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EXHIBIT 10.50(b)

PASS THROUGH TRUST AGREEMENT


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                                                        61







179212.3/NYL2


                  This PASS THROUGH TRUST  AGREEMENT,  dated as of September 25,
1997, among ATLANTIC COAST AIRLINES,  a California  corporation (the "Company"),
ATLANTIC COAST AIRLINES, INC., a Delaware corporation (the "Guarantor"), and THE
FIRST NATIONAL BANK OF MARYLAND, a national banking association,  as Trustee, is
made with  respect to the  formation  of Atlantic  Coast  Airlines  1997-1A Pass
Through Trust and the issuance of 7.20%  Atlantic  Coast  Airlines  1997-1A Pass
Through Certificates representing fractional undivided interests in the Trust.

                  WITNESSETH:

                  WHEREAS,  pursuant to each Indenture,  (i) in the case of each
of the six Canadair  Regional Jet Series 200-ER aircraft  ("CRJs") which will be
leased to the Company  pursuant to the related  Lease (the "Leased  CRJs"),  the
related  Owner Trustee  proposes to issue on a nonrecourse  basis four series of
Equipment  Notes to finance the purchase of the Leased CRJs  referred to in such
Indenture,  (ii) in the case of each of four British  Aerospace  Jetstream  J-41
aircraft  ("J-41s") which will be leased to the Company  pursuant to the related
Lease  (the  "Leased  J-41s",   together  with  the  Leased  CRJs,  the  "Leased
Aircraft"),  the related Owner Trustee proposes to issue on a nonrecourse  basis
three  series of  Equipment  Notes to finance the  purchase of the Leased  J-41s
referred  to in such  Indenture  and (iii) in the case of each of the four J-41s
which are owned by the Company (the "Owned  Aircraft"),  the Company proposes to
issue on a recourse basis three series of Equipment Notes, to finance such Owned
Aircraft;

                  WHEREAS,  the  Trustee,  upon  execution  and delivery of this
Agreement,  hereby declares the creation of this Trust (the "1997-1A Trust") for
the benefit of the Certificateholders,  and the initial  Certificateholders,  as
the  grantors of the  1997-1A  Trust,  by their  respective  acceptances  of the
Certificates, join in the creation of this 1997-1A Trust with the Trustee;

                  WHEREAS,  all  Certificates  to be issued  by the  Trust  will
evidence fractional  undivided interests in the Trust and will convey no rights,
benefits or interests in respect of any property other than the Trust Property;

                  WHEREAS,   pursuant  to  the  terms  and  conditions  of  this
Agreement and each of the Financing Agreements to be entered into by the Trustee
substantially  concurrently  with the execution and delivery of this  Agreement,
the  Trustee  on  behalf  of the  Trust  shall  purchase  one or more  issues of
Equipment  Notes having the same interest rate as, and final  maturity dates not
later  than the final  Regular  Distribution  Date of, the  Certificates  issued
hereunder  and shall hold such  Equipment  Notes in trust for the benefit of the
Certificateholders;

                  WHEREAS,  all of the conditions and requirements  necessary to
make this  Agreement,  when duly executed and  delivered,  a valid,  binding and
legal instrument,  enforceable in accordance with its terms and for the purposes
herein expressed, have been done, performed and fulfilled, and the execution and
delivery of this  Agreement  in the form and with the terms  hereof have been in
all respects duly authorized; and

                  WHEREAS, to facilitate the sale of Equipment Notes to, and the
purchase of Equipment Notes by, the Trustee on behalf of the 1997-1A Trust,  (i)
the Company as the "issuer",  as such term is defined in and solely for purposes
of the  Securities  Act of 1933, as amended,  of the  Certificates  to be issued
pursuant hereto and as the "obligor",  as such term is defined in and solely for
purposes of the Trust  Indenture  Act of 1939, as amended and (ii) the Guarantor
have each duly  authorized  the  execution and delivery of this  Agreement  with
respect  to all  such  Certificates  and  are  undertaking  to  perform  certain
administrative  and ministerial  duties hereunder and is also undertaking to pay
the fees and expenses of the Trustee;

                  NOW,  THEREFORE,  in  consideration  of the mutual  agreements
herein contained,  and of other good and valuable  consideration the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:


                                    ARTICLE I

                                   DEFINITIONS

                  Section 1.01.  Definitions.  For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:

                  (1) the terms used  herein  that are  defined in this  Article
         have the  meanings  assigned to them in this  Article,  and include the
         plural as well as the singular;

                  (2) all other terms used herein which are defined in the Trust
         Indenture Act, either directly or by reference herein have the meanings
         assigned to them therein;

                  (3) all references in this Agreement to designated "Articles",
         "Sections",  "Subsections" and other subdivisions are to the designated
         Articles,   Sections,   Subsections  and  other  subdivisions  of  this
         Agreement;

                  (4) the words  "herein",  "hereof" and  "hereunder"  and other
         words of similar  import refer to this  Agreement as a whole and not to
         any particular Article, Section, Subsection or other subdivision; and

                  (5) unless the context otherwise requires,  whenever the words
         "including",  "include"  or  "includes"  are used  herein,  it shall be
         deemed to be followed by the phrase "without limitation".

                  Act:  With respect to any Certificateholder has the meaning specified in Section 1.04.

                  Affiliate:  Means, with respect to any specified  Person,  any
         other Person  directly or  indirectly  controlling  or controlled by or
         under direct or indirect common control with such Person.  For purposes
         of this definition,  "control", when used with respect to any specified
         Person,  means the power to direct the  management and policies of such
         Person, directly or indirectly, whether through the ownership of voting
         securities,  by contract or otherwise,  and the terms "controlling" and
         "controlled" have meanings correlative to the foregoing.

                  Agent Members:  Has the meaning specified in Section 3.05(a).

                  Aircraft:  Means the Leased Aircraft and the Owned Aircraft.

                  Authorized Agent:  Means any Paying Agent or Registrar for the Certificates.

                  Avoidable  Tax:  Means a state or  local  tax (i) upon (w) the
         Trust,  (x)  the  Trust  Property,  (y)  Certificateholders  or (z) the
         Trustee for which the Trustee is  entitled to seek  reimbursement  from
         the Trust Property, and (ii) which would be avoided if the Trustee were
         located in another state,  or jurisdiction  within a state,  within the
         United  States.  A tax shall not be an Avoidable  Tax if the Company or
         any Owner Trustee shall agree to pay, and shall pay, such tax.

                  Book-Entry  Certificates:  With  respect to the  Certificates,
         means  a  beneficial  interest  in  the  Certificates,   ownership  and
         transfers  of which shall be made  through book entries as described in
         Section 3.04.

                  Business Day: Means any day other than a Saturday, a Sunday or
         a day on which  commercial banks are required or authorized to close in
         Baltimore, Maryland, New York, New York, or, so long as any Certificate
         is  outstanding,  the city and state in which the  Trustee  or any Loan
         Trustee  maintains its Corporate Trust Office or receives and disburses
         funds.

                  Cedel:  Means Cedel Bank societe anonyme.

                  Certificate:  Means any one of the Certificates executed and authenticated by the
         Trustee, substantially in the form of Exhibit A hereto.

                  Certificate Account:  Means the account or accounts created and maintained  pursuant
         to Section 4.01(a).

                  Certificateholder or Holder:  Means the Person in whose name a Certificate is
         registered in the Register.

                  Clearing Agency:  Means an organization registered as a "clearing agency" pursuant to
         Section 17A of the Securities Exchange Act of 1934, as amended.

                  Clearing Agency  Participant:  Means a broker,  dealer,  bank,
         other financial  institution or other Person for whom from time to time
         a Clearing Agency effects, directly or indirectly, book-entry transfers
         and pledges of securities deposited with the Clearing Agency.

                  Company:  Means Atlantic Coast Airlines, a California corporation, or its successor in
         interest.

                  Controlling Party:  Means the party entitled to act as such pursuant to the terms of
         the Intercreditor Agreement.

                  Corporate  Trust  Office:  With  respect to the Trustee or any
         Loan Trustee,  means the office of such trustee in the city at which at
         any particular  time its corporate  trust business shall be principally
         administered.

                  Cut-off Transfer Date:  Means October 2, 1997.

                  Depositary:  Means The Depository Trust Company, its nominees and their respective
         successors.

                  Direction:  Has the meaning specified in Section 1.04(c).

                  Distribution Date:  Means each Regular Distribution Date or Special Distribution Date.

                  Equipment Notes:  Means the "secured certificates" issued pursuant to the Indentures.

                  Escrow Account:  Has the meaning specified in Section 2.01(b).

                  Escrowed Funds:  Has the meaning specified in Section 2.01(b).

                  Euroclear:  Means the Euroclear System.

                  Event of Default: Means the occurrence of an Indenture Default
         under any Indenture pursuant to which Equipment Notes held by the Trust
         were issued.

                  Financing   Agreements:   Means  each  of  the   Participation
         Agreements and the Note Purchase Agreement listed on Schedule 2 hereto,
         as the same may be amended,  supplemented  or otherwise  modified  from
         time to time in accordance with its terms.

                  Financing Documents: With respect to any Equipment Note, means
         the  related  Indenture,   Financing   Agreement  and,  to  the  extent
         applicable,  the Lease and the other relevant  documents referred to in
         the  definitions  of  "Operative  Agreements"  contained in the related
         Indenture.

                  Fractional Undivided Interest:  Means the fractional undivided interest in the Trust
         that is evidenced by a Certificate.

                  Global Certificates:  Has the meaning assigned to such term in Section 3.01.

                  Guarantor:  Means Atlantic Coast Airlines, Inc., a Delaware corporation, or its
         successors in interest.

                  Indentures: Means each Indenture and Security Agreement listed
         on  Schedule  1  hereto,  in each  case as the same may be  amended  or
         supplemented or otherwise modified from time to time in accordance with
         its terms.

                  Indenture Default:  With respect to any Indenture, means any Indenture Event of
         Default (as such term is defined in such Indenture) thereunder.

                  Initial Purchaser:  Means Morgan Stanley & Co. Incorporated.

                  Initial Regular Distribution Date:  Means the first Regular Distribution Date on which
         a Scheduled Payment is to be made.

                  Institutional  Accredited  Investor:  Means  an  institutional
         investor that is an "accredited  investor" within the meaning set forth
         in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
         Act.

                  Intercreditor  Agreement:  Means the  Intercreditor  Agreement
         dated  September 25, 1997 among the Trustee,  the Other  Trustees,  the
         Liquidity Provider,  the liquidity  providers,  if any, relating to the
         Certificates  issued  under (and as defined in) the Other Pass  Through
         Trust  Agreements,   and  The  First  National  Bank  of  Maryland,  as
         Subordination Agent thereunder,  as amended,  supplemented or otherwise
         modified from time to time in accordance with its terms.

                  Issuance Date:  Means the date of the issuance of the Initial Certificates.

                  Lease: Means, with respect to each Leased Aircraft,  the lease
         between  an Owner  Trustee,  as the  lessor,  and the  Company,  as the
         lessee, referred to in the related Indenture, as each such lease may be
         amended or supplemented in accordance  with its respective  terms;  and
         Leases means all such leases.

                  Leased Aircraft:  Has the meaning specified in the first recital to this Agreement.

                  Letter of Representations:  Means the agreement dated the Issuance Date among the
         Company, the Trustee and the initial Clearing Agency.

                  Liquidity  Facility:  Means the Irrevocable  Revolving  Credit
         Agreement  dated  September  25,  1997  relating  to the  Certificates,
         between the Liquidity Provider and the Subordination Agent, as amended,
         replaced,  supplemented  or  otherwise  modified  from  time to time in
         accordance with its terms and the terms of the Intercreditor Agreement.

                  Liquidity Provider:  Means, initially, ING Bank N.V.,  and any replacement or
         successor therefor appointed in accordance with the Liquidity Facility and the Intercreditor
         Agreement.

                  Loan  Trustee:  With  respect  to any  Equipment  Note  or the
         Indenture   applicable  thereto,   means  the  bank  or  trust  company
         designated as loan or indenture  trustee under such Indenture;  and any
         successor to such Loan Trustee as such trustee; and Loan Trustees means
         all of the Loan Trustees under the Indentures.

                  Non-U.S. Person:  Means a Person that is not a U.S. Person, as defined in Regulation S.

                  Officer's Certificate:  Means a certificate signed, (a) in the
         case of the  Guarantor  or the  Company,  by (i) the  President  or any
         Executive  Vice  President or Senior Vice President of the Guarantor or
         the Company,  signing alone or (ii) any Vice President of the Guarantor
         or the Company  signing  together  with the  Secretary,  the  Assistant
         Secretary, the Treasurer or any Assistant Treasurer of the Guarantor or
         the Company or (b) in the case of the Trustee or an Owner  Trustee or a
         Loan  Trustee,  a  Responsible  Officer  of the  Trustee  or such Owner
         Trustee or such Loan Trustee, as the case may be.

                  Offshore Certificates Exchange Date:  Has the meaning specified in Section 3.01.

                  Offshore Global Certificates:  Has the meaning assigned to such term in Section 3.01.

                  Offshore Physical Certificates:  Has the meaning assigned to such term in Section 3.01.

                  Opinion of Counsel:  Means a written  opinion of legal counsel
         who (a) in the case of counsel for the  Guarantor or the Company may be
         (i) a senior  attorney in rank of the officers of the  Guarantor or the
         Company  a  principal  duty of which is  furnishing  advice as to legal
         matters or (ii) such other  counsel  designated by the Guarantor or the
         Company and reasonably acceptable to the Trustee and (b) in the case of
         any Owner  Trustee or any Loan  Trustee  may be such  counsel as may be
         designated by any of them whether or not such counsel is an employee of
         any of them, and who shall be reasonably acceptable to the Trustee.

                  Other Pass Through  Trust  Agreement:  Means each of the three
         other  Atlantic  Coast  Airlines  1997-1 Pass Through Trust  Agreements
         relating  to  Atlantic  Coast  Airlines  1997-1B  Pass  Through  Trust,
         Atlantic Coast  Airlines  1997-1C Pass Through Trust and Atlantic Coast
         Airlines  1997-1D Pass Through Trust,  each dated the date hereof;  and
         Other Pass Through Trust Agreements means all such agreements.

                  Other Trustee:  Means the trustee under each of the Other Pass
         Through Trust Agreements,  and any successor or other trustee appointed
         as provided therein; and Other Trustees means all such trustees.

                  Outstanding:  With respect to Certificates, means, as of the date of determination,
         all Certificates theretofore authenticated and delivered under this Agreement, except:

                           (i)      Certificates theretofore cancelled by the Registrar or delivered to
                  the Trustee or the Registrar for cancellation;

                           (ii)  All of the  Certificates  if  money in the full
                  amount  required to make the final  distribution  with respect
                  thereto  pursuant to Section 11.01 hereof has been theretofore
                  deposited  with the  Trustee in trust for the  Holders of such
                  Certificates as provided in Section 4.01 pending  distribution
                  of such  money  to such  Certificateholders  pursuant  to such
                  final distribution payment; and

                           (iii)  Certificates  in  exchange  for or in  lieu of
                  which other Certificates have been authenticated and delivered
                  pursuant to this Agreement.

                  Owned Aircraft:  Has the meaning specified in the first recital to this Agreement.

                  Owner Participant: With respect to any Equipment Note relating
         to a Leased Aircraft,  means the "Owner  Participant" as referred to in
         the Indenture  pursuant to which such  Equipment Note is issued and any
         permitted  successor  or assign of such  Owner  Participant;  and Owner
         Participants  at any  time  of  determination  means  all of the  Owner
         Participants thus referred to in the Indentures.

                  Owner Trustee:  With respect to any Equipment Note relating to
         a Leased  Aircraft,  means the "Owner  Trustee",  as referred to in the
         Indenture  pursuant to which such Equipment Note is issued,  not in its
         individual capacity but solely as trustee; and Owner Trustees means all
         of the Owner Trustees party to any of the Indentures.

                  Participation Agreement:  With respect to any Leased Aircraft,
         means the related Participation  Agreement listed on Schedule 2 hereto,
         as the same may be amended,  supplemented  or otherwise  modified  from
         time to time in accordance with its terms; and Participation Agreements
         means all such agreements.

                  Paying Agent:  Means the paying agent maintained and appointed for the Certificates
         pursuant to Section 7.12.

                  Permanent Offshore Global Certificates:  Has the meaning specified in Section 3.01.

                  Permitted Investments:  Means obligations of the United States
         of America or agencies or instrumentalities  thereof for the payment of
         which the full  faith and  credit of the  United  States of  America is
         pledged,  maturing  in not more than 60 days or such  lesser time as is
         necessary for payment of any Special Payments on a Special Distribution
         Date or any  mutual  fund the  portfolio  of which is  limited  to such
         obligations,  including  any  proprietary  mutual  fund  of  The  First
         National  Bank of  Maryland  for  which  such bank or an  affiliate  is
         investment  advisor or to which such bank provides  other  services and
         receives reasonable compensation for such services.

                  Person:   Means  any   person,   including   any   individual,
         corporation,   partnership,  joint  venture,  association,  joint-stock
         company,  trust,  unincorporated  organization,  or  government  or any
         agency or political subdivision thereof.

                  Physical Certificates:  Has the meaning specified in Section 3.01.

                  Pool  Balance:  Means,  as  of  any  date,  (i)  the  original
         aggregate  face  amount of the  Certificates  less  (ii) the  aggregate
         amount of all payments made in respect of such Certificates  other than
         payments   made  in  respect  of   interest   or  premium   thereon  or
         reimbursement   of  any  costs  or  expenses   incurred  in  connection
         therewith.  The  Pool  Balance  as of any  Distribution  Date  shall be
         computed  after giving effect to the payment of  principal,  if any, on
         the Equipment  Notes or other Trust  Property held in the Trust and the
         distribution thereof to be made on such Distribution Date.

                  Pool Factor:  Means, as of any date, the quotient  (rounded to
         the seventh decimal place) computed by dividing (i) the Pool Balance as
         at  such  date  by (ii)  the  original  aggregate  face  amount  of the
         Certificates.  The Pool  Factor as of any  Distribution  Date  shall be
         computed  after giving effect to the payment of  principal,  if any, on
         the  Equipment  Notes  or other  Trust  Property  and the  distribution
         thereof to be made on such Distribution Date.

                  Postponed Notes:  Means the Equipment Notes to be held in the Trust as to which a
         Postponement Notice shall have been delivered pursuant to Section 2.01(b).

                  Postponement  Notice:  Means an Officer's  Certificate  of the
         Company (1) requesting that the Trustee  temporarily  postpone purchase
         pursuant to one or more of the  Financing  Agreements of certain of the
         Equipment  Notes to a date which is later than the Issuance  Date,  (2)
         identifying  the amount of the  purchase  price of each such  Equipment
         Note and the aggregate purchase price for all such Equipment Notes, (3)
         setting forth the reasons for such postponement and (4) with respect to
         each such  Equipment  Note,  either  (a)  setting  or  resetting  a new
         Transfer Date (which shall be on or prior to the Cut-Off  Transfer Date
         for payment by the Trustee of such  purchase  price and issuance of the
         related  Equipment  Note, or (b) indicating that such new Transfer Date
         (which shall be on or prior to the Cut-off  Transfer  Date) will be set
         by  subsequent  written  notice not less than one Business Day prior to
         such new Transfer Date.

                  Private Placement Legend:  Has the meaning specified in Section 3.02.

                  QIB:  Means a qualified institutional buyer as defined in Rule 144A.

                  Record  Date:   Means  (i)  for   Scheduled   Payments  to  be
         distributed  on any  Regular  Distribution  Date,  other than the final
         distribution,  the 15th day (whether or not a Business  Day)  preceding
         such Regular  Distribution  Date,  and (ii) for Special  Payments to be
         distributed  on any  Special  Distribution  Date,  other than the final
         distribution,  the 15th day (whether or not a Business  Day)  preceding
         such Special Distribution Date.

                  Register and Registrar:  Mean the register maintained and the registrar appointed
         pursuant to Sections 3.04 and 7.12.

                  Regular  Distribution  Date: With respect to  distributions of
         Scheduled  Payments  in  respect of the  Certificates,  means each date
         designated  as a Regular  Distribution  Date in this  Agreement,  until
         payment of all the  Scheduled  Payments to be made under the  Equipment
         Notes held in the Trust have been made; provided, however, that, if any
         such day shall not be a Business Day, the related distribution shall be
         made on the next succeeding Business Day without additional interest.

                  Regulation S: Means  Regulation S under the  Securities Act or
         any successor regulation thereto.

                  Request:  Means a request  by the  Company  setting  forth the
         subject matter of the request  accompanied by an Officer's  Certificate
         and an  Opinion  of  Counsel  as  provided  in  Section  1.02  of  this
         Agreement.

                  Responsible  Officer:  With respect to the  Trustee,  any Loan
         Trustee and any Owner Trustee, means any officer in the Corporate Trust
         Division of the  Trustee,  Loan  Trustee or Owner  Trustee or any other
         officer customarily  performing functions similar to those performed by
         the persons who at the time shall be such officers, respectively, or to
         whom any corporate trust matter is referred because of his knowledge of
         and familiarity with a particular subject.

                  Rule 144A:  Means Rule 144A under the  Securities  Act and any
         successor regulation thereto.

                  Scheduled  Payment:  With respect to any Equipment Note, means
         any payment of  principal  and interest on such  Equipment  Note or any
         payment of  interest  on the  Certificates  with funds  drawn under the
         Liquidity  Facility  (other than any such payment  which is not in fact
         received by the Trustee or any Subordination  Agent within five days of
         the date on which such  payment is  scheduled  to be made) due from the
         obligor  thereon which payment  represents the installment of principal
         at the  stated  maturity  of  such  installment  of  principal  on such
         Equipment Note, the payment of regularly  scheduled interest accrued on
         the unpaid principal  amount of such Equipment Note, or both;  provided
         that any payment of principal,  premium,  if any, or interest resulting
         from the  redemption  or  purchase  of any  Equipment  Note  shall  not
         constitute a Scheduled Payment.

                  SEC:  Means the Securities  and Exchange  Commission,  as from
         time to time  constituted or created under the Securities  Exchange Act
         of 1934,  as amended,  or, if at any time after the  execution  of this
         instrument  such  Commission is not existing and  performing the duties
         now  assigned  to it  under  the  Trust  Indenture  Act,  then the body
         performing such duties on such date.

                  Securities Act:  Means the United States Securities Act of 1933, as amended from time
         to time, or any successor thereto.

                  Special  Distribution Date: Means each date on which a Special
         Payment is to be distributed as specified in this Agreement;  provided,
         however, that, if any such day shall not be a Business Day, the related
         distribution shall be made on the next succeeding  Business Day without
         additional interest.

                  Special Payment: Means (i) any payment (other than a Scheduled
         Payment) in respect of, or any proceeds of, any Equipment Note or Trust
         Indenture  Estate (as  defined  in each  Indenture),  (ii) the  amounts
         required to be  distributed  pursuant to the last  paragraph of Section
         2.01(b) or (iii) the amounts required to be distributed pursuant to the
         penultimate paragraph of Section 2.01(b).

