forth in such certificate and (ii) to the best of such officer's knowledge,
such certificate does not misstate any fact and does not omit to state any
material fact necessary to make the certificate not misleading.

"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA or any successor thereto.

"Permitted Lien" shall mean (a) Liens of current taxes not yet due
payable, (b) Liens with respect to secured indebtedness disclosed on the
Company's financial statements, (c) Liens taken as exceptions in the title
insurance policies of the Company, (d) such imperfections of title, easements
and encumbrances, if any, as do not materially detract from the value, or
materially interfere with the use of the properties of the Company and (e)
Liens such as carriers', warehouseman's, landlord's, materialmen's or mechanics
liens and other similar liens imposed by law.

"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.

"Plan" shall mean any pension plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or IRC Section 412 that is
maintained for employees of the Company or any ERISA Affiliate.

"Preferred Stock" shall have the meaning specified in Section 1.1
hereof.

"Purchase Price" shall have the meaning specified in Section 1.2
hereof.

"Purchaser" shall have the meaning specified in the recitals hereof.

"Purchaser Representative" means Clipper Capital Partners, L.P. or a
Person designated by the holders of a majority of the Securities.

"Purchaser Transferee" means any Person that is an Affiliate or
partner of any Purchaser.

37
<PAGE> 43

"Qualified Public Offering" shall mean the sale of the
Company's common stock at a price equal to at least $9.00 per share, in an
underwritten initial public offering registered under the Securities Act that
results in net proceeds to the Company of at least $25 million.

"Registration Rights Agreement" shall have the meaning
specified in Section 2.1(a)(iv) hereof.

"Release" shall mean any discharge, emission, release, or
threat thereof, including a "Release" as defined in CERCLA at 42 U.S.C.
Section 9601(22), and the term "Released" has a meaning correlative thereto.

"Reportable Event" shall mean any reportable event as defined
in Section 4043(b) of ERISA or the regulations issued thereunder with respect
to a Plan (other than a Plan maintained by an ERISA Affiliate that is considered
an ERISA Affiliate only pursuant to subsection (m) or (o) of IRC Section 414).

"Second Amended and Restated Articles" shall have the meaning
specified in Section 1.1 hereof.

"Securities" shall have the meaning specified in Section
1.3(a) hereof.

"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal law then in force.

"Shareholders" shall have the meaning specified in Section
2.1(a)(v) hereof.

"Shareholders Agreement" shall have the meaning specified in
Section 2.1(a)(v) hereof.

"Subsidiary" shall mean, with respect to any Person, any
corporation, limited liability company, partnership, association or other
business entity of which (a) if a corporation, a majority of the total voting
power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a combination thereof,
or (b) if a limited liability company, partnership, association or other
business entity, a majority of the partnership or other similar ownership
interest

38
<PAGE> 44

thereof is at the time owned or controlled, directly or indirectly, by any
Person or one or more Subsidiaries of that Person or a combination thereof.
For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a limited liability company, partnership, association or
other business entity if such Person or Persons shall be allocated a majority
of limited liability company, partnership, association or other business entity
gains or losses or shall be or control any managing member or general partner
of such limited liability company, partnership, association or other business
entity.

"Tax" or "Taxes" shall mean federal, state, county, local,
foreign or other income, gross receipts, ad valorem, franchise, profits, sales
or use, transfer, registration, excise, utility, environmental, communications,
real or personal property, capital stock, license, payroll, wage or other
withholding, employment, social security, severance, stamp, occupation,
alternative or add-on minimum, estimated and other taxes of any kind whatsoever
(including, without limitation, deficiencies, penalties, additions to tax, and
interest attributable thereto) whether disputed or not.

"Tax Allocation and Indemnification Agreement" shall have the
meaning specified in Section 2.1(a)(x) hereof.

"Tax Return" shall mean any return, information report or
filing with respect to Taxes, including any Schedules attached thereto and
including any amendment thereof.

"Transaction Documents" shall mean this Agreement, the
Registration Rights Agreement, the Shareholders Agreement and any other
document or instrument required to be delivered hereunder or thereunder.

"Withdrawal Liability" shall mean liability to a Multiemployer
Plan as a result of a complete or partial withdrawal from such Multiemployer
Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

39
<PAGE> 45

ARTICLE VII

SURVIVAL AND INDEMNIFICATION; TAX MATTERS

Section 7.1 Reliance an and Survival of Representations. All
representations and warranties of the Company and each of the Purchasers
herein, and in any certificates or other agreements delivered with this
Agreement shall (a) be deemed to have been relied upon by the Purchasers or the
Company, as the case may be, notwithstanding any investigation heretofore or
hereafter made by the Purchasers or on the Purchasers' behalf or by the
Company, as the case may be, and (b) survive the execution and delivery of this
Agreement and the issuance and purchase of the Securities to the Purchasers and
shall continue in effect for a period of two years from the date on which the
Initial Closing occurs (other than the representations and warranties contained
in: Sections 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 5.1, 5.2, 5.3 and 5.8(a),
which shall survive indefinitely; Section 5.9, which shall survive for the
period coterminous with any applicable statute of limitations; and Sections
5.4, 5.5, 5.6 and 5.12, which shall continue in effect for a period of 18
months from the date on which the Initial Closing occurs).

Section 7.2 Indemnification. (a) Each of the Purchasers
(severally and not jointly), on the one hand, and the Company, on the other
hand, (each, an "Indemnifying Party"), agrees to indemnify the other and each
of their stockholders, partners, agents and representatives, as the case may be
(collectively, the "Indemnitees"), and hold them harmless against any loss,
liability, deficiency, damage (including, in the case of indemnification by the
Company, as a result of the diminution of the value of the Securities) or
expense (including reasonable legal expenses and costs and including interest
and penalties) (a "Loss") which the Indemnitees may suffer, sustain or become
subject to, as a result of the breach by the Company or such Purchaser, as the
case may be, of any representation or warranty set forth in ARTICLE IV OR V of
this Agreement (as applicable) or any other agreement contemplated hereby or
any certificates executed and delivered in connection with the closing of the
transactions contemplated hereby.

(b) The Indemnifying Party will indemnify the Indemnitees and
hold them harmless against any Loss which the Indemnitees may suffer, sustain
or become subject to, as a result of the breach by the Indemnifying Party of
any covenant set forth in this Agreement or any other agreement contemplated
hereby or any documents, instruments or certificates executed and delivered in
connection with the transactions contemplated hereby.

