<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>
                                    SCHEDULE
                                     TO THE
                                MASTER AGREEMENT

                            dated as of July 11, 1997

                                     between

                           BOMBARDIER INC. ("Party A")

                                       and

                       ATLANTIC COAST AIRLINES ("Party B")


I.        PART   TERMINATION PROVISIONS

                           A.        "Specified Entity" means in relation of Party A for the purposes of:

                    Section 5(a)(v) (Default under Specified
                    Transaction):                                  Not applicable

                    Section 5(a)(vi) (Cross Default):              Not applicable

                    Section 5(a)(vii) (Bankruptcy):                Not applicable

                    Section 5(b)(iv) (Credit Event upon Merger):
                                                                   Not applicable

                                           and in relation to Party B for purposes of:

                    Section 5(a)(v) (Default under Specified
                    Transaction):                                  Not applicable

                    Section 5(a)(vi) (Cross Default):              Atlantic Coast Airlines, Inc.

                    Section 5(a)(vii) (Bankruptcy):                Atlantic Coast Airlines, Inc.

                    Section 5(b)(iv) (Credit Event upon Merger):
                                                                   Affiliates

                           A.        "Specified Transaction" will have the meaning specified in Section 14 of this Agreement.

                           A. The "Cross Default" provisions of Section 5(a)(vi)
                  shall apply to Party A, Party B and the Specified  Entities of
                  Party B.

                  "Specified  Indebtedness"  will have the meaning  specified in
                  Section 14 of this  Agreement;  provided  that with respect to
                  Party B only, "Specified  Indebtedness" shall include, without
                  limitation,  the Purchase  Agreement No. RJ-0350 dated January
                  8, 1997 between Party A and Party B and any agreement  entered
                  into between Party A and Party B in connection therewith.

                  "Threshold Amount" means

                           1. with  respect to Party A, an amount equal to three
                           and  one-half  per cent (3 1/2%) of Party  A's  total
                           stockholders'  equity (as specified from time to time
                           in  its  most  recently   audited  annual   financial
                           statements  prepared  in  accordance  with  generally
                           accepted accounting principles), or its equivalent in
                           any other currency; and

                           1.  with  respect  to  Party  B,  the  lesser  of (A)
                           $1,000,000  or (B)  an  amount  equal  to  three  and
                           one-half  per  cent  (3  1/2%)  of  Party  B's  total
                           stockholders'  equity (as specified from time to time
                           in its most  recently  audited  financial  statements
                           prepared  in  accordance   with  generally   accepted
                           accounting principles).

                           A. The  "Credit  Event  Upon  Merger"  provisions  of
Section 5(b)(iv) will only apply to Party B.

                  A.        The "Automatic Early Termination" provisions of Section 6(a) will not apply to either party.

                  A.        Payments on Early Termination.  For the purpose of Section 6(e) of this Agreement:

                                            1.        Market Quotation will apply.
                                            2.        Second Method (Full Two-Way Payment) will apply.

                           A. "Termination Currency" means the currency selected
                  by the non-Defaulting  Party or the non-Affected Party, as the
                  case may be, or in circumstances  where there are two Affected
                  Parties, United States Dollars.

I.        PART   TAX REPRESENTATIONS.

                           A.        Payer Tax Representations.  For purposes of Section 3(e) of this Agreement, Party A and Party B
                  each makes the following representation:

                  It is not required by any  applicable  law, as modified by the
                  practice of any relevant  governmental  revenue authority,  of
                  any Relevant Jurisdiction to make any deduction or withholding
                  for or on  account  of any Tax from any  payment  (other  than
                  interest  under  Section  2(e),   6(d)(ii)  or  6(e)  of  this
                  Agreement)  to be made by it to the  other  party  under  this
                  Agreement.  In making this representation,  it may rely on (i)
                  the  accuracy of any  representations  made by the other party
                  pursuant  to  Section  3(f)  of  this   Agreement,   (ii)  the
                  satisfaction of the agreement  contained in Section 4(a)(i) or
                  4(a)(iii) of this Agreement and the accuracy and effectiveness
                  of any  document  provided  by the  other  party  pursuant  to
                  Section  4(a)(i) or 4(a)(iii) of this  Agreement and (iii) the
                  satisfaction  of the agreement of the other party contained in
                  Section 4(d) of this Agreement,  provided that it shall not be
                  a breach of this  representation  where  reliance is placed on
                  clause  (ii) and the other  party  does not  deliver a form or
                  document  under  Section   4(a)(iii)  by  reason  of  material
                  prejudice to its legal or commercial position.

                           A.        Payee Tax Representations.  For purposes of Section 3(f) of this Agreement, Party A and Party B
                  each make the following representation:

                  It is  fully  eligible  for  the  benefits  of  the  "Business
                  Profits"  provision,  the "Interest"  provision and the "Other
                  Income"  provision of the Specified Treaty with respect to any
                  payment  described  in such  provisions  and received or to be
                  received by it in connection with this Agreement,  and no such
                  payment is attributable  to a trade or business  carried on by
                  it through a permanent  establishment  in the  jurisdiction of
                  the Payer.

                  "Specified  Treaty" means, with respect to a Transaction,  the
                  tax treaty applicable between the United States and Canada.

I.        PART   AGREEMENT TO DELIVER DOCUMENTS

For the  purposes of Sections  4(a)(i) and (iii) of this  Agreement,  each party
agrees to deliver the following documents, as applicable:

                  A.        Tax forms, documents or certificates to be delivered are:

                  Each  party  agrees to  complete,  accurately  and in a manner
                  reasonably  satisfactory  to the other party,  and to execute,
                  arrange for any required  certification of, and deliver to the
                  other party (or to such  governmental  or taxing  authority as
                  the other party reasonably directs), any form or document that
                  may be required or reasonably  requested in order to allow the
                  other party to make a payment under this Agreement without any
                  deduction or withholding  for or on account of any Tax or with
                  such deduction or withholding  for or on account of any Tax or
                  with such  deduction or  withholding  at a reduced  rate,  (i)
                  promptly  upon the  earlier  of (A)  reasonable  demand by the
                  other  party and (B)  learning  that the form or  document  is
                  required and (ii) prior to the expiration or  obsolescence  of
                  any previously delivered form.