                  Special Payments Account:  Means the account or accounts created and maintained
         pursuant to Section 4.01(b).

                  Specified Investments: Means (i) obligations of, or guaranteed
         by, the United States Government or agencies thereof,  (ii) open market
         commercial paper of any corporation  incorporated under the laws of the
         United States of America or any State thereof rated at least P-2 or its
         equivalent by Moody's  Investors  Service,  Inc. or at least A-2 or its
         equivalent  by Standard & Poor's Rating Group,  (iii)  certificates  of
         deposit  issued by  commercial  banks  organized  under the laws of the
         United States or of any political subdivision thereof having a combined
         capital  and  surplus in excess of  $500,000,000  which  banks or their
         holding  companies  have a rating  of A or its  equivalent  by  Moody's
         Investors  Service,  Inc. or Standard & Poor's Rating Group;  provided,
         however,  that the  aggregate  amount  at any one time so  invested  in
         certificates  of deposit  issued by any one bank shall not exceed 5% of
         such bank's capital and surplus,  (iv) U.S. dollar denominated offshore
         certificates  of deposit issued by, or offshore time deposits with, any
         commercial  bank  described  in (iii) or any  subsidiary  thereof,  (v)
         repurchase  agreements with any financial  institution  having combined
         capital  and  surplus  of  at  least   $500,000,000  with  any  of  the
         obligations  described  in clauses (i) through (iv) as  collateral  and
         (vi) any mutual fund the  portfolio of which is limited to  investments
         of the types  specified  in the  preceding  clauses  (i)  through  (v),
         including  any  proprietary  mutual fund of The First  National Bank of
         Maryland for which such bank or an affiliate is  investment  advisor or
         to which such bank  provides  other  services and  receives  reasonable
         compensation  for such  services;  provided  further that if all of the
         above  investments are  unavailable,  the entire amounts to be invested
         may be used to  purchase  Federal  Funds  from an entity  described  in
         clause (iii) above.

                  Subordination Agent:  Has the meaning specified in the Intercreditor Agreement.

                  Temporary Offshore Global Certificates:  Has the meaning specified in Section 3.01.

                  Transfer Date:  Has the meaning assigned to the term "Delivery Date" in each Financing
         Agreement.

                  Triggering Event:  Has the meaning assigned to such term in the Intercreditor
         Agreement.

                  Trust:  Means the trust created by this Agreement, the estate of which consists of the
         Trust Property.

                  Trust Indenture Act:  Except as otherwise provided in Section 9.06, means the United
         States Trust Indenture Act of 1939 as in force at the date hereof.

                  Trust  Property:  Means (i) the  Equipment  Notes  held as the
         property  of the  Trust,  all monies at any time paid  thereon  and all
         monies due and to become due  thereunder,  (ii) the rights of the Trust
         under any Intercreditor  Agreement,  including all monies receivable in
         respect of such rights, (iii) all monies receivable under the Liquidity
         Facility  and (iv)  funds  from time to time  deposited  in the  Escrow
         Account,  the Certificate  Account and the Special Payments Account and
         any proceeds from the sale by the Trustee pursuant to Article VI hereof
         of any such Equipment Note.

                  Trustee:  Means The First National Bank of Maryland, or its successor in interest, and
         any successor or other trustee appointed as provided herein.

                  Trustee's Lien:  Has the meaning specified in Section 7.17.

                  U.S. Global Certificate:  Has the meaning specified in Section 3.01.

                  U.S. Physical Certificates:  Has the meaning specified in Section 3.01.

                  Section 1.02. Compliance  Certificates and Opinions.  Upon any
application or request by the Company,  any Owner Trustee or any Loan Trustee to
the  Trustee to take any  action  under any  provision  of this  Agreement,  the
Company,  such Owner  Trustee or such Loan  Trustee,  as the case may be,  shall
furnish to the Trustee (i) an Officer's Certificate stating that, in the opinion
of the signers, all conditions precedent, if any, provided for in this Agreement
relating to the proposed  action have been  complied with and (ii) an Opinion of
Counsel  stating  that  in the  opinion  of such  counsel  all  such  conditions
precedent,  if any, have been complied with, except that in the case of any such
application  or  request  as to  which  the  furnishing  of  such  documents  is
specifically  required  by any  provision  of this  Agreement  relating  to such
particular  application or request, no additional certificate or opinion need be
furnished.

                  Every certificate or opinion with respect to compliance with a
condition or covenant  provided for in this Agreement  (other than a certificate
provided pursuant to Section 8.04(d)) shall include:

                  (1) a statement that each individual  signing such certificate
         or opinion has read such covenant or condition and the  definitions  in
         this Agreement relating thereto;

                  (2) a  brief  statement  as to the  nature  and  scope  of the
         examination  or  investigation  upon which the  statements  or opinions
         contained in such certificate or opinion are based;

                  (3) a statement that, in the opinion of each such  individual,
         he has made such examination or investigation as is necessary to enable
         him to express an informed  opinion as to whether or not such  covenant
         or condition has been complied with; and

                  (4) a  statement  as to  whether,  in the opinion of each such
         individual, such condition or covenant has been complied with.

                  Section 1.03. Form of Documents  Delivered to Trustee.  In any
case where  several  matters are required to be  certified  by, or covered by an
opinion of, any specified  Person,  it is not necessary that all such matters be
certified  by, or covered by the opinion of, only one such Person,  or that they
be so certified or covered by only one document, but one such Person may certify
or give an  opinion  with  respect  to some  matters  and one or more other such
Persons as to other  matters  and any such Person may certify or give an opinion
as to such matters in one or several documents.

                  Any  Opinion of Counsel  stated to be based on the  opinion of
other counsel shall be accompanied by a copy of such other opinion.

                  Where any Person is required  to make,  give or execute two or
more applications,  requests, consents,  certificates,  statements,  opinions or
other instruments under this Agreement,  they may, but need not, be consolidated
and form one instrument.

                  Section 1.04. Acts of  Certificateholders.  (a) Any direction,
consent,  waiver or other action provided by this Agreement to be given or taken
by  Certificateholders  may  be  embodied  in  and  evidenced  by  one  or  more
instruments of substantially similar tenor signed by such  Certificateholders in
person or by an agent or proxy duly appointed in writing;  and, except as herein
otherwise  expressly  provided,  such action  shall become  effective  when such
instrument or  instruments  are delivered to the Trustee and, where it is hereby
expressly  required  pursuant  to this  Agreement,  to the  Company  or any Loan
Trustee.  Such instrument or instruments  (and the action  embodied  therein and
evidenced  thereby)  are  herein  sometimes  referred  to as  the  "Act"  of the
Certificateholders signing such instrument or instruments. Proof of execution of
any  such  instrument  or of a  writing  appointing  any  such  agent  shall  be
sufficient  for any purpose of this  Agreement  and  conclusive  in favor of the
Trustee,  the Company and any Loan  Trustee,  if made in the manner  provided in
this Section.

                  (b) The fact and date of the  execution  by any  Person of any
such instrument or writing may be proved by the certificate of any notary public
or other officer of any jurisdiction authorized to take acknowledgments of deeds
or administer  oaths that the Person  executing such instrument  acknowledged to
him the  execution  thereof,  or by an affidavit of a witness to such  execution
sworn to before any such notary or such other  officer and where such  execution
is by an officer of a corporation  or  association or a member of a partnership,
on behalf of such corporation,  association or partnership,  such certificate or
affidavit shall also constitute sufficient proof of his authority.  The fact and
date of the execution of any such instrument or writing, or the authority of the
Person  executing the same,  may also be proved in any other  reasonable  manner
which the Trustee deems sufficient.

                  (c)  In  determining  whether  the  Certificateholders  of the
requisite Fractional Undivided Interests of Certificates  Outstanding have given
any  direction,   consent  or  waiver  (a  "Direction")  under  this  Agreement,
Certificates owned by the Company,  the Guarantor,  any Owner Trustee, any Owner
Participant or any Affiliate of any such Person thereof shall be disregarded and
deemed  not to be  Outstanding  for  purposes  of  any  such  determination.  In
determining  whether the Trustee  shall be  protected  in relying  upon any such
Direction,  only Certificates which the Trustee knows to be so owned shall be so
disregarded.  Notwithstanding the foregoing, (i) if any such Person owns 100% of
the Certificates  Outstanding,  such Certificates shall not be so disregarded as
aforesaid,  and (ii) if any amount of  Certificates  so owned by any such Person
have been pledged in good faith, such  Certificates  shall not be disregarded as
aforesaid  if the pledgee  establishes  to the  satisfaction  of the Trustee the
pledgee's right so to act with respect to such Certificates and that the pledgee
is not the Company,  the Guarantor,  any Owner Trustee, any Owner Participant or
any Affiliate of any such Person.

                  (d) The Company may at its option, by delivery of an Officer's
Certificate   to  the   Trustee,   set  a   record   date   to   determine   the
Certificateholders entitled to give any consent, request, demand, authorization,
direction,  notice,  waiver or other Act.  Such  record date shall be the record
date  specified in such  Officer's  Certificate,  which shall be a date not more
than 30 days prior to the first solicitation of Certificateholders in connection
therewith.  If such a record  date is  fixed,  such  consent,  request,  demand,
authorization,  direction,  notice,  waiver or other Act may be given  before or
after such record date, but only the  Certificateholders  of record at the close
of business on such record date shall be deemed to be Certificateholders for the
purposes of determining whether  Certificateholders  of the requisite proportion
of  Outstanding  Certificates  have  authorized  or agreed or  consented to such
consent, request, demand, authorization, direction, notice, waiver or other Act,
and for that purpose the Outstanding  Certificates  shall be computed as of such
record date;  provided that no such  consent,  request,  demand,  authorization,
direction,  notice, waiver or other Act by the Certificateholders on such record
date shall be deemed effective unless it shall become effective  pursuant to the
provisions of this Agreement not later than one year after such record date.

                  (e) Any  direction,  consent,  waiver  or other  action by the
Certificateholder  of any Certificate shall bind the  Certificateholder of every
Certificate  issued upon the transfer thereof or in exchange therefor or in lieu
thereof, whether or not notation of such action is made upon such Certificate.

                  (f)  Except  as   otherwise   provided  in  Section   1.04(c),
Certificates  owned  by or  pledged  to any  Person  shall  have  an  equal  and
proportionate   benefit  under  the  provisions  of  this   Agreement,   without
preference, priority, or distinction as among all of the Certificates.


                                   ARTICLE II

                       ORIGINAL ISSUANCE OF CERTIFICATES;
                         ACQUISITION OF EQUIPMENT NOTES

                  Section  2.01.   Issuance  of  Certificates;   Acquisition  of
Equipment  Notes.  (a) The Trustee is hereby directed to execute and deliver the
Intercreditor  Agreement and each of the Financing Agreements on or prior to the
Issuance Date,  each in the form  delivered to the Trustee by the Company.  Upon
oral or written request of the Company or the Company's counsel acting on behalf
of the Company and the satisfaction of the closing conditions  specified in each
of the Financing Agreements, the Trustee shall execute, deliver and authenticate
Certificates  equalling in the aggregate the aggregate  principal  amount of the
Equipment Notes to be purchased by the Trustee pursuant to each of the Financing
Agreements on the Transfer Date, and evidencing the entire ownership interest in
the Trust.  The Trustee  shall issue and sell such  Certificates,  in authorized
denominations and in such Fractional Undivided Interests, so as to result in the
receipt of consideration  in an amount equal to the aggregate  purchase price of
such Equipment Notes and,  concurrently  therewith,  the Trustee shall purchase,
pursuant to the terms and conditions of the Financing Agreements,  the Equipment
Notes at a purchase price equal to the amount of such consideration so received.
Except as provided  in  Sections  3.04 and 3.07  hereof,  the Trustee  shall not
execute,  authenticate or deliver Certificates in excess of the aggregate amount
specified in this  paragraph.  The provisions of this Subsection (a) are subject
to the provisions of Subsection (b) below.

                  (b) If on or prior to the  Issuance  Date  the  Company  shall
deliver to the Trustee a Postponement  Notice  relating to one or more Postponed
Notes, the Trustee shall postpone the purchase of such Postponed Notes and shall
deposit into an escrow account (the "Escrow Account") to be maintained as a part
of the Trust an amount equal to the purchase price of such Postponed  Notes (the
"Escrowed  Funds").  The Escrowed  Funds so  deposited  shall be invested by the
Trustee at the written  direction  of the Company in Specified  Investments  (i)
maturing no later than any  scheduled  Transfer  Date  relating to the Postponed
Notes or (ii) if no such Transfer Date has been scheduled,  maturing on the next
Business  Day, or (iii) if the Company has given  notice to the Trustee that any
Postponed Notes will not be issued,  with respect to the portion of the Escrowed
Funds relating to such Postponed Notes,  maturing on the next applicable Special
Distribution  Date, if such  investments are reasonably  available for purchase.
The Trustee shall make  withdrawals  from the Escrow Account only as provided in
this  Agreement.  Upon request of the Company on one or more  occasions  and the
satisfaction  of the closing  conditions  specified in the applicable  Financing
Agreements on or prior to the related  Cut-off  Transfer Date, the Trustee shall
purchase the applicable  Postponed  Notes with the Escrowed Funds withdrawn from
the Escrow Account.  The purchase price shall equal the principal amount of such
Postponed Notes.

                  The Trustee  shall hold all  Specified  Investments  until the
maturity thereof and will not sell or otherwise transfer Specified  Investments.
If  Specified  Investments  held  in an  Escrow  Account  mature  prior  to  any
applicable  Transfer  Date,  any  proceeds  received  on the  maturity  of  such
Specified  Investments  (other than any earnings thereon) shall be reinvested by
the Trustee at the written  direction  of the Company in  Specified  Investments
maturing as provided in the preceding paragraph.

                  Any earnings on Specified  Investments  received  from time to
time by the Trustee shall be promptly  distributed  to the Company.  The Company
shall pay to the Trustee for  deposit to the Escrow  Account an amount  equal to
any losses on such Specified Investments as incurred.

                  On the Initial Regular Distribution Date, the Company will pay
(in immediately  available funds) to the Trustee an amount equal to the interest
that would have accrued on any  Postponed  Notes,  if any,  purchased  after the
Issuance Date if such  Postponed  Notes had been purchased on the Issuance Date,
from the Issuance Date to, but not  including,  the date of the purchase of such
Postponed Notes by the Trustee.

                  If the  Company  notifies  the  Trustee  prior to the  Cut-off
Transfer  Date that any  Postponed  Notes  will not be issued on or prior to the
Cut-off  Transfer  Date for any reason,  on the next Special  Distribution  Date
occurring  more than 20 days  following  the date of such notice (i) the Company
shall pay to the  Trustee  for  deposit  in the  Special  Payments  Account,  in
immediately  available  funds,  an amount equal to the interest  that would have
accrued on the Postponed Notes  designated in such notice at a rate equal to the
interest rate applicable to the Certificates  from the Issuance Date to, but not
including, such Special Distribution Date and (ii) the Trustee shall transfer an
amount  equal to that  amount of  Escrowed  Funds  that  would have been used to
purchase the  Postponed  Notes  designated in such notice and the amount paid by
the Company  pursuant  to the  immediately  preceding  clause (i) to the related
Special  Payments  Account for  distribution  as a Special Payment in accordance
with the provisions hereof.

                  If, on the Cut-off Transfer Date, an amount equal to less than
all  of the  Escrowed  Funds  (other  than  Escrowed  Funds  referred  to in the
immediately  preceding  paragraph) has been used to purchase Postponed Notes, on
the next Special  Distribution  Date  occurring  more than 20 days following the
Cut-off  Transfer  Date (i) the Company  shall pay to the Trustee for deposit in
the Special Payments Account, in immediately available funds, an amount equal to
the interest that would have accrued on such Postponed Notes  contemplated to be
purchased with such unused Escrowed Funds (other than Escrowed Funds referred to
in the immediately  preceding paragraph) but not so purchased at a rate equal to
the interest rate applicable to the Certificates  from the Issuance Date to, but
not  including,  such  Special  Distribution  Date and (ii)  the  Trustee  shall
transfer such unused Escrowed Funds and the amount paid by the Company  pursuant
to the immediately  preceding  clause (i) to such Special  Payments  Account for
distribution as a Special Payment in accordance with the provisions hereof.

                  Section  2.02.  Acceptance by Trustee.  The Trustee,  upon the
execution and delivery of this  Agreement,  acknowledges  its  acceptance of all
right,  title and interest in and to the Equipment  Notes  acquired  pursuant to
Section 2.01 hereof and the Financing  Agreements  and declares that the Trustee
holds and will hold such  right,  title and  interest,  together  with all other
property  constituting  the Trust Property,  for the benefit of all then present
and  future  Certificateholders,  upon the trusts  herein set forth.  Subject to
Section 7.14, the Trustee shall take all actions reasonably  necessary to effect
the  registration of all such Equipment  Notes in the name of the  Subordination
Agent. By its payment for and acceptance of each Certificate  issued to it under
this Agreement,  each initial  Certificateholder as grantor of the Trust thereby
joins in the creation and declaration of the Trust.

                  Section 2.03.  Limitation of Powers.  The Trust is constituted
solely for the purpose of making the  investment  in the Equipment  Notes,  and,
except as set forth herein,  the Trustee shall not be authorized or empowered to
acquire  any  other  investments  or  engage in any  other  activities  and,  in
particular, the Trustee shall not be authorized or empowered to do anything that
would  cause such Trust to fail to  qualify  as a  "grantor  trust" for  federal
income tax purposes  (including  as subject to this  restriction,  acquiring any
Aircraft (as defined in the  respective  Indentures)  by bidding such  Equipment
Notes or otherwise,  or taking any action with respect to any such Aircraft once
acquired).


                                   ARTICLE III

                                THE CERTIFICATES

                  Section  3.01.  Title,  Form,  Denomination  and  Execution of
Certificates.  (a) The  Certificates  shall be known as the "7.20%  1997-1A Pass
Through Certificates" of the Trust. Each Certificate will represent a fractional
undivided interest in the Trust and shall be substantially in the form set forth
as Exhibit A hereto, with such appropriate insertions, omissions,  substitutions
and other variations as are required or permitted by this Agreement and may have
such  letters,  numbers or other  marks of  identification  and such  legends or
endorsements  placed  thereon as may be required to comply with the rules of any
securities  exchange or as may,  consistently  herewith,  be  determined  by the
officers  executing such  Certificates,  as evidenced by their  execution of the
Certificates. Any portion of the text of any Certificate may be set forth on the
reverse  thereof,  with an  appropriate  reference  thereto  on the  face of the
Certificate.

                  (b) The Certificates  shall be issued only in fully registered
form without coupons and only in denominations of $100,000 or integral multiples
of $1,000 in excess  thereof,  except  that one  Certificate  may be issued in a
denomination of less than $100,000.  Each Certificate shall be dated the date of
its authentication.  The aggregate Fractional Undivided Interest of Certificates
shall not at any time exceed $57,714,000.

                  (c)  Certificates  offered  and sold in  reliance on Rule 144A
shall be issued initially in the form of a single  permanent global  Certificate
in registered form, substantially in the form set forth as Exhibit A hereto (the
"U.S.  Global  Certificate"),  duly executed and authenticated by the Trustee as
hereinafter provided. The U.S. Global Certificate will be registered in the name
of a nominee for the Depositary and deposited with the Trustee, as custodian for
the Depositary.  The aggregate  principal amount of the U.S. Global  Certificate
may from time to time be  increased  or  decreased  by  adjustments  made on the
records of the  Depositary or its nominee,  or of the Trustee,  as custodian for
the Depositary or its nominee, as hereinafter provided.

                  (d) Certificates offered and sold in offshore  transactions in
reliance  on  Regulation  S shall be  issued  initially  in the form of a single
temporary global  Certificate in registered form,  substantially in the form set
forth as Exhibit A hereto (the  "Temporary  Offshore Global  Certificate")  duly
executed and authenticated by the Trustee as hereinafter provided. The Temporary
Offshore Global  Certificate  will be registered in the name of a nominee of the
Depositary for credit to the account of the Agent Members acting as depositaries
for  Euroclear  and Cedel and  deposited  with the Trustee as custodian  for the
Depositary. At any time on or after November 5, 1997 (the "Offshore Certificates
Exchange Date"),  upon receipt by the Trustee of a certificate  substantially in
the  form of  Exhibit  B  hereto,  a  single  permanent  global  Certificate  in
registered form substantially in the form set forth in Exhibit A (the "Permanent
Offshore Global  Certificate";  and together with the Temporary  Offshore Global
Certificate,   the   "Offshore   Global   Certificates"),   duly   executed  and
authenticated by the Trustee as hereinafter provided, shall be registered in the
name of a  nominee  for the  Depositary  and  deposited  with  the  Trustee,  as
custodian for the  Depositary,  and the Registrar shall reflect on its books and
records the date of such transfer and a decrease in the principal  amount of any
Temporary Offshore Global Certificate in an amount equal to the principal amount
of the  beneficial  interest  in  such  Temporary  Offshore  Global  Certificate
transferred.  The U.S. Global  Certificate and the Offshore Global  Certificates
are sometimes referred to as the "Global Certificates".

                  (e) Certificates offered and sold to Institutional  Accredited
Investors shall be issued in the form of permanent certificated  Certificates in
registered  form in  substantially  the form set forth as Exhibit A hereto  (the
"U.S. Physical  Certificates").  Certificates issued pursuant to Section 3.05(b)
in exchange for  interests in any Offshore  Global  Certificate  shall be in the
form of permanent certificated  Certificates in registered form substantially in
the form set forth in  Exhibit A (the  "Offshore  Physical  Certificates").  The
Offshore  Physical  Certificates  and U.S.  Physical  Certificates are sometimes
collectively herein referred to as the "Physical Certificates".

                  (f) The definitive  Certificates  shall be in registered  form
and shall be  typed,  printed,  lithographed  or  engraved  or  produced  by any
combination  of these  methods or may be  produced in any other  manner,  all as
determined by the officers  executing such  Certificates,  as evidenced by their
execution of such Certificates.