40
<PAGE> 46

(c) Notwithstanding anything to the contrary contained in
this Article VII, the Company shall be Liable to the Purchasers for Losses
under Section 7.2(a) only up to an aggregate amount equal to the aggregate
purchase price paid by the Purchasers for the Securities.

(d) In the circumstance in which the Company is the
Indemnifying Party, in order to prevent the Purchasers from effectively bearing
a portion of such Loss, any indemnification payment required to be made by the
Company pursuant to this Section 7.2 shall be increased such that (i) the
indemnification payment minus (ii) the product of the indemnification payment
and the Purchasers' fully diluted ownership percentage of Common Stock, equals
the Loss.

(e) Each Indemnitee shall notify the Indemnifying Party in
writing within 30 days following the discovery by such Indemnitee of any matter
giving rise to an indemnification obligation of the Indemnifying Party pursuant
to this Section 7.2 and shall indicate in such notification whether such
Indemnitee is requesting indemnification with respect to such matter and the
amount of indemnification initially anticipated (if the same is capable of
estimation). The failure to give notice as required by this Section 7.2(e) in
a timely fashion shall not result in a waiver of any right to indemnification
hereunder. In case any such action is brought against an Indemnitee, the
Indemnifying Party shall be entitled to participate in and, unless in such
Indemnitee's reasonable judgment upon the advice of its counsel a conflict of
interest between the Indemnifying Party and the Indemnitee actually exists in
respect of such Loss, to assume the defense thereof with counsel reasonably
satisfactory to the Indemnitee, and after its assumption of the defense
thereof, the Indemnifying Party shall not be liable to the Indemnitee for any
legal or other expenses subsequently incurred by the Indemnitee in connection
with the defense thereof other than reasonable costs of investigation. Nothing
herein shall limit the Indemnitee's right to employ its own counsel at its own
cost and expense. If in the Indemnitee's reasonable judgment upon the advice
of its counsel a conflict of interest exists requiring the Indemnitee to assume
its own defense, upon written notice thereof by the Indemnitee to the
Indemnifying Party stating the nature of such conflict of interest, the
Indemnitee shall be entitled to assume its own defense with one separate
counsel at the Indemnifying Party's expense in accordance with this Section
7.2. The Indemnifying Party shall not, without the consent of the indemnified
party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to the Indemnitee of an unconditional release from all liability in
respect of such Loss or which requires

41
<PAGE> 47

action on the part of such Indemnitee or otherwise subjects the Indemnitee to
any obligation or restriction to which it would not otherwise be subject.

ARTICLE VIII

MISCELLANEOUS

Section 8.1 Fees, Expenses and Taxes. The Company shall pay,
and hold each Purchaser and all holders of the Securities harmless against
liability for the payment of, (a) all reasonable out-of-pocket expenses
incurred by the Purchasers up to and including the date of the Initial Closing
in connection with the transactions contemplated by this Agreement, including
without limitation, the fees and expenses of their counsel and accountants, (b)
the fees and expenses incurred with respect to any amendments or waivers
requested by the Company (whether or not the same become effective) under or in
respect of this Agreement or any other Transaction Document, (c) the fees and
expenses incurred with respect to the enforcement of the covenants and other
agreements set forth in this Agreement and any other Transaction Document and
(d) all stamp, documentary or other similar taxes, assessments or charges, if
any, levied by any governmental or revenue authority in respect of this
Agreement or any other Transaction Document. The obligations of the Company
under this Section 8.1 shall survive the Initial Closing or any termination of
this Agreement.

Section 8.2 Specific Performance and Other Remedies. In
addition to the rights specifically granted to the Purchasers and the Company
herein, the Purchasers and the Company shall have all rights and remedies set
forth in the Second Amended and Restated Articles and all rights and remedies
which the Purchasers and the Company have been granted at any time under any
other agreement or contract and, in the case of any fraudulent act or omission,
all of the rights which the Purchasers or the Company have under any law. In
addition, the parties agree that the Purchasers and the Company would suffer
irreparable harm from a breach by the other party of the agreements set forth
in Article I or Section 2.1 hereof and the covenants with respect to the other
party set forth in Section 3 hereof and that money damages may not be an
adequate remedy for any such breach. In the event of an alleged or threatened
breach by any such Persons of any of the provisions of this Agreement, the
Purchasers or the Company or their respective successors or assigns may, in
addition to all other rights and remedies existing in their favor, apply to any
court of competent jurisdiction for specific performance and/or injunctive or
other

42
<PAGE> 48

relief (without posting a bond or other security) in order to enforce or
prevent any violation of the provisions hereof.

Section 8.3 Entire Agreement; Amendments and Waivers. This
Agreement (including the Schedules and Exhibits hereto) and the other
Transaction Documents constitute the entire understanding and agreement between
the parties hereto and thereto with respect to the subject matter hereof. This
Agreement can be amended, supplemented or changed, and any provision hereof can
be waived, only by written instrument making specific reference to this
Agreement signed by the party against whom enforcement of any such amendment,
supplement, modification or waiver is sought. No action taken pursuant to this
Agreement, including without limitation, any investigation by or on behalf of
any party, shall be deemed to constitute a waiver by the party taking such
action of compliance with any representation, warranty, covenant or agreement
contained herein. The waiver by any party hereto of a breach of any provision
of this Agreement shall not operate or be construed as a further or continuing
waiver of such breach or as a waiver of any other or subsequent breach. No
failure on the part of any party to exercise, and no delay in exercising, any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of such right, power or remedy by such party
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law.

Section 8.4 Successors and Assigns. All covenants and
agreements contained in this Agreement by or on behalf of any of the parties
hereto shall bind and inure to the benefit of the respective successors and
assigns of the parties hereto whether so expressed or not. In addition, and
whether or not any express assignment has been made, the provisions of this
Agreement which are for any Purchaser's benefit as a purchaser or holder of the
Securities are also for the benefit of, and enforceable by, any subsequent
holder of the Securities.

Section 8.5 Severability. Whenever possible, each provision
of this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement is held to
be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.

Section 8.6 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, any one of which need not contain
the

43
<PAGE> 49

signatures of more than one party, but all such counterparts taken together
shall constitute one and the same Agreement.

Section 8.7 Descriptive Headings; Interpretation. The
descriptive headings of this Agreement are inserted for convenience only and do
not constitute a substantive part of this Agreement. The use of the word
"including" in this Agreement shall be by way of example rather than by
limitation.

