LEASE AGREEMENT



       THIS LEASE AGREEMENT (the AAgreement@), dated as of July 1, 1999, by and
  between the KENTON COUNTY AIRPORT BOARD (the AIssuer@), a public body
  corporate and politic established as a local air board, constituting a
  political subdivision of the Commonwealth of Kentucky, duly organized and
  validly existing under the laws of the Commonwealth of Kentucky, including
  Chapter 183 of the Kentucky Revised Statutes, and MESABA AVIATION, INC.,
  d/b/a/ Mesaba Airlines, a corporation duly organized and validly existing
  under the laws of the State of Minnesota, and duly qualified to do business in
  the Commonwealth of Kentucky (the ACompany@);


       WHEREAS, the Company has previously requested the Issuer to authorize and
  issue, for the benefit of the Company, one or more series of Special
  Facilities Revenue Bonds pursuant to the statutory authority of Chapter 183
  and Sections 103.200 to 103.285, inclusive, of the Kentucky Revised Statutes
  (the AAct@), for the purpose of funding qualified airport facilities to be
  leased, operated and used by the Company in its operations, consisting of an
  aircraft hanger and related maintenance and repair facilities approximately
  126,000 square feet in size, of which approximately 63,000 square feet will be
  comprised of hanger bay space for the Company=s commercial passenger aircraft
  and approximately 63,000 square feet will be comprised of aircraft maintenance
  shops and facilities and support space, including functionally related and
  necessary machinery and equipment,  plus  associated  and  adjacent  aircraft
  parking  ramp  areas (collectively, the AProject Facilities@), which Project
  Facilities will be situated at the Cincinnati/ Northern Kentucky International
  Airport in Boone County, Kentucky (the "Airport") and which will constitute an
  airport or facilities functionally related and subordinate to an airport
  within the meaning of Section 142(a)(1) of the Internal Revenue Code of 1986,
  as amended (the ACode@).  The Project facilities will be used for airport and
  air transportation purposes, be available for public use and will provide
  public benefit; and

       WHEREAS, the Issuer owns and operates the Cincinnati/Northern Kentucky
  International Airport in Boone County, Kentucky and is authorized by the
  provisions of the Constitution and laws of the Commonwealth of Kentucky,
  including KRS Chapter 183, KRS Sections 103.200 to 103.286, inclusive, and
  Section 142 of the Code, to cause the Project Facilities to be acquired and
  constructed and to lease the Project Facilities to the Company for such
  rentals and upon such conditions as are herein provided; and


       WHEREAS, the airport facilities to be financed, constructed and installed
  for lease to the Company, an airline and a common carrier, will promote the
  economic development of the Commonwealth of Kentucky, relieve conditions of
  unemployment and encourage the increase of industry in Kentucky and will
  otherwise perform public purposes as provided by the Act, and as approved in
  the cases, inter alia of Faulconer v. City of Danville (Ky), 232 SW2d 80,
  Norvell v. City of Danville (Ky), 355 SW2d 689, Gregory v. City of
  Lewisport (Ky), 369 SW2d 133 and Massey v. City of Franklin (Ky), 384 SW2d
  505; and


               WHEREAS, in accordance with such requests by the Company, the
          Issuer adopted a Resolution on January 18, 1999 agreeing to the

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          issuance of such Special Facilities Revenue Bonds, to be paid
          solely and only by lease payments and other payments to be made by
          the Company or from the Proceeds of such Bonds or from moneys
          derived from enforcement of the Leasehold Mortgage, hereinafter
          defined; and the corporate parent of the Company, Mesaba Holdings,
          Inc., a Minnesota corporation, has, pursuant to the Guaranty,
          guaranteed (i) the payment of principal of, premium, if any and
          interest on the 1999 Series A Bonds, hereinafter defined and (ii)
          the full and prompt performance and observance by the Company of
          all of the Company=s obligations and covenants under this Lease,
          the Ground Lease, as hereinafter defined, and the Leasehold
          Mortgage; and


               WHEREAS, the Company has, pursuant to the foregoing, caused to
          be designed and has initiated construction and acquisition of,
          certain airport facilities constituting the Project Facilities to
          the Company's specifications to meet the Company's special air
          transportation  business  needs  and  purposes,  which  will  be
          exclusively leased by the Company under this Agreement for the
          periods specified herein and which will be financed in whole or in
          part pursuant to KRS Sections 103.200 to 103.285, inclusive; and


               WHEREAS, the Issuer has, by resolution duly adopted on August
          16, 1999, duly authorized the issuance of its Special Facilities
          Revenue Bonds, 1999 Series A (Mesaba Aviation, Inc. Project) (the
          A1999 Series A Bonds@) to provide funds to finance some or all of
          the  Project Facilities; and


               WHEREAS, pursuant to an Indenture of Trust of even date
          herewith (said Indenture of Trust, as hereafter amended and
          supplemented from time to time, being herein referred to as the
          AIndenture@) between the Issuer and Norwest Bank Minnesota,
          National Association, as trustee (said trustee, or its successors
          under the Indenture, being herein referred to as the ATrustee@),
          the Issuer has issued $14,000,000 aggregate principal amount of
          1999 Series A Bonds, the Proceeds of which are to be applied for
          financing the Project Facilities; and


               WHEREAS, contemporaneously with the issuance of the 1999
          Series A Bonds, the Issuer will assign its rights and benefits
          under this Agreement (except for certain Unassigned Rights) to the
          Trustee as further security for the 1999 Series A Bonds; and


               WHEREAS, the Bonds issued pursuant to this Agreement and the
          Indenture shall be special and limited obligations of the Issuer,
          payable solely and only from and secured by, the Trust Estate, as
          defined in the Indenture, including but not limited to the revenues
          or other receipts, funds or moneys to be derived by the Issuer
          under this Agreement, from the Guaranty, from the Leasehold
          Mortgage, as security for its performance hereunder, from the
          unexpended Proceeds of the Bonds, and from the earnings on all of


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          the amounts held by the Trustee under the Indenture (except moneys
          held in the Rebate Fund); and


               WHEREAS, the execution and delivery of this Agreement has been
          duly and lawfully authorized by both the Issuer and the Company,
          and all conditions, acts and things necessary and required by the
          Constitution and statutes of the Commonwealth of Kentucky (the
          ACommonwealth@) or otherwise, to exist, to have happened, or to
          have been performed precedent to and in the execution and delivery
          of this Agreement and in the issuance of the 1999 Series A Bonds
          authorized in the Indenture, do exist, have happened and have been
          performed in regular form, time and manner.


               NOW, THEREFORE, for and in consideration of the premises and
          of the mutual representations, covenants and agreements herein set
          forth, the Issuer and the Company, each binding itself, its
          successors and assigns,do mutually promise, covenant and agree as
          follows, provided that in the performance of the agreements of the
          Issuer herein contained, any obligation it may incur for the
          payment of money shall not be an obligation, debt or liability or
          give  rise  to  any  pecuniary  liability  of  the  Issuer,  the
          Commonwealth or any political subdivision thereof, including the
          Issuer and the County of Kenton, Kentucky and neither the Issuer,
          the Commonwealth, the County of Kenton, Kentucky, nor any such
          political subdivision shall be liable on any obligation so
          incurred, but any such obligation shall be payable solely and only
          from, and secured by, the Trust Estate, including the Receipts and
          Revenues.

                                      ARTICLE I

                                     DEFINITIONS

               Section 1.01. Use of Defined Terms.  In addition to the words
          and terms defined elsewhere in this Agreement or in the Indenture
          or by reference to another document, the words and terms set forth
          in Section 1.02 and 1.03 shall have the meanings set forth therein
          unless the context or use clearly indicates another meaning or
          intent.  Such definitions shall be equally applicable to both the
          singular and plural forms of any of the words and terms defined
          therein.

               Section 1.02.  Incorporation of Certain Terms by Reference.
           When and if used in this Agreement, the following terms shall have
          the meaning set forth in Section 1.01 of the Indenture:

               AAct@
               AAdditional Bonds@
               AAgreement@
               AAirport@
               AAuthenticating Agent@
               AAuthorized Company Representative@

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               ABankruptcy Code@
               ABankruptcy Counsel@
               ABond Fund@
               ABusiness Day@
               ACompany@
               AConstruction Fund@
               ACosts of Construction@
               ACounsel@
               ADate of Issuance@
               AFacility Rentals@
               AFavorable Opinion of Bond Counsel@
               AGovernment Obligations@
               AGround Lease@
               AGround Lease Termination@
               AGuaranty@
               AGuarantor@
               AIndenture@
               AInterest Payment Date@
               AInvestment Securities@
               AIssuer@
               AMoody's@
               AOutstanding@
               AOwner@
               APaying Agent@
               APerson@
               ARating Category@
               AReceipts and Revenues@
               ARegistrar@
               ASeries@ or ASeries of Bonds@
               AS&P@
               ATrust Estate@
               ATrustee@
               AUnassigned Rights@
               A1999 Series A Bonds@

               Section 1.03.  Additional Definitions.  In addition to the
          terms whose definitions are incorporated by reference herein
          pursuant to Section 1.02, the following terms shall have the
          meanings set forth in this Section unless the use or context
          clearly indicates otherwise:

               AAcquisition and Construction@ means, as appropriate, any
          design and any temporary or permanent acquisition, construction,
          equipping, demolition, installation, additional improvement to,
          restoration, reacquisition, expansion, reconstruction, reproduction
          or reequipping of the Project Facilities and including any related
          and necessary demolition of existing facilities or improvements.

               AAdministration  Expenses@  shall  mean  the  reasonable
          administrative expenses incurred by the Issuer with respect to the
          Bonds, the Indenture, this Agreement, the Leasehold Mortgage and
          the Guaranty (except for expenses incurred by the Issuer excluded

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<PAGE>



          from indemnification pursuant to Section 6.08 hereof, if any),
          including,  without  limitation,  the  reasonable  fees  and
          disbursements of Bond Counsel and Counsel for the Issuer and
          reasonable out-of-pocket expenses of the Issuer incurred in
          connection with the authorization, issuance and sale of the Bonds
          and the compensation and reimbursement of reasonable fees, expenses
          and advances payable to the Trustee, the Registrar and the Paying
          Agent and the Authenticating Agent (including the reasonable fees
          and expenses of their counsel) under the Indenture, together with
          applicable taxes and other governmental charges.

               A Arbitrage Certificate@ means the Arbitrage Certificate dated
          as of the Date of Issuance and delivery of the 1999 Series A Bonds,
          to be issued by the Issuer, based upon a certification furnished by
          the Company.

               AAuthorized Issuer Representative@ means the person or persons
          at the time designated by written certificate furnished to the
          Company and the Trustee containing the specimen signature of each
          such person and signed on behalf of the Issuer by its Chairman or
          its Secretary-Treasurer, to act on behalf of the Issuer.  Such
          certificate shall designate an alternate or alternates.

               ABond@ or ABonds@ means all 1999 Series A Bonds and all
          Additional Bonds, delivered under and pursuant to the Indenture and
          any  Supplemental  Indenture,  including  any  bonds  issued  in
          substitution therefor.

               ABond Counsel@ means Harper, Ferguson & Davis or any other
          firm of attorneys approved by the Issuer and not unacceptable to
          the Company, having a national reputation in the field of municipal
          law whose opinions with respect to the exclusion of interest on
          state or local governmental obligations from gross income for
          purposes of federal income taxation are generally accepted by
          purchasers of state or local governmental obligations.

               ABond Resolution@ shall mean the resolution of the Issuer
          adopted on August 16, 1999, authorizing the issuance and sale of
          the 1999 Series A Bonds and authorizing the execution, delivery and
          performance of this Agreement and the Indenture and determining
          other matters in connection therewith.

               ABond Year@ shall have the meaning ascribed to such term in
          the Indenture.

               ACode@ means the Internal Revenue Code of 1986, as amended, or
          any successor legislation applicable to the Bonds, and the
          regulations and published rulings promulgated thereunder.

               ACommonwealth@ means the Commonwealth of Kentucky.



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<PAGE>



               ACompany Tax Certificate@ means the Company Tax Certificate
          and Compliance Agreement, executed and delivered by the Company on
          the Date of Issuance, regarding compliance with the Code to assure
          that interest on the 1999 Series A Bonds which is intended to be
          excluded from gross income for federal income tax purposes is so
          excluded.

               ACompletion Date@ means the date of completion of the
          Acquisition and Construction of the Project Facilities financed by
          the 1999 Series A Bonds, as such date or dates shall be certified
          as provided in Section 3.04 hereof.

               ADetermination of Taxability@ shall have the meaning specified
          in Section 9.02 of this Agreement.

               AExcluded Equipment@ shall have the meaning specified in
          Section 5.03 of this Agreement.

               AGross Award@ means the total of amounts awarded to or
          received by the Issuer and/or the Company as damages, compensation
          or otherwise, by reason of the taking of the Project Facilities or
          any part thereof as a result of or in anticipation of the exercise
          of the right of condemnation or eminent domain.  The term AGross
          Award@ shall include any amounts awarded as damages, compensation
          or otherwise, by reason of the taking as a result of or in
          anticipation of the exercise of the right of condemnation or
          eminent domain of any of the land leased to the Company pursuant to
          any ground lease.

               AGround Lease@ means the Ground Lease, dated as of September1,
          1999 by and between the Issuer and the Company.

               ALeasehold Mortgage@ means the Leasehold Mortgage dated as of
          July 1, 1999, granted by the Company to the Trustee, as the same
          may be amended, supplemented or otherwise modified from time to
          time.

               ANet Proceeds@ means, with respect to the 1999 Series A Bonds
          and all Additional Bonds, the Proceeds of such issue of Bonds
          reduced by amounts of such Proceeds in a reasonably required
          reserve or replacement fund.

               ANet Insurance Proceeds@ means the gross receipts from the
          policy or policies of property insurance required to be procured
          and maintained pursuant to Section 5.06 remaining after payment of
          all expenses (including attorney's fees and any extraordinary fee
          of the Trustee) incurred in the collection of such gross receipts.

               APerson@ means any natural person, corporation, cooperative,
          partnership, trust or unincorporated organization, government or
          governmental body or agency, political subdivision or other legal
          entity as in the context may be appropriate.

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               APlans and Specifications@ means the plans and specifications
          for the Acquisition and Construction of the Project Facilities,
          prepared by the Company and approved by the Issuer, as the same may
          be supplemented, amended or modified from time to time upon the
          approval of the Issuer as to any such substantial and material
          amendments, supplementations or modifications, and shall include
          all plans and specifications prepared by the Company and approved
          by the Issuer for any additions or improvements to, or any
          restoration, reacquisition, expansion, reconstruction, reproduction
          or reequipping of the Project Facilities in accordance with Section
          3.01.  All such Issuer approvals shall be for the purpose of
          assuring compatibility of the Project Facilities with existing
          Airport facilities and with the continuous operation of the Airport
          and for assuring that the Project Facilities do not violate, or
          cause the Issuer to violate, applicable law or regulations as
          provided in Section 3.01(a).  Such Issuer approvals shall not be
          unreasonably withheld.

               AProceeds@ shall have the meaning ascribed to such term by
          Section 1.141-2 of the Treasury Regulations promulgated under
          Section 141 of the Code.

               AProject Facilities@ shall mean, collectively, the airport
          facilities and improvements financed with the Proceeds of the 1999
          Series A Bonds and the site thereof, all as described in Exhibit A
          attached hereto, as such exhibit may be amended by the Company in
          its discretion from time to time (provided that no such amendment
          shall materially change or alter the nature and character of the
          Project Facilities as facilities constituting an airport or
          facilities functionally related and subordinate thereto), and
          including, until completion thereof, inter alia, any necessary
          temporary   facilities,   necessary   utilities,   public   ways,
          thoroughfares and roads, and similar facilities.

               A Rebatable Arbitrage@ means with respect to any series of
          Bonds, the amount required to be rebated to the United States
          pursuant to Section 148(f)(2) of the Code or successor provisions
          applicable to the Bonds.

               ARebate Expert@ means any of the following, chosen by the
          Company and acceptable to the Issuer: (a) any national firm of
          certified public accountants or (b) any reputable firm which offers
          to the tax-exempt bond industry rebate calculation services and
          holds itself out as and is generally recognized as having expertise
          in that area.

               ARebate Fund@ means the fund bearing such name created in by
          Section 6.02 of the Indenture.

               A S.E.C.@ means the United States Securities and Exchange
          Commission.

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<PAGE>




               Section 1.04.  Interpretation.  Any reference herein to the
          Issuer or to any member or officer thereof includes entities or
          officials succeeding to their respective functions, duties or
          responsibilities pursuant to or by operation of law or lawfully
          performing their functions.

               Any reference to a section or provision of the Constitution of
          the Commonwealth or the Act, or to a section, provision or chapter
          of the Kentucky Revised Statutes, as amended, or to any statute of
          the United States of America, includes that section, provision or
          chapter as amended, modified, revised, supplemented or superseded
          from time to time; provided, that no amendment, modification,
          revision, supplement or superseding section, provision or chapter
          shall be applicable solely by reason of this provision, if it
          constitutes in any way an impairment of the rights or obligations
          of the Issuer, the Owners of the Bonds, the Trustee or the Company
          under this Agreement.

               Unless the context indicates otherwise, words importing the
          singular number include the plural number, and vice versa; the
          terms Ahereof@, Ahereby@, Aherein@, Ahereto@, Ahereunder@ and
          similar terms refer to this Agreement; and the term Ahereafter@
          means after, and the term Aheretofore@ mean before, the date of
          delivery of the 1999 Series A Bonds.  Words of any gender include
          the correlative words of the other genders, unless the sense
          indicates otherwise.

               Any reference to an Article number (e.g., Article IV) or a
          Section number (e.g., Section 8.03) without further qualification
          shall be construed to be a reference to the designated Article
          number or Section number hereof unless the use or context clearly
          indicates otherwise.