                           A.        Other documents to be delivered are:

Party required to deliver    Form / Document /          Date by which to be        Covered by Section 3(d)
document                     Certificate                delivered                  Representation
Party A and Party B          Certified evidence of      Upon execution of this     Yes
                             the authority,             Agreement and, in
                             incumbency and specimen    connection with each
                             signature of each          Confirmation, promptly
                             authorized person          following the request of
                             executing this Agreement   the other party
                             and any Confirmation

Party B                      Audited annual             Upon request of Party A    Yes
                             consolidated financial     promptly following
                             statements, prepared in    availability of such
                             accordance with            statements
                             accounting principles
                             that are generally
                             accepted for
                             institutions of its type
                             in the jurisdiction of
                             its organization and
                             certified by independent
                             public accountants

Party B                      Unaudited interim          Upon request of Party A    Yes
                             consolidated financial     promptly following
                             statements prepared in     availability of such
                             accordance with            statements
                             accounting principles
                             that are generally
                             accepted for
                             institutions of its type
                             in the jurisdiction of
                             its organization

I.        PART   MISCELLANEOUS.



<PAGE>


                  A.        Addresses for Notices.  For purposes of Section 12(a) of this Agreement:

                  Address for notices or communications to Party A:

                  Bombardier Inc.
                  800 boul, Rene-Levesque ouest
                  Montreal (Quebec)
                  H3B 1Y8
                  Attention:  Vice President and Treasurer
                  Facsimile No.:   (514) 861-7053
                  Telephone No. for Confirmation:  (514) 861-9481
                  Telex No.:   055 62129
                  Answerback:  BOMCORPOFF MTL

                  Addresses for notices or communications to Party B:

                           515A Shaw Road
                  Dulles, VA 20166
                  Attention:  Director of Treasury Management
                  Facsimile No.: (703) 925-6299
                  Telephone No. for Confirmation:  (703) 925-6017

                           A.        Process Agent.  For purposes of Section 13(c) of this Agreement:

                                            1.        Party A appoints as its Process Agent:  Not Applicable.

                                            1.        Party B appoints as its Process Agent:  Not Applicable.

                           A.        Offices.  Not applicable.

                           A.        Multibranch Party.  For the purposes of Section 10(c) of this Agreement:

                  Party A is not a Multibranch Party.

                  Party B is not a Multibranch Party.

                           A.        Calculation Agent.  The Calculation Agent is Party A, unless otherwise specified in the
                  applicable Confirmation.

                           A.        Credit Support Document:

                  With respect to Party A, the following shall constitute Credit Support Documents:
                           Not applicable

                  With respect to Party B, the following shall constitute Credit
Support Documents:
                                                              1.        Guaranty dated as of July 11, 1997 by Atlantic Coast
                                                                        Airlines, Inc.

                           A.        Credit Support Provider.

                  Credit Support Provider means in relation to Party A:
                           Not applicable

                           Credit Support Provider means in relation to Party B:
                           Atlantic Coast Airlines, Inc.

                           A.        Governing Law.  This Agreement will be governed by and construed in accordance with the laws of
                  the State of New York (without reference to choice of law doctrine).

                           A.  Netting of  Payments.  Section  2(c)(ii)  of this
                  Agreement will apply to any Transaction  from the date of this
                  Agreement  (i.e.,  no netting) (other than with respect to the
                  payments of the premiums).

                           A.         "Affiliate" will have the meaning specified in Section 14 of this Agreement.


I.        PART   OTHER PROVISIONS



<PAGE>


                           A. ISDA  Definitions.  The 1991 ISDA Definitions (the
                  "Definitions")  and  the  1992  ISDA  FX and  Currency  Option
                  Definitions (the "FX Definitions"  and,  collectively with the
                  1991  Definitions,  the  "Definitions"),  as  published by the
                  International Swaps and Derivatives  Association,  Inc., shall
                  be  deemed  a part of this  Agreement  as if fully  set  forth
                  herein.

                           A.    Inconsistency.    Unless   expressly   provided
                  otherwise,  in the event of any  inconsistency  between any of
                  the  documents  listed below,  the document  listed first will
                  prevail:  (i) the Confirmation;  (ii) the Schedule;  (iii) the
                  printed   form  of  ISDA  Master   Agreement;   and  (iv)  the
                  Definitions,  including:  (A) the FX  Definitions  and (B) the
                  1991 Definitions.

                           A.  Right  of   Set-Off.   Any  amount   (the  "Early
                  Termination  Amount")  payable  to  Party  B by  Party A under
                  Section 6(e), in  circumstances  where Party B is a Defaulting
                  Party will at the option of Party A (and without  prior notice
                  to Party B), be reduced by its set-off  against any  amount(s)
                  (the "Other  Agreement  Amount") payable (whether at such time
                  or in the future or upon the occurrence of a  contingency)  by
                  Party B  (irrespective  of the  currency,  place of payment or
                  booking office of the obligation) under any other agreement(s)
                  between Party A and Party B or instrument(s) or undertaking(s)
                  issued or  executed by one party to, or in favor of, the other
                  party  (and the  Other  Agreement  Amount  will be  discharged
                  promptly  and in all respects to the extent it is so set-off).
                  Party A will give  notice to Party B of any  set-off  effected
                  hereunder.

                  For this purpose,  either the Early Termination  Amount or the
                  Other  Agreement  Amount  (or  the  relevant  portion  of such
                  amounts)  may be  converted  by Party A into the  currency  in
                  which  the other is  denominated  at the rate of  exchange  at
                  which such party would be able,  acting in a reasonable manner
                  and in good faith,  to purchase  the  relevant  amount of such
                  currency.

                  If an obligation is  unascertained,  Party A may in good faith
                  estimate  that  obligation  and  set-off  in  respect  of  the
                  estimate,  subject to the  relevant  party  accounting  to the
                  other when the obligation is ascertained.