Section 8.8 Governing Laws; Consent to Jurisdiction. (a) This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of Florida, without regard to principles of conflict of laws.

(b) Each party hereto agrees that all judicial proceedings
brought against the Company or any Purchaser arising out of or relating to this
Agreement or the breach hereof may be brought in any state or federal court of
competent jurisdiction in the State of Florida or New York.

Section 8.9 Notices. All notices, demands or other
communications to be given or delivered under or by reason of the provisions of
this Agreement shall be in writing and shall be deemed to have been given when
delivered personally to the recipient, sent to the recipient by reputable
overnight courier service (charges prepaid), mailed to the recipient by
certified or registered mail, return receipt requested and postage prepaid.
Such notices, demands and other communications shall be sent to at the
addresses indicated below:

if to the Company, at:

AVTEAM, Inc.
3230 Executive Way
Miramar, Florida 33025
Telephone: (954) 431-2359
Attention: Donald A. Graw

44
<PAGE> 50

with a copy to:

Baker & McKenzie
701 Brickell Avenue, Suite 1600
Miami, Florida 33131-2877
Telephone: (305) 789-8902
Attention: Noel H. Nation, Esq.

and if to any Purchaser, at:

Clipper Capital Partners, L.P.
Eleven Madison Avenue
26th Floor
New York, New York 10010
Telephone: (212) 448-5700
Attention: Eugene P. Lynch

with a copy to:

Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Telephone: (212) 310-8340
Attention: Howard Chatzinoff, Esq.

or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.

Section 8.10 No Strict Construction. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto, and
no presumption or burden of proof shall arise favoring or disfavoring any party
by virtue of the authorship of any of the provisions of this Agreement.

Section 8.11 Definition of Knowledge. For purposes of this
Agreement, "knowledge" or "known" or a similar phrase shall mean only matters
as to which any of the executive officers of the Company has actual knowledge,
and matters which are not actually known but should have been known by any such
executive officer of the Company based upon a reasonable investigation and
inquiry with respect to the correctness and validity of the representation,
warranty or other matter so qualified by knowledge.

45
<PAGE> 51

IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first written above.

AVTEAM INC.

By: /s/ Donald A. Graw
----------------------------------
Name: Donald A. Graw
Title: President and
Chief Executive Officer

47
<PAGE> 52

PURCHASES:

<TABLE>
<S> <C>
Clipper Capital Associates, L.P. Clipper Equity Partners I, L.P.
By: Clipper Capital Associates, Inc. By: Clipper Capital Associates, L.P.
its general partner its general partner
By: Clipper Capital Associates, Inc.
its general partner

By: /s/ Daniel V. Cahillane By: /s/ Daniel V. Cahillane
------------------------------------ ------------------------------------
Name: Daniel V. Cahillane Name: Daniel V. Cahillane
Title: Treasurer and Secretary Title: Treasurer and Secretary

Clipper/Merchant Partners, L.P. Clipper/European Re, L.P.
By: Clipper Capital Associates, L.P, By: Clipper Capital Associates, L.P.
its general partner its general partner
By: Clipper Capital Associates, Inc. By: Clipper Capital Associates, Inc.
its general partner its general partner

Clipper/Merban, L.P.
By: Clipper Capital Associates, L.P.
its general partner
By: Clipper Capital Associates, Inc.
its general partner

By: /s/ Daniel V. Cahillane
------------------------------------
Name: Daniel V. Cahillane
Title: Treasurer and Secretary

</TABLE>

48
<PAGE> 53

SCHEDULE 1
LIST OF PURCHASERS

<TABLE>
<CAPTION>
Number of Number of
Shares of Shares of Aggregate Percentage
Name and Address Class A Class B Purchase of Initial
of Purchaser Preferred Stock Preferred Stock Price Securities
------------------------------- --------------- --------------- --------- ----------
<S> <C> <C> <C> <C>
Clipper Capital Associates, L.P. 42,857 0 $ 299,999 2.52%
Eleven Madison Avenue
New York, NY 10010

Clipper/Merchant Partners, L.P. 509,890 0 $ 3,569,230 29.99%
Eleven Madison Avenue
New York, NY 10010

Clipper Equity 382,418 0 $ 2,676,926 22.50%
Partners I, L.P.
Eleven Madison Avenue
New York, NY 10010

Clipper/European Re, L.P. 254,945 0 $ 1,784,615 15.00%
c/o CITCO
De Ruterkade 62
P.O. Box 812
Curacao, Netherlands Antilles

Clipper/Merban, L.P. 289,890 220,000 $ 3,569,230 29.99%
c/o CITCO
De Ruterkade 62
P.O. Box 812
Curacao, Netherlands Antilles

Total 1,480,000 220,000 $11,900,000 100.00%
</TABLE>

<PAGE> 1

Exhibit 10.21

EXECUTION COPY

AVTEAM, INC.

REGISTRATION RIGHTS AGREEMENT

THIS AGREEMENT is made as of December 6, 1996 (this
"Agreement"), by and among AVTEAM, INC., a Florida corporation (the "Company"),
and the Persons listed on Exhibit A hereto (the "Investors").

The parties to this Agreement are parties to a Stock Purchase
Agreement dated as of December 6, 1996 (the "Purchase Agreement"). In order to
induce the Investors to enter into the Purchase Agreement, the Company has
agreed to provide the registration rights set forth in this Agreement. The
execution and delivery of this Agreement is a condition to the Initial Closing
under the Purchase Agreement. Unless otherwise provided in this Agreement,
capitalized terms used herein shall have the meanings set forth in paragraph 8
hereof.

The parties hereto agree as follows:

1. Demand Registrations.

(a) Requests for Registration. At any time from and
after the earlier of (i) the IPO Date and (ii) the expiration of the three (3)
year period commencing on the date hereof, the holders of the Registrable
Securities may request registration under the Securities Act of all or any
portion of the Registrable Securities on Form S-1, S-2 or S-3, or any similar
registration statements ("Registrations"). The Company shall determine, in its
reasonable discretion, the Form to be used for each Registration. All
registrations requested pursuant to this paragraph l(a) are referred to herein
as "Demand Registrations". The Company only shall be obligated to effect a
Demand Registration if the aggregate number of Registrable Securities requested
to be registered is 750,000 or more. Each request for a Demand Registration
shall specify the approximate number of Registrable Securities requested to be
registered and the intended method or methods of distribution thereof. Within
20 days after receipt of any such request, the Company shall give written
notice of such requested registration to all other holders of Registrable
Securities and shall include in such registration all Registrable Securities
with respect to which the Company has received written requests for inclusion
therein within 10 days after the receipt of the Company's notice.