               Section 1.05.  Captions and Headings. The captions and
          headings in this Agreement are solely for convenience of reference
          and in no way define, limit or describe the scope or intent of any
          Articles, Sections, subsections, paragraphs, subparagraphs or
          clauses hereof.

                                     ARTICLE II


                                   REPRESENTATIONS

               Section 2.01.  Representations, Warranties and Covenants of
          the Issuer.  The Issuer makes the following representations,
          warranties and covenants as the basis for the undertakings on its
          part herein contained, provided, however, that the Issuer shall
          incur no liability whatsoever arising out of or in any way related
          to the reliance by the Company, the Trustee or any other person
          upon the truth or accuracy of any such representation or warranty


                                          8


<PAGE>


          by the Issuer and/or performance of any such covenant by or on the
          part of the Issuer:

                    (a)  Authorization.    The Issuer is a body politic and
               corporate and a local air board established pursuant to
               Chapter 183 of the Kentucky Revised Statutes constituting a
               political subdivision of the Commonwealth of Kentucky and
               existing pursuant to the Kentucky Revised Statutes.

                    (b) Power and Authority.   The Issuer has full power and
               authority to execute,  deliver, issue and perform its duties
               under the 1999 Series A Bonds, the Indenture, this Agreement
               and the Ground Lease and to execute, deliver and perform all
               other agreements and instruments executed and delivered or to
               be executed and delivered by the Issuer pursuant to or in
               connection  with  this  Agreement  and  the  transactions
               contemplated hereby.

                    (c)  Obligations Legal, Valid and Binding.   This
               Agreement, the Indenture and the Ground Lease have been duly
               and validly executed and delivered by the Issuer, and the
               Bonds constitute and will constitute the legal, valid and
               binding limited and special obligations of the Issuer payable
               solely from the Trust Estate; and the 1999 Series A Bonds, the
               Indenture, this Agreement and the Ground Lease are enforceable
               against the Issuer in accordance with their respective terms,
               except insofar as enforcement may be limited by applicable
               bankruptcy,  insolvency,  or  similar  laws  affecting  and
               enforcement of creditors= rights and remedies generally, and
               by equitable principles.

                    (d)  No Legal Bar.   The Issuer is not in violation of
               the Act, or any other laws of the Commonwealth, which would
               affect the Issuer's existence or its powers referred to in
               this Agreement.  The execution, delivery and performance by
               the Issuer of the 1999 Series A Bonds, the Indenture, this
               Agreement and the Ground Lease and all other agreements and
               instruments relating to all the foregoing to be executed and
               delivered by the Issuer in connection herewith and therewith,
               (a) do not and will not violate any provision of the Act, the
               laws of the Commonwealth, or any other applicable law,
               regulation, order, writ, judgment or decree of any court,
               arbitrator or governmental authority, (b) do not and will not
               violate any provision of, constitute a default under, or
               result in the creation or imposition of any lien on any of the
               assets of the Issuer pursuant to the provisions of, any
               mortgage, indenture, contract, agreement or other undertaking
               to which the Issuer is a party or which purports to be binding
               on the Issuer or on any of its assets, and (c) will not
               create, with respect to the obligations of the Issuer under
               this Agreement, a general or subordinated revenue obligation
               of the Issuer, but only a special obligation payable solely
               from the Trust Estate, including the Receipts and Revenues.


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                    (e)  Consents.   Except as otherwise disclosed in an
               exhibit attached to this Agreement on or before the Date of
               Issuance of the 1999 Series A Bonds, the Issuer will have
               obtained  any  consents,  permits,  licenses  and  approvals
               required under law to authorize the execution, delivery and
               performance of the Indenture, this Agreement and the Ground
               Lease, the issuance of the 1999 Series A Bonds and the
               consummation of the transactions contemplated thereby, and all
               such consents, permits, licenses and approvals remain in full
               force and effect.

                    (f)  Litigation.   There is no litigation pending or
               threatened (a) which might materially affect the transactions
               contemplated by this Agreement and the Ground Lease, or affect
               the validity or enforceability hereof or thereof, or any
               agreement or instrument to which the Issuer is bound and which
               is used or contemplated for use in the consummation of the
               transactions contemplated by the Indenture, this Agreement and
               the Ground Lease, or (b) which in any way contests the
               existence or organization of the Issuer; or (c) which in any
               way contests or seeks to enjoin the issuance of any of the
               1999 Series A Bonds.  The Issuer is not in default with
               respect to any order of any court, governmental authority or
               arbitration  board  or  tribunal  or  under  any  agreement,
               indenture, mortgage, lease or other instrument to which the
               Issuer is a party or by which it is or may be bound or
               affected.

                    (g) Maintenance of Exempt Status.  The Issuer will take
               no action that may cause the Plans and Specifications to be
               materially changed or revised, or the Project Facilities to be
               operated, maintained, repaired or renovated, in a manner such
               that the Project Facilities financed by the Proceeds of the
               1999 Series A Bonds or any Additional Bonds will not qualify
               as  an  airport  or  facilities  functionally  related  and
               subordinate to an airport within the meaning of Section 142 of
               the  Code  and  the  income  tax  regulations  promulgated
               thereunder, as determined by a written opinion of Bond
               Counsel.

                    (h) No Defaults.  No event has occurred and no condition
               exists with respect to the Issuer which would constitute an
               Event of Default under this Agreement, the Ground Lease or the
               Indenture or which, with the lapse of time or with the giving
               of notice or both, would become an Event of Default under this
               Agreement, the Ground Lease or the Indenture.

                    (i) No Prior Pledge.  Neither this Agreement, the Ground
               Lease nor the Receipts and Revenues have been or will be
               pledged, assigned or hypothecated by the Issuer, in whole or
               in part, in any manner or for any purpose other than as

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<PAGE>



               provided in the Indenture as security for the payment of the
               interest, principal and premium on the 1999 Series A Bonds.

               Section 2.02. Limited Obligations.  Notwithstanding anything
          herein contained to the contrary, no obligation or liability,
          either direct or contingent, that the Issuer may incur for the
          payment of money arising out of this Agreement, the Indenture, the
          issuance of the Bonds or any other related document to which the
          Issuer is a party or by which the Issuer is bound shall constitute
          a debt or a pledge of the faith and credit of the Issuer or of the
          Commonwealth or of any political subdivision thereof, but shall be
          special and limited obligations of the Issuer payable solely from
          (i) the Trust Estate, (ii) Proceeds derived from the sale of the
          1999 Series A Bonds and (iii) amounts on deposit from time to time
          in the Bond Fund, subject to the provisions of this Agreement and
          the Indenture permitting the application thereof for the purposes
          and on the terms and conditions set forth herein and therein.

               Section 2.03.  No Warranty by Issuer of Condition or
          Suitability of the Project Facilities.  The Issuer makes no
          representations or warranty, either express or implied, as to the
          suitability, fitness or utilization of the Project Facilities or
          the absence of mechanic=s or materialments liens thereon or with
          respect thereto or as to the condition of the Project Facilities or
          that the same is or will be free from defects, latent or patent, or
          will be suitable for the Company's purposes or needs, all of the
          same being leased to the Company as is, where is, with all faults
          and without warranty of merchantability or fitness for a particular
          purpose.

               Section 2.04. Representations and Warranties of the Company.
           The Company makes the following representations as the basis for
          the undertakings on its part herein contained:

                    (a)  Corporate Organization and Power.  The Company (i)
               is a corporation duly organized, validly existing and in good
               standing under the laws of the State of Minnesota and is
               qualified to do business and is in good standing under the
               laws of the Commonwealth, and (ii) has all requisite power and
               authority and all material licenses and permits to own and
               operate its properties and to carry on its business as now
               being conducted and as presently proposed to be conducted and
               to enter into and to perform and observe the agreements on its
               part contained in this Agreement and the Ground Lease; and by
               proper corporate action has been duly authorized to execute
               and deliver this Agreement and the Ground Lease.  The Company
               is a wholly-owned subsidiary of Mesaba Holdings, Inc., a
               Minnesota corporation.

                    (b)  Pending Litigation.  There are no actions, suits,
               proceedings, inquiries or investigations pending, or to the
               knowledge of the Company threatened, against or affecting the

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<PAGE>



               Company in any court or before any governmental authority or
               arbitration board or tribunal which, in the Company's opinion,
               are likely to materially and adversely affect the transactions
               contemplated by this Agreement, the Ground Lease or the
               Indenture, or which, in any way, adversely affect the validity
               or enforceability of the 1999 Series A Bonds, the Indenture,
               this Agreement or the Ground Lease.

                    (c) Agreements Are Valid and Authorized.  The execution
               and delivery by the Company of this Agreement, the Ground
               Lease and the Leasehold Mortgage and the compliance by the
               Company with all of the provisions hereof and thereof and the
               consummation of the transactions contemplated hereby and
               thereby will not (i) materially conflict with or result in any
               material breach of any of the terms, conditions or provisions
               of, or constitute a material default under, any agreement,
               charter document, by-law or other instrument to which the
               Company is a party or by which it may be bound, or any
               licenses, judgment, decree, law, statute, order, rule or
               regulation of any court or governmental agency or body having
               jurisdiction over the Company or any of its activities or
               properties, or (ii) result in the creation or imposition of
               any prohibited material lien, charge or encumbrance of any
               nature whatsoever upon any material property or assets of the
               Company under the terms of any instrument or agreement to the
               extent that any of the events described in clauses (i) and
               (ii) would have a material adverse effect on the financial
               condition of the Company.

                    (d)   Governmental Consent.  In connection with the
               transactions contemplated by this Agreement, the Ground Lease
               and the Indenture, no circumstances in connection with the
               execution, delivery and performance by the Company of this
               Agreement or the offer, issue, sale or delivery by the Issuer
               of the 1999 Series A Bonds, is such as to require the consent,
               approval or authorization of, or the filing, registration or
               qualification with, any governmental authority on the part of
               the Company, other than those already obtained as of the Date
               of Issuance of the 1999 Series A Bonds;provided, however, no
               representation is made herein as to compliance with the
               securities or Ablue sky@ laws of any jurisdiction.

                    (e) No Defaults.  No event has occurred and no condition
               exists with respect to the Company that would constitute an
               Event of Default under this Agreement or the Ground Lease or
               which, with the lapse of time or with the giving of notice or
               both, would become an Event of Default under this Agreement or
               the Ground Lease.

                    (f)  Consents and Permits.  All necessary orders,
               consents, authorizations, permits, licenses and approvals
               legally required by governmental authorities to be obtained by
               the Company as of the date hereof in connection with the

                                         12

<PAGE>



               Acquisition and Construction of the Project Facilities have
               been obtained and are in full force and effect, and the
               Company knows of no reason why it is not eligible to obtain
               all other necessary orders, consents, authorizations, permits,
               licenses and approvals legally required by governmental
               authorities to be obtained by the Company after the date
               hereof in connection with the completion of the Acquisition
               and Construction and the operation of the Project Facilities.

                    (g)  Useful Life of Project Facilities.  The reasonably
               expected economic life of the Project Facilities to be
               financed with the Proceeds of the 1999 Series A Bonds (as
               determined under Section 147(b) of the Code) is ______ years,
               as shown in Exhibit B, attached hereto and made a part hereof.
                The Company presently intends to continue to operate or cause
               the Project Facilities to be operated as airport facilities or
               facilities  functionally  related  and  subordinate  thereto
               pursuant to the Code until all of the 1999 Series A Bonds are
               paid and discharged.

                    (h)  Average Maturity of 1999 Series A Bonds. The
               weighted average maturity of the 1999 Series A Bonds does not
               exceed 120% of the reasonably expected weighted average
               economic life of the Project Facilities to be financed with
               the Proceeds of the 1999 Series A Bonds, as reflected in

               Exhibit B, attached hereto and made a part hereof.

                    (i) Tax Status of 1999 Series A Bonds.  The Company has
               not taken and will not take any action, and knows of no action
               that any other person, firm or corporation has taken or
               intends to take, which would cause interest on the 1999 Series
               A Bonds to be includable in the gross income of the recipients
               thereof for federal income tax purposes (except any 1999
               Series A Bond for any period during which such 1999 Series A
               Bond is held by a Asubstantial user@ of the Project Facilities
               financed with the Proceeds of the 1999 Series A Bonds or a
               Arelated person@ to such Asubstantial user@ as such terms are
               defined in Section 147(a) of the Code).

                    (j)  No Change in Financial Condition.  The Company=s
               financial operations are consolidated with those of its
               corporate parent, the Guarantor, for accounting presentation
               and federal income tax purposes.  The annual, quarterly and
               other required filings periodically made by the Guarantor with
               the United States Securities and Exchange Commission (the
               AS.E.C.@) are incorporated herein by reference.  Since the
               adoption by the Issuer on January 18, 1999, of a reimbursement
               resolution in respect of the financing of the Project
               Facilities, there has been no material adverse change in the
               financial condition of the Guarantor from the condition
               reflected in the S.E.C. statements filed by the Guarantor as
               of such date.


                                         13

<PAGE>



               (k) Inducement.  The availability of the financial assistance
          by the Issuer in issuing the 1999 Series A Bonds has been an
          important inducement to the Company to undertake the Project
          Facilities  and  to  locate  the  Project  Facilities  in  the
          Commonwealth.

                    (l)  Title to Project Facilities Financed with Proceeds
               of the 1999 Series A Bond s.  The Company agrees that in
               accordance with Section 142(a)(1) of the Code, title to the
               Project Facilities financed with the Proceeds of the 1999
               Series A Bonds shall be governmentally owned by the Issuer.

                    (m)  Ground Lease.  The Ground Lease continues in full
               force and effect as the legal, valid and binding obligation of
               the Company thereunder, without material default by the
               Company, or to the best knowledge of the Company, by the
               Issuer thereunder; and the Company has neither received nor
               delivered any notice of default or termination under the
               Ground Lease.

                    (n)Guaranty Agreement.  The Guaranty Agreement continues
               in full force and effect as the legal, valid and binding
               obligation of the Guarantor, Mesaba Holdings, Inc., without
               material default by the Guarantor, and the Guarantor has
               neither received nor delivered any notice of default or
               termination under the Guaranty Agreement.  The Company also
               represents that this Agreement does not cause a default under
               the Guaranty Agreement.

                    (o) Leasehold Mortgage.  The Leasehold Mortgage continues
               in full force and effect as the legal, valid and binding
               obligation of the Company, without material default by the
               Company, or to the best knowledge of the Company, by the
               Trustee thereunder; and the Company has neither received nor
               delivered any notice of default or termination under the
               Leasehold Mortgage.

                                     ARTICLE III

                           COMMENCEMENT AND COMPLETION OF
                      THE PROJECT FACILITIES; ISSUANCE OF BONDS

               Section 3.01.  Agreement Regarding the Acquisition and
          Construction of the Project Facilities.

                    (a)  Subject to (i) the provisions of Section 3.05
               hereof, (ii) compliance with the provisions of the Ground
               Lease and (iii) the obtaining of all governmental approvals
               required for the Acquisition and Construction of the Project
               Facilities, including, but not limited to, any necessary
               approvals or permits of the Federal Aviation Administration
               (AFAA@), the Company will use its best efforts and proceed

                                         14

<PAGE>



               with reasonable speed and dispatch to cause the Acquisition
               and Construction of the Project Facilities substantially in
               accordance with the Plans and Specifications as prepared by
               the Company in reasonable detail and delivered to and approved
               by the Issuer. Any supplements, amendments, changes and
               additions to such Plans and Specifications shall be subject to
               the reasonable approval of the Issuer as to their compliance
               with the rules, regulations and procedures of the Issuer,
               however, that the Issuer shall incur no pecuniary liability to
               the Company, the Trustee or any other Person as a result of
               having  given  or  withheld  such  approval.    No  material
               supplements, amendments, changes or additions to the Plans and
               Specifications shall materially change the descriptions set
               forth in the exhibits hereto or change the function of any
               principal component described in the Plans and Specifications,
               unless there shall be filed with the Issuer and the Trustee
               the written approving opinion of Bond Counsel to the effect
               that such supplement, amendment, change or addition will not
               result in the inclusion of interest on any 1999 Series A Bond
               in the gross income of the holder thereof for federal income
               tax purposes (except in respect to Asubstantial users@ and
               Arelated persons@ as described in Section 147(a)(1) of the
               Code) and will not adversely affect the qualification of the
               Project Facilities as a financeable project under the Act or
               the Code.  In the event of such a change in the descriptions
               set forth in the exhibits hereto and following receipt by the
               Issuer and the Trustee of such opinion of Bond Counsel, the
               Issuer and the Company shall amend (without any requirement
               for Bondholder consent) any or all of the exhibits to this
               Agreement and the Ground Lease to reflect such change.

                    (b)  In no event shall any changes or revisions in Plans
               and Specifications (i) cause the Project Facilities, or any
               portion thereof, to be structurally unsound, unsafe or
               hazardous; (ii) fail to provide for sufficient clearance for
               taxiways and aprons, if applicable; (iii) provide for use of
               the Project Facilities, or any portion thereof, for purposes
               other than those initially contemplated and agreed to by the
               Issuer,  unless  approved  in  writing  by  the  Issuer;
               (iv) adversely  affect  the  qualification  of  the  Project
               Facilities as a financeable project under the Act or the Code
               or impair the exclusion of interest on any of the 1999 Series
               A Bonds from gross income for purposes of federal income
               taxation (except with respect to Asubstantial users@ and
               Arelated persons@ as described in Section 147(a)(1) of the
               Code); or (v) fail to comply with or be inconsistent with the
               terms and conditions of this Agreement.  The Company shall not
               be deemed to be in default under the provisions of this
               Section 3.01 if the Acquisition and Construction of all or any
               portion of the Project Facilities shall be delayed or
               prevented by the Company's inability to secure needed labor or
               material,  stormy  or  inclement  weather,  strikes,  labor

                                         15

<PAGE>



               disputes, lockouts or like trouble, acts of God, acts of
               neglect of the Issuer or its agents or employees, laws,
               regulations or restrictions of or imposed by any governmental
               entity, agency or board, orders of any court, or fire or other
               similar catastrophe or any other cause that is beyond the
               Company's reasonable control;provided, however, that if any
               of such events occur in connection with the Acquisition and
               Construction of all or any portion of the Project Facilities,
               the Company shall in good faith use its best efforts to remedy
               the cause or causes preventing it from carrying out such
               Acquisition and Construction if practicable, at reasonable
               cost (in the Company's judgment) and subject to the remaining
               terms hereof; and provided further that settlement of strikes,
               lockouts and other labor disputes shall be entirely within the
               discretion of the Company.

