Exhibit 10.23
                                                                 
        AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

               _________________________________________

             ATLANTIC COAST AIRLINES HOLDINGS, INC.
                    ATLANTIC COAST AIRLINES

           _________________________________________




           __________________________________________
           __________________________________________


                                 AMENDED AND RESTATED
                   LOAN AND SECURITY AGREEMENT
                                
                                Date: February 8,1999
                                
                                        $50,000,000
                                
                                
                 __________________________________________
                 __________________________________________
                                
                                
                                
                                
                 __________________________________________
                                
                            FLEET CAPITAL CORPORATION,
                            as Lender
                 __________________________________________
                                
                       TABLE OF CONTENTS
                                

                                                             Page

SECTION 1.                                     CREDIT  FACILITIES     -1-
          1.1                                   Revolver Loans.       -1-
          1.2                                      Bridge Loan.       -2-
          1.3      Letters of Credit; Letter of Credit Guaranties     -2-
          1.4                            Use of Proceeds of Loans     -4-

SECTION 2.                          INTEREST,  FEES  AND  CHARGES     -4-
          2.1                                            Interest     -4-
          2.2                                                Fees     -7-
          2.3                    Computation of Interest and Fees     -8-
          2.4                           Reimbursement of Expenses     -8-
          2.5                                        Bank Charges     -9-
          2.6                                         Illegality.     -9-
          2.7                                     Increased Costs     -10-
          2.8                                    Capital Adequacy     -11-
          2.9                                      Funding Losses     -11-
          2.10                                  Maximum Interest.     -12-
          2.11                  Limitation on Borrower's Payments     -13-

SECTION 3.                                  LOAN  ADMINISTRATION.     -13-
          3.1      Manner of Borrowing and Funding Revolver Loans     -13-
          3.2       Special Provisions Governing LIBOR Rate Loans     -14-

SECTION 4.                                               PAYMENTS     -15-
          4.1                       General Payment Provisions.       -15-
          4.2                       Payment of Principal of Loans     -15-
          4.3                                 Payment of Interest     -17-
          4.4                       Payment of Other Obligations.     -17-
          4.5               Mandatory Prepayments of Bridge Loan.     -17-
          4.6                    Optional Prepayments of Loans.       -17-
          4.7  Application of Payments and Collateral Proceeds.       -18-
          4.8                    Marshalling; Payments Set Aside.     -18-
          4.9           All Loans to Constitute One Obligation.       -18-
          4.10                                       Loan Account     -18-
          4.11                              Statements of Account     -19-

SECTION 5.                    TERM  AND  TERMINATION OF AGREEMENT     -19-
          5.1                                Term of Agreement.       -19-
          5.2                            Termination of Agreement     -19-

SECTION 6.                                    SECURITY  INTERESTS     -21-
          6.1                    Security Interest in Collateral.     -21-
          6.2                                   Other Collateral.     -21-
          6.3                Lien Perfection; Further Assurances.     -22-
          6.4                           Lien on Leasehold Estate.     -22-
          6.5                        Exclusion From Collateral.       -22-
          6.6           Release of Lien in Rotable Spare Parts.       -22-

SECTION 7.                             COLLATERAL  ADMINISTRATION     -23-
          7.1                                  General Provisions     -23-
          7.2.                         Administration of Accounts     -24-
          7.3               Administration of Rotable Spare Parts     -26-
          7.4                                  Payment of Charges     -26-

SECTION 8.                       REPRESENTATIONS  AND  WARRANTIES     -26-
          8.1.          General Representations and Warranties.       -26-
          8.2.Continuous Nature of Representations and Warranties.    -32-
          8.3.      Survival of Representations and Warranties.       -32-

SECTION 9.                 COVENANTS  AND  CONTINUING  AGREEMENTS     -32-
          9.1                               Affirmative Covenants     -32-
          9.2                                  Negative Covenants     -36-
          9.3                        Specific Financial Covenants     -38-

SECTION 10.                                CONDITIONS  PRECEDENT   -38-
          10.1Conditions Precedent to Initial Revolver Loan on Closing Date-38-
          10.2Conditions Precedent to All Loans and Letters of Credit and Letter
 of
          Credit Guaranties                                  -41-
          10.3                     Waiver of Conditions Precedent     -42-

SECTION 11.    EVENTS   OF   DEFAULT;  RIGHTS  AND  REMEDIES   ON
               DEFAULT                                       -42-
          11.1                                  Events of Default     -42-
          11.2                    Acceleration of the Obligations     -45-
          11.3                                     Other Remedies     -45-
          11.4                  Remedies Cumulative; No Waiver.       -46-

SECTION 12     MISCELLANEOUS                                 -47-
          12.1                                  Power of Attorney     -47-
          12.2                                          Indemnity     -48-
          12.3                            Survival of Indemnities     -48-
          12.4                          Modification of Agreement     -48-
          12.5                                       Severability     -49-
          12.6                          Successors and Assigns.       -49-
          12.7               Cumulative Effect; Conflict of Terms     -49-
          12.8                          Execution in Counterparts     -49-
          12.9                          Required Lender's Consent     -49-
          12.10                                            Notice     -49-
          12.11                               Credit Inquiries.       -50-
          12.12                                   Time of Essence     -50-
          12.13                                  Entire Agreement     -51-
          12.14                                    Interpretation     -51-
          12.15                   GOVERNING LAW; CONSENT TO FORUM     -51-
          12.16                                           WAIVERS     -51-


                                
                                
                      AMENDED AND RESTATED
                 LOAN  AND  SECURITY  AGREEMENT

     THIS AMENDED AND RESTATED LOAN AND SECURITY  AGREEMENT (this
"Agreement") is made this 8th day of February, 1999, by and among
ATLANTIC  COAST  AIRLINES ("Borrower"), a California  corporation
with  its  chief executive office and principal place of business
at  515-A Shaw Road Sterling, Virginia 20166; and ATLANTIC  COAST
AIRLINES  HOLDINGS,  INC. ("Parent"; Borrower  and  Parent  being
herein  collectively called the "Loan Parties" and, individually,
a  "Loan Party"), a Delaware corporation with its chief executive
office  and  principal  place  of business  at  515-A  Shaw  Road
Sterling, Virginia 20166; and FLEET CAPITAL CORPORATION, a  Rhode
Island corporation with an office at 6100 Fairview Road Suite 200
Charlotte,  North  Carolina 28210 ("Lender").  Capitalized  terms
used  in  this Agreement have the meanings assigned  to  them  in
Appendix A, General Definitions.

                       BACKGROUND STATEMENT

     The Loan Parties and Lender are parties to that certain Loan
and  Security  Agreement, dated October 12, 1995, as  amended  by
First  Amendment thereto, dated June 1, 1997 (the "Existing  Loan
Agreement"),  by  which Lender has agreed  to  extend  credit  to
Borrower.  The Loan Parties have requested that Lender enter into
certain amendments to the Existing Loan Agreement and Lender  has
agreed   to  such  amendments,  subject  to  all  of  the  terms,
conditions and provisions hereof.  Effective on the date on which
all  of  the  conditions  set forth  in  Section  10  hereof  are
satisfied and Lender makes the initial Loan hereunder (such  date
being  herein  called the "Closing Date"), this  Agreement  shall
amend  and  restate in its entirety the Existing Loan  Agreement,
and shall represent the entire agreement between the Loan Parties
and  Lender  with respect to the terms and conditions upon  which
Lender is to extend credit to Borrower from and after the Closing
Date.   Amounts  in respect of interest, fees, and other  amounts
payable  to or for the account of Lender shall be calculated  (i)
in  accordance with the provisions of the Existing Loan Agreement
with  respect  to any period (or a portion of any period)  ending
prior  to  the  Closing  Date, and (ii) in  accordance  with  the
provisions  of this Agreement with respect to any  period  (or  a
portion  of any period) commencing on or after the Closing  Date.
On  the  Closing Date, all Loans outstanding under  the  Existing
Loan  Agreement  shall  be deemed Loans  outstanding  under  this
Agreement.

SECTION 1.CREDIT  FACILITIESSECTION 1.  CREDIT  FACILITIES

     Subject to the terms and conditions of, and in reliance upon
the  representations and warranties made in, this  Agreement  and
the  other  Loan Documents, Lender agrees to make a total  credit
facility   of  $50,000,000  available  upon  Borrower's   request
therefor as follows:

      1.1   Revolver  Loans.   1.1      Revolver  Loans.   Lender
agrees, for so long as no Default or Event of Default exists  and
subject  to the provisions of Section 10 below, to make  Revolver
Loans to Borrower from time to time, as requested by Borrower  in
the  manner  set  forth in Section 3.1 hereof, up  to  a  maximum
principal  amount at any time outstanding equal to the lesser  of
the  Revolver Facility Amount or the Borrowing Base at such time.
The  Revolver  Loans may be repaid and reborrowed  in  accordance
with the provisions of this Agreement.  Each Revolver Loan shall,
at  the option of Borrower, be made or continued as, or converted
into,  a Base Rate Loan, a Daily LIBOR Loan or a LIBOR Loan  upon
the  terms set forth herein. Upon the Closing Date, all  Revolver
Loans  outstanding  under  the  Existing  Loan  Agreement  shall,
without  the  necessity  of any further  action  by  Borrower  or
Lender,   be   deemed  Revolver  Loans  outstanding  under   this
Agreement.

      1.2   Bridge  Loan.   1.2   Bridge  Loan.   Lender  agrees,
provided no Default or Event of Default exists and subject to the
provisions  of  Section 10 below, to make  Bridge  Loan  Advances
under  the  Bridge Loan to Borrower, as requested by Borrower  in
the  manner  set  forth in Section 3.1 hereof, up  to  a  maximum
amount of Bridge Loan Advances made in the amount of $15,000,000,
which  shall be repayable in accordance with the terms of Section
4.2.2  of this Agreement and the Bridge Note and shall be secured
by  all  of  the  Collateral. Borrower shall not be  entitled  to
reborrow  any  amounts repaid with respect to  the  Bridge  Loan.
Each  Bridge  Loan Advance shall, at the option of  Borrower,  be
made  or  continued as, or converted into, a Base  Rate  Loan,  a
Daily  LIBOR  Loan  or  a LIBOR Loan, upon the  terms  set  forth
herein.

      1.3   Letters  of  Credit; Letter of  Credit  Guaranties1.3
Letters of Credit; Letter of Credit Guaranties.

           1.3.1     Issuance of Letters of Credit and Letter  of
Credit Guaranties.    Lender agrees, for so long as no Default or
Event  of Default exists and subject to the provisions of Section
10  below,  to  issue its, or cause to be issued its  Affiliate's
Letters  of Credit and Letter of Credit Guaranties, as  requested
by  Borrower,  provided that the Letter of Credit Amount  at  any
time  shall  not exceed $15,000,000 and no Letter  of  Credit  or
Letter  of  Credit Guaranty may have an expiration date  that  is
after  the  last day of the Original Term or the then  applicable
Renewal  Term. Upon the Closing Date, all Letters of  Credit  and
Letter  of Credit Guaranties outstanding under the Existing  Loan
Agreement,  including, without limitation,  the  Bond  Letter  of
Credit and the Bond Letter of Credit Guaranty, shall, without the
necessity  of any further action by Borrower, Lender or  Lender's
Affiliates,  be  deemed Letter of Credit  and  Letter  of  Credit
Guaranties outstanding under this Agreement.

          1.3.2     Reimbursement Obligations.  All indebtedness,
liabilities  or  obligations whatsoever arising  or  incurred  in
connection  with  any  Letters of  Credit  or  Letter  of  Credit
Guaranties  shall  be  incurred solely  as  an  accommodation  to
Borrower   and   for   Borrower's   account.    Borrower   hereby
unconditionally agrees to reimburse Lender for the  total  amount
of  all sums paid by Lender on Borrower's behalf under the  terms
of any Letter of Credit or Letter of Credit Guaranty, any drawing
or demand under any Letter of Credit or Letter of Credit Guaranty
or  any  additional or further liability which may accrue against
Lender in connection with the same, immediately upon the date  of
payment  by  Lender.  Any such sum paid or liability incurred  by
Lender  in  connection with any Letter of  Credit  or  Letter  of
Credit  Guaranty shall, at Lender's option, if not reimbursed  by
Borrower  on the date paid or incurred by Lender, be treated  for
all  purposes and shall have the same force and effect as if such
amount had been loaned by Lender to Borrower as a Revolver  Loan,
shall be secured by all of the Collateral and shall bear interest
and  be  payable  at  the same rate and in  the  same  manner  as
Revolver Loans that are Base Rate Loans.

           1.3.3      Rights  and Remedies.  In the  event  that,
coincident  with or subsequent to the occurrence of,  and  during
the  continuance  of, a Default or an Event  of  Default,  Lender
becomes  aware  of the possibility of a draw, or  enforcement  of
Lender's  obligations,  under a Letter of  Credit  or  Letter  of
Credit  Guaranty, Lender, at its option, may, but  shall  not  be
required  to,  pay Borrower's obligations to the  beneficiary  or
holder  of  such  Letter of Credit or Letter of  Credit  Guaranty
directly  to such beneficiary or holder, and, in such event,  the
amount  of  any such payment made by Lender shall be treated  for
all  purposes and shall have the same force and effect as if such
amount had been loaned by Lender to Borrower as a Revolver  Loan,
shall be secured by all of the Collateral and shall bear interest
and  be  payable  at  the same rate and in  the  same  manner  as
Revolver  Loans that are Base Rate Loans.  Additionally,  in  the
event  of  Borrower's failure to reimburse Lender for  the  total
amount of all sums paid by Lender on Borrower's behalf under  the
terms  of any Letter of Credit or Letter of Credit Guaranty,  any
drawing or demand under any Letter of Credit or Letter of  Credit
Guaranty or any additional or further liability which may  accrue
against  Lender in connection therewith, Lender, in  addition  to
its  rights  under  the Code and under this Agreement,  shall  be
fully subrogated to the rights and remedies of the issuer of  the
Letter  of Credit under any agreement made with Borrower relating
to  the  issuance of such Letter of Credit, each  such  agreement
being  incorporated  herein by reference,  and  Lender  shall  be
entitled to exercise all such rights and remedies thereunder  and
under law in such regard as fully as if it were the issuer of the
Letter  of  Credit.  If any Letter of Credit  is  drawn  upon  to
discharge any obligation of Borrower to the beneficiary  of  such
Letter  of  Credit, in whole or in part, Lender  shall  be  fully
subrogated to the rights of such beneficiary with respect to  the
obligation  of Borrower to such beneficiary discharged  with  the
proceeds of such Letter of Credit.

             1.3.4        Indemnification.     Borrower    hereby
unconditionally  agrees  to indemnify  Lender   and  hold  Lender
harmless  from any and all losses, claims or liabilities  arising
from  any  transactions  or occurrences relating  to  Letters  of
Credit or Letter of Credit Guaranties issued, established, opened
or accepted for Borrower's account, and any drafts or acceptances
thereunder,  and  all  Letter of Credit Obligations  incurred  in
connection therewith; provided, however, the foregoing shall  not
apply  to  losses, claims or liabilities arising out of  Lender's
gross  negligence  or  willful misconduct. This  indemnity  shall
survive  the  payment in full of all amounts  payable  to  Lender
hereunder and the termination of this Agreement.

            1.3.5      Termination.   In  the  event  that   this
Agreement is terminated for any reason by either party as  herein
provided,  in  addition  to  Lender's  other  rights  under  this
Agreement, unless all outstanding Letters of Credit and Letter of
Credit  Guaranties are terminated or canceled and Lender and  its
Affiliates  released from all liability thereunder, Lender  shall
be entitled to pay and discharge all Letter of Credit Obligations
with  respect to all outstanding Letters of Credit and Letter  of
Credit  Guaranties which are not terminated or canceled,  whether
such Letter of Credit Obligations are absolute or contingent, and
all  sums paid by Lender in connection therewith shall be  deemed
to  have  been  loaned by Lender to Borrower as a Revolver  Loan,
shall be secured by all of the Collateral and shall bear interest
and  be  payable  at  the same rate and in  the  same  manner  as
Revolver Loans that are Base Rate Loans.

      1.4  Use of Proceeds of Loans.  1.4     Use of Proceeds  of
Loans.   The  Borrower shall use the proceeds  of  the  Loans  as
follows:

                     (i) On the Closing Date, the proceeds of the
     initial  Revolver  Loan,  together  with  other  funds  then
     available to Borrower, shall be used solely for the purposes
     of  (i)  refinancing  all  of  the  Indebtedness  for  Money
     Borrowed  owed by Borrower to Fleet under the Existing  Loan
     Agreement, and (ii) to the extent of the balance, paying the
     costs of the transactions contemplated by this Agreement;

                     (ii)  All  Revolver  Loans  made  after  the
     Closing  Date  shall  be used solely for Borrower's  general
     working  capital  needs  in  a manner  consistent  with  the
     provisions of this Agreement and Applicable Law and for  any
     other purposes not inconsistent with this Agreement; and

                     (iii)     The Bridge Loan Advances shall  be
     used  solely  by  Borrower to finance, or to  reimburse  the
     Authority   for  the  financing  of,  the   costs   of   the
     development, construction and related construction  expenses
     of  a  terminal facility located at the Dulles International
     Airport on land owned by the Authority.

SECTION 2.            INTEREST,   FEES   AND   CHARGESSECTION  2.
             INTEREST,  FEES  AND  CHARGES

     2.1  Interest2.1    Interest.

           2.1.1      Rates of Interest - Loans. Subject  to  the
provisions of Section 2.1.6 of this Agreement, Borrower agrees to
pay  interest  on  the  unpaid  principal  amount  of  the  Loans
outstanding from the respective dates such principal amounts  are
advanced until paid (whether at stated maturity, on acceleration,
or  otherwise)  at  a  variable  rate  per  annum  equal  to  the
applicable rate indicated below:

                      (i)  For Loans made or outstanding as  Base
     Rate  Loans, the Base Rate in effect from time to time  plus
     the Applicable Percentage;

                     (ii)  For Loans made or outstanding as Daily
     LIBOR  Loans,  the Daily LIBOR Rate in effect from  time  to
     time plus the Applicable Percentage; or

                     (iii)      For Loans made or outstanding  as
     LIBOR  Rate Loans, the relevant Adjusted LIBOR Rate for  the
     applicable   Interest  Period  selected   by   Borrower   in
     conformity   with   this  Agreement  plus   the   Applicable
     Percentage.

          2.1.2     Computation of Interest. Upon determining the
Adjusted  LIBOR  Rate  for  any  Interest  Period  requested   by
Borrower,  Lender  shall  promptly  notify  Borrower  thereof  by
telephone  or  in  writing, and such Adjusted  LIBOR  Rate  shall
remain in effect throughout the applicable Interest Period.  Such
determination shall, absent manifest error, be final,  conclusive
and  binding on all parties and for all purposes.  The applicable
rates  of  interest with respect to all Base Rate Loans shall  be
increased or decreased, as the case may be, by an amount equal to
any  increase or decrease in the Base Rate, with such adjustments
to be effective as of the opening of business on the day that any
such change in the Base Rate becomes effective.  Interest on each
Loan shall accrue from and including the date of such Loan to but
excluding  the date of any repayment thereof; provided,  however,
that if a Loan is repaid on the same day made, one day's interest
shall be paid on such Loan.

          2.1.3     Conversions and Continuations.

                      (i)    Borrower  may on any  Business  Day,
     subject   to   the   giving   of   a   proper   Notice    of
     Conversion/Continuation, elect to (a) continue  all  or  any
     part  of  the  principal amount of  a  LIBOR  Rate  Loan  by
     selecting a new Interest Period therefor, to commence on the
     last  day of the Interest Period immediately preceding  such
     new  Interest Period, or (b) convert all or any  part  of  a
     Loan  of  one  Type into a Loan of another  Type;  provided,
     however, that no outstanding Loans may be converted into  or
     continued as LIBOR Rate Loans when any Default or  Event  of
     Default has occurred and is continuing, and no conversion of
     any  LIBOR  Rate Loans into Base Rate Loans  or  Daily  Rate
     Loans  shall be made except on the last day of the  Interest
     Period for such LIBOR Rate Loans.

                      (ii)   Whenever Borrower desires to convert
     or to continue Loans under Section 2.1.4(i) hereof, Borrower
     shall  give  Lender  written notice  (or  telephonic  notice
     promptly confirmed in writing), substantially in the form of
     Exhibit     B     attached    hereto    (a    "Notice     of
     Conversion/Continuation"), signed by an  authorized  officer
     of  Borrower,  at  least two (2) Business  Days  before  the
     requested conversion or continuation date.  Each such Notice
     of  Conversion/Continuation shall be irrevocable  and  shall
     specify  the aggregate principal amount of the Loans  to  be
     converted  or  continued, the date  of  such  conversion  or
     continuation  (which shall be a Business Day),  and  whether
     the  Loans  are being converted into or continued  as  LIBOR
     Rate  Loans (and, if so, the duration of the Interest Period
     to  be  applicable thereto), Daily LIBOR Loans or Base  Rate
     Loans.   If, upon the expiration of any Interest  Period  in
     respect of any LIBOR Rate Loans, Borrower shall have  failed
     to  deliver  a  Notice of Conversion/Continuation,  Borrower
     shall  be deemed to have elected to convert such LIBOR  Rate
     Loans to Base Rate Loans.

           2.1.4      Interest Periods.  In connection  with  the
making or continuation of, or conversion into, each Borrowing  of
LIBOR  Rate Loans, Borrower shall select an interest period (each
an  "Interest Period") to be applicable to such LIBOR Rate  Loan,
which interest period shall commence on the date such LIBOR  Rate
Loan  is  made  and shall end 30, 60, 90 or 180 days  thereafter;
provided, however, that:

                      (i)    The  initial Interest Period  for  a
     LIBOR Rate Loan shall commence on the date of such Borrowing
     (including  the  date  of any conversion  from  a  Borrowing
     consisting  of  LIBOR Rate Loans) and each  Interest  Period
     occurring  thereafter  in respect of  such  Borrowing  shall
     commence  on  the date on which the next preceding  Interest
     Period expires;

                    (ii)   If any Interest Period would otherwise
     expire  on a day which is not a Business Day, such  Interest
     Period shall expire on the next succeeding Business Day;

                     (iii)    No  Interest  Period  shall  extend
     beyond the last day of the Original Term or the last day  of
     any Renewal Term; and

                     (iv)     No Interest Period with respect  to
     any  portion  of principal of a Loan shall extend  beyond  a
     date  on  which  Borrower is required to  make  a  scheduled
     payment of such portion of principal.

           2.1.5      Interest Rate Not Ascertainable.  If Lender
shall  determine  (which  determination  shall,  absent  manifest
error, be final, conclusive and binding upon all parties) that on
any date for determining the Adjusted LIBOR Rate for any Interest
Period,  by reason of any changes affecting the London  interbank
market  or  Lender's or Bank's position in such market,  adequate
and  fair  means  do  not exist for ascertaining  the  applicable
interest  rate  on  the basis provided for in the  definition  of
Adjusted  LIBOR Rate, then, and in any such event,  Lender  shall
forthwith  give  notice (by telephone confirmed  in  writing)  to
Borrower  of such determination.  Until Lender notifies  Borrower
that  the  circumstances giving rise to the suspension  described
herein  no  longer exist, the obligation of Lender to make  LIBOR
Rate  Loans  shall  be  suspended, and such affected  Loans  then
outstanding  shall,  at the end of the then  applicable  Interest
Period  or  at such earlier time as may be required by Applicable
Law, bear the same interest as Base Rate Loans.

            2.1.6      Default  Rate  of  Interest.   During  the
existence  of  an Event of Default, the principal amount  of  all
Loans  (and,  to  the  extent permitted by  Applicable  Law,  all
accrued interest that is past due) shall bear interest at a  rate
per  annum  equal  to two percent (2%) above  the  interest  rate
otherwise applicable thereto (the "Default Rate").

           2.1.7      Daily  LIBOR  Loans.   Notwithstanding  any
provision to the contrary in this Agreement, the principal amount
of  Loans  outstanding on any date shall be deemed  to  be  Daily
LIBOR  Loans  and  shall  bear interest  at  the  rate  otherwise
provided herein with respect to Daily LIBOR Loans, if and to  the
extent that (i) Borrower shall request any such Loans to be Daily
LIBOR  Loans in a Notice of Borrowing, (ii) Borrower  shall  have
converted an outstanding Base Rate Loan or LIBOR Rate Loan  to  a
Daily LIBOR Loan pursuant to a Notice of Conversion/Continuation,
or (iii) Borrower shall have failed to continue a LIBOR Rate Loan
upon  the expiration of an applicable Interest Period for  a  new
Interest Period and shall not have elected to convert such  LIBOR
Rate  Loan  to  a Base Rate Loan, in either case  pursuant  to  a
Notice   of   Conversion/Continuation.  Lender  shall   have   no
obligation to notify Borrower on any date of the Daily LIBOR Rate
effective for such date, unless requested to do so in writing  by
Borrower  for  a specific date (but in no event shall  Lender  be
obligated  to advise Borrower of the Daily LIBOR Rate  more  than
once  each  week).   Each determination of the Daily  LIBOR  Rate
shall, absent manifest error, be final, conclusive and binding on
all  parties  and  for  all purposes.   The  applicable  rate  of
interest  for  all Loans bearing interest based  upon  the  Daily
LIBOR  Rate shall be increased or decreased, as the case may  be,
by an amount equal to any increase or decrease in the Daily LIBOR
Rate, with such adjustments to be effective as of the opening  of
business on the day that any such change in the Daily LIBOR  Rate
becomes effective.  The provisions of Section 2.1.5, 2.6 and  2.7
with  respect  to  LIBOR  Rate Loans (but  specifically  omitting
Section   2.9)  shall  apply  to  and  govern  the   making   and
administration of Daily LIBOR Loans.

     2.2  Fees2.2   Fees.

          2.2.1     Closing  Fee.  Borrower shall pay to Lender a
closing  fee  of  $100,000 which shall be fully earned  and  non-
refundable  on  the  Closing Date and shall be paid  concurrently
with and from the proceeds of the initial Loan hereunder.

          2.2.2     Unused Line Fee. Borrower shall pay to Lender
an  unused  line  fee equal to the Applicable Percentage  of  the
amount  by  which seventy-five percent (75%) of the aggregate  of
the Revolver Facility Amount exceeds the Average Monthly Revolver
Loan  and  Letter of Credit Balance.  The unused line  fee  shall
begin  to accrue on the Closing Date and shall be payable monthly
in  arrears  on  the first day of each calendar month  after  the
Closing  Date  and  upon the termination of this  Agreement.  The
Revolver Facility Amount in effect on the Closing Date and on the
first  day  of  each  month  thereafter  shall  be  used  in  the
calculation of the unused line fee payable for the month in which
the Closing Date occurs and each month thereafter.

           2.2.3      Letter  of  Credit  and  Letter  of  Credit
Guaranty  Fees.  Borrower shall pay the following  fees  for  all
Letters  of  Credit  and Letter of Credit  Guaranties  issued  by
Lender and its Affiliates pursuant to Section 1.3.1 hereof:

           (i)       Fees to Bank in the amounts and on the dates
     as set forth in Section 2.03 of the Reimbursement Agreement;
     and

           (ii)      Upon issuance of each other Letter of Credit
     and Letter of Credit Guaranty:

                         (a)   an issuance fee to Lender for
          the  account of both Lender and its Affiliate that
          issues  such other Letter of Credit equal  to  the
          greater   of   (1)  $500  or  (2)  the  Applicable
          Percentage of the undrawn amount of such Letter of
          Credit,  payable in advance upon the  issuance  of
          each  other Letter of Credit and Letter of  Credit
          Guaranty  and  on  each extension  of  the  stated
          termination date thereof for so long as such other
          Letter of Credit and Letter of Credit Guaranty  is
          outstanding; and

                          (b)   the reasonable and customary
          charges  from time to time of the issuer  of  such
          other  Letter  of  Credit  with  respect  to   the
          issuance,   notification,   amendment,   transfer,
          administration,  cancellation and  conversion  of,
          and  drawings under, such other Letter of  Credit,
          all  of  which shall be payable to Lender for  the
          account of such issuer.