<PAGE> 2

(b) Registrations. The holders of Registrable Securities
shall be entitled to request two (2) (or, if the Investors shall have
purchased any of the Additional Securities (as defined in the Purchase
Agreement) under the Purchase Agreement, three (3)) Registrations; provided,
however, that any Registration requested pursuant to this Section 1 shall not
be deemed to have been effected (and, therefore, not exercised for purposes of
Section l(a)) if (i) it was not declared effective by the Commission pursuant
to the Securities Act, (ii) it is declared effective but is subsequently
withdrawn by the Company (prior to the completion of the distribution of the
Registrable Securities covered thereby), (iii) it is interfered with by any
stop order, injunction or other order or requirement of the Commission or other
governmental agency or court such that the Registrable Securities requested to
be registered cannot be completely distributed in accordance with the plan of
distribution set forth in the related registration statement, unless the sole
reason for such interference is a misrepresentation or an omission by any
participating holder of Registrable Securities, or (iv) the conditions to
closing specified in the purchase agreement or underwriting agreement entered
into in connection with such registration are not satisfied or waived, unless
such failure is caused solely by default by any participating holder of
Registrable Securities in carrying out its obligations thereunder.

(c) Demand Registration Expenses. Subject to Section 6
hereof, the Company shall pay all Registration Expenses (as defined in Section
6(a) hereof) incurred in connection with each Demand Registration hereunder.

(d) Selection of Underwriters. The holders of a majority
of the Registrable Securities shall have the right to select the investment
banker(s) and manager(s) (the "Managing Underwriter(s)") to administer the
offering, subject to the approval of the Company, which approval shall not be
unreasonably withheld (provided that such investment banker(s) or Managing
Underwriter(s) are of nationally recognized standing).

(e) Registration of Additional Securities. The Company
shall have the right to cause the registration of additional securities for
sale for the account of any person (including the Company) in any Registration
of Registrable Securities requested pursuant to Section 1(a), provided, that
the Company shall not have the right to cause the registration of such
additional securities if the requesting holders are advised in writing (with
a copy to the Company) by the Managing Underwriter(s), that, in its or their
opinion, the number of additional securities that the Company desires to
include in such Registration exceeds the number which can be sold in such

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<PAGE> 3

Offering without materially and adversely affecting the offering, in which
event, the Company shall include in such Registration, (A) first, the
Registrable Securities requested to be included in such Registration by the
holders of Registrable Securities, (B) second, the additional securities the
Company proposes to sell; (C) third, the additional securities held by the
shareholders of the Company (other than the holders of Registrable Securities)
the proceeds from the sale of which such shareholders propose to transfer to an
organization or foundation qualified as a 501(c)(3) organization (a "501(c)
Organization") under the Internal Revenue Code of 1986, as amended, or, in the
event such securities have been transferred to a 501(c)(3) Organization, the
securities held by such 501(c)(3) Organization; and (D) fourth, the additional
securities (other than those referred to in clause (C) immediately above) held
by any shareholder of the Company other than the holders of Registrable
Securities. The holders of a majority of the Registrable Securities held by
participating holders may require that any such additional securities be
included in the Registration on the same terms and conditions as the
Registrable Securities included therein.

2. Piggyback Registrations.

(a) Right to Piggyback. Whenever the Company proposes to
register on its behalf and/or on behalf of any of its security holders any of
its securities under the Securities Act (other than pursant to a Demand
Registration or registrations on Form S-4 or Form S-8, or any successor forms)
involving any of its equity securities (or any security with respect to which
equity securities may be issuable upon exercise, conversion or exchange of any
options, rights thereto or thereunder) to be offered for cash or cash
equivalents, and the registration form to be used may be used for the
registration of Registrable Securities (a "Piggyback Registration"), the
Company shall give, at least 25 days prior to the anticipated filing date of
the registration statement relating to such transaction, written notice to the
holders of Registrable Securities of its intention to effect such a
registration (which notice shall set forth the intended method of disposition
of the securities proposed to be registered by the Company). Upon the written
request of any holder of Registrable Securities delivered to the Company within
25 days after such notice shall have been given by the Company to the holders
of Registrable Securities (which request shall specify the Registrable
Securities intended to be disposed of by such holder of Registrable Securities
and the intended method of disposition thereof), the Company shall use its
reasonable best efforts to effect the Piggyback Registration under the
Securities Act within 30 days after receipt by the Company of such request by
the holders of the Registrable Securities and the Company shall include in such

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<PAGE> 4

registration all Registrable Securities that the Company has been so requested
to register by the holders of Registrable Securities; provided, that if at any
time after giving such written notice of its intention to register any offering
of such securities and prior to the effective date of the registration
statement filed in connection with such Piggyback Registration, the Company
shall determine in its reasonable judgment not to register or to delay the
registration of such offering of securities, the Company shall give written
notice of such determination to the participating holders of Registrable
Securities in connection with such Piggyback Registration.

(b) Priority on Registrations. If a Piggyback
Registration is an underwritten Primary registration on behalf of the Company,
and the Managing Underwriter(s) advise the Company in writing that in their
opinion the number of securities requested to be included in such registration
exceeds the number which can be sold in such offering without materially and
adversely affecting the offering, the Company shall include in such
registration (i) first, the securities the Company proposes to sell, (ii)
second, the Registrable Securities requested to be included in such
registration, pro rata among the holders of such Registrable Securities on the
basis of the number of shares requested to be registered by each such holder or
such other proportions as such holders may determine, (iii) third, the
securities held by the shareholders of the Company (other than the holders of
Registrable Securities) the proceeds from the sale of which such shareholders
propose to transfer to a 501(c)(3) Organization or, in the event such
securities have been transferred to a 501(c)(3) Organization, the securities
held by such 501(c)(3) Organization and (iv) fourth, other securities requested
to be included in such registration.