                  Section 3.02.  Restrictive Legends.  (a)  Subject to Section 3.06, each Global
Certificate (other than the Permanent Offshore Global Certificate) and each U.S. Physical Certificate
shall bear the following legend (the "Private Placement Legend") on the face thereof:

                  THIS  CERTIFICATE  HAS NOT  BEEN  REGISTERED  UNDER  THE  U.S.
         SECURITIES  ACT  OF  1933,  AS  AMENDED  (THE  "SECURITIES  ACT"),  AND
         ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO,
         OR FOR THE ACCOUNT OR BENEFIT OF, U.S.  PERSONS  EXCEPT AS SET FORTH IN
         THE  FOLLOWING  SENTENCE.  BY ITS  ACQUISITION  HEREOF,  THE HOLDER (1)
         REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
         IN RULE 144A  UNDER THE  SECURITIES  ACT),  (B) IT IS AN  INSTITUTIONAL
         "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF
         REGULATION D UNDER THE SECURITIES  ACT) (AN  "INSTITUTIONAL  ACCREDITED
         INVESTOR")  OR  (C)  IT IS NOT A U.S.  PERSON  AND  IS  ACQUIRING  THIS
         CERTIFICATE IN AN OFFSHORE  TRANSACTION IN COMPLIANCE WITH REGULATION S
         UNDER THE SECURITIES  ACT; (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS
         AFTER THE LATER OF THE  ORIGINAL  ISSUANCE OF THIS  CERTIFICATE  OR THE
         LAST DATE ON WHICH THIS CERTIFICATE WAS HELD BY ATLANTIC COAST AIRLINES
         ("ACA") OR ANY  AFFILIATE  OF ACA,  RESELL OR OTHERWISE  TRANSFER  THIS
         CERTIFICATE EXCEPT (A) TO ACA OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE
         UNITED STATES TO A QUALIFIED  INSTITUTIONAL  BUYER IN  COMPLIANCE  WITH
         RULE 144A UNDER THE SECURITIES  ACT, (C) INSIDE THE UNITED STATES TO AN
         INSTITUTIONAL  ACCREDITED INVESTOR ACQUIRING $100,000 OR MORE AGGREGATE
         PRINCIPAL  AMOUNT OF SUCH  CERTIFICATES  THAT,  PRIOR TO SUCH TRANSFER,
         FURNISHES   TO  THE  TRUSTEE  A  SIGNED   LETTER   CONTAINING   CERTAIN
         REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
         OF THIS  CERTIFICATE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE
         TRUSTEE),  (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE  TRANSACTION IN
         COMPLIANCE  WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE
         EXEMPTION FROM  REGISTRATION  PROVIDED BY RULE 144 UNDER THE SECURITIES
         ACT  (IF  AVAILABLE)  OR  (F)  PURSUANT  TO AN  EFFECTIVE  REGISTRATION
         STATEMENT UNDER THE SECURITIES ACT; AND (3) AGREES THAT IT WILL DELIVER
         TO EACH  PERSON  TO WHOM  THIS  CERTIFICATE  IS  TRANSFERRED  A  NOTICE
         SUBSTANTIALLY  TO THE EFFECT OF THIS  LEGEND.  IN  CONNECTION  WITH ANY
         TRANSFER  OF THIS  CERTIFICATE  WITHIN TWO YEARS AFTER THE LATER OF THE
         ORIGINAL  ISSUANCE OF THIS  CERTIFICATE  OR THE LAST DATE ON WHICH THIS
         CERTIFICATE  WAS HELD BY ACA OR AN  AFFILIATE  OF ACA,  THE HOLDER MUST
         CHECK THE  APPROPRIATE  BOX SET FORTH ON THE REVERSE HEREOF RELATING TO
         THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE.
         IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE
         HOLDER  MUST,  PRIOR TO SUCH  TRANSFER,  FURNISH TO THE TRUSTEE AND ACA
         SUCH  CERTIFICATIONS,  LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF
         THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
         PURSUANT TO AN EXEMPTION  FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
         REGISTRATION  REQUIREMENTS OF THE SECURITIES  ACT. AS USED HEREIN,  THE
         TERMS "OFFSHORE  TRANSACTION",  "UNITED STATES" AND "U.S.  PERSON" HAVE
         THE MEANINGS  GIVEN TO THEM BY REGULATION S UNDER THE  SECURITIES  ACT.
         THE PASS THROUGH  TRUST  AGREEMENT  CONTAINS A PROVISION  REQUIRING THE
         TRUSTEE TO REFUSE TO  REGISTER  ANY  TRANSFER  OF THIS  CERTIFICATE  IN
         VIOLATION OF THE FOREGOING RESTRICTIONS.

                  (b)      Each Global Certificate shall also bear the following legend on the face
thereof:

         UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
         THE DEPOSITORY TRUST COMPANY,  A NEW YORK CORPORATION  ("DTC"),  TO THE
         TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
         AND  ANY  CERTIFICATE  ISSUED  IN  EXCHANGE  FOR  THIS  CERTIFICATE  IS
         REGISTERED  IN THE  NAME OF  CEDE & CO.  OR IN  SUCH  OTHER  NAME AS IS
         REQUESTED  BY AN  AUTHORIZED  REPRESENTATIVE  OF DTC (AND  ANY  PAYMENT
         HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
         AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
         HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL  INASMUCH
         AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

         TRANSFERS OF THIS GLOBAL  CERTIFICATE  SHALL BE LIMITED TO TRANSFERS IN
         WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
         SUCH  SUCCESSOR'S  NOMINEE  AND  TRANSFERS  OF  PORTIONS OF THIS GLOBAL
         CERTIFICATE  SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE  WITH THE
         RESTRICTIONS  SET FORTH IN SECTIONS  3.05 AND 3.06 OF THE PASS  THROUGH
         TRUST AGREEMENT REFERRED TO HEREIN.

                  Section 3.03. Authentication of Certificates.  (a) The Trustee
shall  duly  execute,   authenticate  and  deliver  Certificates  in  authorized
denominations  equalling in the aggregate the aggregate  principal amount of the
Equipment  Notes  to be  purchased  by the  Trustee  pursuant  to the  Financing
Agreements and evidencing the entire ownership of the Trust.

                  (b) No Certificate shall be entitled to any benefit under this
Agreement or be valid or  obligatory  for any purpose,  unless there  appears on
such  Certificate  a certificate  of  authentication  substantially  in the form
provided  for herein  executed by the Trustee by the manual  signature of one of
its authorized  signatories,  and such certificate upon any Certificate shall be
conclusive evidence, and the only evidence,  that such Certificate has been duly
authenticated and delivered hereunder.

                  Section 3.04.  Transfer and Exchange.  The Trustee shall cause
to be kept at the office or agency to be maintained by it in accordance with the
provisions of Section 7.12 of this Agreement a register (the "Register") for the
Certificates  in  which,  subject  to  such  reasonable  regulations  as it  may
prescribe,  the Trustee shall provide for the  registration of the  Certificates
and of transfers  and  exchanges of the  Certificates  as herein  provided.  The
Trustee shall  initially be the registrar (the  "Registrar")  for the purpose of
registering the  Certificates and transfers and exchanges of the Certificates as
herein  provided.  A  Certificateholder  may transfer a  Certificate  by written
application  to the Registrar  stating the name of the proposed  transferee  and
otherwise  complying  with the terms of this  Agreement,  including  providing a
written  certificate or other evidence of compliance  with any  restrictions  on
transfer.  No such transfer shall be effected until,  and such transferee  shall
succeed to the rights of a  Certificateholder  only upon,  final  acceptance and
registration  of the  transfer by the  Registrar in the  Register.  Prior to the
registration  of any transfer by a  Certificateholder  as provided  herein,  the
Trustee  shall treat the person in whose name the  Certificate  is registered as
the owner  thereof for all  purposes,  and the Trustee  shall not be affected by
notice to the contrary.  Furthermore,  the Depositary  shall, by acceptance of a
Global Certificate,  agree that transfers of beneficial interests in such Global
Certificate may be effected only through a book-entry  system  maintained by the
Depositary (or its agent),  and that  ownership of a beneficial  interest in the
Certificate shall be required to be reflected in a book entry. When Certificates
are  presented  to the  Registrar  with a request to register the transfer or to
exchange  them for an equal  face  amount of  Certificates  of other  authorized
denominations, the Registrar shall register the transfer or make the exchange as
requested  if  its  requirements  for  such  transactions  are  met.  To  permit
registrations   of  transfers  and  exchanges  in  accordance  with  the  terms,
conditions and restrictions  hereof,  the Trustee shall execute and authenticate
Certificates at the Registrar's request. No service charge shall be made for any
registration  of transfer or exchange of the  Certificates,  but the Trustee may
require  payment by the transferor of a sum sufficient to cover any transfer tax
or similar  governmental charge payable in connection  therewith (other than any
such transfer taxes or other similar governmental charges payable upon exchanges
pursuant to Section 3.10 or 9.07).

                  Section   3.05.   Book-Entry   Provisions   for  U.S.   Global
Certificate  and Offshore Global  Certificates.  (a) Members of, or participants
in, the Depositary  ("Agent  Members") shall have no rights under this Agreement
with respect to any Global  Certificate  held on their behalf by the Depositary,
or the  Trustee  as its  custodian,  and the  Depositary  may be  treated by the
Trustee  and any  agent of the  Trustee  as the  absolute  owner of such  Global
Certificate for all purposes whatsoever.  Notwithstanding the foregoing, nothing
herein shall  prevent the Trustee or any agent of the Trustee from giving effect
to any written  certification,  proxy or other  authorization  furnished  by the
Depositary or shall impair, as between the Depositary and its Agent Members, the
operation  of  customary  practices  governing  the  exercise of the rights of a
holder of any  Certificate.  Upon the  issuance of any Global  Certificate,  the
Registrar or its duly  appointed  agent shall record a nominee of the Depositary
as the registered holder of such Global Certificate.

                  (b)  Transfers of any Global  Certificate  shall be limited to
transfers of such Global  Certificate in whole,  but not in part, to nominees of
the Depositary, its successor or such successor's nominees. Beneficial interests
in the U.S.  Global  Certificate  and any  Offshore  Global  Certificate  may be
transferred  in accordance  with the rules and  procedures of the Depositary and
the  provisions  of  Section  3.06.  Beneficial  interests  in the  U.S.  Global
Certificate  or an  Offshore  Global  Certificate  shall  be  delivered  to  all
beneficial owners in the form of U.S. Physical Certificates or Offshore Physical
Certificates,  as the case may be, if (i) the  Company  notifies  the Trustee in
writing that the  Depositary  is  unwilling or unable to discharge  properly its
responsibilities  as Depositary for the U.S. Global Certificate or such Offshore
Global  Certificate,  as the case may be, and the  Company is unable to locate a
qualified  successor  depositary within 90 days of such notice or (ii) after the
occurrence  of an  Event  of  Default,  beneficial  owners  of the  U.S.  Global
Certificate or Offshore  Global  Certificates  evidencing  Fractional  Undivided
Interests  aggregating not less than a majority in interest in the Trust, by Act
of such Certificateholders  delivered to the Company and the Trustee, advise the
Company, the Trustee and the Depositary through its Clearing Agency Participants
in writing that the  continuation of a book-entry  system through the Depositary
is no longer in the best interests of the  Certificateholders,  then the Trustee
shall notify all owners of beneficial  interests in the U.S. Global  Certificate
or an Offshore Global Certificate,  through the Depositary, of the occurrence of
any such event and the availability of definitive Certificates.

                  (c) Any beneficial  interest in one of the Global Certificates
that is transferred to a Person who takes delivery in the form of an interest in
the other Global  Certificate will, upon such transfer,  cease to be an interest
in  such  Global  Certificate  and  become  an  interest  in  the  other  Global
Certificate  and,  accordingly,  will  thereafter  be  subject  to all  transfer
restrictions, if any, and other procedures applicable to beneficial interests in
such other Global Certificate for as long as it remains such an interest.

                  (d)      [Intentionally omitted.]

                  (e) In connection  with the transfer of the entire U.S. Global
Certificate or an entire  Offshore Global  Certificate to the beneficial  owners
thereof  pursuant  to  paragraph  (b) of this  Section  3.05,  such U.S.  Global
Certificate or Offshore Global Certificate,  as the case may be, shall be deemed
to be  surrendered  to the  Trustee  for  cancellation,  and the  Trustee  shall
execute,  authenticate  and deliver,  to each beneficial owner identified by the
Depositary  in  exchange  for  its  beneficial  interest  in  such  U.S.  Global
Certificate  or  Offshore  Global  Certificate,  as the  case  may be,  an equal
aggregate  principal amount of U.S.  Physical  Certificates or Offshore Physical
Certificates, as the case may be, of authorized denominations.

                  (f) Any U.S. Physical Certificate delivered in exchange for an
interest  in the U.S.  Global  Certificate  pursuant  to  paragraph  (b) of this
Section  3.05 shall,  except as otherwise  provided by paragraph  (f) of Section
3.06, bear the Private Placement Legend.

                  (g) Any Offshore  Physical  Certificate  delivered in exchange
for an interest in an Offshore Global  Certificate  pursuant to paragraph (b) of
this Section  shall,  except as otherwise  provided by paragraph  (f) of Section
3.06, bear the applicable  legend regarding  transfer  restrictions set forth in
Section 3.02(a).

                  (h) The registered  holder of the U.S.  Global  Certificate or
any Offshore Global  Certificate  may grant proxies and otherwise  authorize any
Person,  including  Agent  Members and Persons that may hold  interests  through
Agent Members,  to take any action which a Holder is entitled to take under this
Agreement or the Certificates.

                  Section 3.06.  Special Transfer Provisions.  The following provisions shall apply to
the Certificates:

                  (a) Transfers to Non-QIB  Institutional  Accredited Investors.
The following  provisions  shall apply with respect to the  registration  of any
proposed  transfer of a Certificate  to any  Institutional  Accredited  Investor
which is not a QIB (excluding transfers to or by Non-U.S. Persons):

                  (i)  The  Registrar   shall   register  the  transfer  of  any
         Certificate,   whether  or  not  such  Certificate  bears  the  Private
         Placement Legend,  if (x) the requested  transfer is at least two years
         after the later of the original issue date of the  Certificates and the
         last date on which  such  Certificate  was held by the  Company  or any
         affiliate  thereof or (y) the proposed  transferee has delivered to the
         Registrar  a letter  substantially  in the form of Exhibit D hereto and
         the aggregate principal amount of the Certificates being transferred is
         at least $100,000.

                  (ii) If the proposed  transferor is an Agent Member  holding a
         beneficial interest in the U.S. Global Certificate, upon receipt by the
         Registrar of (x) the documents,  if any,  required by paragraph (i) and
         (y)  instructions  given in accordance  with the  Depositary's  and the
         Registrar's  procedures,  the Registrar  shall reflect on its books and
         records the date of the transfer and a decrease in the principal amount
         of such U.S.  Global  Certificate  in an amount equal to the  principal
         amount of the beneficial interest in such U.S. Global Certificate to be
         transferred,  and the Company  shall  execute,  and the  Trustee  shall
         authenticate and deliver to the transferor or at its direction,  one or
         more U.S. Physical Certificates of like tenor and amount.

                  (b)      Transfers to QIBs.  The following provisions shall apply with respect to the
registration of any proposed transfer of a Certificate to a QIB (excluding Non-U.S. Persons):

                  (i) If the  Certificate  to be  transferred  consists  of U.S.
         Physical  Certificates or an interest in any Temporary  Offshore Global
         Certificate, the Registrar shall register the transfer if such transfer
         is being made by a proposed transferor who has checked the box provided
         for on the form of Certificate  stating,  or has otherwise  advised the
         Trustee and the  Registrar  in writing,  that the sale has been made in
         compliance  with the  provisions  of Rule 144A to a transferee  who has
         signed  the  certification  provided  for on the  form  of  Certificate
         stating,  or has  otherwise  advised the Trustee and the  Registrar  in
         writing,  that it is purchasing the  Certificate for its own account or
         an  account  with  respect  to  which  it  exercises  sole   investment
         discretion and that it, or the Person on whose behalf it is acting with
         respect to any such account,  is a QIB within the meaning of Rule 144A,
         and is aware that the sale to it is being made in reliance on Rule 144A
         and acknowledges  that it has received such  information  regarding the
         Trust and/or the Company as it has  requested  pursuant to Rule 144A or
         has  determined  not to request such  information  and that it is aware
         that the  transferor is relying upon its foregoing  representations  in
         order to claim the exemption from registration provided by Rule 144A.

                  (ii) Upon receipt by the Registrar of the  documents  referred
         to in clause (i) above and  instructions  given in accordance  with the
         Depositary's  and the Registrar's  procedures  therefor,  the Registrar
         shall reflect on its books and records the date of such transfer and an
         increase in the principal  amount of the U.S. Global  Certificate in an
         amount equal to the principal amount of the U.S. Physical  Certificates
         or interests in the Temporary Offshore Global Certificate,  as the case
         may be, being  transferred,  and the Trustee shall cancel such Physical
         Certificates  or decrease the amount of such Temporary  Offshore Global
         Certificate so transferred.

                  (c)      [Intentionally omitted.]

                  (d)  Transfers of Interests in the Permanent  Offshore  Global
Certificate or Offshore Physical Certificates.  The Registrar shall register any
transfer of interests in the Permanent  Offshore Global  Certificate or Offshore
Physical Certificates without requiring any additional certification.

                  (e)      Transfers to Non-U.S. Persons at Any Time.  The following provisions shall
apply with respect to any registration of any transfer of a Certificate to a Non-U.S. Person:

                  (i) Prior to the  Offshore  Certificates  Exchange  Date,  the
         Registrar  shall  register any proposed  transfer of a Certificate to a
         Non-U.S. Person upon receipt of a certificate substantially in the form
         set forth as Exhibit C hereto from the proposed transferor.

                  (ii) On and after the Offshore Certificates Exchange Date, the
         Registrar shall register any proposed  transfer to any Non-U.S.  Person
         if the Certificate to be transferred is a U.S. Physical  Certificate or
         an  interest  in  the  U.S.  Global  Certificate,  upon  receipt  of  a
         certificate  substantially  in the form of Exhibit C from the  proposed
         transferor.   The  Registrar   shall  promptly  send  a  copy  of  such
         certificate to the Company.

                  (iii) Upon receipt by the Registrar of (x) the  documents,  if
         any, required by paragraph (ii) and (y) instructions in accordance with
         the  Depositary's and the Registrar's  procedures,  the Registrar shall
         reflect  on its  books  and  records  the date of such  transfer  and a
         decrease in the principal amount of such U.S. Global  Certificate in an
         amount equal to the principal amount of the beneficial interest in such
         U.S. Global Certificate to be transferred,  and (B) upon receipt by the
         Registrar of instructions given in accordance with the Depositary's and
         the  Registrar's  procedures,  the Registrar shall reflect on its books
         and records the date and an  increase  in the  principal  amount of the
         Offshore Global  Certificate in an amount equal to the principal amount
         of the U.S. Physical Certificate or the U.S. Global Certificate, as the
         case may be,  to be  transferred,  and the  Trustee  shall  cancel  the
         Physical Certificate,  if any, so transferred or decrease the amount of
         such U.S. Global Certificate.

                  (f) Private Placement Legend.  Upon the transfer,  exchange or
replacement  of  Certificates  not  bearing the Private  Placement  Legend,  the
Registrar  shall  deliver  Certificates  that do not bear the Private  Placement
Legend. Upon the transfer,  exchange or replacement of Certificates  bearing the
Private  Placement  Legend,  the Registrar shall deliver only  Certificates that
bear  the  Private   Placement  Legend  unless  either  (i)  the   circumstances
contemplated  by  paragraph  (a)(i)(x)  or (e)(ii) of this Section 3.06 exist or
(ii) there is  delivered  to the  Registrar  an Opinion of Counsel to the effect
that neither such legend nor the related  restrictions  on transfer are required
in order to maintain compliance with the provisions of the Securities Act.

                  (g) General.  By its acceptance of any Certificate bearing the
Private  Placement  Legend,  each Holder of such a Certificate  acknowledges the
restrictions  on transfer of such  Certificate  set forth in this  Agreement and
agrees  that  it  will  transfer  such  Certificate  only  as  provided  in this
Agreement. The Registrar shall not register a transfer of any Certificate unless
such transfer complies with the restrictions on transfer of such Certificate set
forth in this Agreement.  In connection with any transfer of Certificates,  each
Certificateholder  agrees by its acceptance of the  Certificates  to furnish the
Registrar  or  the  Trustee  such   certifications,   legal  opinions  or  other
information  as either  of them may  reasonably  require  to  confirm  that such
transfer is being made  pursuant to an  exemption  from,  or a  transaction  not
subject to, the registration  requirements of the Securities Act;  provided that
neither the  Trustee  nor the  Registrar  shall be  required  to  determine  the
sufficiency of any such certifications, legal opinions or other information.

                  Until such time as no  Certificates  remain  Outstanding,  the
Registrar  shall  retain  copies  of all  letters,  notices  and  other  written
communications  received  pursuant to Section  3.05 or this  Section  3.06.  The
Trustee,  if not the Registrar at such time, shall have the right to inspect and
make copies of all such letters,  notices or other written communications at any
reasonable time upon the giving of reasonable written notice to the Registrar.

                  Section   3.07.   Mutilated,   Destroyed,   Lost   or   Stolen
Certificates.  If (a) any mutilated  Certificate is surrendered to the Registrar
or the Registrar receives evidence to its satisfaction of the destruction,  loss
or theft of any  Certificate and (b) there is delivered to the Registrar and the
Trustee such  security,  indemnity  or bond,  as may be required by them to save
each of them  harmless,  then,  in the absence of notice to the Registrar or the
Trustee that such  Certificate has been acquired by a bona fide  purchaser,  the
Trustee shall execute,  authenticate and deliver,  in exchange for or in lieu of
any such mutilated,  destroyed, lost or stolen Certificate, a new Certificate or
Certificates,  in  authorized  denominations  and of like  Fractional  Undivided
Interest and bearing a number not contemporaneously outstanding.

                  In connection with the issuance of any new  Certificate  under
this Section 3.07,  the Trustee shall require the payment of a sum sufficient to
cover any tax or other  governmental  charge  that may be  imposed  in  relation
thereto and any other  expenses  (including the fees and expenses of the Trustee
and the Registrar) connected therewith.

                  Any duplicate Certificate issued pursuant to this Section 3.07
shall constitute  conclusive  evidence of the appropriate  Fractional  Undivided
Interest in the Trust, as if originally issued,  whether or not the lost, stolen
or destroyed Certificate shall be found at any time.

                  The  provisions  of  this  Section  are  exclusive  and  shall
preclude (to the extent  lawful) all other  rights and remedies  with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Certificates.

                  Section 3.08. Persons Deemed Owners.  Prior to due presentment
of a Certificate for  registration of transfer,  the Trustee,  the Registrar and
any  Paying  Agent  may  treat  the  Person  in whose  name any  Certificate  is
registered  as the  owner  of such  Certificate  for the  purpose  of  receiving
distributions pursuant to Article IV and for all other purposes whatsoever,  and
none of the Trustee,  the Registrar or any Paying Agent shall be affected by any
notice to the contrary.

                  Section 3.09.  Cancellation.  All Certificates surrendered for
payment or transfer  or exchange  shall,  if  surrendered  to the Trustee or any
agent of the Trustee other than the Registrar, be delivered to the Registrar for
cancellation  and shall  promptly be cancelled by it. No  Certificates  shall be
authenticated  in  lieu of or in  exchange  for any  Certificates  cancelled  as
provided in this Section,  except as expressly permitted by this Agreement.  All
cancelled   Certificates  held  by  the  Registrar  shall  be  destroyed  and  a
certification of their destruction delivered to the Trustee.

                  Section  3.10.  Limitation  of  Liability  for  Payments.  All
payments and distributions  made to  Certificateholders  shall be made only from
the Trust Property and only to the extent that the Trustee shall have sufficient
income or proceeds  from the Trust  Property to make such payments in accordance
with the terms of Article IV of this Agreement.  Each Certificateholder,  by its
acceptance of a  Certificate,  agrees that it will look solely to the income and
proceeds from the Trust  Property to the extent  available for  distribution  to
such Certificateholder as provided in this Agreement.