                    (c)  Issuer approvals required by this Section 3.01 shall
               be for the purpose of assuring the compatibility of the
               Project Facilities with existing Airport facilities and with
               the continuous operation of the Airport and to assure
               compliance with the Ground Lease and/or applicable federal
               and/or Issuer regulations as provided in clause (a) of this
               Section 3.01.  Such Issuer approvals shall not be unreasonably
               withheld.  The Issuer's approval rights under this Section
               3.01 are Unassigned Rights, which are not assigned to, or
               granted to the Issuer for the benefit of, the Trustee, and the
               Trustee shall not have any right pursuant to this Agreement or
               the Indenture to approve any supplements, amendments, changes
               and  additions  to  or  deletions  from  the  Plans  and
               Specifications or the Project Facilities.

                    (d)  The  Plans  and  Specifications,  including  any
               supplements, amendments and additions thereto and as-built
               Plans and Specifications, in form as reasonably stipulated by
               the Issuer, shall be filed by the Company with the Issuer.

               Section 3.02.  Agreement to Issue 1999 Series A Bonds.

                    (a)  In order to provide funds for payment of the Costs
               of Construction of the Project Facilities, the Issuer agrees
               to use its best efforts to issue the 1999 Series A Bonds in an
               aggregate principal amount not to exceed $14,000,000.  The
               Company may request the Issuer to issue Additional Bonds
               pursuant to Section 2.17 of the Indenture to (1) finance the
               cost of completing any portion of the Project Facilities, (2)
               refund any of the 1999 Series A Bonds or Additional Bonds,
               including the costs of issuance and sale of such 1999 Series
               A Bonds or (3) finance the Acquisition and Construction of
               additions,  expansions  and  improvements  to  the  Project
               Facilities or additional facilities at the Airport for
               operation and use by the Company.  If the Company is not in
               default hereunder, the Issuer, upon request of the Company to

                                         16

<PAGE>



               issue such Additional Bonds pursuant to the preceding sentence
               and the authorizations of the Issuer=s governing board, will
               endeavor to issue such Additional Bonds if it is legally
               permitted to do so.  Additional Bonds shall be issued upon
               such terms and conditions as may be agreed upon by the Issuer
               and the Company in accordance with the provisions of Section
               2.17 of the Indenture.  The Issuer and the Company hereby
               agree that, to the extent permitted by law, any statutory
               mortgage lien provided for by KRS 103.250(1) or KRS 103.250(2)
               is expressly waived and released and shall not be applicable
               to the Project Facilities or constitute security for the
               payment of the 1999 Series A Bonds.

                    (b)  It is understood and agreed that the principal
               amount, interest rate or rates, terms and other provisions of
               any Additional Bonds shall be subject to the direction and
               written consent of the Company prior to the issuance of any
               such Additional Bonds and that the Issuer will not issue any
               such Additional Bonds without such direction and approval.
               If, however, the Issuer is unable to issue any such Additional
               Bonds as aforesaid after a request of the Company under this
               Section 3.02, the Company shall, upon demand, pay or reimburse
               the Issuer for all reasonable costs and expenses, if any,
               expended by the Issuer in attempting to issue such Additional
               Bonds.  The Issuer shall not refund any 1999 Series A Bonds or
               change or modify any 1999 Series A Bonds, this Agreement, the
               Ground Lease or the Indenture in any way without prior written
               direction and approval of the Company.

                    (c)  The Company hereby approves the form of the
               Indenture and the terms, provisions and conditions thereof.

               Section 3.03.
                              Application of the Proceeds of 1999 Series A
          Bond s.  The Proceeds of the 1999 Series A Bonds shall be deposited
          with the Trustee in the funds and accounts specified in the
          Indenture.  The application of such Proceeds shall be subject to
          the conditions set forth in the Indenture.  Payments shall be made
          by the Trustee under the Indenture for the Costs of Construction,
          acquisition, installation and equipping of the Project Facilities,
          and all such payments shall be made at the times, to the persons,
          subject to the conditions, and in accordance with the procedures
          set forth in the Indenture.  The Proceeds of the 1999 Series A
          Bonds which are deposited in the Construction Fund shall be
          expended only for the cost of the construction, acquisition and
          installation of the Project Facilities, as provided in the
          Indenture.  No 1999 Series A Bond Proceeds shall be subject to
          attachment or levy in the suit of any creditor of the Company or
          any agent, manufacturer, supplier, contractor or subcontractor.

               Section 3.04.   Establishment of the Completion Date.  The
          Company covenants that it has obtained or will cause to be obtained
          all necessary approvals and permits from any and all governmental

                                         17

<PAGE>



          agencies requisite to the construction and operation of the Project
          Facilities, and that the Project Facilities have been or will be,
          as applicable, acquired, constructed and operated in all material
          respects in compliance with all federal, state and local laws,
          ordinances and regulations applicable thereto.  The Company shall,
          with all reasonable dispatch, commence construction and proceed
          with due diligence to complete the construction, acquisition and
          installation of the Project Facilities.

               The Completion Date of the Project Facilities financed by the
          1999 Series A Bonds shall be evidenced in each case to the Issuer
          and  the  Trustee  by  issuance  of  the  Company=s  Completion
          Certificate, as provided by Section 6.01 of the Indenture.  Any
          amounts to be retained by the Trustee for payment of Costs of
          Construction not then due and payable shall be the subject of
          specific instructions and directions of the Company to the Trustee.
           Notwithstanding the foregoing, each certificate of completion
          shall state that it is given without prejudice to any rights of the
          Issuer or the Company, as the case may be, against third parties
          which exist at the date of such certificate or which may
          subsequently come into being.

               Section 3.05.   Company Required to Pay Costs of Construction
          in Event Proceeds of 1999 Series A Bonds Insufficient.

                    (a)  In the event that moneys held in the Construction
               Fund available for payment of the Costs of Construction of the
               Project Facilities are not sufficient to pay such Costs of
               Construction in full, the Company either (i) shall request the
               Issuer to issue Additional Bonds pursuant to Section 3.02
               hereof to pay any or all of such excess Costs of Construction,
               or (ii) shall complete and pay all Costs of Construction of
               such Project Facilities in accordance with the Plans and
               Specifications, as such Plans and Specifications may be
               modified with the approval of the Issuer, which approval shall
               not be unreasonably withheld, at the Company's expense;

               provided that in the event the Company requests the Issuer to
               issue Additional Bonds and the Issuer does not do so, the
               Company shall comply with clause (ii) of this sentence.

                    (b)  The Issuer does not make any warranty, either
               express or implied, that the moneys paid into the Construction
               Fund and available for payment of the Costs of Construction of
               the Project Facilities will be sufficient for such purpose.
                The Company agrees that if after exhaustion of such moneys
               the  Company  should  pay  any  portion  of  the  Costs  of
               Construction of the Project Facilities pursuant to the
               provisions of this Section 3.05, it shall not be entitled to
               any reimbursement therefor from the Issuer (except from the
               Proceeds of any Additional Bonds or pursuant to separate
               agreement) or from the holders of any 1999 Series A Bonds, nor


                                         18

<PAGE>



               shall the Company be entitled to any diminution of the rents
               payable under Article IV hereof.

               Section 3.06. Company to Pursue Remedies Against Contractors,
          Subcontractors and Suppliers and Their Sureties.  In the event of
          default of any contractor, subcontractor or supplier under any
          contract made in connection with the Project Facilities, the
          Company will, if in its sole discretion it deems it appropriate,
          promptly proceed, either separately or in conjunction with the
          Issuer (but at the expense of the Company), if the Issuer consents
          (which consent shall not be unreasonably withheld) or with others,
          to pursue the remedies of the Company against the contractor,
          subcontractor or supplier so in default and against any surety for
          the performance of such contractor, subcontractor or supplier.  The
          Company agrees to advise the Issuer and the Trustee of any default
          by a contractor, subcontractor or supplier material to the
          operations of the Airport and any legal actions or proceedings it
          intends to commence in connection with any such default.  Any
          amount recovered by way of damages, refunds, adjustment or
          otherwise  in  connection  with  the  foregoing  shall,  after
          reimbursement to the Issuer and the Company of any cost incurred by
          them by reason of such default and legal and other related costs
          expended in prosecuting all claims against such defaulting party,
          (i) prior to the Completion Date shall be used to pay Costs of
          Construction  of  the  Project  Facilities  and  (ii)  after  the
          Completion Date shall be paid to the Trustee for deposit into the
          Bond Fund and applied, at the direction of the Authorized Company
          Representative, (A) to purchase 1999 Series A Bonds in the open
          market (excluding any portion of the purchase price which is
          attributable to interest accrued and/or accruing on such 1999
          Series A Bonds until the date of purchase) for the purpose of
          cancellation; (B) to redeem 1999 Series A Bonds on their earliest
          redemption date, as applicable (paying principal sums only) for the
          purpose of cancellation; or (C) used to pay the principal of and/or
          interest on the 1999 Series A Bonds, provided that prior to
          exercising the rights set out in clause (C) above the Company shall
          deliver to the Trustee and the Issuer a Favorable Opinion of Bond
          Counsel to the effect that such transfer will not impair the
          exclusion of the interest on the 1999 Series A Bonds from gross
          income for federal income tax purposes.  The Company agrees that if
          the Issuer participates in any legal action or proceedings, it and
          its officers and employees shall be fully indemnified and held
          harmless by the Company in connection therewith.

               Section 3.07.  Directions by Company.  In all cases where
          action may be taken under this Agreement or the Indenture by the
          Issuer at or upon the direction of the Company, the Issuer hereby
          authorizes the Company to give notice on behalf of the Issuer of
          the exercise of such action.  Such notice shall be given
          concurrently to both the Issuer and the Trustee and may be given
          either in writing or by telephone or telegraph, confirmed in
          writing.

                                         19

<PAGE>




               Section 3.08.  Title to the Project Facilities.

                    (a) The Company agrees and acknowledges that, subject to
               Section 3.09, all right, title and interest in the Project
               Facilities, including any portion thereof heretofore or
               hereafter acquired or constructed, whether constituting real,
               personal  or  mixed  property,  shall,  pursuant  to  the
               requirements  of  Section  142(b)(1)(B)  of  the  Code,  be
               governmentally-owned by  the Issuer, subject to the leasehold
               estate of the Company (and the rights of all successors
               thereto, whether by law, equity or contract) created by this
               Agreement in respect of the Project Facilities.  The Company
               hereby agrees to execute any further written instrument as
               shall be necessary to satisfy the requirements of Section
               142(b)(1)(B) of the Code, with respect to such governmental
               ownership, subject to the leasehold estate of the Company
               created by this Agreement.  It is intended that nothing in
               this Section 3.08 shall cause any Company property not
               financed by the Proceeds of the 1999 Series A Bonds which is
               or may be installed in or on the Project Facilities pursuant
               to Article V or cause any AExcluded Equipment@ under Article
               V hereof to become part of the Project Facilities.

                    (b) Pursuant to Section 142(b)(1)(B)(i) of the Code, the
               Company hereby makes an irrevocable election, binding upon the
               Company, the Guarantor and all their successors in interest
               under this Agreement, not to claim depreciation or any
               investment tax credit with respect to the 1999 Series A Bond-
               financed Project Facilities.

               Section 3.09.  Failure to Issue 1999 Series A Bonds.  If for
          any reason the 1999 Series A Bonds are not issued, this Agreement
          shall automatically terminate and the Project Facilities, if then
          constructed in whole or in part by the Company, shall continue to
          be owned by the Company.  In that event, notwithstanding any other
          provision in this Agreement to the contrary, there shall be no
          rental applicable to such facilities for the original Agreement
          term and any additional option terms.  Furthermore, upon any such
          occurrence, the Issuer agrees to take, at the Company=s cost and
          expense, whatever actions the Company may reasonably request to
          carry out the intent of this provision, including, without
          limitation conveying all present and future right, title and
          interest of the Issuer in such Project Facilities as may be now or
          hereafter constructed, to the Company and executing any further
          deed, conveyance, bill of sale or other written instrument as shall
          be necessary or desirable to convey any interest it has in such
          facilities to the Company.

                                     ARTICLE IV

                     LEASE OF THE PROJECT FACILITIES; OPTIONS TO

                                         20


<PAGE>


                RENEW; EFFECTIVE DATE OF THIS AGREEMENT; DURATION OF

             AGREEMENT TERM; RENTAL PROVISIONS; PREPAYMENTS AND CREDITS

               Section 4.01. Demise of Project Facilities.  The Issuer does,
          by these presents, hereby lease and demise to the Company, and the
          Company does, by these presents, hereby take and hire from the
          Issuer, for and during the term provided in Section 4.02 and upon
          and subject to the terms, provisions and conditions herein set
          forth, the Project Facilities.  It is the intention of the Issuer
          and the Company that the Project Facilities shall at all times be
          governmentally-owned by  the Issuer, as provided by Section
          142(b)(1)(B) of the Code.

               Section 4.02.  Effective Date of This Agreement; Duration of
          Agreement Term; Options to Renew.

                    (a)  This Agreement shall become effective upon the
               delivery hereof, and the leasehold estate created in this
               Agreement shall then begin, and shall continue in full force
               and effect, subject to Section 2.02 hereof, unless terminated
               prior thereto as hereinafter provided, for an initial term
               expiring July 1, 2029, subject to the options set forth in
               clause (b) of this Section 4.02.  Notwithstanding any other
               provisions of this Agreement, the aggregate sum of the initial
               term of this Agreement, plus all option terms, including the
               Fair Market Value Term, if applicable, shall not exceed 40
               years.

                    (b)  Upon expiration of the initial Agreement term, the
               Company is hereby granted the options, exercisable in the case
               of each such option not more than 18 months nor less than 12
               months prior to the expiration of either the initial Agreement
               term or the applicable option term, to renew this Agreement in
               respect of the Project Facilities for two additional option
               terms ending respectively on (i) July 1, 2034 (the AFirst
               Option Term@) and (ii) July 1, 2039 (the ASecond Option
               Term@).  In the event the First Option Term and the Second
               Option Term (as adjusted, pursuant to clause (d) of this
               Section 4.02) in the aggregate equal 80% of the reasonably
               expected economic life of the Project Facilities, as of the
               Date of Issuance of the 1999 Series A Bonds, determined
               pursuant to Section 147(b) of the Code, but do not, in the
               aggregate, equal 40 years, the Company is hereby granted an
               option to renew this agreement, at fair market rental value,
               from the date of the expiration of the Second Option Term to
               July 1, 2039 (the AFair Market Value Term@).  The Company
               represents to the Issuer that (y) the initial Agreement term
               plus both (z) the First Option Term and the Second Option Term
               do not, in the aggregate, exceed 80% of the reasonably
               expected economic life of the Project Facilities, as of the
               Date of Issuance of the 1999 Series A Bonds, determined
               pursuant to Section 147(b) of the Code.



                                         21

<PAGE>



                    (c)  The rental payable for the Project Facilities during
               each of the First Option Term and Second Option Term shall be
               $1.00 per annum plus payment of Facility Rentals described in
               Sections 4.03(a) and 4.03(b) hereof, if any.  The rental
               payable for the Project Facilities during the Fair Market
               Value Term shall be the fair market rental value of the
               Project Facilities during such term, determined in accordance
               with clause (e) of this Section 4.02.

                    (d)  Upon completion of Acquisition and Construction of
               the Project Facilities, the Company shall recalculate the
               reasonably expected economic life of the Project Facilities to
               be leased pursuant hereto, based on final, definitive costs of
               the Project Facilities; and to the extent required to assure
               that the Project Facilities to be leased pursuant hereto are
               not leased for more than 80% of their reasonably expected
               economic life (as determined under Section 147(b) of the Code)
               by the Company at rental rates other than fair market rent
               (the A80% Test@), the First Option Term and Second Option Term
               commencement and termination dates shall, if necessary, be
               adjusted to dates identified by the Company which comply with
               the 80% Test.  The Company shall notify the Issuer in writing
               of any such rental period adjustments and shall provide upon
               request reasonable information to verify compliance with the
               80% Test.

                    (e) (i)  For purposes of clause (c) of this Section 4.02,
               in determining the fair market rental value of the Project
               Facilities for purposes of the Fair Market Value Term, the
               Issuer and the Company shall, not more than four (4) months
               nor less than three (3) months prior to the expiration of the
               term preceding the Fair Market Value Term, each select an
               appraiser, which shall be knowledgeable, experienced and
               qualified in the evaluation of the fair market value of
               airport properties and leases of airport properties, whose
               fees shall be paid, respectively, by the Issuer and the
               Company.  Those two appraisers shall, within 5 days of their
               appointments, select a third similarly qualified appraiser,
               whose fee shall be shared equally by the Issuer and the
               Company.  In the event the three appraisers so selected cannot
               agree upon the fair market rental value for the Project
               Facilities during the Fair Market Value Term, each of the
               three appraisers shall, within 15 days of appointment,
               independently appraise the fair market rental value of the
               Project Facilities for the Fair Market Value Term.  For
               purposes of those appraisals, fair market rental value shall
               mean the rental value as of the expiration date of the Option
               Term preceding the Fair Market Value Term payable in cash in
               monthly installments, that a bona fide willing lessee who is
               not in possession and a bona fide willing lessor who is under
               no compulsion to lease are willing to pay to lease the Project
               Facilities for the Fair Market Value Term.  The Company's

                                         22

<PAGE>



               option to lease under this subparagraph (e) shall be at the
               fair market rental value as determined either by (i) the
               agreement of the three appraisers or (ii) the average of such
               three separate appraisals.  The Issuer agrees to cooperate
               with the Company to ensure that the appraisals and rental
               rates determined thereby are made available to the Company at
               least fifteen (15) days in advance of the latest date on which
               the Company can exercise its option.  If the Company exercises
               any option to renew granted by this Agreement, this Agreement
               shall continue in full force and effect for such Fair Market
               Value Term.