     All fees in connection with each Letter of Credit and Letter
of  Credit Guaranty as set forth in Sections 2.2.3(i) and (ii)(a)
hereof  shall  be  deemed fully earned upon the issuance  of  the
Letter  of Credit and Letter of Credit Guaranty and shall not  be
subject  to  rebate  or proration upon the  termination  of  this
Agreement for any reason.

           2.2.4      Agency Fee. In the event that Lender  sells
any   portion  of  the  Loans  and  the  Loan  Documents   to   a
Participating  Lender,  then on the date that  Borrower  receives
notice  of such sale from Lender and on each anniversary of  such
date,  Borrower  shall  pay to Lender an  annual  agency  fee  of
$10,000  per  year, which fee shall not be subject to  rebate  or
proration upon the termination of this Agreement for any reason.

           2.2.5     Interest on Unpaid Fees.  Any amount of fees
payable  by  Borrower to Lender that is not paid when  due  shall
bear  interest, from the date such amount of fees was  due  until
the  date  of  payment  in full, at the rate  applicable  to  the
Revolver Loans that are Base Rate Loans, payable upon demand  and
on the date of payment in full.

           2.2.6      Audit  and Appraisal Fees.  Borrower  shall
reimburse  Lender  for  all reasonable  out-of-pocket  costs  and
expenses from time to time incurred by Lender in connection  with
all  audits and appraisals of Borrower's books and records and of
the  Collateral and such other matters related thereto as  Lender
shall  deem  appropriate; provided, however, for so  long  as  no
Default  or Event of Default exists, the maximum amount  of  such
audit  and  appraisal  expenses  for  which  Borrower  shall   be
obligated  to  pay  Lender for any Loan  Year  shall  not  exceed
$8,000.

      2.3  Computation of Interest and Fees2.3     Computation of
Interest and Fees.  All interest, fees and other charges provided
for  in  this  Agreement shall be calculated daily and  shall  be
computed on the actual number of days elapsed over a year of  360
days.  For the purpose of computing interest hereunder, all items
of  payment received by Lender shall be deemed applied by  Lender
on  account of the Obligations (subject to final payment of  such
items) on the Business Day of  receipt by Lender of such items in
immediately available funds, and Lender shall be deemed  to  have
received  such item of payment on the date specified  in  Section
4.1 hereof.

       2.4    Reimbursement  of  Expenses2.4   Reimbursement   of
Expenses.     If, at any time or times regardless of  whether  or
not  an  Event  of  Default then exists, Lender incurs  legal  or
accounting expenses or any other costs or out-of-pocket  expenses
in  connection with (i) the negotiation and preparation  of  this
Agreement or any of the other Loan Documents, or any amendment of
or  modification  of  this Agreement or any  of  the  other  Loan
Documents,  or any sale or attempted sale of any interest  herein
to  a  Participating Lender; (ii)  reasonable charges for Persons
whom Lender may engage from time to time during the existence  of
an  Event  of  Default to render opinions concerning  the  books,
records  and financial condition of Borrower and its Subsidiaries
and  the  condition  and  value  of  the  Collateral;  (iii)  any
litigation, contest, dispute, suit, proceeding or action (whether
instituted  by Lender, Borrower or any other Person) in  any  way
relating  to the Collateral, this Agreement or any of  the  other
Loan   Documents;  provided,  however,  Borrower  shall  not   be
obligated for the expenses and costs of Lender set forth in  this
Section  2.4(iii)  in  connection with any  litigation,  contest,
dispute,  suit,  proceeding  or action  initiated  by  Lender  or
Borrower  in  which Borrower is ultimately the prevailing  party;
(iv) the enforcement of the rights of Lender against Borrower  or
any  other  Person which may be obligated to Lender by virtue  of
this  Agreement  or  any of the other Loan Documents,  including,
without  limitation,  the Account Debtors;  (v)  any  attempt  by
Lender  to inspect, verify, protect, preserve, restore,  collect,
sell,  liquidate  or  otherwise dispose of or  realize  upon  the
Collateral after the occurrence and during the continuance of  an
Event  of Default;  (vi) the filing and recording of the Deed  of
Trust  and  the  financing  statements and  all  other  documents
required  by  Lender to perfect Lender's Lien in the  Collateral,
and  the  conducting of searches in all filing  offices  at  such
intervals  as  Lender  may reasonably determine  to  confirm  the
priority  of  Lender's  Lien in the Collateral;  and  (vii)   any
documentary  stamp  tax  or any other taxes  incurred  by  Lender
because  of the filing or recording of the Deed of Trust  or  the
financing statements or the other documents required by Lender to
perfect Lender's Lien in the Collateral; then all such legal  and
accounting  expenses, other costs and out of pocket  expenses  of
Lender  shall  be  charged to, and paid by,  Borrower.   Borrower
shall  also reimburse Lender for expenses incurred by  Lender  in
its  administration of the Collateral to the extent  and  in  the
manner  provided  in  Section 7 hereof or  in  any  of  the  Loan
Documents.

      2.5  Bank Charges2.5     Bank Charges.   Borrower shall pay
to  Lender, on demand, any and all fees, costs or expenses  which
Lender pays to a bank or other similar institution arising out of
or in connection with (i) the forwarding to Borrower or any other
Person on behalf of Borrower by Lender of proceeds of Loans  made
by  Lender  to  Borrower  pursuant to this  Agreement,  (ii)  the
depositing for collection, by Lender of any Payment Item received
or  delivered to Lender on account of the Obligations, and  (iii)
the  forwarding  by  Lender to any Participating  Lender  of  any
payments   on  the  Obligations  received  by  Lender.   Borrower
acknowledges and agrees that Lender may charge such  costs,  fees
and  expenses to Borrower based upon Lender's good faith estimate
of such costs, fees and expenses as they are incurred by Lender.

     2.6  Illegality.2.6 Illegality.  Notwithstanding anything to
the  contrary contained elsewhere in this Agreement, if  (i)  any
change  in any law or regulation or in the interpretation thereof
by  any  governmental authority charged with  the  administration
thereof  shall  make it unlawful for Lender or any  Participating
Lender to make or maintain a LIBOR Rate Loan or to give effect to
its  obligations as contemplated hereby with respect to  a  LIBOR
Rate  Loan or (ii) at any time Lender or any Participating Lender
reasonably determines that the making or continuance of any LIBOR
Rate  Loan  has become impracticable as a result of a contingency
occurring  after the date hereof which materially  and  adversely
affects the London interbank market or the position of Lender  in
such market, then, by written notice to Borrower, Lender may  (a)
declare  that  LIBOR Rate Loans will not thereafter  be  made  by
Lender,  whereupon any request by Borrower for a LIBOR Rate  Loan
shall be deemed a request for a Base Rate Loan unless Lender's or
such  Participating  Lender's declaration shall  be  subsequently
withdrawn; and (b) require that all outstanding LIBOR Rate  Loans
made  by  Lender be converted to Base Rate Loans, in which  event
all  such  LIBOR Rate Loans shall be automatically  converted  to
Base  Rate  Loans  as of the date of Borrower's  receipt  of  the
aforesaid notice from Lender.

      2.7  Increased Costs2.7  Increased Costs.  If, by reason of
(i)  after  the  date hereof, the introduction of or  any  change
(including,  without limitation, any change by way of  imposition
or  increase of Statutory Reserves or other reserve requirements)
in  or  in the interpretation of any Applicable Law, or (ii)  the
compliance with any guideline or request from any central bank or
other  governmental  authority  or  quasi-governmental  authority
exercising control over banks or financial institutions generally
(whether or not having the force of law):

                    (a)  Lender shall be subject to any Tax, duty
     or  other charge with respect to any LIBOR Rate Loan or  its
     obligation  to  make LIBOR Rate Loans, or shall  change  the
     basis  of taxation of payment to Lender of the principal  of
     or  interest  on its LIBOR Rate Loans or its  obligation  to
     make LIBOR Rate Loans (except for changes in the rate of Tax
     on the overall net income of Lender); or

                      (b)    any   reserve  (including,   without
     limitation, any imposed by the Board of Governors),  special
     deposits  or similar requirement against assets of, deposits
     with  or  for the account of, or credit extended by,  Lender
     shall be imposed or deemed applicable or any other condition
     affecting  its LIBOR Rate Loans or its obligation   to  make
     LIBOR  Rate  Loans shall be imposed on Lender or the  London
     interbank market;

and as a result thereof there shall be any increase in the actual
cost  to  Lender  of  agreeing  to make  or  making,  funding  or
maintaining  LIBOR  Rate  Loans (except  to  the  extent  already
included  in  the determination of the applicable Adjusted  LIBOR
Rate for LIBOR Rate Loans), or there shall be a reduction in  the
amount received or receivable by Lender, then Borrower shall from
time to time, upon written notice from and demand by Lender,  pay
to  Lender within ten (10) Business Days after the date specified
in  such  notice and demand, an additional amount  sufficient  to
indemnify  Lender against such increased cost.  A certificate  as
to  the  amount of such increased cost, submitted to Borrower  by
Lender,  shall  be conclusive in the absence of  manifest  error.
Such  certificate  will set forth the nature  of  the  occurrence
giving  rise  to  such  compensation, the  additional  amount  of
amounts  to  be  paid  to Lender, and the method  by  which  such
amounts were determined.  In determining such amount, Lender  may
use   any  reasonable  averaging  and  attribution  method.   For
purposes  of this Section 2.7, all references to Lender shall  be
deemed  to  include  any Participating Lender  and  bank  holding
company or bank parent of Lender or any Participating Lender.

     2.8  Capital Adequacy2.8 Capital Adequacy. If after the date
hereof Lender reasonably determines that (i) the adoption of  any
Applicable   Law,   rule,   or   regulation   regarding   capital
requirements  for  banks  or  bank  holding  companies   or   the
subsidiaries  thereof, (ii) any change in the  interpretation  or
administration  of  any  such law,  rule  or  regulation  by  any
governmental  authority,  central  bank,  or  comparable   agency
charged  with  the interpretation or administration  thereof,  or
(iii) compliance by Lender or its respective holding company with
any  request  or  directive of any such  governmental  authority,
central  bank  or  comparable agency regarding  capital  adequacy
(whether  or  not  having the force of law), has  the  effect  of
reducing  the  return on Lender's capital to a level  below  that
which  Lender  could  have  achieved (taking  into  consideration
Lender's  and  its  respective holding  company's  policies  with
respect  to  capital adequacy immediately before  such  adoption,
change or compliance and assuming that Lender's capital was fully
utilized  prior to such adoption, change or compliance)  but  for
such  adoption, change or compliance as a consequence of Lender's
commitment to make the Loans pursuant hereto by any amount deemed
by Lender to be material:

            (a)         Lender  shall  promptly,  after  Lender's
     determination  of  such occurrence, give notice  thereof  to
     Borrower; and

            (b)         Borrower  shall  pay  to  Lender,  as  an
     additional  fee from time to time, within ten (10)  Business
     Days  after Lender's demand therefor, such amount as  Lender
     certifies  to be the amount that will compensate Lender  for
     such reduction.

     A certificate of Lender claiming entitlement to compensation
as  set forth above will be conclusive in the absence of manifest
error.   Such  certificate  will set  forth  the  nature  of  the
occurrence  giving  rise  to  such compensation,  the  additional
amount  or amounts to be paid to Lender, and the method by  which
such amounts were determined.  In determining such amount, Lender
may  use  any  reasonable averaging and attribution  method.  For
purposes  of this Section 2.8, all references to Lender shall  be
deemed  to  include  any Participating Lender  and  bank  holding
company or bank parent of Lender or any Participating Lender.

      2.9   Funding Losses.9    Funding Losses.   Borrower  shall
reimburse  Lender  for  any  loss,  cost,  expense  or  liability
(including,  without limitation, any interest paid by  Lender  to
lenders  of funds borrowed by Lender to make or carry  the  LIBOR
Rate  Loans  to the extent not recovered by Lender in  connection
with  the  re-employment of such funds) sustained or incurred  by
Lender if for any reason (other than a default by Lender): (i)  a
Borrowing  of, or conversion to or continuation of, a LIBOR  Rate
Loan does not occur on the date specified therefor in a Notice of
Borrowing  or Notice of Conversion/Continuation (whether  or  not
withdrawn);   (ii)  any  repayment  (including  any   conversions
pursuant to Section 2.1.3 hereof) of any LIBOR Rate Loans  occurs
on  a  date  that  is  not  the last day of  an  Interest  Period
applicable  thereto; or (iii) Borrower defaults in its obligation
to  repay  LIBOR Rate Loans when required by the  terms  of  this
Agreement.   Borrower  shall  pay such  amount  within  five  (5)
Business Days after presentation by Lender of a statement setting
forth  the  amount  and  Lender's  calculation  thereof  pursuant
hereto,  which  statement shall, except for  manifest  error,  be
final, conclusive and binding.  For purposes of this Section 2.9,
all   references  to  Lender  shall  be  deemed  to  include  any
Participating Lender and bank holding company or bank  parent  of
Lender or any Participating Lender.

      2.10 Maximum Interest..10     Maximum Interest.  Regardless
of  any provision contained in this Agreement or any of the other
Loan  Documents, in no contingency or event whatsoever shall  the
aggregate  of  all amounts that are contracted  for,  charged  or
collected pursuant to the terms of this Agreement or any  of  the
other   Loan  Documents  and  that  are  deemed  interest   under
Applicable  Law  exceed  the highest rate permissible  under  any
Applicable   Law.   No  agreements,  conditions,  provisions   or
stipulations contained in this Agreement or any of the other Loan
Documents,  or the exercise by Lender of the right to  accelerate
the  payment  or  the  maturity of all  or  any  portion  of  the
Obligations,  or the exercise of any option whatsoever  contained
in  any  of the Loan Documents, or the prepayment by Borrower  of
any  of  the  Obligations, or the occurrence of  any  contingency
whatsoever,  shall  entitle Lender to charge or  receive  in  any
event,  interest or any charges, amounts, premiums or fees deemed
interest  by  Applicable  Law (such interest,  charges,  amounts,
premiums  and fees referred to herein collectively as "Interest")
in  excess of the Maximum Rate and in no event shall Borrower  be
obligated  to pay Interest exceeding such Maximum Rate,  and  all
agreements, conditions or stipulations, if any, which may in  any
event  or  contingency whatsoever operate to  bind,  obligate  or
compel Borrower to pay Interest exceeding the Maximum Rate  shall
be  without binding force or effect, at law or in equity, to  the
extent only of the excess of Interest over such Maximum Rate.  If
any Interest is charged or received in excess of the Maximum Rate
("Excess"),  Borrower acknowledges and stipulates that  any  such
charge  or  receipt shall be the result of an accident  and  bona
fide  error,  and such Excess, to the extent received,  shall  be
applied  first  to  reduce  the  principal  Obligations  and  the
balance, if any, returned to Borrower, it being the intent of the
parties  hereto not to enter into a usurious or otherwise illegal
relationship.  The right to accelerate the maturity of any of the
Obligations does not include the right to accelerate any interest
that  has not otherwise accrued on the date of such acceleration,
and  Lender  does not intend to collect any unearned interest  in
the  event  of any such acceleration.  Borrower recognizes  that,
with  fluctuations in the rates of interest set forth in  Section
2.1.1  of  this  Agreement,  and in the  Maximum  Rate,  such  an
unintentional result could inadvertently occur.  All monies  paid
to  Lender  hereunder or under any of the other  Loan  Documents,
whether  at  maturity or by prepayment, shall be subject  to  any
rebate  of  unearned  interest as and to the extent  required  by
Applicable  Law.   By  the execution of this Agreement,  Borrower
covenants  that  (i)  the credit or return of  any  Excess  shall
constitute  the acceptance by Borrower of such Excess,  and  (ii)
Borrower  shall  not seek or pursue any other  remedy,  legal  or
equitable,  against  Lender, based  in  whole  or  in  part  upon
contracting for, charging or receiving any Interest in excess  of
the  Maximum Rate.  For the purpose of determining whether or not
any  Excess  has  been  contracted for, charged  or  received  by
Lender,  all  interest  at any time contracted  for,  charged  or
received  from  Borrower  in connection  with  any  of  the  Loan
Documents  shall, to the extent permitted by Applicable  Law,  be
amortized,   prorated,  allocated  and  spread  in  equal   parts
throughout the full term of the Obligations.  Borrower and Lender
shall, to the maximum extent permitted under Applicable Law,  (i)
characterize  any  non-principal payment as an  expense,  fee  or
premium  rather  than  as  Interest and  (ii)  exclude  voluntary
prepayments  and  the effects thereof.  The  provisions  of  this
subsection  shall be deemed to be incorporated  into  every  Loan
Document  (whether  or  not  any provision  of  this  Section  is
referred to therein).  All such Loan Documents and communications
relating  to  any Interest owed by Borrower and all  figures  set
forth therein shall, for the sole purpose of computing the extent
of  Obligations, be automatically recomputed by Borrower, and  by
any court considering the same, to give effect to the adjustments
or credits required by this Section.

      2.11 Limitation on Borrower's Payments.11    Limitation  on
Borrower's Payments.  Notwithstanding anything contained in  this
Agreement to the contrary, Borrower shall not have any obligation
to  pay  to Lender amounts owing under Sections 2.7 or 2.8 hereof
if  such  amounts relate to any period which is more than  ninety
(90)  days  prior to the date upon which the request for  payment
therefor is delivered to Borrower.

SECTION 3.           LOAN   ADMINISTRATION.SECTION 3.        LOAN
             ADMINISTRATION.

      3.1   Manner  of  Borrowing and Funding  Revolver  Loans3.1
Manner  of  Borrowing  and  Funding Revolver  Loans.   Borrowings
pursuant  to  Section  1.1 hereof shall be  made  and  funded  as
follows:

          3.1.1.    Notice of Borrowing.

                     (i)   Whenever Borrower desires  to  make  a
     Borrowing under Section 1.1 or 1.2 of this Agreement  (other
     than a Borrowing resulting from a conversion or continuation
     pursuant to Section 2.1.4), Borrower shall give Lender prior
     written  notice (or telephonic notice promptly confirmed  in
     writing)   of   such  Borrowing  request   (a   "Notice   of
     Borrowing"),  which  shall  be in  the  form  of  Exhibit  C
     attached  hereto  and  signed by an  authorized  officer  of
     Borrower.   Such  Notice  of Borrowing  shall  be  given  by
     Borrower no later than 11:00 a.m., Charlotte, North Carolina
     time, at the office of Lender designated by Lender from time
     to  time  (a)  on the Business Day of the requested  funding
     date  of such Borrowing, in the case of all Base Rate  Loans
     and  Daily  LIBOR Loans, and (b) at least two  (2)  Business
     Days  prior to the requested funding date of such  Borrowing
     in  the  case  of LIBOR Rate Loans.  Notices received  after
     11:00 a.m., Charlotte, North Carolina time,  shall be deemed
     received  on the next Business Day.  All Loans made  on  the
     Closing  Date  shall  be  made  as  Daily  LIBOR  Loans  and
     thereafter  may  be made or continued as or  converted  into
     Base  Rate  Loans,  Daily LIBOR Loans or LIBOR  Rate  Loans.
     Each  Notice  of  Borrowing (or telephonic  notice  thereof)
     shall  be  irrevocable and shall specify (a)  the  principal
     amount of the Borrowing, which, in the case of a Bridge Loan
     Advance,  shall be in a minimum amount of at least $500,000,
     (b)  the date of Borrowing (which shall be a Business  Day),
     (c)  whether the Borrowing is to consist of Base Rate Loans,
     Daily  LIBOR  Loans or LIBOR Rate Loans, and the  amount  of
     each such Loan, and (d) in the case of LIBOR Rate Loans, the
     duration  of  the Interest Period to be applicable  thereto.
     Borrower may not request any LIBOR Rate Loans or Daily LIBOR
     Loans if a Default or Event of Default exists.

                     (ii) Unless payment is otherwise timely made
     by  Borrower, the becoming due of any amount required to  be
     paid   under  this  Agreement  or  any  of  the  other  Loan
     Documents, or under the Reimbursement Agreement, whether  as
     principal,  accrued  interest,  fees,  expenses   or   other
     charges, including, without limitation, payments required to
     be  made  pursuant  to  Section 1.3.2  hereof  and  payments
     required to be made to Bank pursuant to Section 2.03 of  the
     Reimbursement Agreement, shall be deemed irrevocably to be a
     request by Borrower for a Revolver Loan on the due date  of,
     and  in an aggregate amount required to pay, such principal,
     accrued interest, fees, expenses  or other charges, and  the
     proceeds  of  each such Revolver Loan may  be  disbursed  by
     Lender  by way of direct payment of the relevant Obligation.
     Within a reasonable time after the payment by Lender of  any
     expenses  or  other charges that are not  of  a  routine  or
     administrative  nature, Lender shall  give  Borrower  notice
     thereof  and  send to Borrower (if available to Lender)  any
     invoice  or other supporting documentation for such  fee  or
     other charge.

                     (iii)      As  an accommodation to Borrower,
     Lender  may  permit telephonic requests for  Borrowings  and
     electronic   transmittal  of  instructions,  authorizations,
     agreements  or  reports  to Lender  by  Borrower;  provided,
     however,  that  Borrower shall confirm each such  telephonic
     request  for a Borrowing of LIBOR Loans by delivery  of  the
     required   Notice  of  Borrowing  to  Lender  by   facsimile
     transmission promptly, but in no event later than 5:00 p.m.,
     Charlotte,  North  Carolina time, on the same  day.   Unless
     Borrower  specifically  directs Lender  in  writing  not  to
     accept  or  act upon telephonic or electronic communications
     from  Borrower, Lender shall have no liability  to  Borrower
     for any loss or damage suffered by such Borrower as a result
     of  Lender's  honoring  of any requests,  execution  of  any
     instructions,  authorizations or agreements or  reliance  on
     any   reports   communicated   to   it   telephonically   or
     electronically and purporting to have been sent to Lender by
     Borrower and Lender shall have no duty to verify the  origin
     of  any  such communication or the identity or authority  of
     the Person sending it.

           3.1.2.    Disbursement Authorization.  Borrower hereby
irrevocably  authorizes Lender to disburse the proceeds  of  each
Revolver  Loan requested, or deemed to be requested  pursuant  to
Section  3.1.1,  as follows:  (i) the proceeds of  each  Revolver
Loan  requested  under  Section 3.1.1(i) shall  be  disbursed  by
Lender  in  lawful  money  of the United  States  of  America  in
immediately available funds in accordance with the terms  of  the
written  disbursement letter from Borrower in  the  case  of  the
initial Borrowing, and, in the case of each subsequent Borrowing,
by  wire  transfer to such bank account as may be agreed upon  by
Borrower and Lender from time to time or elsewhere if pursuant to
a  written direction from Borrower; and (ii) the proceeds of each
Revolver   Loan  requested  under  Section  3.1.1(ii)  shall   be
disbursed  by  Lender by way of direct payment  of  the  relevant
interest or other Obligation.

      3.2   Special  Provisions  Governing  LIBOR  Rate  Loans3.2
Special Provisions Governing LIBOR Rate Loans.

           3.2.1     Number of LIBOR Rate Loans.  In no event may
the  number  of  LIBOR Rate Loans outstanding in respect  of  the
Loans at any time exceed six (6).

          3.2.2     Minimum Amount of each LIBOR Rate Loan.  Each
election  of a LIBOR Rate Loan pursuant to Section 3.1.1(i),  and
each  continuation  of  or conversion  into  a  LIBOR  Rate  Loan
pursuant to Section 2.1.4 hereof, shall be in a minimum amount of
$500,000  and integral multiples of $100,000  in excess  of  that
amount.

          3.2.3     LIBOR Lending Office.  Lender's initial LIBOR
Lending  Office is set forth opposite its name on  the  signature
pages  hereof.  Lender shall have the right at any time and  from
time  to  time to designate a different office of itself  or  any
Affiliate  as Lender's LIBOR Lending Office, and to transfer  any
outstanding  LIBOR Loans to such LIBOR Lending Office.   No  such
designation or transfer shall result in any liability on the part
of Borrower for increased costs or expenses resulting solely from
such  designation or transfer (except any such transfer  that  is
made  by  Lender  pursuant to Sections  2.6  or  2.7  hereof,  or
otherwise  for  the  purpose of complying with  Applicable  Law).
Increased   costs  for  expenses  resulting  from  a  change   in
Applicable  Law  occurring subsequent to any such designation  or
transfer  shall  be  deemed  not  to  result  solely  from   such
designation or transfer.

SECTION 4.          PAYMENTSSECTION 4.          PAYMENTS

      4.1   General  Payment Provisions.  4.1    General  Payment
Provisions.   All  payments (including all  prepayments)  of  the
principal  of, and interest on, the Loans and all  of  the  other
Obligations that are payable to Lender shall be made to Lender in
Dollars without any offset or counterclaim and free and clear  of
(and  without  deduction for) any present or future  Taxes.   All
payments received by Lender in immediately available funds  on  a
Business Day for which Borrower shall have given Lender notice of
its intent to make such payment no later than 12:00 o'clock noon,
Charlotte, North Carolina, on such Business Day, shall be  deemed
to  be  made  on  the  Business Day of receipt.   If  payment  is
received  by  Lender after such time, or if notice of  Borrower's
intent  to  make  such payment is not given by  Borrower  or,  if
given,  is given later than 12:00 o'clock noon, Charlotte,  North
Carolina  time, then such payment shall be deemed  to  have  been
made  on the next succeeding Business Day.  If any payment  under
this Agreement or the other Loan Documents shall be specified  to
be  made upon a day which is not a Business Day, it shall be made
on  the  next  succeeding day which is a Business Day,  and  such
extension  of  time shall in such case be included  in  computing
interest and fees, if any, in connection with such payment.

     4.2  Payment of Principal of Loans4.2   Payment of Principal
of Loans.

           4.2.1     Payment of Principal of Revolver Loans.  The
outstanding principal amounts of the Revolver Loans shall be  due
and payable as follows:

                     (i)   Any  portion  of  the  Revolver  Loans
     consisting  of  the principal amount of Base Rate  Loans  or
     Daily LIBOR Loans shall be paid by Borrower to Lender unless
     converted  to  a  LIBOR  Rate Loan in accordance  with  this
     Agreement,  immediately upon the earlier of (a) the  receipt
     by  Lender  or  Borrower  of any  proceeds  of  any  of  the
     Collateral,  to  the  extent of such proceeds,  or  (b)  the
     termination of this Agreement by Borrower or Lender pursuant
     to Section 5 hereof.

                     (ii)  Any  portion  of  the  Revolver  Loans
     consisting of the principal amount of LIBOR Rate Loans shall
     be  paid by Borrower to Lender, unless converted to  a  Base
     Rate  Loan or Daily LIBOR Loan or continued as a LIBOR  Rate
     Loan  in  accordance with the terms of this Agreement,  upon
     the  earlier  of  (a)  the last day of the  Interest  Period
     applicable thereto or (b)  the termination of this Agreement
     by  Borrower or Lender pursuant to Section 5 hereof.  In  no
     event  shall  Borrower be authorized to pay any  LIBOR  Rate
     Loan prior to the last day of the Interest Period applicable
     thereto  unless  otherwise agreed in writing  by  Lender  or
     Borrower  is  otherwise expressly authorized or required  by
     any  other provision of this Agreement to pay any LIBOR Rate
     Loan  outstanding on a date other than the last day  of  the
     Interest  Period  applicable thereto, and Borrower  pays  to
     Lender concurrently with any prepayment of a LIBOR Rate Loan
     the  amount due Lender under Section 2.9 hereof as a  result
     of such prepayment.