(c) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
the Company's securities, and the Managing Underwriter(s) advise the Company
in writing that in their opinion the number of securities requested to be
included in such registration exceeds the number which can be sold in such
offering without materially and adversely affecting the offering, the Company
shall include in such registration (i) first, the securities requested to be
included therein by the holders requesting such registration, (ii) second, the
Registrable Securities requested to be included in such registration, pro rata
among the holders of such Registrable Securities on the basis of the number of
shares requested to be registered by each such holder or such other proportions
as such holders may determine, (iii) third, the securities held by the
shareholders of the Company (other than the holders of Registrable Securities)
the proceeds from the sale of which such shareholders propose to transfer to a
501(c)(3) Organization or, in the event such securities have been transferred
to a 501(c)(3)

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<PAGE> 5

Organization, the securities held by such 501(c)(3) Organization and (iv)
fourth, other securities requested to be included in such registration.

(d) Piggyback Registration Expenses. Subject to Section
6 hereof, and except as otherwise agreed to between the Company and the
security holders on whose behalf a Piggyback Registration is filed, the Company
shall pay all Registration Expenses in connection with each Piggyback
Registration.

3. Holdback Agreements.

(a) Each holder of Registrable Securities shall
not effect any public sale or distribution (including sales pursuant to Rule
144) of equity securities of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, during the 10 days prior to
and the 90-day period (or such greater period as the Managing Underwriter(s)
require) beginning on the effective date of any applicable registration
statement for any underwritten registration (except as part of such
underwritten registration), unless the Managing Underwriter(s) otherwise agree.

(b) The Company (i) shall not effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the 10 days prior to
and during the 90-day period beginning on the effective date of any applicable
registration statement for any underwritten Demand Registration or any
underwritten Piggyback Registration (except as part of such underwritten
registration or pursuant to registrations on Form S-4 or Form S-8 or any
successor form), unless the underwriters managing the registered public
offering otherwise agree, and (ii) shall use its reasonable best efforts to
cause each holder of at least five percent (5%) of its Common Stock, or any
securities convertible into or exchangeable or exercisable for Common Stock,
purchased from the Company at any time after the date of this Agreement (other
than in a registered public offering) to agree not to effect any public sale or
distribution (including sales pursuant to Rule 144) of any such securities
during such period (except as part of such underwritten registration, if
otherwise permitted), unless the underwriters managing the registered public
offering otherwise agree.

4. Registration Procedures. Whenever the holders of
Registrable Securities have requested that any Registrable Securities be
registered pursuant to this Agreement, the Company shall use its reasonable
best efforts to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of

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<PAGE> 6

disposition thereof, and pursuant thereto the Company shall as expeditiously as
possible:

(a) prepare and file with the Commission a registration
statement with respect to such Registrable Securities and use its reasonable
best efforts to cause such registration statement to become effective (provided
that before filing a registration statement or prospectus or any amendments or
supplements thereto, the Company shall furnish to the counsel selected by the
holders of a majority of the Registrable Securities covered by such
registration statement copies of all such documents proposed to be filed, which
documents shall be subject to the reasonable review and comment of such
counsel);

(b) notify each holder of Registrable Securities of the
effectiveness of each registration statement filed hereunder and prepare and
file with the Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary
to keep such registration statement effective for a period of not less than
120 days (except as provided in Section 5 hereof) and comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement;

(c) furnish to each seller of Registrable Securities a
copy of such registration statement, each amendment and supplement thereto,
the prospectus included in such registration statement (including each
preliminary prospectus) and such copies of the prospectus as such seller may
reasonably request in order to facilitate the disposition of the Registable
Securities owned by such seller.

(d) use its reasonable best efforts to register or
qualify such Registrable Securities under such state securities or blue sky
laws of such jurisdictions as any seller reasonably requests and do any and all
other acts and things which may be reasonably necessary or advisable to enable
such seller to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such seller (provided that the Company shall
not be required to (i) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this subparagraph,
(ii) subject itself to taxation in any such jurisdiction or (iii) consent to
general service of process in any such jurisdiction);

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<PAGE> 7

(e) notify each seller of such Registrable Securities, at
any time when a prospectus relating thereto is required to be delivered under
the Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, other than any such untrue statement or omission made therein
in reliance upon and conformity with written information furnished to the
Company by or on behalf of such seller of Registrable Securities specifically
for inclusion in such registration statement, and, at the request of any such
seller, the Company shall prepare a supplement or amendment to such prospectus
so that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus shall not contain an untrue statement of a material
fact or omit to state any fact necessary to make the statements therein not
misleading;

(f) cause all such Registrable Securities to be listed
on each securities exchange on which similar securities issued by the Company
are then listed and, if not so listed, to be listed on the NASD automated
quotation system and, if listed on the NASD automated quotation system, use its
best efforts to secure designation of all such Registrable Securities covered
by such registration statement as a NASDAQ "national market system security"
within the meaning of Rule 11Aa2-1 of the Commission or, failing that, to
secure NASDAQ authorization for such Registrable Securities and, without
limiting the generality of the foregoing, to arrange for at least two market
makers to register as such with respect to such Registrable Securities with
the NASD;

(g) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement;

(h) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other actions as
the holders of a majority of the Registrable Securities being sold or the
underwriters, if any, reasonably request in order to expedite or facilitate
the disposition of such Registrable Securities (including effecting a stock
split or a combination of shares);

(i) make available for inspection during normal business
hours of the Company by any seller of Registrable Securities, any underwriter
participating in any disposition pursuant to such registration statement and
any attorney, accountant or other agent retained by any such seller or
underwriter, all reasonably relevant financial and other records, pertinent
corporate documents and properties of the

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<PAGE> 8

Company, and cause the Company's officers, directors, employees and independent
accountants to supply all reasonably relevant information requested by any such
seller, underwriter, attorney, accountant or agent in connection with such
registration statement as is customary for similar due diligence examinations;
provided, however, that any information that is designated in writing by the
Company as confidential at the time of delivery of such information shall be
kept confidential by the shareholders of the Company or any such underwriter,
attorney, accountant, agent or representative, unless (x) disclosure is, in the
opinion of counsel to the disclosing party, required to be made in connection
with a court proceeding or required by law or (y) such information is or
becomes generally available to the public;

(j) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months beginning with the first day of
the Company's first full month after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder;

(k) permit any holder of Registrable Securities which
holder, in its sole and exclusive judgment, might be deemed to be an
underwriter or a controlling person of the Company, to participate in the
preparation of such registration statement and to require the insertion therein
of material, furnished to the Company in writing, which in the reasonable
judgment of such holder and its counsel should be included;