                    (ii) Notwithstanding the provisions of Section 4.02(e)(i)
               of this Agreement, the fair market rental value of the Project
               Facilities during the Fair Market Value Term must, at the time
               of any exercise of the Fair Market Value Term Option, comply
               with the provisions of Section 142 of the Code and the
               provisions of this Agreement shall be construed to accomplish
               such requirements.

               Section 4.03.  Rentals Payable.  Throughout the Agreement
          term, the Company shall pay or cause to be paid to the Issuer each
          of the following Facility Rentals at the following times and in the
          following amounts:

                    (a)  With respect to any Outstanding 1999 Series A Bonds,
               in the manner, at the times and in the amounts set forth in
               clauses (i) and (ii) of this subsection 4.03(a), the Company
               shall make such payments so that there shall be on deposit in
               the Bond Fund (i) on each maturity, redemption or principal
               payment date (whether by scheduled maturity or optional or
               mandatory redemption), an amount equal to the principal of and
               redemption premium, if any, due on such 1999 Series A Bonds
               (whether such payment date be by reason of maturity or upon
               redemption, prepayment or by acceleration or otherwise) on
               such maturity, redemption or principal payment date and (ii)
               on each Interest Payment Date, an amount equal to the interest
               due on such 1999 Series A Bonds on such Interest Payment Date;

               provided, however, the Company shall receive a credit against
               any rental amount due under this Section 4.03(a) and such
               obligation shall be deemed satisfied in the amount of any sum
               required to be paid under this Section 4.03(a) which is paid
               from any amounts on hand available for such purposes under the
               Trust Indenture, including any amounts paid pursuant to the
               Guaranty; and

                    In order to satisfy the requirements of this subsection
               (a), the Company shall pay on or prior to the first day of
               each month:

                         (y) To the Bond Fund, taking into account any
                    amounts already on deposit therein, an amount sufficient

                                         23


<PAGE>


                    to produce the interest component of then accrued Debt
                    Service Requirement of the 1999 Series A Bonds and
                    thereafter monthly an amount equal to one-sixth (1/6) of
                    the interest coming due on the 1999 Series A Bonds on the
                    next Interest Payment Date;

                         (z) To the Bond Fund, taking into account any
                    amounts already on deposit therein, an amount sufficient
                    to produce the principal and sinking fund installment
                    component of then accrued Debt Service Requirement of the
                    1999 Series A Bonds and thereafter monthly an amount
                    equal to one-twelfth (1/12) of the principal and sinking
                    fund installment coming due on the 1999 Series A Bonds on
                    the next July 1.

                    (b)  A rental commencing upon delivery of this Agreement
               payable from time to time within thirty (30) days after
               receipt by the Company of a requisition therefor from the
               Issuer, until the principal of and premium, if any, and
               interest on all 1999 Series A Bonds shall have been fully paid
               or provision for the payment thereof shall have been made, in
               an amount equal to previously unreimbursed Administration
               Expenses, which may be payable to the Issuer or to third
               parties, at the request of the Issuer.

                    (c)  The Company further agrees to pay or cause to be
               paid to the Trustee until the      principal of, premium, if
               any, and interest on the 1999 Series A Bonds shall have been
               fully paid or provision for the payment thereof shall have
               been made in accordance with the provisions of the Indenture,
               (i) an amount equal to the annual fee of the Trustee for the
               ordinary services of the Trustee, as trustee, rendered and its
               ordinary expenses incurred under the Indenture, as and when
               the same become due, (ii) the reasonable fees, charges and
               expenses of the Trustee, for acting as Registrar and Paying
               Agent as provided in the Indenture, as and when the same
               become due and (iii) the reasonable fees, charges and expenses
               of the Trustee and its counsel for the necessary extraordinary
               services rendered by it and extraordinary expenses incurred by
               it under the Indenture with prior written notice to the
               Company, as and when the same become due.

                    (d)  In the event the Company should fail to make or
               cause to be made any of the payments required in this Section
               4.03, the item or installment so in default shall continue as
               an obligation of the Company until the amount in default shall
               have been fully paid, and the Company agrees to pay the same
               with interest on all outstanding amounts due hereunder at the
               rate of interest per annum then borne by the 1999 Series A
               Bonds until paid.

                    (e)    Notwithstanding  any  other  provision  of  this
               Agreement, the Company shall (i) make payments or cause


                                         24

<PAGE>



               payments to be made at such times and in such amounts as will
               enable the Issuer to meet all of its obligations under the
               1999 Series A Bonds and the Indenture, including any payment
               required to be made to the Rebate Fund under the Indenture and
               to the Bond Fund under the Indenture, (ii) to pay and thereby
               eliminate any deficiency in the minimum requirements of any
               other funds created by and under the Indenture and (iii) to
               make any payment due on an acceleration of the maturity of the
               1999  Series  A  Bonds  pursuant  to  the  terms  thereof.
               Accordingly, the Company agrees (but such agreement shall not
               limit the generality of the preceding sentence) that if any
               additional amounts become payable by the Issuer to the Owners
               of the 1999 Series A Bonds pursuant to the terms thereof, then
               additional amounts shall be due and payable by the Company to
               the Issuer hereunder equal to any additional amounts that may
               be so payable by the Issuer, whether before or after payment
               of principal on the 1999 Series A Bonds, all of which amounts
               shall be paid by the Company no later than the date that the
               comparable amounts are due by the Issuer to the Owners of the
               1999 Series A Bonds.  The Company further agrees to pay or
               cause to be paid all costs of maintenance and repair, all
               taxes and assessments, insurance premiums and other costs and
               expenses concerning or in any way related to ownership,
               maintenance and use of the Project Facilities, or any part
               thereof, during the term of this Agreement or any renewal
               thereof.

                    (f)   Notwithstanding anything to the contrary which may
               be contained in this Agreement, any amount payable pursuant to
               this Agreement with respect to the principal of (whether at
               maturity or upon redemption or acceleration or otherwise) or
               premium, if any, and interest on the 1999 Series A Bonds shall
               be deemed satisfied and discharged to the extent moneys are
               available for such payment in accordance with the terms of the
               Indenture.

               Section 4.04.  Assignment of Rights; Payees of Rental
          Payments.  As security for the payment of the 1999 Series A Bonds,
          the Issuer will assign to the Trustee the Issuer's rights under
          this Agreement, including the rights to receive payments hereunder,
          but exclusive of Unassigned Rights and the Company herewith assents
          to such assignment.  The rent provided for in Section 4.03(a) (i)
          and (ii) hereof shall be paid by the Company directly to the
          Trustee and shall be used by the Trustee to pay principal of and
          premium, if any, and interest on the 1999 Series A Bonds. The rent
          provided for in Section 4.03(b) shall be paid either to the Issuer
          or directly to third parties, at the direction and request of the
          Issuer.

               Section 4.05.   Obligations of the Company Hereunder Absolute
          and Unconditional.  The obligations of the Company to make the
          payments required under Section 4.03(a), 4.03(b), 4.03(c), and

                                         25

<PAGE>



          4.03(e) and to pay the premiums or charges necessary to maintain or
          cause to be maintained the insurance required by Section 5.06 not
          otherwise paid in accordance with other provisions of this
          Agreement shall be absolute and unconditional and the Company will
          not suspend or discontinue any such payments referred to in Section
          4.03(a), 4.03(b), 4.03(c), and 4.03(e) so long as any 1999 Series
          A Bonds are Outstanding and will not terminate this Agreement for
          any cause including, without limiting the generality of the
          foregoing, (A) any abatement, suspension, deferment, reduction,
          setoff, defense (other than payment), counterclaim or recoupment
          whatsoever, or any right to any thereof, which the Company may now
          or hereafter have, (B) any insolvency, composition, bankruptcy,
          reorganization, arrangement, liquidation or similar proceedings
          relating to the Issuer or the Company, (C) any delay or failure of
          the Project Facilities, or any portion thereof, to be completed,
          operating or operable, or any defect in the title, quality,
          condition, design, operation or fitness for use of, or any damage
          to, or loss of, or loss of use of, or destruction or theft of, all
          or any part of the Project Facilities from any cause whatsoever,
          (D) any interruption or prohibition of the use or possession by the
          Issuer or the Company of, or any ouster or dispossession by
          paramount title or otherwise of the Issuer or the Company from, all
          or any part of the Project Facilities, or any interference with
          such use or possession by any governmental agency or board or other
          person or otherwise, (E) the invalidity or unenforceability or
          disaffirmance, in whole or in part, of this Agreement or any
          failure, omission, delay or inability of the Issuer to perform any
          of its obligations contained in this Agreement, (F) any amendment,
          extension or other change of, or any assignment or encumbrance of
          any rights or obligations under, this Agreement, or any waiver or
          other action or inaction, or any exercise or non-exercise of any
          right or remedy, under or in respect of this Agreement, (G) any
          sale, release, substitution, exchange or other action or inaction
          with  respect  to  the  Project  Facilities,  (H)  any  acts  or
          circumstances that may constitute failure of consideration, (I) any
          change in the tax or other laws of the United States of America or
          of the Commonwealth or any political subdivision of either thereof,
          (J) any failure of the Issuer to perform and observe any agreement,
          whether express or implied, or any duty, liability or obligation
          arising out of or connection with this Agreement, or (K) any other
          circumstance, happening or event whatsoever, whether foreseeable or
          unforeseeable and to the extent permitted by applicable law, any
          and all rights which it may now have or which may at any time
          hereafter be conferred upon it, by statute or otherwise, to
          terminate, cancel, quit or surrender any of its obligations under
          this Agreement in regard to payments referred to in Section 4.03
          and agrees that if, for any reason whatsoever, this Agreement shall
          be terminated in whole or in part by operation of law or otherwise,
          the Company will nonetheless promptly pay to the Trustee as
          assignee of the Issuer amounts equal to all such amounts referred
          to in Section 4.03(a) and 4.03(b) which shall become due and
          payable pursuant to this Agreement, to the same extent as if this
          Agreement had not been terminated in whole or in part.  Each


                                         26
<PAGE>




          payment referred to in Section 4.03(a) and 4.03(b) made by the
          Company pursuant to this Agreement, including such other amounts,
          shall be final, and the Company shall not seek to recover all or
          any part of such payment from the Issuer, the Trustee or any holder
          of 1999 Series A Bonds for any reason whatsoever.  Nothing
          contained in this Section 4.05 shall be construed to relieve the
          Issuer or the Trustee from the performance of any of the agreements
          on their part contained herein or in the Indenture or to constitute
          a waiver by the Company of its rights to enforce the performance
          thereof.

               Section 4.06.  Prepayment of Rents.

                    (a) There is expressly reserved to the Company the right,
               and the Company is authorized, at any time or times it may
               choose, to prepay or cause to be prepaid all or any part of
               the Facility Rentals to provide for the redemption of 1999
               Series A Bonds in whole or in part, or to provide for the
               defeasance of 1999 Series A Bonds pursuant to the Indenture,
               and the Issuer agrees that the Trustee shall accept such
               prepayment of rents when the same are tendered by the Company.
               All Facility Rentals so prepaid (including interest accrued
               thereon) shall be deposited in accordance with the Indenture
               and applied to such payment, redemption or defeasance in
               accordance with the terms thereof.

                    (b) At the time of the issuance of the 1999 Series A
               Bonds, the Company shall file a certificate with the Issuer
               and the Trustee allocating the Proceeds of the 1999 Series A
               Bonds to the several airport facilities comprising the Project
               Facilities, on the basis of the amount of the Proceeds of the
               1999 Series A Bonds expected to be expended for each such
               airport facility. Within a reasonable period of time after
               completion of Acquisition and Construction of the Project
               Facilities, the Company, based on final, definitive costs of
               the Project Facilities shall file a supplemental certificate
               with the Trustee to the extent required to accurately allocate
               the Proceeds of the 1999 Series A Bonds to the Project
               Facilities.

                                      ARTICLE V

                          MAINTENANCE, TAXES AND INSURANCE

               Section 5.01.  Maintenance of Project Facilities by the
               Company.

                    (a)  During the term of this Agreement, the operation,
               maintenance and repair of the Project Facilities and the
               related Leased Premises, as defined in the Ground Lease, shall
               be the obligation and responsibility of the Company and shall
               be in strict accordance with all of the relevant terms of the
               Ground Lease, which are incorporated herein by reference.  In


                                         27

<PAGE>



               such regard, the Company shall pay, as the same shall become
               due, all costs and expenses incurred by it in the operation,
               maintenance and repair of the Project Facilities and such
               Leased Premises, including any machinery, equipment or related
               property substituted for any equipment therein.

                    (b)  The Company shall at all times stipulated in clause
               (a), keep or cause to be kept the Project Facilities, together
               with all property of the Company located in or on the Project
               Facilities, in a clean, sanitary and orderly condition and
               appearance, as required by the Ground Lease.

               Section 5.02.  Utility Services.

                    (a)  The Issuer shall, in accordance with the provisions
               of the Ground Lease, at the expense of the Company, bring or
               cause to be brought and maintained such utility facilities and
               connections for the supply of water, gas, electricity,
               telephone and other utilities, and for the disposal of sewage,
               as the Company shall require up to such point or points on the
               boundary or boundaries of the Leased Premises upon which the
               Project Facilities, are to be situated, as the parties shall
               mutually determine.  The obtaining and maintaining of all
               other or additional utility services with respect to the
               Project Facilities shall be in accordance with the Ground
               Lease.  As provided in the Ground Lease, the Company shall
               accept from the Issuer and pay for all water supply services
               and sanitary sewer connection services required by the
               Company.  All other utility services and supplies shall be
               obtained and paid for by the Company from the appropriate
               public utilities.

                    (b)  The Company shall pay all lawful charges for utility
               services furnished to the Company as the same become due, both
               during and after Acquisition and Construction of the Project
               Facilities.

                    (c)  So long as any 1999 Series A Bonds are Outstanding,
               no failure, delay or interruption in any utility service or
               services, whether such are supplied by the Issuer or others,
               shall relieve or be construed to relieve the Company of any of
               its obligations hereunder, or shall be or construed to be an
               eviction of the Company, or shall constitute grounds for
               diminution or abatement of the Facility Rentals payable by the
               Company pursuant to this Agreement, except as provided in
               Section 8.02 hereof, the provisions of which are incorporated
               herein by reference.

               Section 5.03.  Installation of the Company's Property.

                    Except as otherwise provided in the Ground Lease, the
               Company  shall  have  the  right  (i)  to  make  structural

                                         28

<PAGE>



               improvements, alterations or modifications not inconsistent
               with the Plans and Specifications to the Project Facilities
               which shall become part thereof and be the property of the
               Issuer, and (ii) to install its own furnishings, equipment,
               machinery or other personal property in or on the Project
               Facilities or to attach fixtures or structures in or on the
               Project Facilities which, if same can be removed without
               material damage to or alteration of the Project Facilities,
               shall not become a part of the Project Facilities (the
               AExcluded Equipment@).  Except as otherwise provided in the
               Ground  Lease,  from  time  to  time,  including  upon  the
               termination of the term of this Agreement by lapse of time or
               otherwise (including without limitation, upon exercise by the
               Issuer of the remedies reserved to it in Article VIII, Section
               8.07), the Company may remove from the Project Facilities, at
               its own expense, any of its furnishings, equipment, machinery
               or other personal property, fixtures or structures added by it
               which constitute Excluded Equipment and do not constitute part
               of the Project Facilities;  provided, however, that such
               removal shall be accomplished so as to leave the Project
               Facilities,  except  for  ordinary  wear  and  tear,  in
               substantially the same condition as they were before the
               Company's furnishings, equipment, machinery or other personal
               property, fixtures or structures were added by it to the
               Project Facilities, and that any damage occasioned by such
               removal shall be repaired by the Company at its own expense.
                The Company shall, before or within a reasonable time after
               the termination of the term of this Agreement by lapse of time
               or otherwise (including, without limitation, upon the exercise
               by the Issuer of the remedies reserved to it in Article VIII,
               Section 8.07), remove its Excluded Equipment from the Project
               Facilities.  Except as otherwise provided in the Ground Lease,
               all furnishings, equipment, machinery or other personal
               property installed by the Company pursuant to clause (ii) of
               the first sentence of this Section 5.03(a) shall remain the
               property of the Company in which the Issuer shall have no
               interest and shall not in any way be subject to the terms and
               provisions of this Agreement.

               Section 5.04.   Changes to the Project Facilities After the
               Completion Thereof.

                    (a)  The Company may remove any item of equipment or any
               other part of the Project Facilities which in the opinion of
               the Company has become inadequate, obsolete, worn out,
               unsuitable, undesirable or unnecessary.  The Company shall be
               under no obligation to replace removed items or parts with
               other items or parts unless and to the extent such replacement
               is required in order to avoid a material adverse effect on the
               overall  operating  efficiency  of  the  Project  Facilities
               remaining after such removal.  Any replacement items and parts
               required to be so replaced (hereinafter referred to as the

                                         29


<PAGE>


               AReplacement Property@), other than any item or part of the
               Company's  own  furnishings,  equipment,  machinery,  other
               personal property, fixtures, structures in or on the Project
               Facilities furnished by the Company pursuant to clause (ii) of
               the first sentence of Section 5.03(a)(ii) which are Excluded
               Equipment, shall be and become a part of the Project
               Facilities and shall be subject to this Agreement.  Nothing in
               this paragraph shall be a limitation upon or be construed as
               a limitation upon, the obligations of the Company set forth in
               Section 5.01.

