Document:

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                                                                    Exhibit 10.7

                     AMENDED AND RESTATED CREDIT AGREEMENT

                                     among

                          MILLER EXPLORATION COMPANY,
                                as the Company,

                                      and

                     VARIOUS SUBSIDIARIES OF THE COMPANY,
                   together with the Company, as Borrowers,

                             BANK ONE, TEXAS, N.A.
                                   as Agent

                                      and

                        CERTAIN FINANCIAL INSTITUTIONS,
                                  as Lenders

            _______________________________________________________

                $ 50,000,000 Reducing Revolving Credit Facility

                                 July 18, 2000
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                     AMENDED AND RESTATED CREDIT AGREEMENT

         This Agreement, dated as of July 18, 2000, is among MILLER EXPLORATION
COMPANY, a Delaware corporation (the "Company"), and the Subsidiaries of the
Company listed on the signature pages hereto or which hereafter become a party
hereto pursuant to an Addendum (as herein defined) (each such Subsidiary and
Parent, and their respective successors and assigns, a "Borrower", and
collectively, "Borrowers"), Bank One, Texas, N.A., individually and as agent (in
its agent capacity herein "Agent"), and the Lenders referenced to below.

                                    RECITALS

1.       Miller Oil Corporation, a Subsidiary of the Company and a Borrower, and
         the Company entered into that certain Credit Agreement dated February
         9, 1998 with Bank of Montreal, as agent, and lenders named therein (as
         amended, the "Existing Agreement"), pursuant to which Miller Oil
         Corporation executed and delivered that certain Promissory Note dated
         February 9, 1998 payable to the order of Bank of Montreal in the
         original principal amount of $75,000,000 (the "Existing Note"), the
         Company executed and delivered a Guaranty Agreement in favor of Bank of
         Montreal, guaranteeing the indebtedness and obligations under the
         Existing Agreement and Existing Note (the "Existing Guaranty"), and the
         Company and certain other Borrowers executed and delivered various
         Security Instruments (as defined in the Existing Agreement) to secure
         the indebtedness and obligations owing under the Existing Agreement,
         the Existing Note and the Existing Guaranty (the "Existing Security
         Instruments").

2.       Pursuant to that certain Assignment of Note and Liens of even date
         herewith by Bank of Montreal, as assignor, in favor of Bank One, as
         assignee, Bank of Montreal has assigned all of its Rights in, to and
         under the Existing Agreement, the Existing Note, the Existing
         Guaranties and the Existing Security Instruments to Bank One.

3.       Borrowers and Bank One desire to amend the obligations and indebtedness
         under the Existing Agreement, the Existing Note, the Existing Guaranty
         and the Existing Security Instruments. Accordingly, the parties hereto
         agree as follows:

                              ARTICLE IDEFINITIONS

         As used in this Agreement:

         "Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which any
Borrower (i) acquires any going business or all or substantially all of the
assets of any Person, whether through purchase of assets, merger or otherwise,
or (ii) directly or indirectly acquires (in one transaction or as the most
recent transaction in a series of transactions) at least a majority (in number
of votes) of the securities of a corporation which have ordinary voting power
for the election of directors (other than securities having such power only by

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reason of the happening of a contingency) or a majority (by percentage or voting
power) of the outstanding ownership  interests of a partnership or limited
liability company.

     "Advance" means a borrowing hereunder, (i) made by the Lenders on the same
Borrowing Date, or (ii) converted or continued by the Lenders on the same date
of conversion or continuation, consisting, in either case, of the aggregate
amount of the several Loans of the same Type and, in the case of Eurodollar
Loans, for the same Interest Period.

     "Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person.  A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.

     "Agent" means Bank One in its capacity as contractual representative of the
Lenders pursuant to Article X, and not in its individual capacity as a Lender,
and any successor Agent appointed pursuant to Article X.

     "Aggregate Commitment" means the aggregate of the Commitments of all the
Lenders, as reduced from time to time pursuant to the terms hereof.

     "Aggregate Outstanding Credit Exposure" means, at any time, the aggregate
of the Outstanding Credit Exposure of all the Lenders.

     "Agreement" means this Credit Agreement, as it may be amended or modified
and in effect from time to time.

     "Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in Section 5.4.

     "Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Corporate Base Rate for such day; and (ii) the
sum of the Federal Funds Effective Rate for such day plus 1/2% per annum.

     "Amerada Hess Indebtedness" means  indebtedness of the Company in favor of
Amerada Hess Corporation, a Delaware corporation in an amount not to exceed
$1,500,000, which indebtedness shall be subordinate to the Obligations of
Borrowers.

     "Applicable Fee Rate" means one-half percent (0.5%) per annum.

     "Applicable Margin" means (a) with respect to Floating Rate Advances, two
percent (2.00%) per annum, and (b) with respect to Eurodollar Advances, four
percent (4.00%) per annum.

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     "Article" means an article of this Agreement unless another document is
specifically referenced.

     "Authorized Officer" means any of the Chairman of the Board, President,
Treasurer, or any Vice President of any Borrower, acting singly.

     "Available Borrowing Base" means, at any time, the Borrowing Base then in
effect minus the Aggregate Outstanding Credit Exposure at such time.

     "Bank One" means Bank One, Texas, N.A., a national banking association
having its principal office in Houston, Texas, in its individual capacity, and
its successors.

     "Borrower" has the meaning set forth in the introductory paragraph hereof.

     "Borrowing Base" shall mean the amount of indebtedness which can be
adequately supported by the value of oil and gas reserves attributable to the
Collateral, which value shall be determined by the Lenders, in the exercise of
their sole discretion, in accordance with the Lenders' customary practices and
standards for oil and gas loans, all as more particularly set forth in Section
2.2.

     "Borrowing Base Reduction Amount" means (a) for each Payment Date
commencing August 1, 2000 until the next semi-annual Borrowing Base
redetermination pursuant to Section 2.2.2, $500,000, and (b) for each Payment
Date thereafter, such amount as Required Lenders may designate.

     "Borrowing Date" means a date on which an Advance is made hereunder.

     "Borrowing Notice" is defined in Section 2.9.

     "Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago and New York for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in United States
dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Chicago for the conduct of substantially all of their commercial lending
activities and interbank wire transfers can be made on the Fedwire system.

     "Capital Expenditures" means, without duplication, any expenditures for any
purchase or other acquisition of any asset which would be classified as a fixed
or capital asset on a consolidated balance sheet of the Company and its
Subsidiaries prepared in accordance with Agreement Accounting Principles.

     "Capitalized Lease" of a Person means any lease of Property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with Agreement Accounting Principles.

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     "Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.

     "Cash Equivalent Investments" means (i) short-term obligations of, or fully
guaranteed by, the United States of America, (ii) commercial paper rated A-1 or
better by S&P or P-1 or better by Moody's, (iii) demand deposit accounts
maintained in the ordinary course of business, and (iv) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000; provided in each case that
the same provides for payment of both principal and interest (and not principal
alone or interest alone) and is not subject to any contingency regarding the
payment of principal or interest.

     "Change in Control" means (i) the Company shall at any time cease to own,
directly or indirectly, free and clear of all Liens or other encumbrances, all
of the outstanding capital stock of each other Borrower, or (ii) the acquisition
by any Person, or two or more Persons acting in concert, of beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange Commission
under the Securities Exchange Act of 1934) of 15% or more of the outstanding
shares of voting stock of the Company.

     "Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.

     "Collateral" means any Property or asset of any Borrower, now or hereafter
acquired, which is subject to a Lender Lien in favor of the Lenders (or in favor
of the Agent for the benefit of the Lenders) or which, under the terms of any
Collateral Document or otherwise, is purported to be subject to such a Lien, as
described in Section 2.21.

     "Collateral Documents" means, collectively, the Deed of Trust, Security
Agreement, Security Agreement-Pledge, and all financing statements, notices, and
other documents executed in connection therewith.

     "Collateral Shortfall Amount" is defined in Section 8.1.

     "Commitment" means, for each Lender, the obligation of such Lender to make
Loans to, and participate in Facility LCs issued upon the application of, any
Borrower in an aggregate amount not exceeding the amount set forth opposite its
signature below or as set forth in any Notice of Assignment relating to any
assignment that has become effective pursuant to Section 12.3.2, as such amount
may be modified from time to time pursuant to the terms hereof.

     "Company" means Miller Exploration Company, a Delaware corporation.

     "Consolidated EBITDA" means Consolidated Net Income plus, to the extent
deducted from revenues in determining Consolidated Net Income, (i) Consolidated
Interest Expense, (ii) expense for taxes paid or accrued, (iii) depreciation,
(iv) amortization and (v) extraordinary losses incurred other than in the
ordinary course of business, minus, to the extent included in Consolidated Net

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Income, extraordinary gains realized other than in the ordinary course of
business, all calculated for the Company and its Subsidiaries on a consolidated
basis.

     "Consolidated Interest Expense" means, with reference to any period, the
interest expense of the Company and its Subsidiaries calculated on a
consolidated basis for such period.

     "Consolidated Net Income" means, with reference to any period, the net
income (or loss) of the Company and its Subsidiaries calculated on a
consolidated basis for such period.

     "Consolidated Net Worth" means at any time the consolidated stockholders'
equity of the Company and its Subsidiaries calculated on a consolidated basis as
of such time.

     "Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or the obligations of any such Person as general
partner of a partnership with respect to the liabilities of the partnership.

     "Conversion/Continuation Notice" is defined in Section 2.10.

     "Controlled Group" means all members of a controlled group of corporations
or other business entities and all trades or businesses (whether or not
incorporated) under common control which, together with the Company or any of
its Subsidiaries, are treated as a single employer under Section 414 of the
Code.

     "Corporate Base Rate" means a rate per annum equal to the corporate base
rate or prime rate of interest announced by Bank One or by its parent, BANK ONE
CORPORATION, from time to time, changing when and as said corporate base rate or
prime rate changes.

     "Credit Extension" means the making of an Advance or the issuance of a
Facility LC hereunder.

     "Credit Extension Date" means the Borrowing Date for an Advance or the
issuance date for a Facility LC.

     "Deed of Trust" means the Amended and Restated Deed of Trust, Mortgage,
Assignment, Security Agreement and Financing Statement executed by Borrowers in
favor of the Agent, for the ratable benefit of the Lenders, as it may be amended
or modified and in effect from time to time.

     "Default" means an event described in Article VII.

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     "Determining Lenders" means Lenders in the aggregate having at least 75% of
the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding at least 75% of the Aggregate Outstanding
Credit Exposure.

     "Disclosure Schedule" means Schedule 1 hereto.

     "Environmental Laws" means any and all federal, state, local and foreign
statutes, Laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to (i) the
protection of the environment, (ii) the effect of the environment on human
health, (iii) emissions, discharges or releases of pollutants, contaminants,
hazardous substances or wastes into surface water, ground water or land, or (iv)
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.

     "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.

     "Eurodollar Advance" means an Advance which, except as otherwise provided
in Section 2.12, bears interest at the applicable Eurodollar Rate.

     "Eurodollar Base Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the applicable British Bankers' Association Interest
Settlement Rate for deposits in U.S. dollars appearing on Reuters Screen FRBD as
of 11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period, and having a maturity equal to such Interest Period, provided
that, if Reuters Screen FRBD is not available to the Agent for any reason, the
applicable  Eurodollar Base Rate for the relevant Interest Period shall instead
be the rate determined by the Agent to be the rate at which Bank One or one of
its Affiliate banks offers to place deposits in U.S. dollars with first-class
banks in the London interbank market at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, in the
approximate amount of Bank One's relevant Eurodollar Loan and having a maturity
equal to such Interest Period.

     "Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.12, bears interest at the applicable Eurodollar Rate.

     "Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the Applicable Margin.

     "Excluded Taxes" means, in the case of each Lender or applicable Lending
Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (i) the jurisdiction under the laws of which
such Lender or the Agent is incorporated or organized or (ii) the jurisdiction
in which the Agent's or such Lender's principal executive office or such
Lender's applicable Lending Installation is located.

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     "Exhibit" refers to an exhibit to this Agreement, unless another document
is specifically referenced.

     "Facility LC" is defined in Section 2.20.1.

     "Facility LC Application" is defined in Section 2.20.3.

     "Facility LC Collateral Account" is defined in Section 2.20.11.

     "Facility Termination Date" means January 12, 2003 or any earlier date on
which the Aggregate Commitment is reduced to zero or otherwise terminated
pursuant to the terms hereof.

     "Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.