                     (iii)      Notwithstanding anything  to  the
     contrary  contained  elsewhere  in  this  Agreement,  if  an
     Overadvance  Condition shall exist, Borrower shall,  without
     the  necessity  of a demand, repay the outstanding  Revolver
     Loans  that are Base Rate Loans or Daily LIBOR Loans  in  an
     amount  sufficient to reduce the aggregate unpaid  principal
     amount of all such Revolver Loans by an amount equal to such
     excess;  and,  if such payment of Base Rate Loans  or  Daily
     LIBOR  Loans  is  not  sufficient to  cure  the  Overadvance
     Condition,  then  Borrower  shall  immediately  either   (a)
     deposit  with  Lender, for application  to  any  outstanding
     Revolver Loans bearing interest as LIBOR Rate Loans  as  the
     same  become  due and payable at the end of  the  applicable
     Interest Periods, cash in an amount sufficient to cure  such
     Overadvance  Condition  to be held by  Lender  in  the  Cash
     Collateral Account, pending disbursement of same to  Lender,
     but  subject to Lender's Lien therein and rights  of  offset
     with respect thereto, or (b) pay the Revolver Loans that are
     LIBOR  Rate  Loans  to  the extent necessary  to  cure  such
     Overadvance  Condition and also pay to Lender  any  and  all
     amounts required by Section 2.9 hereof to be paid by  reason
     of the prepayment of a LIBOR Rate Loan prior to the last day
     of the Interest Period applicable thereto.

            4.2.2      Payment  of  Principal  of  Bridge   Loan.
Borrower shall repay the principal balance of the Bridge Loan  in
full on or before the Bridge Loan Maturity Date.

           4.2.3      Cash  Collateral Account.  If at  any  time
Availability, when added to the amount of funds then  on  deposit
in  the  Cash Collateral Account, is less than the amount of  the
Availability  Reserve,  then Borrower shall  immediately  pay  to
Lender, on Lender's demand, an amount equal to the difference  to
be  held by Lender in the Cash Collateral Account as security for
the  Obligations.  If on any date the amount of funds on  deposit
in  the  Cash  Collateral Account, when added to Availability  at
such  time,  is more than the Availability Reserve,  then  Lender
shall  release to Borrower on such date that portion of the funds
then  on  deposit in the Cash Collateral Account  equal  to  such
excess,  if, and only to the extent that, immediately before  and
after giving effect to such release, no Default, Event of Default
or Overadvance Condition has occurred and continues to exist.

     4.3  Payment of Interest4.3   Payment of Interest.  Interest
accrued on all of the Loans shall be paid upon the earlier of (i)
the  first  calendar  day  of  each  month  for  the  immediately
preceding  month, computed through the last calendar day  of  the
preceding  month,  or (ii) the termination of this  Agreement  by
Borrower or Lender pursuant to Section 5 hereof.

      4.4   Payment of Other Obligations.4.4   Payment  of  Other
Obligations.   Borrower  shall pay all costs,  fees  and  charges
pursuant  to  this Agreement as and when provided in Section  2.2
hereof, to Lender, or to any other Person designated by Lender in
writing.  The balance of the Obligations requiring the payment of
money shall be payable by Borrower to Lender as and when provided
in   this   Agreement,  the  Other  Agreements  or  the  Security
Documents,  or, if no date of payment is otherwise  specified  in
the Loan Documents, on demand.

      4.5  Mandatory Prepayments of Bridge Loan.4.5     Mandatory
Prepayments of Bridge Loan.  In addition to the payment  in  full
of  the Bridge Loan on the Bridge Loan Maturity Loan as set forth
in  Section  4.2.2 hereof and in the Bridge Note, Borrower  shall
make  mandatory  payments of principal  on  the  Bridge  Loan  as
follows:

                     (i)   Upon the termination of this Agreement
     for  any  reason,  Borrower shall prepay the Bridge Loan  in
     full; and

                     (ii) If, at any time and for any reason, the
     amount of the Escrow Funds pledged to Lender as security for
     the  Bridge  Loan  Obligations is less  than  the  principal
     balance of the Bridge Loan, Borrower shall pay to Lender the
     amount of such deficiency.

      Each  mandatory  prepayment  applied  to  the  Bridge  Loan
pursuant to this Section 4.5 shall be applied first to Base  Rate
Loans  and  Daily LIBOR Loans to the full extent  thereof  before
application to any LIBOR Rate Loans; provided, however, that,  so
long  as  no  Default  or Event of Default has  occurred  and  is
continuing,  in lieu of application of such prepayment  to  LIBOR
Rate  Loans  prior  to the expiration of the respective  Interest
Periods with respect thereto and the resulting requirement to pay
the charges provided for in Section 2.9 hereof, Borrower may,  at
its  option,  deposit  with  Lender  cash  funds  equal  to  such
prepayment  to  be held by Lender in the Cash Collateral  Account
for disbursement to Lender and application to the Bridge Loan  on
the  sooner  to  occur of the expiration of the  Interest  Period
applicable  thereto  or  the termination  of  this  Agreement  by
Borrower or Lender pursuant to Section 5 hereof.

     4.6  Optional Prepayments of Loans.  .6 Optional Prepayments
of  Loans.   Borrower  may, at its option, prepay  the  principal
owing  on any Loan at any time in whole and from time to time  in
part,   but  (i)  any  such  prepayment  in  connection  with   a
termination of this Agreement shall be subject to the payment  of
any  applicable  termination charge  pursuant  to  Section  5.2.4
hereof,  (ii) any partial prepayment of the Bridge Loan shall  be
in  amounts  aggregating  $500,000 or  any  greater  multiple  of
$100,000,  and (iii) if such prepayment is made of a  LIBOR  Rate
Loan  and  on  a  date other than the last day of any  applicable
Interest  Period, by paying any charges required by  Section  2.9
hereof.  Borrower shall give written notice (or telephonic notice
confirmed  in  writing) to Lender of any intended prepayment  not
less  than one (1) Business Day prior to any prepayment of  Daily
LIBOR Loans or Base Rate Loans and not less than two (2) Business
Days  prior to any prepayment of LIBOR Rate Loans.  Such  notice,
once given, shall be irrevocable.

      4.7. Application of Payments and Collateral Proceeds.   .7.
Application of Payments and Collateral Proceeds.  Except  to  the
extent  that  the  manner of application to  the  Obligations  of
payments or proceeds of Collateral is expressly governed by other
provisions  of  this Agreement, Borrower irrevocably  waives  the
right  to  direct  the application of any and  all  payments  and
Collateral  proceeds at any time or times hereafter  received  by
Lender  from  or on behalf of Borrower, and Borrower does  hereby
irrevocably agree that Lender shall have the continuing exclusive
right  to  apply  and  reapply any  and  all  such  payments  and
Collateral  proceeds received at any time or times  hereafter  by
Lender  or  its agent against the Obligations, in such manner  as
Lender  may deem advisable, notwithstanding any entry  by  Lender
upon  any of its books and records, provided such application  of
payments and collections is made in a manner consistent with this
Agreement and the other Loan Documents.  If as the result of  the
clearance and collections of all Accounts of Borrower through the
ACH  and  the direct payment of all funds credited to  Borrower's
Clearing   Bank  Account  to  Lender  for  application   to   the
Obligations, all as provided in Sections 7.2.5 and 7.2.6  hereof,
a  credit balance exists in the Loan Account, such credit balance
shall  not  accrue interest in favor of Borrower,  but  shall  be
available  to  Borrower at any time or times for so  long  as  no
Default or Event of Default exists.

       4.8    Marshalling;  Payments  Set  Aside..8  Marshalling;
Payments  Set  Aside.   Lender shall be under  no  obligation  to
marshall  any assets in favor of Borrower or any other Person  or
against or in payment of any or all of the Obligations.   To  the
extent  that  Borrower makes a payment or payments to  Lender  or
Lender  receives payment from the proceeds of any  Collateral  or
exercises  its right of setoff, and such payment or  payments  or
the  proceeds of such setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside
or  required  to be repaid to a trustee, receiver  or  any  other
party,  then,  to the extent of such recovery, the obligation  or
part  thereof originally intended to be satisfied, and all Liens,
rights  and remedies therefor, shall be revived and continued  in
full  force  and effect as if such payment had not been  made  or
such  enforcement or setoff had not occurred.  The provisions  of
the  immediately  preceding sentence of this  Section  4.8  shall
survive any termination of this Agreement and payment in full  of
the Obligations.

      4.9  All Loans to Constitute One Obligation.  .9  All Loans
to  Constitute  One Obligation.  The Loans shall  constitute  one
general  Obligation of Borrower and shall be secured by  Lender's
Lien in all of the Collateral.

      4.10  Loan Account.10     Loan Account.  Lender shall enter
all Revolver Loans as debits to Borrower's Loan Account and shall
also record in the Loan Account all payments made by Borrower  on
the  Revolver  Loans  and all proceeds of  Collateral  which  are
finally  paid to Lender, and may record therein other debits  and
credits,   including  interest  and  all  charges  and  expenses,
properly  chargeable  to Borrower under this  Agreement  and  the
other Loan Documents.

     4.11 Statements of Account.11 Statements of Account.  Lender
will  account  to  Borrower monthly with a  statement  of  Loans,
charges  and payments made pursuant to this Agreement,  and  such
account  rendered  by Lender shall be deemed final,  binding  and
conclusive upon Borrower unless Lender is notified by Borrower in
writing to the contrary within thirty (30) days after the date on
which  such  accounting is deemed to have been sent  pursuant  to
Section  12.10  hereof.   Such notice shall  only  be  deemed  an
objection to those items specifically objected to therein.

SECTION 5.          TERM  AND  TERMINATION OF AGREEMENTSECTION 5.
             TERM  AND  TERMINATION OF AGREEMENT

     5.1  Term of Agreement.  5.1  Term of Agreement.  Subject to
Lender's  right  to  cease making Loans to  Borrower  during  the
existence  of  any  Default or Event of Default,  this  Agreement
shall  be  in  effect from the date hereof through and  including
September  30,  2000  (the "Original Term"), and  this  Agreement
shall  automatically  renew  itself  for  one  (1)  year  periods
thereafter (each a "Renewal Term"), unless terminated as provided
in Section 5.2 hereof.

     5.2  Termination of Agreement.2    Termination of Agreement

           5.2.1     Termination by Lender.  Upon at least ninety
(90)  days prior written notice to Borrower, Lender may terminate
this  Agreement as of the last day of the Original  Term  or  the
then current Renewal Term and Lender may terminate this Agreement
without notice during the existence of an Event of Default.

           5.2.2      Termination  by Borrower.   Upon  at  least
ninety (90) days prior written notice to Lender, Borrower may, at
its  option, terminate this Agreement; provided, however, no such
termination  by  Borrower shall be effective until  Borrower  has
satisfied  all  of  the  Obligations.  For purposes  hereof,  the
Obligations shall not be deemed to have been satisfied until  all
Obligations for the payment of money have been paid to Lender  in
same  day  funds  and all Obligations that are  at  the  time  in
question contingent have been fully cash securitized in favor and
to   the  satisfaction  of  Lender  or  Lender  has  received  as
beneficiary  a direct pay letter of credit in form  and  from  an
issuing  bank  reasonably acceptable to Lender and providing  for
direct  payment  to Lender of all such contingent Obligations  at
the  time they become fixed.  Any notice of termination given  by
Borrower  shall be irrevocable unless Lender otherwise agrees  in
writing.  Borrower may elect to terminate this Agreement  in  its
entirety  only.   No section of this Agreement or  type  of  Loan
available hereunder may be terminated by Borrower singly.

          5.2.3     Termination Upon Expiration of United Express
Operating  Agreement.  This Agreement shall, at Lender's  option,
automatically  terminate  three  (3)  months  before  the  United
Express Termination Date.

           5.2.4     Termination Charges.  On the effective  date
of  termination of this Agreement for any reason, Borrower  shall
pay  to  Lender  (in addition to the then outstanding  principal,
accrued interest and other charges owing under the terms of  this
Agreement  and  any  of the other Loan Documents)  as  liquidated
damages  for  the loss of the bargain and not as  a  penalty,  an
amount  equal to the product obtained by multiplying the  highest
of  the Average Monthly Loan and Letter of Credit Balance for any
month  during  the immediately preceding 12-month  period  ending
with the month immediately preceding the date of such termination
(or  shorter  period of time this Agreement is in effect),  times
one-half percent (0.50%); provided however, in the event that the
credit rating of Bank as established by Standard and Poor's, Inc.
shall  at any time while the Bond Letter of Credit is outstanding
fall below an "A" rating, and, as a result of such reduced credit
rating,  the  variable  interest rate  on  the  Bonds  thereafter
remarketed  by  the  Remarketing Agent  shall  be  increased,  as
confirmed  by the written certification of the Remarketing  Agent
delivered  to  Lender, Borrower may, within  one  hundred  twenty
(120)  days after the increase of the interest rate on the  Bonds
remarketed by the Remarketing Agent, terminate this Agreement and
the foregoing termination charge shall be one-half of one percent
(0.50%)  of  the  highest of the Average  Monthly  Revolver  Loan
Balance  during the immediately preceding 12-month period  ending
with   the   month  immediately  preceding  the  date   of   such
termination.   If  termination occurs on  the  last  day  of  the
Original Term or any Renewal Term, no termination charge shall be
payable.

           5.2.5     Effect of Termination. On the effective date
of termination of this Agreement, all of the Obligations shall be
immediately  due and payable and Lender shall have no  obligation
to  make  any  Loans.   All undertakings, agreements,  covenants,
warranties and representations of Borrower contained in the  Loan
Documents  shall  survive any such termination and  Lender  shall
retain  its  Liens in the Collateral and all of  its  rights  and
remedies   under   the   Loan  Documents   notwithstanding   such
termination  until  Borrower  has satisfied  the  Obligations  to
Lender,  in  full, in immediately available funds, together  with
the  applicable termination charge, if any.  Notwithstanding  the
payment  in full of the Obligations, Lender shall not be required
to  terminate its Liens in the Collateral unless, with respect to
any  loss  or  damage Lender may incur as a result of  dishonored
checks  or other items of payment constituting uncollected  funds
received  by  Lender  from Borrower or  any  Account  Debtor  and
applied to the Obligations before final collection, Lender shall,
at its option, (i) have received a written agreement, executed by
Borrower  and  by  any Person whose loans or  other  advances  to
Borrower are used in whole or in part to satisfy the Obligations,
indemnifying  Lender from any such loss or damage, or  (ii)  such
monetary reserves and Liens on the Collateral for such period  of
time as Lender, in its reasonable discretion, may deem reasonably
necessary  to protect Lender from any such loss or  damage.   All
obligations  of  Borrower to indemnify Lender  pursuant  to  this
Agreement  shall  survive  any  termination  of  this  Agreement.
Subject  to the provisions of this Section 5.2.5, the termination
of  this  Agreement shall constitute a termination  of  all  Loan
Documents; provided, however, that any and all provisions of such
Loan  Documents that are intended to survive payment in  full  of
the  Obligations shall survive such termination  as  and  to  the
extent provided in such Loan Documents.
SECTION 6.                SECURITY       INTERESTSSECTION      6.
             SECURITY  INTERESTS

       6.1   Security  Interest  in  Collateral.6.1      Security
Interest  in  Collateral.   To  secure  the  prompt  payment  and
performance to Lender of the Obligations, Borrower hereby  grants
to  Lender  a continuing Lien upon all of the following  Property
and  interests  in  Property of Borrower, whether  now  owned  or
existing   or   hereafter  created,  acquired  or   arising   and
wheresoever located:

          (i)       All Accounts;

                                                             (ii)
                                                  All     Rotable
                                                  Spare Parts;

          (iii)     All General Intangibles;

          (iv)      All Documents;

          (v)       All Instruments;

          (vi)      All Chattel Paper;

           (vii)      All  tickets,  exchange  orders  and  other
     billing  documents for the air transportation of  passengers
     and property, whether processed or unprocessed;

           (viii)    All right, title and interest of Borrower in
     and  to the settlement accounts maintained with the Clearing
     Bank  and  all  sums  now or hereafter  in,  payable  to  or
     withdrawable from such accounts;

          (ix)      All monies and other Property of any kind now
     or   at  any  time or times hereafter in the  possession  or
     under  the  control of Lender or a bailee  or  Affiliate  of
     Lender;

           (x)       All accessions to, substitutions for and all
     replacements, products and cash and non-cash proceeds of (i)
     through  (ix) above, including, without limitation, proceeds
     of  and unearned premiums with respect to insurance policies
     insuring any of the Collateral; and

           (xi)       All  books and records (including,  without
     limitation, customer lists, credit files, computer programs,
     print-outs,  and  other computer materials and  records)  of
     Borrower pertaining to any of (i) through (x) above.

     6.2  Other Collateral.6.2     Other Collateral.  In addition
to  the  items of Property referred to in Section 6.1 above,  (a)
the  Bridge Loan Obligations shall be secured by the Escrow Funds
to  the  extent provided in the Escrow Agreement, and (b) all  of
the  Obligations shall also be secured by the Cash Collateral  to
the extent provided herein and all of the other items of Property
from  time to time described in any of the Security Documents  as
security for any of the Obligations.

       6.3    Lien   Perfection;  Further   Assurances.6.3   Lien
Perfection;  Further Assurances.  At Lender's  request,  Borrower
shall  execute,  and  shall cause each  of  its  Subsidiaries  to
execute,  such UCC-1 financing statements as are required by  the
Code and such other instruments, assignments or documents as  are
necessary  to  perfect Lender's Lien upon any of  the  Collateral
and, at Lender's request, shall take such other action as may  be
directed  by  Lender to perfect or to continue the perfection  of
Lender's   Lien  upon  the  Collateral.   Unless  prohibited   by
Applicable Law, Borrower hereby authorizes Lender to execute  and
file  any  such  financing statement on Borrower's  behalf.   The
parties  agree that a carbon, photographic or other  reproduction
of  this  Agreement shall be sufficient as a financing  statement
and  may be filed in any appropriate office in lieu thereof.   At
Lender's  request, Borrower shall also promptly execute or  cause
to be executed and shall deliver to Lender any and all documents,
instruments  and agreements deemed necessary by  Lender  to  give
effect to or carry out the terms or intent of the Loan Documents.

     6.4  Lien on Leasehold Estate.6.4  Lien on Leasehold Estate.
The  due and punctual payment and performance of up to $9,579,932
of  the Obligations shall also be secured by the Lien created  by
the  Deed of Trust upon Borrower's leasehold estate in the Realty
leased by Borrower from the Authority pursuant to the Lease.  The
Deed  of  Trust shall be executed by Borrower in favor of  Lender
and shall be duly recorded, at Borrower's expense, in each office
where  such recording is required to constitute a fully perfected
Lien  on the Property encumbered thereby.  Borrower shall deliver
to  Lender,  at  Borrower's  expense, mortgagee  title  insurance
policies  issued  by  a title insurance company  satisfactory  to
Lender,   which   policies  shall  be  in  form   and   substance
satisfactory  to Lender and shall insure a valid  first  Lien  in
favor  of  Lender on Borrower's leasehold estate in  the  Realty,
subject  only  to those exceptions acceptable to Lender  and  its
counsel.

      6.5   Exclusion  From Collateral.   .5      Exclusion  From
Collateral.   The Collateral in which Lender is  granted  a  Lien
pursuant  to Section 6.1 of this Agreement shall not include  any
licenses,  permits, contracts or other agreements to  the  extent
that  the  grant  of  a  Lien therein or  assignment  thereof  is
prohibited  under, or would result in a breach of the  terms  of,
any  such  license, permit, contract or other  agreement,  or  is
prohibited  by  Applicable Law; provided, however, the  foregoing
exclusion shall in no way be construed (i) to apply if  any  such
prohibition  is unenforceable under Section 9-318 of the  Uniform
Commercial Code or other Applicable Law or (ii) so as  to  limit,
impair  or  otherwise  affect Lender's  unconditional  continuing
Liens in any rights or interests of Borrower in or to monies  due
or  to  become  due under any such license, permit,  contract  or
other agreement (including any Accounts).

     6.6  Release of Lien in Rotable Spare Parts.  .6  Release of
Lien  in  Rotable Spare Parts.  Upon Borrower's written  request,
Lender shall release its Lien in all Rotable Spare Parts, and, at
Borrower's  expense, execute, deliver and record such termination
statements,  instruments,  documents  and  other  agreements   as
Borrower may reasonably request to release Lender's Lien  in  the
Rotable   Spare  Parts,  provided  that  each  of  the  following
conditions shall have first been satisfied: (i) concurrently with
such release, Borrower, Parent and Lender shall have executed and
delivered  an amendment to this Agreement, in form and  substance
reasonably satisfactory to Lender and its counsel, modifying  the
definition  of  the Borrowing Base to eliminate  as  one  of  the
components  thereof the Rotable Spare Parts Borrowing  Base,  and
(ii)  immediately before, and after giving pro forma  effect  to,
such  elimination of the Rotable Spare Parts Borrowing  Base,  no
Default, Event of Default or Overadvance Condition shall exist.

SECTION 7.             COLLATERAL     ADMINISTRATIONSECTION    7.
             COLLATERAL  ADMINISTRATION

     7.1  General Provisions7.1    General Provisions

           7.1.1     Location of Rotable Spare Parts.  All of the
Rotable Spare Parts shall at all times be kept by Borrower at one
or  more  of  the business locations set forth in Schedule  7.1.1
hereto  and  shall  not, without the prior  written  approval  of
Lender,  be moved therefrom except, prior to an Event of Default,
for  (i) the location of Rotable Spare Parts at locations  within
the  continental United States other than those shown in Schedule
7.1.1 hereto if, (a) Borrower gives Lender written notice of such
a  location at least thirty (30) days prior to moving or locating
any  Rotable Spare Parts to such location, (b) Lender's  Lien  in
such  Rotable Spare Parts is and continues to be a duly perfected
Lien thereon (and Borrower shall have taken such action as may be
required pursuant to Section 6.3 hereof to perfect Lender's  Lien
thereon,   including,  without  limitation,  the  execution   and
recordation  in  the  registry of the  FAA  of  an  amendment  or
supplement   to  the  Rotable  Spare  Parts  Security   Agreement
designating  such new location) subject to no other Lien  thereon
except  for  Permitted  Liens, and  (c)  neither  Borrower's  nor
Lender's right of entry upon the premises where the Rotable Spare
Parts  are stored, or its right to remove the Rotable Spare Parts
therefrom,  is  restricted  in any  material  respect;  and  (ii)
temporary transfers (for a period not to exceed three (3)  months
in  any event) of Rotable Spare Parts from any location set forth
in  Schedule  7.1.1 hereto to another location if  done  for  the
limited  purpose  of repairing, refurbishing or overhauling  such
Rotable   Spare  Parts  in  the  ordinary  course  of  Borrower's
business, and, while such Rotable Spare Parts are away  from  any
location  set  forth in Schedule 7.1.1 hereto, they are  excluded
from  the Rotable Spare Parts Borrowing Base even if they satisfy
all other criteria set forth in the definition thereof.

           7.1.2     Insurance.  Borrower shall maintain and  pay
for  insurance  upon  all  of the Rotable  Spare  Parts  wherever
located   and  with  respect  to  Borrower's  business,  covering
casualty, hazard, public liability and such other risks  in  such
amounts,  with such deductibles and with such insurance companies
as are reasonably satisfactory to Lender.  Borrower shall deliver
the  originals  or  copies (which copies shall  be  certified  if
requested by Lender) of such policies to Lender with satisfactory
lender's  loss payable endorsements naming Lender  as  sole  loss
payee,  assignee  or  additional insured, as  appropriate.   Each
policy  of  insurance  or  endorsement  shall  contain  a  clause
requiring  the  insurer to give not less than  thirty  (30)  days
prior  written  notice to Lender in the event of cancellation  of
the policy for any reason whatsoever and a clause specifying that
the  interest  of Lender shall not be impaired or invalidated  by
any act or neglect of Borrower or the owner of the Property or by
the  occupation of the premises for purposes more hazardous  than
are  permitted by said policy.  If Borrower fails to provide  and
pay  for such insurance, Lender may, at its option, but shall not
be  required  to, procure the same and charge Borrower  therefor.
Borrower  agrees to deliver to Lender, promptly, if requested  by
Lender, true copies of all reports made in any reporting forms to
insurance  companies.   In  addition to  the  insurance  required
herein  with respect to the Collateral, Borrower shall  maintain,
with  financially  sound and reputable insurers,  insurance  with
respect  to  its Properties and business against such  casualties
and  contingencies  of  such  type and  in  such  amounts  as  is
customary  in  the business of Borrower, or as otherwise  may  be
reasonably  required  by  Lender.   All  proceeds  of   insurance
received by Borrower or Lender on account of any casualty to  the
Collateral shall be applied as follows:

                     (i)  if an Event of Default exists, all such
     insurance proceeds shall, at Lender's option, be deemed  Net
     Proceeds  and  paid  to  Lender  and  applied  first,  as  a
     mandatory  prepayment of the Revolver Loans outstanding  and
     added  to  the Availability Reserve, and, after the Revolver
     Loans  are  paid in full, to the other Obligations  in  such
     order  and  against  such particular Obligations  as  Lender
     shall determine; and

                     (ii) if no Event of Default exists, all such
     insurance proceeds of any claim of less than $500,000  shall
     be  released  to  Borrower  for the  purpose  of  Borrower's
     repairing,  replacing or restoring the damaged or  destroyed
     Collateral  (and,  if  replaced, the replacement  Collateral
     shall  be  subject to Lender's duly perfected first priority
     Lien  therein subject to no other Lien other than  Permitted
     Liens), and all such insurance proceeds of any claim of more
     than $500,000 shall be remitted to Lender and applied first,
     as  a mandatory prepayment of the Revolver Loans outstanding
     and  added  to  the  Availability Reserve,  and,  after  the
     Revolver  Loans  are  paid  in  full,  added  to  the   Cash
     Collateral  Account,  and  thereafter  released   from   the
     Availability  Reserve  and the Cash  Collateral  Account  to
     Borrower from time to time, but not more often than monthly,
     against  such evidence of repair, replacement or restoration
     as  Lender may reasonably require (subject, as aforesaid, in
     the case of replacement Collateral).

           7.1.3      Protection of Collateral.  All expenses  of
protecting, storing, warehousing, insuring, handling, maintaining
and  shipping the Collateral, all Taxes imposed by any Applicable
Law  on  any of the Collateral or in respect of the sale thereof,
and  all  other  payments required to be made by  Lender  to  any
Person to realize upon the Collateral, shall be borne and paid by
Borrower.  If Borrower fails to promptly pay any portion  thereof
when  due,  Lender may, at its option, but shall not be  required
to,  pay the same and charge Borrower therefor.  Lender shall not
be liable or responsible in any way for the safekeeping of any of
the  Collateral  or  for any loss or damage thereto  (except  for
reasonable care in the custody thereof while any Collateral is in
Lender's  actual possession) or for any diminution in  the  value
thereof,  or for any act or default of any warehouseman, carrier,
forwarding agency, or other person whomsoever, but the same shall
be at Borrower's sole risk.

      7.2.  Administration of Accounts7.2.     Administration  of
Accounts.

            7.2.1      Records,  Schedules  and  Assignments   of
Accounts.   Borrower shall keep accurate and complete records  in
accordance  with  standard air carrier industry practice  of  its
Accounts  and  all  payments and collections  thereon  and  shall
submit to Lender:

           (i)        On  such  periodic basis  as  Lender  shall
     request,  but  no less frequently than weekly,  a  Borrowing
     Base Certificate;

           (ii)      Copies of each recap sheet submitted to  the
     ACH  under  the ACH Procedure Manual concurrently  with  the
     sending thereof to ACH;

           (iii)      Copies  of  each monthly  settlement  sheet
     received  from ACH pursuant to the ACH Procedure Manual,  no
     later  than  the third (3rd) Business Day after the  receipt
     thereof; and

          (iv)      Upon Lender's request therefor, copies of all
     interline invoices submitted to, or received from, ACH under
     the  ACH  Procedure  Manual,  and  such  other  matters  and
     information relating to the Accounts of Borrower included on
     any Borrowing Base Certificate as Lender shall from time  to
     time reasonably request.

      In  addition,  if Accounts owing by any Account  Debtor  to
Borrower  in  an  aggregate amount in excess  of  $25,000  become
ineligible  because  they  fall  within  one  of  the   specified
categories  of  ineligibility set  forth  in  the  definition  of
Eligible  Accounts or otherwise established by  Lender,  Borrower
shall  notify Lender of such occurrence no later than the  second
(2d)  Business  Day following such occurrence and  the  Borrowing
Base shall thereupon be adjusted to reflect such occurrence.