(l) in the event of the issuance of any stop order
suspending the effectiveness of a registration statement, or of any order
suspending or preventing the use of any related prospectus or suspending the
qualification of any common stock included in such registration statement for
sale in any jurisdiction, the Company shall use its reasonable best efforts
promptly to obtain the withdrawal of such order;

(m) furnish, at the request of any holder requesting
registration of Registrable Securities pursuant to Section 1 or 2, on the date
that such shares of Registrable Securities are delivered to the underwriters
for sale pursuant to such registration or, if such Registrable Securities are
not being sold through underwriters, on the date that the registration
statement with respect to such shares of Registrable Securities becomes
effective, (1) an opinion, dated such date, of the independent counsel
representing Company for the purposes of such registration, addressed to the
underwriters, if any, and if such Registrable Securities are not being sold
through underwriters, then to the holders making such request, in customary
form and

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<PAGE> 9

covering matters of the type customarily covered in such legal opinions; and
(2) a "cold comfort" letter dated such date, from the independent certified
public accountants of Company, addressed to the underwriters, if any, and if
such Registrable Securities are not being sold through underwriters, then to
the holder making such request and, if such accountants refuse to deliver such
letter to such holder, then to Company in a customary form and covering matters
of the type customarily covered by such "cold comfort" letter and as the
underwriters or such holder shall reasonably request. Such opinion of counsel
shall additionally cover such other legal matters with respect to the
registration in respect of which such opinion is being given as such holders of
Registrable Securities may reasonably request.

5. Suspension of Offerings in Certain Circumstances. The
Company shall be entitled for the period referred to below to postpone the
filing of any registration statement filed by it pursuant to Sections 1 or 2
hereof and/or to direct the suspension of any public offering, sale or
distribution of Registrable Securities if the Board of Directors of the Company
(the "Board") determines in good faith based on an opinion of outside counsel
to the Company that any disclosure that would be required in connection
therewith would have a material adverse effect on the Company or any financing,
acquisition, disposition, merger, business combination, corporate
reorganization, or other transaction or development involving the Company or
any subsidiary of the Company (a "Business Development Determination"). Such
postponement or direction shall continue until such time as the Board
determines that the preparation and/or filing of such Registration Statement or
the taking of any such action and/or such public offering, sale or distribution
would no longer have a material adverse effect on the Company or any such
transaction but shall not, in any event, exceed 30 days for any particular
Business Development Determination or 60 days for all Business Development
Determinations during any twelve month period. No Business Development
Determination shall occur within 90 days of the expiration of a postponement or
suspension caused by another Business Development Determination. The Board
shall, as promptly as practicable, give the holders of the Registrable
Securities written notice of any Business Development Determination.

6. Registration Expenses.

(a) All expenses incident to the Company's performance of
or compliance with this Agreement, including without limitation all
registration and Commission, New York Stock Exchange or NASDAQ filing fees,
fees and expenses of compliance with state securities or blue sky laws,
printing expenses, messenger and delivery expenses, fees and disbursements of
custodians, and fees and disbursements

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<PAGE> 10

of counsel for the Company and all independent certified public accountants,
underwriters (excluding discounts and commissions) and other Persons retained
by the Company (all such expenses being herein called "Registration Expenses")
shall be borne as provided in this Agreement, including the Company paying its
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expense
of any annual audit or quarterly review, the expense of any liability insurance
and the expenses and fees for listing the securities to be registered on each
securities exchange on which similar securities issued by the Company are then
listed or on the NASDAQ, provided, that each holder of Registrable Securities
shall bear and pay its pro rata portion of any brokerage fees or underwriting
discounts and fees applicable to the Registrable Securities sold by such
holder.

(b) In connection with each Demand Registration
and each Piggyback Registration, the Company shall reimburse the holders of
Registrable Securities included in such registration for the reasonable fees
and disbursements of one counsel chosen by the holders of a majority of the
Registrable Securities included in such registration.

7. Indemnification and Contribution.

(a) In the event of any registration of any Registrable
Securities under the Securities Act pursuant to this Agreement, the Company
shall indemnify and hold harmless the holder of such Registrable Securities,
such holder's directors, officers and partners (and the directors and officers
of such partners), and each other Person (including each underwriter and
broker dealer, if required by such broker dealer as a condition to its
participation in such offering of Registrable Securities) who participated in
the offering of such Registerable Securities and each other Person, if any,
who controls such holder or such participating Person within the meaning of
the Securities Act, against any losses, claims, damages or liabilities, joint
or several, to which such holder or any such director, officer, partner (and
the directors and officers of such partner) or participating Person or
controlling Person may become subject under the Securities Act or any other
statute or at common law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any alleged untrue statement of any material fact contained, on the effective
date thereof, in any registration statement under which such securities were
registered under the Securities Act, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereto, or (ii)
any alleged omission to state therein a material fact required to be stated
therein or necessary to make the

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<PAGE> 11

statements therein not misleading, and shall reimburse such holder or such
director, officer, partner (and the directors and officers of such partner) or
participating Person or controlling Person for any legal or any other expenses
reasonably incurred by such holder or such director, officer, partner (and the
directors and officers of such partner) or participating Person or controlling
Person in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any alleged untrue statement or
alleged omission made in such registration statement, preliminary prospectus,
prospectus or amendment or supplement in reliance upon and in conformity with
written information furnished to Company by such holder specifically for use
therein or (in the case of any registration pursuant to Section 1 or 2) so
furnished for such purposes by any underwriter. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
such holder or such director, officer or participating Person or controlling
Person, and shall survive the transfer of such securities by such holder.

(b) Each holder of any Registrable Securities, by
acceptance thereof, agrees to indemnify and hold harmless the Company, its
directors and officers and each other Person, if any, who controls Company
within the meaning of the Securities Act against any losses, claims, damages or
liabilities, joint or several, to which Company or any such director or officer
or any such Person may become subject under the Securities Act or any other
statute or at common law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
information in writing provided to the Company by such holder of such
Registrable Securities specifically for use in the following documents and
contained, on the effective date thereof, in any registration statement under
which securities were registered under the Securities Act at the request of
such holder, any preliminary prospectus or final prospectus contained therein,
or any amendment or supplement thereto; provided that the obligation to
indemnify shall be individual, not joint and several, for each holder and shall
be limited to the net amount of proceeds received by such holder from the sale
of Registrable Securities pursuant to such registration statement.