                    (b)  The Company may, with the consent of the Issuer, on
               behalf of the Issuer in the case of any part of the Project
               Facilities other than Excluded Equipment, sell, trade in,
               exchange or otherwise dispose of (as a whole or in part) any
               property removed from the Project Facilities pursuant to
               subsection (a) of this Section 5.04.  The Company shall not be
               accountable to the Issuer or the Trustee for such property or
               for the Proceeds of the disposition thereof (except as
               specifically set forth in subsection (a) and (d) of this
               Section 5.04).

                    (c)  The Company will promptly report to the Issuer and
               the Trustee each removal, substitution, installation, sale and
               other disposition made pursuant to this Section 5.04, other
               than Excluded Equipment; provided, that no such report need be
               made, and no such payment need be made, as the case may be,
               until the amount so to be reported, or so to be paid, as the
               case may be, not previously reported, or not previously paid,
               as the case may be, aggregates at least $25,000.

                    (d)  The removal from the Project Facilities of any part
               of the Project Facilities pursuant to the provisions of this
               Section 5.04, or the installation by the Company of any new or
               additional property thereon pursuant to the provisions of this
               Section 5.04 shall not entitle the Company to any abatement or
               diminution of the rentals payable hereunder.  The Company
               shall not remove or permit the removal of any other machinery,
               apparatus, furnishings, equipment or other personal property
               constituting  part  of  the  Project  Facilities  except  in
               accordance with the provisions of Sections 5.03 and 5.04.  In
               the event that the removal of the property causes material
               damage to any remaining buildings or structures, the Company
               shall promptly restore and repair the same at its own expense.

               Section 5.05.   Taxes, Other Governmental Charges and Utility
               Charges.

                    (a) Subject to Section 5.05(b), the Company will pay
               during the term of this Agreement, as the same respectively
               become due, all taxes and governmental charges of any kind
               whatsoever that may at any time be lawfully assessed or levied

                                         30

<PAGE>



               against or with respect to the Project Facilities or any
               machinery, equipment or other property installed, brought by
               the Company therein or thereon or with respect to the issuing
               of 1999 Series A Bonds (including, without limiting the
               generality of the foregoing, any taxes levied upon or with
               respect to the rentals of the Issuer derived under this
               Agreement, or any transaction privilege taxes or rental taxes
               payable as a result of any rental payments hereunder and
               similar  charges,  pursuant  to  this  Agreement)  and  all
               assessments and charges lawfully made by any governmental body
               for public improvements; provided that with respect to special
               assessments or other governmental charges that may lawfully be
               paid in installments over a period of years, the Company shall
               be obligated to pay only such installments as are required to
               be paid during the term of this Agreement.  Upon receipt of
               notice thereof by the Issuer, the Issuer will promptly provide
               notice to the Company as to the levy or assessment of any such
               taxes or governmental charges, but the failure of the Issuer
               to provide such notice will not affect the responsibilities of
               the Company as set forth in this subsection (a) once such
               notice is provided to the Company.

                    (b)  The Company may, at its expense and in its own name
               and behalf or in the name and on behalf of the Issuer, but
               only after written notice to the Issuer, in good faith contest
               any assessed valuation or the amount or the legality of such
               taxes, assessments and other charges, and, in the event of any
               such contest, may permit the taxes, assessments or other
               charges so contested to remain unpaid during the period of
               such contest and any appeal therefrom unless the enforcement
               of any such contested items is so stayed and such stay
               thereafter expires or unless by nonpayment of any such
               contested items, any part of the Project Facilities will be
               subject to loss or forfeiture, in which event such taxes,
               assessments or charges shall be paid promptly or secured by
               posting a bond, in form satisfactory to the Issuer, with the
               Issuer.  The Issuer will cooperate with the Company in any
               such contest at the Company=s expense.  The Issuer shall
               cooperate with the Company, at the Company=s expense, in
               connection with any administrative or judicial proceedings for
               determining the validity or amount of any such taxes,
               assessments or other charges or any payments in lieu of taxes
               and appoints the Company to take any action which the Issuer
               may lawfully take in respect of such payments and all matters
               relating thereto, and the Company shall bear and pay all
               reasonable costs and expenses of the Issuer thereby incurred
               at the request of the Company or by reason of any such action
               taken by the Company on behalf of the Issuer.

               Section 5.06. Insurance Required. The Company shall maintain
          reasonably  adequate  insurance  against  risks,  accidents  or
          casualties, including self-insurance, with respect to the Project

                                         31

<PAGE>



          Facilities as is customarily carried by persons engaged in similar
          businesses and operating facilities like the Project Facilities.
           Specifically, the Company shall obtain and maintain all insurance
          coverage required by the provisions of the Ground Lease and
          provided continuous evidence thereof to the Issuer in accordance
          with Section XIII thereof.  The Company shall annually file a
          certificate of the Authorized Company Representative or other
          authorized Company officer affirming such required insurance
          coverage with the Trustee upon issuance of the 1999 Series A Bonds
          and thereafter within 45 days following the end of each Company
          fiscal year.

                                     ARTICLE VI


                                  SPECIAL COVENANT
                                                  S

               Section 6.01.  Maintenance of Existence.

                    (a)  The Company agrees that so long as any 1999 Series
               A Bond remains Outstanding, it will maintain its corporate
               existence, will not dissolve or otherwise dispose of all or
               substantially all of its assets and licenses and will not
               merge into or consolidate with any other corporation or other
               entity; provided, however, that the Company may, without
               violating any provision hereof and without the necessity of
               any consent of the Issuer or any  owner of any 1999 Series A
               Bond, so long as the Guaranty remains in full force and
               effect, and except as otherwise provided in the Ground Lease,
               consolidate with or merge into another corporation or other
               entity or permit one or more other corporations or other
               entities to consolidate with or merge into it, or transfer or
               convey all or substantially all of its property, assets or
               licenses to another corporation or other entity and be
               released from any further responsibility hereunder, but only
               on the condition that the corporation or other entity
               resulting from or surviving such merger (if other than the
               Company) or consolidation or the corporation or other entity
               to which such transfer or conveyance is made shall either be
               a subsidiary of the Company or an affiliate of the Company or
               such entity shall (i) be legally qualified to occupy, use and
               operate  the  Project  Facilities  as  exempt  facilities
               constituting an airport or being functionally related and
               subordinate to an airport under Section 142(a)(1) of the Code
               and covenant to continue to operate and use the Project
               Facilities as such, (ii) expressly assume in writing and agree
               to perform all of the Company's obligations under this
               Agreement,  (iii)  be  qualified  to  do  business  in  the
               Commonwealth and (iv) if such corporation or other entity
               shall not be organized and existing under the laws of the
               United States of America or any state or territory thereof or
               the District of Columbia, deliver to the Issuer and the
               Trustee an irrevocable consent to service of process in, and

                                         32

<PAGE>



               to the jurisdiction of the courts of, the Commonwealth with
               respect to any action or suit, in law or in equity, brought by
               the Issuer or the Trustee to enforce this Agreement.
               Additionally, a Favorable Opinion of Bond Counsel must be
               issued to the effect that the action to be taken will not
               adversely affect the exclusion of interest on the 1999 Series
               A Bonds from gross income for federal income tax purposes.  If
               the Company is the surviving corporation in such a merger, the
               express assumption referred to in the preceding sentence shall
               not be required.

                    (b)  The Company shall preserve and keep in full force
               and effect all material licenses and permits necessary to the
               proper conduct of its business and necessary to its use and
               beneficial occupancy of the Project Facilities.

               Section 6.02.  Financial Information.

                    (a) (i)  The Company agrees to furnish to the Issuer a
               copy of the Guarantor=s annual report and Report on S.E.C.
               Form 10-K setting forth the Guarantor=s financial statements
               and the report of the independent public accountants with
               respect thereto and a copy of the Guarantor=s quarterly
               reports on S.E.C. Form 10-Q  not later than 60 days after the
               Guarantor files such reports with the S.E.C.

                    (ii)  Upon request of the Underwriter and/or the Trustee,
               the Company will furnish to such parties copies of the
               Guarantor=s annual report and any public financial statements
               and reports filed by the Company with the Securities and
               Exchange Commission pursuant to the Securities Act of 1933, as
               amended, or the Securities Exchange Act of 1934, as amended.


                    (iii)  If at any time the Guarantor is not required to
               file S.E.C. forms 10-K or 10-Q, the Company shall cause the
               Guarantor to prepare and file with the Issuer, the original
               underwriter of the 1999 Series A Bonds and the Trustee within
               120 days following the end of the fiscal year of the Guarantor
               audited (i) financial statements of the Guarantor for such
               period and (ii) unaudited operating statements and balance
               sheets of the Guarantor within 60 days of the end of each
               fiscal quarter of the Guarantor.

                    (b) The Company, the Issuer and the Kentucky Economic
               Development Finance Authority (AKEDFA@), a Kentucky state
               agency, intend, at the special instance and request of the
               Company, in order to assist the Company to obtain financial
               incentives from the Commonwealth, to enter into a certain
               AService and Technology Agreement@ (the AService Agreement@).
                The Service Agreement will require the Issuer to provide to
               KEDFA in writing, the following: (i) on an annual basis, no

                                         33


<PAGE>


               later than ninety (90) days following the end of each fiscal
               year of the Company, a report as to the rentals paid under
               this Agreement by the Company to the Issuer; (ii) notice of
               all defaults of the Company, specifying the nature thereof,
               within 10 days of the default declaration; and (iii) notice of
               expiration or early termination of this Agreement, without
               extension or renewal, within ten (10) days of such expiration
               or termination.  The Company covenants that it will annually
               file the data required by clause (i) in writing with the
               Trustee within forty-five (45) days following the end of each
               fiscal year of the Company and will file the data required by
               clauses (ii) and (iii) in writing with the Trustee within five
               (5) days of any default declaration or termination or
               expiration of the Lease, so as to enable the Trustee, on
               behalf of the Issuer, to comply with such required reporting,
               in accordance with the Service Agreement.

               Section 6.03.  Right of Access to the Project Facilities.

                    (a)  The Issuer or its designees shall have, during the
               term of this Agreement at reasonable times and upon reasonable
               prior written notice, the right of entry upon the Project
               Facilities:  (i) to examine and inspect the same, (ii) for any
               purpose connected with the Issuer's rights or obligations or
               the Company's obligations under the Ground Lease and this
               Agreement, (iii) to service or post or keep posted thereon
               notices provided by any law or rules or regulations of the
               Commonwealth which the Issuer deems to be necessary for the
               protection of the Issuer or the Project Facilities; and (iv)
               for all other lawful purposes;provided that in exercising the
               right  of  entry  pursuant  hereto  the  Issuer  shall  not
               unreasonably interfere with the Company's use or occupancy of
               the Project Facilities.

                    (b)  Without limiting the generality of the foregoing,
               the   Issuer,   by   its   officers,   employees,   agents,
               representatives, contractors and furnishers of utilities and
               other services, shall have the right for its own benefit, for
               the benefit of the Company or for the benefit of other persons
               at reasonable times and upon reasonable prior written notice,
               to  maintain  existing  and  future  utility,  mechanical,
               electrical and other systems and to enter upon the Project
               Facilities at all reasonable times and upon reasonable prior
               written  notice  to  make  such  repairs,  replacements  or
               alterations to such systems as may, in the opinion of the
               Issuer, be necessary or desirable and, from time to time, to
               construct or install such systems over, in or under the
               Project Facilities for access to other parts of the Airport,
               provided that the maintenance, construction and installation
               of such systems does not unreasonably interfere with the
               operation by the Company of the Project Facilities.


                                         34

<PAGE>



                    (c)  Nothing in this Section 6.03 shall, or shall be
               construed to impose upon the Issuer any obligations so to
               maintain, construct or install such systems or to make
               repairs, replacements, alterations or additions to the Project
               Facilities, or shall create any liability for any failure to
               do so provided that nothing herein shall be construed to
               reduce or abrogate any of the obligations of the Issuer
               arising under Section 5.02(a) hereof.

                    (d) The Issuer and the Company shall have the rights of
               ingress, egress, rights of use of the public streets,
               roadways, ramps, taxiways, access roads and runways, as
               provided in the Ground Lease.

               Section  6.04.    Company's  Performance  Under  Indenture;

          Amendments to Indenture.  The Company agrees, for the benefit of
          the Owners from time to time of the 1999 Series A Bonds, to do and
          perform all acts and things contemplated in the Indenture to be
          done or performed by it, including specifically, but not by way of
          limitation, the duties with respect to arbitrage rebate set forth
          in the Indenture.  The Issuer agrees that it shall not execute or
          permit any amendment or supplement to the Indenture which affects
          any rights, obligations, powers or authorities of the Company under
          the Indenture or this Agreement or which requires a revision of
          this Agreement without the prior written consent of the Company.

               Section 6.05. Qualification in the Commonwealth.  The Company
          agrees (except as may be otherwise permitted pursuant to the
          provisions of Section 6.01) that throughout the term of this
          Agreement, it will continue to be a corporation either organized
          under the laws of the Commonwealth or duly qualified to do business
          in the Commonwealth as a foreign corporation.

               Section 6.06. Compliance with Applicable Laws.   The Company
          will  comply  with  all  laws,  ordinances,  orders,  rules  and
          regulations of all federal, state and municipal governments and the
          appropriate departments, commissions, boards and offices thereof,
          including the Issuer, having jurisdiction over the Airport and the
          Project  Facilities,  legally  applicable  to  the  Company's
          construction, acquisition, installation, use and operation of the
          Project Facilities (AApplicable Laws@), including any reasonable
          rules and regulations of general applicability of the Issuer;
          provided that the Issuer agrees that all Applicable Laws so
          promulgated by the Issuer shall not be inconsistent with any
          Applicable Laws of the Federal Aviation Administration which are
          binding on the Company, as the same now are or may from time to
          time be amended or supplemented.  Without limiting the generality
          of the foregoing, the Company shall construct, acquire and install
          and at all times thereafter (subject to the provisions of this
          Agreement) use and occupy the Project Facilities in strict
          accordance with any and all Applicable Laws that may be imposed by
          the Federal Aviation Administration which are binding on the

                                         35

<PAGE>



          Company with respect to the Project Facilities or the operations
          thereof or the Airport and the operations thereof.  The Company
          may, so long as such action does not, in the reasonable opinion of
          the Issuer, subject the Issuer to any liability and the Company
          shall indemnify and hold harmless the Issuer from such liability,
          in good faith and with due diligence contest any Applicable Laws
          and their application, and in the event of such contest, may,
          without breach of this covenant, continue any then-existing
          noncompliance with any such Applicable Laws during the period of
          the contest and any appeal therefrom unless and until it is
          judicially determined that such non-compliance will subject the
          Project Facilities or any part thereof to loss or forfeiture, in
          which event the Company shall, upon such determination, thereafter
          promptly comply with such Applicable Laws in issue pending a final
          outcome on such contest and the exhaustion of or the failure to
          timely pursue the Company's appeal rights.

               Section 6.07.  Illegal Acts.  The Company shall not use the
          Project Facilities or any parts thereof or permit within its
          knowledge  the  same  to  be  used  by  any  of  its  sublessees,
          concessionaires, tenants, officers, agents or employees for any
          illegal purposes.

               Section 6.08.  Indemnification of Issuer and Trustee.

                    (a)  The Company will pay, and will protect, indemnify
               and save the Issuer and the Trustee, including all officers,
               employees and agents of the Issuer and the Trustee (each of
               the Issuer, the Trustee or any such officer or employee, an
               AIndemnified Party@) harmless from and against any and all
               fines, penalties, liabilities, losses, damages, costs and
               expenses (including reasonable attorneys' fees and expenses of
               the Company, the Issuer and the Trustee), causes of action,
               suits, claims, demands and judgments of whatsoever kind and
               nature (including, but not by way of limitation, those arising
               or resulting from any injury to or death of any person or
               damage to property), arising out of the following: (i) the
               design, Acquisition and Construction by the Company of the
               Project Facilities; (ii) the use, operation or occupancy by
               the Company of the Project Facilities; (iii) violation by the
               Company of any agreement, warranty, covenant or condition of
               this Agreement; (iv) violation by the Company of any other
               contract, agreement or restriction relating to the Project
               Facilities;(v) violation by the Company of any Applicable Laws
               affecting the Project Facilities; (vi) the offering, sale and
               issuance of the 1999 Series A Bonds and any Additional Bonds;
               and (vii) the taking of any action on the part of the Issuer
               authorized or required to be taken by the Issuer under the
               Indenture provided that the Company shall not be required to
               indemnify  any  Indemnified  Party  for  such  party's  sole
               negligence  or  wilful  misconduct.    To  the  extent  such
               indemnification is unavailable to the Issuer, the Company

                                         36


<PAGE>


               agrees, in lieu of such indemnification, to contribute to the
               Issuer an amount equal to all amounts paid or payable by the
               Issuer as a result of such claim to the fullest extent
               contribution is permitted by law.

                    (b)  Subject to the provisions of Section 10.01 of this
               Agreement, the Issuer or the Trustee, as the case may be,
               shall promptly notify the Company in writing of any claim or
               action brought against the Issuer or the Trustee, as the case
               may be, in respect of which indemnity may be sought against
               the Company, setting forth the particulars of such claim or
               action, and the Company will assume the defense thereof,
               including the employment of counsel reasonably acceptable to
               the Indemnified Party, and the payment of all expenses.  The
               Issuer or Trustee, as the case may be, may reasonably employ
               separate counsel in any such action and participate in the
               defense thereof, and the fees and expenses of such counsel
               shall be payable by the Company.  The Company shall not be
               liable for any settlements of any action effected without its
               consent, which consent shall not be unreasonably withheld.

                    (c)  The obligation of the Company under this Section
               6.08 shall survive the termination of this Agreement.