     "Financial Contract" of a Person means (i) any exchange-traded or over-the-
counter futures, forward, swap or option contract or other financial instrument
with similar characteristics, or (ii) any Rate Management Transaction.

     "Floating Rate" means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) the Applicable Margin, in each case
changing when and as the Alternate Base Rate changes.

     "Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.12, bears interest at the Floating Rate.

     "Floating Rate Loan" means a Loan which, except as otherwise provided in
Section 2.12, bears interest at the Floating Rate.

     "Guardian Indebtedness" means  indebtedness of the Company in favor of
Guardian Energy Management Corp., a Michigan corporation, in an amount not to
exceed $5,500,000, which indebtedness shall be subordinate to the Obligations of
Borrowers.

     "Hazardous Substance" means any substance regulated under any Environmental
Law whether as pollutants, contaminants, or chemicals, or as industrial, toxic,
or hazardous substances or wastes, or otherwise.

     "Highest Lawful Rate" means the maximum rate (or, if the context so
permits, an amount calculated at such rate) of interest which, at the time in
question, would not cause the interest charged to exceed the maximum amount
which the Lenders would be allowed to contract for, charge,

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take, reserve or receive under applicable Law after taking into account, to the
extent required by applicable Law, any and all relevant payments or charges
under the Loan Documents.

     "Hydrocarbons" means oil, gas, casinghead gas, drip gasoline, natural
gasoline, condensate, distillate, liquid hydrocarbons, gaseous Hydrocarbons and
all products refined or separated therefrom and all other minerals.

     "Hydrocarbons Interests" means all rights, titles, interests and estates in
and to oil and gas leases, oil, gas and mineral leases, or other liquid or
gaseous Hydrocarbon leases, mineral fee interests, overriding royalty and
royalty interests, net profit interests and production payment interests,
including any reserved or residual interest of whatever nature.

     "Indebtedness" of a Person means such Person's (i) obligations for borrowed
money, (ii) obligations representing the deferred purchase price of Property or
services (other than accounts payable arising in the ordinary course of such
Person's business payable on terms customary in the trade), (iii) obligations,
whether or not assumed, secured by Liens or payable out of the proceeds or
production from Property now or hereafter owned or acquired by such Person, (iv)
obligations which are evidenced by notes, acceptances, or other instruments, (v)
obligations of such Person to purchase securities or other Property arising out
of or in connection with the sale of the same or substantially similar
securities or Property, (vi) Capitalized Lease Obligations and (vii) any other
obligation for borrowed money or other financial accommodation which in
accordance with Agreement Accounting Principles would be shown as a liability on
the consolidated balance sheet of such Person.

     "Initial Reserve Report" means the reserve report dated March 31, 2000,
prepared by Miller and Lents Limited as of March 1, 2000, concerning the Oil and
Gas Properties and the oil and gas reserves therein and thereunder, that
reflects the net interest of the Borrowers therein, a copy of which has been
delivered to each Lender.

     "Interest Period" means, with respect to a Eurodollar Advance, a period of
one, two, three or six months commencing on a Business Day selected by any
Borrower pursuant to this Agreement.  Such Interest Period shall end on the day
which corresponds numerically to such date one, two, three or six months
thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third
or sixth succeeding month.  If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.

     "Investment" of a Person means any loan, advance (other than commission,
travel and similar advances to officers and employees made in the ordinary
course of business), extension of credit (other than accounts receivable arising
in the ordinary course of business on terms customary in the trade) or
contribution of capital by such Person; stocks, bonds, mutual funds, partnership
interests, notes, debentures or other securities owned by such Person; any
deposit accounts and certificate of deposit owned by such Person; and structured
notes, derivative financial instruments and other similar instruments or
contracts owned by such Person.

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     "Law" means all applicable statutes, laws, ordinances, regulations, orders,
writs, injunctions or decrees of any state, commonwealth, nation, country,
territory, possession, county, parish, municipality or tribunal.

     "LC Fee" is defined in Section 2.20.4.

     "LC Issuer" means Bank One (or any subsidiary or affiliate of Bank One
designated by Bank One) in its capacity as issuer of Facility LCs hereunder.

     "LC Obligations" means, at any time, the sum, without duplication, of (i)
the aggregate undrawn stated amount under all Facility LCs outstanding at such
time plus (ii) the aggregate unpaid amount at such time of all Reimbursement
Obligations.

     "LC Payment Date" is defined in Section 2.20.5.

     "Lenders" means the lending institutions listed on the signature pages of
this Agreement and their respective successors and assigns.

     "Lender Liens" means the Liens granted in the Collateral in favor of the
Agent for the ratable benefit of the Lenders or directly for the benefit of any
Lender pursuant to the Loan Documents.

     "Lending Installation" means, with respect to a Lender or the Agent, the
office, branch, subsidiary or affiliate of such Lender or the Agent listed on
the signature pages hereof or on a Schedule or otherwise selected by such Lender
or the Agent pursuant to Section 2.18.

     "Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.

     "Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, security interest,
mechanic's or materialsman's lien, production payment, tax lien, preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement). "Lien" also means any filed financing statement, registration of a
pledge (such as with an issuer of uncertificated securities), or any other
arrangement or action which would serve to perfect a Lien described in the
preceding sentence, regardless of whether such financing statement is filed,
such registration is made, or such arrangement or action is undertaken before or
after such Lien exists.

     "Loan" means, with respect to a Lender, such Lender's loan made pursuant to
Article II (or any conversion or continuation thereof).

     "Loan Documents" means this Agreement, the Facility LC Applications, any
Notes issued pursuant to Section 2.14.4, and the Collateral Documents.

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     "Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of any Borrower, (ii) the ability of any Borrower to perform its
obligations under the Loan Documents to which it is a party, (iii) the validity
or enforceability of any of the Loan Documents or the rights or remedies of the
Agent, the LC Issuer or the Lenders thereunder; or (iv) the Collateral or Lender
Liens on the Collateral or the priority of any such lien.

     "Material Indebtedness" is defined in Section 7.5.

     "Modify" and "Modification" are defined in Section 2.20.1.

     "Moody's" means Moody's Investors Service, Inc.

     "Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which any Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.

     "Net Borrowing Base" means the Borrowing Base as determined by Lenders for
the then subsequent six month period, minus projected principal payments on the
Amerada Hess Indebtedness, plus projected cash flow (calculation of which shall
be acceptable to Lenders in their sole discretion) of the Borrowers for such
period, minus projected Capital Expenditures for such period.

     "Net Mark-to-Market Exposure" of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Management Transactions.  "Unrealized
losses" means the fair market value of the cost to such Person of replacing such
Rate Management Transaction as of the date of determination (assuming the Rate
Management Transaction were to be terminated as of that date), and "unrealized
profits" means the fair market value of the gain to such Person of replacing
such Rate Management Transaction as of the date of determination (assuming such
Rate Management Transaction were to be terminated as of that date).

     "Net Proceeds from Production" means the amounts attributable to the
Borrowers' interest in proceeds from the sale of Hydrocarbons from the Oil and
Gas Properties covered by the Deeds of Trust after deduction of (i) royalties;
(ii) pipeline, severance and windfall profit taxes chargeable against such
production; (iii) overriding royalties; (iv) other interests in and measured by
production burdening said properties; and (v) that portion of operating and
marketing costs which are allocable to the Borrowers' interests in said Oil and
Gas Properties allowed under the applicable joint operating agreement, if any.

     "Non-U.S. Lender" is defined in Section 3.5.4.

     "Note" means any promissory note issued at the request of a Lender pursuant
to Section 2.14.4 in the form of Exhibit E.

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     "Obligations" means all unpaid principal of and accrued and unpaid interest
on the Loans, all Reimbursement Obligations, all accrued and unpaid fees and all
expenses, reimbursements, indemnities and other obligations of any Borrower to
the Lenders or to any Lender, the Agent, the LC Issuer or any indemnified party
arising under the Loan Documents.

     "Off-Balance Sheet Liability" of a Person means (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability under any Sale and Leaseback
Transaction which is not a Capitalized Lease, (iii) any liability under any so-
called "synthetic lease" transaction entered into by such Person, or (iv) any
obligation arising with respect to any other transaction which is the functional
equivalent of or takes the place of borrowing but which does not constitute a
liability on the balance sheets of such Person, but excluding from this clause
(iv) Operating Leases.

     "Oil and Gas Properties" means Hydrocarbon Interests; the properties now or
hereafter pooled or unitized with Hydrocarbon Interests; all presently existing
or future unitization, pooling agreements and declarations of pooled units and
the units created thereby (including without limitation all units created under
orders, regulations and rules of any governmental body or agency having
jurisdiction) which may affect all or any portion of the Hydrocarbon Interests;
all operating agreements, contracts and other agreements which relate to any of
the Hydrocarbon Interests or the production, sale, purchase, exchange or
processing of Hydrocarbons from or attributable to such Hydrocarbon Interests;
all Hydrocarbons in and under and which may be produced and saved or
attributable to the Hydrocarbon Interests, the lands covered thereby and all oil
in tanks and all rents, issues, profits, proceeds, products, revenues and other
incomes from or attributable to the Hydrocarbon Interests; all tenements,
hereditaments, appurtenances and properties in anywise appertaining, belonging,
affixed or incidental to the Hydrocarbon Interests, properties, rights, titles,
interests and estates described or referred to above, including any and all
Property, real or personal, now owned or hereafter acquired and situated upon,
used, held for use or useful in connection with the operating, working or
development of any of such Hydrocarbon Interests or Property (excluding drilling
rigs, automotive equipment or other personal property which may be on such
premises for the purpose of drilling a well or for other similar temporary uses)
and including any and all oil wells, gas wells, injection wells or other wells,
buildings, structures, fuel separators, liquid extraction plants, plant
compressors, pumps, pumping units, field gathering systems, tanks and tank
batteries, fixtures, valves, fittings, machinery and parts, engines, boilers,
meters, apparatus, equipment, appliances, tools, implements, cables, wires,
towers, casing, tubing and rods, surface leases, rights-of-way, easements and
servitudes together with all additions, substitutions, replacements, accessions
and attachments to any and all of the foregoing.

     "Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.

     "Operating Lease Obligations" means, as at any date of determination, the
amount obtained by aggregating the present values, determined in the case of
each particular Operating Lease by applying a discount rate (which discount rate
shall equal the discount rate which would be applied under Agreement Accounting
Principles if such Operating Lease were a Capitalized Lease) from the date on
which each fixed lease payment is due under such Operating Lease to such date of

                                    Page 11
<PAGE>

determination, of all fixed lease payments due under all Operating Leases of the
Company and its Subsidiaries.

     "Other Taxes" is defined in Section 3.5.2.

     "Outstanding Credit Exposure" means, as to any Lender at any time, the sum
of (i) the aggregate principal amount of its Loans outstanding at such time,
plus (ii) an amount equal to its Pro Rata Share of the LC Obligations at such
time.

     "Participants" is defined in  Section 12.2.1.

     "Payment Date" means the first day of each month.

     "PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.

     "Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.

     "Plan" means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which any Borrower or any member of the Controlled Group may have any
liability.

     "Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.

     "Pro Rata Share" means, with respect to a Lender, a portion equal to a
fraction the numerator of which is such Lender's Commitment and the denominator
of which is the Aggregate Commitment.

     "Purchasers" is defined in Section 12.3.1.

     "Rate Management Transaction" means any transaction (including an agreement
with respect thereto) now existing or hereafter entered into between any
Borrower and any Lender or Affiliate thereof which is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity
index swap, equity or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor transaction, collar
transaction, forward transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions) or any combination
thereof, whether linked to one or more interest rates, foreign currencies,
commodity prices, equity prices or other financial measures.

     "Rate Management Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Rate
Management Transactions, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.

                                    Page 12
<PAGE>

     "Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.

     "Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.

     "Reimbursement Obligations" means, at any time, the aggregate of all
obligations of the Borrowers then outstanding under Section 2.20 to reimburse
the LC Issuer for amounts paid by the LC Issuer in respect of any one or more
drawings under Facility LCs.

     "Release" means a release as defined in 42 U.S.C. (S) 9601(22) and means
the presence or disposal, as defined in 42 U.S.C. (S) 6903(c) of Hazardous
Substances, including pesticides and fertilizers, on any Property or at any
site, property, facility or location.

     "Rentals" of a Person means the aggregate fixed amounts payable by such
Person under any Operating Lease.

     "Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.

     "Reports" is defined in Section 9.6.