          7.2.2     Discounts, Allowances, Disputes.  If Borrower
grants any discounts or allowances that are not reflected in  the
calculation of the face value of each Account involved,  Borrower
shall  report such discounts or allowances to Lender as  part  of
the  next required Borrowing Base Certificate.  In the event  any
amounts due and owing in excess of $25,000 are in dispute between
Borrower  and  any Account Debtor, Borrower shall provide  Lender
with written notice thereof at the time of submission of the next
Borrowing  Base Certificate, explaining in detail the reason  for
the  dispute,  all  claims  related thereto  and  the  amount  in
controversy.

           7.2.3     Taxes.  If an Account of Borrower includes a
charge for any Tax, Lender is authorized, in its sole discretion,
to  pay the amount thereof to the proper taxing authority for the
account  of  Borrower and to charge Borrower therefor,  provided,
however,  that neither Lender nor any Lender shall be liable  for
any Taxes that may be due by Borrower.

           7.2.4      Account  Verification.  Whether  or  not  a
Default  or  an  Event of Default has occurred, any  of  Lender's
officers, employees or agents shall have the right, at  any  time
or times hereafter, in the name of Lender, any designee of Lender
or  Borrower,  to take reasonable steps to verify  the  validity,
amount  or any other matter relating to any Accounts of  Borrower
by  verbal  or written communications.  Borrower shall  cooperate
fully  with  Lender  in  an  effort to  facilitate  and  promptly
conclude any such verification process.

           7.2.5     Transmission of Funds.  Borrower shall cause
all  funds  credited to its Clearing Bank Account to be  sent  by
federal funds wire transfer to the Payment Account.

           7.2.6     Collection of Accounts and Other Proceeds of
Collateral.  All Eligible Accounts of Borrower shall  be  cleared
and  collected  for payment by ACH pursuant to the ACH  Procedure
Manual.  After the occurrence of an Event of Default, all Payment
Items received by Borrower on account of, or with respect to, its
Accounts or the proceeds of any other Collateral shall be held as
Lender's property by Borrower as trustee of an express trust  for
Lender's benefit and, no later than the first (1st) Business  Day
after  receipt, Borrower shall immediately forward  the  same  in
kind  to  Lender  for  application to the Obligations.   Borrower
shall  obtain  the  agreement by the Clearing Bank  in  favor  of
Lender to waive any offset rights the Clearing Bank may otherwise
have  against  the funds credited to the Clearing  Bank  Account.
Lender assumes no responsibility for the Clearing Bank Account or
its  maintenance or operation, including, without limitation, any
claim  of  accord  and satisfaction or release  with  respect  to
deposits made by the Clearing Bank thereto.

        7.3     Administration   of   Rotable   Spare    Parts7.3
Administration of Rotable Spare Parts.

           7.3.1      Records and Reports of Rotable Spare Parts.
Borrower shall keep accurate and complete records of its  Rotable
Spare  Parts.   Borrower shall furnish to Lender reports  of  its
Rotable Spare Parts in form and detail satisfactory to Lender  at
such  times as Lender may request, but at least once each  month,
not later than the twentieth (20th) day of such month for Rotable
Spare  Parts  of  Borrower as of the end of the preceding  month.
Borrower shall conduct a physical inventory of its Rotable  Spare
Parts  no  less  frequently than annually and  shall  provide  to
Lender   a  report based on each such physical inventory promptly
thereafter, together with such supporting information  as  Lender
shall request.

      7.4   Payment  of  Charges7.4    Payment of  Charges.   All
amounts  chargeable to Borrower under Section 7 hereof  shall  be
Obligations secured by all of the Collateral, shall be payable on
demand  and  shall bear interest from the date such  advance  was
made  until paid in full at the rate applicable to Revolver Loans
from time to time.

SECTION 8.           REPRESENTATIONS   AND  WARRANTIESSECTION  8.
             REPRESENTATIONS  AND  WARRANTIES

       8.1.General Representations and Warranties.   .1.  General
Representations and Warranties.  To induce Lender to  enter  into
this  Agreement  and to make Loans and extend  credit  hereunder,
each Loan Party warrants and represents to Lender that:

           8.1.1      Organization and Qualification.  Each  Loan
Party  is a corporation duly organized, validly existing  and  in
good  standing  under  the  laws  of  the  jurisdiction  of   its
incorporation.   Each  Loan  Party  is  duly  qualified  and   is
authorized  to do business and is in good standing as  a  foreign
corporation  in  each state or jurisdiction  listed  on  Schedule
8.1.1 hereto and in all other states and jurisdictions where  the
character of its Properties or the nature of its activities  make
such  qualification necessary except where the  failure  of  such
Loan  Party  or  its respective Subsidiaries to be  so  qualified
cannot  reasonably be expected to have a Material Adverse Effect.
Borrower  is an air carrier holding a certificate issued  by  the
FAA under 49 U.S.C. 44705.

           8.1.2      Corporate Power and Authority.   Each  Loan
Party  is  duly authorized and empowered to enter into,  execute,
deliver  and  perform this Agreement and each of the  other  Loan
Documents  to  which it is a party.  The execution, delivery  and
performance  of  this  Agreement  and  each  of  the  other  Loan
Documents  by each Loan Party  have been duly authorized  by  all
necessary  corporate action and do not and will not  (i)  require
any  consent or approval of the shareholders of such Loan  Party;
(ii)   contravene   such  Loan  Party's  charter,   articles   or
certificate of incorporation or by-laws; (iii) violate, or  cause
such Loan Party to be in default under, any provision of any law,
rule,  regulation,  order,  writ, judgment,  injunction,  decree,
determination  or  award in effect having applicability  to  such
Loan  Party; (iv) result in a breach of or constitute  a  default
under  any  indenture or loan or credit agreement  or  any  other
agreement,  lease or instrument to which such  Loan  Party  is  a
party  or  by which it or its Properties may be bound or affected
that  may  reasonably  be  expected to have  a  Material  Adverse
Effect;  or (v) result in, or require, the creation or imposition
of  any Lien (other than Permitted Liens) upon or with respect to
any  of  the Properties now owned or hereafter acquired  by  such
Loan Party.

            8.1.3       Legally   Enforceable  Agreement.    This
Agreement is, and each of the other Loan Documents when delivered
under  this  Agreement  will  be,  a  legal,  valid  and  binding
obligation  of each Loan Party enforceable against  it  in  accor
dance with its respective terms subject to applicable bankruptcy,
insolvency,  reorganization, moratorium  or  other  similar  laws
affecting  creditors'  rights generally and  subject  to  general
principles  of  equity,  regardless of whether  considered  in  a
proceeding in equity or in law.

           8.1.4      Capital Structure.  Schedule  8.1.4  hereto
states (i) the name of each corporate or joint venture Affiliates
of  each  Loan Party and the nature of the affiliation, (ii)  the
number  and  nature of all outstanding Securities  of  each  Loan
Party,  and  (iii) the number of authorized, issued and  treasury
shares of each Loan Party.  Each Loan Party has good title to all
of  the  shares it purports to own of the stock of  each  of  its
Subsidiaries, free and clear in each case of any Lien other  than
Permitted Liens.  All such shares have been duly issued  and  are
fully  paid and non-assessable.  There are no outstanding options
to  purchase, or any rights or warrants to subscribe for, or  any
commitments or agreements to issue or sell, or any Securities  or
obligations convertible into, or any powers of attorney  relating
to,  shares  of the capital stock of any Loan Party  or  any  its
respective  Subsidiaries,  except as listed  on  Schedule  8.1.4.
There  are no outstanding agreements or instruments binding  upon
any  Loan Party's shareholders relating to the ownership  of  its
shares  of  capital.  Borrower is a  wholly-owned  Subsidiary  of
Parent  and  is the only Subsidiary of Parent.  Borrower  has  no
Subsidiaries  other  than  Atlantic  Coast  Airlines,  Inc.   and
Atlantic  Coast  Management, Inc., each  a  Delaware  corporation
which,  as  of the Closing Date, is not conducting any activities
and has no material assets.

           8.1.5      Corporate Names.  No Loan Party   has  been
known  as or used any corporate, fictitious or trade (other  than
substantially  similar  variations of  its  respective  corporate
name) names except those listed on Schedule 8.1.5 hereto.  Except
as  set  forth  on  Schedule 8.1.5, no Loan Party  has  been  the
surviving  corporation of a merger or consolidation  or  acquired
all or substantially all of the assets of any Person.

           8.1.6      Chief Executive Office.  Each Loan  Party's
chief executive office is as listed on Schedule 7.1.1 hereto.

          8.1.7     Title to Properties; Priority of Liens.  Each
Loan Party has good, indefeasible and marketable title to and fee
simple  ownership of, or valid and subsisting leasehold interests
in,  all  of  its real Property, and good title  to  all  of  the
Collateral and all of its other Property, and, in the case of the
Collateral,  free and clear of all Liens except Permitted  Liens.
Each  Loan Party has paid or discharged all lawful claims  which,
if  unpaid, might become a Lien against any of such Loan  Party's
Properties  that is not a Permitted Lien.  The Liens  granted  to
Lender  under Section 6 hereof are first priority Liens,  subject
only  to those Permitted Liens that are expressly stated to  have
priority over the Liens of Lender.

           8.1.8      Accounts.  Lender may rely, in  determining
which  Accounts  of  Borrower  are  Eligible  Accounts,  on   all
statements  and representations made by Borrower with respect  to
any  Account or Accounts.  Unless otherwise indicated in  writing
to  Lender,  with respect to each Account listed on  a  Borrowing
Base Certificate:

                     (i)   It is genuine and in all respects what
     it  purports  to be, and it is not evidenced by a  judgment,
     Instrument, Document or Chattel paper;

                     (ii) It arises out of a completed, bona fide
     rendition of air transportation services by Borrower in  the
     ordinary  course of its business and in accordance with  the
     terms  and  conditions of all contracts or  other  documents
     relating thereto and forming a part of the contract  between
     Borrower and the Account Debtor;

                     (iii)      It  is  for  a liquidated  amount
     maturing  as  stated in the duplicate invoice covering  such
     service,  a copy of which has been furnished or is available
     to Lender;

                     (iv) To the best knowledge of Borrower, such
     Account, and Lender's Lien therein, is not, and will not (by
     voluntary  act  or omission of Borrower) be in  the  future,
     subject   to   any  offset,  deduction,  defense,   dispute,
     counterclaim or any other adverse condition except  for,  in
     the  case  of  Accounts owing by United, United's  right  of
     setoff  for  current amounts owing under the United  Express
     Agreements,  and in the case of all other Accounts,  offsets
     arising  in  the ordinary course of business for  settlement
     through  the ACH under the ACH Agreement in accordance  with
     the   ACH  Procedure  Manual,  and  each  such  Account   is
     absolutely  owing to Borrower and is not contingent  in  any
     respect or for any reason;

                     (v)  Borrower has made no agreement with any
     Account  Debtor  thereunder for any  extension,  compromise,
     settlement  or  modification of  any  such  Account  or  any
     deduction  therefrom, except for, in the  case  of  Accounts
     owing  by United, United's right of setoff for amounts owing
     under   the  United  Express  Agreements,  and  except   for
     discounts  or  allowances reported  to  Lender  pursuant  to
     Section 7.2.1 hereof;

                    (vi) To the best knowledge of Borrower, there
     are  no facts, events or occurrences which in any way impair
     the validity or enforceability of such Account;

                     (vii)     To the best knowledge of Borrower,
     the  Account  Debtor  thereunder (1)  had  the  capacity  to
     contract  at the time any contract or other document  giving
     rise to the Account was executed and (2) such Account Debtor
     is Solvent; and

                     (viii)    To the best knowledge of Borrower,
     there are no proceedings or actions which are threatened  or
     pending  against any Account Debtor thereunder  which  might
     result  in  any  material  adverse change  in  such  Account
     Debtor's financial condition or the collectibility  of  such
     Account.

          8.1.9     Financial Statements; Fiscal Year.

                     (i)  The Consolidated balance sheets of  the
     Loan  Parties  and  such  other  Persons  described  therein
     (including  the accounts of all Subsidiaries  of  each  Loan
     Party  for  the respective periods during which a Subsidiary
     relationship  existed) as of December 31, 1997 and  November
     30,  1998, and the related statements of income, changes  in
     stockholder's equity, and changes in financial position  for
     the  periods  ended  on such dates, have  been  prepared  in
     accordance  with  GAAP,  and present  fairly  the  financial
     position  of the Loan Parties and such Persons  as  of  such
     dates  and  the results of the Loan Parties' operations  for
     such  periods.  Since September 30, 1998, there has been  no
     material change in the condition, financial or otherwise, of
     any  Loan  Party  and such other Persons  as  shown  on  the
     Consolidated balance sheet as of such date;

                     (ii) The Consolidated balances sheets of the
     Loan  Parties and such other Persons described therein,  and
     the  related  statements of income, changes in stockholder's
     equity,  and changes in financial position, which  are  from
     time  to time delivered to Lender pursuant to Section  9.1.3
     of  this Agreement fairly present the financial position  of
     the  Loan  Parties and such Persons at such  dates  and  the
     results  of  the  operations of the Loan  Parties  and  such
     Persons for the periods set forth therein; and

           (iii)      The fiscal year of each Loan Party ends  on
     December 31 of each year.

           8.1.10     Full Disclosure.  The financial  statements
referred  to  in subsection 8.1.9 hereof do not,  nor  does  this
Agreement or any other written statement of any Loan Party or its
respective  Subsidiaries to Lender, contain any untrue  statement
of  a material fact or omit a material fact necessary to make the
statements  contained therein or herein not misleading.   To  the
best of each Loan Party's knowledge, there is no fact (other than
matters  of  a  general economic nature) which a Loan  Party  has
failed  to  disclose to Lender in writing which such  Loan  Party
reasonably   expects   may  materially   affect   adversely   the
Properties, business, prospects, profits or condition  (financial
or  otherwise) of a Loan Party  or the ability of a Loan Party to
perform this Agreement or the other Loan Documents.

            8.1.11     Solvent  Financial  Condition.   The  Loan
Parties are now and, after giving effect to the Loans to be  made
hereunder, at all times will be, Solvent on a Consolidated basis.

            8.1.12     Surety  Obligations.   Except  for   those
obligations  of  Borrower to the Authority with  respect  to  the
Bridge  Loan, no Loan Party is obligated as surety or  indemnitor
under  any  surety  or similar bond or other contract  issued  or
entered  into  any  agreement to assure payment,  performance  or
completion of performance of any undertaking or obligation of any
Person other than the other Loan Party.

          8.1.13    Taxes.  The federal tax identification number
of  each  Loan  Party  is shown on Schedule 8.1.13 hereto.   Each
Loan Party has filed all federal, state and local tax returns and
other reports it is required by law to file and has paid, or made
provision  for the payment of, all Taxes upon it, its income  and
Properties as and when such Taxes are due and payable, except  to
the extent being Properly Contested.  The provision for Taxes  on
the books of each Loan Party is adequate for all years not closed
by applicable statutes, and for its current fiscal year.

           8.1.14     Brokers.  There are no claims for brokerage
commissions,  finder's  fees  or  investment  banking   fees   in
connection with the transactions contemplated by this Agreement.

          8.1.15    Patents, Trademarks, Copyrights and Licenses.
Each  Loan  Party owns or possesses all the patents,  trademarks,
service marks, trade names, copyrights and licenses necessary for
the  present and planned future conduct of its business,  without
any  known conflict with the rights of others.  All such patents,
trademarks,  service marks, tradenames, copyrights, licenses  and
other  similar rights of a material nature are listed on Schedule
8.1.15 hereto.

           8.1.16    Governmental Consents.  Each Loan Party has,
and  is  in  good standing with respect to, all governmental  con
sents,  approvals,  licenses,  authorizations,  permits,  certifi
cates,  inspections  and  franchises  necessary  to  continue  to
conduct its business as heretofore or proposed to be conducted by
it and to own or lease and operate its Properties as now owned or
leased by it.

           8.1.17     Compliance with Laws.  Each Loan Party  has
duly  complied with, and its Properties, business operations  and
leaseholds are in compliance in all material respects  with,  the
provisions  of  all  Applicable  Law  and  there  have  been   no
citations, notices or orders of noncompliance issued to any  Loan
Party  or any of its respective Subsidiaries under any such  law,
rule or regulation where such non-compliance could reasonably  be
expected to have a Material Adverse Effect.  Each Loan Party  and
its  respective  Subsidiaries has established  and  maintains  an
adequate   monitoring  system  to  insure  that  it  remains   in
compliance  with  all federal, state and local  laws,  rules  and
regulations applicable to it.

           8.1.18    Restrictions.  No Loan Party  is a party  or
subject to any contract, agreement, or charter or other corporate
restriction, which materially and adversely affects its  business
or  the use or ownership of any of its Properties.  No Loan Party
is  a  party  or  subject  to  any contract  or  agreement  which
restricts its right or ability to incur Indebtedness, other  than
as  set  forth on Schedule 8.1.18 hereto, none of which  prohibit
the  execution of or compliance with this Agreement or the  other
Loan  Documents  by  any  Loan Party or  any  of  its  respective
Subsidiaries, as applicable.

           8.1.19    Litigation.  Except as set forth on Schedule
8.1.19  hereto,  there  are  no actions,  suits,  proceedings  or
investigations pending on the date hereof or, to the knowledge of
the Loan Parties, threatened against or affecting any Loan Party,
or  the  business, operations, Properties, prospects, profits  or
condition  of  any  Loan  Party, and  no  such  action,  suit  or
proceeding  will,  if decided adversely, have a Material  Adverse
Effect.   No Loan Party is in default with respect to any  order,
writ,   injunction,  judgment,  decree  or  rule  of  any  court,
governmental authority or arbitration board or tribunal which  is
reasonably expected to have a Material Adverse Effect.

           8.1.20    No Defaults.  No event has occurred  and  no
condition  exists  which would, upon or after the  execution  and
delivery  of  this  Agreement  or any  Loan  Party's  performance
hereunder, constitute a Default or an Event of Default.  No  Loan
Party  is  in default, and no event has occurred and no condition
exists  which constitutes, or which with the passage of  time  or
the  giving of notice or both would constitute, a default in  the
payment  of any Indebtedness to any Person for Money Borrowed  in
excess of $500,000.

           8.1.21    Leases.  Each Loan Party is in compliance in
all  material  respects with all of the  terms  of  each  of  its
respective capitalized and operating leases.

           8.1.22     Pension  Plans.   Except  as  disclosed  on
Schedule  8.1.22 hereto, no Loan Party has any Plan on  the  date
hereof.   Each  Loan  Party  is  in  full  compliance  with   the
requirements of ERISA and the regulations promulgated  thereunder
with  respect  to  each  Plan.  No fact or situation  that  could
result in a Material Adverse Effect exists in connection with any
Plan.   No  Loan Party has any withdrawal liability in connection
with a Multiemployer Plan.

           8.1.23    Trade Relations.  There exists no actual  or
threatened  termination, cancellation or limitation  of,  or  any
modification or change in, the business relationship between  any
Loan  Party   and  any customer or any group of  customers  whose
purchases  individually or in the aggregate are material  to  the
business  of  any  Loan  Party,  or with  any  material  supplier
(unless  such  supplier can be readily replaced  on  terms  which
cannot reasonably be expected to have a Material Adverse Effect),
and,  the  best of each Loan Party's knowledge, there  exists  no
present condition or state of facts or circumstances which  would
materially  affect adversely any Loan Party or prevent  any  Loan
Party from conducting such business after the consummation of the
transactions contemplated by this Agreement in substantially  the
same manner in which it has heretofore been conducted.

           8.1.24     Labor  Relations.  Except as  described  on
Schedule  8.1.24  hereto,  no  Loan  Party  is  a  party  to  any
collective bargaining agreement on the date hereof.  There are no
material grievances, disputes or controversies with any union  or
any  other  organization  of  any Loan  Party's  or  any  of  its
respective  Subsidiaries' employees, or threats of strikes,  work
stoppages   or  any  asserted  pending  demands  for   collective
bargaining by any union or organization.

            8.1.25     Loans  Outstanding  Under  Existing   Loan
Agreement.   All  Loans  and reimbursement obligations  owing  to
Lender  under the Existing Loan Agreement which, upon the Closing
Date,  shall be deemed Loans and reimbursement obligations  owing
to  Lender under this Agreement, are owing to Lender without  any
defenses, offsets or claims of any nature.

      8.2.  Continuous Nature of Representations and  Warranties.
 .2.   Continuous  Nature of Representations and Warranties.   The
representations and warranties made by Borrower in this Agreement
and  the  other Loan Documents shall be true and correct  in  all
material  respects on the Closing Date and on the  date  of  each
Borrowing under this Agreement except for any representation  and
warranty  relating to a specific period before the date  of  such
Borrowing.   Each  request for a Revolver Loan made  by  Borrower
pursuant  to  this  Agreement shall constitute (i)  an  automatic
representation and warranty by Borrower to Lender that there does
not  then  exist  any  Default or Event of  Default  and  (ii)  a
reaffirmation  as of the date of such request  that  all  of  the
representations and warranties of the Loan Parties  contained  in
this  Agreement  and the other Loan Documents  are  true  in  all
material  respects, except for any representations and warranties
relating to a specific period before the date of such request and
except  for  any  changes  in  the  nature  of  the  business  or
operations  of the Loan Parties and their respective Subsidiaries
that  would  render the information contained in any Schedule  or
Exhibit attached hereto either inaccurate or incomplete, so  long
as  Lender has consented to such changes or such changes are  not
prohibited by this Agreement.

      8.3.  Survival  of  Representations  and  Warranties.   .3.
Survival  of Representations and Warranties.  All representations
and warranties of each Loan Party contained in this Agreement  or
any  of the other Loan Documents shall be true at the time of the
execution  of  this Agreement and the other Loan  Documents,  and
shall  survive the execution, delivery and acceptance thereof  by
Lender   and  the  parties  thereto  and  the  closing   of   the
transactions described therein or related thereto.

SECTION 9.          COVENANTS  AND  CONTINUING  AGREEMENTSSECTION
             9.        COVENANTS  AND  CONTINUING  AGREEMENTS

     9.1  Affirmative Covenants9.1 Affirmative Covenants.  During
the  term of this Agreement, and thereafter for so long as  there
are  any  Obligations to Lender, each Loan Party covenants  that,
unless otherwise consented to by Lender in writing, it shall:

             9.1.1        Visits    and   Inspections.     Permit
representatives of Lender, from time to time, as often as may  be
reasonably requested, but only during normal business hours  upon
reasonable advance notice, to visit and inspect the Properties of
each  Loan Party, inspect, audit and make extracts from its books
and records, and discuss with its officers, its employees and its
independent  accountants,  each Loan  Party's  business,  assets,
liabilities, financial condition, business prospects and  results
of operations.

          9.1.2.    Notices.  Notify Lender in writing (i) of the
occurrence  of  any  event or the existence  of  any  fact  which
renders any representation or warranty in this Agreement  or  any
of  the other Loan Documents inaccurate, incomplete or misleading
in  any  material  respect; (ii) promptly after  a  Loan  Party's
learning thereof, of the commencement of any litigation affecting
any Loan Party or any of its Properties, whether or not the claim
is  considered by such Loan Party to be covered by insurance, and
of  the  institution of any administrative proceeding  which,  in
either case, if decided adversely could reasonably be expected to
have  a  Material  Adverse  Effect;  (iii)  promptly  after   the
execution of any amendment or modification to the United  Express
Operating   Agreement  that  would  extend  the  United   Express
Termination Date and send to Lender a copy thereof; (iv) promptly
after  a  Loan  Party's learning thereof, of any organized  labor
dispute  of a material nature to which a Loan Party may become  a
party, any strikes or walkouts by organized labor relating to any
of  its  facilities, and the final expiration of  any  collective
bargaining  agreement to which it is a party or by  which  it  is
bound; (v) promptly after a Loan Party's learning thereof, of any
material  default  by any Loan Party under any  note,  indenture,
loan  agreement, mortgage, lease, deed, guaranty or other similar
agreement  relating  to  any  Indebtedness  of  such  Loan  Party
exceeding  $500,000; (vi) promptly after the occurrence  thereof,
of  any  Default  or Event of Default; (vii) promptly  after  the
occurrence  thereof,  of  any default  or  event  of  default  by
Borrower  or  United under any of the United Express  Agreements;
(viii)  promptly  after the rendition thereof,  of  any  judgment
rendered  against  a  Loan Party in an amount exceeding  $500,000
which is not fully covered by insurance; (ix) of the ordering  of
any  services  from  United  under the United  Express  Emergency
Response  Agreement,  and  give Lender full  particulars  of  the
estimated  costs thereof, to the extent not covered by insurance;
and  (x) promptly upon any change of the fiscal year of the  Loan
Parties.

           9.1.3     Financial Statements .  Keep, and cause each
Subsidiary  to keep, adequate records and books of  account  with
respect  to  its business activities in which proper entries  are
made  in  accordance  with  GAAP  reflecting  all  its  financial
transactions;  and cause to be prepared and furnished  to  Lender
the following (all to be prepared in accordance with GAAP applied
on   a  consistent  basis,  unless  Borrower's  certified  public
accountants  concur  in any change therein  and  such  change  is
disclosed to Lender and is consistent with GAAP):

                     (i)                not later than ninety-one
     (91)  days after the close of each fiscal year of  the  Loan
     Parties, audited financial statements of the Loan Parties as
     of  the end of such year, on a Consolidated basis, certified
     by  one  of the big five national accounting firms or  other
     firm   of   independent  certified  public  accountants   of
     recognized  standing  selected  by  the  Loan  Parties   but
     reasonably acceptable to Lender;

                     (ii)       not  later than sixty  (60)  days
     after  the  end  of  the  months of  January,  February  and
     December in each fiscal year of the Loan Parties, and thirty
     (30)  days after the end of each other month in each  fiscal
     year  of  the  Loan  Parties,  unaudited  interim  financial
     statements  of the Loan Parties as of the end of such  month
     and  of  the portion of the Loan Parties' fiscal  year  then
     elapsed,  on a Consolidated basis, certified by a  financial
     officer  of the Loan Parties as prepared in accordance  with
     GAAP   and  fairly  presenting  the  Consolidated  financial
     position  and results of operations of the Loan Parties  for
     such month and period subject only to changes from audit and
     year-end  adjustments and except that such  statements  need
     not contain notes;

                     (iii)          promptly after the sending or
     filing  thereof,  as the case may be, copies  of  any  proxy
     statements, financial statements or reports which each  Loan
     Party  has made available to its shareholders and copies  of
     any  regular,  periodic and special reports or  registration
     statements  which each Loan Party files with the  Securities
     and  Exchange Commission or any governmental authority which
     may  be  substituted  therefor, or any  national  securities
     exchange;

                     (iv)      promptly after the filing thereof,
     copies  of  any  annual report to be  filed  with  ERISA  in
     connection with each Plan; and

                     (v)        such  other data and  information
     (financial and otherwise) maintained by the Loan Parties  as
     Lender,  from time to time, may reasonably request,  bearing
     upon  or  related  to the Collateral or  each  Loan  Party's
     financial condition or results of operations.

            Concurrently  with  the  delivery  of  the  financial
statements  described in clause (i) of this  Section  9.1.3,  the
Loan  Parties  shall cause to be prepared and  shall  furnish  to
Lender   a   certificate  of  the  aforesaid   certified   public
accountants   certifying  to  Lender  that,  based   upon   their
examination  of  the  financial statements of  the  Loan  Parties
performed  in connection with their examination of said financial
statements,  they  are  not aware of  any  Default  or  Event  of
Default,  or,  if  they are aware of such  Default  or  Event  of
Default, specifying the nature thereof, and acknowledging,  in  a
manner satisfactory to Lender, that they are aware that Lender is
relying on such financial statements in making its decisions with
respect  to  the Loans.  No later than ten days after receipt  of
the  accountants'  letter to the management of the  Loan  Parties
that  is  prepared  in  connection with the financial  statements
described  in clause (i) of this Section 9.1.3, but in  no  event
later  than 150 days after the end of each fiscal year, the  Loan
Parties  shall  forward  to Lender a copy  of  such  accountants'
letter.    Concurrently  with  the  delivery  of  the   financial
statements  described  in clause (i) of this  Section  9.1.3  and
those  financial  statements described in  clause  (ii)  of  this
Section 9.1.3 which are for the last month in a fiscal quarter of
the Loan Parties, the Loan Parties shall cause to be prepared and
furnished  to  Lender a Compliance Certificate  in  the  form  of
Exhibit  D  hereto executed by a financial officer  of  the  Loan
Parties.