                  Nothing  in this  Part  5(c)  shall be  effective  to create a
                  charge or other  security  interest.  This Part 5(c)  shall be
                  without  prejudice  and in  addition  to any right of set-off,
                  combination  of  accounts,  lien or other  right to which  any
                  party is at any time otherwise  entitled (whether by operation
                  of law, contract or otherwise).

                           A. Deduction or Withholding for Tax.  Neither Party A
                  nor Party B shall have an  obligation  to make payments to the
                  other under Section 2(d)(i)(4) of this Agreement to the extent
                  the  obligation  to make such payment  arises as a result of a
                  Change in Tax Law.

                           A.  Confirmations.  Each Confirmation shall be in the
                  standard  form  attached  hereto as Exhibit A. With respect to
                  each  Transaction,  Party A shall,  on or  promptly  after the
                  Trade  Date,  send  Party  B a  Confirmation  which  shall  be
                  promptly acknowledged by Party B.

                           A. Illegality. The "Illegality" provisions of Section
                  5(b)(i) shall be expanded to include the  obligation of either
                  party to comply with any directive, direction or similar order
                  of any applicable governmental agency or authority (whether or
                  not having the force of law) which specifically  prohibits its
                  performance under this Agreement.

                           A.        Additional Representations.  Section 3(a) is hereby amended by deleting the word "and" at the
                                     end of Section 3(a)(iv) and adding the following after Section 3(a)(v):

                           "  (vi)  Non-Reliance.  It  is  acting  for  its  own
                           account,   and  it  has  made  its  own   independent
                           decisions  to enter into that  Transaction  and as to
                           whether that Transaction is appropriate or proper for
                           it based upon its own  judgment  and upon advice from
                           such advisers as it has deemed  necessary.  It is not
                           relying on any communication (written or oral) of the
                           other   party   as   investment   advice   or   as  a
                           recommendation  to enter  into that  Transaction;  it
                           being  understood that  information and  explanations
                           related to the terms and  conditions of a Transaction
                           shall  not  be  considered  investment  advice  or  a
                           recommendation  to enter  into that  Transaction.  No
                           communication  (written  or oral)  received  from the
                           other  party  shall be deemed to be an  assurance  or
                           guarantee  as  to  the   expected   results  of  that
                           Transaction.

                                    (vii)  Assessment and  Understanding.  It is
                           capable of assessing the merits of and  understanding
                           (on   its   own   behalf   or   through   independent
                           professional  advice),  and  understands and accepts,
                           the terms,  conditions and risks of that Transaction.
                           It is also  capable of  assuming,  and  assumes,  the
                           risks of that Transaction.

                                    (viii) Status of Parties. The other party is
                           not acting as a fiduciary  for or an adviser to it in
                           respect of that Transaction."

                           A.  Equivalency  Clause.  For purposes of  disclosure
                  pursuant  to the  Interest  Act  (Canada),  the yearly rate of
                  interest  to which any rate of  interest  payable  under  this
                  Agreement or any  Confirmation,  which is to be  calculated on
                  any basis other than a full calendar  year, is equivalent  may
                  be  determined  by  multiplying  such rate by a  fraction  the
                  numerator of which is the number of days in the calendar  year
                  in which the period for which interest at such rate is payable
                  ends  and the  denominator  of  which  is the  number  of days
                  comprising such other basis.

                           A. Impossibility.  The occurrence of an Impossibility
                  shall also be a  Termination  Event,  as to which the Affected
                  Party  shall be the party  subject  to an  Impossibility.  For
                  purposes  of this  Agreement,  "Impossibility"  shall mean the
                  occurrence of a natural or man-made disaster,  armed conflict,
                  act  of  terrorism,  riot,  labour  disruption  or  any  other
                  circumstance  beyond  its  control  after  the date on which a
                  Transaction  is entered into which makes it impossible  (other
                  than as a result of its own misconduct) for such a party:

                                            1.  to  perform   any   absolute  or
                           contingent obligation,  to make a payment or delivery
                           or to  receive a payment  or  delivery  in respect of
                           such Transaction or to comply with any other material
                           provision   of  this   Agreement   relating  to  such
                           Transaction; or

                                            1. to  perform,  or for  any  Credit
                           Support   Provider  of  such  party  to  perform  any
                           contingent  or other  obligation  which the party (or
                           such Credit  Support  Provider)  has under any Credit
                           Support Document relating to such Transaction.

                           All terms and conditions of this Agreement applicable
                  to  an   Illegality   shall  be  equally   applicable   to  an
                  Impossibility and the definition of Termination Event shall be
                  amended to include Impossibility.

                           A.        Consent to Recording.  Each party consents to the recording of the telephone conversations of
                  relevant personnel of the parties in connection with this Agreement or any Transaction or potential Transaction.

                           A.  Waiver  of  Jury  Trial.  To the  fullest  extent
                  permitted by law, each party  irrevocably  waives its right to
                  trial by jury in any legal proceeding instituted in connection
                  with this Agreement or any Transaction.

                           A. Severability.  If any term, provision, covenant or
                  condition of this Agreement, or the application thereof to any
                  party  or  circumstance,  shall  be  held  to  be  invalid  or
                  unenforceable  (in  whole  or in  part)  for any  reason,  the
                  remaining  terms,  provisions,  covenants and conditions shall
                  continue  in full  force and effect as if this  Agreement  had
                  been  executed  with  the  invalid  or  unenforceable  portion
                  eliminated, so long as this Agreement as so modified continues
                  to express, without material change, the original intention of
                  the parties as to the subject  matter of this  Agreement,  and
                  the  deletion  of such  portion  of this  Agreement  does  not
                  substantially  impair the respective  benefits or expectations
                  of the parties to this Agreement.

                           A. Transfer.  An exception to the Transfer provisions
                  of Section 7 is that consent to transfer shall not be required
                  for a transfer by Party B (with prior written  notice to Party
                  A) to a United States market maker in transactions of the type
                  covered by this Agreement in connection  with a transaction by
                  Party B intended to unwind a transaction herein.




                                                                                BOMBARDIER INC.  ATLANTIC COAST AIRLINES


                  By:____________________________    By:____________________________
                        Name:                                                Name:
                        Title:                                               Title:




                  By:____________________________
                        Name:
                        Title:


                                                                                                          EXHIBIT A (Call Option)

                              FORM OF CONFIRMATION


                         [Letterhead of Bombardier Inc.]