     "Required Lenders" means Lenders in the aggregate having at least 66 2/3%
of the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding at least 66 2/3% of the Aggregate Outstanding
Credit Exposure.

     "Reserve Report" means the Initial Reserve Report and each reserve report
delivered pursuant to Section 6.1.

     "Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.

     "Rights" means rights, remedies, powers, and privileges.

     "S&P" means Standard and Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc.

                                    Page 13
<PAGE>

     "Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.

     "Schedule" refers to a specific schedule to this Agreement, unless another
document is specifically referenced.

     "Section" means a numbered section of this Agreement, unless another
document is specifically referenced.

     "Secured Obligations" means, collectively, (i) the Obligations, and (ii)
all Rate Management Obligations owing to one or more Lenders.

     "Security Agreements" means those certain Security Agreements of even date
herewith and any and all other Security Agreement now or hereafter executed by
the Borrowers in favor of the Agent, for the ratable benefit of the Lenders, as
they may be amended or modified and in effect from time to time.

     "Security Agreement-Pledge" means that certain Security Agreement-Pledge of
even date herewith executed by the Company in favor of the Agent, for the
ratable benefit of the Lenders, as it may be amended or modified and in effect
from time to time.

     "Single Employer Plan" means a Plan maintained by any Borrower or any
member of the Controlled Group for employees of any Borrower or any member of
the Controlled Group.

     "Subordinated Indebtedness" of a Person means any Indebtedness of such
Person the payment of which is subordinated to payment of the Obligations to the
written satisfaction of the Required Lenders. For purposes of the Agreement the
Amerada Hess Indebtedness, the Guardian Indebtedness and the Veritas
Indebtedness shall be deemed to be Subordinated Indebtedness.

     "Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries; or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Company.

     "Substantial Portion" means, with respect to the Property of the Borrowers,
Property which (i) represents more than 10% of the consolidated assets of the
Borrowers as would be shown in the consolidated financial statements of
Borrowers as at the beginning of the twelve-month period ending with the month
in which such determination is made, or (ii) is responsible for more than 10% of
the consolidated net sales or of  the Consolidated Net Income of Borrowers as
reflected in the financial statements referred to in clause (i) above.

                                    Page 14
<PAGE>

     "Taxes" means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and any and all liabilities with respect to
the foregoing, but excluding Excluded Taxes and Other Taxes.

     "Transferee" is defined in Section 12.4.

     "Type" means, with respect to any Advance, its nature as a Floating Rate
Advance or a Eurodollar Advance.

     "Unfunded Liabilities" means the amount (if any) by which the present value
of all vested and unvested accrued benefits under all Single Employer Plans
exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.

     "Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.

     "Veritas Indebtedness" means indebtedness of the Company in favor of
Veritas DGC Land,  Inc., a Delaware corporation in an amount not to exceed
$4,696,040.60, which indebtedness shall be subordinate to the Obligations of
Borrowers.

     "Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (ii) any partnership, limited liability company, association,
joint venture or similar business organization 100% of the ownership interests
having ordinary voting power of which shall at the time be so owned or
controlled.

     The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.

                                  ARTICLE II

                  THE CREDITS, COLLATERAL AND OTHER SECURITY
                  ------------------------------------------

     2.1.  Commitment.  From and including the date of this Agreement and
           ----------
prior to the Facility Termination Date, each Lender severally agrees, on the
terms and conditions set forth in this Agreement to (i) make Loans to the
Borrowers and (ii) participate in Facility LCs issued upon the request of the
Borrowers, provided, that, after giving effect to the making of each such Loan
and the issuance of each such Facility LC, such Lender's Outstanding Credit
Exposure shall not exceed its Commitment.  Subject to the terms of this
Agreement, the Borrowers may borrow, repay and reborrow at any time prior to the
Facility Termination Date.  The Commitments to extend credit hereunder shall
expire on the Facility Termination Date.  The LC Issuer will issue Facility LCs
hereunder on the terms and conditions set forth in Section 2.20.

                                    Page 15
<PAGE>

     2.2.   Borrowing Base.
            --------------

     2.2.1  During the period from the date of this Agreement to the date as of
which the Borrowing Base is first redetermined pursuant to Section 2.2.2, the
Borrowing Base shall be $11,500.000.00.

     2.2.2  On or before May 15 and November 15 of each year the Borrowers shall
furnish to each Lender all information, reports, and data which the Agent has
then requested concerning the Borrowers' businesses and properties (including
their Oil and Gas Properties and interests and the reserves and production
relating thereto), together with the Reserve Report described in Section
6.1(xi).  Within 45 days after receiving such information, or as promptly
thereafter as practicable, (i) the Agent shall determine and the Determining
Lenders shall approve an amount for the Borrowing Base (provided that all
Lenders must agree to any increase in the Borrowing Base) and (ii) the Agent
shall by notice to the Borrowers designate such amount as the new Borrowing Base
available to the Borrowers hereunder, which designation shall take effect
immediately on the date such notice is sent and shall remain in effect until,
but not including, the next date as of which the Borrowing Base is redetermined.
If the Borrowers do not furnish all such information, reports, and data by the
date specified in the first sentence of this section, the Agent may nonetheless
designate the Borrowing Base at any amount which the Determining Lenders have
approved and may redesignate the Borrowing Base from time to time thereafter
until each Lender receives all such information, reports, and data, whereupon
the Determining Lenders shall designate a new Borrowing Base as described above.
Any redetermination of the Borrowing Base shall not be effective until written
notice is sent to the Borrowers.

     2.2.3  In addition to the foregoing, Required Lenders or the Borrowers may
initiate a redetermination of the Borrowing Base at any other time as it so
elects, provided, however, that the Borrowers may initiate only two (2) such
unscheduled redeterminations during any consecutive twelve (12) month period by
specifying in writing to the Lenders the date on which the Borrowers will
furnish the information required by Section 2.2.2 and the date on which it
desires such redetermination to occur.  The Lenders shall have at least forty-
five (45) days after the delivery of the information required by Section 2.2.2
to make any unscheduled redetermination of the Borrowing Base requested by the
Borrowers.  The Lenders may, at any time, initiate an unscheduled
redetermination of the Borrowing Base by specifying in writing to the Borrowers
the date by which the Borrowers are to furnish the information required by
Section 2.2.2 and the projected date on which such redetermination is to occur.
The Lenders shall promptly notify the Borrowers, in writing, of the new
Borrowing Base.

     2.2.4  The Agent shall determine and the Determining Lenders shall approve
the amount of the Borrowing Base based upon the loan collateral value which they
in their discretion assign to the various Oil and Gas Properties included in the
Collateral of the Borrowers at the time in question and based upon such other
credit factors (including, without limitation, the assets, liabilities, cash
flow, hedged and unhedged exposure to price, foreign exchange rate, and interest
rate changes, business, properties, prospects, management, and ownership of the
Borrowers and their Affiliates) as they in their discretion deem significant.
It is expressly understood that the Lenders and the Agent have no obligation to
agree upon or designate the Borrowing Base at any particular amount, whether in
relation to the Aggregate Commitment or otherwise, and that the Lenders'
commitments to

                                    Page 16
<PAGE>

advance funds hereunder is determined by reference to the Borrowing Base from
time to time in effect, and, to the extent permitted by Law and regulatory
authorities, for the purposes of capital adequacy determination and
reimbursements under Section 3.2.

     2.2.5  The Borrowing Base shall automatically reduce by the applicable
Borrowing Base Reduction Amount on each Payment Date.

     2.2.6  In the event the Outstanding Credit Exposure shall, at any time, be
in excess of the amount of the Borrowing Base in effect at such time, then the
Borrowers shall immediately prepay Credit Extensions in an amount at least equal
to such excess.

     2.3.   Termination.  The Aggregate Outstanding Credit Exposure and all
            -----------
other unpaid Obligations shall be paid in full by the Borrowers on the Facility
Termination Date.

     2.4.   Ratable Loans.  Each Advance hereunder shall consist of Loans made
            -------------
from the several Lenders ratably according to their Pro Rata Shares.

     2.5.   Types of Advances.  The Advances may be Floating Rate Advances or
            -----------------
Eurodollar Advances, or a combination thereof, selected by the Borrowers in
accordance with Sections 2.9 and 2.10.

     2.6.   Commitment Fee; Reductions in Borrowing Base.  The Borrowers
            --------------------------------------------
jointly and severally agree to pay to the Agent for the account of each Lender
according to its Pro Rata Share a commitment fee at a per annum rate equal to
the Applicable Fee Rate on the average daily Available Borrowing Base from the
date hereof to and including the Facility Termination Date, payable on each
Payment Date hereafter and on the Facility Termination Date.  The Borrowers may
permanently reduce the Borrowing Base in whole, or in part ratably among the
Lenders in integral multiples of $1,000,000, upon at least five Business Days'
written notice to the Agent, which notice shall specify the amount of any such
reduction, provided, however, that the amount of the Borrowing Base may not be
reduced below the Aggregate Outstanding Credit Exposure.  All accrued commitment
fees shall be payable on the effective date of any termination of the
obligations of the Lenders to make Credit Extensions hereunder.

     2.7.   Minimum Amount of Each Advance.  Each Eurodollar Advance shall be
            ------------------------------
in the minimum amount of $1,000,000 (and in multiples of $100,000 if in excess
thereof), and each Floating Rate Advance shall be in the minimum amount of
$500,000 (and in multiples of $100,000 if in excess thereof), provided, however,
that any Floating Rate Advance may be in the amount of the Available Borrowing
Base.

     2.8.   Optional Principal Payments.  The Borrowers may from time to time
            ---------------------------
pay, without penalty or premium, all outstanding Floating Rate Advances, or, in
a minimum aggregate amount of $500,000 or any integral multiple of $100,000 in
excess thereof, any portion of the outstanding Floating Rate Advances upon one
Business Days' prior notice to the Agent.  The Borrowers may from time to time
pay, subject to the payment of any funding indemnification amounts required by
Section 3.4 but without penalty or premium, all outstanding Eurodollar Advances,
or, in a minimum aggregate amount of $500,000 or any integral multiple of
$100,000 in excess thereof, any portion

                                    Page 17
<PAGE>

of the outstanding Eurodollar Advances on the last day of the then current
Interest Period upon three Business Days' prior notice to the Agent.

     2.9.   Method of Selecting Types and Interest Periods for New Advances.
            ---------------------------------------------------------------
The Borrowers shall select the Type of Advance and, in the case of each
Eurodollar Advance, the Interest Period applicable thereto from time to time.
The Borrowers shall give the Agent irrevocable notice (a "Borrowing Notice")
substantially in the form of Exhibit B hereto, not later than 10:00 a.m.
(Chicago time) at least one Business Day before the Borrowing Date of each
Floating Rate Advance and three Business Days before the Borrowing Date for each
Eurodollar Advance, specifying:

       (i)  the Borrowing Date, which shall be a Business Day, of such Advance,

      (ii)  the aggregate amount of such Advance,

     (iii)  the Type of Advance selected, and

      (iv)  in the case of each Eurodollar Advance, the Interest Period
            applicable thereto.

Not later than noon (Chicago time) on each Borrowing Date, each Lender shall
make available its Loan or Loans in funds immediately available in Chicago to
the Agent at its address specified pursuant to Article XIII.  The Agent will
make the funds so received from the Lenders available to the Borrowers at the
Agent's aforesaid address.

     2.10.  Conversion and Continuation of Outstanding Advances.  Floating
            ---------------------------------------------------
Rate Advances shall continue as Floating Rate Advances unless and until such
Floating Rate Advances are converted into Eurodollar Advances pursuant to this
Section 2.10 or are repaid in accordance with Section 2.8.  Each Eurodollar
Advance shall continue as a Eurodollar Advance until the end of the then
applicable Interest Period therefor, at which time such Eurodollar Advance shall
be automatically converted into a Floating Rate Advance unless (x) such
Eurodollar Advance is or was repaid in accordance with Section 2.8 or (y) the
Borrowers shall have given the Agent a Conversion/Continuation Notice (as
defined below) requesting that, at the end of such Interest Period, such
Eurodollar Advance continue as a Eurodollar Advance for the same or another
Interest Period.  Subject to the terms of Section 2.7, the Borrowers may elect
from time to time to convert all or any part of a Floating Rate Advance into a
Eurodollar Advance.  The Borrowers shall give the Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of a Floating Rate Advance
into a Eurodollar Advance or continuation of a Eurodollar Advance not later than
10:00 a.m. (Chicago time) at least three Business Days prior to the date of the
requested conversion or continuation, specifying:

       (i)  the requested date, which shall be a Business Day, of such
            conversion or continuation,

      (ii)  the aggregate amount and Type of the Advance which is to be
            converted or continued, and

     (iii)  the amount of such Advance which is to be converted into or
            continued as a Eurodollar Advance and the duration of the Interest
            Period applicable thereto.