(c) Any Person entitled to indemnification hereunder shall
(i) give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification (provided that the failure to give
prompt notice shall not impair any Person's right to indemnification hereunder
to the extent such failure has not prejudiced the indemnifying party) and (ii)
unless in such indemnified party's

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<PAGE> 12

reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent shall not
be unreasonably withheld). An indemnifying party who is not entitled to, or
elects not to, assume the defense of a claim shall not be obligated to pay the
fees and expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to
such claim.

(d) If the indemnification provided for in this Section 6
from the indemnifying party is unavailable to an indemnified party hereunder
in respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying
party and indemnified parties shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact, has been made by, or relates to information supplied by, such
indemnifying party or indemnified parties, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such party
in connection with any investigation or proceeding.

The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. No Person guilty of fraudulent misrepresentation (within
the meaning of Section 11 (f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.

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<PAGE> 13

8. Participation in Underwritten Registrations. No
Person may participate in any registration hereunder which is underwritten
unless such Person (i) agrees to sell such Person's securities on the basis
provided in any underwriting arrangements approved by the Person or Persons
entitled hereunder to approve such arrangements and (ii) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements
and other documents required under the terms of such underwriting arrangements;
provided that no holder of Registrable Securities included in any underwritten
registration shall be required to make any representations or warranties to the
Company or the underwriters (other than representations and warranties
regarding such holder and such holder's intended method of distribution) or to
undertake any indemnification obligations to the Company or the underwriters
with respect thereto, except as otherwise provided in paragraph 7 hereof.

9. Definitions.

"Commission" means the Securities and Exchange Commission or
any agency succeeding to the functions thereof.

"Common Stock" means the Company's Class A Common Stock, $.0l
par value per share, and the Company's Class B Common Stock, $.01 per value
per share; provided, however, that it is acknowledged that pursuant to Article
IV, Section D.4(c) of the Company's Second Amended and Restated Articles of
Incorporation, such Class B Common Stock automatically will convert into Class
A Common Stock upon a sale pursuant to a public offering.

"IPO Date" means the first date on which any class of common
stock of the Company shall have been registered and sold pursuant to an
effective registration statement under the Securities Act.

"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof,

"Preferred Stock" means the shares of convertible preferred
stock, par value $.01 per share, of the Company.

"Purchaser Representative" means Clipper Capital Partners,
L.P. or a person designated by the holders of a majority of the Registrable
Securities.

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<PAGE> 14

"Registrable Securities" means any shares of Common Stock (i)
acquired by the Investors upon conversion of the shares of Preferred Stock
purchased by the Investors pursuant to the Purchase Agreement or (ii) purchased
by the Investors pursuant to the Shareholders Agreement. As to any particular
Registrable Securities, such securities shall cease to be Registrable
Securities when they have been distributed to the public pursuant to a offering
registered under the Securities Act or sold to the public through a broker,
dealer or market maker in compliance with Rule 144 under the Securities Act
(or any similar rule then in force) or repurchased by the Company. For
purposes of this Agreement, a Person shall be deemed to be a holder of
Registrable Securities, and the Registrable Securities shall be deemed to be
in existence, whenever such Person has the right to acquire directly or
indirectly such Registrable Securities (upon conversion or exercise in
connection with a transfer of securities or otherwise, but disregarding any
restrictions or limitations upon the exercise of such right), whether or not
such acquisition has actually been effected, and such Person shall be entitled
to exercise the rights of a holder of Registrable Securities hereunder.

"Securities Act" means the Securities Act of 1933, as amended
from time to time.

"Shareholders Agreement" means the Shareholders Agreement
dated as of December 6, 1996 by and among the Company, the Investors the other
shareholders of the Company and the Purchaser Representative.

Unless otherwise stated, other capitalized terms contained
herein have the meanings set forth in the Shareholders Agreement.

10. Miscellaneous.

(a) Termination of Agreement. The parties hereto agree
that this Agreement shall terminate 10 years from the date hereof.

(b) No Inconsistent Agreements. The Company shall not
hereafter enter into any agreement with respect to its securities which is
inconsistent with or violates the rights granted to the holders of Registrable
Securities in this Agreement.

(c) Adjustments Affecting Registrable Securities. The
Company shall not take any action, or permit any change to occur, with respect
to its securities which reasonably could be expected to adversely affect the
ability of the holders of

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<PAGE> 15

Registrable Securities to include such Registrable Securities in a registration
undertaken pursuant to this Agreement or which reasonably could be expected to
adversely affect the marketability of such Registrable Securities in any such
registration (including, without limitation, effecting a stock split or a
combination of shares unless the Managing Underwriter(s) in connection with a
registration undertaken pursuant to this Agreement recommend(s) such an action
and such action could not reasonably be expected to adversely affect the rights
of the holders of Registrable Securities in any manner).

(d) Remedies. Any Person having rights under any
provision of this Agreement shall be entitled to enforce such rights
specifically to recover damages caused by reason of any breach of any provision
of this Agreement and to exercise all other rights granted by law. The parties
hereto agree and acknowledge that money damages may not be an adequate remedy
for any breach of the provisions of this Agreement and that any party may in
its sole discretion apply to any court of law or equity of competent
jurisdiction (without posting any bond or other security) for specific
performance and for other injunctive relief in order to enforce or prevent
violation of the provisions of this Agreement.

(e) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may be amended or waived only upon
the prior written consent of the Company and holders of at least 51% of the
Registrable Securities.

(f) Successors and Assigns. All covenants and agreements
in this Agreement by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the parties
hereto whether so expressed or not. In addition, whether or not any express
assignment has been made, the provisions of this Agreement which are for the
benefit of purchasers or holders of Registrable Securities are also for the
benefit of, and enforceable by, any subsequent holder of Registrable Securities.

(g) Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement is held to
be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.

15
<PAGE> 16

(h) Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, any one of which need not contain
the signatures of more than one party, but all such counterparts taken together
shall constitute one and the same Agreement.

(i) Descriptive Headings. The descriptive headings
of this Agreement are inserted for convenience only and do not constitute a part
of this Agreement.

(j) Governing Law; Consent to Jurisdiction. (a) This
Agreement shall be deemed to be a contract made under the laws of the State of
New York, and for all purposes shall be construed in accordance with the laws
of the State of New York, without regard to principles of conflict of laws.

(b) Each party hereto agrees that all judicial proceedings
arising out of or relating to this Agreement or the breach hereof may be
brought in any state of federal court of competent jurisdiction in the State
of New York or Florida.