                                                                                [Date]


Atlantic Coast Airlines
515A Shaw Road
Dulles, Virginia 20166
Attention: Director of Treasury Management
Fax No.:  (703) 925-6299

         Re:      Bombardier Reference Number ______
                  Bond Option Transaction (Call)


Ladies and Gentlemen:

         The purpose of this confirmation is to confirm the terms and conditions
of the Bond Option Transaction  entered into between us, Bombardier Inc. ("Party
A") and you,  Atlantic  Coast  Airlines  ("Party B") on the Trade Date specified
below (the "Transaction").
This confirmation is a "Confirmation" as referred to in the Agreement  specified
below.

         The definitions and provisions  contained in the 1991 ISDA  Definitions
(the  "Definitions"),  as published by the  International  Swaps and Derivatives
Association,  Inc., formerly known as the International Swap Dealers Association
("ISDA"),  are hereby  incorporated into this Confirmation by reference.  In the
event of any inconsistency  between the Definitions and this Confirmation,  this
Confirmation will govern. Capitalized terms not otherwise defined shall have the
meanings  given to them in the Agreement  (including the  Definitions  and other
documents incorporated therein by reference).

         This  Confirmation  supplements,  forms part of, and is subject to, the
ISDA Master  Agreement  dated as of July 11, 1997,  as amended and  supplemented
from  time to time  (the  "Agreement"),  between  you  and  us.  All  provisions
contained  in the  Agreement  govern  this  Confirmation,  except  as  expressly
modified below.

The terms of the particular  Transaction to which this Confirmation  relates are
as follows:

1.  General Terms:

Trade Date:                                               [date]

Option Style:                                             European

Option Type:                                              Call

Seller:                                                   Atlantic Coast Airlines

Buyer:                                                    Bombardier Inc.

Reference Bonds:                                          U.S. Treasury 6.625% due May 15, 2007

Number of Options:                                        One per Expiration Date.


Bond Entitlement:                                         For any Expiration Date, the amount set forth
                                                          for such date under the caption "Bond
                                                          Entitlement" on Schedule 1 attached hereto.

Partial Exercise:                                         Not applicable

Option Strike Price:                                      For any Expiration Date, the amount set forth
                                                          for such date under the caption "Option Strike
                                                          Price" on Schedule 1 attached hereto.

Premium:                                                  See Letter Agreement dated July __, 1997
                                                          between Party A and Party B.

Seller                                                    Business  Day: Any day
                                                          on  which   commercial
                                                          banks   are  open  for
                                                          business    (including
                                                          dealings   in  foreign
                                                          exchange  and  foreign
                                                          currency  deposits) in
                                                          Toronto/Montreal,
                                                          Canada  and New  York,
                                                          New York.

Exchange Business Day:~Any day that is a Seller           Currency Business Day:
Business Day and is a trading day on the Canadian
Exchange  other than a day on which  trading such exchange is scheduled to close
prior to its regular  weekday  closing time and is a day on which U.S.  Treasury
Markets are open for business in New York, New York.

Any day on which  commercial  banks are open for Local  Business  Day:  business
(including  dealings in foreign  exchange  and  foreign  currency  deposits)  in
Toronto/Montreal, Canada and New York, New York.

Any day on which  commercial  banks  are open for  Calculation  Agent:  business
(including  dealings in foreign exchange and foreign  currency  deposits) in the
city specified in the address for notice provided by the recipient.

Bombardier Inc., whose determinations and                 2.  Procedure for Exercise:
calculations shall be binding in the absence of
manifest error.

                                Expiration Date:

Each of the dates set forth on Schedule 1 attached Automatic  Exercise:  hereto,
or if that date is not an Exchange Business Day, the first following day that is
an Exchange Business Day.

An Option  will be deemed to be  automatically  In-the-Money:  exercised  on the
Expiration Date for such Option if such Option is In-the-Money, as determined by
the Calculation Agent.

An Option will be  "In-the-Money"  if the  Settlement  Reference  Price:  Amount
yields a positive amount.

For any  Option,  the  price  for the  Bonds  equal  in an  amount  to the  Bond
Entitlement  as  determined  in  good  faith  by the  Calculation  Agent  on the
Expiration  Date for such Option by  obtaining  the offered side price quoted by
"Cantor-Fitzgerald" on page 500 of Telerate at 11:00 a.m., provided that the bid
offer spread is at or within 3/32 in price.  If the Reference Bond is not quoted
on p. 500 of Telerate, then Bloomberg,  page PX7 [U.S. Bond 7-15 years] shall be
used as a replacement quotation.

3.  Settlement Terms:

Settlement:                                               Cash Settlement

Settlement Date:                                          For any Option, one Currency Business Day
                                                          following the Expiration Date for such Option.

Settlement                                                Amount:     For    any
                                                          Option,     on     the
                                                          Settlement   Date  for
                                                          such  Option,   Seller
                                                          shall pay to Buyer the
                                                          amount  by  which  the
                                                          Bond  Payment for such
                                                          Option   exceeds   the
                                                          Call  Amount  for such
                                                          Option.

Bond                                                      Payment:    For    any
                                                          Option, the product of
                                                          the  Reference   Price
                                                          for    such     Option
                                                          multiplied by the Bond
                                                          Entitlement  for  such
                                                          Option  multiplied  by
                                                          the  number of Options
                                                          exercised    on    the
                                                          Expiration   Date  for
                                                          such Option.

Call                                                      Amounts:    For    any
                                                          Option, the product of
                                                          the   Option    Strike
                                                          Price for such  Option
                                                          multiplied by the Bond
                                                          Entitlement  for  such
                                                          Option  multiplied  by
                                                          the  number of Options
                                                          exercised    on    the
                                                          Expiration   Date  for
                                                          such Option.

Failure to Deliver:                                       Failure by a party to deliver, when due, any
                                                          payment under this Option shall constitute an
                                                          Event of Default only, if on or before the
                                                          third Local Business Day after notice of the
                                                          failure is given to the party it does not
                                                          remedy such failure.