               Section 6.09. Issuer's Expenses; Release and Indemnification
          Provision
                   s.  The Company agrees, regardless of whether the
          transactions contemplated by this Agreement and the Indenture are
          consummated, to indemnify and save the Issuer and the Trustee
          harmless against liability for the payment of all Administration
          Expenses arising in connection with the transactions contemplated
          by this Agreement.

               Section  6.10.    Compensation  and  Other  Indemnification
          Provisions.  The Company will pay to the Trustee, the Paying Agent
          and the Registrar reasonable compensation for their services
          rendered under the Indenture and any Tender Agreement and the
          Remarketing Agreement, pursuant to the provisions thereof.

               Section 6.11.  Discharge of Liens.

                    (a)  The Company shall pay or cause to be satisfied and
               discharged  or  make  adequate  provision  to  satisfy  and
               discharge, within 60 days after the same shall accrue, any
               lien or charge upon the payments under Section 4.03(a), and
               all lawful claims or demands for labor, materials, supplies or
               other charges which, if unpaid might be or become a lien
               thereon; provided, that, if the Company shall first notify the
               Trustee of its intention so to do, the Company may in good
               faith and with due diligence contest any such lien or charge
               or claims or demands in appropriate legal proceedings, and in
               such event may permit the items so contested to remain
               undischarged and unsatisfied during the period of such contest

                                         37

<PAGE>



               and any appeal therefrom, unless the Trustee shall notify the
               Company in writing that, in the opinion of Counsel acceptable
               to the Trustee, by nonpayment of any such item the lien of the
               Indenture  as  to  the  Trust  Estate  shall  be  materially
               endangered, in which event the Company shall promptly secure
               a bond for or pay and cause to be satisfied and discharged all
               such unpaid items.  The Issuer and the Trustee shall cooperate
               fully with the Company in any such contest at the Company's
               sole cost and expense.

                    (b)  The Company agrees to pay (to the extent moneys
               therefor are not then available from the Proceeds of the
               Bonds) or cause to be paid when due, all sums of moneys that
               may lawfully become due for any labor, services, materials,
               supplies, utilities, furnishings, machinery or equipment
               alleged to have been furnished or to be furnished to, or for
               the Company in, upon or about the Project Facilities.  The
               Company agrees that, if a mechanic's lien is filed upon the
               Project  Facilities  or  the  leasehold  or  against  the
               Construction Fund or any Receipts and Revenues, the Company
               shall protect and save harmless the Issuer against any loss,
               liability or expense whatsoever by reason thereof.  Upon
               receipt of notice thereof by the Issuer, the Issuer will
               promptly provide notice to the Company as to the existence of
               any such mechanic's lien on the Project Facilities or against
               the Construction Fund or any Receipts and Revenues, but the
               failure of the Issuer to provide such notice will not affect
               the responsibilities of the Company as set forth in this
               subsection (b).

                    (c)  The Company may, however, in good faith and with due
               diligence, contest any mechanics' or other liens filed or
               established against all or any portion of the Project
               Facilities or against the Construction Fund or any Receipts
               and Revenues or the leasehold, or contest any rule, law,
               regulation or other governmental requirement even though such
               contest may result in the imposition of a lien or charge
               against all or any portion of the Project Facilities or
               against the Construction Fund or any Receipts and Revenues or
               the leasehold, and in such event may permit the items so
               contested and such lien or charge to remain undischarged and
               unsatisfied during the period of such contest and appeal
               therefrom, (i) if the Company shall effectively prevent or
               stay the execution, foreclosure or enforcement of such lien or
               charge, and (ii) if and so long as such contest or appeal
               shall prevent or stay the execution or enforcement or
               foreclosure of such lien or charge; provided, however, that if
               such lien or charge is so stayed and such stay thereafter
               expires or the Company is notified by the Issuer that by
               non-payment of any such items the Project Facilities or any
               part thereof or the Construction Fund or any Receipts and
               Revenues will be subject to loss or forfeiture, then the

                                         38


<PAGE>


               Company shall forthwith pay and cause to be satisfied and
               discharged  such  lien  or  charge  or  comply  with  such
               governmental requirement or secure such payment by posting a
               bond, in form satisfactory to the Issuer, as the case may be.
                The Issuer will cooperate fully with the Company in any such
               contest, at the cost and expense of the Company.

               Section 6.12. Redemption and Purchase of 1999 Series A Bonds.
           The Issuer, upon the request in writing at any time of the
          Company, shall forthwith take all steps that may be necessary under
          the provisions of the Indenture to effect redemption or purchase of
          all or a portion of the then Outstanding 1999 Series A Bonds, as
          may be specified by the Company, on the earliest date on which such
          redemption  or  purchase  may  be  made  under  such  applicable
          provisions.  The Issuer shall not redeem, purchase or call for
          redemption any 1999 Series A Bonds subject to optional redemption
          except upon the written direction of the Company.

               Section 6.13. Assignment or Sublease.  The Company shall not
          assign this Agreement or any part thereof, or sublet all or any
          portion of the Project Facilities, without the consent in writing
          of the Issuer in accordance with the provisions of Section XVII,
          inter alia, of the Ground Lease.  No consent of the Trustee, the
          owners of the 1999 Series A Bonds or any other party to any such
          assignment or sublease shall be required.  The consent of the
          Issuer shall not be required if the requirements of Section 6.01
          hereof are satisfied.  Additionally, the following conditions must
          be met as to any Sublease:

                    (a) The sublease does not relieve the Company from
               liability for any of its obligations hereunder (without the
               Issuer's consent), and, so long as any 1999 Series A Bonds are
               Outstanding, in the event of any such sublease, the Company
               shall continue to remain liable for payment of the amounts
               referred to in Section 4.03 and for performance and observance
               of the other covenants, warranties, representations and
               agreements on its part herein provided to be performed and
               observed to the same extent as though no sublease had been
               made;

                    (b)    The  sublessee  shall  assume  in  writing  the
               obligations of the Company hereunder to the extent of the
               interest assigned; and

                    (c)  The Company shall, at least thirty (30) days prior
               to any such sublease, provide the Issuer and the Trustee with
               written notice thereof and promptly, but in any event no later
               than thirty (30) days after any such event, furnish or cause
               to be furnished to the Issuer and to the Trustee a true and
               complete copy of such sublease.



                                         39

<PAGE>



                    (d) The Issuer shall receive a Favorable Opinion of Bond
               Counsel in respect of the proposed transaction.

               Section 6.14.  No Liability of Issuer.  The 1999 Series A
          Bonds shall be special and limited obligations of the Issuer
          payable solely and only out of the Facility Rentals paid pursuant
          to Section 4.03 hereof.  No holder of any 1999 Series A Bond shall
          have the right to compel any exercise of the taxing power of the
          Commonwealth or any political subdivision thereof or the Issuer or
          to require the Issuer to pay or apply any of its general revenues
          to pay principal of, premium, if any, or interest on or purchase
          price of the 1999 Series A Bonds, and the 1999 Series A Bonds shall
          not  constitute  a  general  indebtedness  of  the  Issuer,  the
          Commonwealth or any political subdivision thereof or a loan of
          credit thereof within the meaning of any constitutional or
          statutory provision or limitation of indebtedness.

               Section 6.15.  Tax Covenants.

                    A.  Notwithstanding any other provision hereof, the
               Company generally covenants and agrees that it will at all
               times do and perform all acts and things necessary or
               desirable and within its reasonable control in order to assure
               that interest paid on the 1999 Series A Bonds shall be
               excludable from the gross income of the recipients thereof for
               the purposes of federal income taxation, except, in the case
               of the 1999 Series A Bonds, in the event that such recipient
               is a Asubstantial user@ of the Project Facilities or Arelated
               person@ within the meaning of Section 147(a)(1) of the Code.

                    B.  The Company and the Issuer each covenants that it
               shall take no action, nor shall the Issuer or the Company
               approve the Trustee's taking of any action or making of any
               investment or use the Proceeds of the 1999 Series A Bonds or
               any other moneys which may arise out of or in connection with,
               this Agreement, Indenture or the Project Facilities, which
               would cause any of the 1999 Series A Bonds to be treated as
               Aarbitrage bonds@ within the meaning of Section 148 of the
               Code and applicable Treasury Regulations thereunder.  Without
               limiting  the  generality  of  the  foregoing,  the  Company
               covenants and agrees to comply with the requirements of
               Section 148 of the Code as the same may be applicable to the
               1999 Series A Bonds or the Proceeds derived from the sale of
               the 1999 Series A Bonds or any other moneys which arise out of
               or in connection with, this Agreement, the Indenture or the
               Project Facilities.

                    C.  The Company further agrees that, in the case of the
               1999 Series A Bonds, not more than 2% of the Proceeds of the
               1999 Series A Bonds shall be used to pay the cost of issuance
               of the 1999 Series A Bonds; and (ii) at no time will any funds
               constituting Agross proceeds@ (as used with respect to Section

                                         40

<PAGE>



               148 of the Code) of the 1999 Series A Bonds be used in a
               manner that would constitute failure of compliance with
               Section 148 of the Code.

                    D.  The Company covenants and agrees that at least
               ninety-five percent (95%) of the Net Proceeds of the 1999
               Series A Bonds, including investment earnings thereon not
               subject to rebate, will be applied to acquire, construct,
               install and equip an exempt facility constituting an airport
               or facilities functionally related and subordinate to an
               airport, within the meaning of Section 142(a)(1) of the Code
               and the rules and regulations promulgated thereunder from time
               to time applicable to the 1999 Series A Bonds.  The Company
               further agrees that it will not apply the Proceeds of the 1999
               Series A Bonds, including investment earnings not subject to
               rebate, in a manner which will result in more than five
               percent of (reduced by any allocation of Proceeds not
               exceeding 2% of Proceeds for cost of issuance of the 1999
               Series A Bonds) of such Proceeds of the 1999 Series A Bonds at
               any time being used for a facility which would not be exempt
               under such Section 142(a)(1) or for working capital, for
               property of a character not subject to the allowance for
               depreciation as prescribed in Section 167 of the Code and such
               rules and regulations or for otherwise non-qualifying costs
               paid or incurred prior to action taken by the Issuer in
               respect of any of the Project Facilities pursuant to Treas.
               Reg. ' 1.150-2.  Except for the expenditures described in this
               Section 6.15(C) above, nothing in this Section 6.15 is
               intended to limit the uses to which any nonqualifying
               expenditure may be applied by the Company.  The Company will
               not cause the Plans and Specifications to be changed or
               revised, or the Project Facilities to be operated, maintained,
               repaired or renovated, in a manner, or take or fail to take
               any other action, such that  the Project Facilities to be
               financed by the application of the Proceeds of the 1999 Series
               A Bonds will not qualify as an exempt facility within the
               meaning of Section 142(a)(1) of the Code and the rules and
               regulations promulgated thereunder applicable to the 1999
               Series A Bonds.

                    E.  Notwithstanding any other provision hereof, the
               Company covenants and agrees that it will not knowingly take
               or authorize or permit action to be taken or omit to take any
               action (to the extent that such action is within the control
               of the Company) with respect to the Project Facilities, or the
               Proceeds of the 1999 Series A Bonds (including investment
               earnings thereon), or insurance, condemnation, or any other
               Proceeds derived directly or indirectly in connection with the
               Project Facilities, that will knowingly cause the interest on
               the 1999 Series A Bonds to be included in gross income for
               federal income tax purposes under Section 103 of the Code
               (except for any 1999 Series A Bond during any period while any

                                         41

<PAGE>



               such 1999 Series A Bond is held by a person referred to in
               Section 147(a) of the Code).

                    F.    So  long  as  the  1999  Series  A  Bonds  remain
               Outstanding, the Company will fully comply with all effective
               rules, rulings and regulations promulgated by the Department
               of Treasury and the Internal Revenue Service with respect to
               obligations issued in accordance with Section 142 of the Code
               so as to maintain in accordance with Section 142 of the Code
               the exclusion of interest on the Bonds from gross income for
               federal income tax purposes; and specifically the Company will
               not cause the Plans and Specifications to be changed or
               revised, or the Project Facilities to be operated, maintained,
               repaired or renovated, in a manner such that the Project
               Facilities financed with the proceeds of the 1999 Series A
               Bonds  will  not  qualify  as  an  airport  or  facilities
               functionally related and subordinate to an airport within the
               meaning of Section 142 of the Code and the income tax
               regulations promulgated thereunder.

                    G.  The Company has not taken and will not take any
               action, and knows of no action that any other person, firm or
               corporation has taken or intends to take, which would cause
               interest on the 1999 Series A Bonds to be includable in the
               gross income of the recipients thereof for federal income tax
               purposes (except any 1999 Series A Bonds for any period during
               which such 1999 Series A Bonds are held by a Asubstantial
               user@ of the Project Facilities financed with the Proceeds of
               the 1999 Series A Bonds or a Arelated person@ to such
               Asubstantial user@ as such terms as defined in Section 147(a)
               of the Code).

                    H.  The Company will at all times comply with all
               provisions of Section 148 of the Code so long as the 1999
               Series A Bonds remain outstanding.

                    I.  The Proceeds of the 1999 Series A Bonds will not be
               applied to finance any Project Facilities unless such use of
               the Project Facilities shall constitute the first use of such
               property.

                    J.  No aircraft, skybox, or other private luxury box,
               health club facility, facility primarily used for gambling,
               store the principal business of which is the sale of alcoholic
               beverages for consumption off premises, private or commercial
               golf course, country club, massage parlor, tennis club,
               skating facility (including roller skating, skateboard, and
               ice skating), racquet sports facility (including handball or
               racquetball courts), hot tub facility, suntan facility,
               racetrack, impermissible retail food and drink establishments,
               automobile sales or service or provision of recreation or
               entertainment will be financed from the Proceeds of the 1999
               Series A Bonds.


                                         42

<PAGE>




                    K.  The 1999 Series A Bonds are not and will not be
               Afederally guaranteed@ (within the meaning of Section 149(b)
               of the Code).

                    L.  The Company will provide all information relating to
               the Project Facilities or the Company reasonably requested by
               the  Issuer  necessary  to  evidence  compliance  with  the
               requirements of the Code, including the information in United
               States Internal Revenue Service Form 8038 filed by the Issuer
               with respect to the 1999 Series A Bonds and the airport
               facilities constituting the Project Facilities, and such
               information (not to include any information relating to the
               Issuer, as to which no representations will be made) will be
               true and correct in all material respects.

                    M.  At least ninety-five per cent (95%) of the Net
               Proceeds of the 1999 Series A Bonds and interest thereon (i)
               will be used to provide property chargeable to the capital
               account of the Project Facilities financed by Proceeds of the
               1999 Series A Bonds for federal income tax purposes and
               subject to Section 167 of the Code, and will be used either to
               provide   qualified   airport   facilities   or   properties
               functionally related and subordinate thereto which shall serve
               or be available on a regular basis for the general public use,
               or be used by a common carrier, within the meaning of Treasury
               Regulations 1.103-8(a)(2), all within the meaning of Sections
               142(a), (b) and (c) of the Code and applicable Treasury
               Regulations promulgated thereunder and (ii) shall be expended
               on costs incurred after the date which is sixty (60) days
               prior to the date of adoption of the preliminary approving
               resolution  of  the  Issuer  adopted  in  respect  of  the
               acquisition,  construction  and  financing  of  the  Project
               Facilities being, to wit: January 18, 1999

                    N.  Within one year prior to the date of issuance of the
               1999 Series A Bonds the Company will cooperate with the Issuer
               in order to comply with the public approval requirements of
               Section 147 of the Code and at or following the issuance of
               the 1999 Series A Bonds the Company will cooperate with the
               Issuer in order to comply with the information reporting
               requirements of Section 149 of the Code by the filing of
               Internal Revenue Service Form 8038 with the United States
               Internal Revenue Service.

                    O.  Arbitrage Rebate Compliance.

                         (i)    The  Company  hereby  covenants  that  in
                    connection with the 1999 Series A Bonds it will comply
                    with the requirement for payment of Rebatable Arbitrage
                    to the United States.  The Company acknowledges and
                    agrees that the calculation of Rebatable Arbitrage and

                                         43

<PAGE>



                    the payment of the Rebatable Arbitrage to the United
                    States shall be the responsibility of the Company and
                    that neither the Issuer nor the Trustee shall have
                    obligation therefor.  The Trustee shall be entitled to
                    rely on any certificate delivered to it by the Company
                    accompanied  by  an  opinion  of  a  Rebate  Expert  in
                    accordance with the Indenture and shall have no duty to
                    verify the accuracy of such certificate.  The Company
                    agrees to indemnify the Issuer and the Trustee against
                    any loss, liability or expense incurred in connection
                    with the Company's failure to pay the Rebatable Arbitrage
                    to the United States as required by this Section.

                         (ii)  The Company hereby covenants that on or prior
                    to forty-five (45) days subsequent to the end of each
                    fifth Bond Year applicable to the 1999 Series A Bonds and
                    the retirement of the last obligation of the 1999 Series
                    A Bonds, the Company shall retain a Rebate Expert to
                    compute the Rebatable Arbitrage with respect to the 1999
                    Series A Bonds for the period ending on the last day of
                    such fifth Bond Year completed, or the retirement of the
                    last obligation of the 1999 Series A Bonds occurring,
                    within forty-five (45) days thereof.  Within such
                    forty-five (45)-day period, the Company shall cause to be
                    delivered to the Trustee and the Issuer an opinion of the
                    Rebate Expert concerning its conclusions with respect to
                    the amount of such Rebatable Arbitrage together with a
                    written report providing a summary of the calculations
                    relating  thereto.    In  connection  with  each  such
                    determination of the Rebatable Arbitrage, the Trustee,
                    pursuant to the Indenture, shall report to the Issuer and
                    the Company (i) the amount, if any, theretofore paid to
                    the United States with respect to the 1999 Series A Bonds
                    by the Trustee on behalf of the Issuer pursuant to the
                    Indenture, (ii) the amount in the account of the Rebate
                    Fund established for the payment of Rebatable Arbitrage
                    with respect to the 1999 Series A Bonds at the end of
                    each fifth Bond Year, or at the time of the computation,
                    in the case of the retirement of the last 1999 Series A
                    Bond, (iii) the balance to be added to the account of the
                    Rebate Fund established for the payment of Rebatable
                    Arbitrage with respect to the 1999 Series A Bonds, (iv)
                    if additional amounts are required to be added to the
                    amount in the account of the Rebate Fund established for
                    the payment of Rebatable Arbitrage with respect to the
                    1999 Series A Bonds, and (v) the balance, if any, to be
                    paid by the Company.