                  Section  3.11.   Temporary   Certificates.   Until  definitive
Certificates are ready for delivery,  the Trustee shall  authenticate  temporary
Certificates.  Temporary  Certificates  shall  be  substantially  in the form of
definitive  Certificates but may have insertions,  substitutions,  omissions and
other  variations  determined to be  appropriate  by the officers  executing the
temporary  Certificates,  as  evidenced  by their  execution  of such  temporary
Certificates.  If  temporary  Certificates  are issued,  the Trustee  will cause
definitive  Certificates to be prepared without  unreasonable  delay.  After the
preparation  of definitive  Certificates,  the temporary  Certificates  shall be
exchangeable  for  definitive  Certificates  upon  surrender  of  the  temporary
Certificates at the office or agency of the Trustee  designated for such purpose
pursuant  to  Section  7.12,  without  charge  to  the  Certificateholder.  Upon
surrender  for  cancellation  of any one or  more  temporary  Certificates,  the
Trustee shall execute, authenticate and deliver in exchange therefor a like face
amount  of  definitive  Certificates  of  authorized  denominations.   Until  so
exchanged,  the  temporary  Certificates  shall be entitled to the same benefits
under this Agreement as definitive Certificates.


                                   ARTICLE IV

                          DISTRIBUTIONS; STATEMENTS TO
                               CERTIFICATEHOLDERS

                  Section  4.01.   Certificate   Account  and  Special  Payments
Account.  (a)  The  Trustee  shall  establish  and  maintain  on  behalf  of the
Certificateholders  a  Certificate  Account as one or more  non-interest-bearing
accounts.  The  Trustee  shall  hold the  Certificate  Account  in trust for the
benefit  of  the  Certificateholders,  and  shall  make  or  permit  withdrawals
therefrom  only as  provided  in this  Agreement.  On each day when a  Scheduled
Payment  is  made  to the  Trustee,  the  Trustee  upon  receipt  thereof  shall
immediately  deposit the  aggregate  amount of such  Scheduled  Payment into the
Certificate Account.

                  (b) The Trustee shall  establish and maintain on behalf of the
Certificateholders  a Special  Payments  Account as one or more accounts,  which
shall be  non-interest  bearing  except as provided in Section 4.04. The Trustee
shall  hold the  Special  Payments  Account  in  trust  for the  benefit  of the
Certificateholders  and  shall  make or  permit  withdrawals  therefrom  only as
provided in this  Agreement.  On each day when one or more Special  Payments are
made to the  Trustee,  the  Trustee,  upon receipt  thereof,  shall  immediately
deposit the aggregate  amount of such Special Payments into the Special Payments
Account.

                  (c) The Trustee  shall present to the Loan Trustee to which an
Equipment  Note  relates  such  Equipment  Note on the date of its stated  final
maturity or, in the case of any Equipment  Note which is to be redeemed in whole
pursuant to the relevant Indenture, on the applicable redemption date under such
Indenture.

                  Section  4.02.  Distributions  from  Certificate  Account  and
Special  Payments  Account.  (a) On each  Regular  Distribution  Date or as soon
thereafter as the Trustee has confirmed  receipt of the payment of the Scheduled
Payments due on such date, the Trustee shall  distribute out of the  Certificate
Account the entire amount deposited  therein pursuant to Section 4.01(a).  There
shall be so distributed to each  Certificateholder  of record on the Record Date
with  respect to such  Regular  Distribution  Date  (other  than as  provided in
Section  11.01  concerning  the  final  distribution)  by check  mailed  to such
Certificateholder,   at   the   address   appearing   in  the   Register,   such
Certificateholder's  pro rata share (based on the Fractional  Undivided Interest
in the  Trust  held  by  such  Certificateholder)  of the  total  amount  in the
Certificate Account, except that, with respect to Certificates registered on the
Record  Date in the  name of the  nominee  of the  Depositary  (initially,  such
nominee to be Cede & Co.), such  distribution  shall be made by wire transfer in
immediately available funds to the account designated by such nominee.

                  (b) On each  Special  Distribution  Date with  respect  to any
Special  Payment or as soon  thereafter as the Trustee has confirmed  receipt of
any Special  Payments,  the Trustee shall distribute out of the Special Payments
Account the entire amount of such Special Payment  deposited therein pursuant to
Section  4.01(b).  There shall be so  distributed to each  Certificateholder  of
record on the Record Date with respect to such Special  Distribution Date (other
than as provided in Section 11.01  concerning the final  distribution)  by check
mailed to such Certificateholder, at the address appearing in the Register, such
Certificateholder's  pro rata share (based on the aggregate Fractional Undivided
Interest in the Trust held by such Certificateholder) of the aggregate amount in
the Special Payments  Account on account of such Special  Payment,  except that,
with respect to  Certificates  registered  on the Record Date in the name of the
nominee of the  Depositary  (initially,  such  nominee  to be Cede & Co.),  such
distribution  shall be made by wire transfer in immediately  available  funds to
the account designated by such nominee.

                  (c) The Trustee  shall,  at the expense of the Company,  cause
notice of each  Special  Payment to be mailed to each  Certificateholder  at his
address as it appears in the Register. In the event of redemption, prepayment or
purchase of Equipment  Notes held in the Trust,  such notice shall be mailed not
less than 20 days  prior to the date any  Special  Payment  is  scheduled  to be
distributed.  In the case of any other  Special  Payments,  such notice shall be
mailed  as soon as  practicable  after the  Trustee  has  confirmed  that it has
received funds for such Special Payment,  stating the Special  Distribution Date
for such Special  Payment which shall occur not less than 20 days after the date
of such  notice and as soon as  practicable  thereafter.  Notices  mailed by the
Trustee shall set forth:

                  (i)      the Special Distribution Date and the Record Date therefor (except as
         otherwise provided in Section 11.01),

                  (ii) the amount of the  Special  Payment  for each $1,000 face
         amount  Certificate  (taking into account any payment to be made by the
         Company   pursuant  to  Section   2.01(b))   and  the  amount   thereof
         constituting principal, premium, if any, and interest,

                  (iii)    the reason for the Special Payment, and

                  (iv) if the  Special  Distribution  Date is the same date as a
         Regular Distribution Date, the total amount to be received on such date
         for each $1,000 face amount Certificate.

If the amount of premium,  if any,  payable upon the  redemption,  prepayment or
purchase  of an  Equipment  Note has not been  calculated  at the time  that the
Trustee mails notice of a Special Payment,  it shall be sufficient if the notice
sets forth the other  amounts to be  distributed  and  states  that any  premium
received will also be distributed.

                  If any redemption of the Equipment  Notes held in the Trust is
cancelled,  the Trustee, as soon as possible after learning thereof, shall cause
notice  thereof  to be mailed to each  Certificateholder  at its  address  as it
appears on the Register.

                  Section 4.03.  Statements to  Certificateholders.  (a) On each
Distribution   Date,  the  Trustee  will  include  with  each   distribution  to
Certificateholders  of a Scheduled  Payment or Special Payment,  as the case may
be, a statement setting forth the following  information (per $1,000 face amount
Certificate as to (i) and (ii) below):

                  (i)      the amount of such distribution allocable to principal and the amount
         allocable to premium, if any;

                  (ii)     the amount of such distribution allocable to interest; and

                  (iii) the Pool Balance and the Pool Factor.

                  With respect to the  Certificates  registered in the name of a
Clearing  Agency or its nominee,  on the record date prior to each  Distribution
Date,  the Trustee will request from the Clearing  Agency a securities  position
listing  setting  forth  the  names  of all  the  Clearing  Agency  Participants
reflected  on  the  Clearing   Agency's  books  as  holding   interests  in  the
Certificates  on such record date. On each  Distribution  Date, the Trustee will
mail to each such Clearing Agency Participant the statement  described above and
will make  available  additional  copies as  requested by such  Clearing  Agency
Participant for forwarding to holders of Certificates.

                  (b) Within a  reasonable  period of time after the end of each
calendar  year but not later than the latest date  permitted by law, the Trustee
shall  furnish to each Person who at any time during  such  calendar  year was a
Certificateholder  of  record  a  statement  containing  the sum of the  amounts
determined  pursuant to clauses (a)(i) and (a)(ii) with respect to the Trust for
such  calendar  year or, in the event  such  Person was a  Certificateholder  of
record during a portion of such calendar  year,  for the  applicable  portion of
such year,  and such other  items as are  readily  available  to the Trustee and
which a Certificateholder  shall reasonably request as necessary for the purpose
of such Certificateholder's  preparation of its federal income tax returns. With
respect  to  Certificates  registered  in the name of a  Clearing  Agency or its
nominee,  such  report and such other  items  shall be  prepared on the basis of
information  supplied to the Trustee by the  Clearing  Agency  Participants  and
shall be delivered by the Trustee to such  Clearing  Agency  Participants  to be
available for forwarding by such Clearing Agency Participants.

                  Section 4.04.  Investment of Special Payment Moneys. Any money
received  by the  Trustee  pursuant to Section  4.01(b)  representing  a Special
Payment  which  is  not  to  be  promptly   distributed  shall,  to  the  extent
practicable,  be invested in Permitted Investments by the Trustee as directed in
writing by the Company pending  distribution of such Special Payment pursuant to
Section 4.02. Any investment made pursuant to this Section 4.04 shall be in such
Permitted Investments having maturities not later than the date that such moneys
are required to be used to make the payment  required  under Section 4.02 on the
applicable  Special  Distribution  Date  and the  Trustee  shall  hold  any such
Permitted  Investments until maturity.  The Trustee shall have no liability with
respect to any  investment  made  pursuant to this Section  4.04,  other than by
reason of the willful  misconduct or  negligence of the Trustee.  All income and
earnings from such investments shall be distributed on such Special Distribution
Date as part of such Special Payment.


                                    ARTICLE V

                                   THE COMPANY

                  Section 5.01. Maintenance of Corporate Existence. The Company,
at its own cost and expense, will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate  existence,  rights and
franchises,   except  as  otherwise  specifically  permitted  in  Section  5.02;
provided,  however, that the Company shall not be required to preserve any right
or franchise if the Company shall determine that the preservation  thereof is no
longer desirable in the conduct of the business of the Company.

                  Section 5.02.  Consolidation, Merger, Etc.  The Company shall not consolidate with or
merge into any other corporation or convey, transfer or lease substantially all of its assets as an
entirety to any Person unless:

                  (a) the corporation formed by such consolidation or into which
         the  Company  is merged or the Person  which  acquires  by  conveyance,
         transfer or lease  substantially all of the assets of the Company as an
         entirety shall be organized and validly  existing under the laws of the
         United  States of  America  or any state  thereof  or the  District  of
         Columbia  and a "citizen  of the United  States" (as defined in Section
         40102(a)(15)  of Title 49 of the  United  States  Code)  holding an air
         carrier   operating   certificate   issued  by  the  Federal   Aviation
         Administration,  or any successor agency thereto (the "FAA"),  pursuant
         to  Chapter  447 of Title  49,  United  States  Code,  authorizing  the
         operation in air  transportation  of aircraft capable of carrying 10 or
         more  individuals or 6,000 pounds or more of cargo pursuant to Part 121
         of the FAA's regulations (14 CFR Part 121);

                  (b) the corporation formed by such consolidation or into which
         the  Company  is merged or the Person  which  acquires  by  conveyance,
         transfer or lease  substantially all of the assets of the Company as an
         entirety  shall  execute and deliver to the Trustee a duly  authorized,
         valid,  binding  and  enforceable   agreement  in  form  and  substance
         reasonably satisfactory to the Trustee containing an assumption by such
         successor corporation or Person of the due and punctual performance and
         observance of each covenant and condition of this Agreement,  the Other
         Pass Through Trust Agreements, the Financing Agreements, and each other
         Financing Document to be performed or observed by the Company;

                  (c) immediately  after giving effect to such  transaction,  no
         Event of Default or event which is, or after notice or passage of time,
         or both,  would be, such an Event of Default shall have occurred and be
         continuing; and

                  (d)  the  Company  shall  have  delivered  to the  Trustee  an
         Officer's  Certificate  of the Company and an Opinion of Counsel of the
         Company reasonably  satisfactory to the Trustee, each stating that such
         consolidation, merger, conveyance, transfer or lease and the assumption
         agreement  mentioned  in clause (b) above comply with this Section 5.02
         and that all conditions  precedent herein provided for relating to such
         transaction have been complied with.

                  Upon any consolidation or merger, or any conveyance,  transfer
or lease of  substantially  all of the assets of the  Company as an  entirety in
accordance with this Section 5.02, the successor corporation or Person formed by
such  consolidation  or into  which  the  Company  is  merged  or to which  such
conveyance,  transfer or lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Agreement with
the same effect as if such successor corporation or Person had been named as the
Company herein.  No such conveyance,  transfer or lease of substantially  all of
the assets of the Company as an entirety  shall have the effect of releasing the
Company or any  successor  corporation  or Person which shall  theretofore  have
become such in the manner  prescribed in this Section 5.02 from its liability in
respect of this Agreement or any Financing Document to which it is a party.


                                   ARTICLE VI

                                     DEFAULT

                  Section 6.01.  Events of Default.  (a)  Exercise of Remedies.  Upon the occurrence and
during the continuation of any Indenture Default under any Indenture, the Trustee may, to the extent it
is the Controlling Party at such time, direct the exercise of remedies as provided in the Intercreditor
Agreement.

                  (b) Purchase Rights of  Certificateholders.  (i) By acceptance
of its  Certificate,  each  Certificateholder  agrees that at any time after the
occurrence  and during the  continuation  of a  Triggering  Event:  each Class B
Certificateholder  shall have the right to purchase  all, but not less than all,
of the Certificates  upon ten days' written notice to the Trustee and each other
Class B Certificateholder, provided that (A) if prior to the end of such ten-day
period any other Class B  Certificateholder  notifies  such  purchasing  Class B
Certificateholder that such other Class B Certificateholder wants to participate
in such purchase,  then such other Class B  Certificateholder  may join with the
purchasing Class B Certificateholder  to purchase all, but not less than all, of
the  Certificates  pro rata based on the  Fractional  Undivided  Interest in the
Class B Trust  held by each such Class B  Certificateholder  and (B) if prior to
the end of such  ten-day  period any other  Class B  Certificateholder  fails to
notify  the  purchasing  Class  B  Certificateholder   of  such  other  Class  B
Certificateholder's  desire to participate  in such a purchase,  then such other
Class B  Certificateholder  shall lose its right to  purchase  the  Certificates
pursuant to this Section 6.01(b).

                  (ii) By acceptance of its Certificate,  each Certificateholder
agrees that at any time after the  occurrence and during the  continuation  of a
Triggering  Event:  each Class C  Certificateholder  shall have the right (which
shall not expire upon any  purchase of the  Certificates  pursuant to clause (i)
above) to purchase all, but not less than all, of the Certificates and the Class
B Certificates upon ten days' written notice to the Trustee, the Class B Trustee
and each other Class C Certificateholder,  provided that (A) if prior to the end
of such  ten-day  period  any  other  Class C  Certificateholder  notifies  such
purchasing Class C  Certificateholder  that such other Class C Certificateholder
wants to participate in such purchase, then such other Class C Certificateholder
may join with the purchasing Class C Certificateholder  to purchase all, but not
less than all, of the  Certificates  and the Class B Certificates pro rata based
on the  Fractional  Undivided  Interest  in the Class C Trust  held by each such
Class C Certificateholder and (B) if prior to the end of such ten day period any
other  Class  C  Certificateholder  fails  to  notify  the  purchasing  Class  C
Certificateholder   of  such  other  Class  C   Certificateholder's   desire  to
participate in such a purchase,  then such other Class C Certificateholder shall
lose  its  right to  purchase  the  Certificates  and the  Class B  Certificates
pursuant to this Section 6.01(b).

                  (iii) By acceptance of its Certificate, each Certificateholder
agrees that at any time after the  occurrence and during the  continuation  of a
Triggering  Event:  each Class D  Certificateholder  shall have the right (which
shall not expire upon any  purchase of the  Certificates  pursuant to clause (i)
above and the Certificates and the Class B Certificates  pursuant to clause (ii)
above) to purchase all, but not less than all, of the Certificates,  the Class B
Certificates  and the Class C Certificates  upon ten days' written notice to the
Trustee,  the  Class B  Trustee,  the  Class C Trustee  and each  other  Class D
Certificateholder,  provided that (A) if prior to the end of such ten-day period
any  other  Class  D   Certificateholder   notifies  such  purchasing   Class  D
Certificateholder that such other Class D Certificateholder wants to participate
in such purchase,  then such other Class D  Certificateholder  may join with the
purchasing Class D Certificateholder  to purchase all, but not less than all, of
the Certificates, the Class B Certificates and the Class C Certificates pro rata
based on the  Fractional  Undivided  Interest  in the Class D Trust held by each
such  Class D  Certificateholder  and (B) if  prior  to the end of such  ten day
period any other Class D Certificateholder  fails to notify the purchasing Class
D  Certificateholder  of  such  other  Class  D  Certificateholder's  desire  to
participate in such a purchase,  then such other Class D Certificateholder shall
lose its right to purchase the  Certificates,  the Class B Certificates  and the
Class C Certificates pursuant to this Section 6.01(b).

                  The purchase price with respect to the  Certificates  shall be
equal to the Pool Balance of the Certificates,  together with accrued and unpaid
interest thereon to the date of such purchase,  without  premium,  but including
any other  amounts  then due and  payable to the  Certificateholders  under this
Agreement,  the Intercreditor Agreement or any other Financing Document or on or
in respect of the  Certificates;  provided,  however,  that no such  purchase of
Certificates  shall be  effective  unless  the  purchaser  shall  certify to the
Trustee that contemporaneously with such purchase, such purchaser is purchasing,
pursuant  to the  terms of this  Agreement  and the  Other  Pass  Through  Trust
Agreements,  the  Certificates,  the  Class  B  Certificates  and  the  Class  C
Certificates  which are senior to the Class of  Certificates  (as defined in the
Intercreditor  Agreement) held by such  purchaser.  Each payment of the purchase
price of the Certificates shall be made to an account or accounts  designated by
the  Trustee  and each  such  purchase  shall be  subject  to the  terms of this
Section. Each Certificateholder agrees by its acceptance of its Certificate that
it will,  subject  to  Section  3.04  hereof,  upon  payment  from such  Class B
Certificateholder(s),     Class    C    Certificateholder(s)    or    Class    D
Certificateholder(s)  of the purchase  price set forth in the first  sentence of
this  paragraph,  forthwith sell,  assign,  transfer and convey to the purchaser
thereof (without recourse, representation or warranty of any kind except for its
own  acts),  all  of  the  right,   title,   interest  and  obligation  of  such
Certificateholder in, this Agreement, the Intercreditor Agreement, the Liquidity
Facility,   the  Financing   Documents  and  all   Certificates   held  by  such
Certificateholder  (excluding  all right,  title and  interest  under any of the
foregoing  to the extent  such right,  title or  interest is with  respect to an
obligation  not then due and payable as respects any action or inaction or state
of affairs  occurring  prior to such sale) and the purchaser shall assume all of
such  Certificateholder's  obligations  under this Agreement,  the Intercreditor
Agreement,  the Liquidity Facility and the Financing Documents. The Certificates
will be deemed to be purchased on the date payment of the purchase price is made
notwithstanding   the   failure  of  the   Certificateholders   to  deliver  any
Certificates  (whether  in the  form  of  Physical  Certificates  or  beneficial
interests in Global Certificates) and, upon such a purchase, (i) the only rights
of the  Certificateholders  will be to deliver the Certificates to the purchaser
and receive the purchase  price for the  Certificates  and (ii) if the purchaser
shall so request, such  Certificateholder will comply with all the provisions of
Section 3.04 hereof to enable new  Certificates to be issued to the purchaser in
such  denominations as it shall request.  All charges and expenses in connection
with the issuance of any such new  Certificates  shall be borne by the purchaser
thereof.

                  As   used    in    this    Section    6.01(b),    the    terms
"Certificateholder",     "Class",    "Class    B    Certificate",    "Class    B
Certificateholder",  "Class B Trust", "Class B Trustee",  "Class C Certificate",
"Class C  Certificateholder",  "Class C  Trust",  "Class  C  Trustee",  "Class D
Certificate",  "Class  D  Certificateholder",  "Class  D  Trust"  and  "Class  D
Trustee",  shall  have the  respective  meanings  assigned  to such terms in the
Intercreditor Agreement.

                  Section 6.02.  Incidents of Sale of Equipment Notes.  Upon any
sale of all or any part of the  Equipment  Notes made either  under the power of
sale  given  under this  Agreement  or  otherwise  for the  enforcement  of this
Agreement, the following shall be applicable:

                  (1)  Certificateholders  and  Trustee May  Purchase  Equipment
         Notes.  Any  Certificateholder,  the Trustee in its  individual  or any
         other  capacity or any other Person may bid for and purchase any of the
         Equipment  Notes, and upon compliance with the terms of sale, may hold,
         retain,  possess  and  dispose  of such  Equipment  Notes in their  own
         absolute right without further accountability.

                  (2) Receipt of Trustee Shall Discharge Purchaser.  The receipt
         of the Trustee or of the officer making such sale shall be a sufficient
         discharge to any purchaser for his purchase  money,  and,  after paying
         such purchase money and receiving  such receipt,  such purchaser or its
         personal  representative  or assigns shall not be obliged to see to the
         application of such purchase money, or be in any way answerable for any
         loss, misapplication or non-application thereof.

                  (3)  Application  of Moneys  Received  upon  Sale.  Any moneys
         received by the Trustee from the  Subordination  Agent  pursuant to the
         Intercreditor  Agreement  upon any sale made either  under the power of
         sale given by this  Agreement or otherwise for the  enforcement of this
         Agreement shall be applied as provided in Section 4.02.

                  Section  6.03.  Judicial  Proceedings  Instituted  by Trustee;
Trustee  May Bring  Suit.  If there  shall be a failure  to make  payment of the
principal of,  premium,  if any, or interest on any Equipment  Note, or if there
shall be any failure to pay Rent (as defined in the  relevant  Lease)  under any
Lease when due and payable,  then the Trustee, in its own name and as trustee of
an express trust, as holder of such Equipment  Notes, to the extent permitted by
and in  accordance  with  the  terms  of the  Intercreditor  Agreement  and  the
Financing  Documents  (subject to the rights of the applicable  Owner Trustee or
Owner  Participant  to cure any such failure in accordance  with Section 8.03 of
the  applicable  Indenture),  shall be entitled and  empowered to institute  any
suits, actions or proceedings at law, in equity or otherwise, for the collection
of the sums so due and  unpaid on such  Equipment  Notes or under such Lease and
may  prosecute  any such claim or  proceeding  to judgment or final  decree with
respect to the whole amount of any such sums so due and unpaid.