4.  Account Details:

         Account details of Buyer:                        National Bank of Canada

125 West 55th Street                                               Account details of Seller:
New York, NY  10019-5366
ABA No. 026005487
Account No. 015370001

Crestar Bank
Alexandria, VA
ABA No. 202369358
Account No. 051000020

         Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this  Confirmation  enclosed for that purpose
and  returning  it to us within two Business  Days after your receipt  hereof or
return  it to us  within  two  Business  Days  indicating  revisions  needed  to
accurately  reflect our  agreement.  If your reply is not  received by us within
this  time  period,  the  terms  stated  in this  Confirmation  will  constitute
conclusive  and binding  evidence of the terms of the  Transaction to which this
Confirmation relates, absent manifest error.

                                Yours sincerely,

                                 BOMBARDIER INC.


                                                              By:_________________________
                                                                    Name:
                                                                    Title:



                                                              By:_________________________
                                                                    Name:
                                                                    Title:


Confirmed as of the date first above written:

ATLANTIC COAST AIRLINES

By:__________________________
      Name:
      Title:

                                                                                                                        Schedule 1


<PAGE>









                                  July 11, 1997


Atlantic Coast Airlines
515A Shaw Road
Dulles, Virginia 20166
Attention: Director of Treasury Management
Fax No.:  (703) 925-6299

         Re:      Bombardier Reference Number ACA-2
                  Bond Option Transaction (Call)


Ladies and Gentlemen:

         The purpose of this confirmation is to confirm the terms and conditions
of the Bond Option Transaction  entered into between us, Bombardier Inc. ("Party
A") and you,  Atlantic  Coast  Airlines  ("Party B") on the Trade Date specified
below (the "Transaction").
This confirmation is a "Confirmation" as referred to in the Agreement  specified
below.

         The definitions and provisions  contained in the 1991 ISDA  Definitions
(the  "Definitions"),  as published by the  International  Swaps and Derivatives
Association,  Inc., formerly known as the International Swap Dealers Association
("ISDA"),  are hereby  incorporated into this Confirmation by reference.  In the
event of any inconsistency  between the Definitions and this Confirmation,  this
Confirmation will govern. Capitalized terms not otherwise defined shall have the
meanings  given to them in the Agreement  (including the  Definitions  and other
documents incorporated therein by reference).

         This  Confirmation  supplements,  forms part of, and is subject to, the
ISDA Master  Agreement  dated as of July 11, 1997,  as amended and  supplemented
from  time to time  (the  "Agreement"),  between  you  and  us.  All  provisions
contained  in the  Agreement  govern  this  Confirmation,  except  as  expressly
modified below.

The terms of the particular  Transaction to which this Confirmation  relates are
as follows:

1.  General Terms:

Trade Date:                                               July 11, 1997

Option Style:                                             European



<PAGE>


Option Type:                                              Call

Seller:                                                   Atlantic Coast Airlines

Buyer:                                                    Bombardier Inc.

Reference Bonds:                                          U.S. Treasury 6.625% due May 15, 2007

Number of Options:                                        One per Expiration Date.


Bond Entitlement:                                         For any Expiration Date, the amount set forth
                                                          for such date under the caption "Bond
                                                          Entitlement" on Schedule 1 attached hereto.

Partial Exercise:                                         Not applicable

Option Strike Price:                                      For any Expiration Date, the amount set forth
                                                          for such date under the caption "Option Strike
                                                          Price" on Schedule 1 attached hereto.

Premium:                                                  See Letter Agreement dated July 11, 1997
                                                          between Party A and Party B.

Seller                                                    Business  Day: Any day
                                                          on  which   commercial
                                                          banks   are  open  for
                                                          business    (including
                                                          dealings   in  foreign
                                                          exchange  and  foreign
                                                          currency  deposits) in
                                                          Toronto/Montreal,
                                                          Canada  and New  York,
                                                          New York.

Exchange Business Day:                                    Any day that is a Seller Business Day and is a
                                                          trading day on the Canadian Exchange other than
                                                          a day on which trading such exchange is
                                                          scheduled to close prior to its regular weekday
                                                          closing time and is a day on which U.S.
                                                          Treasury Markets are open for business in New
                                                          York, New York.

Currency                                                  Business  Day: Any day
                                                          on  which   commercial
                                                          banks   are  open  for
                                                          business    (including
                                                          dealings   in  foreign
                                                          exchange  and  foreign
                                                          currency  deposits) in
                                                          Toronto/Montreal,
                                                          Canada  and New  York,
                                                          New York.

Local                                                     Business  Day: Any day
                                                          on  which   commercial
                                                          banks   are  open  for
                                                          business    (including
                                                          dealings   in  foreign
                                                          exchange  and  foreign
                                                          currency  deposits) in
                                                          the city  specified in
                                                          the address for notice
                                                          provided     by    the
                                                          recipient.

Calculation Agent:                                        Bombardier Inc., whose determinations and
                                                          calculations shall be binding in the absence of
                                 manifest error.

2.  Procedure for Exercise:

Expiration Date:                                          Each of the dates set forth on Schedule 1
                                                          attached hereto, or if that date is not an
                                                          Exchange Business Day, the first following day
                                                          that is an Exchange Business Day.

Automatic Exercise:                                       An Option will be deemed to be automatically
                                                          exercised on the Expiration Date for such
                                                          Option if such Option is In-the-Money, as
                                                          determined by the Calculation Agent.

In-the-Money:                                             An Option will be "In-the-Money" if the
                                                          Settlement Amount yields a positive amount.

Reference Price:                                          For any Option, the price for the Bonds equal
                                                          in an amount to the Bond Entitlement as
                                                          determined in good faith by the Calculation
                                                          Agent on the Expiration Date for such Option by
                                                          obtaining the offered side price quoted by
                                                          "Cantor-Fitzgerald" on page 500 of Telerate at
                                                          11:00 a.m., provided that the bid offer spread
                                                          is at or within 3/32 in price.  If the
                                                          Reference Bond is not quoted on p. 500 of
                                                          Telerate, then Bloomberg, page PX7 [U.S. Bond
                                                          7-15 years] shall be used as a replacement
                                                          quotation.