                                    Page 18
<PAGE>

     2.11.  Changes in Interest Rate, etc.    Each Floating Rate Advance shall
            ------------------------------
bear interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is automatically converted from a
Eurodollar Advance into a Floating Rate Advance pursuant to Section 2.10, to but
excluding the date it is paid or is converted into a Eurodollar Advance pursuant
to Section 2.10 hereof, at a rate per annum equal to the Floating Rate for such
day.  Changes in the rate of interest on that portion of any Advance maintained
as a Floating Rate Advance will take effect simultaneously with each change in
the Alternate Base Rate.  Each Eurodollar Advance shall bear interest on the
outstanding principal amount thereof from and including the first day of the
Interest Period applicable thereto to (but not including) the last day of such
Interest Period at the interest rate determined by the Agent as applicable to
such Eurodollar Advance based upon the Borrowers' selections under Sections 2.9
and 2.10 and otherwise in accordance with the terms hereof.  No Interest Period
may end after the Facility Termination Date.

     2.12.  Rates Applicable After Default.  Notwithstanding anything to the
            ------------------------------
contrary contained in Section 2.9 or 2.10, during the continuance of a Default
or Unmatured Default the Required Lenders may, at their option, by notice to the
Borrowers, declare that no Advance may be made as, converted into or continued
as a Eurodollar Advance.  During the continuance of a Default the Required
Lenders may, at their option, by notice to the Borrowers, declare that (i) each
Eurodollar Advance shall bear interest for the remainder of the applicable
Interest Period at the rate otherwise applicable to such Interest Period plus 2%
per annum, (ii) each Floating Rate Advance shall bear interest at a rate per
annum equal to the Floating Rate in effect from time to time plus 2% per annum
and (iii) the LC Fee shall be increased by 2% per annum, provided that, during
the continuance of a Default under Section 7.6 or 7.7, the interest rates set
forth in clauses (i) and (ii) above and the increase in the LC Fee set forth in
clause (iii) above shall be applicable to all Credit Extensions without any
election or action on the part of the Agent or any Lender.

     2.13.  Method of Payment.  All payments of the Obligations hereunder
            -----------------
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XIII, or at any other Lending Installation of the Agent specified in
writing by the Agent to the Borrowers, by noon (local time) on the date when due
and shall (except in the case of Reimbursement Obligations for which the LC
Issuer has not been fully indemnified by the Lenders, or as otherwise
specifically required hereunder) be applied ratably by the Agent among the
Lenders.  Each payment delivered to the Agent for the account of any Lender
shall be delivered promptly by the Agent to such Lender in the same type of
funds that the Agent received at its address specified pursuant to Article XIII
or at any Lending Installation specified in a notice received by the Agent from
such Lender.  The Agent is hereby authorized to charge the account of any
Borrower maintained with Bank One for each payment of principal, interest,
Reimbursement Obligations and fees as it becomes due hereunder.  Each reference
to the Agent in this Section 2.13 shall also be deemed to refer, and shall apply
equally, to the LC Issuer, in the case of payments required to be made by the
Borrowers to the LC Issuer pursuant to Section 2.20.6.

     2.14.  Noteless Agreement; Evidence of Indebtedness.
            --------------------------------------------

     2.14.1 Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrowers to such Lender
resulting from each Loan

                                    Page 19
<PAGE>

made by such Lender from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.

     2.14.2  The Agent shall also maintain accounts in which it will record (i)
the amount of each Loan made hereunder, the Type thereof and the Interest Period
with respect thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrowers to each Lender
hereunder, (c) the original stated amount of each Facility LC and the amount of
LC Obligations outstanding at any time, and (d) the amount of any sum received
by the Agent hereunder from the Borrowers and each Lender's share thereof.

     2.14.3  The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded; provided, however, that the failure
of the Agent or any Lender to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrowers to repay the
Obligations in accordance with their terms.

     2.14.4  Any Lender may request that its Loans be evidenced by a promissory
note (a "Note").  In such event, the Borrowers shall prepare, execute and
deliver to such Lender a Note payable to the order of such Lender in a form
supplied by the Agent.  Thereafter, the Loans evidenced by such Note and
interest thereon shall at all times (including after any assignment pursuant to
Section 12.3) be represented by one or more Notes payable to the order of the
payee named therein or any assignee pursuant to Section 12.3, except to the
extent that any such Lender or assignee subsequently returns any such Note for
cancellation and requests that such Loans once again be evidenced as described
in paragraphs (i) and (ii) above.

     2.15.   Telephonic Notices.  The Borrowers hereby authorize the Lenders
             ------------------
and the Agent to extend, convert or continue Advances, effect selections of
Types of Advances and to transfer funds based on telephonic notices made by any
person or persons the Agent or any Lender in good faith believes to be acting on
behalf of the Borrowers, it being understood that the foregoing authorization is
specifically intended to allow Borrowing Notices and Conversion/Continuation
Notices to be given telephonically.  The Borrowers agree to deliver promptly to
the Agent a written confirmation, if such confirmation is requested by the Agent
or any Lender, of each telephonic notice signed by an Authorized Officer.  If
the written confirmation differs in any material respect from the action taken
by the Agent and the Lenders, the records of the Agent and the Lenders shall
govern absent manifest error.

     2.16.   Interest Payment Dates; Interest and Fee Basis.  Interest accrued
             ----------------------------------------------
on each Floating Rate Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof, on any date on which
the Floating Rate Advance is prepaid, whether due to acceleration or otherwise,
and at maturity.  Interest accrued on that portion of the outstanding principal
amount of any Floating Rate Advance converted into a Eurodollar Advance on a day
other than a Payment Date shall be payable on the date of conversion.  Interest
accrued on each Eurodollar Advance shall be payable on the last day of its
applicable Interest Period, on any date on which the Eurodollar Advance is
prepaid, whether by acceleration or otherwise, and at maturity.  Interest
accrued on each Eurodollar Advance having an Interest Period longer than three
months shall also be payable on the last day of each three-month interval during
such Interest Period.  Interest on all

                                    Page 20
<PAGE>

Eurodollar Loans shall be calculated for actual days elapsed on the basis of a
360-day year. Interest on Floating Rate Loans, commitment fees and LC Fees shall
be calculated for actual days elapsed on a basis of a 365, or when appropriate a
366, day year. Interest shall be payable for the day an Advance is made but not
for the day of any payment on the amount paid if payment is received prior to
noon (local time) at the place of payment. If any payment of principal of or
interest on an Advance shall become due on a day which is not a Business Day,
such payment shall be made on the next succeeding Business Day and, in the case
of a principal payment, such extension of time shall be included in computing
interest in connection with such payment.

     2.17.  Notification of Advances, Interest Rates, Prepayments and Commitment
            --------------------------------------------------------------------
Reductions. Promptly after receipt thereof, the Agent will notify each Lender of
----------
the contents of each Aggregate Commitment reduction notice, Borrowing Notice,
Conversion/Continuation Notice, and repayment notice received by it hereunder.
Promptly after notice from the LC Issuer, the Agent will notify each Lender of
the contents of each request for issuance of a Facility LC hereunder. The Agent
will notify each Lender of the interest rate applicable to each Eurodollar
Advance promptly upon determination of such interest rate and will give each
Lender prompt notice of each change in the Alternate Base Rate.

     2.18.  Lending Installations.  Each Lender may book its Loans and its
            ---------------------
participation in any LC Obligations and the LC Issuer may book the Facility LCs
at any Lending Installation selected by such Lender or the LC Issuer, as the
case may be, and may change its Lending Installation from time to time.  All
terms of this Agreement shall apply to any such Lending Installation and the
Loans, Facility LCs, participations in LC Obligations  and any Notes issued
hereunder shall be deemed held by each Lender or the LC Issuer, as the case may
be, for the benefit of any such Lending Installation.  Each Lender and the LC
Issuer may, by written notice to the Agent and the Borrowers in accordance with
Article XIII, designate replacement or additional Lending Installations through
which Loans will be made by it or Facility LCs will be issued by it and for
whose account Loan payments or payments with respect to Facility LCs are to be
made.

     2.19.  Non-Receipt of Funds by the Agent. Unless the Borrowers or a Lender,
            ---------------------------------
as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrowers, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrowers, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (x) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day for the first three days and,
thereafter, the interest rate applicable to the relevant Loan or (y) in the case
of payment by the Borrowers, the interest rate applicable to the relevant Loan.

                                    Page 21
<PAGE>

     2.20.    Facility LCs.
              ------------

     2.20.1.  Issuance. The LC Issuer hereby agrees, on the terms and conditions
              --------
set forth in this Agreement, to issue standby and commercial letters of credit
(each, a "Facility LC") and to renew, extend, increase, decrease or otherwise
modify each Facility LC ("Modify," and each such action a "Modification"), from
time to time from and including the date of this Agreement and prior to the
Facility Termination Date upon the request of the Borrowers; provided that
immediately after each such Facility LC is issued or Modified, (i) the aggregate
amount of the outstanding LC Obligations shall not exceed $500,000 and (ii) the
Aggregate Outstanding Credit Exposure shall not exceed the Aggregate Commitment.
No Facility LC shall have an expiry date later than the earlier of (x) the fifth
Business Day prior to the Facility Termination Date and (y) one year after its
issuance.

     2.20.2.  Participations. Upon the issuance or Modification by the LC Issuer
              --------------
of a Facility LC in accordance with this Section 2.20, the LC Issuer shall be
deemed, without further action by any party hereto, to have unconditionally and
irrevocably sold to each Lender, and each Lender shall be deemed, without
further action by any party hereto, to have unconditionally and irrevocably
purchased from the LC Issuer, a participation in such Facility LC (and each
Modification thereof) and the related LC Obligations in proportion to its Pro
Rata Share.

     2.20.3.  Notice. Subject to Section 2.20.1, the Borrowers shall give the LC
              ------
Issuer notice prior to 10:00 a.m. (Chicago time) at least five Business Days
prior to the proposed date of issuance or Modification of each Facility LC,
specifying the beneficiary, the proposed date of issuance (or Modification) and
the expiry date of such Facility LC, and describing the proposed terms of such
Facility LC and the nature of the transactions proposed to be supported thereby.
Upon receipt of such notice, the LC Issuer shall promptly notify the Agent, and
the Agent shall promptly notify each Lender, of the contents thereof and of the
amount of such Lender's participation in such proposed Facility LC. The issuance
or Modification by the LC Issuer of any Facility LC shall, in addition to the
conditions precedent set forth in Article IV (the satisfaction of which the LC
Issuer shall have no duty to ascertain), be subject to the conditions precedent
that such Facility LC shall be satisfactory to the LC Issuer and that the
Borrowers shall have executed and delivered such application agreement and/or
such other instruments and agreements relating to such Facility LC as the LC
Issuer shall have reasonably requested (each, a "Facility LC Application"). In
the event of any conflict between the terms of this Agreement and the terms of
any Facility LC Application, the terms of this Agreement shall control.

     2.20.4.  LC Fees. The Borrowers shall pay to the Agent, for the account of
              -------
the Lenders ratably in accordance with their respective Pro Rata Shares, with
respect to each standby Facility LC, a letter of credit fee at a per annum rate
equal to the Applicable Margin for Eurodollar Loans in effect from time to time
on the average daily undrawn stated amount under such standby Facility LC, such
fee to be payable in arrears on each Payment Date ("LC Fee"). The Borrowers
shall also pay to the LC Issuer for its own account (x) at the time of issuance
of each Facility LC, a fronting fee in an amount to be agreed upon between the
LC Issuer and the Borrowers, and (y) documentary and processing charges in
connection with the issuance or Modification of and draws under Facility LCs in
accordance with the LC Issuer's standard schedule for such charges as in effect
from time to time.