          9.1.4     Projections.  No later than 45 days after the
end  of  each fiscal year of the Loan Parties, deliver to  Lender
Projections  of each Loan Party for the forthcoming fiscal  year,
month by month.

           9.1.5      Taxes  and Liens.  Pay and  discharge,  and
cause  each Subsidiary to pay and discharge, all Taxes  prior  to
the  date  on  which  such Taxes become delinquent  or  penalties
attach thereto, except and only to the extent that such Taxes are
being  Properly  Contested.   Each Loan  Party  shall  also  pay,
discharge  or  provide a bond with respect to, any lawful  claims
which, if unpaid or unbonded, might become a Lien against any  of
a Loan Party's Property except for Permitted Liens.

          9.1.6     Tax Returns.  File, and cause each Subsidiary
to  file,  all  federal, state and local tax  returns  and  other
reports  any  Loan Party is required by law to file and  maintain
adequate  reserves for the payment of all Taxes imposed upon  it,
its income or its profits, or upon any Property belonging to it.

          9.1.7     Compliance with Applicable Laws.  Comply with
all  Applicable Laws, and obtain and keep in force  any  and  all
licenses,    permits,    franchises   or    other    governmental
authorizations necessary to the ownership of its Property  or  to
the conduct of its business, which violation or failure to obtain
might have a Material Adverse Effect.

           9.1.8      Environmental  Events.   Notify  Lender  in
writing  promptly after learning thereof (i) of any violation  of
any   Environmental   Law,  (ii)  of  any  inquiry,   proceeding,
investigation   or  other  action,  involving   a   request   for
information or a notice of potential environmental liability from
any  foreign,  federal,  state or local environmental  agency  or
board,  or (iii) of the discovery of the release of any Hazardous
Material at, on, under or from any real Property owned or  leased
by  any Loan Party or any facility or equipment thereat in excess
of   reportable  or  reliable  standards  or  levels  under   any
Environmental  Law,  or  in a manner and/or  amount  which  could
reasonably  be  expected  to  result  in  liability   under   any
Environmental  Law,  in  each case which would  have  a  Material
Adverse  Effect.  In the event of the presence of  any  Hazardous
Materials on any real Property owned or leased by any Loan  Party
which  is  in violation of, or which could reasonably be expected
to result in liability under, any Environmental Law, in each case
which would have a Material Adverse Effect, such Loan Party  upon
discovery thereof, shall take all necessary steps to initiate and
expeditiously complete all remedial, corrective and other  action
to mitigate and eliminate any such adverse effect, and shall keep
Lender informed of their actions and the results.

          9.1.9     Computer Software.  Establish an action plan,
and  cause  such action plan to be implemented by no  later  than
June 30, 1999,  to reasonably assure that the essential items  of
the  computer software of each Loan Party is able to be used  and
operated before, during and after calendar year 2000 A.D. without
error  functions  of  a material nature relating  to  date  data,
specifically  including any error of a material  nature  relating
to,  or  the conduct of, date data which represents or references
different centuries or more than one century, and provide  Lender
with assurances reasonably satisfactory to Lender that after June
30, 1999 the essential items of the computer software of the Loan
Parties  will  be  able  to recognize and perform  without  error
functions relating to date data before, during and after calender
year 2000 A.D.

      9.2   Negative Covenants9.2    Negative Covenants.   During
the  term of this Agreement, and thereafter for so long as  there
are  any  Obligations to Lender, each Loan Party covenants  that,
unless  Lender  has first consented thereto in writing,  it  will
not:

           9.2.1      Fundamental Changes. Merge  or  consolidate
with  any  Person or acquire all or any substantial part  of  the
Properties  of  any  Person;  provided,  however,  the  foregoing
restriction  shall not apply to (i) a merger by Parent  with  and
into  Borrower with Borrower as the surviving corporation or (ii)
a merger by Borrower with and into Parent or with a Subsidiary of
Borrower,  with  Parent  or  such  Subsidiary  as  the  surviving
corporation, provided, in the case of a merger pursuant to clause
(ii) hereof, the following conditions are first satisfied by  the
Loan  Parties: (a) Borrower shall have given Lender not less than
fifteen  (15) days prior written notice of the effective date  of
such  merger,  (b)  Lender  shall  have  received,  in  form  and
substance  satisfactory to Lender and its counsel, an  assumption
agreement  as of the effective date of the merger, duly  executed
by  Parent  or  such Subsidiary into which Borrower  proposes  to
merge,  pursuant to which Parent or such Subsidiary, as the  case
may  be,  shall  assume, adopt, ratify and  confirm  all  of  the
Obligations of Borrower under this Agreement and the  other  Loan
Documents,  together with such other documents as Lender  or  its
counsel  may  reasonably require, (c) Lender shall have  received
copies  of all agreements, documents and instruments relating  to
the  merger  as  executed by the parties thereto,  including  the
certificates  of merger as issued and certified by the  Secretary
of  States  of  the jurisdictions of incorporation of  each  Loan
Party, (d) Lender's Lien in the Collateral is and continues to be
a  duly  perfected Lien thereon (and each Loan Party  shall  have
taken such action as may be required pursuant to Section 6.3  and
any  other provision of this Agreement or any other Loan Document
to  perfect  Lender's  Lien thereon) subject  to  no  other  Lien
thereon except for Permitted Liens, and (e) no Default, Event  of
Default  or Overadvance Condition shall exist immediately  before
or after giving effect to such merger.

           9.2.2     Loans.  Make any loans or other advances  of
money to any Person, except:

                     (i)       salary or other employment related
     benefit,  travel advances, advances against commissions  and
     other  similar advances in the ordinary course of  business,
     including  loans  to  pilots and  other  employees  for  the
     payment of training courses;

                     (ii)       loans or advances from  one  Loan
     Party to the other Loan Party; and

                     (iii)          other loans and advances  not
     in  excess of $200,000 outstanding in the aggregate  at  any
     one time.

           9.2.3     Affiliate Transactions.  Enter into, or be a
party  to,  any transaction with any Affiliate of  a  Loan  Party
(other  than the other Loan Party) or stockholder, except in  the
ordinary course of and pursuant to the reasonable requirements of
such  Loan  Party's business and upon fair and  reasonable  terms
which are fully disclosed to Lender and are no less favorable  to
such  Loan  Party  than would be obtained in a  comparable  arm's
length  transaction with a Person not an Affiliate of  such  Loan
Party.

           9.2.4      Limitation on Liens.  Create or  suffer  to
exist  any Lien upon any of the Collateral, whether now owned  or
hereafter acquired, except:

                     (i)       Liens at any time granted in favor
     of Lender;

                    (ii)      Liens for taxes (excluding any Lien
     imposed pursuant to any of the provisions of ERISA) not  yet
     due or that are being Properly Contested;

                     (iii)            statutory Liens arising  in
     the  ordinary  course  of  such  Loan  Party's  business  by
     operation  of  law  or regulation, but only  if  payment  in
     respect of any such Lien is not at the time required or such
     Liens  are  being  Properly Contested and  do  not,  in  the
     aggregate,  materially  detract  from  the  value   of   the
     Collateral  or  materially impair the  use  thereof  in  the
     operation of such Loan Party's business; and

                     (iv)       Purchase Money Liens  in  Rotable
     Spare  Parts, provided such Purchase Money Liens are limited
     by their express terms to readily identifiable Rotable Spare
     Parts  and  such  Rotable  Spare  Parts  are  segregated  by
     Borrower from all of its other Rotable Spare Parts.

            9.2.5       Distributions.   Declare  or   make   any
Distributions.

           9.2.6      Disposition of Collateral.  Sell, lease  or
otherwise   dispose   of  any  of  the  Collateral   except   for
dispositions  of  the  Rotable Spare Parts  for  so  long  as  no
Default,  Event of Default or Overadvance Condition then  exists,
or, after giving effect to such disposition, will exist.

           9.2.7      Restricted Investment.  Make  or  have  any
Restricted Investment.

           9.2.8      Tax Consolidation.  File or consent to  the
filing  of  any  consolidated income tax return with  any  Person
other than a Subsidiary of a Loan Party.

            9.2.9       Guaranties.   Become  liable   upon   the
obligations of any Person (other than the other Loan  Party),  by
assumption,  endorsement or guaranty thereto or otherwise  (other
than to Lender), except the endorsement of checks in the ordinary
course of business and the issuance of guaranties in the ordinary
course  of business of loans to pilots and other employees  of  a
Loan Party for the payment of training courses

          9.2.10 United Express Agreements.  Enter into, or agree
to, any amendment, modification, supplement or termination of any
United Express Agreement subsequent to the date of this Agreement
if  the  effect  of such amendment, modification,  supplement  or
termination would (i) shorten the period during which the  United
Express  Operating  Agreement is in effect or (ii)  increase,  or
could reasonably be expected to increase, in any material way the
structure or the basis of payment of the fees, charges  or  other
Indebtedness owing by Borrower to United which, pursuant  to  the
United  Non-Offset  Agreement,  United  is  permitted  to  offset
against the Accounts of Borrower owing by United.

            9.2.11  ACH  Membership.   Withdraw  from  being   an
associate member of the ACH.

           9.2.12 Subsidiaries.  Hereafter divest itself  of  any
material assets by transferring them to any Subsidiary.

           9.2.13 Subordinated Debt.  Prepay or redeem any of the
Subordinated Debt before its scheduled maturity date or  pay  any
of  the Subordinated Debt except in accordance with the terms  of
the  instrument  under  which  such Subordinated  Debt  has  been
subordinated to the payment of the Obligations.

      9.3   Specific Financial Covenants9.3    Specific Financial
Covenants.    During the term of this Agreement,  and  thereafter
for  so  long as there are any Obligations to Lender,  each  Loan
Party  covenants that, unless Lender has first consented  thereto
in   writing,  it  shall  comply  with  the  following  financial
covenants:

          9.3.1     Consolidated Fixed Charge Coverage Ratio. The
Loan  Parties and their respective Subsidiaries shall maintain  a
Consolidated Fixed Charge Coverage Ratio as of the  end  of  each
Testing Period, beginning with the Testing Period ending December
31, 1998, of not less than 1.6 to 1.0.

            9.3.2      Consolidated  Leverage  Ratio.   The  Loan
Parties and their respective Subsidiaries shall maintain  at  all
times  a  Consolidated Leverage Ratio of no greater than  1.5  to
1.0.

          9.3.3     Consolidated Senior Indebtedness/Consolidated
EBITDA Ratio.  The Loan Parties and their respective Subsidiaries
shall  maintain  a  Consolidated Senior Indebtedness/Consolidated
EBITDA Ratio as of the end of each Testing Period, beginning with
the  Testing Period ending December 31, 1998, of no greater  than
3.0 to 1.0.

SECTION 10.              CONDITIONS  PRECEDENT10.      CONDITIONS
                    PRECEDENT

      10.1  Conditions  Precedent to  Initial  Revolver  Loan  on
Closing Date10.1    Conditions Precedent to Initial Revolver Loan
on  Closing  Date.  Notwithstanding any other provision  of  this
Agreement  or  any  of  the  other Loan  Documents,  and  without
affecting  in  any manner the rights of Lender  under  the  other
sections  of  this Agreement, it is understood  and  agreed  that
Lender will have no obligation to make the initial Revolver  Loan
under Section 1 of this Agreement on the Closing Date unless  and
until, in addition to each of the conditions set forth in Section
10.2 hereof, each of the following conditions has been satisfied:

           10.1.1     Documentation.  Lender shall have  received
the  following  documents,  each to  be  in  form  and  substance
satisfactory to Lender and its counsel:

                      (i)         Certified  copies  of  casualty
     insurance  policies of Borrower, together with loss  payable
     endorsements  on  Lender's  standard  form  of  Loss   Payee
     Endorsement naming Lender as loss payee as its interests may
     appear,  and  certified  copies of the  liability  insurance
     policies  of  Borrower,  together with  endorsements  naming
     Lender as a coinsured;

                     (ii)       Copies of all filing receipts  or
     acknowledgments   issued   by  any  governmental   authority
     (including,  without limitation, the FAA)  to  evidence  any
     filing  or  recordation necessary to perfect  the  Liens  of
     Lender  in  the Collateral and evidence in a form acceptable
     to  Lender  that such Liens constitute valid  and  perfected
     first priority security interests and Liens, subject only to
     those  Permitted Liens which are expressly  stated  to  have
     priority over the Liens of Lender;

                     (iii)           Copies  of the  Articles  or
     Certificate  of  Incorporation of each Loan  Party  and  all
     amendments thereto, certified by the Secretary of  State  or
     other appropriate official of its respective jurisdiction of
     incorporation;

                     (iv)          Good standing certificates for
     each  Loan Party issued by the Secretary of State  or  other
     appropriate   official  of  such  Loan  Party's   respective
     jurisdiction  of  incorporation and each jurisdiction  where
     the   conduct  of  such  Loan  Party's  business  activities
     necessitates qualification and in which the failure of  such
     Loan  Party to be so qualified would have a Material Adverse
     Effect;

                       (v)           A closing certificate signed
     by  the  chief executive or financial officer of  each  Loan
     Party,  dated as of the Closing Date, stating that  (a)  the
     representations and warranties set forth in Section 8 hereof
     are  true and correct in all material respects on and as  of
     such date, (b) such Loan Party is on such date in compliance
     in  all  material respects with all the terms and provisions
     set forth in this Agreement and the other Loan Documents and
     (c) on such date no Default or Event of Default has occurred
     and is continuing;

                      (vi)           The Security Documents  duly
     executed, accepted and acknowledged by or on behalf of  each
     of the signatories thereto;

                     (vii)           The  Other  Agreements  duly
     executed and delivered by each Loan Party;

                    (viii)         The favorable, written opinion
     of  counsel  to  the  Loan Parties as  to  the  transactions
     contemplated by this Agreement and the other Loan Documents;

                      (ix)          Written instructions from the
     Loan  Parties directing the application of proceeds  of  the
     Bridge  Loan and the initial Revolver Loan made to the  Loan
     Parties pursuant to this Agreement on the Closing Date;

                       (x)          Certificates of the Secretary
     or  an Assistant Secretary of each Loan Party certifying (a)
     that  attached thereto is a true and complete  copy  of  the
     Bylaws of such Loan Party, as in effect on the date of  such
     certification,  (b)  that attached thereto  is  a  true  and
     complete  copy of the resolutions adopted by  the  Board  of
     Directors  of  such Loan Party, authorizing  the  execution,
     delivery  and  performance of this Agreement and  the  other
     Loan  Documents to which such Loan Party is a party and  the
     consummation  of  the transactions contemplated  hereby  and
     thereby, and (c) as to the incumbency and genuineness of the
     signature of each officer of such Loan Party executing  this
     Agreement or any of the Loan Documents;

                     (xi)       An amendment to the Reimbursement
     Agreement,  duly  executed by Borrower and Bank,  conforming
     the   definition  of  the  "Applicable  Percentage"  to  the
     definition of that term as set forth in this Agreement;

                     (xii)           Certificate of the Secretary
     of  the Authority certifying (a) that attached thereto is  a
     true  and  complete copy of the resolutions adopted  by  the
     Authority,   authorizing   the   execution,   delivery   and
     performance of the Escrow Agreement and the consummation  of
     the  transactions contemplated thereby, and (b)  as  to  the
     incumbency and genuineness of the signature of each  officer
     of the Authority executing the Escrow Agreement;

                    (xiii)         The favorable, written opinion
     of   counsel   to  the  Authority  as  to  the  transactions
     contemplated by the Escrow Agreement;

                      (xiv)           an  opinion  from  Lender's
     special FAA counsel, certifying to Lender that Lender has  a
     first priority Lien in the Rotable Spare Parts of Borrower;

                     (xv)      an amendment to the Deed of Trust,
     duly  executed by Borrower, the trustee under  the  Deed  of
     Trust  and  Lender, with all fees and taxes,  if  any,  paid
     thereon,  reflecting  the amendments to  the  Existing  Loan
     Agreement made by this Agreement;

                     (xvi)           an endorsement to the policy
     of  title insurance currently insuring the lien of the  Deed
     of  Trust, updating the effective date of such policy to the
     recordation  date  of the amendment to  the  Deed  of  Trust
     insured  thereby  executed pursuant to this Agreement,  with
     all premiums thereon paid, and

                       (xvii)           Such   other   documents,
     instruments  and  agreements  as  Lender  shall   reasonably
     request in connection with the foregoing matters.

           10.1.2     No Injunction, etc.  No action, proceeding,
investigation,   regulation  or  legislation  shall   have   been
instituted, threatened or proposed before any court, governmental
agency or legislative body to enjoin, restrain or prohibit, or to
obtain  damages in respect of, or which is related to  or  arises
out  of  this Agreement or the Loan Documents or the consummation
of  the  transactions contemplated hereby or which,  in  Lender's
reasonable judgment, would make it inadvisable to consummate  the
transactions contemplated by this Agreement or any of  the  other
Loan Documents.

           10.1.3    Consents.  All approvals, licenses, consents
and filings necessary to permit the transactions contemplated  by
this Agreement shall have been obtained and made.

           10.1.4     Material Adverse Change.  There  shall  not
have  occurred  any  material adverse  change  in  the  financial
condition, results of operations or business of Borrower and  its
Subsidiaries  or  the value of the Collateral from  November  30,
1998  to  the Closing Date, or any event, condition or  state  of
facts  which  would  reasonably be expected to  have  a  Material
Adverse Effect, as reasonably determined by Lender.

           10.1.5     No Default or Event of Default.  No Default
or Event of Default shall have occurred and be continuing.

           10.1.6    Liens.  Lender shall be satisfied that  this
Agreement and the other Loan Documents create or will create,  as
security  for the Obligations, a valid and enforceable  perfected
first  priority  security interest in and Lien upon  all  of  the
Collateral  in favor of Lender, subject to no other  Liens  other
than  Permitted Liens which are expressly stated to have priority
over the Liens of Lender.

           10.1.7     Escrow Funds.  Lender shall  have  received
evidence  that the Escrow Funds have been received by the  Escrow
Agent to be held pursuant to the Escrow Agreement.

     10.2 Conditions Precedent to All Loans and Letters of Credit
and  Letter of Credit Guaranties10.2     Conditions Precedent  to
All  Loans and Letters of Credit and Letter of Credit Guaranties.
Notwithstanding  any of the provisions of this Agreement  or  the
other  Loan  Documents, and without affecting in any  manner  the
rights  of Lender under the other sections of this Agreement,  it
is  understood and agreed that Lender will have no obligation  to
make any Loan (including the Bridge Loan Advances and the initial
Revolver  Loan) and Lender will have no obligation to  issue  any
Letter  of Credit or Letter of Credit Guaranty unless and  until,
in  addition to the conditions set forth in Section 10.1, each of
the following conditions has been and continues to be satisfied:

           10.2.1     Events  of Default.  No Default,  Event  of
Default or Overadvance Condition shall exist.

           10.2.2     Delivery of Documents.  Lender  shall  have
received   copies  of  all  documents,  reports  and  information
required to be delivered to Lender hereunder.

            10.2.3      Representations  and   Warranties.    The
representations  and warranties contained in Section  8  of  this
Agreement and in the Loan Documents shall be true and correct  in
all  material respects except for changes in the nature of a Loan
Party's  business or operations that would render the information
contained  in  any  Exhibit or Schedule  attached  hereto  either
inaccurate, incomplete or misleading, except for any  changes  in
the  nature of the business or operations of the Loan Parties and
their  respective Subsidiaries that would render the  information
contained  in  any  Schedule or Exhibit  attached  hereto  either
inaccurate or incomplete, so long as Lender has consented to such
changes or such changes are not prohibited by this Agreement.

           10.2.4    Subordinated Debt.  The Loan, if made, would
enjoy  the  benefits and privileges of being senior in  right  of
payment to all Subordinated Debt then outstanding.

     10.3 Waiver of Conditions Precedent10.3 Waiver of Conditions
Precedent.   If  Lender makes any Loan or issues  any  Letter  of
Credit  or Letter of Credit Guaranty prior to the fulfillment  of
any  of  the conditions precedent set forth in Sections 10.1  and
10.2  hereof,  the  making of such Loan or the issuance  of  such
Letter  of  Credit or Letter of Credit Guaranty shall  constitute
only  an  extension of time for the fulfillment of such condition
and  not  a  waiver thereof, and each Loan Party shall thereafter
use its best efforts to fulfill such condition promptly.

SECTION 11.    EVENTS   OF   DEFAULT;  RIGHTS  AND  REMEDIES   ON
               DEFAULTSECTION  11.  EVENTS  OF  DEFAULT;   RIGHTS
               AND  REMEDIES  ON  DEFAULT

      11.1  Events  of  Default11.1    Events  of  Default.   The
occurrence  of  one  or  more  of  the  following  events   shall
constitute an "Event of Default":

           11.1.1     Payment  of  Loans  and  Amounts  for  Cash
Collateral  Account.  Borrower shall fail to make any payment  of
principal,  interest or premium, if any, owing on the  Loans,  or
any  amounts to be paid into the Cash Collateral Account pursuant
to  Section 4.2.3 hereof, within two (2) Business Days of the due
date  thereof  (whether due at stated maturity, on  demand,  upon
acceleration or otherwise)."

          11.1.2    Payment of Other Obligations.  Borrower shall
fail  to pay any of the other Obligations (other than those dealt
with  specifically  in Section 11.1.1 hereof)  on  the  due  date
thereof  (whether  due  at  stated  maturity,  on  demand,   upon
acceleration or otherwise) and such failure shall continue for  a
period  of three (3) Business Days after Lender's giving Borrower
written notice thereof.

            11.1.3     Misrepresentations.   Any  representation,
warranty or other statement made or furnished to Lender by or  on
behalf  of any Loan Party or in this Agreement, any of the  other
Loan  Documents  or  any  instrument,  certificate  or  financial
statement  furnished in compliance with or in  reference  thereto
proves  to have been false or misleading in any material  respect
when made or furnished or when reaffirmed pursuant to Section 8.2
hereof.

          11.1.4    Breach of Specific Covenants.  Any Loan Party
shall  fail  or neglect to perform, keep or observe any  covenant
contained  in  Sections 6.3, 7.1.1, 7.2.5, 7.2.6,  9.1.1,  9.1.3,
9.2 or 9.3 hereof on the date that such Loan Party is required to
perform, keep or observe such covenant.

           11.1.5     Breach of Loan Documents.  Any  Loan  Party
shall  fail  or neglect to perform, keep or observe any  covenant
contained in this Agreement (other than a covenant which is dealt
with  specifically elsewhere in Section 11.1 hereof) or the other
Loan Documents and the breach of such other covenant or the other
Loan  Documents is not cured within fifteen (15) days  after  the
sooner  to occur of such Loan Party's receipt of notice  of  such
breach  from Lender or the date on which such failure or  neglect
first becomes known to any officer of such Loan Party.

           11.1.6     Other  Defaults.   There  shall  occur  any
default  or event of default on the part of any Loan Party  under
any  agreement,  document or instrument to which  Borrower  is  a
party  or by which a Loan Party or any of its Property is  bound,
creating  or  relating to any Indebtedness for Money Borrowed  in
excess  of $200,000 in the aggregate (other than the Obligations)
and  such default or event of default remains uncured beyond  the
applicable notice and grace period, if any, with respect thereto.

          11.1.7    Insolvency and Related Proceedings.  Any Loan
Party  shall  cease to be Solvent;  or United or any  Loan  Party
shall suffer the appointment of a receiver, trustee, custodian or
similar fiduciary, or shall make an assignment for the benefit of
creditors, or any petition for an order for relief shall be filed
by  or against any Loan Party or United under the Bankruptcy Code
(if  against  a  Loan Party or United, the continuation  of  such
proceeding  for more than 60 days); or any Loan Party shall  make
any  offer  of  settlement, extension  or  composition  to  their
respective unsecured creditors generally.

           11.1.8     Business Disruption.  Any Loan Party  shall
suffer  the loss or revocation of any license or permit now  held
or hereafter acquired by any Loan Party which is necessary to the
continued or lawful operation of a material part of its business;
or  any  Loan Party shall be enjoined, restrained,  or  otherwise
permanently  prevented by court, governmental  or  administrative
order  from  conducting all or any material part of its  business
affairs; or any material lease or agreement pursuant to which any
Loan  Party  leases,  uses  or occupies  any  Property  shall  be
canceled  or  terminated prior to the expiration  of  its  stated
term;   or  any  Loan  Party  or  United  ceases  scheduled   air
transportation services other than on a temporary basis.

           11.1.9     Change of Ownership. Parent shall cease  to
own  and  control, beneficially and of record, all of the  issued
and  outstanding  stock  of Borrower other  than  pursuant  to  a
transaction permitted by Section 9.2.1(i) or (ii) hereof.

           11.1.10    Challenge to Agreement.  Any Loan Party  or
any  Affiliate of any of them, shall challenge or contest in  any
action, suit or proceeding the validity or enforceability of this
Agreement,  or any of the other Loan Documents, the  legality  or
enforceability  of  any of the Obligations or the  perfection  or
priority of any Lien granted to Lender.  Nothing set forth herein
shall  preclude  a  Loan  Party from enforcing  its  rights,  and
Lender's  duties  and obligations, under this Agreement  and  the
other Loan Documents.

           11.1.11   Criminal Forfeiture.  Any Loan Party or  any
Subsidiary  of  any  Loan Party shall be criminally  indicted  or
convicted  under any law that could lead to a forfeiture  of  any
Property  of any Loan Party or any Subsidiary of any  Loan  Party
which  can  reasonably  be expected to have  a  Material  Adverse
Effect.

           11.1.12    Judgments.   One or more  money  judgments,
writs of attachment or similar process is filed against any  Loan
Party  or  any  Subsidiary of any Loan  Party  or  any  of  their
respective  Property involving liability of $200,000 or  more  in
the  aggregate  (to  the  extent not paid  or  fully  covered  by
insurance  provided by a carrier who has acknowledged  coverage),
and the same is not released, stayed, discharged or bonded within
thirty (30) days after the entry thereof.

           11.1.13    Repudiation  of or Default  Under  Guaranty
Agreement.   Any Guarantor shall revoke or attempt to revoke  the
Guaranty  Agreement signed by such Guarantor, or shall  repudiate
such  Guarantor's  liability thereunder or shall  be  in  default
under the terms thereof.

           11.1.14   ACH Procedure Manual.  Borrower shall  cease
scheduled  air transportation services other than on a  temporary
basis  for a work stoppage and, in consequence thereof, ACH shall
have  directed the Clearing Bank to withhold twenty-five  percent
(25%)  of the net funds due Borrower in any subsequent settlement
in  which Borrower is a net creditor, pursuant to paragraph 8  of
the  settlement regulations set forth in Section  B  of  the  ACH
Procedure Manual.

           11.1.15    Withdrawal as Member.  Borrower shall  give
notice of withdrawal from the ACH Agreement.

           11.1.16   Termination or Breach of the United  Express
Operating  Agreement  or  the  United  Express  Agreements.   The
termination  for  any  reason  of the  United  Express  Operating
Agreement by Borrower without the prior written consent of Lender
as  required  by Section 9.2.11 hereof or by United; or  Borrower
shall  default in the payment (beyond the applicable grace period
with  respect  thereto, if any) with respect to any  Indebtedness
owing  under  any  of the United Express Agreements  or  fail  to
perform or observe any term, covenant or agreement on its part to
be  performed  or observed pursuant to any of the United  Express
Agreements, the effect of which failure is to cause,  or  permit,
United to terminate any of the United Express Agreements.

          11.1.17   Default Under Reimbursement Agreement.  There
shall  occur  any   "Event  of Default" under  the  Reimbursement
Agreement as such term is defined in Section 6.01 thereof.