3.  Settlement Terms:

Settlement:                                               Cash Settlement

Settlement Date:                                          For any Option, one Currency Business Day
                                                          following the Expiration Date for such Option.

Settlement                                                Amount:     For    any
                                                          Option,     on     the
                                                          Settlement   Date  for
                                                          such  Option,   Seller
                                                          shall pay to Buyer the
                                                          amount  by  which  the
                                                          Bond  Payment for such
                                                          Option   exceeds   the
                                                          Call  Amount  for such
                                                          Option.

Bond                                                      Payment:    For    any
                                                          Option, the product of
                                                          the  Reference   Price
                                                          for    such     Option
                                                          multiplied by the Bond
                                                          Entitlement  for  such
                                                          Option  multiplied  by
                                                          the  number of Options
                                                          exercised    on    the
                                                          Expiration   Date  for
                                                          such Option.

Call                                                      Amounts:    For    any
                                                          Option, the product of
                                                          the   Option    Strike
                                                          Price for such  Option
                                                          multiplied by the Bond
                                                          Entitlement  for  such
                                                          Option  multiplied  by
                                                          the  number of Options
                                                          exercised    on    the
                                                          Expiration   Date  for
                                                          such Option.

Failure to Deliver:                                       Failure by a party to deliver, when due, any
                                                          payment under this Option shall constitute an
                                                          Event of Default only, if on or before the
                                                          third Local Business Day after notice of the
                                                          failure is given to the party it does not
                                                          remedy such failure.

4.  Account Details:

         Account details of Buyer:                        National Bank of Canada
                              125 West 55th Street
                             New York, NY 10019-5366
                                ABA No. 026005487
                              Account No. 015370001

         Account details of Seller:                       Crestar Bank
                                 Alexandria, VA
                                ABA No. 202369358
                              Account No. 051000020


         Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this  Confirmation  enclosed for that purpose
and  returning  it to us within two Business  Days after your receipt  hereof or
return  it to us  within  two  Business  Days  indicating  revisions  needed  to
accurately  reflect our  agreement.  If your reply is not  received by us within
this  time  period,  the  terms  stated  in this  Confirmation  will  constitute
conclusive  and binding  evidence of the terms of the  Transaction to which this
Confirmation relates, absent manifest error.

                                                                                          Yours sincerely,

                                                                                           BOMBARDIER INC.


                                                                                    By:_________________________
                                                                                                   Name:
                                                                                                  Title:



                                                                                    By:_________________________
                                                                                                   Name:
                                                                                                  Title:


                            Confirmed as of the date
                              first above written:

                             ATLANTIC COAST AIRLINES

                          By:__________________________
                                      Name:
                                     Title:



<PAGE>






                              Terms of Call Option


             Option              Bond Entitlement                   Option Strike Price

         March 16, 1998             $ 6,645,757                        102 15/32

         April 15, 1998                        6,659,432                        102 11/32

         May 15, 1998                          6,579,357                        102 10/32

         July 15, 1998                         6,613,850                        102 4/32

         August 17, 1998               6,627,540                       102 2/32

         September 15, 1998                    6,641,231                        102 4/32


























                                                                                                            EXHIBIT A (Put Option)


                              FORM OF CONFIRMATION


                         [Letterhead of Bombardier Inc.]

                                                                                [Date]


Atlantic Coast Airlines
515A Shaw Road
Dulles, Virginia 20166
Attention: Director of Treasury Management
Fax No.: (703) 925-6299

         Re:      Bombardier Reference Number ______
                  Bond Option Transaction (Put)


Ladies and Gentlemen:

         The purpose of this confirmation is to confirm the terms and conditions
of the Bond Option Transaction  entered into between us, Bombardier Inc. ("Party
A") and you,  Atlantic  Coast  Airlines  ("Party B") on the Trade Date specified
below (the "Transaction").
This confirmation is a "Confirmation" as referred to in the Agreement  specified
below.

         The definitions and provisions  contained in the 1991 ISDA  Definitions
(the  "Definitions"),  as published by the  International  Swaps and Derivatives
Association,  Inc., formerly known as the International Swap Dealers Association
("ISDA"),  are hereby  incorporated into this Confirmation by reference.  In the
event of any inconsistency  between the Definitions and this Confirmation,  this
Confirmation will govern. Capitalized terms not otherwise defined shall have the
meanings  given to them in the Agreement  (including the  Definitions  and other
documents incorporated therein by reference).

         This  Confirmation  supplements,  forms part of, and is subject to, the
ISDA Master  Agreement  dated as of July 11, 1997,  as amended and  supplemented
from  time to time  (the  "Agreement"),  between  you  and  us.  All  provisions
contained  in the  Agreement  govern  this  Confirmation,  except  as  expressly
modified below.

The terms of the particular  Transaction to which this Confirmation  relates are
as follows:

1.  General Terms:

Trade Date:                                               [date]

Option Style:                                             European

Option Type:                                              Put

Seller:                                                   Bombardier Inc.

Buyer:                                                    Atlantic Coast Airlines

Reference Bonds:                                          U.S. Treasury 6.625% due May 15, 2007

Number of Options:                                        One per Expiration Date.


Bond Entitlement:                                         For any Expiration Date, the amount set forth
                                                          for such date under the caption "Bond
                                                          Entitlement" on Schedule 1 attached hereto.

Partial Exercise:                                         Not applicable

Option Strike Price:                                      For any Expiration Date, the amount set forth
                                                          for such date under the caption "Option Strike
                                                          Price" on Schedule 1 attached hereto.

Premium:                                                  See Letter Agreement dated July __, 1997
                                                          between Party A and Party B.

Seller                                                    Business  Day: Any day
                                                          on  which   commercial
                                                          banks   are  open  for
                                                          business    (including
                                                          dealings   in  foreign
                                                          exchange  and  foreign
                                                          currency  deposits) in
                                                          Toronto/Montreal,
                                                          Canada  and New  York,
                                                          New York.