                                    Page 22
<PAGE>

     2.20.5.  Administration; Reimbursement by Lenders.  Upon receipt from the
              ----------------------------------------
beneficiary of any Facility LC of any demand for payment under such Facility LC,
the LC Issuer shall notify the Agent and the Agent shall promptly notify the
Borrowers and each other Lender as to the amount to be paid by the LC Issuer as
a result of such demand and the proposed payment date (the "LC Payment Date").
The responsibility of the LC Issuer to the Borrowers and each Lender shall be
only to determine that the documents (including each demand for payment)
delivered under each Facility LC in connection with such presentment shall be in
conformity in all material respects with such Facility LC. The LC Issuer shall
endeavor to exercise the same care in the issuance and administration of the
Facility LCs as it does with respect to letters of credit in which no
participations are granted, it being understood that in the absence of any gross
negligence or willful misconduct by the LC Issuer, each Lender shall be
unconditionally and irrevocably liable without regard to the occurrence of any
Default or any condition precedent whatsoever, to reimburse the LC Issuer on
demand for (i) such Lender's Pro Rata Share of the amount of each payment made
by the LC Issuer under each Facility LC to the extent such amount is not
reimbursed by the Borrowers pursuant to Section 2.20.6 below, plus (ii) interest
on the foregoing amount to be reimbursed by such Lender, for each day from the
date of the LC Issuer's demand for such reimbursement (or, if such demand is
made after 11:00 a.m. (Chicago time) on such date, from the next succeeding
Business Day) to the date on which such Lender pays the amount to be reimbursed
by it, at a rate of interest per annum equal to the Federal Funds Effective Rate
for the first three days and, thereafter, at a rate of interest equal to the
rate applicable to Floating Rate Advances.

     2.20.6.  Reimbursement by Borrowers. The Borrowers shall be irrevocably and
              --------------------------
unconditionally jointly and severally obligated to reimburse the LC Issuer on or
before the applicable LC Payment Date for any amounts to be paid by the LC
Issuer upon any drawing under any Facility LC, without presentment, demand,
protest or other formalities of any kind; provided that neither the Borrowers
nor any Lender shall hereby be precluded from asserting any claim for direct
(but not consequential) damages suffered by the Borrowers or such Lender to the
extent, but only to the extent, caused by (i) the willful misconduct or gross
negligence of the LC Issuer in determining whether a request presented under any
Facility LC issued by it complied with the terms of such Facility LC or (ii) the
LC Issuer's failure to pay under any Facility LC issued by it after the
presentation to it of a request strictly complying with the terms and conditions
of such Facility LC. All such amounts paid by the LC Issuer and remaining unpaid
by the Borrowers shall bear interest, payable on demand, for each day until paid
at a rate per annum equal to (x) the rate applicable to Floating Rate Advances
for such day if such day falls on or before the applicable LC Payment Date and
(y) the sum of 2% plus the rate applicable to Floating Rate Advances for such
day if such day falls after such LC Payment Date. The LC Issuer will pay to each
Lender ratably in accordance with its Pro Rata Share all amounts received by it
from the Borrowers for application in payment, in whole or in part, of the
Reimbursement Obligation in respect of any Facility LC issued by the LC Issuer,
but only to the extent such Lender has made payment to the LC Issuer in respect
of such Facility LC pursuant to Section 2.20.5. Subject to the terms and
conditions of this Agreement (including without limitation the submission of a
Borrowing Notice in compliance with Section 2.8 and the satisfaction of the
applicable conditions precedent set forth in Article IV), the Borrowers may
request an Advance hereunder for the purpose of satisfying any Reimbursement
Obligation.

     2.20.7.  Obligations Absolute. The Borrowers' obligations under this
              --------------------
Section 2.20 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff,

                                    Page 23
<PAGE>

counterclaim or defense to payment which the Borrowers may have or have had
against the LC Issuer, any Lender or any beneficiary of a Facility LC. The
Borrowers further agree with the LC Issuer and the Lenders that the LC Issuer
and the Lenders shall not be responsible for, and the Borrowers' Reimbursement
Obligation in respect of any Facility LC shall not be affected by, among other
things, the validity or genuineness of documents or of any endorsements thereon,
even if such documents should in fact prove to be in any or all respects
invalid, fraudulent or forged, or any dispute between or among the Borrowers,
any of their Affiliates, the beneficiary of any Facility LC or any financing
institution or other party to whom any Facility LC may be transferred or any
claims or defenses whatsoever of the Borrowers or of any of their Affiliates
against the beneficiary of any Facility LC or any such transferee. The LC Issuer
shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Facility LC. The Borrowers agree that any
action taken or omitted by the LC Issuer or any Lender under or in connection
with each Facility LC and the related drafts and documents, if done without
gross negligence or willful misconduct, shall be binding upon the Borrowers and
shall not put the LC Issuer or any Lender under any liability to the Borrowers.
Nothing in this Section 2.20.7 is intended to limit the right of the Borrowers
to make a claim against the LC Issuer for damages as contemplated by the proviso
to the first sentence of Section 2.20.6.

     2.20.8.  Actions of LC Issuer.  The LC Issuer shall be entitled to rely,
              --------------------
and shall be fully protected in relying, upon any Facility LC, draft, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person or Persons, and upon advice and statements of legal
counsel, independent accountants and other experts selected by the LC Issuer.
The LC Issuer shall be fully justified in failing or refusing to take any action
under this Agreement unless it shall first have received such advice or
concurrence of the Required Lenders as it reasonably deems appropriate or it
shall first be indemnified to its reasonable satisfaction by the Lenders against
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action. Notwithstanding any other
provision of this Section 2.20, the LC Issuer shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement in
accordance with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon the
Lenders and any future holders of a participation in any Facility LC.

     2.20.9.  Indemnification. The Borrowers hereby agree to jointly and
              ---------------
severally indemnify and hold harmless each Lender, the LC Issuer and the Agent,
and their respective directors, officers, agents and employees from and against
any and all claims and damages, losses, liabilities, costs or expenses which
such Lender, the LC Issuer or the Agent may incur (or which may be claimed
against such Lender, the LC Issuer or the Agent by any Person whatsoever) by
reason of or in connection with the issuance, execution and delivery or transfer
of or payment or failure to pay under any Facility LC or any actual or proposed
use of any Facility LC, including, without limitation, any claims, damages,
losses, liabilities, costs or expenses which the LC Issuer may incur by reason
of or in connection with (i) the failure of any other Lender to fulfill or
comply with its obligations to the LC Issuer hereunder (but nothing herein
contained shall affect any rights the Borrowers may have against any defaulting
Lender) or (ii) by reason of or on account of the LC Issuer issuing any Facility
LC which specifies that the term "Beneficiary" included therein includes any
successor by operation of law of the named Beneficiary, but which Facility LC
does not require that any drawing

                                    Page 24
<PAGE>

by any such successor Beneficiary be accompanied by a copy of a legal document,
satisfactory to the LC Issuer, evidencing the appointment of such successor
Beneficiary; provided that the Borrowers shall not be required to indemnify any
Lender, the LC Issuer or the Agent for any claims, damages, losses, liabilities,
costs or expenses to the extent, but only to the extent, caused by (x) the
willful misconduct or gross negligence of the LC Issuer in determining whether a
request presented under any Facility LC complied with the terms of such Facility
LC or (y) the LC Issuer's failure to pay under any Facility LC after the
presentation to it of a request strictly complying with the terms and conditions
of such Facility LC. Nothing in this Section 2.20.9 is intended to limit the
obligations of the Borrowers under any other provision of this Agreement.

     2.20.10.  Lenders' Indemnification.  Each Lender shall, ratably in
               ------------------------
accordance with its Pro Rata Share, indemnify the LC Issuer, its affiliates and
their respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrowers) against any cost, expense (including reasonable
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from such indemnitees' gross negligence or willful
misconduct or the LC Issuer's failure to pay under any Facility LC after the
presentation to it of a request strictly complying with the terms and conditions
of the Facility LC) that such indemnitees may suffer or incur in connection with
this Section 2.20 or any action taken or omitted by such indemnitees hereunder.

     2.20.11.  Facility LC Collateral Account.  The Borrowers agree that they
               ------------------------------
will, upon the request of the Agent or the Required Lenders and until the final
expiration date of any Facility LC and thereafter as long as any amount is
payable to the LC Issuer or the Lenders in respect of any Facility LC, maintain
a special collateral account pursuant to arrangements satisfactory to the Agent
(the "Facility LC Collateral Account") at the Agent's office at the address
specified pursuant to Article XIII, in the name of the Borrowers but under the
sole dominion and control of the Agent, for the benefit of the Lenders and in
which the Borrowers shall have no interest other than as set forth in Section
8.1. The Borrowers hereby pledge, assign and grant to the Agent, on behalf of
and for the ratable benefit of the Lenders and the LC Issuer, a security
interest in all of the Borrowers' right, title and interest in and to all funds
which may from time to time be on deposit in the Facility LC Collateral Account
to secure the prompt and complete payment and performance of the Obligations.
The Agent will invest any funds on deposit from time to time in the Facility LC
Collateral Account in certificates of deposit of Bank One having a maturity not
exceeding 30 days. Nothing in this Section 2.20.11 shall either obligate the
Agent to require the Borrowers to deposit any funds in the Facility LC
Collateral Account or limit the right of the Agent to release any funds held in
the Facility LC Collateral Account in each case other than as required by
Section 8.1.

     2.20.12.  Rights as a Lender.  In its capacity as a Lender, the LC Issuer
               ------------------
shall have the same rights and obligations as any other Lender.

     2.21  Collateral.  The full and complete payment and performance of the
           ----------
Secured Obligations shall be secured under the Collateral Documents ratably and
pari passu by first and prior Lender Liens in, to and on all of the Borrowers'
Rights, titles, and interests in and to (but none of the Borrowers' obligations
with respect to) the following items and types of Property, all as more
particularly set forth in the Collateral Documents:

                                    Page 25
<PAGE>

  (i)   All present and future Rights, titles and interests that the Borrowers
        may now have or hereafter acquire in and to the Oil and Gas Properties
        included in any determination or redetermination of the Borrowing Base,
        including, but not limited to, oil and gas and/or oil, gas and mineral
        leases and interests, royalty and overriding royalty interests,
        production payment and net profits interests, mineral fee interests, and
        Rights therein, including, without limitation, all reversionary or
        carried interests relating to the foregoing, together with all present
        and future Rights, titles and interests in and to all present and future
        unitization, communitization and pooling agreements (and all properties
        covered and units created thereby), whether arising by contract or
        operation of Law, which now or hereafter include all or any part of the
        foregoing and together with all lands now or hereafter subject to any of
        the foregoing, and all tenements, hereditaments, appurtenances, and
        properties in anywise appertaining, belonging, affixed or incidental to
        any of the foregoing; and

  (ii)  All present and future oil, gas or other liquid and gaseous
        hydrocarbons, and other minerals now or hereafter accruing to or
        produced from mineral interests described in (i) preceding and/or to
        which the Borrowers now or hereafter may be entitled as a result of
        ownership thereof; and

  (iii) Whether now owned or hereafter acquired, all present and future Rights,
        titles and interests of the Borrowers (including without limitation, the
        Rights to receive payments due thereunder) in and to any and all gas
        sales contracts, oil, gas or other condensates or other products sales
        contracts now or hereafter existing in connection with the Collateral
        described hereinabove;

  (iv)  All present and future increases, profits, combinations and
        reclassifications of, and substitutions and replacements for, all or
        part of the Collateral heretofore described.

provided, Agent may elect, in its sole discretion, to not record Collateral
Documents with respect to certain minor value Property not to exceed ten percent
(10%) of the total value of Borrowers' producing Oil and Gas Property.

     The Lender Liens in the Collateral shall be further evidenced and governed
by the Collateral Documents.