      11.2 Acceleration of the Obligations.2  Acceleration of the
Obligations.  Without in any way limiting the right of Lender  to
demand  payment  of  any  portion of the Obligations  payable  on
demand in accordance with Section 3.2 hereof, upon or at any time
after  the occurrence of an Event of Default, all or any  portion
of  the  Obligations shall, at the option of Lender  and  without
presentment, demand, protest or further notice by Lender,  become
at  once  due  and  payable and Borrower shall forthwith  pay  to
Lender  the full amount of such Obligations, provided, that  upon
the  occurrence  of an Event of Default specified  in  subsection
11.1.7  hereof, all of the Obligations shall become automatically
due and payable without declaration, notice or demand by Lender.

      11.3  Other  Remedies.3    Other  Remedies.     During  the
existence  of an Event of Default, Lender may exercise from  time
to time the following rights and remedies:

           11.3.1.   All of the rights and remedies of a  secured
party under the Code or under other Applicable Law, and all other
legal  and equitable rights to which Lender may be entitled,  all
of  which rights and remedies shall be cumulative and shall be in
addition  to  any  other  rights or remedies  contained  in  this
Agreement or any of the other Loan Documents, and none  of  which
shall be exclusive.

           11.3.2.    The  right to terminate this  Agreement  as
provided in Section 5.2.1 hereof.

           11.3.3.   The right to notify Account Debtors to  make
remittance  to  Lender of all sums due on Accounts  of  Borrower,
collect such Accounts directly from the Account Debtors, and take
such  other and further action with respect thereto as set  forth
in Section 12.1.2 hereof.

          11.3.4.   The right to take immediate possession of the
Collateral,   and  to  (i)  require  Borrower  to  assemble   the
Collateral,  at  Borrower's expense, and  make  it  available  to
Lender  at  a  place  designated by Lender  which  is  reasonably
convenient to both parties, and (ii) enter any premises where any
of  the  Collateral shall be located and to keep  and  store  the
Collateral  on said premises until sold (and if said premises  be
the  Property  of Borrower, Borrower agrees not to charge  Lender
for storage thereof).

          11.3.5.   The right to sell or otherwise dispose of all
or  any Collateral in a commercially reasonable manner, at public
or  private sale or sales, with such notice as may be required by
law, in lots or in bulk, for cash or on credit, all as Lender, in
its sole discretion, may deem advisable.  Borrower agrees that 10
days written notice to Borrower of any public or private sale  or
other  disposition  of  Collateral  shall  be  reasonable  notice
thereof,  and such sale shall be at such locations as Lender  may
designate in said notice.  Lender shall have the right to conduct
such  sales on Borrower's premises, without charge therefor,  and
such  sales may be adjourned from time to time in accordance with
applicable  law.  Lender shall have the right to sell,  lease  or
otherwise  dispose  of the Collateral, or any part  thereof,  for
cash,  credit or any combination thereof, and Lender may purchase
all  or any part of the Collateral at public or, if permitted  by
law, private sale and, in lieu of actual payment of such purchase
price,  may  set  off  the  amount  of  such  price  against  the
Obligations.   The  proceeds  realized  from  the  sale  of   any
Collateral  may  be applied, after allowing 2 Business  Days  for
collection,   first  to  the  reasonable  costs,   expenses   and
attorneys' fees incurred by Lender in collecting the Obligations,
in enforcing the rights of Lender under the Loan Documents and in
collecting, retaking, completing, protecting, removing,  storing,
advertising  for  sale,  selling and delivering  any  Collateral,
second  to  the  interest due upon any of  the  Obligations;  and
third,  to  the principal of the Obligations.  If any  deficiency
shall arise, Borrower shall remain liable to Lender therefor.  If
there  shall be any surplus, Lender shall remit such  surplus  to
Borrower or other Person entitled thereto.

           11.3.6     With  respect to the  face  amount  of  all
Letters   of   Credit  and  Letter  of  Credit  Guaranties   then
outstanding, Lender may, at its option, require the Loan  Parties
to  deposit with Lender funds equal to such undrawn face  amount,
and  if  the  Loan  Parties fail promptly to make  such  deposit,
Lender  may  advance such amount as a Revolver  Loan.   Any  such
deposit or advance shall be held by Lender in the Cash Collateral
Account  as a reserve to fund future payments on such Letters  of
Credit  or  Letter  of Credit Guaranties.  At such  time  as  all
Letters of Credit and Letter of Credit Guaranties have expired or
have  been  canceled or terminated and Lender and its  Affiliates
released from all liability thereunder, any amounts remaining  in
such   reserves   shall  be  applied  against   any   outstanding
Obligations,  or,  to  the  extent  all  Obligations  have   been
indefeasibly  paid and satisfied in full, returned  to  the  Loan
Parties.
           11.3.7    With respect to the Escrow Funds, the  right
to  notify  the  Escrow Agent of the existence  of  an  Event  of
Default  and to demand that, pursuant to the terms of the  Escrow
Agreement, so much of the Escrow Funds be remitted to Lender  for
application to the Bridge Loan Obligations.

      11.4  Remedies  Cumulative;  No  Waiver.   .4      Remedies
Cumulative;  No  Waiver.  All covenants, conditions,  provisions,
warranties,  guaranties, indemnities, and other  undertakings  of
any  Loan  Party contained in this Agreement and the  other  Loan
Documents, or in any document referred to herein or contained  in
any  agreement  supplementary  hereto  or  in  any  schedule   or
contained  in  any other agreement between Lender  and  any  Loan
Party, heretofore, concurrently, or hereafter entered into, shall
be  deemed cumulative to and not in derogation or substitution of
any  of  the  terms, covenants, conditions, or agreements  herein
contained.   The  failure or delay of Lender  to  require  strict
performance by any Loan Party of any provision of this  Agreement
or  to exercise or enforce any rights, Liens, powers, or remedies
hereunder  or  under  any of the aforesaid  agreements  or  other
documents or security or Collateral shall not operate as a waiver
of  such performance, Liens, rights, powers and remedies, but all
such  requirements,  Liens, rights, powers,  and  remedies  shall
continue  in full force and effect until all Loans and all  other
Obligations  owing  or to become owing from  Borrower  to  Lender
shall  have  been  fully satisfied.  None  of  the  undertakings,
agreements, warranties, covenants and representations of any Loan
Party  contained  in  this Agreement or any  of  the  other  Loan
Documents  and no Event of Default by any Loan Party  under  this
Agreement  or  any other Loan Documents shall be deemed  to  have
been  suspended  or waived by Lender, unless such  suspension  or
waiver  is by an instrument in writing specifying such suspension
or  waiver  and is signed by a duly authorized representative  of
Lender and directed to the Loan Parties.

SECTION 12     MISCELLANEOUSSECTION 12     MISCELLANEOUS

     12.1 Power of Attorney.1 Power of Attorney.  Borrower hereby
irrevocably  designates, makes, constitutes and  appoints  Lender
(and  all  Persons designated by Lender) as Borrower's  true  and
lawful  attorney  (and  agent-in-fact) and  Lender,  or  Lender's
agent,  may, without notice to Borrower and in either  Borrower's
or Lender's name, but at the cost and expense of Borrower:

           12.1.1.    At  such time or times as  Lender  or  said
agent,  in its sole discretion, may determine, endorse Borrower's
name  on any checks, notes, acceptances, drafts, money orders  or
any other evidence of payment or proceeds of the Collateral which
come into the possession of Lender or under Lender's control  for
application to the Obligations in accordance with this Agreement.

          12.1.2.   At such time or times during the existence of
an  Event  of  Default,  and during the continuance  thereof,  as
Lender  or  its  agent in its sole discretion may determine:  (i)
demand  payment  of  the Accounts of Borrower  from  the  Account
Debtors,  enforce payment of such Accounts of Borrower  by  legal
proceedings   or  otherwise,  and  generally  exercise   all   of
Borrower's rights and remedies with respect to the collection  of
its  Accounts;  (ii) in a commercially reasonable manner  settle,
adjust,  compromise, discharge or release any of the Accounts  of
Borrower or other Collateral or any legal proceedings brought  to
collect  any  of  the Accounts of Borrower or  other  Collateral;
(iii)  sell or assign any of the Accounts of Borrower  and  other
Collateral  upon and for such commercially reasonable terms,  for
such amounts and at such time or times as Lender deems advisable;
(iv)  take  control,  in any manner, of any item  of  payment  or
proceeds  relating to any Collateral; (v) prepare, file and  sign
Borrower's  name  to  a proof of claim in bankruptcy  or  similar
document  against any Account Debtor or to any  notice  of  lien,
assignment  or  satisfaction  of  lien  or  similar  document  in
connection  with  any of the Collateral; (vi) receive,  open  and
dispose  of  all  mail addressed to Borrower  and  notify  postal
authorities  to change the address for delivery thereof  to  such
address  as  Lender  may designate; (vii)  endorse  the  name  of
Borrower  upon any of the Payment Items or proceeds  relating  to
any  Collateral and deposit the same to the account of Lender  on
account  of  the  Obligations; (viii) endorse the  name  of  such
Borrower  upon any Chattel Paper, Document, Instrument,  invoice,
freight  bill,  bill of lading or similar document  or  agreement
relating  to the Accounts or Rotable Spare Parts of the  Borrower
and  any other Collateral; (ix) use Borrower's stationery for the
purpose of and sign the name of Borrower to verifications of  its
Accounts  and  notices thereof to Account Debtors;  (x)  use  the
information  recorded  on or contained  in  any  data  processing
equipment  and  computer hardware and software  relating  to  the
Accounts  and  Rotable  Spare Parts of  Borrower  and  any  other
Collateral;  (xi)  make  and  adjust  claims  under  policies  of
insurance;  and (xii) do all other acts and things necessary,  in
Lender's  determination, to fulfill Borrower's obligations  under
this Agreement.

           12.1.3.    The power of attorney granted  pursuant  to
this  Section  14.1,  being coupled with an  interest,  shall  be
irrevocable by Borrower until all of the Obligations are paid and
satisfied in full.

     12.2 Indemnity.2    Indemnity.

          12.2.1    Indemnity by Borrower. Borrower hereby agrees
to  indemnify the Lender and to hold the Lender harmless from and
against  any liability, loss, damage, suit, action or  proceeding
ever  suffered  or incurred by  the Lender (including  reasonable
attorneys fees and reasonable legal expenses) arising out  of  or
related to this Agreement or any of the other Loan Documents, the
performance by Lender of its duties or the exercise of any of its
rights  and  remedies hereunder, on account of, or as the  result
of,  a claim made, asserted or initiated by any Person other than
a  Loan  Party that any Loan Party has failed to observe, perform
or  discharge such Loan Party's duties hereunder or under any  of
the  Loan  Documents.  In addition, Borrower shall also indemnify
and  defend the Lender against and save the Lender harmless  from
all  Claims  of  any  Person  with  respect  to  the  Collateral.
Additionally,  if  any  Taxes (excluding Taxes  imposed  upon  or
measured by the net income of the Lender, but including,  without
limitation,  any  intangibles tax, stamp tax,  recording  tax  or
franchise tax) shall be payable by Lender or by any Loan Party or
any  of  its Subsidiaries on account of the execution or delivery
of  this  Agreement,  or  the execution,  delivery,  issuance  or
recording of any of the other Loan Documents, or the creation  of
any  of  the Obligations, by reason of any existing or  hereafter
enacted  federal,  state,  foreign  or  local  statute,  rule  or
regulation, Borrower will pay (or will promptly reimburse  Lender
for   the   payment  of)  all  such  Taxes,  including,   without
limitation,  any  interest  and  penalties  thereon,   and   will
indemnify and hold Lender harmless from and against all liability
in  connection  therewith.  The foregoing indemnities  shall  not
apply  to  protect  Lender  for the  consequences  of  its  gross
negligence or willful misconduct.

          12.2.2    Indemnity by Lender.  Lender hereby agrees to
indemnify Borrower against any liability, loss, damage or expense
which Borrower may suffer or occur as a result of Lender's breach
of any of its warranties and representations set forth in Section
4.02 of the Reimbursement Agreement or Lender's failure to comply
with  any  of  the  covenants set forth in Section  5.03  of  the
Reimbursement Agreement and Bank's exercise of its  rights  under
Section 6.02 of the Reimbursement Agreement as a result thereof.

      12.3 Survival of Indemnities.3     Survival of Indemnities.
Notwithstanding any contrary provision in this Agreement  or  the
other  Loan  Documents, the obligation of the  Loan  Parties  and
Lender  with  respect  to each indemnity  given  by  it  in  this
Agreement  or any of the other Loan Documents shall  survive  the
payment  in full of the Obligations and the termination  of  this
Agreement.

       12.4   Modification  of  Agreement.4     Modification   of
Agreement.  This  Agreement  may  not  be  modified,  altered  or
amended,  except by an agreement in writing signed by  each  Loan
Party and Lender.  No Loan Party may sell, assign or transfer any
interest  in this Agreement, any of the other Loan Documents,  or
any  of  the  Obligations,  or  any portion  thereof,  including,
without  limitation, such Loan Party's rights, title,  interests,
remedies, powers, and duties hereunder or thereunder.  Each  Loan
Party   hereby   consents   to  Lender's   participation,   sale,
assignment, transfer or other disposition, at any time  or  times
hereafter, of this Agreement and any of the other Loan Documents,
or   of   any  portion  hereof  or  thereof,  including,  without
limitation, Lender's rights, title, interests, remedies,  powers,
and  duties hereunder or thereunder; provided, however,  no  such
sale, assignment, participation, transfer or other disposition by
Lender   will  result  in  any  diminution  of  the  rights   and
obligations  of  the Loan Parties under this  Agreement  and  the
other Loan Documents.  In the case of an assignment, the assignee
shall  have,  to the extent of such assignment, the same  rights,
benefits  and  obligations  as  it  would  if  it  were  "Lender"
hereunder  and  Lender  shall  be  relieved  of  all  obligations
hereunder upon any such assignments.  Each Loan Party agrees that
it  will use its best efforts to assist and cooperate with Lender
in  any manner reasonably requested by Lender to effect the  sale
of  participations in or assignments of any of the Loan Documents
or  any  portion thereof or interest therein, including,  without
limitation,   assisting   in  the  preparation   of   appropriate
disclosure documents.  Each Loan Party further agrees that Lender
may disclose credit information regarding such Loan Party and its
Subsidiaries to any potential participant or assignee.

      12.5 Severability.5 Severability.  Wherever possible,  each
provision  of this Agreement shall be interpreted in such  manner
as  to  be effective and valid under Applicable Law, but  if  any
provision  of  this Agreement shall be prohibited by  or  invalid
under Applicable Law, such provision shall be ineffective only to
the   extent   of   such   prohibition  or  invalidity,   without
invalidating  the  remainder of such provision or  the  remaining
provisions of this Agreement.

      12.6  Successors and Assigns.  .6   Successors and Assigns.
This  Agreement, the Other Agreements and the Security  Documents
shall  be binding upon and inure to the benefit of the successors
and assigns of Borrower and Lender.

      12.7  Cumulative  Effect; Conflict of  Terms.7   Cumulative
Effect;   Conflict  of  Terms.   The  provisions  of  the   Other
Agreements  and the Security Documents are hereby made cumulative
with  the  provisions  of this Agreement.   Except  as  otherwise
provided in any of the other Loan Documents by specific reference
to  the  applicable provision of this Agreement, if any provision
contained  in  this  Agreement is in  direct  conflict  with,  or
inconsistent  with,  any  provision in  any  of  the  other  Loan
Documents, the provision contained in this Agreement shall govern
and control.

        12.8   Execution   in   Counterparts.8     Execution   in
Counterparts.   This Agreement may be executed in any  number  of
counterparts  and  by  different  parties  hereto   in   separate
counterparts, each of which when so executed and delivered  shall
be  deemed to be an original and all of which counterparts  taken
together shall constitute but one and the same instrument.

       12.9   Required  Lender's  Consent.9    Required  Lender's
Consent.   Whenever Lender's consent is required to  be  obtained
under  this  Agreement or any of the other Loan  Documents  as  a
condition  to  any action, inaction, condition or  event,  Lender
shall  be authorized to give or withhold its consent in its  sole
and  absolute  discretion and to condition its consent  upon  the
giving of additional collateral security for the Obligations, the
payment of money or any other matter.

     12.10Notice.10 Notice.  All notices, requests and demands to
or  upon a party hereto, to be effective, shall be in writing and
shall  be  sent  by certified or registered mail, return  receipt
requested,  by  personal delivery against receipt,  by  overnight
courier  or  by  facsimile  transmission  and,  unless  otherwise
expressly  provided herein, shall be deemed to have been  validly
served,  given  or  delivered immediately when delivered  against
receipt,  three  (3)  Business Days after deposit  in  the  mail,
postage prepaid, or, in the case of facsimile transmission,  when
received (if on a Business Day and, if not received on a Business
Day,  then  on the next Business Day after receipt), or  one  (1)
Business  Day after deposit with an overnight courier,  addressed
as follows:

          If to Borrower:     Atlantic Coast Airlines
                         515-A Shaw Road
                         Sterling, Virginia 20166
                            Attention:   Director   of   Treasury
Management
                         Facsimile:  703-925-6299

          If to Parent:       Atlantic Coast Airlines, Inc.
                         515-A Shaw Road
                         Sterling, Virginia 20166
                         Attention: Chief Financial Officer
                         Facsimile:  703-925-6299

          If to Lender:       Fleet Capital Corporation
                         6100 Fairview Road
                         Suite 200
                         Charlotte, North Carolina 28210
                         Attention: Southeast Loan Administration
                         Facsimile No.: 704-553-6738

          With a copy to:     Carruthers & Roth, P.A.
                         235 N. Edgeworth Street
                         Greensboro, North Carolina 27401
                         Attention: Kenneth M. Greene, Esq.
                         Facsimile No.: 336-273-7885

or  to  such other address as each party may designate for itself
by  notice given in accordance with this Section 12.10; provided,
however,  that  any notice, request or demand to or  upon  Lender
pursuant  to  subsection  3.1.1 or  5.2.2  hereof  shall  not  be
effective until received by Lender.  Any written notice or demand
that  is not sent in conformity with the provisions hereof  shall
nevertheless  be  effective  on the  date  that  such  notice  is
actually received by the noticed party.

      12.11Credit Inquiries.  .11   Credit Inquiries.  Each  Loan
Party hereby authorizes and permits Lender, at its discretion and
without  any obligation to do so, to respond to credit  inquiries
from  third  parties  concerning a  Loan  Party  or  any  of  its
Subsidiaries.

      12.12Time of Essence.12  Time of Essence.  Time is  of  the
essence  of this Agreement, the Other Agreements and the Security
Documents.

      12.13Entire Agreement.13 Entire Agreement; Appendix  A  and
Exhibits  and  Schedules.   This Agreement  and  the  other  Loan
Documents,  together with all other instruments,  agreements  and
certificates  executed by the parties in connection therewith  or
with  reference  thereto,  embody the  entire  understanding  and
agreement between the parties hereto and thereto with respect  to
the  subject  matter hereof and thereof and supersede  all  prior
agreements,  understandings and inducements, whether  express  or
implied,  oral or written.   Appendix A and each of the  exhibits
and   schedules  attached  hereto  are  incorporated  into   this
Agreement and by this reference made a part hereof.

      12.14Interpretation.14   Interpretation.  No  provision  of
this  Agreement  or  any  of the other Loan  Documents  shall  be
construed against or interpreted to the disadvantage of any party
hereto  by  any court or other governmental or judicial authority
by reason of such party having or being deemed to have structured
or dictated such provision.

      12.15GOVERNING  LAW;  CONSENT TO  FORUM.15  GOVERNING  LAW;
CONSENT TO FORUM.  THIS  AGREEMENT  SHALL  BE  GOVERNED  BY   AND
CONSTRUED   IN  ACCORDANCE  WITH  THE  LAWS  OF  THE   STATE   OF
NORTH   CAROLINA;  PROVIDED,  HOWEVER,  THAT  IF   ANY   OF   THE
COLLATERAL   SHALL   BE   LOCATED  IN  ANY   JURISDICTION   OTHER
THAN   NORTH  CAROLINA,  THE  LAWS  OF  SUCH  JURISDICTION  SHALL
GOVERN   THE   METHOD,  MANNER  AND  PROCEDURE  FOR   FORECLOSURE
OF  LENDER'S  LIEN  UPON  SUCH  COLLATERAL  AND  THE  ENFORCEMENT
OF  LENDER'S  OTHER  REMEDIES  IN  RESPECT  OF  SUCH   COLLATERAL
TO   THE   EXTENT   THAT  THE  LAWS  OF  SUCH  JURISDICTION   ARE
DIFFERENT   FROM  OR  INCONSISTENT  WITH  THE   LAWS   OF   NORTH
CAROLINA.   EACH  OF  THE PARTIES HERETO  HEREBY   CONSENTS   AND
AGREES   THAT ANY STATE OR FEDERAL COURT IN  MECKLENBURG  COUNTY,
NORTH  CAROLINA SHALL HAVE EXCLUSIVE  JURISDICTION  TO  HEAR  AND
DETERMINE  ANY  CLAIMS  OR  DISPUTES  AMONG  THE LOAN PARTIES AND
LENDER  PERTAINING   TO  THIS  AGREEMENT   OR   TO   ANY   MATTER
ARISING   OUT  OF  OR  RELATED  TO  THIS  AGREEMENT.  EACH  PARTY
EXPRESSLY   SUBMITS   AND   CONSENTS   IN   ADVANCE    TO    SUCH
JURISDICTION  IN  ANY  ACTION  OR  SUIT  COMMENCED  IN  ANY  SUCH
COURT,  AND EACH PARTY HEREBY  WAIVES  ANY  OBJECTION  WHICH  ANY
PARTY  MAY   HAVE  BASED  UPON  LACK  OF  PERSONAL  JURISDICTION,
IMPROPER    VENUE   OR   FORUM   NON   CONVENIENS   AND    HEREBY
CONSENTS   TO   THE   GRANTING  OF  SUCH   LEGAL   OR   EQUITABLE
RELIEF  AS  IS  DEEMED  APPROPRIATE  BY  SUCH  COURT.

      12.16WAIVERS.16     WAIVERS.    EACH LOAN PARTY WAIVES  (i)
TO   THE   FULLEST  EXTENT  PROVIDED  BY  APPLICABLE   LAW,   THE
RIGHT   TO  TRIAL  BY  JURY  (WHICH LENDER  HEREBY  ALSO  WAIVES)
IN   ANY   ACTION,  SUIT,  PROCEEDING  OR  COUNTERCLAIM  OF   ANY
KIND   ARISING   OUT  OF  OR  RELATED  TO   ANY   OF   THE   LOAN
DOCUMENTS,    THE    OBLIGATIONS   OR   THE    COLLATERAL;   (ii)
PRESENTMENT,  DEMAND  AND  PROTEST  AND  NOTICE  OF  PRESENTMENT,
PROTEST,     DEFAULT,    NON    PAYMENT,    MATURITY,    RELEASE,
COMPROMISE,   SETTLEMENT,  EXTENSION  OR  RENEWAL   OF   ANY   OR
ALL  COMMERCIAL  PAPER,  ACCOUNTS,  CONTRACT  RIGHTS,  DOCUMENTS,
INSTRUMENTS,   CHATTEL   PAPER  AND  GUARANTIES   AT   ANY   TIME
HELD   BY LENDER  ON  WHICH  THE LOAN PARTIES  MAY  IN  ANY   WAY
BE   LIABLE;   (iii)  NOTICE  PRIOR  TO  TAKING   POSSESSION   OR
CONTROL  OF  THE  COLLATERAL  OR  ANY  BOND  OR  SECURITY   WHICH
MIGHT   BE  REQUIRED  BY  ANY  COURT  PRIOR  TO  ALLOWING  LENDER
TO  EXERCISE  ANY  OF LENDER'S  REMEDIES;  (iv)  THE  BENEFIT  OF
ALL   VALUATION,  APPRAISEMENT  AND  EXEMPTION  LAWS;   AND   (v)
NOTICE   OF   ACCEPTANCE  HEREOF.  EACH LOAN  PARTY  ACKNOWLEDGES
THAT   THE  FOREGOING  WAIVERS  ARE  A  MATERIAL  INDUCEMENT   TO
LENDER'S   ENTERING  INTO  THIS  AGREEMENT  AND  THAT LENDER   IS
RELYING  UPON  THE  FOREGOING  WAIVERS  IN  ITS  FUTURE  DEALINGS
WITH   THE  LOAN  PARTIES.     EACH  LOAN  PARTY   WARRANTS   AND
REPRESENTS   THAT   IT   HAS  REVIEWED  THE   FOREGOING   WAIVERS
WITH   ITS  LEGAL  COUNSEL  AND  HAS  KNOWINGLY  AND  VOLUNTARILY
WAIVED   ITS  JURY  TRIAL  RIGHTS  FOLLOWING  CONSULTATION   WITH
LEGAL  COUNSEL.  IN  THE  EVENT  OF  LITIGATION,  THIS  AGREEMENT
MAY   BE   FILED  AS  A  WRITTEN  CONSENT  TO  A  TRIAL  BY   THE
COURT.
     IN  WITNESS  WHEREOF,  this Agreement has been duly executed
on the day and year specified at the beginning of this Agreement.

ATTEST:                       ATLANTIC COAST AIRLINES
                              ("Borrower")


__________________________________
By:____________________________
Richard J. Kennedy. Secretary    Thomas J. Moore, Executive  Vice
                               President   and  Chief   Operating
                               Officer


[CORPORATE SEAL]




ATTEST:                        ATLANTIC COAST AIRLINES  HOLDINGS,
INC.
                              ("Parent")


__________________________________ By:___________________________
Richard J. Kennedy. Secretary      Thomas   J.  Moore,  Executive
                                   Vice President and
                                   Chief Operating Officer


[CORPORATE SEAL]


Accepted in Charlotte, North Carolina

FLEET CAPITAL CORPORATION
                                   ("Lender")



By:_______________________________________

Title:___________________________________

                              LIBOR Lending Office:

                              6100 Fairview Road
                              Suite 200 Charlotte, North Carolina
28210
                                  Attention:    Southeast    Loan
Administration
                              Facsimile No.: 704-553-6738
                          APPENDIX  A

                      GENERAL  DEFINITIONS

           When  used in the Amended and Restated  Loan  and
Security  Agreement,  dated of even date  herewith,  by  and
among  ATLANTIC  COAST AIRLINES ("Borrower"),  and  ATLANTIC
COAST AIRLINES HOLDINGS, INC. ("Parent"; Borrower and Parent
being  herein  collectively called the "Loan  Parties"  and,
individually, a "Loan Party"), and FLEET CAPITAL CORPORATION
("Lender"),  the  following terms shall have  the  following
meanings  (terms defined in the singular to  have  the  same
meaning when used in the plural and vice versa):

           ACH  -  Airline Clearing House, Inc., a  Delaware
     corporation.

            ACH   Agreement   -  the  Associate   Membership
     Agreement, dated January 3, 1992, which incorporates by
     reference  the Agreement Relating to the Settlement  of
     Interline  Accounts  through Airlines  Clearing  House,
     Inc. dated as of February 1, 1948, as amended from time
     to  time, each among ACH, certain air carriers that are
     and may become party thereto, and Borrower.

          ACH Procedure Manual - the Manual of Procedure for
     the  clearing  and settlement functions of  ACH  as  in
     effect from time to time.

            ACH  Settlement  Date  -  in  the  case  of  ACH
     transactions  between Borrower and an  Account  Debtor,
     the  twenty-eighth (28th) calendar  day  of  the  month
     following  the  month in which the  air  transportation
     services are rendered and revenues earned, and, in  the
     case  of  IATA  transactions between  Borrower  and  an
     Account  Debtor, the fifteenth (15th) calendar  day  of
     the  second month following the month in which the  air
     transportation  services  are  rendered  and   revenues
     earned,  and, if such calendar day falls on a Saturday,
     Sunday or legal holiday observed by the Clearing  Bank,
     the ACH Settlement Date shall be the next working day.

           Account - shall have the meaning ascribed to  the
     term  "account"  under  the Code,  and  shall  include,
     without limitation, any right to payment for goods sold
     or  leased  or  for  services  rendered  which  is  not
     evidenced by an Instrument, Document or Chattel  Paper,
     whether secured or unsecured, and whether or not earned
     by performance.

           Account Debtor - any Person who is or may  become
     obligated under or on account of an Account.