                  Section  6.04.  Control  by  Certificateholders.   Subject  to
Section 6.03 and the Intercreditor  Agreement,  the  Certificateholders  holding
Certificates evidencing Fractional Undivided Interests aggregating not less than
a majority  in  interest  in the Trust  shall have the right to direct the time,
method and place of conducting any  proceeding  for any remedy  available to the
Trustee with respect to the Trust or pursuant to the terms of the  Intercreditor
Agreement,  or exercising any trust or power conferred on the Trustee under this
Agreement or the Intercreditor Agreement,  including any right of the Trustee as
Controlling  Party  under  the  Intercreditor  Agreement  or as  holder  of  the
Equipment Notes, provided that

                  (1) such  Direction  shall not be in conflict with any rule of
         law or with this  Agreement  and  would  not  involve  the  Trustee  in
         personal liability or expense,

                  (2) the  Trustee  shall  not  determine  that  the  action  so
         directed would be unjustly  prejudicial to the  Certificateholders  not
         taking part in such Direction, and

                  (3) the Trustee may take any other action deemed proper by the
         Trustee which is not inconsistent with such Direction.

                  Section  6.05.  Waiver  of  Past  Defaults.   Subject  to  the
Intercreditor Agreement, the Certificateholders  holding Certificates evidencing
Fractional Undivided Interests  aggregating not less than a majority in interest
in the Trust (i) may on behalf of all of the  Certificateholders  waive any past
Event of Default  hereunder and its  consequences  or (ii) if the Trustee is the
Controlling  Party,  may direct the  Trustee to  instruct  the  applicable  Loan
Trustee  to  waive,  any past  Indenture  Default  under any  Indenture  and its
consequences,  and thereby annul any Direction given by such  Certificateholders
or the Trustee to such Loan Trustee with respect thereto, except a default:

                  (1) in the deposit of any Scheduled Payment or Special Payment
         under Section 4.01 or in the  distribution of any payment under Section
         4.02 on the Certificates, or

                  (2)      in the payment of the principal of (premium, if any) or interest on the
         Equipment Notes, or

                  (3) in respect of a covenant or  provision  hereof which under
         Article IX or X cannot be  modified  or amended  without the consent of
         each  Certificateholder  holding an  Outstanding  Certificate  affected
         thereby.

                  Upon any such waiver,  such default  shall cease to exist with
respect to the Certificates and any Event of Default arising  therefrom shall be
deemed to have  been  cured for every  purpose  and any  direction  given by the
Trustee on behalf of the  Certificateholders  to the relevant Loan Trustee shall
be  annulled  with  respect  thereto;  but no such  waiver  shall  extend to any
subsequent or other  default or Event of Default or impair any right  consequent
thereon. Upon any such waiver, the Trustee shall vote the Equipment Notes issued
under the relevant Indenture to waive the corresponding Indenture Default.

                  Section 6.06. Right of  Certificateholders to Receive Payments
Not to Be Impaired.  Anything in this Agreement to the contrary notwithstanding,
including,  without  limitation,   Section  6.07  hereof,  but  subject  to  the
Intercreditor   Agreement,   the  right  of  any  Certificateholder  to  receive
distributions  of  payments  required  pursuant  to Section  4.02  hereof on the
Certificates  when due, or to  institute  suit for the  enforcement  of any such
payment  on or  after  the  applicable  Regular  Distribution  Date  or  Special
Distribution Date, shall not be impaired or affected without the consent of such
Certificateholder.

                  Section  6.07.  Certificateholders  May Not Bring Suit  Except
Under  Certain  Conditions.  A  Certificateholder  shall  not have the  right to
institute any suit,  action or proceeding at law or in equity or otherwise  with
respect  to  this  Agreement,  for  the  appointment  of a  receiver  or for the
enforcement of any other remedy under this Agreement, unless:

                  (1) such Certificateholder previously shall have given written
         notice to the Trustee of a continuing Event of Default;

                  (2)   Certificateholders   holding   Certificates   evidencing
         Fractional  Undivided  Interests  aggregating  not less than 25% of the
         Trust shall have  requested  the Trustee in writing to  institute  such
         action,  suit or  proceeding  and shall  have  offered  to the  Trustee
         indemnity as provided in Section 7.03(e);

                  (3) the Trustee  shall have  refused or neglected to institute
         such an action,  suit or  proceeding  for 60 days after receipt of such
         notice, request and offer of indemnity; and

                  (4) no direction  inconsistent with such written request shall
         have  been  given  to  the  Trustee   during  such  60-day   period  by
         Certificateholders holding Certificates evidencing Fractional Undivided
         Interests  aggregating  not less than a  majority  in  interest  in the
         Trust.

                  It is  understood  and  intended  that  no one or  more of the
Certificateholders  shall have any right in any manner  whatsoever  hereunder or
under the  Certificates  to (i) surrender,  impair,  waive,  affect,  disturb or
prejudice any property in the Trust Property or the lien of any Indenture on any
property subject thereto, or the rights of the Certificateholders or the holders
of the  Equipment  Notes,  (ii)  obtain  or  seek  to  obtain  priority  over or
preference with respect to any other such Certificateholder or (iii) enforce any
right under this  Agreement,  except in the manner  herein  provided and for the
equal, ratable and common benefit of all the  Certificateholders  subject to the
provisions of this Agreement.

                  Section  6.08.   Remedies   Cumulative.   Every  remedy  given
hereunder  to the  Trustee  or to any of  the  Certificateholders  shall  not be
exclusive  of any other  remedy or  remedies,  and every  such  remedy  shall be
cumulative  and in addition  to every other  remedy  given  hereunder  or now or
hereafter given by statute, law, equity or otherwise.

                  Section  6.09.  Undertaking  for  Costs.  In any  suit for the
enforcement of any right or remedy under this Agreement,  or in any suit against
the Trustee for any action taken,  suffered or omitted by it as Trustee, a court
may require any party  litigant in such suit to file an  undertaking  to pay the
costs of such suit, and may assess costs against any such party litigant, in the
manner and to the extent  provided in the Trust  Indenture  Act;  provided  that
neither  this Section nor the Trust  Indenture  Act shall be deemed to authorize
any court to require such an  undertaking  or to make such an  assessment in any
suit instituted by the Company or the Guarantor.


                                   ARTICLE VII

                                   THE TRUSTEE

                  Section 7.01. Certain Duties and Responsibilities.  (a) Except
during the continuance of an Event of Default, the Trustee undertakes to perform
such  duties as are  specifically  set forth in this  Agreement,  and no implied
covenants or obligations shall be read into this Agreement against the Trustee.

                  (b)  In  case  an  Event  of  Default  has   occurred  and  is
continuing,  the Trustee shall  exercise such of the rights and powers vested in
it by this  Agreement,  and use the  same  degree  of care  and  skill  in their
exercise,  as a prudent man would exercise or use under the circumstances in the
conduct of its own affairs.

                  (c) No  provision  of this  Agreement  shall be  construed  to
relieve  the  Trustee  from  liability  for its own  negligent  action,  its own
negligent failure to act, or its own wilful misconduct, except that

                  (1)      this Subsection shall not be construed to limit the effect of Subsection (a)
         of this Section; and

                  (2) the Trustee  shall not be liable for any error of judgment
         made in good faith by a Responsible  Officer of the Trustee,  unless it
         shall be proved that the  Trustee was  negligent  in  ascertaining  the
         pertinent facts.

                  (d)  Whether  or  not  herein  expressly  so  provided,  every
provision  of this Trust  Agreement  relating  to the conduct or  affecting  the
liability  of or  affording  protection  to the Trustee  shall be subject to the
provisions of this Section.

                  Section 7.02.  Notice of Defaults.  As promptly as practicable
after,  and in any event within 90 days after, the occurrence of any default (as
such term is defined below)  hereunder  known to the Trustee,  the Trustee shall
transmit by mail to the Company, the Owner Trustees, the Owner Participants, the
Loan Trustees and the  Certificateholders  in accordance  with Section 313(c) of
the Trust Indenture Act, notice of such default  hereunder known to the Trustee,
unless such default shall have been cured or waived;  provided,  however,  that,
except in the case of a default in the  payment of the  principal,  premium,  if
any, or interest on any  Equipment  Note,  the  Trustee  shall be  protected  in
withholding such notice if and so long as the board of directors,  the executive
committee or a trust committee of directors and/or  Responsible  Officers of the
Trustee in good faith  determine  that the  withholding of such notice is in the
interests of the  Certificateholders.  For the purpose of this Section, the term
"default"  means  any event  that is,  or after  notice or lapse of time or both
would become, an Event of Default.

                  Section 7.03.  Certain Rights of Trustee.  Subject to the provisions of Section 315 of
the Trust Indenture Act:

                  (a) the Trustee may rely and shall be  protected  in acting or
         refraining  from acting in reliance upon any  resolution,  certificate,
         statement,  instrument,  opinion,  report, notice, request,  direction,
         consent,  order, bond, debenture or other paper or document believed by
         it to be genuine  and to have been  signed or  presented  by the proper
         party or parties;

                  (b)      any request or direction of the Company mentioned herein shall be sufficiently
         evidenced by a Request;

                  (c) whenever in the  administration  of this  Agreement or the
         Intercreditor  Agreement  the Trustee  shall deem it  desirable  that a
         matter be proved or established prior to taking,  suffering or omitting
         any action  hereunder,  the Trustee  (unless  other  evidence be herein
         specifically  prescribed) may, in the absence of bad faith on its part,
         rely upon an Officer's Certificate of the Company, any Owner Trustee or
         any Loan Trustee;

                  (d) the  Trustee may  consult  with  counsel and the advice of
         such  counsel  or any  Opinion of  Counsel  shall be full and  complete
         authorization  and protection in respect of any action taken,  suffered
         or omitted by it hereunder in good faith and in reliance thereon;

                  (e) the Trustee  shall be under no  obligation to exercise any
         of  the  rights  or  powers  vested  in it by  this  Agreement  or  the
         Intercreditor  Agreement  at the  request  or  direction  of any of the
         Certificateholders  pursuant  to this  Agreement  or the  Intercreditor
         Agreement,  unless such  Certificateholders  shall have  offered to the
         Trustee reasonable security or indemnity against the cost, expenses and
         liabilities  which  might be  incurred  by it in  compliance  with such
         request or direction;

                  (f) the Trustee  shall not be bound to make any  investigation
         into the  facts  or  matters  stated  in any  resolution,  certificate,
         statement,  instrument,  opinion,  report, notice, request,  direction,
         consent, order, bond, debenture or other paper or document;

                  (g) the Trustee may execute any of the trusts or powers  under
         this  Agreement  or the  Intercreditor  Agreement or perform any duties
         under this Agreement or the Intercreditor  Agreement either directly or
         by or  through  agents  or  attorneys,  and the  Trustee  shall  not be
         responsible  for any  misconduct or negligence on the part of any agent
         or attorney  appointed  with due care by it under this Agreement or the
         Intercreditor Agreement;

                  (h) the Trustee shall not be liable with respect to any action
         taken or omitted to be taken by it in good faith in accordance with the
         direction of the  Certificateholders  holding  Certificates  evidencing
         Fractional Undivided Interests  aggregating not less than a majority in
         interest  in the  Trust  relating  to the  time,  method  and  place of
         conducting any proceeding for any remedy  available to the Trustee,  or
         exercising any trust or power  conferred  upon the Trustee,  under this
         Agreement or the Intercreditor Agreement; and

                  (i) the  Trustee  shall not be  required to expend or risk its
         own funds in the performance of any of its duties under this Agreement,
         or in the  exercise  of any of its rights or  powers,  if it shall have
         reasonable  grounds  for  believing  that  repayment  of such  funds or
         adequate indemnity against such risk is not reasonably assured to it.

                  Section  7.04.  Not  Responsible  for  Recitals or Issuance of
Certificates. The recitals contained herein and in the Certificates,  except the
certificates  of  authentication,  shall not be taken as the  statements  of the
Trustee,  and the  Trustee  assumes  no  responsibility  for their  correctness.
Subject to Section 7.15, the Trustee makes no representations as to the validity
or sufficiency of this Agreement,  any Financing Agreement, any Equipment Notes,
the Certificates or any other Financing Document, except that the Trustee hereby
represents  and warrants  that this  Agreement has been,  and the  Intercreditor
Agreement,  each Financing  Agreement and each  Certificate  will be,  executed,
authenticated  and  delivered by one of its officers who is duly  authorized  to
execute, authenticate and deliver such document on its behalf.

                  Section 7.05. May Hold Certificates.  The Trustee,  any Paying
Agent,  Registrar  or any of  their  Affiliates  or any  other  agent  in  their
respective  individual or any other  capacity may become the owner or pledgee of
Certificates and, subject to Sections 310(b) and 311 of the Trust Indenture Act,
if  applicable,  may otherwise deal with the Company,  the Guarantor,  the Owner
Trustees or the Loan  Trustees with the same rights it would have if it were not
Trustee, Paying Agent, Registrar or such other agent.

                  Section 7.06.  Money Held in Trust.  Money held by the Trustee
or the Paying Agent in trust  hereunder need not be segregated  from other funds
except to the extent  required  herein or by law and neither the Trustee nor the
Paying Agent shall have any  liability  for interest upon any such moneys except
as provided for herein.

                  Section 7.07.  Compensation and Reimbursement.  The Company agrees:

                  (1) to pay, or cause to be paid,  to the Trustee  from time to
         time  compensation (as set out in a separate fee agreement  between the
         Trustee and the  Company)  for all  services  rendered by it  hereunder
         (which  compensation  shall not be limited by any  provision  of law in
         regard to the compensation of a trustee of an express trust);

                  (2)  except  as  otherwise   expressly   provided  herein,  to
         reimburse, or cause to be reimbursed,  the Trustee upon its request for
         all  reasonable  out-of-pocket  expenses,  disbursements  and  advances
         incurred or made by the Trustee in  accordance  with any  provision  of
         this Agreement or the Intercreditor Agreement (including the reasonable
         compensation  and the  expenses  and  disbursements  of its  agents and
         counsel),  except any such expense,  disbursement  or advance as may be
         attributable to its negligence,  willful  misconduct or bad faith or as
         may be incurred due to the Trustee's breach of its  representations and
         warranties set forth in Section 7.15;

                  (3) to indemnify, or cause to be indemnified, the Trustee for,
         and to hold it harmless against,  any loss, liability or expense (other
         than for or with  respect  to any  tax)  incurred  without  negligence,
         willful  misconduct  or bad faith,  on its part,  arising  out of or in
         connection  with  the  acceptance  or  administration  of  this  Trust,
         including the costs and expenses of defending  itself against any claim
         or liability in connection  with the exercise or  performance of any of
         its powers or duties hereunder,  except for any such loss, liability or
         expense   incurred   by   reason  of  the   Trustee's   breach  of  its
         representations  and  warranties set forth in Section 7.15. The Trustee
         shall  notify the Company and the  Guarantor  promptly of any claim for
         which it may seek  indemnity.  The Company  and/or the Guarantor  shall
         defend the claim and the Trustee  shall  cooperate in the defense.  The
         Trustee may have  separate  counsel with the consent of the Company and
         the Guarantor and the Company and the Guarantor will pay the reasonable
         fees  and  expenses  of  such  counsel.  Neither  the  Company  nor the
         Guarantor need pay for any settlement made without its consent; and

                  (4) to  indemnify,  or cause to be  indemnified,  the Trustee,
         solely  in its  individual  capacity,  for,  and to  hold  it  harmless
         against,  any tax  (except  to the extent  the  Trustee  is  reimbursed
         therefor   pursuant   to  the   next   paragraph,   provided   that  no
         indemnification shall be available with respect to any tax attributable
         to the Trustee's  compensation  for serving as such)  incurred  without
         negligence,  willful  misconduct or bad faith, on its part, arising out
         of or in  connection  with the  acceptance  or  administration  of this
         Trust,  including  any costs and expenses  incurred in  contesting  the
         imposition of any such tax. The Trustee,  in its  individual  capacity,
         shall  notify the Company and the  Guarantor  promptly of any claim for
         any tax for which it may seek  indemnity.  The Trustee shall permit the
         Company and the Guarantor to contest the imposition of such tax and the
         Trustee,  in its individual  capacity,  shall cooperate in the defense.
         The Trustee, in its individual capacity, may have separate counsel with
         the consent of the Company  and the  Guarantor  and the Company and the
         Guarantor  will pay the  reasonable  fees and expenses of such counsel.
         Neither the Company nor the  Guarantor  need pay for any taxes paid, in
         settlement or otherwise, without its consent.

                  The Trustee shall be entitled to reimbursement from, and shall
have a lien  prior to the  Certificates  upon,  the Trust  Property  for any tax
incurred  without  negligence,  bad faith or  willful  misconduct,  on its part,
arising out of or in connection  with the acceptance or  administration  of such
Trust (other than any tax attributable to the Trustee's compensation for serving
as such), including any costs and expenses incurred in contesting the imposition
of any such tax. If the  Trustee  reimburses  itself from the Trust  Property of
such Trust for any such tax, it will mail a brief report  within 30 days setting
forth the  circumstances  thereof to all  Certificateholders  as their names and
addresses appear in the Register.

                  Section 7.08. Corporate Trustee Required;  Eligibility.  There
shall at all times be a Trustee  hereunder  which  shall be eligible to act as a
trustee  under  Section  310(a) of the  Trust  Indenture  Act and  shall  have a
combined capital and surplus of at least  $75,000,000 (or a combined capital and
surplus in excess of $5,000,000  and the  obligations  of which,  whether now in
existence or hereafter incurred,  are fully and unconditionally  guaranteed by a
corporation  organized and doing  business  under the laws of the United States,
any state or  territory  thereof or of the  District  of  Columbia  and having a
combined  capital  and  surplus of at least  $75,000,000).  If such  corporation
publishes  reports of  conditions at least  annually,  pursuant to law or to the
requirements of federal, state,  territorial or District of Columbia supervising
or examining authority, then for the purposes of this Section 7.08, the combined
capital  and  surplus  of such  corporation  shall be deemed to be its  combined
capital  and  surplus as set forth in its most recent  report of  conditions  so
published.

                  In case at any time the Trustee  shall cease to be eligible in
accordance  with the  provisions  of this  Section  7.08 to act as Trustee,  the
Trustee  shall resign  immediately  as Trustee in the manner and with the effect
specified in Section 7.09.

                  Section  7.09.   Resignation   and  Removal;   Appointment  of
Successor.  (a) No resignation or removal of the Trustee and no appointment of a
successor  Trustee  pursuant to this Article  shall become  effective  until the
acceptance of appointment by the successor Trustee under Section 7.10.

                  (b) The  Trustee  may  resign at any time as trustee by giving
prior written notice thereof to the Company,  the Authorized  Agents,  the Owner
Trustees and the Loan  Trustees.  If an  instrument of acceptance by a successor
Trustee shall not have been delivered to the Company, the Authorized Agents, the
Owner  Trustees,  the Loan  Trustees  and the  Trustee  within 30 days after the
giving of such notice of  resignation,  the  resigning  Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.

                  (c)  The  Trustee  may be  removed  at any  time by Act of the
Certificateholders   holding   Certificates   evidencing   Fractional  Undivided
Interests  aggregating  not  less  than a  majority  in  interest  in the  Trust
delivered to the Trustee, the Company, the Owner Trustees and the Loan Trustees.

                  (d)      If at any time:

                  (1) the Trustee  shall fail to comply with  Section 310 of the
         Trust Indenture Act, if applicable,  after written request  therefor by
         the  Company  or by any  Certificateholder  who  has  been a bona  fide
         Certificateholder for at least six months; or

                  (2) the Trustee shall cease to be eligible  under Section 7.08
         and shall fail to resign after written request  therefor by the Company
         or by any such Certificateholder; or

                  (3) the Trustee  shall become  incapable of acting or shall be
         adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
         property  shall be appointed or any public officer shall take charge or
         control of the Trustee or of its property or affairs for the purpose of
         rehabilitation, conservation or liquidation;

then,  in any  case,  (i) the  Company  may  remove  the  Trustee  or  (ii)  any
Certificateholder  who has been a bona fide  Certificateholder  for at least six
months may, on behalf of itself and all others similarly situated,  petition any
court  of  competent  jurisdiction  for  the  removal  of the  Trustee  and  the
appointment of a successor Trustee.

                  (e) If a  Responsible  Officer  of the  Trustee  shall  obtain
actual knowledge of an Avoidable Tax which has been or is likely to be asserted,
the Trustee shall promptly notify the Company and shall,  within 30 days of such
notification,  resign  hereunder  unless  within such 30-day  period the Trustee
shall have  received  notice that the  Company  has agreed to pay such tax.  The
Company shall promptly appoint a successor Trustee in a jurisdiction where there
are no Avoidable Taxes.

                  (f)  If  the  Trustee  shall  resign,  be  removed  or  become
incapable of acting as trustee or if a vacancy  shall occur in the office of the
Trustee for any cause, the Company shall promptly  appoint a successor  Trustee.
If, within 90 days after such  resignation,  removal or  incapability,  or other
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Certificateholders   holding   Certificates   evidencing   Fractional  Undivided
Interests  aggregating  not  less  than a  majority  in  interest  in the  Trust
delivered to the Company, the Owner Trustees, the Loan Trustees and the retiring
Trustee, and the Company approves such appointment,  which approval shall not be
unreasonably withheld,  then the successor Trustee so appointed shall, forthwith
upon its  acceptance  of such  appointment,  become the  successor  Trustee  and
supersede the successor  Trustee  appointed as provided  above.  If no successor
Trustee shall have been so appointed as provided above and accepted  appointment
in the manner hereinafter  provided,  any  Certificateholder who has been a bona
fide Certificateholder for at least six months may, on behalf of himself and all
others similarly situated,  petition any court of competent jurisdiction for the
appointment of a successor Trustee.

                  (g) The successor Trustee shall give notice of the resignation
and removal of the Trustee and  appointment of the successor  Trustee by mailing
written  notice of such  event by  first-class  mail,  postage  prepaid,  to the
Certificateholders  as their names and addresses  appear in the  Register.  Each
notice shall include the name of such  successor  Trustee and the address of its
Corporate Trust Office.

                  Section 7.10.  Acceptance of Appointment  by Successor.  Every
successor Trustee appointed  hereunder shall execute and deliver to the Company,
the  Authorized  Agents,  the Owner  Trustees  and the Loan  Trustees and to the
retiring  Trustee an instrument  accepting such  appointment,  and thereupon the
resignation or removal of the retiring  Trustee shall become  effective and such
successor  Trustee,  without any further act, deed or  conveyance,  shall become
vested with all the rights,  powers,  trusts and duties of the retiring Trustee;
but, on request of the Company or the successor  Trustee,  such retiring Trustee
shall execute and deliver an instrument  transferring to such successor  Trustee
all such  rights,  powers  and  trusts of the  retiring  Trustee  and shall duly
assign,  transfer and deliver to such successor  Trustee all Trust Property held
by such retiring Trustee  hereunder,  subject  nevertheless to its lien, if any,
provided for in Section 7.07.  Upon request of any such successor  Trustee,  the
Company,  the retiring  Trustee and such  successor  Trustee  shall  execute and
deliver any and all instruments containing such provisions as shall be necessary
or  desirable  to  transfer  and  confirm  to, and for more fully and  certainly
vesting in, such successor Trustee all such rights, powers and trusts.