                                  ARTICLE III

                            YIELD PROTECTION; TAXES
                            -----------------------

     3.1.  Yield Protection. If, on or after the date of this Agreement, the
           ----------------
adoption of any Law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of Law), or any
change in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation or the LC Issuer with any request or directive
(whether or not having the force of Law) of any such authority, central bank or
comparable agency:

                                    Page 26
<PAGE>

   (i)     subjects any Lender or any applicable Lending Installation or the LC
           Issuer to any Taxes, or changes the basis of taxation of payments
           (other than with respect to Excluded Taxes) to any Lender or the LC
           Issuer in respect of its Eurodollar Loans, Facility LCs or
           participations therein or

   (ii)    imposes or increases or deems applicable any reserve, assessment,
           insurance charge, special deposit or similar requirement against
           assets of, deposits with or for the account of, or credit extended
           by, any Lender or any applicable Lending Installation or the LC
           Issuer (other than reserves and assessments taken into account in
           determining the interest rate applicable to Eurodollar Advances), or

   (iii)   imposes any other condition the result of which is to increase the
           cost to any Lender or any applicable Lending Installation or the LC
           Issuer of making, funding or maintaining its Eurodollar Loans, or of
           issuing or participating in Facility LCs, or reduces any amount
           receivable by any Lender or any applicable Lending Installation or
           the LC Issuer in connection with its Eurodollar Loans, Facility LCs
           or participations therein, or requires any Lender or any applicable
           Lending Installation or the LC Issuer to make any payment calculated
           by reference to the amount of Eurodollar Loans, Facility LCs or
           participations therein held or interest or LC Fees received by it, by
           an amount deemed material by such Lender or the LC Issuer as the case
           may be,

and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation or the LC Issuer, as the case may be, of making
or maintaining its Eurodollar Loans or Commitment or of issuing or participating
in Facility LCs or to reduce the return received by such Lender or applicable
Lending Installation or the LC Issuer, as the case may be, in connection with
such Eurodollar Loans, Commitment, Facility LCs or participations therein, then,
within 15 days of demand by such Lender or the LC Issuer, as the case may be,
the Borrowers shall pay such Lender or the LC Issuer, as the case may be, such
additional amount or amounts as will compensate such Lender or the LC Issuer, as
the case may be, for such increased cost or reduction in amount received.

     3.2.  Changes in Capital Adequacy Regulations. If a Lender or the LC Issuer
           ---------------------------------------
determines the amount of capital required or expected to be maintained by such
Lender or the LC Issuer, any Lending Installation of such Lender or the LC
Issuer, or any corporation controlling such Lender or the LC Issuer is increased
as a result of a Change, then, within 15 days of demand by such Lender or the LC
Issuer, the Borrowers shall pay such Lender or the LC Issuer the amount
necessary to compensate for any shortfall in the rate of return on the portion
of such increased capital which such Lender or the LC Issuer determines is
attributable to this Agreement, its Outstanding Credit Exposure or its
Commitment to make Loans and issue or participate in Facility LCs, as the case
may be, hereunder (after taking into account such Lender's or the LC Issuer's
policies as to capital adequacy). "Change" means (i) any change after the date
of this Agreement in the Risk-Based Capital Guidelines or (ii) any adoption of
or change in any other Law, governmental or quasi-governmental rule, regulation,
policy, guideline, interpretation, or directive (whether or not having the force
of Law) after the date of this Agreement which affects the amount of capital
required or expected to be maintained by any Lender or the LC Issuer or any
Lending Installation or any corporation controlling any Lender or the LC Issuer.
"Risk-Based Capital Guidelines" means

                                    Page 27
<PAGE>

(i) the risk-based capital guidelines in effect in the United States on the date
of this Agreement, including transition rules, and (ii) the corresponding
capital regulations promulgated by regulatory authorities outside the United
States implementing the July 1988 report of the Basle Committee on Banking
Regulation and Supervisory Practices Entitled "International Convergence of
Capital Measurements and Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.

     3.3.  Availability of Types of Advances. If any Lender determines that
           ---------------------------------
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable Law, rule, regulation, or directive, whether or not
having the force of Law, or if the Required Lenders determine that (i) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available or (ii) the interest rate applicable to Eurodollar Advances does not
accurately reflect the cost of making or maintaining Eurodollar Advances, then
the Agent shall suspend the availability of Eurodollar Advances and require any
affected Eurodollar Advances to be repaid or converted to Floating Rate
Advances, subject to the payment of any funding indemnification amounts required
by Section 3.4.

     3.4.  Funding Indemnification. If any payment of a Eurodollar Advance
           -----------------------
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Eurodollar
Advance is not made on the date specified by the Borrowers for any reason other
than default by the Lenders, the Borrowers will jointly and severally indemnify
each Lender for any loss or cost incurred by it resulting therefrom, including,
without limitation, any loss or cost in liquidating or employing deposits
acquired to fund or maintain such Eurodollar Advance.

     3.5.  Taxes.
           -----

     3.5.1 All payments by the Borrowers to or for the account of any Lender,
the LC Issuer or the Agent hereunder or under any Note or Facility LC
Application shall be made free and clear of and without deduction for any and
all Taxes. If the Borrowers shall be required by Law to deduct any Taxes from or
in respect of any sum payable hereunder to any Lender, the LC Issuer or the
Agent, (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 3.5) such Lender, the LC Issuer or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrowers shall make such deductions, (iii)
the Borrowers shall pay the full amount deducted to the relevant authority in
accordance with applicable Law and (d) the Borrowers shall furnish to the Agent
the original copy of a receipt evidencing payment thereof within 30 days after
such payment is made.

     3.5.2 In addition, the Borrowers hereby jointly and severally agree to pay
any present or future stamp or documentary taxes and any other excise or
property taxes, charges or similar levies which arise from any payment made
hereunder or under any Note or Facility LC Application or from the execution or
delivery of, or otherwise with respect to, this Agreement or any Note or
Facility LC Application ("Other Taxes").

                                    Page 28
<PAGE>

     3.5.3  The Borrowers hereby jointly and severally agree to indemnify the
Agent, the LC Issuer and each Lender for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed on amounts
payable under this Section 3.5) paid by the Agent, the LC Issuer or such Lender
and any liability (including penalties, interest and expenses) arising therefrom
or with respect thereto. Payments due under this indemnification shall be made
within 30 days of the date the Agent, the LC Issuer or such Lender makes demand
therefor pursuant to Section 3.6.

     3.5.4  Each Lender that is not incorporated under the Laws of the United
States of America or a state thereof (each a "Non-U.S. Lender") agrees that it
will, not less than ten Business Days after the date of this Agreement, (i)
deliver to each of the Borrowers and the Agent two duly completed copies of
United States Internal Revenue Service Form 1001 or 4224, certifying in either
case that such Lender is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income taxes, and
(ii) deliver to each of the Borrowers and the Agent a United States Internal
Revenue Form W-8 or W-9, as the case may be, and certify that it is entitled to
an exemption from United States backup withholding tax. Each Non-U.S. Lender
further undertakes to deliver to each of the Borrowers and the Agent (x)
renewals or additional copies of such form (or any successor form) on or before
the date that such form expires or becomes obsolete, and (y) after the
occurrence of any event requiring a change in the most recent forms so delivered
by it, such additional forms or amendments thereto as may be reasonably
requested by the Borrowers or the Agent. All forms or amendments described in
the preceding sentence shall certify that such Lender is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income taxes, unless an event (including without limitation any
change in treaty, Law or regulation) has occurred prior to the date on which any
such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly completing and
delivering any such form or amendment with respect to it and such Lender advises
the Borrowers and the Agent that it is not capable of receiving payments without
any deduction or withholding of United States federal income tax.

     3.5.5  For any period during which a Non-U.S. Lender has failed to provide
the Borrowers with an appropriate form pursuant to Section 3.5.4 above (unless
such failure is due to a change in treaty, Law or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
occurring subsequent to the date on which a form originally was required to be
provided), such Non-U.S. Lender shall not be entitled to indemnification under
this Section 3.5 with respect to Taxes imposed by the United States; provided
that, should a Non-U.S. Lender which is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to Taxes because of its failure
to deliver a form required under clause (iv), above, the Borrowers shall take
such steps as such Non-U.S. Lender shall reasonably request to assist such Non-
U.S. Lender to recover such Taxes.

     3.5.6  Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Note
pursuant to the Law of any relevant jurisdiction or any treaty shall deliver to
the Borrowers (with a copy to the Agent), at the time or times prescribed by
applicable Law, such properly completed and executed documentation prescribed by
applicable Law as will permit such payments to be made without withholding or at
a reduced rate.

                                    Page 29
<PAGE>

     3.5.7  If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political subdivision
thereof asserts a claim that the Agent did not properly withhold tax from
amounts paid to or for the account of any Lender (because the appropriate form
was not delivered or properly completed, because such Lender failed to notify
the Agent of a change in circumstances which rendered its exemption from
withholding ineffective, or for any other reason), such Lender shall indemnify
the Agent fully for all amounts paid, directly or indirectly, by the Agent as
tax, withholding therefor, or otherwise, including penalties and interest, and
including taxes imposed by any jurisdiction on amounts payable to the Agent
under this Section 3.5.7, together with all costs and expenses related thereto
(including attorneys fees and time charges of attorneys for the Agent, which
attorneys may be employees of the Agent). The obligations of the Lenders under
this Section 3.5.7 shall survive the payment of the Obligations and termination
of this Agreement.

     3.6.   Lender Statements; Survival of Indemnity. To the extent reasonably
            ----------------------------------------
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Loans to reduce any liability of the Borrowers to such
Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of
Eurodollar Advances under Section 3.3, so long as such designation is not, in
the judgment of such Lender, disadvantageous to such Lender. Each Lender shall
deliver a written statement of such Lender to the Borrowers (with a copy to the
Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such
written statement shall set forth in reasonable detail the calculations upon
which such Lender determined such amount and shall be final, conclusive and
binding on the Borrowers in the absence of manifest error. Determination of
amounts payable under such Sections in connection with a Eurodollar Loan shall
be calculated as though each Lender funded its Eurodollar Loan through the
purchase of a deposit of the type and maturity corresponding to the deposit used
as a reference in determining the Eurodollar Rate applicable to such Loan,
whether in fact that is the case or not. Unless otherwise provided herein, the
amount specified in the written statement of any Lender shall be payable on
demand after receipt by the Borrowers of such written statement. The obligations
of the Borrowers under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of
the Obligations and termination of this Agreement.

                                  ARTICLE IV

                             CONDITIONS PRECEDENT
                             --------------------

     4.1.   Initial Credit Extension. The Lenders shall not be required to make
            ------------------------
the initial Credit Extension hereunder unless the Borrowers have furnished the
following to the Agent with sufficient copies for the Lenders:

  (i)       This Agreement.

  (ii)      Copies of the articles or certificate of incorporation of each
            Borrower, together with all amendments, and a certificate of good
            standing, each certified by the appropriate governmental officer in
            its jurisdiction of incorporation or organization.

  (iii)     Copies certified by the Secretary or Assistant Secretary of each
            Borrower, of its by-laws (or partnership, operating or other
            management agreement) and of its Board

                                    Page 30
<PAGE>

          of Directors' (or partners' or members') resolutions and of
          resolutions or actions of any other body authorizing the execution of
          the Loan Documents to which such Borrower is a party.

   (iv)   Incumbency certificates, executed by the Secretary or Assistant
          Secretary of each Borrower, which shall identify by name and title and
          bear the signatures of the Authorized Officers and any other officers
          of such Borrower authorized to sign the Loan Documents to which such
          Borrower is a party, upon which certificate the Agent and the Lenders
          shall be entitled to rely until informed of any change in writing by
          such Borrower.

    (v)   A certificate, signed by the chief financial officer of the Borrowers,
          stating that on the initial Credit Extension Date no Default or
          Unmatured Default has occurred and is continuing.

   (vi)   If the initial Credit Extension will be the issuance of a Facility LC,
          a properly completed Facility LC Application.

  (vii)   A written opinion of the counsel of Borrowers, addressed to the Agent
          and Lenders and their counsel in substantially the form of Exhibit A-
          1, and the written opinions of the local counsel of Borrowers in the
          State of Mississippi addressed to the Agent and Lenders and their
          counsel in substantially the form of Exhibit A-2.

 (viii)   Any Notes requested by a Lender pursuant to Section 2.14.4 payable to
          the order of each such requesting Lender.

   (ix)   The Deeds of Trust, executed by the Borrowers, in a form satisfactory
          to the Agent, the Lenders and their counsel with respect to the
          Properties therein described, which are part of the Collateral, and
          such other agreements, documents and instruments as may be necessary
          and appropriate, in form and substance satisfactory to the Agent and
          the Lenders executed and delivered by the Borrowers, as mortgagors or
          assignors, in favor of the Agent, ratably for the Lenders, in order to
          create and perfect the Lender Liens in and to all Collateral described
          therein.

    (x)   [Intentionally Omitted]

   (xi)   The Pledge Agreement, executed by the Company in a form satisfactory
          to the Agent, the Lenders, and their counsels with respect to the
          Properties therein described, which are a part of the Collateral, and
          such other agreements, documents and instruments as may be necessary
          and appropriate, in a form and substance satisfactory to the Agent and
          the Lenders executed and delivered by the Company as debtor or
          assignor, in favor of the Agent, ratably for the Lenders, in order to
          create and perfect the Lender Liens in and to all the Collateral
          described therein.)