                         (iii)  The Company hereby covenants that in the
                    event the amount in the Rebate Fund shall be insufficient
                    to  properly  fund  the  account  in  the  Rebate  Fund
                    established for the payment of Rebatable Arbitrage with

                                         44

<PAGE>



                    respect to the 1999 Series A Bonds in the manner
                    specified herein, the Company shall, within five (5) days
                    of receipt of the report furnished by the Trustee
                    pursuant to this Section hereof, pay or cause to be paid
                    to the Trustee for deposit into the account in the Rebate
                    Fund established for the payment of Rebatable Arbitrage
                    with respect to the 1999 Series A Bonds, the difference
                    between the amount required to be added to such account
                    in the Rebate Fund and the amount then available for such
                    purpose in the Project Fund.  If the Company fails to
                    make or cause to be made any payment required pursuant to
                    this Section 6.16(O)(iii) when due, the Issuer or the
                    Trustee shall have the right, but shall not be required,
                    to make any such payment on behalf of the Company.  Any
                    amount advanced by the Issuer or the Trustee pursuant to
                    this clause (iii) shall be added to the moneys owing by
                    the Company under this Agreement and shall be payable on
                    demand with interest.

                         (iv)  The Company hereby covenants that it shall
                    direct the Trustee to withdraw from the Rebate Fund and
                    pay over to the United States the Rebatable Arbitrage
                    with respect to the 1999 Series A Bonds in installments
                    as follows:  The first payment shall be made not later
                    than 60 days after the end of the fifth Bond Year of the
                    1999 Series A Bonds.  Each subsequent payment shall be
                    made not later than 60 days after the succeeding fifth
                    Bond Year of the 1999 Series A Bonds.  Each installment
                    shall be in an amount which ensures that at least 90
                    percent of the amount of the Rebatable Arbitrage with
                    respect to the 1999 Series A Bonds as of the close of the
                    period ending on the last day of the most recent fifth
                    Bond Year of the 1999 Series A Bonds will have been paid
                    to the United States (determined in accordance with the
                    opinion of the Rebate Expert and accompanying written
                    summary given to the Trustee by the Company concerning
                    Rebatable Arbitrage with respect to the 1999 Series A
                    Bonds for the period ending on the last day of such fifth
                    Bond Year).  Not later than 60 days after the retirement
                    of the last obligation of the 1999 Series A Bonds, the
                    United States shall be paid the remaining balance of the
                    Rebatable Arbitrage with respect to the 1999 Series A
                    Bonds.

                         (v)  The Company hereby covenants that it shall
                    request the Issuer to direct the Trustee to file the
                    payments to the United States of Rebatable Arbitrage with
                    respect to the 1999 Series A Bonds at the then applicable
                    Internal Revenue Service Center, Ogden, Utah 84201 or
                    such other Internal Revenue Service office authorized to
                    receive payments of Rebatable Arbitrage.  All payments of
                    Rebatable Arbitrage shall be accompanied by Form 8038-T

                                         45



<PAGE>

                    or such other form prescribed by the Internal Revenue
                    Service to accompany payments of Rebatable Arbitrage,
                    prepared  by  the  Company,  together  with  any  other
                    information which the Company requests the Issuer to
                    instruct the Trustee to accompany such payments.  In
                    furtherance of the foregoing, the Issuer shall cooperate
                    with the Company by timely executing the Form 8038-T or
                    such other applicable form prescribed by the Internal
                    Revenue Service.

                         (vi)  The Company hereby covenants that the Issuer
                    shall have the right at any time and in the sole and
                    absolute discretion of the Issuer to obtain from the
                    Company and the Trustee the information necessary to
                    determine the amount required to be paid to the United
                    States pursuant to Section 148(f) of the Code.  If the
                    Company fails to make or retain a Rebate Expert to make
                    the determination of the amount to be paid to the United
                    States, the Issuer may make or retain a Rebate Expert to
                    make the determination of the amount to be paid to the
                    United States.  The Company hereby agrees to be bound by
                    any such determination, to pay the costs of such
                    determination,   including   without   limitation   the
                    reasonable fees and expenses of counsel or a Rebate
                    Expert retained by the Issuer and all Administration
                    Expenses of the Issuer relating thereto, and to pay to
                    the Trustee any additional amounts for deposit in the
                    Rebate  Fund  required  as  the  result  of  any  such
                    determination.

                    P.  In the event the Issuer and the Company receive a
               written opinion of Bond Counsel to the effect that one or more
               of the provisions of this Section 6.15 is no longer in effect
               or is no longer applicable to the 1999 Series A Bonds and that
               compliance therewith is no longer required, the Issuer and the
               Company may amend (without any requirement for Bondholder
               consent) this Section 6.15 to comport with such opinion and
               shall be under no further duty to comply with any such
               requirements.

               Section 6.16.  Qualified Exempt Facility.  The Company
          covenants that in the event all or a portion of the Project
          Facilities shall no longer qualify as an airport or property which
          is functionally related and subordinate to an airport which is an
          exempt facility within the meaning of Section 142(a)(1) of the
          Code, the Company shall within ninety (90) days either (i) cause
          1999 Series A Bonds to be redeemed pursuant to the Indenture in an
          amount that will retire all nonqualified bonds (if any) within the
          meaning of Treasury Regulations Section 1.142-2(e), (ii) establish
          a defeasance escrow within the meaning of Treasury Regulations
          Section 1.142-2(c) and deposit therein sufficient funds to defease
          all nonqualified bonds (if any) or (iii) purchase the 1999 Series

                                         46

<PAGE>



          A Bonds in the open market for delivery to the Paying Agent for
          cancellation in the amount that will retire all nonqualified bonds
          within the meaning of Treasury Regulations Section 1.142-2(e),
          unless the Company shall obtain a Favorable Opinion of Bond Counsel
          to the effect that failure to take one or more of the actions
          described in clauses (i), (ii) or (iii) of the foregoing will not
          adversely affect the exclusion of interest on the 1999 Series A
          Bonds from gross income for federal income tax purposes.

               Section 6.17. No Liability of Issuer.  The 1999 Series A
          Bonds shall be special and limited obligations of the Issuer
          payable solely and only out of the Trust Estate, including the
          rental payments made pursuant to Section 4.03 hereof.  No holder of
          any 1999 Series A Bond shall have the right to compel any exercise
          of  the  taxing  power  of  the  Commonwealth  or  any  political
          subdivision thereof or of the Issuer to pay principal of, premium,
          if any, or interest on the 1999 Series A Bonds, and the 1999 Series
          A Bonds shall not constitute a general indebtedness of the Issuer,
          the Commonwealth or any political subdivision thereof or a loan of
          credit thereof within the meaning of any constitutional or
          statutory provision or limitation of indebtedness.

                                     ARTICLE VII

                        DAMAGE AND DESTRUCTION; CONDEMNATION

               Section 7.01.  Damage or Destruction.

                    (a)  The receipts and recoveries of insurance carried
               pursuant to Section 5.06 shall be applied as provided in this
               Section 7.01 and the Ground Lease.  In the event that all or
               any part of the Project Facilities is destroyed in whole or
               damaged by fire or other casualty requiring more than $250,000
               for rehabilitation and reconstruction, the Company shall by
               notice given pursuant to Section 10.01, notify the Trustee and
               the Issuer within 30 days of said occurrence as to whether or
               not the Project Facilities, or the damaged or destroyed
               portion thereof, shall be reconstructed and reequipped.  If
               the damage or destruction does not exceed $250,000, the
               Company shall be obligated to reconstruct and reequip the
               Project Facilities and shall apply the Net Insurance Proceeds,
               with the consent of the Issuer, to such reconstruction and
               reequipping.  To the extent the Net Insurance Proceeds exceed
               $250,000, the Company shall elect that the Project Facilities
               or some portion thereof be reconstructed and reequipped, (i)
               all Net Insurance Proceeds with respect to the Project
               Facilities shall be paid to the Trustee for deposit in a
               separate account in the Construction Fund and application in
               accordance with this Section 7.01, or if no 1999 Series A
               Bonds  applicable  to  such  destroyed  or  damaged  Project
               Facilities are Outstanding, shall be so applied by the Company
               and (ii) the Company will promptly use its best efforts and

                                         47


<PAGE>


               proceed with reasonable speed and dispatch to reconstruct and
               reequip the applicable Project Facilities in accordance with
               the Plans and Specifications to a condition equivalent to that
               immediately prior to the event of damage or destruction
               (subject  to  any  changes,  modifications,  additions  and
               deletions which the Company desires and to which the Issuer
               consents in accordance with Section 3.01(c) hereof) and will
               apply for such purposes so much as may be necessary of any
               such Net Insurance Proceeds.  In the event that the Net
               Insurance Proceeds are not sufficient to pay in full the costs
               of such Project Facilities reconstruction and reequipping, the
               Company will nonetheless complete the work thereof and pay
               that portion of the costs thereof in excess of the amount of
               such Net Insurance Proceeds, provided that the Company may
               request that Additional Bonds be issued to provide Project
               Facilities costs.  Any balance of Net Insurance Proceeds
               incident to the Project Facilities received by the Trustee
               remaining  after  paying  therefrom  the  costs  of  such
               reconstruction and reequipping of the Project Facilities
               pursuant to this Section 7.01 shall be paid to the Trustee for
               deposit into a separate account in the Bond Fund, and shall be
               promptly applied, at the direction of the Authorized Company
               Representative, (a) to be applied by the Trustee to purchase
               1999 Series A Bonds in the open market (excluding any portion
               of the purchase price which is attributable to interest
               accrued and/or accruing on such 1999 Series A Bonds until the
               date of purchase) for the purpose of cancellation; (b) to
               redeem 1999 Series A Bonds on the earliest redemption date
               thereof (paying principal sums only) for the purpose of
               cancellation; or (c) to pay the principal of and/or interest
               on the 1999 Series A Bonds, provided that if the Company
               directs the Trustee to apply said balance pursuant to clause
               (c) above, the Company shall also deliver to the Trustee and
               the Issuer a Favorable Opinion of Bond Counsel to the effect
               that such use will not impair the exclusion of the interest on
               the 1999 Series A Bonds from gross income for federal income
               tax purposes.  If the Company shall elect that the Project
               Facilities, or any damaged or destroyed portion thereof, not
               be reconstructed and reequipped, and any 1999 Series A Bonds
               are  then  Outstanding,  then  all  Net  Insurance  Proceeds
               allocable to those portions of the Project Facilities that
               will not be reconstructed and reequipped shall be paid to the
               Trustee.  All such Net Insurance Proceeds received by the
               Trustee shall be deposited into a separate account in the Bond
               Fund, and applied to redeem 1999 Series A Bonds (paying
               principal  sums  only)  on  the  earliest  redemption  date
               permissible for the purpose of cancellation. If the Net
               Insurance Proceeds are inadequate to pay and discharge the
               relevant 1999 Series A Bonds, the Company shall pay to the
               Trustee such moneys as may be required for such payment and
               discharge.  If such Net Insurance Proceeds are in excess of
               the amount required to pay, redeem, purchase in the open

                                         48

<PAGE>



               market or defease 1999 Series A Bonds equal in aggregate
               principal amount to all the then Outstanding 1999 Series A
               Bonds allocable to such damaged or destroyed portion of the
               Project Facilities, all such excess shall be paid to the
               Issuer, as the governmental owner of the Project Facilities.

                    (b)  The Company shall not, by reason of the payment of
               any excess costs as required by the foregoing provisions of
               this Section 7.01 be entitled to any reimbursement from the
               Trustee or the Issuer or any abatement or diminution of any of
               the rents payable under Section 4.03, except as set forth
               above.

                    (c)  In the event that (i) the Company shall have elected
               that  the  damaged  or  destroyed  portion  of  the  Project
               Facilities shall not be reconstructed and reequipped, or the
               damaged or destroyed portions of the Project Facilities shall
               be reconstructed and reequipped at the Company's direction,
               and (ii) 1999 Series A Bonds allocable to the Project
               Facilities so damaged or destroyed are not then Outstanding,
               the Net Insurance Proceeds shall be paid to the Issuer, as the
               governmental owner of the Project Facilities.

               Section 7.02.  Condemnation.

                    (a)  The Company, or the Issuer immediately upon
               obtaining knowledge of the institution of any proceedings for
               the condemnation or taking of the Project Facilities or any
               portion thereof for public or quasi-public use, shall notify
               one  another  and  the  Trustee  of  the  pendency  of  such
               proceedings.

                    (b)  In the event that title to, or the temporary use of,
               the Project Facilities or any part thereof shall be taken as
               a result, or in anticipation of, the exercise of the power of
               eminent domain by any governmental body or by any person, firm
               or corporation acting under governmental authority, the
               provisions of this Section 7.02 shall apply.

                    (c)  Subject to the provisions of Section 10.01 of this
               Agreement, in the event that all, or any portion of the
               Project Facilities shall be so taken by the exercise of the
               power of eminent domain, the Company shall promptly by notice
               given pursuant to Section 10.01 notify the Trustee and the
               Issuer whether or not the Project Facilities, or portion
               thereof so taken, shall be reconstructed and reequipped.  In
               the event the Company determines to reconstruct and reequip
               the Project Facilities or some portion thereof, (i) the Gross
               Award in respect of the Project Facilities shall be paid to
               the Trustee for deposit in a special account or accounts
               within the Construction Fund and be applied in accordance with
               this Section 7.02, or if no 1999 Series A Bonds are

                                         49

<PAGE>



               outstanding shall be deposited in a segregated bank account in
               the name of the Issuer and applied by the Company for
               reconstruction and reequipping of the Project Facilities and
               (ii) the Company will promptly use its best efforts and
               proceed with reasonable speed and dispatch to reconstruct and
               reequip the Project Facilities in accordance with the Plans
               and Specifications to a condition equivalent to that of the
               Project Facilities immediately prior to the taking (subject to
               any changes, modifications, additions and deletions which the
               Company desires and to which the Issuer consents in accordance
               with Section 3.01(c) hereof) and will apply for such purposes
               so much as may be necessary of such Gross Award.  In the event
               that such Gross Award is not sufficient to pay in full the
               costs of such reconstruction and reequipping of the Project
               Facilities, the Company will nonetheless complete the work
               thereof and will pay that portion of the costs thereof in
               excess of the amount of such Gross Award provided that the
               Company may request that Additional Bonds be issued to provide
               Project Facilities costs.  Any balance of any Gross Award
               incident to the Project Facilities received by the Trustee
               remaining  after  paying  therefrom  the  costs  of  such
               reconstruction and reequipping of the Project Facilities
               pursuant to this Section 7.02 shall be paid to the Trustee for
               deposit into a separate account in the Bond Fund, and applied
               either (a) to be applied by the Trustee to purchase 1999
               Series A Bonds in the open market (excluding any portion of
               the purchase price which is attributable to interest accrued
               and/or accruing on such 1999 Series A Bonds until the date of
               purchase) for the purpose of cancellation or (b) to redeem
               1999 Series A Bonds on the earliest redemption date thereof
                as may be permitted by the Indenture (paying principal sums
               only) for the purpose of cancellation.  If the Company shall
               elect that all or any portion of the Project Facilities so
               taken not be reconstructed and reequipped, then the Gross
               Award  allocable  to  the  Project  Facilities  not  being
               reconstructed or reequipped shall be paid to the Trustee, who
               shall apply all or so much of such Gross Award as shall be
               required to redeem 1999 Series A Bonds on the earliest
               permissible redemption date (paying principal sums only) for
               the purpose of cancellation.

                    (d)  In case such Gross Award shall exceed the costs of
               reconstruction and reequipping of the Project Facilities
               undertaken pursuant to this Section 7.02 and no 1999 Series A
               Bonds, as applicable, are Outstanding, the balance of such
               Gross Award received by the Trustee remaining after paying
               therefrom the costs of such reconstruction and reequipping
               shall be paid to the Issuer, as the governmental owner of the
               Project Facilities.

                    (e)  The Company shall not, by reason of payment of any
               excess costs as required by the foregoing provisions of this

                                         50


<PAGE>


               Section or by reason of any diminution of all or any part of
               the Project Facilities resulting from any taking thereof, be
               entitled to any reimbursement from the Trustee or the Issuer
               of any abatement or diminution of the rent payable pursuant to
               Section 4.03, except as set forth above.

                    (f)  In the event that less than the whole or less than
               substantially the whole of the Project Facilities shall be so
               taken and the remaining part thereof is reconstructed and
               reequipped as provided in the preceding subsections of this
               Section  7.02  and  the  cost  of  such  reconstruction  or
               reequipping exceeds the Gross Award available therefor, the
               Company may request the Issuer to issue Additional Bonds to
               provide moneys to pay all or part of such excess costs.

                                    ARTICLE VIII

                           EVENTS OF DEFAULT AND REMEDIES

               Section 8.01.  Events of Default.  Each of the following
          events shall constitute and is referred to in this Agreement as an
          AEvent of Default@:

                    (a)  (i) the Company shall fail to pay when due and owing
               any installment of Facility Rentals payable pursuant to
               Section 4.03(a)(i); or (ii) the Company shall fail to pay when
               due and owing any installment of Facility Rentals payable
               pursuant to Section 4.03(a)(ii).