                  No  institution  shall  accept  its  appointment  as a Trustee
hereunder  unless  at the  time of such  acceptance  such  institution  shall be
qualified and eligible under this Article VII.

                  Section 7.11. Merger, Conversion,  Consolidation or Succession
to Business.  Any corporation  into which the Trustee may be merged or converted
or with which it may be  consolidated,  or any  corporation  resulting  from any
merger,  conversion or  consolidation  to which the Trustee shall be a party, or
any corporation  succeeding to all or  substantially  all of the corporate trust
business  of the  Trustee,  shall be the  successor  of the  Trustee  hereunder,
provided such corporation  shall be otherwise  qualified and eligible under this
Article,  without the execution or filing of any paper or any further act on the
part of any of the  parties  hereto.  In case any  Certificates  shall have been
executed or authenticated, but not delivered, by the Trustee then in office, any
successor by merger,  conversion or consolidation to such authenticating Trustee
may adopt such  execution  or  authentication  and deliver the  Certificates  so
executed or authenticated  with the same effect as if such successor Trustee had
itself executed or authenticated such Certificates.

                  Section 7.12.  Maintenance of Agencies. (a) There shall at all
times be maintained an office or agency where  Certificates  may be presented or
surrendered  for  registration  of  transfer  or for  exchange,  and for payment
thereof and where  notices and demands to or upon the Trustee in respect of such
Certificates  may be served.  Presentations  and demands may be made and notices
may be served at the Corporate Trust Office of the Trustee.

                  (b) There shall at all times be a Registrar and a Paying Agent
hereunder with respect to the Certificates.  Each such Authorized Agent shall be
a bank or trust  company,  shall be a corporation  organized and doing  business
under the laws of the United  States or any state,  with a combined  capital and
surplus of at least $75,000,000,  or a corporation having a combined capital and
surplus in excess of  $5,000,000,  the  obligations of which are guaranteed by a
corporation  organized and doing business under the laws of the United States or
any state,  with a combined  capital  and surplus of at least  $75,000,000,  and
shall be authorized under such laws to exercise corporate trust powers,  subject
to supervision by federal or state  authorities.  The Trustee shall initially be
the Paying  Agent and, as provided in Section  3.04,  Registrar  hereunder  with
respect to the  Certificates.  Each Registrar  shall furnish to the Trustee,  at
stated  intervals  of not more than six  months,  and at such other times as the
Trustee  may  request in  writing,  a copy of the  Register  maintained  by such
Registrar.

                  (c) Any  corporation  into which any  Authorized  Agent may be
merged or converted  or with which it may be  consolidated,  or any  corporation
resulting from any merger,  consolidation  or conversion to which any Authorized
Agent shall be a party,  or any  corporation  succeeding to the corporate  trust
business of any  Authorized  Agent,  shall be the  successor of such  Authorized
Agent hereunder,  if such successor corporation is otherwise eligible under this
Section,  without the execution or filing of any paper or any further act on the
part  of  the  parties  hereto  or  such  Authorized  Agent  or  such  successor
corporation.

                  (d) Any  Authorized  Agent  may at any time  resign  by giving
written notice of resignation  to the Trustee,  the Company,  the Owner Trustees
and the Loan Trustees. The Company may, and at the request of the Trustee shall,
at any time  terminate  the  agency of any  Authorized  Agent by giving  written
notice of  termination  to such  Authorized  Agent and to the Trustee.  Upon the
resignation  or  termination  of an Authorized  Agent or in case at any time any
such  Authorized  Agent shall cease to be eligible under this Section (when,  in
either  case,  no  other  Authorized  Agent  performing  the  functions  of such
Authorized Agent shall have been appointed),  the Company shall promptly appoint
one or more qualified successor  Authorized Agents,  reasonably  satisfactory to
the Trustee, to perform the functions of the Authorized Agent which has resigned
or whose  agency has been  terminated  or who shall have  ceased to be  eligible
under  this  Section.  The  Company  shall  give  written  notice  of  any  such
appointment made by it to the Trustee, the Owner Trustees and the Loan Trustees;
and in each  case the  Trustee  shall  mail  notice of such  appointment  to all
Certificateholders as their names and addresses appear on the Register.

                  (e) The Company agrees to pay, or cause to be paid,  from time
to time to each Authorized Agent reasonable compensation for its services and to
reimburse it for its reasonable expenses.

                  Section  7.13.  Money for  Certificate  Payments to Be Held in
Trust. All moneys deposited with any Paying Agent for the purpose of any payment
on  Certificates  shall be  deposited  and held in trust for the  benefit of the
Certificateholders  entitled to such payment,  subject to the provisions of this
Section. Moneys so deposited and held in trust shall constitute a separate trust
fund for the benefit of the Certificateholders  with respect to which such money
was deposited.

                  The Trustee may at any time,  for the purpose of obtaining the
satisfaction  and discharge of this Agreement or for any other  purpose,  direct
any Paying  Agent to pay to the  Trustee  all sums held in trust by such  Paying
Agent,  such sums to be held by the  Trustee  upon the same trusts as those upon
which such sums were held by such Paying  Agent;  and,  upon such payment by any
Paying  Agent to the  Trustee,  such Paying  Agent  shall be  released  from all
further liability with respect to such money.

                  Section  7.14.  Registration  of  Equipment  Notes  in Name of
Subordination Agent. The Trustee agrees that all Equipment Notes to be purchased
by the  Trust  shall be  issued  in the name of the  Subordination  Agent or its
nominee  and held by the  Subordination  Agent in trust for the  benefit  of the
Certificateholders,  or, if not so held, the Subordination  Agent or its nominee
shall be reflected as the owner of such  Equipment  Notes in the register of the
issuer of such Equipment Notes.

                  Section 7.15.  Representations and Warranties of Trustee.  The Trustee hereby
represents and warrants that:

                  (a) the Trustee is a national  banking  association  organized
         and  validly  existing  in good  standing  under the laws of the United
         States of America;

                  (b) the Trustee has full power,  authority  and legal right to
         execute,   deliver,  and  perform  this  Agreement,  the  Intercreditor
         Agreement  and the  Financing  Agreements  and has taken all  necessary
         action to authorize the execution,  delivery,  and performance by it of
         this  Agreement,   the   Intercreditor   Agreement  and  the  Financing
         Agreements;

                  (c) the execution,  delivery and performance by the Trustee of
         this  Agreement,   the   Intercreditor   Agreement  and  the  Financing
         Agreements  (i) will not violate any provision of United States federal
         law or the law of the state of the  United  States  where it is located
         governing  the  banking  and trust  powers of the Trustee or any order,
         writ,  judgment,  or decree of any court,  arbitrator  or  governmental
         authority applicable to the Trustee or any of its assets, (ii) will not
         violate any provision of the articles of  association or by-laws of the
         Trustee,  or (iii) will not violate any  provision  of, or  constitute,
         with or without notice or lapse of time, a default under,  or result in
         the creation or  imposition of any lien on any  properties  included in
         the  Trust  Property  pursuant  to  the  provisions  of  any  mortgage,
         indenture,  contract,  agreement or other  undertaking to which it is a
         party, which violation, default or lien could reasonably be expected to
         have an  adverse  effect on the  Trustee's  performance  or  ability to
         perform  its duties  hereunder  or  thereunder  or on the  transactions
         contemplated herein or therein;

                  (d) the execution,  delivery and performance by the Trustee of
         this  Agreement,   the   Intercreditor   Agreement  and  the  Financing
         Agreements will not require the authorization, consent, or approval of,
         the giving of notice to, the filing or registration with, or the taking
         of any other action in respect of, any governmental authority or agency
         of the  United  States or the State of the  United  States  where it is
         located  regulating the banking and corporate  trust  activities of the
         Trustee; and

                  (e)  this  Agreement,  the  Intercreditor  Agreement  and  the
         Financing  Agreements  have been duly  executed  and  delivered  by the
         Trustee and constitute the legal,  valid, and binding agreements of the
         Trustee,  enforceable  against it in accordance  with their  respective
         terms,  provided that  enforceability  may be limited by (i) applicable
         bankruptcy,  insolvency,  reorganization,  moratorium  or similar  laws
         affecting the rights of creditors generally and (ii) general principles
         of equity.

                  Section 7.16. Withholding Taxes;  Information  Reporting.  (a)
The Trustee,  as trustee of the grantor trust created by this  Agreement,  shall
exclude and withhold from each distribution of principal,  premium,  if any, and
interest and other  amounts due under this  Agreement or under the  Certificates
any and all withholding taxes applicable thereto as required by law. The Trustee
agrees to act as such withholding agent and, in connection  therewith,  whenever
any present or future taxes or similar  charges are required to be withheld with
respect to any amounts payable in respect of the Certificates,  to withhold such
amounts and timely pay the same to the appropriate  authority in the name of and
on behalf of the Certificateholders, that it will file any necessary withholding
tax returns or statements  when due, and that, as promptly as possible after the
payment  thereof,  it will  deliver to each such  Certificateholder  appropriate
documentation  showing  the  payment  thereof,  together  with  such  additional
documentary evidence as such Certificateholders may reasonably request from time
to time. The Trustee agrees to file any other  information  reports as it may be
required to file under United States law.

                  (b) The Trustee may satisfy  certain of its  obligations  with
respect to this Agreement by retaining, at the expense of the Company, a firm of
independent   public  accountants  (the   "Accountants")   which  shall  (i)  be
responsible for all tax filing  requirements and (ii) perform the obligations of
the Trustee in respect of tax filing  requirements.  The Trustee shall be deemed
to have  discharged  its tax filing  obligations  under this  Agreement upon its
retention of the  Accountants,  and, if the Trustee  shall have  selected in the
Accountants  in good faith and without gross  negligence,  the Trustee shall not
have any liability with respect to the default or misconduct of the Accountants.

                  (c) The Trustee, at the request of the Company, will make such
United  States  federal  income tax elections as may be necessary to prevent the
Trust from being  classified  for federal  income tax purposes as an association
taxable as a corporation.

                  Section 7.17.  Trustee's  Liens. The Trustee in its individual
capacity  agrees  that it will at its own cost  and  expense  promptly  take any
action as may be necessary to duly  discharge  and satisfy in full any mortgage,
pledge,  lien,  charge,  encumbrance,  security  interest  or claim  ("Trustee's
Liens") on or with respect to the Trust  Property which is  attributable  to the
Trustee  either (i) in its  individual  capacity  and which is  unrelated to the
transactions  contemplated by this Agreement,  the Intercreditor  Agreement, the
Financing Agreements or the Financing Documents, or (ii) as Trustee hereunder or
in its individual  capacity and which arises out of acts or omissions  which are
not contemplated by this Agreement.

                  Section 7.18.  Preferential  Collection of Claims. The Trustee
shall comply with  Section  311(a) of the Trust  Indenture  Act,  excluding  any
creditor  relationship  listed in Section 311(b) of the Trust  Indenture Act. If
the  Trustee  shall  resign or be  removed  as  Trustee,  it shall be subject to
Section 311(a) of the Trust Indenture Act to the extent provided therein.


                                  ARTICLE VIII

                CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE

                  Section  8.01.  The Company to Furnish  Trustee with Names and
Addresses  of  Certificateholders.  The  Company  will  furnish  or  cause to be
furnished to the Trustee within 15 days after each Record Date with respect to a
Scheduled Payment, and at such other times as the Trustee may request in writing
within 30 days after receipt by the Company of any such request, a list, in such
form as the Trustee may reasonably require, of all information in the possession
or   control   of  the   Company   as  to  the  names  and   addresses   of  the
Certificateholders, in each case as of a date not more than 15 days prior to the
time such list is furnished;  provided,  however, that so long as the Trustee is
the sole  Registrar,  no such  list need be  furnished;  and  provided  further,
however,  that  no such  list  need  be  furnished  for so long as a copy of the
Register is being furnished to the Trustee pursuant to Section 7.12.

                  Section 8.02.  Preservation of Information;  Communications to
Certificateholders.  The  Trustee  shall  preserve,  in as  current a form as is
reasonably practicable,  the names and addresses of Certificateholders contained
in the most recent list  furnished to the Trustee as provided in Section 7.12 or
Section   8.01,   as  the  case  may  be,  and  the  names  and   addresses   of
Certificateholders  received by the Trustee in its capacity as Registrar,  if so
acting.  The Trustee may destroy any list furnished to it as provided in Section
7.12 or  Section  8.01,  as the  case  may be,  upon  receipt  of a new  list so
furnished.

                  Section 8.03. Reports by Trustee.  Within 60 days after May 15
of each year  commencing  with the first full year following the issuance of the
Certificates, the Trustee shall transmit to the Certificateholders,  as provided
in Section  313(c) of the Trust  Indenture  Act, a brief report dated as of such
May 15, if required by Section 313(a) of the Trust Indenture Act.

                  Section 8.04.  Reports by the Guarantor and the Company.  The Guarantor and the
Company shall:

                  (a) file with the Trustee,  within 30 days after the Guarantor
         or the Company is required to file the same with the SEC, copies of the
         annual reports and of the information,  documents and other reports (or
         copies of such  portions  of any of the  foregoing  as the SEC may from
         time to time by rules and regulations prescribe) which the Guarantor or
         the Company is required to file with the SEC  pursuant to section 13 or
         section 15(d) of the Securities  Exchange Act of 1934, as amended;  or,
         if the  Guarantor or the Company is not  required to file  information,
         documents or reports pursuant to either of such sections,  then to file
         with the Trustee and the SEC, in accordance  with rules and regulations
         prescribed  by  the  SEC,  such  of  the   supplementary  and  periodic
         information,  documents and reports  which may be required  pursuant to
         section 13 of the  Securities  Exchange  Act of 1934,  as  amended,  in
         respect of a security  listed and  registered on a national  securities
         exchange as may be prescribed in such rules and regulations;

                  (b) file with the Trustee and the SEC, in accordance  with the
         rules  and   regulations   prescribed  by  the  SEC,  such   additional
         information,  documents  and reports with respect to  compliance by the
         Guarantor  and the Company  with the  conditions  and  covenants of the
         Guarantor  and the Company  provided for in this  Agreement,  as may be
         required  by such  rules  and  regulations,  including,  in the case of
         annual reports, if required by such rules and regulations, certificates
         or opinions of independent public accountants;

                  (c) transmit to all  Certificateholders,  in the manner and to
         the extent  provided in Section 313(c) of the Trust  Indenture Act such
         summaries  of any  information,  documents  and reports  required to be
         filed by the Guarantor and the Company  pursuant to subsections (a) and
         (b) of this  Section  8.04 as may be required by rules and  regulations
         prescribed by the SEC;

                  (d) furnish to the Trustee,  not less often than  annually,  a
         brief  certificate  from the  principal  executive  officer,  principal
         financial  officer  or  principal  accounting  officer as to his or her
         knowledge of the  Guarantor's  and the  Company's  compliance  with all
         conditions and covenants under this Agreement (it being understood that
         for purposes of this paragraph (d), such compliance shall be determined
         without regard to any period of grace or requirement of notice provided
         under this Agreement); and

                  (e) make available to any Certificateholder, upon request, the
         annual  audited and  quarterly  unaudited  financial  statements of the
         Guarantor which are provided to the Trustee.


                                   ARTICLE IX

                             SUPPLEMENTAL AGREEMENTS

                  Section  9.01.  Supplemental  Agreements  Without  Consent  of
Certificateholders. Without the consent of the Certificateholders, the Guarantor
and the Company may and the Trustee (subject to Section 9.03) shall, at any time
and from time to time, enter into one or more agreements supplemental hereto or,
if applicable,  to the Intercreditor Agreement or the Liquidity Facility in form
and substance satisfactory to the Trustee, for any of the following purposes:

                  (1) to evidence the  succession of another  corporation to the
         Company or the  Guarantor and the  assumption by any such  successor of
         the covenants of the Company or the Guarantor herein contained; or

                  (2) to add to the  covenants  of the Company or the  Guarantor
         for the benefit of the Certificateholders, or to surrender any right or
         power in this Agreement conferred upon the Company or the Guarantor; or

                  (3) to correct or supplement any provision in this  Agreement,
         the  Intercreditor  Agreement or the  Liquidity  Facility  which may be
         defective or inconsistent  with any other  provision  herein or to make
         any other provisions with respect to matters or questions arising under
         this Agreement,  the Intercreditor Agreement or the Liquidity Facility,
         provided that any such action shall not adversely  affect the interests
         of the  Certificateholders;  or to cure any  ambiguity  or correct  any
         mistake; or

                  (4) to  modify,  eliminate  or add to the  provisions  of this
         Agreement  to such  extent  as  shall  be  necessary  to  continue  the
         qualification of this Agreement (including any supplemental  agreement)
         under the Trust  Indenture  Act or under any  similar  Federal  statute
         hereafter  enacted,  and to add to this Agreement such other provisions
         as may be expressly  permitted by the Trust  Indenture Act,  excluding,
         however,  the provisions  referred to in Section 316(a)(2) of the Trust
         Indenture Act as in effect at the date as of which this  instrument was
         executed or any corresponding  provision in any similar Federal statute
         hereafter enacted; or

                  (5) to evidence and provide for the  acceptance of appointment
         under this  Agreement by the Trustee of a successor  Trustee and to add
         to or  change  any of the  provisions  of this  Agreement  as  shall be
         necessary to provide for or facilitate the administration of the Trust,
         pursuant to the requirements of Section 7.10;


provided  that no such action  described in this  Section 9.01 shall  materially
adversely affect the interests of the Certificateholders.

                  Section  9.02.   Supplemental   Agreements   with  Consent  of
Certificateholders.   With  the  consent  of  the   Certificateholders   holding
Certificates evidencing Fractional Undivided Interests aggregating not less than
a majority in interest in the Trust, by Act of said Certificateholders delivered
to the Guarantor, the Company and the Trustee, the Guarantor and the Company may
(with the consent of the Owner  Trustees,  if any,  which  consent  shall not be
unreasonably  withheld),  and the Trustee (subject to Section 9.03) shall, enter
into an agreement or  agreements  supplemental  hereto for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement,  the Intercreditor  Agreement,  the Liquidity Facility or any
Financing  Agreement to the extent applicable to such  Certificateholders  or of
modifying in any manner the rights and  obligations  of such  Certificateholders
under this Agreement, the Intercreditor Agreement, the Liquidity Facility or any
Financing  Agreement;  provided,  however,  that no such supplemental  agreement
shall,  without  the  consent  of  the  Certificateholder  of  each  Outstanding
Certificate affected thereby:

                  (1)  reduce in any  manner  the amount of, or delay the timing
         of, any receipt by the Trustee of payments on the Equipment  Notes held
         in the Trust or  distributions  that are  required to be made herein on
         any Certificate,  or change any date of payment of any Certificate,  or
         change the place of payment  where,  or the coin or  currency in which,
         any  Certificate is payable,  or impair the right to institute suit for
         the  enforcement  of any such payment or  distribution  on or after the
         Regular  Distribution  Date or  Special  Distribution  Date  applicable
         thereto; or

                  (2) permit the  disposition  of any Equipment Note included in
         the Trust Property except as permitted by this Agreement,  or otherwise
         deprive such  Certificateholder  of the benefit of the ownership of the
         Equipment Notes in the Trust; or

                  (3)      alter the priority of distributions specified in the Intercreditor Agreement;
         or

                  (4) modify any of the  provisions  of this  Section or Section
         6.05, except to increase any such percentage or to provide that certain
         other provisions of this Agreement cannot be modified or waived without
         the  consent  of the  Certificateholder  of each  Certificate  affected
         thereby.

                  It shall not be  necessary  for any Act of  Certificateholders
under this Section to approve the particular  form of any proposed  supplemental
agreement,  but it shall be  sufficient  if such Act shall approve the substance
thereof.

                  Section 9.03. Documents Affecting Immunity or Indemnity. If in
the opinion of the Trustee any  document  required to be executed by it pursuant
to the terms of Section 9.01 or 9.02 affects any interest, right, duty, immunity
or indemnity in favor of the Trustee  under this  Agreement,  the Trustee may in
its discretion decline to execute such document.

                  Section  9.04.  Execution  of  Supplemental   Agreements.   In
executing,  or accepting  the  additional  trusts  created by, any  supplemental
agreement  permitted by this Article or the modifications  thereby of the trusts
created by this Agreement,  the Trustee shall be entitled to receive,  and shall
be fully  protected  in relying  upon,  an Opinion of Counsel  stating  that the
execution  of such  supplemental  agreement is  authorized  or permitted by this
Agreement.

                  Section  9.05.  Effect of  Supplemental  Agreements.  Upon the
execution of any agreement  supplemental  to this Agreement  under this Article,
this Agreement shall be modified in accordance therewith,  and such supplemental
agreement  shall  form a part of this  Agreement  for all  purposes;  and  every
Certificateholder   theretofore  or  thereafter   authenticated   and  delivered
hereunder shall be bound thereby.

                  Section  9.06.  Conformity  with Trust  Indenture  Act.  Every
supplemental  agreement  executed  pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.

                  Section  9.07.   Reference  in  Certificates  to  Supplemental
Agreements.  Certificates authenticated and delivered after the execution of any
supplemental  agreement  pursuant  to this  Article  may bear a notation in form
approved  by the  Trustee as to any  matter  provided  for in such  supplemental
agreement;  and, in such case,  suitable  notation may be made upon  Outstanding
Certificates after proper presentation and demand.


                                    ARTICLE X

                AMENDMENTS TO INDENTURES AND FINANCING DOCUMENTS

                  Section 10.01.  Amendments  and  Supplements to Indentures and
Other  Financing  Documents.  In the event  that the  Trustee,  as holder of any
Equipment  Note  in  trust  for  the  benefit  of the  Certificateholders  or as
Controlling  Party,   receives  a  request  for  a  consent  to  any  amendment,
modification,  waiver or  supplement  under  any  Indenture  or other  Financing
Document,  the Trustee shall forthwith send a notice of such proposed amendment,
modification,  waiver or supplement to each Certificateholder  registered on the
Register as of the date of such  notice.  The  Trustee  shall  request  from the
Certificateholders  a Direction as to (a) whether or not to take or refrain from
taking  any  action  which a holder  of such  Equipment  Note has the  option to
direct, (b) whether or not to give or execute any waivers, consents, amendments,
modifications  or  supplements as a holder of such Equipment Note and (c) how to
vote any  Equipment  Note if a vote has been  called for with  respect  thereto.
Provided such a request for Certificateholder Direction shall have been made, in
directing  any action or casting any vote or giving any consent as the holder of
any  Equipment  Note,  the  Trustee  shall vote for or give  consent to any such
action with respect to such Equipment Note in the same proportion as that of (i)
the aggregate face amounts of all Certificates actually voted in favor of or for
giving  consent  to such  action by such Act of  Certificateholders  to (ii) the
aggregate  face  amount of all  Outstanding  Certificates.  For  purposes of the
immediately  preceding sentence,  a Certificate shall have been "actually voted"
if the Holder of such  Certificate  has  delivered to the Trustee an  instrument
evidencing  such Holder's  consent to such Direction on or prior to the Business
Day  before the  Trustee  directs  such  action or casts such vote or gives such
consent.  Notwithstanding  the  foregoing,  but subject to Section  6.04 and the
Intercreditor  Agreement,  the Trustee may, in its own discretion and at its own
direction,  consent and notify the relevant  Loan Trustee of such consent to any
amendment,  modification,  waiver or supplement under the relevant  Indenture or
any other  Financing  Document,  if an Event of  Default  hereunder  shall  have
occurred and be continuing,  or if such  amendment,  modification or waiver will
not adversely affect the interests of the Certificateholders.