(k) Notices. All notices, demands or other communications
to be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally to the recipient, sent to the recipient by reputable overnight
courier service (charges prepaid) or mailed to the recipient by certified or
registered mail, return receipt requested and postage prepaid. Such notices,
demands and other communications shall be sent to each Investor at the address
indicated on the Schedule of Investors and to the Company at the address
indicated below:

AVTEAM, Inc.
3230 Executive Way
Miramar, Florida 33025
Attention: Donald A. Graw

or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.

(l) Entire Agreement. Except as otherwise expressly set
forth herein, this Agreement embodies the complete agreement and understanding
among the parties hereto with respect to the subject matter hereof and
supersedes and preempts any prior understanding, agreements or representations
by or among the parties, written or oral, which may have related to the subject
matter hereof in any way.

16
<PAGE> 17

IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.

AVTEAM, INC.

By: /s/ Donald A. Graw
--------------------------------------------
Donald A. Graw
President and Chief Executive Officer

INVESTORS
---------

By: /s/ Daniel V. Cahillane By: /s/ Daniel V. Cahillane
--------------------------------------- ----------------------------------------
Name: Daniel V. Cahillane Name: Daniel V. Cahillane
Title: Treasurer and Secretary Title: Treasurer and Secretary

Clipper/Merban, L.P. Clipper/European Re, L.P.
By: Clipper Capital Associates, L.P. By: Clipper Capital Associates, L.P.
its general partner its general partner
By: Clipper Capital Associates, Inc. By: Clipper Capital Associates, Inc.
its general partner its general partner

By: /s/ Daniel V. Callihane By: /s/ Daniel V. Callihane
--------------------------------------- ----------------------------------------
Name: Daniel V. Cahillane Name: Daniel V. Cahillane
Title: Treasurer and Secretary Title: Treasurer and Secretary

Clipper/Merban, L.P.
By: Clipper Capital Associates, L.P.
its general partner
By: Clipper Capital Associates, Inc.
its general partner

By: /s/ Daniel V. Callihane
---------------------------------------
Name: Daniel V. Cahillane
Title: Treasurer and Secretary

</TABLE>

18
<PAGE> 18

EXHIBIT A

LIST OF INVESTORS
-----------------

Clipper Capital Associates, L.P.
Eleven Madison Avenue
New York, NY 10010

Clipper/Merchant Partners, L.P.
Eleven Madison Aveune
New York, NY 10010

Clipper/Merban, L.P.
c/o CITCO
De Ruterkade 62
P.O. Box 812
Curacao, Netherlands Antilles

Clipper Equity Partners I, L.P.
Eleven Madison Avenue
New York, NY 10010

Clipper/European Re, L.P.
c/o CITCO
De Ruterkade 62
P.O. Box 812
Curacao, Netherlands Antilles

<PAGE> 1

Exhibit 10.22

AVTEAM TAX ALLOCATION AND
INDEMNIFICATION AGREEMENT

THIS AVTEAM TAX ALLOCATION AND INDEMNIFICATION AGREEMENT is entered
into as of this 5th day of December, 1996 between Leon Sragowicz
("Stockholder"), and AVTEAM, INC., a Florida corporation, formerly known as
Interstar Trading Corporation (the "Company").

W I T N E S S E T H :

WHEREAS, Stockholder owns 3,500,000 shares of the sole class of stock
in the Company, constituting ___ percent of the total outstanding shares of
stock in the Company;

<PAGE> 1

Exhibit 10.23

AVTEAM TAX ALLOCATION AND
INDEMNIFICATION AGREEMENT

THIS AVTEAM TAX ALLOCATION AND INDEMNIFICATION AGREEMENT is entered
into as of this 5th day of December, 1996 between Richard Preston
("Stockholder"), and AVTEAM, INC., a Florida corporation, formerly known as
Interstar Trading Corporation (the "Company").

W I T N E S S E T H :

WHEREAS, Stockholder owns 500,000 shares of the sole class of stock
in the Company, constituting ___ percent of the total outstanding shares of
stock in the Company;

<PAGE> 1

Exhibit 10.24

AVTEAM TAX ALLOCATION AND
INDEMNIFICATION AGREEMENT

THIS AVTEAM TAX ALLOCATION AND INDEMNIFICATION AGREEMENT is entered
into as of this 5th day of December, 1996 between Jaime J. Levy
("Stockholder"), and AVTEAM, INC., a Florida corporation, formerly known as
Interstar Trading Corporation (the "Company").

W I T N E S S E T H :

WHEREAS, Stockholder owns 500,000 shares of the sole class of stock
in the Company, constituting ___ percent of the total outstanding shares of
stock in the Company;

<PAGE> 1

EXHIBIT 23.2

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
ERNST & YOUNG LLP

We consent to the reference to our firm under the caption "Experts" and to
the use of our reports dated February 27, 1997, with respect to the financial
statements and schedule of AVTEAM, Inc. as of December 31, 1996 and 1995, and
for each of the three years in the period ended December 31, 1996, and our
report dated January 30, 1996, with respect to the statements of operations and
cash flows of Turbine Engine Sales Group, Inc. for the year ended December 31,
1993 and the period from January 1, 1994 through July 21, 1994, in the
Registration Statement and related Prospectus of AVTEAM, Inc. for the
registration of 4,500,000 shares of its Class A Common Stock.

ERNST & YOUNG LLP

Miami, Florida
March 21, 1997

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS AND THE
NOTES THERETO.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 6,881
<ALLOWANCES> 280
<INVENTORY> 12,926
<CURRENT-ASSETS> 21,664
<PP&E> 502
<DEPRECIATION> 287
<TOTAL-ASSETS> 22,302
<CURRENT-LIABILITIES> 4,082
<BONDS> 0
0
17
<COMMON> 50
<OTHER-SE> 15,030
<TOTAL-LIABILITY-AND-EQUITY> 22,302
<SALES> 34,047
<TOTAL-REVENUES> 34,047
<CGS> 24,218
<TOTAL-COSTS> 28,564
<OTHER-EXPENSES> 1,154
<LOSS-PROVISION> 50
<INTEREST-EXPENSE> 757
<INCOME-PRETAX> 3,572
<INCOME-TAX> (310)<F1>
<INCOME-CONTINUING> 3,882
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,882
<EPS-PRIMARY> .38
<EPS-DILUTED> .38
<FN>
<F1>The Company has a net income tax benefit of $310,000 for 1996.
</FN>

</TABLE>