                    (b)  a failure by the Company to pay when due any other
               amount required to be paid under this Agreement (including,
               but not limited to Administration Expenses, pursuant to
               Section 4.03(b)) or to observe and perform any covenant,
               condition or agreement on its part to be observed or performed
               hereunder (other than a failure described in Section 8.01(a)
               and other than as provided in Section 6.06), which failure
               shall continue for a period of 30 days after written notice,
               specifying such failure and requesting that it be remedied,
               shall have been given to the Company by the Issuer or the
               Trustee, unless the Issuer and the Trustee shall agree in
               writing  to  an  extension  of  such  period  prior  to  its
               expiration; provided, that the Issuer and the Trustee shall be
               deemed to have agreed to an extension of such period if
               corrective action, approved in advance by the Issuer, is
               initiated by the Company within such period and is being
               diligently pursued and provided further, that failure by the
               Company to observe tax covenants herein shall not constitute
               an Event of Default unless (1) such failure results in a
               Determination of Taxability and (2) the subject 1999 Series A
               Bonds are not either mandatorily redeemed in accordance with
               their terms and as provided in the Indenture or defeased as


                                         51

<PAGE>



               provided in the Indenture prior to such Determination of
               Taxability.

                    (c) the Company shall file a voluntary petition or
               institute any proceeding under the United States Bankruptcy
               Code, either as such Code now exists or under any amendment
               thereof which may hereafter be enacted, or under any act or
               acts, State or Federal, dealing with or relating to the
               subject or subjects of bankruptcy or insolvency, or under any
               amendment to such act or acts, either as a bankrupt, or as an
               insolvent, or as a debtor, or in any similar capacity, wherein
               or whereby the Company asks, seeks or prays to be adjudicated
               a bankrupt, or to be discharged from all of the Company=s
               debts  or  obligations,  or  asks,  seeks  or  prays  for  a
               reorganization or to effect a plan of reorganization or for a
               readjustment of the Company=s debts or for any similar relief;
               or any involuntary petition in bankruptcy or any other
               proceedings of the foregoing of similar kind or character
               shall be filed or be instituted or taken against the Company
               and shall not be dismissed within ninety (90) days thereof; or
               a custodian or receiver of the Company or of a substantial
               portion of the property or assets of the Company shall be
               appointed by any court and shall not be dismissed within
               ninety (90) days thereof; or the Company shall make a general
               assignment for the benefit of the Company=s creditors or the
               Company shall enter into an agreement of composition with the
               Company=s creditors; or the Company shall admit in writing its
               inability to pay its debts generally as they become due.

               Section 8.02. Force Majeure.  The provisions of Section 8.01,
          other than payment of Facility Rentals, are subject to the
          following limitations:  If by reason of acts of God; strikes,
          lockouts or other industrial disturbances; acts of public enemies;
          order of any kinds of the government of the United States of
          America or of the Commonwealth or any department, agency, political
          subdivision, court or official of any of them or any civil or
          military  authority;  riots;  lightning;  earthquakes;  fires;
          hurricanes; tornados; storms; floods; washouts; arrests; restraint
          of government and people; civil disturbances; explosions; breakage
          or accident to machinery; partial or entire failure of utilities;
          the Company=s ability to carry out any one or more of its
          agreements  or  obligations  contained  herein  (other  than  its
          obligations under Sections 4.03, 5.06, 6.01, 6.10, 6.11 and 6.16)
          is rendered impossible, the Company shall not be deemed in default
          by reason of not carrying out said agreement or agreements or
          performing such obligation or obligations during the continuance of
          such impossibility.  The Company shall make reasonable efforts to
          remedy with all reasonable dispatch the cause or causes preventing
          it from carrying out its agreements;provided,that the settlement
          of strikes, lockouts and other industrial disturbances shall be
          entirely within the discretion of the Company.


                                         52

<PAGE>



               Section 8.03.  Remedies.

                    (a)  Whenever any Event of Default referred to in clauses
               (a) or (c) of Section 8.01 hereof shall have occurred and be
               continuing, and in accordance with the terms of the Indenture,
               the 1999 Series A Bonds shall have been declared to be
               immediately due and payable pursuant to any provision of the
               Indenture, the Trustee shall forthwith declare all amounts
               payable under this Agreement to be immediately due and
               payable.  The amount payable upon such an event shall be an
               amount equal to the amounts due and payable on the 1999 Series
               A Bonds, together with all fees and expenses payable pursuant
               to Sections 6.10 and 8.05, and the Trustee may thereafter take
               whatever action at law or in equity may be appropriate to
               collect any payments then due and thereafter to become due, or
               to enforce performance and observance of any obligation,
               agreement or covenant of the Company under this Agreement or
               enforcement of the Guaranty or the Leasehold Mortgage.

                    Any waiver of any AEvent of Default@ under the Indenture
               and a rescission and annulment of its consequences shall be in
               writing and shall constitute a waiver of the corresponding
               Event or Events of Default under this Agreement and a
               rescission and annulment of the consequences thereof.

                    (b)  Upon the occurrence and continuance of any Event of
               Default, the Issuer may take, or cause to be taken, any action
               at law or in equity to collect any payments then due and
               thereafter to become due, or to enforce performance and
               observance of any obligation, agreement or covenant of the
               Company hereunder.

                    (c)  Any amounts collected from the Company pursuant to
               this Section 8.03 shall be applied in accordance with the
               Indenture.

               Section 8.04  No Remedy Exclusive.  No remedy conferred upon
          or reserved to the Issuer hereby is intended to be exclusive of any
          other available remedy or remedies, but each and every such remedy
          shall be cumulative and shall be in addition to every other remedy
          given hereunder or now or hereafter existing at law or in equity or
          by statute.  No delay or omission to exercise any right or power
          accruing upon any default shall impair any such right of power or
          shall be construed to be a waiver thereof, but any such right or
          power may be exercised from time to time and as often as may be
          deemed expedient.  In order to entitle the Issuer to exercise any
          remedy reserved to it in this Article, it shall not be necessary to
          give any notice, other than such notice as may be herein expressly
          required.

               Section 8.05.   Reimbursement of Attorneys' Fees.  If the
          Company shall default under any of the provisions hereof and the
          Issuer or the Trustee shall employ attorneys or incur other


                                         53


<PAGE>


          reasonable expenses for the collection of payments due hereunder or
          for the enforcement of performance or observance of any obligation
          or agreement on the part of the Company contained herein, the
          Company will on demand therefor reimburse the Issuer or the
          Trustee, as the case may be, for the reasonable fees and expenses
          of such attorneys and such other reasonable expenses so incurred,
          to the extent permitted by law.

               Section 8.06.  Waiver of Breach.  If any obligation created
          hereby shall be breached by either of the parties and such breach
          shall thereafter be waived by the other party, such waiver shall be
          limited to the particular breach so waived and shall not be deemed
          to waive any other breach hereunder.  In view of the assignment of
          certain of the Issuer's rights and interests hereunder to the
          Trustee, the Issuer shall have no power to waive any default
          hereunder by the Company in respect of such rights and interests
          (except Unassigned Rights) without the consent of the Trustee, and
          the Trustee may exercise any of the rights of the Issuer hereunder.

               Section 8.07.  Remedies Reserved Solely to the Issuer.  Upon
          the occurrence of any Event of Default referred to in clauses (a),
          (b) or (c) of Section 8.01 or upon the occurrence of either of the
          following:

                    (i)  Any event of default shall have occurred and be
               continuing under the provisions of the Ground Lease and such
               event of default shall continue unremedied for a period of
               thirty (30) days after the Issuer shall have given to the
               Company written notice specifying wherein the Company has
               failed to observe or perform any such covenant, agreement or
               obligation, plus such additional time as is reasonably
               required to correct any such failure if the Company has
               initiated corrective action in such thirty (30) day period and
               is diligently pursuing the same to completion, or

                    (ii)  The Company shall abandon all or substantially all
               of the Project Facilities for a period of 90 days, other than
               pursuant to and as permitted by Section 8.08

          at any time thereafter so long as the same shall be continuing the
          Issuer may, at its election, give the Company written notice of
          intention to terminate this Agreement on a date specified in said
          notice, which date shall not be earlier than thirty (30) days after
          such notice is given, and if all Events of Default and events
          specified in clauses (i) and (ii) of this Section 8.07 have not
          been cured on the date so specified and if curative action has not
          been commenced in accordance with clause (b) of Section 8.01 or
          clause (i) of this Section 8.07 hereof, the Company's rights to
          possession of the Project Facilities shall cease and this Agreement
          and term hereof shall thereupon cease; provided that the Company
          shall be, and shall remain, liable for all Facility Rentals accrued
          hereunder to the date such termination becomes effective and for
          all other sums then owing by the Company hereunder; and provided


                                         54

<PAGE>



          further, that notwithstanding the termination of this Agreement and
          the term hereof, the Company nevertheless shall continue to be
          liable for the payment of all rentals reserved under Section 4.03
          and shall pay such rentals at the same time and in the same manner
          as provided in Section 4.03.

               Section 8.08. Termination by the Company After 1999 Series A
          Bonds are Paid or Defeased.  At any time after all of the 1999
          Series A Bonds issued under the Indenture have been paid in full,
          or provisions for the timely payment thereof have been duly made
          and provided for, and the lien of the Indenture has been defeased
          according to Article IX thereof, the Company may terminate its
          obligations hereunder as to the Project Facilities, except that the
          covenant and obligation of the Company to maintain and keep the
          Project Facilities in good condition (ordinary wear and tear
          excepted) so long as the Ground Lease remains in effect, subject to
          certain exceptions upon reletting by the Issuer, as set forth in
          Section 5.01 hereof, shall remain in full force and effect in
          accordance with its terms, and to pay all accrued and unpaid
          Facility Rentals and to pay any accounts payable pursuant to
          Section 8.05 hereof.

               Section 8.09.  Termination of Ground Lease or Related
          Agreement.  The termination of the Ground Lease for any reason
          (AGround Lease Termination@) shall automatically terminate this
          Agreement.

                                     ARTICLE IX

                         REDEMPTION OF 1999 SERIES A BONDS;

                              COMPLIANCE WITH INDENTURE

               Section 9.01.
                             Redemption of 1999 Series A Bonds.  The Company
          shall have the option to prepay the Facility Rentals due hereunder
          at any time in whole or in part in order to defease all or a
          portion of the 1999 Series A Bonds under the circumstances provided
          in Article IX of the Indenture or to provide for the redemption of
          1999 Series A Bonds pursuant to Article IV of the Indenture.  The
          Issuer shall take, or cause to be taken, the actions required by
          the Indenture to discharge the lien thereof through the redemption,
          or provision for payment or redemption, of all 1999 Series A Bonds
          then Outstanding, or to effect the redemption, or provision for
          payment or redemption, of less than all the 1999 Series A Bonds
          then Outstanding, upon receipt, not less than five Business Days
          prior to the day on which the Registrar shall be required to give
          notice of any such redemption or payment pursuant to the Indenture,
          by the Issuer, the Registrar and the Trustee from the Company of a
          notice designating the principal amount of the 1999 Series A Bonds
          to be redeemed, or for the payment or redemption of which provision
          is to be made, and specifying the date of redemption and the
          applicable redemption provision of the Indenture.  In addition, the
          Company shall simultaneously with such notice, furnish to the

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          Registrar a proposed form of notice of such redemption as required
          by the Indenture.  In connection with any redemption pursuant to
          Section 4.04(4) of the Indenture, the Company shall also deliver to
          the Trustee the certificate of the Company required by such
          Section.  Pursuant to Section 5.03, the Company shall provide, any
          moneys required by the Indenture to be deposited with the Trustee
          or otherwise paid by the Issuer in connection with any of the
          foregoing purposes.

               Section 9.02.   Extraordinary Mandatory Redemption of 1999
          Series A Bonds Upon Determination of Taxability.  The Issuer and
          the Company shall take all actions required to mandatorily redeem
          the 1999 Series A Bonds at the cost of the Company upon the terms
          specified in this Agreement and in Section 4.04(3) of the Indenture
          following  the  occurrence  of  a  Determination  of  Taxability,
          including, but not limited to, prepaying appropriate amounts due on
          the 1999 Series A Bonds in order to effect such redemption.  The
          1999 Series A Bonds shall be redeemed by the Issuer, in whole, or
          in such part as described below, at a redemption price equal to
          103% of the principal amount thereof, without redemption premium,
          plus accrued interest, if any, to the redemption date, within 180
          days following a Determination of Taxability.  For purposes of this
          section, a ADetermination of Taxability@ shall mean the receipt by
          the Trustee of written notice from a current or former registered
          owner of a 1999 Series A Bond or from the Company or the Issuer of
          (i) the issuance of a published or private ruling or a technical
          advice memorandum by the Internal Revenue Service in which the
          Company  participated  or  has  been  given  the  opportunity  to
          participate, and which ruling or memorandum the Company, in its
          discretion, does not contest or from which no further right of
          judicial review or appeal exists, or (ii) a final determination
          from which no further right of appeal exists of any court of
          competent jurisdiction in the United States in a proceeding in
          which the Company has participated or has been a party, or has been
          given the opportunity to participate or be a party, in each case,
          to the effect that the interest on the 1999 Series A Bonds is
          included in the gross income of the owners thereof for federal
          income tax purposes, other than with respect to a person who is a
          Asubstantial user@ or a Arelated person@ of a substantial user
          within the meaning of the Section 147 of Internal Revenue Code of
          1986, as amended (the ACode@).  No Determination of Taxability
          described above will result from the inclusion of interest on any
          1999 Series A Bond in the computation of minimum or indirect taxes.
           All of the 1999 Series A Bonds shall be redeemed upon a
          Determination of Taxability as described above unless, in the
          opinion of Bond Counsel, redemption of a portion of the 1999 Series
          A Bonds of one or more series or one or more maturities would have
          the result that interest payable on the remaining 1999 Series A
          Bonds outstanding after the redemption would not be so included in
          any such gross income.



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               In the event any of the Issuer, the Company or the Trustee has
          been put on notice or becomes aware of the existence or pendency of
          any inquiry, audit or other proceedings relating to the 1999 Series
          A Bonds being conducted by the Internal Revenue Service, the party
          so put on notice shall give immediate written notice to the other
          parties of such matters.

               Promptly upon learning of the occurrence of a Determination of
          Taxability (whether or not the same is being contested), or any of
          the events described in this Section 9.02, the Company shall give
          notice thereof to the Trustee and the Issuer.

               Section 9.03.   Extraordinary Mandatory Redemption of 1999
          Series A Bonds Upon Ground Lease Termination.  The Issuer and the
          Company shall take all actions required to mandatorily redeem the
          1999 Series A Bonds in whole upon the terms specified in Section
          4.01(2) of the Indenture following the occurrence of a Ground Lease
          Termination.  The Issuer and the Company shall give prompt notice
          to the Trustee of the occurrence of a Ground Lease Termination.

                                      ARTICLE X

                                    MISCELLANEOUS

               Section 10.01. Notices.  Except as otherwise provided in this
          Agreement, all notices, certificates, requests, requisitions and
          other communications hereunder shall be in writing and shall be
          sufficiently given and shall be deemed given when mailed by
          registered or certified mail, postage or delivery fee prepaid,
          return receipt requested addressed as provided in Section 15.08 of
          the Indenture.  A copy of each notice, certificate, request or
          other communication given hereunder to the Issuer, the Company, the
          Trustee, the Registrar or the Paying Agent shall also be given to
          the others.  Any of the foregoing may, by notice given hereunder,
          designate any further or different addresses to which subsequent
          notices, certificates, requests or other communications shall be
          sent.

               Section 10.02.  Parties in Interest.  This Agreement shall
          inure to the benefit of and shall be binding upon the Issuer, the
          Company and their respective successors and assigns, and no other
          person, firm or corporation, other than the Trustee shall have any
          right, remedy or claim under or by reasons of this Agreement.

               Section 10.03.  No Personal Liability.

                    (A)  No covenant, obligation or agreement of the Issuer
               shall be deemed to be a covenant, obligation or agreement of
               any present or future member, officer, agent or employee of
               the Issuer in other than his official capacity, and neither
               the members of the Issuer nor any official executing the 1999
               Series A Bonds shall be liable personally with respect to the

                                         57

<PAGE>



               1999 Series A Bonds or be subject to any personal liability or
               accountability by reason of the issuance thereof or by reason
               of the covenants, obligations or agreements of the Issuer
               contained in this Agreement or in the Indenture.

                    (B)  No covenant, obligation or agreement of the Company
               shall be deemed to be a covenant, obligation or agreement of
               any present or future officer, agent or employee of the
               Company in other than his official capacity, and neither the
               officers, agents or employees of the Company nor any officer
               executing this Agreement shall be liable personally on the
               Agreement or the 1999 Series A Bonds or be subject to any
               personal liability or accountability by reason of the delivery
               or issuance thereof, respectively or by reason of the
               covenants, obligations or agreements of the Company contained
               in this Agreement.

               Section 10.04.  Amendments.  This Agreement may be amended
          only by written agreement of the parties hereto, subject to the
          limitations set forth herein and in the Indenture.

               Section 10.05. Counterparts.  This Agreement may be executed
          in any number of counterparts, each of which, when so executed and
          delivered, shall be an original; but such counterparts shall
          together constitute but one and the same Agreement.

               Section 10.06.  Severability.  If any clause, provision or
          section of this Agreement shall, for any reason, be held illegal or
          invalid, such illegality or invalidity shall not affect any other
          provision of this Agreement, and this Agreement shall be construed
          and enforced as if such illegal or invalid provisions had not been
          contained herein.

               Section 10.07.  Governing Law.  The laws of the Commonwealth
          shall govern the construction and enforcement of this Agreement.


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

                                             KENTON COUNTY AIRPORT BOARD

          (SEAL)

                                             By
                                             __________________________________
                                                               GARY R.BOCKELMAN
                                                                       Chairman


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          ATTEST:



          By ___________________________
                      SHEILA R. HAMMONS
                    Secretary-Treasurer














































                                         59


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                                             MESABA AVIATION, INC.


                                             By
                                             __________________________________
                                                           JOHN S. FREDERICKSEN
                                                        Chief Executive Officer












































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