                                   ARTICLE XI

                              TERMINATION OF TRUST

                  Section  11.01.  Termination  of  the  Trust.  The  respective
obligations and  responsibilities of the Company,  the Guarantor and the Trustee
with respect to the Trust shall  terminate upon the  distribution to all Holders
of  Certificates  and the Trustee of all amounts  required to be  distributed to
them pursuant to this Agreement and the disposition of all property held as part
of the  Trust  Property;  provided,  however,  that in no event  shall the Trust
continue  beyond one hundred ten (110) years  following the date of the earliest
execution of this Trust Agreement.

                  Notice of any termination, specifying the Regular Distribution
Date  (or  Special  Distribution  Date,  as the  case  may be)  upon  which  the
Certificateholders  may surrender their  Certificates to the Trustee for payment
of the final  distribution  and  cancellation,  shall be mailed  promptly,  upon
notice to the Trustee, by the Trustee to Certificateholders not earlier than the
60th day and not later than the 20th day next preceding such final  distribution
specifying (A) the Regular  Distribution Date (or Special  Distribution Date, as
the case may be) upon which the proposed final payment of the Certificates  will
be made upon  presentation and surrender of Certificates at the office or agency
of the Trustee  therein  specified,  (B) the amount of any such  proposed  final
payment,  and (C) that the Record  Date  otherwise  applicable  to such  Regular
Distribution  Date (or  Special  Distribution  Date,  as the case may be) is not
applicable,  payments  being made only upon  presentation  and  surrender of the
Certificates  at the  office or agency of the  Trustee  therein  specified.  The
Trustee shall give such notice to the Registrar at the time such notice is given
to  Certificateholders.  Upon  presentation and surrender of the Certificates in
accordance  with such  notice,  the  Trustee  shall cause to be  distributed  to
Certificateholders such final distribution pursuant to Section 4.02.

                  In the  event  that all of the  Certificateholders  shall  not
surrender their  Certificates for cancellation  within six months after the date
specified in the above-mentioned written notice, the Trustee shall give a second
written  notice  to  the  remaining   Certificateholders   to  surrender   their
Certificates for cancellation  and receive the final  distribution  with respect
thereto.  No  additional  interest  shall accrue on the  Certificates  after the
Regular  Distribution  Date (or Special  Distribution  Date, as the case may be)
specified in the first written  notice.  In the event that any money held by the
Trustee  for the  payment of  distributions  on the  Certificates  shall  remain
unclaimed  for two years (or such lesser time as the Trustee shall be satisfied,
after sixty days'  notice  from the  Company,  is one month prior to the escheat
period  provided under  applicable law) after the final  distribution  date with
respect  thereto,  the Trustee  shall pay to each Loan  Trustee the  appropriate
amount of money  relating  to such Loan  Trustee and shall give  written  notice
thereof to the related Owner Trustees, the Owner Participants and the Company.


                                   ARTICLE XII

                            MISCELLANEOUS PROVISIONS

                  Section 12.01. Limitation on Rights of Certificateholders. The
death or incapacity of any Certificateholder shall not operate to terminate this
Agreement   or  the  Trust,   nor   entitle   such   Certificateholder's   legal
representatives  or  heirs  to claim an  accounting  or to take  any  action  or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise  affect the rights,  obligations,  and  liabilities of the parties
hereto or any of them.

                  Section  12.02.  Certificates  Nonassessable  and Fully  Paid.
Except   as  set   forth  in  the  last   sentence   of  this   Section   12.02,
Certificateholders  shall not be personally liable for obligations of the Trust,
the Fractional  Undivided  Interests  represented by the  Certificates  shall be
nonassessable  for any  losses  or  expenses  of the  Trust  or for  any  reason
whatsoever,  and  Certificates,  upon  authentication  thereof  by  the  Trustee
pursuant  to  Section   3.03,   are  and  shall  be  deemed   fully   paid.   No
Certificateholder  shall have any right (except as expressly provided herein) to
vote or in any manner  otherwise  control the  operation  and  management of the
Trust Property,  the Trust, or the obligations of the parties hereto,  nor shall
anything set forth  herein,  or contained in the terms of the  Certificates,  be
construed  so as to  constitute  the  Certificateholders  from  time  to time as
partners or members of an  association.  Neither the  existence of the Trust nor
any  provision   herein  is  intended  to  or  shall  limit  the  liability  the
Certificateholders  would otherwise incur if the Certificateholders  owned Trust
Property as co-owners, or incurred any obligations of the Trust, directly rather
than through the Trust.

                  Section  12.03.  Notices.  (a) Unless  otherwise  specifically
provided  herein,  all notices  required  under the terms and provisions of this
Agreement  shall be in English and in writing,  and any such notice may be given
by United States mail, courier service or telecopy, and any such notice shall be
effective when delivered or received or, if mailed,  three days after deposit in
the United States mail with proper postage for ordinary mail prepaid,

                  if to the Company or the Guarantor, to:

                           Atlantic Coast Airlines
                           515A Shaw Road
                           Dulles, Virginia  20166
                           Attention:  Chief Financial Officer
                           Facsimile:  (703) 925-6294

                  if to the Trustee, to:

                           The First National Bank of Maryland
                           25 South Charles Street
                           Mail Code 101-591
                           Baltimore, Maryland  21201
                           Attention:  Corporate Trust Department
                           Facsimile:  (410) 244-4626
                           Telephone:  (410) 244-4236

                  (b) The Company,  the  Guarantor or the Trustee,  by notice to
the other,  may  designate  additional  or different  addresses  for  subsequent
notices or communications.

                  (c) Any notice or communication to Certificateholders shall be
mailed by first-class mail to the addresses for Certificateholders  shown on the
Register kept by the Registrar.  Failure so to mail a notice or communication or
any defect in such notice or communication shall not affect its sufficiency with
respect to other Certificateholders.

                  (d) If a notice  or  communication  is  mailed  in the  manner
provided above within the time prescribed,  it is conclusively  presumed to have
been duly given, whether or not the addressee receives it.

                  (e) If the  Company  mails a notice  or  communication  to the
Certificateholders,  it shall mail a copy to the Trustee and to the Paying Agent
at the same time.

                  (f)  Notwithstanding  the  foregoing,  all  communications  or
notices  to the  Trustee  shall be deemed to be given  only when  received  by a
Responsible Officer of the Trustee.

                  (g) The Trustee shall promptly furnish the Company with a copy
of any demand, notice or written communication received by the Trustee hereunder
from any Certificateholder, Owner Trustee or Loan Trustee.

                  Section   12.04.   Governing  Law.  THIS  AGREEMENT  HAS  BEEN
DELIVERED IN THE STATE OF NEW YORK AND THIS AGREEMENT AND THE CERTIFICATES SHALL
BE GOVERNED BY AND  CONSTRUED  IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICTS-OF-LAW PRINCIPLES.

                  Section 12.05.  Severability of Provisions. If any one or more
of the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions,
or terms shall be deemed  severable  from the remaining  covenants,  agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or the Trust, or of the
Certificates or the rights of the Certificateholders thereof.

                  Section 12.06.  Effect of Headings and Table of Contents.  The Article and
Section headings herein and the Table of Contents are for convenience only and shall not affect the
construction hereof.

                  Section  12.07.   Successors   and  Assigns.   All  covenants,
agreements, representations and warranties in this Agreement by the Trustee, the
Guarantor and the Company shall bind and, to the extent permitted hereby,  shall
inure to the benefit of and be  enforceable by their  respective  successors and
assigns, whether so expressed or not.

                  Section  12.08.   Benefits  of  Agreement.   Nothing  in  this
Agreement or in the Certificates,  express or implied, shall give to any Person,
other  than  the  parties  hereto  and  their  successors  hereunder,   and  the
Certificateholders, any benefit or any legal or equitable right, remedy or claim
under this Agreement.

                  Section 12.09.  Legal Holidays.  In any case where any Regular
Distribution Date or Special Distribution Date relating to any Certificate shall
not be a  Business  Day,  then  (notwithstanding  any  other  provision  of this
Agreement)  payment  need not be made on such date,  but may be made on the next
succeeding  Business  Day with  the same  force  and  effect  as if made on such
Regular  Distribution Date or Special  Distribution  Date, and no interest shall
accrue during the intervening period.

                  Section 12.10.  Counterparts.  For the purpose of facilitating
the execution of this  Agreement and for other  purposes,  this Agreement may be
executed   simultaneously   in  any  number  of  counterparts,   each  of  which
counterparts  shall be deemed to be an original,  and all of which  counterparts
shall constitute but one and the same instrument.

                  Section 12.11.  Communication by Certificateholders with Other
Certificateholders.    Certificateholders    may    communicate    with    other
Certificateholders  with  respect to their  rights  under this  Agreement or the
Certificates pursuant to Section 312(b) of the Trust Indenture Act. The Company,
the  Guarantor,  the Trustee and any and all other  persons  benefitted  by this
Agreement  shall have the  protection  afforded  by Section  312(c) of the Trust
Indenture Act.


<PAGE>


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


                                                              ATLANTIC COAST AIRLINES


                                                              By
                                                                  Name:
                                                                       Title:



                                                              ATLANTIC COAST AIRLINES, INC.


                                                              By
                                                                  Name:
                                                                       Title:



                                                              THE FIRST NATIONAL BANK OF MARYLAND, as
                                                              Trustee


                                                              By
                                                                  Name:  Robert D. Brown
                                                                  Title:  Assistant Vice President



<PAGE>


                                       A-1










179212.3/NYL2
179212.3/NYL2




179212.3/NYL2
                                                                                                          EXHIBIT A


<PAGE>


                                       A-7










179212.3/NYL2


                               FORM OF CERTIFICATE



REGISTERED

No. ______________


         [THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
         OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,  ACCORDINGLY,  MAY NOT
         BE OFFERED OR SOLD  WITHIN THE UNITED  STATES OR TO, OR FOR THE ACCOUNT
         OR  BENEFIT  OF,  ANY  PERSONS  EXCEPT  AS SET  FORTH IN THE  FOLLOWING
         SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A)
         IT IS A "QUALIFIED  INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
         THE SECURITIES ACT), (B) IT IS AN INSTITUTIONAL  "ACCREDITED  INVESTOR"
         (AS DEFINED IN RULE  501(a)(1),  (2), (3) OR (7) OF  REGULATION D UNDER
         THE SECURITIES ACT) (AN "INSTITUTIONAL  ACCREDITED INVESTOR") OR (C) IT
         IS NOT A U.S.  PERSON AND IS ACQUIRING THIS  CERTIFICATE IN AN OFFSHORE
         TRANSACTION IN COMPLIANCE  WITH  REGULATION S UNDER THE SECURITIES ACT;
         (2) AGREES  THAT IT WILL NOT  WITHIN  TWO YEARS  AFTER THE LATER OF THE
         ORIGINAL  ISSUANCE OF THIS  CERTIFICATE  OR THE LAST DATE ON WHICH THIS
         CERTIFICATE  WAS  HELD  BY  ATLANTIC  COAST  AIRLINES  ("ACA")  OR  ANY
         AFFILIATE OF ACA, RESELL OR OTHERWISE  TRANSFER THIS CERTIFICATE EXCEPT
         (A) TO ACA OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
         QUALIFIED  INSTITUTIONAL  BUYER IN COMPLIANCE  WITH RULE 144A UNDER THE
         SECURITIES  ACT,  (C)  INSIDE  THE  UNITED  STATES TO AN  INSTITUTIONAL
         ACCREDITED  INVESTOR  ACQUIRING  $100,000 OR MORE  AGGREGATE  PRINCIPAL
         AMOUNT OF SUCH CERTIFICATE  THAT, PRIOR TO SUCH TRANSFER,  FURNISHES TO
         THE TRUSTEE A SIGNED  LETTER  CONTAINING  CERTAIN  REPRESENTATIONS  AND
         AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS CERTIFICATE
         (THE  FORM OF WHICH  LETTER  CAN BE  OBTAINED  FROM THE  TRUSTEE),  (D)
         OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
         RULE 904 UNDER THE  SECURITIES  ACT, (E) PURSUANT TO THE EXEMPTION FROM
         REGISTRATION  PROVIDED  BY  RULE  144  UNDER  THE  SECURITIES  ACT  (IF
         AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
         THE SECURITIES  ACT; AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON
         TO WHOM THIS  CERTIFICATE IS TRANSFERRED A NOTICE  SUBSTANTIALLY TO THE
         EFFECT  OF  THIS  LEGEND.  IN  CONNECTION  WITH  ANY  TRANSFER  OF THIS
         CERTIFICATE  WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL  ISSUANCE
         OF THIS CERTIFICATE OR THE LAST DATE ON WHICH THIS CERTIFICATE WAS HELD
         BY ACA OR ANY  AFFILIATE OF ACA, THE HOLDER MUST CHECK THE  APPROPRIATE
         BOX SET FORTH ON THE  REVERSE  HEREOF  RELATING  TO THE  MANNER OF SUCH
         TRANSFER AND SUBMIT THIS  CERTIFICATE  TO THE TRUSTEE.  IF THE PROPOSED
         TRANSFEREE IS AN INSTITUTIONAL  ACCREDITED  INVESTOR,  THE HOLDER MUST,
         PRIOR  TO  SUCH   TRANSFER,   FURNISH  TO  THE  TRUSTEE  AND  ACA  SUCH
         CERTIFICATIONS,  LEGAL OPINIONS OR OTHER  INFORMATION AS EITHER OF THEM
         MAY  REASONABLY  REQUIRE TO CONFIRM  THAT SUCH  TRANSFER  IS BEING MADE
         PURSUANT TO AN EXEMPTION  FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
         REGISTRATION  REQUIREMENTS OF THE SECURITIES  ACT. AS USED HEREIN,  THE
         TERMS "OFFSHORE  TRANSACTION",  "UNITED STATES" AND "U.S.  PERSON" HAVE
         THE MEANINGS  GIVEN TO THEM BY REGULATION S UNDER THE  SECURITIES  ACT.
         THE PASS THROUGH  TRUST  AGREEMENT  CONTAINS A PROVISION  REQUIRING THE
         TRUSTEE TO REFUSE TO  REGISTER  ANY  TRANSFER  OF THIS  CERTIFICATE  IN
         VIOLATION OF THE FOREGOING RESTRICTIONS.]*

         [UNLESS THIS  CERTIFICATE IS PRESENTED BY AN AUTHORIZED  REPRESENTATIVE
         OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
         TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
         AND  ANY  CERTIFICATE  ISSUED  IN  EXCHANGE  FOR  THIS  CERTIFICATE  IS
         REGISTERED  IN THE  NAME OF  CEDE & CO.  OR IN  SUCH  OTHER  NAME AS IS
         REQUESTED  BY AN  AUTHORIZED  REPRESENTATIVE  OF DTC (AND  ANY  PAYMENT
         HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
         AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
         HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL  INASMUCH
         AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

         TRANSFERS OF THIS GLOBAL  CERTIFICATE  SHALL BE LIMITED TO TRANSFERS IN
         WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
         SUCH  SUCCESSOR'S  NOMINEE  AND  TRANSFERS  OF  PORTIONS OF THIS GLOBAL
         CERTIFICATE  SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE  WITH THE
         RESTRICTIONS  SET FORTH IN SECTIONS  3.05 AND 3.06 OF THE PASS  THROUGH
         TRUST AGREEMENT REFERRED TO HEREIN.]*

         ANY PERSON  ACQUIRING THIS PASS THROUGH  CERTIFICATE  WILL BE DEEMED TO
         REPRESENT  AND WARRANT  THAT (i) NO ASSETS OF AN EMPLOYEE  BENEFIT PLAN
         SUBJECT TO TITLE I OF THE EMPLOYEE  RETIREMENT  INCOME  SECURITY ACT OF
         1974, AS AMENDED ("ERISA") OR AN INDIVIDUAL  RETIREMENT ACCOUNT OR PLAN
         SUBJECT TO 4975 OF THE CODE,  OR ANY TRUST  ESTABLISHED  UNDER ANY SUCH
         PLAN OR  ACCOUNT,  HAVE  BEEN USED TO  ACQUIRE  OR HOLD ANY OF THE PASS
         THROUGH  CERTIFICATES  OR  (ii)  THAT  ONE OR  MORE  ADMINISTRATIVE  OR
         STATUTORY  EXEMPTIONS  FROM  THE  PROHIBITED  TRANSACTION  RULES  UNDER
         SECTION  406 OF  ERISA  AND  SECTION  4975 OF THE CODE  APPLIES  TO ITS
         PURCHASE  AND HOLDING OF THIS PASS  THROUGH  CERTIFICATE  SUCH THAT ITS
         PURCHASE AND HOLDING OF THIS PASS THROUGH  CERTIFICATE  WILL NOT RESULT
         IN A NON-EXEMPT  PROHIBITED  TRANSACTION UNDER SECTION 406 OF ERISA AND
         SECTION 4975 OF THE CODE.


<PAGE>


                              [GLOBAL CERTIFICATE]*

               ATLANTIC COAST AIRLINES 1997-1A PASS THROUGH TRUST

             7.20% Atlantic Coast Airlines Pass Through Certificate
                                 Series 1997-1A

                Final Expected Distribution Date: January 1, 2014

evidencing a  fractional  undivided  interest in a trust,  the property of which
includes certain  equipment notes each secured by an Aircraft leased to or owned
by Atlantic Coast Airlines.


                                    $             Fractional Undivided Interest
                                    representing .        % of the Trust per $1,000 face amount

                  THIS  CERTIFIES THAT , for value  received,  is the registered
owner of a $ ( dollars) Fractional Undivided Interest in Atlantic Coast Airlines
1997-1A  Pass Through  Trust (the  "Trust")  created  pursuant to a Pass Through
Trust  Agreement,  dated as of September 25, 1997 (the  "Agreement"),  among The
First  National Bank of Maryland (the  "Trustee"),  Atlantic Coast  Airlines,  a
corporation incorporated under California law (the "Company") and Atlantic Coast
Airlines, Inc., a corporation incorporated under Delaware law (the "Guarantor"),
a summary of certain of the pertinent provisions of which is set forth below. To
the extent not otherwise defined herein,  the capitalized terms used herein have
the meanings  assigned to them in the Agreement.  This Certificate is one of the
duly authorized  Certificates  designated as "7.20% Atlantic Coast Airlines Pass
Through  Certificates Series 1997-1A" (herein called the  "Certificates").  This
Certificate  is issued  under  and is  subject  to the  terms,  provisions,  and
conditions  of  the  Agreement.   By  virtue  of  its   acceptance   hereof  the
Certificateholder  of this Certificate  assents to and agrees to be bound by the
provisions of the Agreement and the Intercreditor Agreement. The property of the
Trust includes  certain  Equipment  Notes and all rights of the Trust to receive
payments  under the  Intercreditor  Agreement  and the  Liquidity  Facility (the
"Trust Property").  Each issue of the Equipment Notes is secured by, among other
things, a security interest in the Aircraft leased to or owned by the Company.

                  The Certificates  represent  fractional undivided interests in
the Trust and the Trust  Property,  and have no rights,  benefits or interest in
respect of any assets or property other than the Trust Property.

                  Subject to and in  accordance  with the terms of the Agreement
and the Intercreditor Agreement,  from and to the extent of funds then available
to the  Trustee,  there  will be  distributed  on each  January  1 and July 1 (a
"Regular  Distribution  Date"),  commencing on January 1, 1998, to the Person in
whose name this  Certificate  is registered at the close of business on the 15th
day  preceding  the  Regular  Distribution  Date,  an amount in  respect  of the
Scheduled Payments on the Equipment Notes due on such Regular Distribution Date,
the receipt of which has been confirmed by the Trustee,  equal to the product of
the percentage interest in the Trust evidenced by this Certificate and an amount
equal to the sum of such Scheduled  Payments.  Subject to and in accordance with
the terms of the Agreement and the  Intercreditor  Agreement,  in the event that
Special Payments on the Equipment Notes are received by the Trustee,  from funds
then  available to the Trustee,  there shall be  distributed  on the  applicable
Special  Distribution  Date,  to the  Person in whose name this  Certificate  is
registered  at the  close of  business  on the 15th day  preceding  the  Special
Distribution  Date,  an  amount  in  respect  of such  Special  Payments  on the
Equipment Notes,  the receipt of which has been confirmed by the Trustee,  equal
to the  product  of the  percentage  interest  in the  Trust  evidenced  by this
Certificate and an amount equal to the sum of such Special Payments so received.
If a Regular  Distribution  Date or Special  Distribution Date is not a Business
Day,  distribution shall be made on the immediately  following Business Day with
the same  force  and  effect  as if made on such  Regular  Distribution  Date or
Special  Distribution  Date and no interest shall accrue during the  intervening
period.  The Trustee  shall mail notice of each Special  Payment and the Special
Distribution Date therefor to the Certificateholder of this Certificate.

                  Except   as   otherwise   provided   in  the   Agreement   and
notwithstanding  the above,  the final  distribution on this Certificate will be
made after notice mailed by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
of the Trustee specified in such notice.

                  THE  AGREEMENT AND THIS  CERTIFICATE  SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICTS-OF-LAW PRINCIPLES.

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


<PAGE>


                  Unless  the  certificate  of  authentication  hereon  has been
executed by the Trustee,  by manual  signature,  this  Certificate  shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                  IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.

Dated:  _____________,                                        ATLANTIC COAST AIRLINES
                                                                  1997-1A               PASS THROUGH
TRUST

                                                              By:  The First National Bank of Maryland,
                                                                       not in its individual capacity but
                                                                       solely as Trustee


                                                                   By:
                                                                         Name:
                                                                         Title:



<PAGE>


              [FORM OF THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION]


<PAGE>


                                       A-9










179212.3/NYL2


                    This is one of the Certificates referred
                      to in the within-mentioned Agreement.