Exchange Business Day:~Any day that is a Seller           Currency Business Day:
Business Day and is a trading day on the Canadian
Exchange  other than a day on which  trading such exchange is scheduled to close
prior to its regular  weekday  closing time and is a day on which U.S.  Treasury
Markets are open for business in New York, New York.

Any day on which  commercial  banks are open for Local  Business  Day:  business
(including  dealings in foreign  exchange  and  foreign  currency  deposits)  in
Toronto/Montreal, Canada and New York, New York.

Any day on which  commercial  banks  are open for  Calculation  Agent:  business
(including  dealings in foreign exchange and foreign  currency  deposits) in the
city specified in the address for notice provided by the recipient.

Bombardier Inc., whose determinations and                 2.  Procedure for Exercise:
calculations shall be binding in the absence of
manifest error.

                                Expiration Date:

Each of the dates set forth on Schedule 1 attached Automatic  Exercise:  hereto,
or if that date is not an Exchange Business Day, the first following day that is
an Exchange Business Day.

An Option  will be deemed to be  automatically  In-the-Money:  exercised  on the
Expiration Date for such Option if such Option is In-the-Money, as determined by
the Calculation Agent.

An Option will be  "In-the-Money"  if the  Settlement  Reference  Price:  Amount
yields a positive amount.

For any  Option,  the  price  for the  Bonds  equal  in an  amount  to the  Bond
Entitlement  as  determined  in  good  faith  by the  Calculation  Agent  on the
Expiration  Date for such Option by  obtaining  the offered side price quoted by
"Cantor-Fitzgerald" on page 500 of Telerate at 11:00 a.m., provided that the bid
offer spread is at or within 3/32 in price.  If the Reference Bond is not quoted
on page 500 of Telerate,  then Bloomberg,  page PX7 [U.S. Bond 7-15 years] shall
be used as a replacement quotation.

3.  Settlement Terms:

Settlement:                                               Cash Settlement

Settlement Date:                                          For any Option, one Currency Business Day
                                                          following the Expiration Date for such Option.

Settlement Amount:                                        For any Option, on the Settlement Date, Seller
                                                          shall pay to Buyer the amount by which the Put
                                                          Amount for such Option exceeds the Bond Payment
                                                          for such Option.

Bond                                                      Payment:    For    any
                                                          Option, the product of
                                                          the  Reference   Price
                                                          for    such     Option
                                                          multiplied by the Bond
                                                          Entitlement  for  such
                                                          Option  multiplied  by
                                                          the  number of Options
                                                          exercised    on    the
                                                          Expiration   Date  for
                                                          such Option.

Put                                                       Amount:     For    any
                                                          Option, the product of
                                                          the   Option    Strike
                                                          Price for such  Option
                                                          multiplied by the Bond
                                                          Entitlement  for  such
                                                          Option  multiplied  by
                                                          the  number of Options
                                                          exercised    on    the
                                                          Expiration   Date  for
                                                          such Option.

Failure to Deliver:                                       Failure by a party to deliver, when due, any
                                                          payment under this Option shall constitute an
                                                          Event of Default only, if on or before the
                                                          third Local Business Day after notice of the
                                                          failure is given to the party it does not
                                                          remedy such failure.

4.  Account Details:

         Account details of Seller:                       National Bank of Canada
                              125 West 55th Street

New York, NY  10019-5366                                           Account details of Buyer:
ABA No. 026005487
Account No. 015370001

Crestar Bank
Alexandria, VA
ABA No. 202369358
Account No. 051000020

         Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this  Confirmation  enclosed for that purpose
and  returning  it to us within two Business  Days after your receipt  hereof or
return  it to us  within  two  Business  Days  indicating  revisions  needed  to
accurately  reflect our  agreement.  If your reply is not  received by us within
this  time  period,  the  terms  stated  in this  Confirmation  will  constitute
conclusive  and binding  evidence of the terms of the  Transaction to which this
Confirmation relates, absent manifest error.

                                Yours sincerely,

                                 BOMBARDIER INC.


                                                              By:_________________________
                                                                    Name:
                                                                    Title:



                                                              By:_________________________
                                                                    Name:
                                                                    Title:


Confirmed as of the date first above written:

ATLANTIC COAST AIRLINES

By:__________________________
      Name:
      Title:

<PAGE>


                                                                                                                        Schedule 1

                               Terms of Put Option

                                                                                           Option
         Option                     Bond Entitlement                   Strike Price



<PAGE>





                                                                                July 11, 1997


Atlantic Coast Airlines
515A Shaw Road
Dulles, Virginia 20166
Attention: Director of Treasury Management
Fax No.: (703) 925-6299

         Re:      Bombardier Reference Number ACA-1
                  Bond Option Transaction (Put)


Ladies and Gentlemen:

         The purpose of this confirmation is to confirm the terms and conditions
of the Bond Option Transaction  entered into between us, Bombardier Inc. ("Party
A") and you,  Atlantic  Coast  Airlines  ("Party B") on the Trade Date specified
below (the "Transaction").
This confirmation is a "Confirmation" as referred to in the Agreement  specified
below.

         The definitions and provisions  contained in the 1991 ISDA  Definitions
(the  "Definitions"),  as published by the  International  Swaps and Derivatives
Association,  Inc., formerly known as the International Swap Dealers Association
("ISDA"),  are hereby  incorporated into this Confirmation by reference.  In the
event of any inconsistency  between the Definitions and this Confirmation,  this
Confirmation will govern. Capitalized terms not otherwise defined shall have the
meanings  given to them in the Agreement  (including the  Definitions  and other
documents incorporated therein by reference).

         This  Confirmation  supplements,  forms part of, and is subject to, the
ISDA Master  Agreement  dated as of July 11, 1997,  as amended and  supplemented
from  time to time  (the  "Agreement"),  between  you  and  us.  All  provisions
contained  in the  Agreement  govern  this  Confirmation,  except  as  expressly
modified below.

The terms of the particular  Transaction to which this Confirmation  relates are
as follows:

1.  General Terms:

Trade Date:                                               July 11, 1997

Option Style:                                             European



<PAGE>


Option Type:                                              Put

Seller:                                                   Bombardier Inc.

Buyer:                                                    Atlantic Coast Airlines

Reference Bonds:                                          U.S. Treasury 6.625% due May 15, 2007

Number of Options:                                        One per Expiration Date.