  (xii)   Written money transfer instructions, in substantially the form of
          Exhibit D, addressed to the Agent and signed by an Authorized Officer
          of the Borrowers, together with

                                    Page 31
<PAGE>

          such other related money transfer authorizations as the Agent may have
          reasonably requested.

 (xiii)   The Financial Statements described in Section 5.4, together with a
          closing balance sheet, as of May 31, 2000, reflecting working capital
          and capitalization consistent with the pro forma balance sheet
          previously delivered to Agent.

  (xiv)   Title Opinions from counsel with respect to the producing Oil and Gas
          Properties included in the Collateral and in a form acceptable to the
          Agent and the Lenders, covering at least ninety percent of the
          aggregate value of the Borrowers in such Oil and Gas Properties.

   (xv)   The Initial Reserve Report.

  (xvi)   [Intentionally Omitted]

 (xvii)   Documents (a) confirming the payment in full of all Indebtedness
          under the Existing Agreement, (b) assigning all Liens on any of the
          Borrowers' Property securing such Indebtedness to the Agent for the
          benefit of the Lenders, and (c) terminating the Existing Agreement.

(xviii)   Documents confirming (a) the consummation of the Company's proposed
          common equity offering and the receipt by the Company of gross
          proceeds of not less than $5,000,000 as evidenced by the documents and
          instruments governing the Guardian Indebtedness and confirming that no
          cash interest or principal payments will be paid thereon , (b) that
          the outstanding amount of the Amerada Hess Indebtedness does not
          exceed $1,500,000, (c) that all proceeds of the Company's common
          equity offering exceeding $5,000,000 have been applied to reduce the
          outstanding Veritas Indebtedness, and (d) that the Veritas
          Indebtedness has been converted to a note maturing in not less than 36
          months and requiring no cash interest or principal payments except as
          permitted herein.

  (xix)   Documents in form and substance satisfactory to Agent subordinating
          the Amerada Hess Indebtedness, the Guardian Indebtedness and the
          Veritas Indebtedness to the Obligations.

   (xx)   Completion of a satisfactory field audit by Agent with respect to
          Borrowers' accounts receivable and accounts payable.

  (xxi)   A certificate, signed by the President of the Borrowers stating that
          the representations and warranties contained in Article V hereof shall
          be true and correct on and as of the date of the making of the initial
          Credit Extension with the same effect as if made on and as of such
          date.

 (xxii)   The insurance certificate(s) described in Section 5.19.

                                    Page 32
<PAGE>

(xxiii)   There shall not have been, in the sole judgment of the Agent, any
          material adverse change in the financial condition, business, or
          operations of any Borrower.

 (xxiv)   Payment of all facility and administrative fees required to be paid
          pursuant to any Loan Document or any commitment agreement heretofore
          entered into and legal fees and disbursements of Agent's counsel.

  (xxv)   Documents in form and substance satisfactory to Agent establishing
          the Rate Management Transactions required pursuant to Section 6.25.

 (xxvi)   Such other documents as any Lender or its counsel may have reasonably
          requested.

     4.2. Each Credit Extension.  The Lenders shall not be required to make any
          ---------------------
Credit Extension unless on the applicable Credit Extension Date:

    (i)   There exists no Default or Unmatured Default.

   (ii)   The representations and warranties contained in Article V are true and
          correct as of such Credit Extension Date except to the extent any such
          representation or warranty is stated to relate solely to an earlier
          date, in which case such representation or warranty shall have been
          true and correct on and as of such earlier date.

  (iii)   There exists no litigation, arbitration, governmental investigation,
          proceeding or inquiry pending threatened against the Borrowers which,
          if adversely determined, could reasonably be expected to have a
          Material Adverse Effect.

   (iv)   All legal matters incident to the making of such Credit Extension
          shall be satisfactory to the Lenders and their counsel.

    (v)   There shall not have been, in the sole judgment of the Lenders, any
          change from any Borrower's financial condition and operation  as
          reflected in the Company's consolidated financial statements dated
          December 31, 1999, that would have a Material Adverse Effect on the
          financial condition, business or operations of any Borrower.

     Each Borrowing Notice or request for issuance of a Facility LC with respect
to each such Credit Extension shall constitute a representation and warranty by
the Borrowers that the conditions contained in Sections 4.2(i) and (ii) have
been satisfied.  Any Lender may require a duly completed compliance certificate
in substantially the form of Exhibit E as a condition to making a Credit
Extension.

                                   ARTICLE V

                        REPRESENTATIONS AND WARRANTIES
                        ------------------------------

     The Borrowers represent and warrant to the Lenders that:

                                    Page 33
<PAGE>

     5.1.  Existence and Standing.  Each Borrower is a corporation,
           ----------------------
partnership (in the case of Subsidiaries only) or limited liability company duly
and properly incorporated or organized, as the case may be, validly existing and
(to the extent such concept applies to such entity) in good standing under the
Laws of its jurisdiction of incorporation or organization and has all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted.  No Borrower has used or transacted business under any other
corporate or trade name in the five (5) year period preceding the date hereof.

     5.2.  Authorization and Validity. Each Borrower has the power and authority
           --------------------------
and legal right to execute and deliver the Loan Documents to which it is a party
and to perform its obligations thereunder. The execution and delivery by each
Borrower of the Loan Documents to which it is a party and the performance of its
obligations thereunder have been duly authorized by proper corporate
proceedings, and the Loan Documents to which each Borrower is a party constitute
legal, valid and binding obligations of such Borrower enforceable against such
Borrower in accordance with their terms, except as enforceability may be limited
by bankruptcy, insolvency or similar Laws affecting the enforcement of
creditors' rights generally.

     5.3.  No Conflict; Government Consent.    Neither the execution and
           -------------------------------
delivery by any Borrower of the Loan Documents to which it is a party, nor the
consummation of the transactions therein contemplated, nor compliance with the
provisions thereof will violate (i) any Law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on the Borrowers or (ii) any
Borrower's articles or certificate of incorporation, partnership agreement,
certificate of partnership, articles or certificate of organization, by-laws, or
operating or other management agreement, as the case may be, or (iii) the
provisions of any indenture, instrument or agreement to which any  Borrower is a
party or is subject, or by which it, or its Property, is bound, or conflict with
or constitute a default thereunder, or result in, or require, the creation or
imposition of any Lien in, of or on the Property of any Borrower pursuant to the
terms of any such indenture, instrument or agreement.  No order, consent,
adjudication, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, or other action in respect of
any governmental or public body or authority, or any subdivision thereof, which
has not been obtained by the Borrowers, is required to be obtained by the
Borrowers in connection with the execution and delivery of the Loan Documents,
the borrowings under this Agreement, the payment and performance by the
Borrowers of the Obligations or the legality, validity, binding effect or
enforceability of any of the Loan Documents.

     5.4.  Financial Statements.  The December 31, 1999 audited and March 31,
           --------------------
2000 unaudited consolidated financial statements of the Company and its
Subsidiaries heretofore delivered to the Lenders were prepared in accordance
with generally accepted accounting principles in effect on the date such
statements were prepared and fairly present the consolidated financial condition
and operations of the Company and its Subsidiaries at such date and the
consolidated results of their operations for the period then ended.

     5.5.  Material Adverse Change. Since December 31, 1999, there has been no
           -----------------------
change in the business, Property, prospects, condition (financial or otherwise)
or results of operations of any Borrower which could reasonably be expected to
have a Material Adverse Effect.

                                    Page 34
<PAGE>

     5.6.  Taxes.  The Borrowers have filed all United States federal tax
           -----
returns and all other tax returns which are required to be filed and have paid
all Taxes due pursuant to said returns or pursuant to any assessment received by
the Borrowers, except such Taxes, if any, as are being contested in good faith
and as to which adequate reserves have been provided in accordance with
Agreement Accounting Principles and as to which no Lien exists.  No tax liens
have been filed and no claims are being asserted with respect to any such Taxes.
The charges, accruals and reserves on the books of the Borrowers in respect of
any Taxes or other governmental charges are adequate. If any Borrower is a
limited liability company, each such limited liability company qualifies for
partnership tax treatment under United States federal tax law.

     5.7.  Litigation and Contingent Obligations.  There is no litigation,
           -------------------------------------
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrowers which could reasonably be expected to have a Material Adverse Effect
or which seeks to prevent, enjoin or delay the making of any Credit Extensions.
Other than any liability incident to any litigation, arbitration or proceeding
which is set forth on the Disclosure Schedule, the Borrowers have no material
Contingent Obligations not provided for or disclosed in the financial statements
referred to in Section 5.4.

     5.8.  Subsidiaries.  Schedule 5.8 contains an accurate list of all
           ------------
Subsidiaries of the Company as of the date of this Agreement, setting forth
their respective jurisdictions of organization and the percentage of their
respective capital stock or other ownership interests owned by the Company or
other Subsidiaries.  All of the issued and outstanding shares of capital stock
or other ownership interests of such Subsidiaries have been (to the extent such
concepts are relevant with respect to such ownership interests) duly authorized
and issued and are fully paid and non-assessable.

     5.9.  ERISA.  The Unfunded Liabilities of all Single Employer Plans do
           -----
not in the aggregate exceed $100,000.  Neither the Borrowers nor any other
member of the Controlled Group has incurred, or is reasonably expected to incur,
any withdrawal liability to Multiemployer Plans in excess of $100,000 in the
aggregate.  Each Plan complies in all material respects with all applicable
requirements of Law and regulations, no Reportable Event has occurred with
respect to any Plan, no Borrower nor any other member of the Controlled Group
has withdrawn from any Plan or initiated steps to do so, and no steps have been
taken to reorganize or terminate any Plan.

     5.10. Accuracy of Information.  No information, exhibit or report
           -----------------------
furnished by the Borrowers to the Agent or to any Lender in connection with the
negotiation of, or compliance with, the Loan Documents contained any material
misstatement of fact or omitted to state a material fact or any fact necessary
to make the statements contained therein not misleading.

     5.11. Regulation U.  Margin stock (as defined in Regulation U)
           ------------
constitutes less than 25% of the value of those assets of the Borrowers which
are subject to any limitation on sale, pledge, or other restriction hereunder.

     5.12. Material Agreements.  Except as set forth on Schedule 5.12, no
           -------------------
Borrower is a party to any agreement or instrument or subject to any charter or
other corporate restriction which could reasonably be expected to have a
Material Adverse Effect.  No Borrower is in default in the

                                    Page 35
<PAGE>

performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in (i) any agreement to which it is a party, which default
could reasonably be expected to have a Material Adverse Effect or (ii) any
agreement or instrument evidencing or governing Indebtedness.

     5.13. Compliance With Laws.  The Borrowers have complied with all
           --------------------
applicable statutes, rules, regulations, orders and restrictions of any domestic
or foreign government or any instrumentality or agency thereof having
jurisdiction over the conduct of their respective businesses or the ownership of
their respective Property, except for any failure to comply with any of the
foregoing which could not reasonably be expected to have a Material Adverse
Effect. The Borrowers have all licenses, permits, franchises, or other
governmental authorizations necessary for the ownership and operation of the Oil
and Gas Properties or the conduct of their respective business, and are in
compliance with the terms and conditions or all such licenses, permits,
franchises, or other governmental authorizations. The Oil and Gas Properties
(and properties unitized therewith) have been maintained, operated and developed
in a good and worker like manner and in conformity with all applicable Laws and
all rules, regulations and orders of all duly constituted Tribunals having
jurisdiction and in conformity with the provisions of all leases, subleases or
other contracts comprising a part of the Hydrocarbon Interests and other
contracts and agreements forming a part of the Oil and Gas Properties;
specifically in this connection, (i) after the Closing Date, no Oil and Gas
Property is subject to having allowable production reduced below the full and
regular allowable (including the maximum permissible tolerance) because of any
overproduction (whether or not the same was permissible at the time) prior to
the Closing Date; and (ii) none of the wells comprising a part of the Oil and
Gas Properties (or properties unitized therewith) are deviated from the vertical
more than the maximum permitted by applicable Laws and regulations, rules and
orders of any Tribunal having appropriate jurisdiction, and such wells are, in
fact, bottomed under and are producing from, and the wellbores are wholly
within, the Oil and Gas Properties (or in the case of wells located on
properties unitized therewith, such unitized properties).