            Accounts  Borrowing  Base  -  at  any  date   of
     determination thereof, an amount equal to  seventy-five
     percent  (75%)  of the net amount of Eligible  Accounts
     outstanding   at  such  date.   For  the  purposes   of
     calculating the Accounts Borrowing Base, the net amount
     of  Eligible  Accounts at any time shall  be  the  face
     amount  of  such  Eligible Accounts less  any  and  all
     returns,  rebates, discounts (which  may,  at  Lender's
     option, be calculated on shortest terms), sales  taxes,
     credits,  allowances or excise taxes of any  nature  at
     any  time  issued,  owing, claimed by Account  Debtors,
     granted, outstanding or payable in connection with such
     Accounts at such time (including current amounts  owing
     by   Borrower  to  United  under  the  United   Express
     Agreements).

           Adjusted  LIBOR  Rate  -  with  respect  to  each
     Interest Period for a LIBOR Rate Loan, an interest rate
     per annum (rounded to the nearest ten thousandth of 1%)
     equal  to the quotient of (i) the LIBOR Rate in  effect
     for  such  Interest Period divided by (ii) a percentage
     (expressed as a decimal) equal to 100% minus  Statutory
     Reserves.

           Affiliate  -  as to any Person, any other  Person
     (other  than  a  Subsidiary):  (i)  which  directly  or
     indirectly through one or more intermediaries controls,
     or  is  controlled by, or is under common control with,
     such  Person; (ii) which beneficially owns or holds  5%
     or  more  of  any  class of the Voting  Stock  of  such
     Person; or (iii) 5% or more of the Voting Stock (or  in
     the case of a Person which is not a corporation, 5%  or
     more  of  the equity interest) of which is beneficially
     owned  or held by such Person or a Subsidiary  of  such
     Person. For the purposes of the Agreement, United shall
     not be deemed an Affiliate of a Loan Party.

           Agreement  -  the  Loan  and  Security  Agreement
     referred  to in the first sentence of this Appendix  A,
     as   the  same  may  hereafter  be  amended,  modified,
     supplemented  or  restated  from  time  to  time,   all
     exhibits hereto and this Appendix A.

          Appliance - an instrument, equipment, apparatus, a
     part, an appurtenance, or an accessory used, capable of
     being  used,  or intended to be used, in  operating  or
     controlling aircraft in flight, including a  parachute,
     communication   equipment,   and   another    mechanism
     installed in or attached to aircraft during flight, and
     not  a  part  of  an  aircraft,  aircraft  engine,   or
     propeller.

           Applicable  Law - all laws, rules and regulations
     applicable   to   the  Person,  conduct,   transaction,
     covenant or Loan Documents in question, including,  but
     not limited to, all applicable common law and equitable
     principles; all provisions of all applicable state  and
     federal constitutions, statutes, rules, regulations and
     orders  of  governmental bodies; orders, judgments  and
     decrees   of  all  courts  and  arbitrators   and   all
     Environmental Laws.

           Applicable Percentage - for any day, the rate per
     annum  set  forth  below opposite the applicable  Level
     then in effect, it being understood that the Applicable
     Percentage  for (i) the Revolver Loans that  are  LIBOR
     Rate Loans or Daily LIBOR Loans shall be the percentage
     set  forth  in  Table  I  under the  column  Applicable
     Percentage  for  LIBOR Loans, (ii) the  Revolver  Loans
     that  are  Base Rate Loans shall be the percentage  set
     forth in Table I under the column Applicable Percentage
     for  Base  Rate Loan, (iii) the portion of  the  Bridge
     Loan  that  are LIBOR Rate Loans or Daily  LIBOR  Loans
     shall be the percentage set forth in Table II under the
     column Applicable Percentage for LIBOR Loans, (iv)  the
     portion  of  the Bridge Loan that are Base  Rate  Loans
     shall be the percentage set forth in Table II under the
     column  Applicable Percentage for Base Rate Loans,  (v)
     the  unused line fee shall be the percentage set  forth
     in  Table I under the column Applicable Percentage  for
     Unused  Line  Fee; and (vi) the letter  of  credit  fee
     shall be the percentage set forth in Table I under  the
     column Applicable Percentage for Letter of Credit Fee:
     
                           Table I
    Revolver Loans; Unused Line Fee; Letter of Credit Fee
                              
                        Applicable                 Applicable
ApplicableApplicable
                     Percentage for           Percentage  for
Percentage for  Percentage for
           Level            LIBOR Loan             Base  Rate
Loan     Unused Line Fee   Letter of Credit Fee
        Level I          .75%           0%           .25%             .75%
        Level II         1.00%          0%           .375%       1.0%
             Level      III            1.25%               0%
 .375%    1.0%
        Level IV         1.50%          .25%      .375%          1.0%
        Level V          1.75%          .25%      .375%          1.25%
     
                               Table II
                             Bridge Loan

                                                  Applicable
Applicable
                           Percentage for       Percentage for
              Level             LIBOR Loan                Base
Rate Loan
              Level I             .25%           0%
              Level II                 .50%           0%
              Level III           0.75%               0%
              Level IV            1.0%           .25%

              Level V             1.25%               .25%

           The Applicable Percentage shall, in each case, be
     determined  after  receipt by Lender of  the  financial
     statements as of the end of each fiscal quarter and for
     that  portion  of the fiscal year of the  Loan  Parties
     then ended which are required to be delivered to Lender
     in  accordance with the provisions of Section 9.1.3(ii)
     of  the  Agreement, commencing with the fiscal  quarter
     ending  March 31, 1999, and shall be adjusted effective
     on  the first day of the month following the receipt by
     Lender   of   such  financial  statements   (each,   an
     "Adjustment  Date").  Such Applicable Percentage  shall
     be  effective from such Adjustment Date until the  next
     such   Adjustment   Date.    The   initial   Applicable
     Percentages shall be based on Level IV until the  first
     Adjustment Date occurring after March 31, 1999.

           Authority - the Metropolitan Washington  Airports
Authority.

           Availability - the amount of money which Borrower
     is  entitled  to borrow from time to time  as  Revolver
     Loans,  such  amount being the difference derived  when
     the  sum of the principal amount of Revolver Loans then
     outstanding  (including any amounts  which  Lender  may
     have  paid for the account of Borrower pursuant to  any
     of   the  Loan  Documents  and  which  have  not   been
     reimbursed   by  Borrower)  is  subtracted   from   the
     Borrowing Base.  If the amount outstanding is equal  to
     or  greater  than  the Borrowing Base, Availability  is
     zero (0).

            Availability   Reserve  -   On   any   date   of
     determination thereof, an amount equal to  the  sum  of
     (i)  any  amounts  of past due rent  or  other  charges
     (other  than project rental as specified in the  Lease)
     owing  at such time by Borrower to the Authority  under
     the Lease; (ii) any amounts which Borrower is obligated
     to pay pursuant to the provisions of the Loan Documents
     but  does  not pay when due and which Lender elects  to
     pay  pursuant  to  any of the Loan  Documents  for  the
     account  of  Borrower;  (iii)  the  estimated  cost  of
     services  ordered  by Borrower from  United  under  the
     United  Express Emergency Response Agreement; (iv)  the
     amount  of all Letter of Credit Obligations outstanding
     at  such date except for those with respect to the Bond
     Letter   of  Credit  and  the  Bond  Letter  of  Credit
     Guaranty;  and (v) such reserves established by  Lender
     in  such  amounts,  and with respect to  such  matters,
     events, conditions or contingencies as to which Lender,
     in  its  credit  judgment  based  upon  its  usual  and
     customary   credit   and   collateral   considerations,
     determines reserves should be established from time  to
     time,  including, without limitation, with  respect  to
     (1)  improper  billings, other billing  and  settlement
     errors  which  occur from time to time  under  the  ACH
     Procedures Manual, (2) any diminution in the  value  of
     any  of  the  Rotable Spare Parts, to  the  extent  not
     otherwise taken into account in the calculation of  the
     Rotable Spare Parts Borrowing Base, and (3) other  sums
     chargeable against Borrower's Loan Account as  Revolver
     Loans under any section of the Agreement.

          Average Monthly Revolver Loan and Letter of Credit
     Balance  -  the amount obtained by adding the aggregate
     unpaid  balance  of all Revolver Loans  and  Letter  of
     Credit  Obligations outstanding at the end of each  day
     during  the month in question and by dividing that  sum
     by the number of days in such month.

          Average Monthly Revolver Loan Balance - the amount
     obtained by adding the aggregate unpaid balance of  all
     Revolver  Loans  and  all Letter of Credit  Obligations
     except  for  the  Letter of Credit Obligations  arising
     under the Bond Letter of Credit Guaranty, in each  case
     which are outstanding at the end of each day during the
     month  in  question and by dividing  that  sum  by  the
     number of days in such month.

          Bank - Fleet National Bank, and its successors and
     assigns.

           Base  Rate  -  the rate of interest announced  or
     quoted  by Bank from time to time as its base rate  for
     commercial  loans,  whether or not  such  rate  is  the
     lowest  rate  charged  by Bank to  its  most  preferred
     borrowers; and, if such base rate for commercial  loans
     is  discontinued  by Bank as a standard,  a  comparable
     reference  rate  designated by  Bank  as  a  substitute
     therefor shall be the Base Rate.

           Base  Rate  Loan  - a Loan, or  portion  thereof,
     during any period in which it bears interest at a  rate
     based upon the Base Rate.

          Board of Governors - the Board of Governors of the
     Federal Reserve System of the United States.

           Bond  Documents  - collectively,  the  Bond  Loan
     Agreement,  the Bonds, the Indenture, the Reimbursement
     Agreement,  and  all guaranties, agreements,  opinions,
     certificates  or  assurances  executed  in   connection
     therewith.

           Bond  Letter  of  Credit  -  Bank's  irrevocable,
     transferable   direct-pay   letter   of    credit    in
     substantially   the   form  of   Exhibit   A   to   the
     Reimbursement Agreement in the original undrawn  amount
     of $9,579,932.

           Bond Letter of Credit Guaranty - the guaranty  by
     Lender of the reimbursement and other obligations owing
     by  Borrower to Bank in respect of the Bond  Letter  of
     Credit as set forth in the Reimbursement Agreement

           Bond  Loan  Agreement  - that  certain  Financing
     Agreement dated June 1, 1997 between the Issuer and the
     Borrower, pursuant to which the proceeds of the sale of
     the  Bonds will be used by the Borrower for the purpose
     of  financing the cost of construction of a maintenance
     facility and associated access roadway, vehicle parking
     and  maneuvering  areas and aircraft paving  aprons  on
     land controlled by the Authority.

           Bond  Trustee   -  FMB  Trust  Company,  National
     Association.

           Bonds - Issuer's Variable Rate Demand/Fixed  Rate
     Revenue Bonds (Atlantic Coast Airlines Project)  Series
     1997 in the aggregate principal amount of $9,425,000.

           Borrowing  -  a borrowing of one or  more  Loans,
     including Bridge Loan Advances, made on the same day by
     Lender.
 .
           Borrowing  Base - as at any date of determination
     thereof, an amount equal to the sum of:

                         (i)  the Accounts Borrowing Base at
          such date;

                              PLUS

                         (ii)      subject to the provisions
          of Section 6.6 of the Agreement, the Rotable Spare
          Parts Borrowing Base at such date;

                             MINUS

                                (iii)      the  Availability
               Reserve.

           Borrowing Base Certificate - A certificate of  an
     officer of Borrower certifying to Lender the amount and
     value  of  all  of  Borrower's  Eligible  Accounts  and
     Eligible  Rotable  Spare Parts, and  other  information
     about the Collateral reasonably requested by Lender, as
     of  a specific date, such certificate to be in form and
     detail reasonably satisfactory to Lender.

           Bridge  Loan - the Loan to Borrower by Lender  as
     provided in Section 1.2 of the Agreement.

           Bridge  Loan  Advance - the principal  amount  of
     loans,  advances and disbursements made  by  Lender  to
     Borrower pursuant to Section 1.2 of the Agreement  with
     respect to the Bridge Loan.

           Bridge  Note - the Bridge Note to be executed  by
     Borrower  in  favor of Lender on or about  the  Closing
     Date in the form of Exhibit A hereto.

           Bridge Loan Maturity Date - the date that is  the
     earlier  to occur of (a) September 30, 2000 or (b)  the
     date  on  which the Obligations have been  declared  or
     have  automatically become due and payable pursuant  to
     Section 11.2 of the Agreement.

           Bridge  Loan  Obligations - that portion  of  the
     Obligations  consisting  of  the  principal   of,   and
     interest  on, the Bridge Loan, and all expenses,  fees,
     attorneys' fees and any other amounts chargeable to, or
     to  be paid by, Borrower or any Guarantor under any  of
     the  Loan Documents, in connection with the enforcement
     by Lender of its rights to collect the Bridge Loan from
     Borrower or any Guarantor in accordance with the  terms
     of  the  Loan Documents or to collect the Escrow  Funds
     from  the  Escrow Agent or otherwise realize  upon  the
     Escrow Funds.

           Business Day - any day excluding Saturday, Sunday
     and any day which is a legal holiday under the laws  of
     the  State  of  North Carolina or is  a  day  on  which
     banking institutions located in such states are closed,
     provided, however, that when used with reference  to  a
     LIBOR  Rate  Loan  (including the  making,  continuing,
     prepaying  or repaying of any LIBOR Rate  Loan  for  an
     Interest  Period), the term "Business Day"  shall  also
     exclude  any  day  on which banks are  not  opened  for
     dealings  in  dollar deposits on the  London  interbank
     market.

           Cash  Collateral - cash deposited with Lender  in
     accordance  with  the  Agreement as  security  for  the
     Obligations to the extent provided in the Agreement.

           Cash  Collateral  Account -  an  interest-bearing
     account established by Lender on its books and to which
     Lender shall credit all Cash Collateral deposited  with
     Lender in accordance with the Agreement.

            Capital  Expenditures  -  expenditures  made  or
     liabilities incurred for the acquisition of  any  fixed
     assets or improvements, replacements, substitutions  or
     additions thereto which have a useful life of more than
     one  year,  including  the total principal  portion  of
     Capitalized Lease Obligations.

           Capitalized  Lease Obligation - any  Indebtedness
     represented  by  obligations  under  a  lease  that  is
     required  to  be  capitalized for  financial  reporting
     purposes in accordance with GAAP.

            Cash   Equivalents   -  (i)  marketable   direct
     obligations issued or unconditionally guaranteed by the
     United  States Government and backed by the full  faith
     and  credit  of  the  United States  Government  having
     maturities of not more than twelve (12) months from the
     date  of acquisition; (ii) certificates of deposit  and
     time  deposits  (including  eurodollar  time  deposits)
     having  maturities of not more than twelve (12)  months
     from  the date of acquisition, and banker's acceptances
     having  maturities of not more than twelve (12)  months
     from   the  date  of  acquisition  and  overnight  bank
     deposits, which in each case (unless issued by  Lender)
     are  not subject to offset rights in favor of such bank
     arising  from any banking relationship with such  bank;
     (iii)  repurchase obligations with a term of  not  more
     than thirty (30) days for underlying securities of  the
     types   described  in  clauses  (i)  and  (ii);    (iv)
     commercial  paper  having a maturity  within  nine  (9)
     months after the date of acquisition thereof; (v) money
     market  mutual  funds;  (vi)  municipal  auction   rate
     preferred  instruments;  (vii) corporate  auction  rate
     preferred  instruments; (viii) municipal  auction  rate
     bonds; and (ix) variable rate demand notes.

          Chattel Paper - shall have the meaning ascribed to
     "chattel paper" under the Code.

           Claim - any and all claims, demands, liabilities,
     obligations,   losses,  damages,  penalties,   actions,
     judgments,  suits, costs, expenses or disbursements  of
     any  kind  or  nature whatsoever (including  reasonable
     attorneys' fees and expenses), whether arising under or
     in  connection  with  the  Loan  Documents,  under  any
     Applicable  Law  (including any Environmental  Law)  or
     otherwise.

           Clearing Bank - The Chase Manhattan Bank, and any
     successor clearing bank under the ACH Procedure Manual.

           Clearing Bank Account - the account maintained by
     Borrower at the Clearing Bank in which, pursuant to the
     ACH  Procedure  Manual, all funds due  and  payable  to
     Borrower are credited.

           Closing  Date  -  the date on which  all  of  the
     conditions precedent in Section 10 of the Agreement are
     satisfied  and  the  initial Loan  is  made  under  the
     Agreement.

           Code - the Uniform Commercial Code as adopted and
     in  force in the State of North Carolina, as from  time
     to time in effect.

           Collateral - all of the Property and interests in
     Property  of  Borrower described in Section  6  of  the
     Agreement,  and  all other Property  and  interests  in
     Property  of Borrower or any other Person that  now  or
     hereafter secure the payment and performance of any  of
     the Obligations.

           Consolidated  - the consolidation  in  accordance
     with  GAAP of the accounts or other items as  to  which
     such term applies.

          Consolidated Adjusted Net Earnings From Operations
     -  with  respect  to any Person for any fiscal  period,
     means  the  net earnings (or loss) after provision  for
     income  taxes for such fiscal period of such Person  as
     reflected  on the financial statements of  such  Person
     supplied  to  Lender pursuant to Section 9.1.3  of  the
     Agreement, but excluding:

                         (i)   any gain or loss arising from
          the sale of capital assets;

                          (ii)    any gain arising from  any
          write-up of assets;

                          (iii)   earnings of any Subsidiary
          of such Person accrued prior to the date it became
          a Subsidiary of such Person;

                         (iv)   earnings of any corporation,
          substantially  all the assets of which  have  been
          acquired in any manner by such Person, realized by
          such   corporation  prior  to  the  date  of  such
          acquisition;

                           (v)    any  portion  of  the  net
          earnings  of  any Subsidiary of such Person  which
          for  any  reason  is unavailable  for  payment  of
          dividends to such Person;

                          (vii)   the earnings of any Person
          to which any assets of such Person shall have been
          sold,  transferred or disposed of, or  into  which
          such Person shall have merged, or been a party  to
          any consolidation or other form of reorganization,
          prior to the date of such transaction;

                          (viii)    any gain or loss arising
          from  the  acquisition of any Securities  of  such
          Person; and

                     (ix)    any  gain or loss arising  from
     extraordinary or non-recurring items.

          Consolidated Cash Flow -with respect to any Person
     for  any  fiscal  period, the sum of  (i)  Consolidated
     Adjusted  Net Earnings From Operations of  such  Person
     for  such  fiscal  period, plus (ii)  depreciation  and
     amortization  expense of such Person  for  such  fiscal
     period   which   were  subtracted  from   earnings   in
     calculating   Consolidated   Adjusted   Earnings   From
     Operations of such Person for such fiscal period, minus
     (iii)  Capital  Expenditures not financed  by  Purchase
     Money  Indebtedness which are incurred by  such  Person
     during  such  fiscal  period, minus (iv)  Distributions
     paid by such Person during such fiscal period.

           Consolidated Current Assets - with respect to any
     Person  at  any date,  the amount at which all  of  the
     Consolidated  current assets of such  Person  would  be
     properly  classified  as  Consolidated  current  assets
     shown on a Consolidated balance sheet of such Person at
     such  date in accordance with GAAP except that  amounts
     due from Affiliates and investments in Affiliates shall
     be excluded therefrom.

          Consolidated Current Liabilities - with respect to
     any  Person at any date, the amount at which all of the
     Consolidated  current liabilities of such Person  would
     be   properly   classified  as   Consolidated   current
     liabilities  on a Consolidated balance  sheet  of  such
     Person at such date in accordance with GAAP.

           Consolidated EBITDA - with respect to any  Person
     for  any  fiscal  period, the sum of  (i)  Consolidated
     Adjusted  Net Earnings From Operations of  such  Person
     for  such  fiscal  period, plus (ii)  interest,  taxes,
     depreciation and amortization expenses of  such  Person
     for  such  fiscal  period which  were  subtracted  from
     earnings  in  calculating  Consolidated  Adjusted   Net
     Earnings From Operations of such Person for such fiscal
     period.

           Consolidated EBITDA - with respect to any  Person
     for  any  fiscal  period, the sum of  (i)  Consolidated
     EBITDA of such Person for such fiscal period, plus (ii)
     rental  expenses of such Person for such fiscal  period
     which  were  subtracted  from earnings  in  calculating
     Consolidated  Adjusted Net Earnings From Operations  of
     such Person for such fiscal period.

           Consolidated Fixed Charges - with respect to  any
     Person  for any period, the sum of (i) interest expense
     of such Person for such period in respect of all of its
     Indebtedness  for Money Borrowed, plus  (ii)  regularly
     scheduled  payments  of principal on  Indebtedness  for
     Money  Borrowed  required to be  paid  by  such  Person
     during  such  period, plus (iii) rentals for  aircraft,
     engines  and  propellers required to be  paid  by  such
     Person during such period.

    Consolidated  Fixed  Charges Coverage  Ratio  -  on  the
    determination thereof with respect to any Person at  the
    end   of   each  Testing  Period,  the  ratio   of   (i)
    Consolidated  EBITDA  of such Person  for  such  Testing
    Period  to  (ii) Consolidated Fixed Charges required  to
    be paid by such Person during such Testing Period.

           Consolidated Leverage Ratio - with respect to any
     Person at any date, means the ratio of (i) Indebtedness
     of  such  Person and its Subsidiaries at such  date  to
     (ii)  Consolidated  Net Worth of such  Person  and  its
     Subsidiaries at such date.

           Consolidated  Net  Worth - with  respect  to  any
     Person  at any date, the total stockholders' equity  of
     such   Person  and  its  Subsidiaries  shown   on   its
     Consolidated  balance sheet at such date in  accordance
     with GAAP.

            Consolidated   Senior  Indebtedness/Consolidated
     EBITDA  Ratio  -  on  the  determination  thereof  with
     respect  to  any  Person at the  end  of  each  Testing
     Period,  the  ratio  of  (i)  the  aggregate  principal
     balance  of all Senior Indebtedness for Money  Borrowed
     of  such  Person outstanding at the end of such Testing
     Period  to (ii) Consolidated EBITDA of such Person  for
     the Testing Period then ended.

           Convertible  Subordinated Notes -  the  7%  Event
     Convertible   Subordinated  Notes  issued   by   Parent
     pursuant  to  an Indenture dated July 2,  1997  between
     Parent and First Union National Bank of Virginia  which
     have  a  scheduled maturity date of July  1,  2004,  as
     outstanding on the Closing Date.

          Daily LIBOR Loan - a Loan, or any portion thereof,
     during any period in which it bears interest at a  rate
     based upon the Daily LIBOR Rate.

           Daily LIBOR Rate - for each day that such rate is
     in  effect  under the Agreement, an interest  rate  per
     annum  equal  to  the quotient of (a)  the  Fleet  Bank
     Posted LIBOR Rate in effect for such day divided by (b)
     a  percentage  (expressed as a decimal) equal  to  100%
     minus Statutory Reserves.

           Deed of Trust - the Credit Line Leasehold Deed of
     Trust and Security Agreement executed by Borrower on or
     about  June  1,  1997  in favor of the  trustees  named
     therein  for  the  benefit of  Lender,  as  it  may  be
     amended,  modified, supplemented or restated from  time
     to  time, by which Borrower has granted and conveyed to
     the trustees for the benefit of Lender, as security for
     $9,579,932  of  the Obligations, Liens upon  Borrower's
     leasehold estate in the Realty leased by Borrower  from
     the Authority pursuant to the Lease.

           Default - an event or condition the occurrence of
     which  would, with the lapse of time or the  giving  of
     notice, or both, become an Event of Default.

           Default  Rate  - a rate per annum  equal  to  two
     percent  (2%) in excess of the interest rates otherwise
     applicable to the Loans.

          Distribution - in respect of any corporation means
     and  includes:   (i) the payment of  any  dividends  or
     other distributions on capital stock of the corporation
     (except  distributions  in such  stock)  and  (ii)  the
     redemption or acquisition of Securities (or any warrant
     or  option  for  the purchase of any  such  Securities)
     unless made contemporaneously from the net proceeds  of
     the sale of Securities.

           Document - shall have the meaning ascribed to the
     term "document" under the Code.

           Dollars  - and the sign $ shall refer to currency
     of the United States of America.

           Eligible  Account - an inter-airline  Account  of
     Borrower arising and created in the ordinary course  of
     Borrower's   business  from  the   rendition   of   air
     transportation  and related services which  Lender,  in
     its  sole  credit judgment, based upon  its  usual  and
     customary  credit and collateral considerations,  deems
     to  be an Eligible Account.  To be an Eligible Account,
     such Account must be subject to Lender's perfected Lien
     and no other Lien other than a Permitted Lien, must  be
     cleared   and  collected  through  the  Clearing   Bank
     pursuant  to  the  ACH Procedure Manual,  and  must  be
     billed  monthly by a recap sheet submitted to  ACH,  no
     later than the nineteenth (19th) day of each month, for
     all  air  transportation and related services  rendered
     and   revenues  earned  during  the  preceding   month.
     Without  limiting the generality of the  foregoing,  no
     Account of Borrower shall be an Eligible Account if:

                            (i)    it  arises  out  of   air
          transportation  and related services  rendered  by
          Borrower  to  a  Subsidiary, or  an  Affiliate  of
          Borrower,  or  to  a  Person  controlled   by   an
          Affiliate of Borrower; or

                          (ii)   payment of such Account  is
          not received from the ACH within fifteen (15) days
          after the ACH Settlement Date for such Account; or

                              (iii)        any     covenant,
          representation  or  warranty  contained   in   the
          Agreement  with respect to such Account  has  been
          breached; or

                           (iv)    in  the case of  Accounts
          owing  by  United, are subject  to  any  right  of
          offset  other  than United's right of  setoff  for
          amounts owing under the United Express Agreements,
          and,  in  the  case  of  all other  Accounts,  the
          Account  Debtor  is  also Borrower's  creditor  or
          supplier,  or  the  Account  Debtor  has  disputed
          liability  with  respect to such Account,  or  the
          Account Debtor has made any claim with respect  to
          any other Account due from such Account Debtor  to
          Borrower,  or the Account otherwise is subject  to
          any right of setoff by the Account Debtor; or

                            (v)    the  Account  Debtor  has
          commenced  a  voluntary  case  under  the  federal
          bankruptcy  laws, as now constituted or  hereafter
          amended, or made an assignment for the benefit  of
          creditors,  or  a decree or order for  relief  has
          been entered by a court having jurisdiction in the
          premises  in respect of the Account Debtor  in  an
          involuntary  case  under  the  federal  bankruptcy
          laws, as now constituted or hereafter amended,  or
          any other petition or other application for relief
          under  the federal bankruptcy laws has been  filed
          against  the  Account Debtor, or  if  the  Account
          Debtor  has failed, suspended business, ceased  to
          be   Solvent,  or  consented  to  or  suffered   a
          receiver, trustee, liquidator or custodian  to  be
          appointed  for  it  or for all  or  a  significant
          portion of its assets or affairs; or

                          (vi)   the Account is evidenced by
          Chattel Paper or an Instrument of any kind, or has
          been reduced to judgment; or

                   (vii)  the Account is contingent  in  any
respect or for any reason; or

                          (viii)   the Account Debtor is the
          United States of America or any department, agency
          or   instrumentality  thereof,   unless   Borrower
          assigns  its right to payment of such  Account  to
          Lender, in a manner satisfactory to Lender, so  as
          to  comply  with the Assignment of Claims  Act  of
          1940 (31 U.S.C. 203 et seq., as amended); or

                          (ix)   the Account is subject to a
          Lien other than a Permitted Lien; or

                          (x)    the air transportation  and
          related services giving rise to such Account  have
          not  been  performed by Borrower  or  the  Account
          otherwise does not represent a final sale; or

                           (xi)    Borrower  has  made   any
          agreement   with  the  Account  Debtor   for   any
          deduction  therefrom,  except,  in  the  case   of
          Accounts owing by United, United's right of setoff
          for   amounts  owing  under  the  United   Express
          Agreements; or

                            (xii)    Borrower  has  made  an
          agreement  with the Account Debtor to  extend  the
          time of payment thereof; or

                          (xiii)    Borrower has  failed  to
          comply  with the provisions of Section 7.2.1  with
          respect  to  such Account and the  Account  Debtor
          obligated thereon; or

                          (xiv)    It is not based  upon  or
          evidenced by passenger tickets, exchange orders or
          other passenger billing documents which have  been
          separated and put into batches in accordance  with
          the requirements of the ACH Procedure Manual.