Bond Entitlement:                                         For any Expiration Date, the amount set forth
                                                          for such date under the caption "Bond
                                                          Entitlement" on Schedule 1 attached hereto.

Partial Exercise:                                         Not applicable

Option Strike Price:                                      For any Expiration Date, the amount set forth
                                                          for such date under the caption "Option Strike
                                                          Price" on Schedule 1 attached hereto.

Premium:                                                  See Letter Agreement dated July 11, 1997
                                                          between Party A and Party B.

Seller                                                    Business  Day: Any day
                                                          on  which   commercial
                                                          banks   are  open  for
                                                          business    (including
                                                          dealings   in  foreign
                                                          exchange  and  foreign
                                                          currency  deposits) in
                                                          Toronto/Montreal,
                                                          Canada  and New  York,
                                                          New York.

Exchange Business Day:                                    Any day that is a Seller Business Day and is a
                                                          trading day on the Canadian Exchange other than
                                                          a day on which trading such exchange is
                                                          scheduled to close prior to its regular weekday
                                                          closing time and is a day on which U.S.
                                                          Treasury Markets are open for business in New
                                                          York, New York.

Currency                                                  Business  Day: Any day
                                                          on  which   commercial
                                                          banks   are  open  for
                                                          business    (including
                                                          dealings   in  foreign
                                                          exchange  and  foreign
                                                          currency  deposits) in
                                                          Toronto/Montreal,
                                                          Canada  and New  York,
                                                          New York.

Local                                                     Business  Day: Any day
                                                          on  which   commercial
                                                          banks   are  open  for
                                                          business    (including
                                                          dealings   in  foreign
                                                          exchange  and  foreign
                                                          currency  deposits) in
                                                          the city  specified in
                                                          the address for notice
                                                          provided     by    the
                                                          recipient.

Calculation Agent:                                        Bombardier Inc., whose determinations and
                                                          calculations shall be binding in the absence of
                                 manifest error.

2.  Procedure for Exercise:

Expiration Date:                                          Each of the dates set forth on Schedule 1
                                                          attached hereto, or if that date is not an
                                                          Exchange Business Day, the first following day
                                                          that is an Exchange Business Day.

Automatic Exercise:                                       An Option will be deemed to be automatically
                                                          exercised on the Expiration Date for such
                                                          Option if such Option is In-the-Money, as
                                                          determined by the Calculation Agent.

In-the-Money:                                             An Option will be "In-the-Money" if the
                                                          Settlement Amount yields a positive amount.

Reference Price:                                          For any Option, the price for the Bonds equal
                                                          in an amount to the Bond Entitlement as
                                                          determined in good faith by the Calculation
                                                          Agent on the Expiration Date for such Option by
                                                          obtaining the offered side price quoted by
                                                          "Cantor-Fitzgerald" on page 500 of Telerate at
                                                          11:00 a.m., provided that the bid offer spread
                                                          is at or within 3/32 in price.  If the
                                                          Reference Bond is not quoted on page 500 of
                                                          Telerate, then Bloomberg, page PX7 [U.S. Bond
                                                          7-15 years] shall be  used as a replacement
                                                          quotation.

3.  Settlement Terms:

Settlement:                                               Cash Settlement

Settlement Date:                                          For any Option, one Currency Business Day
                                                          following the Expiration Date for such Option.

Settlement Amount:                                        For any Option, on the Settlement Date, Seller
                                                          shall pay to Buyer the amount by which the Put
                                                          Amount for such Option exceeds the Bond Payment
                                                          for such Option.

Bond                                                      Payment:    For    any
                                                          Option, the product of
                                                          the  Reference   Price
                                                          for    such     Option
                                                          multiplied by the Bond
                                                          Entitlement  for  such
                                                          Option  multiplied  by
                                                          the  number of Options
                                                          exercised    on    the
                                                          Expiration   Date  for
                                                          such Option.

Put                                                       Amount:     For    any
                                                          Option, the product of
                                                          the   Option    Strike
                                                          Price for such  Option
                                                          multiplied by the Bond
                                                          Entitlement  for  such
                                                          Option  multiplied  by
                                                          the  number of Options
                                                          exercised    on    the
                                                          Expiration   Date  for
                                                          such Option.

Failure to Deliver:                                       Failure by a party to deliver, when due, any
                                                          payment under this Option shall constitute an
                                                          Event of Default only, if on or before the
                                                          third Local Business Day after notice of the
                                                          failure is given to the party it does not
                                                          remedy such failure.

4.  Account Details:

         Account details of Seller:                       National Bank of Canada
                              125 West 55th Street
                             New York, NY 10019-5366
                                ABA No. 026005487
                              Account No. 015370001

         Account details of Buyer:                        Crestar Bank
                                 Alexandria, VA
                                ABA No. 202369358
                              Account No. 051000020


         Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this  Confirmation  enclosed for that purpose
and  returning  it to us within two Business  Days after your receipt  hereof or
return  it to us  within  two  Business  Days  indicating  revisions  needed  to
accurately  reflect our  agreement.  If your reply is not  received by us within
this  time  period,  the  terms  stated  in this  Confirmation  will  constitute
conclusive  and binding  evidence of the terms of the  Transaction to which this
Confirmation relates, absent manifest error.

                                Yours sincerely,

                                 BOMBARDIER INC.


                                                              By:_________________________
                                                                    Name:
                                                                    Title:



                                                              By:_________________________
                                                                    Name:
                                                                    Title:


Confirmed as of the date first above written:

ATLANTIC COAST AIRLINES

By:__________________________
      Name:
      Title:

<PAGE>




                               Terms of Put Option

                                                                                        Option
                  Option                      Bond Entitlement                       Strike Price
            March 16, 1998                       $ 6,645,757                           100  3/32

            April 15, 1998                          6,659,432                           99 30/32

            May 15, 1998                            6,579,357                           99 26/32

            July 15, 1998                           6,613,850                           99 17/32

            August 17, 1998                         6,627,540                           99 12/32

            September 15, 1998                      6,641,231                           99   8/32


</TABLE>