                                                              The First National Bank of Maryland,
                                                                  not in its individual capacity but
                                                                  solely as Trustee



                                                                   By:
                                                                                  Authorized Officer



<PAGE>


                            [REVERSE OF CERTIFICATE]


                  The  Certificates do not represent a direct  obligation of, or
an obligation  guaranteed  by, or an interest in, the Company,  the Guarantor or
the Trustee or any of their affiliates. The Certificates are limited in right or
payment,  all as more  specifically  set  forth  on the face  hereof  and in the
Agreement.  All payments or distributions made to  Certificateholders  under the
Agreement shall be made only from the Trust Property and only to the extent that
the Trustee shall have sufficient  income or proceeds from the Trust Property to
make  such  payments  in  accordance  with  the  terms  of the  Agreement.  Each
Certificateholder of this Certificate,  by its acceptance hereof, agrees that it
will look  solely to the  income and  proceeds  from the Trust  Property  to the
extent available for distribution to such  Certificateholder  as provided in the
Agreement.  This  Certificate  does not purport to summarize  the  Agreement and
reference  is  made  to  the  Agreement  for  information  with  respect  to the
interests, rights, benefits, obligations, proceeds, and duties evidenced hereby.
A copy of the Agreement  may be examined  during  normal  business  hours at the
principal office of the Trustee, and at such other places, if any, designated by
the Trustee, by any Certificateholder upon request.

                  The  Agreement   permits,   with  certain  exceptions  therein
provided,  the  amendment  thereof  and  the  modification  of  the  rights  and
obligations   of  the  Company  and  the   Guarantor   and  the  rights  of  the
Certificateholders under the Agreement at any time by the Guarantor, the Company
and the Trustee with the consent of the Certificateholders  holding Certificates
evidencing  Fractional Undivided Interests  aggregating not less than a majority
in  interest in the Trust.  Any such  consent by the  Certificateholder  of this
Certificate shall be conclusive and binding on such  Certificateholder  and upon
all future  Certificateholders of this Certificate and of any Certificate issued
upon the transfer  hereof or in exchange hereof or in lieu hereof whether or not
notation  of such  consent is made upon this  Certificate.  The  Agreement  also
permits the amendment  thereof,  in certain limited  circumstances,  without the
consent of the Certificateholders of any of the Certificates.

                  As   provided  in  the   Agreement   and  subject  to  certain
limitations  therein set forth,  the transfer of this Certificate is registrable
in the Register upon surrender of this  Certificate for registration of transfer
at the  offices  or  agencies  maintained  by the  Trustee  in its  capacity  as
Registrar, or by any successor Registrar, in the Borough of Manhattan,  the City
of New York, duly endorsed or accompanied by a written instrument of transfer in
form  satisfactory  to the  Trustee  and  the  Registrar  duly  executed  by the
Certificateholder hereof or such Certificateholder's attorney duly authorized in
writing, and thereupon one or more new Certificates of authorized  denominations
evidencing the same aggregate Fractional Undivided Interest in the Trust will be
issued to the designated transferee or transferees.

                  The Certificates are issuable only as registered  Certificates
without  coupons in  minimum  denominations  of  $100,000  Fractional  Undivided
Interest and integral multiples of $1,000 in excess thereof.  As provided in the
Agreement and subject to certain limitations therein set forth, the Certificates
are exchangeable for new Certificates of authorized denominations evidencing the
same aggregate  Fractional  Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.


<PAGE>


                                       A-5










179212.3/NYL2



<PAGE>


                                      A-11










179212.3/NYL2
                  No service  charge will be made for any such  registration  of
transfer or exchange,  but the Trustee shall require  payment by the Holder of a
sum  sufficient to cover any tax or  governmental  charge  payable in connection
therewith.

                  The Trustee,  the  Registrar,  and any agent of the Trustee or
the Registrar may treat the person in whose name this  Certificate is registered
as the owner hereof for all purposes,  and neither the Trustee,  the  Registrar,
nor any such agent shall be affected by any notice to the contrary.

                  The obligations and responsibilities  created by the Agreement
and  the  Trust  created  thereby  shall  terminate  upon  the  distribution  to
Certificateholders of all amounts required to be distributed to them pursuant to
the  Agreement  and the  disposition  of all property  held as part of the Trust
Property.




<PAGE>


                             FORM OF TRANSFER NOTICE


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

Insert Taxpayer Identification No.



please print or typewrite name and address including zip code of assignee


the within Certificate and all rights thereunder, hereby irrevocably constituting and appointing


attorney  to transfer  said  Certificate  on the books of the Trustee  with full
power of substitution in the premises.


                     [THE FOLLOWING PROVISION TO BE INCLUDED
                               ON ALL CERTIFICATES
                      EXCEPT PERMANENT OFFSHORE GLOBAL AND
                         OFFSHORE PHYSICAL CERTIFICATES]

                  In connection with any transfer of this Certificate  occurring
prior to __________, the undersigned confirms that without utilizing any general
solicitation or general advertising that:

                                   [Check One]

[                 ] (a) this Certificate is being transferred in compliance with
                  the exemption  from  registration  under the Securities Act of
                  1933, as amended, provided by Rule 144A thereunder.

                                       or

[                 ] (b) this  Certificate  is being  transferred  other  than in
                  accordance  with (a) above and documents  are being  furnished
                  that comply with the  conditions of transfer set forth in this
                  Certificate and the Agreement.

If neither of the  foregoing  boxes is checked,  the Trustee or other  Registrar
shall not be obligated to register  this  Certificate  in the name of any Person
other  than the  Holder  hereof  unless  and  until the  conditions  to any such
transfer of  registration  set forth herein and in Section 3.06 of the Agreement
shall have been satisfied.


Date:                                                [Name of Transferor]

                                                           NOTE:  The  signature
                                                           must  correspond with
                                                           the  name as  written
                                                           upon  the face of the
                                                           within-mentioned
                                                           instrument  in  every
                                                           particular,   without
                                                           alteration   or   any
                                                           change whatsoever.

Signature Guarantee:

TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.

                The  undersigned  represents  and warrants that it is purchasing
this  Certificate  for its own  account or an account  with  respect to which it
exercises  sole  investment  discretion  and that it and any such  account  is a
"qualified  institutional  buyer"  within  the  meaning  of Rule 144A  under the
Securities  Act of 1933,  as amended,  and is aware that the sale to it is being
made in  reliance  on Rule  144A  and  acknowledges  that it has  received  such
information  regarding the Company as the undersigned has requested  pursuant to
Rule 144A or has determined not to request such information and that it is aware
that the transferor is relying upon the undersigned's foregoing  representations
in order to claim the exemption from registration provided by Rule 144A.


Dated:
                                                           NOTE:      To be executed by an executive
                                                                      officer.



<PAGE>



                                       A-7










179212.3/NYL2
179212.3/NYL2










179212.3/NYL2
                                                                                                         EXHIBIT B


<PAGE>


                                      A-13










179212.3/NYL2

                 FORM OF CERTIFICATE FOR UNLEGENDED CERTIFICATES


                                                                                        [Date]

[Name and address of Trustee]


Attention:  Corporate Trust Department


                           Re:      Atlantic Coast Airlines 1997-1A Pass Through Trust, ___%
                                    Atlantic Coast Airlines Pass Through Certificates Series
                                    1997-1A (the "Certificates")

Dear Sirs:

                  This letter relates to U.S.  $__________  Fractional Undivided
Interest  of   Certificates   represented   by  a  Certificate   (the  "Legended
Certificate") which bears a legend outlining  restrictions upon transfer of such
Legended  Certificate.  Pursuant  to  Section  3.01 of the  Pass  Through  Trust
Agreement relating to the Certificates dated as of September 25,1997 (the "Trust
Agreement"),  among Atlantic Coast Airlines  ("ACA"),  Atlantic Coast  Airlines,
Inc.  ("ACAI")  and you,  we  hereby  certify  that we are (or we will hold such
securities  on  behalf  of) a  person  outside  the  United  States  to whom the
Certificates  could be transferred  in accordance  with Rule 904 of Regulation S
promulgated under the U.S. Securities Act of 1933, as amended.  Accordingly, you
are hereby  requested  to exchange the legended  certificate  for an  unlegended
certificate  representing an identical principal amount of Certificates,  all in
the manner provided for in the Trust Agreement.

                  You,  ACA and ACAI are  entitled  to rely upon this letter and
are  irrevocably  authorized  to  produce  this  letter or a copy  hereof to any
interested party in any  administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.  Terms used in this certificate have
the meanings set forth in Regulation S.

                                                     Very truly yours,

                                                     [Name of Certificateholder]


                                                                       By:
                                                                                Authorized Signature


<PAGE>



                                       C-1










179212.3/NYL2
179212.3/NYL2










179212.3/NYL2
                                                                                                          EXHIBIT C


<PAGE>


                                       C-2


179212.3/NYL2


                            FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
                                 WITH TRANSFERS PURSUANT TO REGULATION S


                                                                                        [date]



[Name and address of Trustee]


Attention:  Corporate Trust Department


                           Re:      Atlantic Coast Airlines 1997-1A Pass Through Trust
                                    (the "Trust"), 7.20% Atlantic Coast Airlines Pass Through
                Certificates Series 1997-1A (the "Certificates")

Sirs:

                  In connection  with our proposed  sale of $_______  Fractional
Undivided  Interest  of the  Certificates,  we  confirm  that such sale has been
effected  pursuant to and in accordance  with  Regulation S under the Securities
Act of 1933, as amended, and, accordingly, we represent that:

                  (1)      the offer of the Certificates was not made to a person in the United States;

                  (2) either (a) at the time the buy order was  originated,  the
         transferee was outside the United States or we and any person acting on
         our behalf  reasonably  believed  that the  transferee  was outside the
         United States or (b) the transaction was executed in, on or through the
         facilities of a designated  off-shore  securities market and neither we
         nor any person acting on our behalf knows that the transaction has been
         pre-arranged with a buyer in the United States;

                  (3) no directed  selling  efforts have been made in the United
         States in  contravention  of the  requirements  of Rule  903(b) or Rule
         904(b) of Regulation S, as applicable; and

                  (4) the  transaction  is not part of a plan or scheme to evade
         the registration requirements of the Securities Act.

                  In addition,  if the sale is made during a  restricted  period
and the  provisions  of Rule  903(c)(3) or Rule  904(c)(1)  of  Regulation S are
applicable  thereto,  we confirm that such sale has been made in accordance with
the applicable  provisions of Rule 903(c)(3) or Rule 904(c)(1),  as the case may
be.

                  You, Atlantic Coast Airlines and Atlantic Coast Airlines, Inc.
are entitled to rely upon this letter and are irrevocably  authorized to produce
this letter or a copy hereof to any interested  party in any  administrative  or
legal  proceedings  or official  inquiry  with  respect to the  matters  covered
hereby. Terms used in this certificate have the meanings set forth in Regulation
S.

                                                              Very truly yours,

                                                              [Name of Transferor]


                                                              By:_______________________
                                                                        Authorized Signature


<PAGE>



                                       D-1


                                                                                               EXHIBIT D


<PAGE>
                                       D-3












                            FORM OF CERTIFICATE TO BE
                          DELIVERED IN CONNECTION WITH
                    TRANSFERS TO NON-QIB ACCREDITED INVESTORS

                                                                                                        [date]


[Name and address of Trustee]


Attention:  Corporate Trust Department


                  Re:      Atlantic Coast Airlines 1997-1A Pass-Through
                           Trust (the "Trust"), 7.20% Atlantic Coast Airlines
                           Pass Through Certificates Series 1997-1A
                           (the "Certificates")

Dear Sirs:

                  In connection with our proposed  purchase of  $_______________
aggregate principal amount of the Certificates, we confirm that:

                  1.  We  understand   that  any  subsequent   transfer  of  the
         Certificates  is subject to certain  restrictions  and  conditions  set
         forth in the Pass Through  Trust  Agreement  dated as of September  25,
         1997 relating to the Certificates  (the "Pass Through Trust Agreement")
         and the undersigned agrees to be bound by, and not to resell, pledge or
         otherwise  transfer the  Certificates  except in compliance  with, such
         restrictions  and conditions and the Securities Act of 1933, as amended
         (the "Securities Act").

                  2.  We  are  purchasing   Certificates   having  an  aggregate
         principal  amount of not less than  $100,000  and each account (if any)
         for which we are  purchasing  Certificates  is purchasing  Certificates
         having an aggregate principal amount of not less than $100,000.

                  3.  We  understand  that  the   Certificates   have  not  been
         registered  under the Securities Act, and that the Certificates may not
         be offered or sold except as permitted in the  following  sentence.  We
         agree, on our own behalf and on behalf of any accounts for which we are
         acting as hereinafter  stated,  that if we should sell any Certificate,
         we  will  do so  only  (A) in  accordance  with  Rule  144A  under  the
         Securities  Act  to  a  "qualified  institutional  buyer"  (as  defined
         therein),  (B) to an  institutional  "accredited  investor" (as defined
         below)  that,  prior to such  transfer,  furnishes  to you and Atlantic
         Coast Airlines, Inc., a signed letter substantially in the form of this
         letter,  (C) outside the United States in  accordance  with Rule 904 of
         Regulation S under the  Securities  Act, (D) pursuant to the  exemption
         from registration provided by Rule 144 under the Securities Act, or (E)
         pursuant to an effective  registration  statement  under the Securities
         Act, and we further  agree to provide to any person  purchasing  any of
         the Certificates  from us a notice advising such purchaser that resales
         of the Notes are  restricted as stated  herein.  We further  understand
         that  the  Certificates  purchased  by us  will  bear a  legend  to the
         foregoing effect.

                  4.  We  understand   that,  on  any  proposed  resale  of  any
         Certificates,  we will be  required to furnish to you,  Atlantic  Coast
         Airlines  ("ACA") and  Atlantic  Coast  Airlines,  Inc.  ("ACAI")  such
         certifications,  legal  opinions and other  information as you, ACA and
         ACAI may reasonably  require to confirm that the proposed sale complies
         with  the  foregoing  restrictions.  We  further  understand  that  the
         Certificates  purchased  by us  will  bear a  legend  to the  foregoing
         effect.

                  5. We are an institutional  "accredited  investor" (as defined
         in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
         Act) and have such  knowledge and  experience in financial and business
         matters  as to be  capable  of  evaluating  the merits and risks of our
         investment in the Certificates and we and any accounts for which we are
         acting  are  each  able  to  bear  the  economic  risk  of  our  or its
         investment.

                  6. We are acquiring the  Certificates  purchased by us for our
         own  account  or  for  one  or  more  accounts  (each  of  which  is an
         institutional  "accredited  investor")  as to each of which we exercise
         sole investment discretion.

                  You,  ACA and ACAI are  entitled  to rely upon this letter and
are  irrevocably  authorized  to  produce  this  letter or a copy  hereof to any
interested party in any  administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.

                                                              Very truly yours,

                                                              [Name of Transferor]


                                                              By:
                                                                   Authorized Signature


<PAGE>













179212.3/NYL2



<PAGE>













179212.3/NYL2










                                       PASS THROUGH TRUST AGREEMENT

                         Dated as of September 25, 1997


                                      among


                            ATLANTIC COAST AIRLINES,

                          ATLANTIC COAST AIRLINES, INC.


                                       and


                       THE FIRST NATIONAL BANK OF MARYLAND

                                   as Trustee





                            Atlantic Coast Airlines 1997-1A Pass Through Trust

                                 7.20% 1997-1A Pass Through Certificates









<PAGE>



                                                         5



         Section                                                                                               Page









179212.3/NYL2
179212.3/NYL2










179212.3/NYL2
                                TABLE OF CONTENTS


<PAGE>




         Section                                                                                               Page

         ARTICLE I

                                   DEFINITIONS

    1.01.  Definitions..........................................................................................  2
           -----------
    1.02.  Compliance Certificates and Opinions................................................................. 12
           ------------------------------------
    1.03.  Form of Documents Delivered to Trustee............................................................... 13
           --------------------------------------
    1.04.  Acts of Certificateholders........................................................................... 14
           --------------------------

         ARTICLE II

                       ORIGINAL ISSUANCE OF CERTIFICATES;
                         ACQUISITION OF EQUIPMENT NOTES

    2.01.  Issuance of Certificates; Acquisition of Equipment Notes............................................. 15
           --------------------------------------------------------
    2.02.  Acceptance by Trustee................................................................................ 17
           ---------------------
    2.03.  Limitation of Powers................................................................................. 18
           --------------------

         ARTICLE III

                                THE CERTIFICATES

    3.01.  Title, Form, Denomination and Execution of Certificates.............................................. 18
           -------------------------------------------------------
    3.02.  Restrictive Legends.................................................................................. 19
           -------------------
    3.03.  Authentication of Certificates....................................................................... 21
           ------------------------------
    3.04.  Transfer and Exchange................................................................................ 22
           ---------------------
    3.05.  Book-Entry Provisions for U.S. Global Certificate and Offshore Global Certificates................... 22
           ----------------------------------------------------------------------------------
    3.06.  Special Transfer Provisions.......................................................................... 24
           ---------------------------
    3.07.  Mutilated, Destroyed, Lost or Stolen Certificates.................................................... 27
           -------------------------------------------------
    3.08.  Persons Deemed Owners................................................................................ 28
           ---------------------
    3.09.  Cancellation......................................................................................... 28
           ------------
    3.10.  Limitation of Liability for Payments................................................................. 28
           ------------------------------------
    3.11.  Temporary Certificates............................................................................... 28
           ----------------------

         ARTICLE IV

                          DISTRIBUTIONS; STATEMENTS TO
                               CERTIFICATEHOLDERS

    4.01.  Certificate Account and Special Payments Account..................................................... 29
           ------------------------------------------------
    4.02.  Distributions from Certificate Account and Special Payments Account.................................. 29
           -------------------------------------------------------------------
    4.03.  Statements to Certificateholders..................................................................... 31
           --------------------------------
    4.04.  Investment of Special Payment Moneys................................................................. 31
           ------------------------------------

         ARTICLE V

                                   THE COMPANY

    5.01.  Maintenance of Corporate Existence................................................................... 32
           ----------------------------------
    5.02.  Consolidation, Merger, Etc........................................................................... 32
           --------------------------

         ARTICLE VI

                                     DEFAULT

    6.01.  Events of Default.................................................................................... 33
           -----------------
    6.02.  Incidents of Sale of Equipment Notes................................................................. 36
           ------------------------------------
    6.03.  Judicial Proceedings Instituted by Trustee; Trustee May Bring Suit................................... 36
           ------------------------------------------------------------------
    6.04.  Control by Certificateholders........................................................................ 37
           -----------------------------
    6.05.  Waiver of Past Defaults.............................................................................. 37
           -----------------------
    6.06.  Right of Certificateholders to Receive Payments Not to Be Impaired................................... 38
           ------------------------------------------------------------------
    6.07.  Certificateholders May Not Bring Suit Except Under Certain Conditions................................ 38
           ---------------------------------------------------------------------
    6.08.  Remedies Cumulative.................................................................................. 39
           -------------------
    6.09.  Undertaking for Costs................................................................................ 39
           ---------------------

         ARTICLE VII

                                   THE TRUSTEE

    7.01.  Certain Duties and Responsibilities.................................................................. 39
           -----------------------------------
    7.02.  Notice of Defaults................................................................................... 40
           ------------------
    7.03.  Certain Rights of Trustee............................................................................ 40
           -------------------------
    7.04.  Not Responsible for Recitals or Issuance of Certificates............................................. 41
           --------------------------------------------------------
    7.05.  May Hold Certificates................................................................................ 42
           ---------------------
    7.06.  Money Held in Trust.................................................................................. 42
           -------------------
    7.07.  Compensation and Reimbursement....................................................................... 42
           ------------------------------
    7.08.  Corporate Trustee Required; Eligibility.............................................................. 43
           ---------------------------------------
    7.09.  Resignation and Removal; Appointment of Successor.................................................... 44
           -------------------------------------------------
    7.10.  Acceptance of Appointment by Successor............................................................... 45
           --------------------------------------
    7.11.  Merger, Conversion, Consolidation or Succession to Business.......................................... 46
           -----------------------------------------------------------
    7.12.  Maintenance of Agencies.............................................................................. 46
           -----------------------
    7.13.  Money for Certificate Payments to Be Held in Trust................................................... 47
           --------------------------------------------------
    7.14.  Registration of Equipment Notes in Name of Subordination Agent....................................... 47
           --------------------------------------------------------------
    7.15.  Representations and Warranties of Trustee............................................................ 48
           -----------------------------------------
    7.16.  Withholding Taxes; Information Reporting............................................................. 49
           ----------------------------------------
    7.17.  Trustee's Liens...................................................................................... 49
           ---------------
    7.18.  Preferential Collection of Claims.................................................................... 50
           ---------------------------------

         ARTICLE VIII

                CERTIFICATEHOLDERS' LISTS AND REPORTS BY TRUSTEE

    8.01.  The Company to Furnish Trustee with Names and Addresses of Certificateholders........................ 50
           -----------------------------------------------------------------------------
    8.02.  Preservation of Information; Communications to Certificateholders.................................... 50
           -----------------------------------------------------------------
    8.03.  Reports by Trustee................................................................................... 50
           ------------------
    8.04.  Reports by the Guarantor and the Company............................................................. 50
           ----------------------------------------

         ARTICLE IX

                             SUPPLEMENTAL AGREEMENTS

    9.01.  Supplemental Agreements Without Consent of Certificateholders........................................ 52
           -------------------------------------------------------------
    9.02.  Supplemental Agreements with Consent of Certificateholders........................................... 53
           ----------------------------------------------------------
    9.03.  Documents Affecting Immunity or Indemnity............................................................ 54
           -----------------------------------------
    9.04.  Execution of Supplemental Agreements................................................................. 54
           ------------------------------------
    9.05.  Effect of Supplemental Agreements.................................................................... 54
           ---------------------------------
    9.06.  Conformity with Trust Indenture Act.................................................................. 54
           -----------------------------------
    9.07.  Reference in Certificates to Supplemental Agreements................................................. 54
           ----------------------------------------------------

         ARTICLE X

                AMENDMENTS TO INDENTURES AND FINANCING DOCUMENTS

    10.01.  Amendments and Supplements to Indentures and Other Financing Documents.............................. 54
            ----------------------------------------------------------------------

         ARTICLE XI

                              TERMINATION OF TRUST

    11.01.  Termination of the Trust............................................................................ 55
            ------------------------

         ARTICLE XII

                            MISCELLANEOUS PROVISIONS

    12.01.  Limitation on Rights of Certificateholders.......................................................... 56
    12.02.  Certificates Nonassessable and Fully Paid........................................................... 56
    12.03.  Notices 57
    12.04.  Governing Law....................................................................................... 58
            -------------
    12.05.  Severability of Provisions.......................................................................... 58
            --------------------------
    12.06.  Effect of Headings and Table of Contents............................................................ 58
            ----------------------------------------
    12.07.  Successors and Assigns.............................................................................. 58
            ----------------------
    12.08.  Benefits of Agreement............................................................................... 58
            ---------------------
    12.09.  Legal Holidays...................................................................................... 58
            --------------
    12.10.  Counterparts........................................................................................ 59
            ------------
    12.11.  Communication by Certificateholders with Other Certificateholders................................... 59
            -----------------------------------------------------------------

         Schedule 1          -      Indentures
         Schedule 2 -        Financing Agreements


         Exhibit A  -               Form of Certificate
         Exhibit B  -        Form of Certificate for Unlegended Certificates
         Exhibit C  -               Form of Certificate to be Delivered in Connection with
                                    Transfers Pursuant to Regulation S
         Exhibit D  -        Form of Certificate to be Delivered in Connection with
                    Transfers to Non-QIB Accredited Investors


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