           Eligible Rotable Spare Parts - such Rotable Spare
     Parts  of  Borrower which Lender, in  its  sole  credit
     judgment, based upon its usual and customary credit and
     collateral considerations, deems to be Eligible Rotable
     Spare  Parts.  Without limiting the generality  of  the
     foregoing,  no  Rotable Spare Parts shall  be  Eligible
     Rotable Spare Parts unless:

                              (i)     it   is  in  airworthy
          condition in accordance with all Applicable  Laws,
          including    all   applicable   FAA   rules    and
          regulations, and is not obsolete;

                            (ii)   it  meets  all  standards
          imposed  by any applicable governmental agency  or
          authority;

                            (iii)     it  conforms  in   all
          respects to the warranties and representations set
          forth in the Agreement;

                            (iv)    Lender shall  have  (and
          shall   have   received  reasonably   satisfactory
          evidence  of) a first priority perfected  Lien  in
          such  Rotable  Spare Parts and such Rotable  Spare
          Parts  shall  not  be subject to  any  other  Lien
          except  a  Permitted Lien that is not  a  Purchase
          Money Lien;

                             (v)    it  is  situated  at   a
          location in compliance with the Agreement;  and

                           (vi)   it  is  owned outright  by
          Borrower  and not held by Borrower on  consignment
          or other sale or return basis.

           Environmental Laws - all federal, state and local
     laws,   rules,   regulations,   ordinances,   programs,
     permits, guidances, orders and consent decrees relating
     to health, safety and environmental matters.

           ERISA  -  the Employee Retirement Income Security
     Act  of 1974, as amended, and all rules and regulations
     from time to time promulgated thereunder.

          Escrow Agent - FMB Trust, N.A., a national banking
     association.

           Escrow  Funds - cash in the amount of $15,000,000
     deposited  by  the  Authority  with  the  Escrow  Agent
     pursuant  to  the  terms  of the  Escrow  Agreement  as
     security for the Bridge Loan Obligations.

           Escrow Agreement - the Escrow Agreement dated  on
     or about the Closing Date among Borrower, the Authority
     and   the   Escrow   Agent,  in  form   and   substance
     satisfactory to Lender, by which the Authority deposits
     with  the Escrow Agent the Escrow Funds to be  held  by
     the  Escrow  Agent  as  security for  the  Bridge  Loan
     Obligations  and  disbursed in  the  manner  set  forth
     therein.

           Eurocurrency Liabilities - shall have the meaning
     ascribed thereto in Regulation D issued by the Board of
     Governors.

           Event of Default - as defined in Section 11.1  of
     the Agreement.

           FAA  -  the  Federal Aviation Administration,  an
     agency of the United States of America.

           Existing  Loan Agreement - the Loan and  Security
     Agreement,  dated October 12, 1995, between Lender  and
     the Loan Parties, as in effect on the Closing Date.

          GAAP - generally accepted accounting principles in
     the  United  States of America in effect from  time  to
     time.

           General Intangibles - with respect to any Person,
     all  general  intangibles  of such  Person,  including,
     without  limitation, all choses in  action,  causes  of
     action,  corporate or other business  records,  deposit
     accounts,  inventions,  blueprints,  designs,  patents,
     patent      applications,     trademarks,     trademark
     applications,  trade  names,  trade  secrets,   service
     marks,     goodwill,    brand    names,     copyrights,
     registrations,  licenses, franchises,  customer  lists,
     tax   refund  claims,  computer  programs,  operational
     manuals,   all   claims   under  guaranties,   security
     interests or other security held by or granted to  such
     Person to secure payment of any of the Accounts  by  an
     Account  Debtor, all rights to indemnification and  all
     other  intangible  property of every  kind  and  nature
     (other  than Accounts).  General Intangibles shall  not
     include any landing slots of Borrower at any airport.

           Guarantor - Parent and any other Person  who  may
     hereafter guarantee payment or performance of the whole
     or any part of the Obligations.

            Guaranty  Agreement  -  the  Guaranty  Agreement
     executed  by  each  Guarantor  in  form  and  substance
     satisfactory to Lender.

          Hazardous Material - any pollutants, contaminants,
     chemicals,  toxic  or hazardous substance  or  material
     defined   as   such  in  (or  for  purposes   of)   the
     Environmental  Laws, including without limitation,  any
     waste constituents coming within the definition or list
     of  hazardous  substances in 40  C.F.R.  261.1  through
     261.33.

           Hedging Obligations - with respect to any Person,
     all liabilities of such Person under interest rate swap
     agreements,  interest rate cap agreements and  interest
     rate  collar  agreements, foreign  exchange  contracts,
     currency  swap agreements, and all other agreements  or
     arrangements  designed to protect such  Person  against
     fluctuations  in  interest rates or  currency  exchange
     rates.

          IATA - International Air Transport Association.

           Improvements - the construction of a  maintenance
     facility and associated access roadway, vehicle parking
     and maneuvering areas and aircraft paving aprons on the
     Realty.

           Indebtedness  -  as applied to  a  Person  means,
     without duplication:

                          (i)  all items which in accordance
          with  GAAP would be included in determining  total
          liabilities as shown on the liability  side  of  a
          balance sheet of such Person as at the date as  of
          which Indebtedness is to be determined, including,
          without limitation, Capitalized Lease Obligations,

                           (ii)  all  obligations  of  other
          Persons which such Person has guaranteed,

                          (iii)      in the case of Borrower
          (without duplication), the Obligations.

          Indenture - that certain Indenture of Trust, dated
     June  1,  1997, between the Issuer and the Bond Trustee
     pursuant to which Issuer has issued the Bonds.

           Instrument  - shall have the meaning ascribed  to
     the term "instrument" under the Code.

           Interest Period - as defined in Section 2.1.4  of
     the Agreement.

           Internal Revenue Code - the Internal Revenue Code
     of 1986, as amended from time to time.

           Issuer - the Industrial Development Authority  of
     Loudoun County, Virginia.

          Lease - that certain Ground Lease Agreement, dated
     June 23, 1997 between the Authority and the Borrower.

           Letter of Credit - any letter of credit issued by
     Lender or any of Lender's Affiliates for the account of
     Borrower pursuant to the Agreement.

           Letter  of  Credit  Amount -  at  any  time,  the
     aggregate undrawn face amount of all Letters of  Credit
     and Letter of Credit Guaranties then outstanding.

          Letter of Credit Guaranty - any guaranty issued by
     Lender  pursuant  to which Lender shall  guarantee  the
     payment or performance by Borrower of its reimbursement
     obligations under a Letter of Credit.

          Letter of Credit Obligations - that portion of the
     Obligations   constituting  Borrower's  obligation   to
     reimburse  Lender for all amounts paid by Lender  under
     or with respect to a Letter of Credit Guaranty.

          Level - as at the determination thereof at the end
     of  each  Testing  Period, the level  set  forth  below
     corresponding   to  the  Consolidated   Fixed   Charges
     Coverage Ratio as of the end of such Testing Period:
                              

                         Level                    Ratio
                             Level I                    >2.5
                              Level  II                 >2.2
but 2.5
                              Level III                 >2.0
but 2.2
                              Level IV                  >1.7
but 2.0
                             Level V                   1.7

          LIBOR Lending Office - with respect to Lender, the
     office  designated  as  the LIBOR  Lending  Office  for
     Lender  on the signature pages of the Agreement (or  on
     any  Assignment  and Acceptance,  in  the  case  of  an
     assignee) and such other office of Lender or any of its
     Affiliates  that is hereafter designated by  notice  to
     Lender.

           LIBOR  Rate - with respect to an Interest Period,
     the  rate  per  annum  determined by  Lender  at  which
     deposits  of Dollars of amounts equal to or  comparable
     to  the  amount  of the LIBOR Rate Loan to  which  such
     Interest  Period relates and for a term  comparable  to
     such Interest Period are offered to Bank by prime banks
     in  the  London  interbank  foreign  currency  deposits
     market  at  approximately 11:00  o'clock  a.m.,  London
     time,  two (2) Business Days prior to the first day  of
     such Interest Period.  Each determination by Lender  of
     any LIBOR Rate shall, in the absence of manifest error,
     be conclusive.

           LIBOR  Rate  Loan  - a Loan, or portion  thereof,
     during any period in which it bears interest at a  rate
     based upon the applicable Adjusted LIBOR Rate.

           Lien  -  any  interest  in Property  securing  an
     obligation owed to, or a claim by, a Person other  than
     the  owner  of the Property, whether such  interest  is
     based  on  common law, statute or contract.   The  term
     "Lien"  shall  also  include reservations,  exceptions,
     encroachments,  easements,  rights-of-way,   covenants,
     conditions,   restrictions,  leases  and  other   title
     exceptions  and encumbrances affecting  Property.   For
     the purpose of this Agreement, Borrower shall be deemed
     to  be  the owner of any Property which it has acquired
     or  holds  subject to a conditional sale  agreement  or
     other  arrangement  pursuant  to  which  title  to  the
     Property  has been retained by or vested in some  other
     Person for security purposes.

           Loan  -  the  Bridge  Loan and  the  Bridge  Loan
     Advances made thereunder, a Revolver Loan or all or any
     of them as the context may require.

          Loan Account - the loan account established on the
     books  of  Lender  pursuant  to  Section  4.10  of  the
     Agreement.

            Loan   Documents  -  the  Agreement,  the  Other
     Agreements and the Security Documents.

           Margin Stock - shall have the meaning ascribed to
     it in Regulation U of the Board of Governors.

           Material Adverse Effect - the effect of any event
     or  condition which, alone or when taken together  with
     other   events  or  conditions  occurring  or  existing
     concurrently  therewith, (i) has or may  be  reasonably
     expected  to  have a material adverse effect  upon  the
     business,  operations, Properties, condition (financial
     or  otherwise) of the Loan Parties and their respective
     Subsidiaries  taken  as a whole; (ii)  has  or  may  be
     reasonably expected to have any material adverse effect
     whatsoever upon the validity or enforceability  of  the
     Agreement or any of the other Loan Documents; (iii) has
     or  may  be  reasonably expected to have  any  material
     adverse effect upon the Collateral, the Liens of Lender
     with  respect to the Collateral or the priority of such
     Liens;  or (iv) materially impairs the ability  of  the
     Loan  Parties and their respective Subsidiaries or  any
     Guarantor to perform their respective obligations under
     the  Agreement, any Guaranty Agreement or  any  of  the
     other Loan Documents or of Lender to enforce or collect
     the  Obligations or realize upon any of the  Collateral
     in  accordance  with the Loan Documents and  Applicable
     Law.

           Maximum Rate - the maximum non-usurious  rate  of
     interest permitted by Applicable Law that at any  time,
     or  from  time to time, may be contracted  for,  taken,
     reserved,  charged or received on the  Indebtedness  in
     question or, to the extent permitted by Applicable Law,
     under  such  Applicable Law that may  hereafter  be  in
     effect  and  which allow a higher maximum  non-usurious
     interest   rate   than  Applicable  Law   now   allows.
     Notwithstanding any other provision hereof, the Maximum
     Rate shall be calculated on a daily basis (computed  on
     the actual number of days elapsed over a year of 365 or
     366 days, as the case may be).

            Money Borrowed - with respect to any Person, (i)
     Indebtedness arising from the lending of money  by  any
     other Person to such Person; (ii) Indebtedness, whether
     or not in any such case arising from the lending by any
     other  Person  of money to such Person,  (a)  which  is
     represented  by notes payable or drafts  accepted  that
     evidence  extensions of credit, (b)  which  constitutes
     obligations  evidenced by bonds, debentures,  notes  or
     similar instruments, or (c) upon which interest charges
     are  customarily paid (other than accounts payable)  or
     that  was issued or assumed as full or partial  payment
     for  Property;  (iii) Indebtedness that  constitutes  a
     Capitalized Lease Obligation; (iv) Indebtedness of such
     Person  under  any guaranty of obligations  that  would
     constitute   Indebtedness  for  Money  Borrowed   under
     clauses  (i) through (iii) hereof, if owed directly  by
     such Person.

           Moody's - Moody's Investors Service, Inc., or any
successor thereto.

           Multiemployer Plan - has the meaning set forth in
Section 4001(a)(3) of ERISA.

           Notice  of  Borrowing  - as  defined  in  Section
     3.1.1(i) of the Agreement.

           Notice of Conversion/Continuation - as defined in
     Section 2.1.4(ii) of the Agreement.

           Obligations - collectively, (i) the Loans and all
     other sums loaned or advanced by Lender to or on behalf
     of Borrower pursuant to the Agreement or the other Loan
     Documents,  (ii)  all  liabilities,  indebtedness   and
     obligations now or any time hereafter owing by Borrower
     or  any Guarantor to Lender under the Agreement or  any
     of  the other Loan Documents, (iii) Hedging Obligations
     in respect of the Loans owing to Lender or an Affiliate
     thereof  (unless the Lender or such Affiliate otherwise
     agrees  in  writing), (iv) the Bridge Loan Obligations,
     and   (iv)  all  other  liabilities,  indebtedness  and
     obligations  of  any and every kind  now  or  hereafter
     owing  or  to become due from Borrower or any Guarantor
     in  respect  of the Loans.  The term includes,  without
     limitation, all principal, interest, charges, expenses,
     fees, attorneys' fees and any other sums chargeable to,
     or  to be paid by, Borrower or any Guarantor under  any
     of the Loan Documents.

          Original Closing Date - October 12, 1995.

           Original Term - as defined in Section 5.1 of  the
     Agreement.

            Other  Agreements  -  any  and  all  agreements,
     instruments and documents (other than the Agreement and
     the  Security Documents), heretofore, now or  hereafter
     executed  by  a Loan Party, any Subsidiary  of  a  Loan
     Party, or any other third party and delivered to Lender
     in  respect  of  the transactions contemplated  by  the
     Agreement.

           Overadvance - a Revolver Loan made by Lender when
     an  Overadvance Condition exists or would  result  from
     the making of such Revolver Loan.

           Overadvance Condition - at any date, a  condition
     such  that  the principal amount of the Revolver  Loans
     outstanding to Borrower on such date exceeds the lesser
     of  the  Borrowing Base or the Revolver Facility Amount
     on such date.

           Participating Lender - any Person  who  shall  be
     granted  the right by Lender to participate in  any  of
     the Loans described in the Agreement and who shall have
     entered  into  a participation agreement  in  form  and
     substance satisfactory to Lender.

           Payment Account - an account maintained by Lender
     to  which all monies from time to time deposited  to  a
     Dominion  Account shall be transferred  and  all  other
     payments shall be sent in immediately available federal
     funds.

           Payment Item - all checks, drafts or other  items
     of  payment payable to Borrower, including proceeds  of
     any of the Collateral.

           Permitted Liens - any Lien of a kind specified in
     Section 9.2.4 of the Agreement.

           Person - an individual, partnership, corporation,
     limited  liability company, joint stock  company,  land
     trust, business trust, unincorporated organization,  or
     a   government  or  agency  or  political   subdivision
     thereof.

           Plan  - an employee benefit plan now or hereafter
     maintained  for  employees of  a  Loan  Party  that  is
     covered by Title IV of ERISA.

            Projections  -  the  Loan  Parties'   forecasted
     Consolidated (i) balance sheets, (ii) profit  and  loss
     statements,   and  (iii)  cash  flow  statements,   all
     prepared  on a consistent basis with the Loan  Parties'
     historical   financial   statements,   together    with
     appropriate  supporting  details  and  a  statement  of
     underlying assumptions.

             Properly   Contested  -in  the  case   of   any
     Indebtedness  of  any  Loan  Party  or   any   of   its
     Subsidiaries (including, but not limited to, any Taxes)
     that  is not paid as and when due or payable by  reason
     of  such  Loan  Party's or any Subsidiary's  bona  fide
     dispute  concerning  its  liability  to  pay  same   or
     concerning   the   amount  thereof,   that   (i)   such
     Indebtedness is being properly contested in good  faith
     by  appropriate  proceedings  promptly  instituted  and
     diligently  conducted, (ii) such Loan Party  has  estab
     lished  appropriate reserves as shall  be  required  in
     conformity  with  GAAP, (iii) the non-payment  of  such
     Indebtedness  will not have a Material Adverse  Effect;
     (iv)  no Lien is imposed upon such Loan Party's or  any
     Subsidiary's Property with respect to such Indebtedness
     unless such Lien is at all times junior and subordinate
     in  priority  to  the Liens in favor of Lender  (except
     only  with  respect to Taxes that have  priority  as  a
     matter of any state's Applicable Laws); and (v) if such
     contest  is abandoned, settled or determined  adversely
     to  such  Loan  Party or any of its Subsidiaries,  such
     Loan  Party  forthwith pays such Indebtedness  and  all
     penalties and interest in connection therewith.

          Property - any interest in any kind of property or
     asset, whether real, personal or mixed, or tangible  or
     intangible.

           Purchase Money Indebtedness - means and  includes
     (i)  Indebtedness (other than the Obligations) for  the
     payment of all or any part of the purchase price of any
     Property,  (ii)  any  Indebtedness  (other   than   the
     Obligations) incurred at the time of or within ten (10)
     days  prior to or after the acquisition of any Property
     for  the  purpose of financing all or any part  of  the
     purchase   price  thereof,  and  (iii)  any   renewals,
     extensions or refinancings thereof.

           Purchase  Money Lien - a Lien upon Rotable  Spare
     Parts  which  secures Purchase Money Indebtedness,  but
     only if such Lien shall at all times be confined solely
     to  the Rotable Spare Parts the purchase price of which
     was  financed  through the incurrence of  the  Purchase
     Money  Indebtedness secured by such Lien and shall  not
     extend to any other Property of Borrower.

           Realty  -  the tract or parcels of real  property
     leased  by Borrower from the Authority pursuant to  the
     Lease,  together with the Improvements and the fixtures
     attached thereto.

           Regulation  D  -  Regulation D of  the  Board  of
     Governors.

           Reimbursement Agreement - that certain Letter  of
     Credit and Reimbursement Agreement, dated June 1, 1997,
     among  the Bank, Lender and Borrower, pursuant to which
     Bank  issued  the  Bond Letter of Credit,  as  amended,
     modified, supplemented or restated from time to time.

            Related  United  Express  Agreements   -   those
     agreements  between  United and Borrower  described  on
     Schedule A attached hereto, as the same may be amended,
     modified, supplemented or restated from time to time.

            Remarketing  Agent  -  shall  have  the  meaning
     ascribed to such term in the Indenture.

           Renewal Term - as defined in Section 5.1  of  the
     Agreement.

           Reportable Event - any of the events set forth in
     Section 4043(b) of ERISA.

           Restricted  Investment - any investment  made  in
     cash  or by delivery of Property to any Person, whether
     by   acquisition  of  stock,  Indebtedness   or   other
     obligation  or Security, or by loan, advance,  deposit,
     capital  contribution or otherwise, or in any  Property
     except the following:

                          (i)    investments in one or  more
          Subsidiaries  of  a  Loan  Party  to  the   extent
          existing on the Closing Date;

                          (ii)   Property to be used in  the
          ordinary course of business;

                         (iii)   Consolidated Current Assets
          arising from the sale of goods and services in the
          ordinary  course of business of a Loan  Party  and
          its Subsidiaries;

                          (iv)    cash and Cash Equivalents;
          and

                          (v)    investments in certificates
          of deposit (a) which issues a letter of credit for
          the  account  of  a Loan Party, (b)  securing  the
          reimbursement  obligations of a  Loan  Party  with
          respect to such letter of credit, and (c) maturing
          on  a date corresponding to the expiration date of
          such letter of credit.

           Revolver  Facility Amount - at any  date  of  the
     determination  thereof,  the sum  of  (i)  Thirty  Five
     Million Dollars ($35,000,000), less (ii) the Letter  of
     Credit Amount at such date.

           Revolver Loan - a Loan made by Lender to Borrower
     as provided in Section 1.1 of the Agreement.

           Rotable Spare Parts - those Spare Parts which can
     be  economically  restored to a  serviceable  condition
     and,  in  the  normal  course  of  operations,  can  be
     repeatedly   rehabilitated  to  a   fully   serviceable
     condition over a period approximating the life  of  the
     flight equipment to which it is related.

           Rotable Spare Parts Borrowing Base - at any  date
     of  determination thereof, the lesser of (a) $8,000,000
     or  (b)  sixty percent (60%) of the aggregate value  of
     Borrower's  Eligible Rotable Spare Parts at such  date,
     in  each case calculated on the basis of lower of  book
     value  or  market value, with book value calculated  on
     the   basis   of   original   cost   less   accumulated
     depreciation in accordance with GAAP.

           Rotable  Spare  Parts Security  Agreement  -  the
     Rotable  Spare Parts Security Agreement to be  executed
     by  Borrower on or about the Closing Date, in form  and
     substance  satisfactory to Lender,  by  which  Borrower
     shall  grant  Lender Liens in all of its Rotable  Spare
     Parts,  whether  now  owned or hereafter  acquired,  as
     security for the Obligations.

           Security  -  shall have the same  meaning  as  in
     Section 2(1) of the Securities Act of 1933, as amended.

           Security  Documents  - the  Rotable  Spare  Parts
     Security Agreement, the Escrow Agreement, the  Deed  of
     Trust,   each   Guaranty  Agreement,  and   all   other
     instruments and agreements now or at any time hereafter
     securing the whole or any part of the Obligations.

           Senior  Indebtedness for Money  Borrowed  -  with
     respect   to   any   Person,  all  of   such   Person's
     Indebtedness for Money Borrowed except for Subordinated
     Debt.

           Solvent - as to any Person, such Person (i)  owns
     Property whose fair saleable value is greater than  the
     amount   required   to  pay  all   of   such   Person's
     Indebtedness  (including  contingent  debts),  (ii)  is
     generally able to pay all of its Indebtedness  as  such
     Indebtedness  matures and (iii) has capital  sufficient
     to  carry  on  its  business and transactions  and  all
     business  and  transactions in which  it  is  about  to
     engage.

           Spare  Parts - (a) an accessory, appurtenance  or
     part  of (i) an aircraft (except an aircraft engine  or
     propeller),  (ii) aircraft engine (except a propeller),
     or  (iii) propeller, or (b) an Appliance, that is to be
     installed  at  a  later time in an  aircraft,  aircraft
     engine,  propeller or Appliance. Spare Parts shall  not
     include  any  aircraft  engines,  propellers  or  quick
     engine  change kits now owned or hereafter acquired  by
     Borrower.

           Statutory  Reserves - on any date, the percentage
     (expressed  as a decimal) established by the  Board  of
     Governors which is the then stated maximum rate for all
     reserves (including, but not limited to, any emergency,
     supplemental  or  other marginal reserve  requirements)
     applicable  to  any member bank of the Federal  Reserve
     System  in respect to Eurocurrency Liabilities (or  any
     successor category of liabilities under Regulation  D).
     Such   reserve   percentage  shall   include,   without
     limitation,  those imposed pursuant to said  Regulation
     D.    The   Statutory   Reserves  shall   be   adjusted
     automatically on and as of the effective  date  of  any
     change in such percentage.

           Subordinated Debt - the Convertible  Subordinated
     Notes  and any other Indebtedness of a Loan Party  that
     is subordinated to the Obligations in a manner and upon
     terms satisfactory to Lender.

           Subsidiary  - any corporation of which  a  Person
     owns,  directly  or  indirectly  through  one  or  more
     intermediaries,  more than 50% of the Voting  Stock  at
     the time of determination.

           Taxes  -  any  present or future  taxes,  levies,
     imposts,   duties,   fees,   assessments,   deductions,
     withholdings  or  other  charges  of  whatever  nature,
     including  income, receipts, excise,  property,  sales,
     use,  transfer,  license, payroll, withholding,  social
     security  and franchise taxes now or hereafter  imposed
     or  levied by the United States, or any state, local or
     foreign  government  or  by any department,  agency  or
     other political subdivision or taxing authority thereof
     or  therein  and all interest, penalties, additions  to
     tax  and similar liabilities with respect thereto,  but
     excluding, in the case of Lender, taxes imposed  on  or
     measured by the net income or overall gross receipts of
     Lender.

            Testing  Period  -  each  period  of  four   (4)
     consecutive fiscal quarters.

           Type - the type of Loan, which shall either be  a
     LIBOR Rate Loan or a Base Rate Loan.

            United   -United  Airlines,  Inc.,  a   Delaware
     corporation.

           United  Express  Agreements -the  United  Express
     Operating  Agreement  and the  Related  United  Express
     Agreements  or any one or more of them as  the  context
     may require.

           United Express Emergency Response Agreement - the
     Emergency  Response Services Agreement  between  United
     and Borrower dated June 23, 1995, which constitutes one
     of the United Express Related Agreements.

           United  Express Operating Agreement - the  United
     Express  Agreement between United and  Borrower,  dated
     October  1,  1991,  as the same is  amended,  modified,
     supplemented or restated from time to time, pursuant to
     which, among other things, Borrower has acquired a non-
     exclusive  license  to use trademarks,  service  marks,
     trade   names,   and  logos  and  related  intellectual
     property   rights  in  the  operations  of   Borrower's
     business.

           United Express Termination Date - the termination
     date  of the United Express Operating Agreement as that
     date  may  be  modified pursuant to the  terms  of  the
     United  Express  Operating  Agreement  and  as  may  be
     permitted by the terms of the Agreement.

           United  Non-Offset  Agreement  -  the  non-offset
     agreement, dated October 12, 1995, executed  by  Lender
     and United pursuant to which United agreed to limit its
     right  of  setoff  against Borrower to current  amounts
     owing  by  Borrower to United under the United  Express
     Agreements, as amended by amendment thereto dated on or
     about the Closing Date.

           Voting Stock - Securities of any class or classes
     of  a  corporation the holders of which are ordinarily,
     in  the  absence of contingencies, entitled to elect  a
     majority   of  the  corporate  directors  (or   Persons
     performing similar functions).

           Other  Terms.  All other terms contained  in  the
Agreement  shall  have, when the context so  indicates,  the
meanings provided for by the Code to the extent the same are
used  or  defined therein.  Accounting terms  not  otherwise
specifically defined herein shall be construed in accordance
with GAAP consistently applied.

            Certain  Matters  of  Construction.   The  terms
"herein",  "hereof"  and  "hereunder"  and  other  words  of
similar import refer to the Agreement as a whole and not  to
any  particular section, paragraph or subdivision.  Whenever
in  the  Agreement  the  word "including"  is  used,  it  is
understood  to  mean "including, without  limitation".   Any
pronoun  used  shall be deemed to cover  all  genders.   The
section  titles,  table of contents  and  list  of  exhibits
appear  as a matter of convenience only and shall not affect
the  interpretation  of the Agreement.   All  references  to
statutes   and   related  regulations  shall   include   any
amendments   of   same  and  any  successor   statutes   and
regulations.   All references to any of the  Loan  Documents
shall include any and all modifications thereto and any  and
all  extensions or renewals thereof.  All references to  any
Person  shall  mean  and  include successors  and  permitted
assigns  of such Person.  All references to "including"  and
"include"  shall  be understood to mean "including,  without
limitation".

           IN  WITNESS WHEREOF, the parties have caused this
Appendix  to  be  duly  executed by  their  duly  authorized
officers on February 8, 1999.


ATTEST:                       ATLANTIC COAST AIRLINES
                              ("Borrower")

__________________________
By:___________________________________
Richard  J.  Kennedy. Secretary Thomas J.  Moore,  Executive
Vice                                     President and
                              Chief Operating Officer


[CORPORATE SEAL]




ATTEST:                          ATLANTIC   COAST   AIRLINES
HOLDINGS,                                   INC.
                              ("Parent")


_________________________  By:______________________________
Richard J. Kennedy. Secretary Thomas   J.  Moore,  Executive
                              Vice President and
                              Chief Operating Officer
[CORPORATE SEAL]


                              FLEET CAPITAL CORPORATION
                              ("Lender")



By:_______________________________________

Title:___________________________________