     5.14.  Ownership/Title to the Property; Licenses; Liens.
            ------------------------------------------------

     5.14.1 Except as set forth on Schedule 5.14, on the date of this Agreement,
the Borrowers have good title, free of all Liens other than those permitted by
Section 6.16, to all of the Property (including but not limited to their
respective material Oil and Gas Properties) and assets reflected in the
Borrowers' most recent consolidated financial statements provided to the Agent
as owed by the Borrowers.  On the date of this Agreement, after giving full
effect to the Liens permitted under Section 6.16, the Borrowers own the net
interests in production attributable to the wells and units evaluated in the
Initial Reserve Report or the most recent Reserve Report furnished to the
Lenders pursuant to Section 6.1(xi).  The ownership of the Oil and Gas
Properties shall not in any material respect obligate the Borrowers to bear the
costs and expenses relating to the maintenance, development and operations of
each such Oil and Gas Property in any amount in excess of the working interest
of each Oil and Gas Property set forth in the Initial Reserve Report or the most
recent Reserve Report furnished to the Lenders pursuant to Section 6.1.  The
Borrowers have paid all royalties payable under the oil and gas leases to which
they are operator, except those contested in accordance with the terms of the
applicable joint operating agreement or otherwise contested in good faith by
appropriate proceedings.  Upon the delivery of each Reserve Report furnished to
the Lenders pursuant to Section 6.1, the statements made in the preceding
sentences of this section shall be true with respect to such Reserve Reports.
All information contained in the Initial Reserve Report

                                    Page 36
<PAGE>

or the most recent Reserve Report provided to the Lenders (whichever is most
recent) is true and correct in all material respects.

     5.14.2  The Borrowers possess all licenses, permits, franchises, patents,
copyrights, trademarks and trade names, and other intellectual property (or
otherwise possess the right to use such intellectual property without violation
of the rights of any other Person) which are necessary to carry out its business
as presently conducted and as presently proposed to be conducted hereafter, and
no Borrower is in violation in any material respect of the terms under which it
possesses such intellectual property or the right to use such intellectual
property.

     5.14.3  Upon filing of the Deeds of Trust with the Clerk of the County or
Parish where the Property thereby covered is located and the financing
statements with the appropriate governmental entity, the Collateral Documents
will constitute legal, valid and continuing perfected first liens on the
Collateral as security for the Obligation, free and clear of all other Liens,
except for the Liens permitted by Section 6.16.

     5.15.   Plan Assets; Prohibited Transactions.  No Borrower is an entity
             ------------------------------------
deemed to hold "plan assets" within the meaning of 29 C.F.R. (S) 2510.3-101 of
an employee benefit plan (as defined in Section 3(3) of ERISA) which is subject
to Title I of ERISA or any plan (within the meaning of Section 4975 of the
Code), and neither the execution of this Agreement nor the making of Credit
Extension hereunder gives rise to a prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Code.

     5.16    Environmental Matters.    As used in this section, "CERCLA" means
             ----------------------                              ------
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, and "CERCLIS" means the Comprehensive Environmental Response,
                       -------
Compensation and Liability Information System List of the Environmental
Protection Agency.  The Disclosure Schedule identifies (a) all environmental
audits, analyses, assessments, or occupational health studies (whether routine
or special) with regard to any Property ordered or undertaken by the Borrowers
or under the direction, suggestion of or by any government, lender or other
person with an interest in such Property, any insurer or any predecessor
landowner or lessee of such Property or predecessor in interest; (b) the results
of any and all tests or analyses of water, soil, air, buildings on or near any
Property, whether or not compliance was questioned or indicated which have been
taken or made in the period five (5) years prior to the date hereof, whether
conducted by the Borrowers or any predecessor landowner or lessee of the
Property, any government or any other person; (c) the results of and
circumstances surrounding any government inspection or audit of any Property or
each operating entity of the Borrowers whether routine or relating directly or
indirectly to its use of contamination or non-compliance with the Environmental
Laws; or (d) any claim or complaint concerning the Environmental Laws relative
to the Borrowers.   Except as set forth in the Disclosure Schedule or a
Disclosure Report:

     (i)  The Borrowers are conducting their businesses in compliance with all
          applicable Laws, including Environmental Laws, and have all permits,
          licenses, and authorizations required in connection with the conduct
          of their businesses.  The Borrowers are in compliance with the terms
          and conditions of all such permits, licenses, and authorizations, and
          are also in compliance with all other limitations,

                                    Page 37
<PAGE>

            restrictions, conditions, standards, prohibitions, requirements,
            obligations, schedules, and timetables contained in any applicable
            Environmental Law or in any regulation, code, law, order, decree,
            judgment, injunction, notice, or demand letter issued, entered,
            promulgated, or approved thereunder, except to the extent failure to
            comply could not have a Material Adverse Effect.

     (ii)   No notice, notification, demand, request for information, citation,
            summons, or order has been issued, no complaint has filed, no
            penalty has been assessed, and no investigation or review is pending
            or threatened by any Tribunal or any other Person with respect to
            (a) any alleged generation, treatment, storage, recycling,
            transportation, disposal, or Release of any Hazardous Materials by
            the Borrowers or on any Property owned by the Borrowers, (b) any
            material remedial action which might be needed to respond to any
            such alleged generation, treatment, storage, recycling,
            transportation, disposal, or Release, or (c) any alleged failure by
            the Borrowers to have any permit, license, or authorization required
            in connection with the conduct of their businesses or with respect
            to any such generation, treatment, storage, recycling,
            transportation, disposal, or Release.

     (iii)  No Borrower otherwise has any known material contingent liability in
            connection with any alleged generation, treatment, storage,
            recycling, transportation, disposal, or Release of Hazardous
            Materials.

     (iv)   No Borrower has handled any Hazardous Materials, other than a
            generator, on any properties now or previously owned or leased by
            the Borrowers to an extent that such handling has or could have a
            Material Adverse Effect; and

            (a)  no PCBs are or have been present at any properties now or
                 previously owned or leased by the Borrowers;

            (b)  no asbestos is or has been present at any properties now or
                 previously owned or leased by the Borrowers;

            (c)  there are no underground storage tanks for Hazardous Materials,
                 active or abandoned, at any properties now or previously owned
                 or leased by the Borrowers, and those tanks, if any, listed on
                 the Disclosure Schedule are presently and have been in the past
                 in good conditions and do not leak and the Borrowers are in
                 full compliance with the regulations set forth in 40 C.F.R.
                 Part 280, as amended;

            (d)  no Hazardous Materials have been Released, in a reportable
                 quantity, where such quantity has been established by statute,
                 ordinance, rule, regulation, or order, at, on or under any
                 properties now or previously owned or leased by the Borrowers;
                 and

                                    Page 38
<PAGE>

            (e)  no Hazardous Materials have been otherwise Released, at on or
                 under any properties now or previously owned or leased by the
                 Borrowers to an extent that such Release has or could have a
                 Material Adverse Effect.

     (v)    No Borrower has transported or arranged for the transportation of
            any Hazardous Materials to any location which is listed on the
            National Priorities List under CERCLA, listed for possible inclusion
            on the National Priorities List by the Environmental Protection
            Agency in CERCLIS, or listed on any similar state list or which is
            the subject of federal, state, or local enforcement actions, or
            other investigations which may lead to claims against the Borrowers
            for clean-up costs, remedial work, damages to natural resources or
            for personal injury claims, including, but not limited, to claims
            under CERCLA.

     (vi)   No Hazardous Material generated by the Borrowers has been recycled,
            treated, stored, disposed or released by the Borrowers at any
            location other than those listed in the Disclosure Schedule.

     (vii)  No oral or written notification of a Release of a Hazardous Material
            has been filed by or on behalf of the Borrowers (and to the best
            knowledge of the Borrowers, no such notification has been filed with
            respect to the Borrowers by any other Person), and no Property now
            or previously owned or leased by the Borrowers is listed or proposed
            for listing on the National Priority List promulgated pursuant to
            CERCLA, in CERCLIS, or on any other similar state list of sites
            requiring investigation or clean-up.

     (viii) There are no Liens arising under or pursuant to any Environmental
            Laws on any of the real properties or properties owned or leased by
            the Borrowers, and no government actions have been taken or are in
            process which could subject any of such properties to such Liens;
            nor would the Borrowers be required to place any notice or
            restrictions relating to the presence of Hazardous Materials at any
            properties owned by it in any deed to such properties.

     (ix)   There have been no environmental investigations, studies, audits,
            tests, review, no other analyses conducted by or which are in the
            possession of the Borrowers in relation to any properties or
            facility now or previously owned or leased by the Borrowers, which
            have not been made available to Agent.

     5.17.  Investment Company Act. No Borrower is an "investment company" or
            ----------------------
a company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.

     5.18.  Public Utility Holding Company Act; Federal Power Act.  No Borrower
            -----------------------------------------------------
is a "holding company" or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act of 1935,
as amended, or subject to the Federal Power Act or any other

                                    Page 39
<PAGE>

Law relating to common contract carriers or the sale of electricity, gas, steam,
water, or other public utility.

     5.19.  Insurance.  The certificate signed by the President or Chief
            ---------
Financial Officer of the Borrowers, that attests to the existence and adequacy
of, and summarizes, the property and casualty insurance program carried by the
Borrowers with respect to themselves and that has been furnished by the
Borrowers to the Agent and the Lenders, is complete and accurate.  This summary
includes the insurer's or insurers' name(s), policy number(s), expiration
date(s), amount(s) of coverage, type(s) of coverage, exclusion(s), and
deductibles.  This summary also includes similar information, and describes any
reserves, relating to any self-insurance program that is in effect.

     5.20.  Solvency.
            --------

     5.20.1 Immediately after the consummation of the transactions to occur on
the date hereof and immediately following the making of each Loan, if any, made
on the date hereof and after giving effect to the application of the proceeds of
such Loans, (i) the fair value of the assets of the Borrowers on a consolidated
basis, at a fair valuation, will exceed the debts and liabilities, subordinated,
contingent or otherwise, of the Borrowers on a consolidated basis; (ii) the
present fair saleable value of the Property of the Borrowers on a consolidated
basis will be greater than the amount that will be required to pay the probable
liability of the Borrowers on a consolidated basis on their debts and other
liabilities, subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (iii) the Borrowers on a consolidated
basis will be able to pay their debts and liabilities, subordinated, contingent
or otherwise, as such debts and liabilities become absolute and matured; and
(iv) the Borrowers on a consolidated basis will not have unreasonably small
capital with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted after the date
hereof.

     5.20.2 No Borrower intends to, and does not believe that it will, incur
debts beyond its ability to pay such debts as they mature, taking into account
the timing of and amounts of cash to be received by it and the timing of the
amounts of cash to be payable on or in respect of its Indebtedness.

     5.21.  Burdensome Provisions. No Borrower is a party to any agreement or
            ---------------------
instrument containing any burdensome or uncustomary provisions, or subject to
any charter or other corporate restrictions or to any judgment, order, writ,
injunction, decree, award, rule or regulation, which will or could cause a
Material Adverse Effect.

     5.22.  Relationship with the Lenders.  No Borrower nor any Person having
            -----------------------------
"control" (as that term is defined in 12 U.S.C. (S) 375b(9) or in regulations
promulgated pursuant thereto) of any Borrower is an "executive officer,"
"director," or "principal shareholder" (as those terms are defined in 12 U.S.C.
(S) 375b(8) or (9) or in regulations promulgated pursuant thereto) of any
Lender, or a bank holding company of which Lender is a Subsidiary or of any
Subsidiary of a bank holding company of which any Lender is a Subsidiary.

                                    Page 40
<PAGE>

     5.23.  Principal Office. The principal place of business, the chief
            ----------------
executive office and the place at which the books and records of the Borrowers
are located at the address of the Borrowers set forth on the signature pages
hereto.

     5.24.  Full Disclosure. Neither the Loan Documents nor any other agreement,
            ---------------
document, certificate or statement furnished to the Lenders by or on behalf of
the Borrowers in connection with the transactions contemplated in any of the
Loan Documents contains any untrue statement of material fact or omits to state
a material fact necessary in order to make statements contained herein or
therein not misleading. There are no significant material facts or conditions
relating to the making of Advances, any of the Collateral and/or the financial
condition and business of the Borrowers which could, collectively or
individually, cause a Material Adverse Effect, and which have not been fully
disclosed, in writing, to the Lenders. There are no statements or conclusions in
any Reserve Report which are based upon or include misleading information or
fail to take into account material information regarding the matter reported
therein, it being understood that each Reserve Report is necessarily based upon
professional opinions, estimates, projections, and that Borrowers do not warrant
that such opinions, estimates, and projections will ultimately prove to have
been accurate. The Borrowers have heretofore delivered to each Lender true,
correct and complete copies of the Initial Reserve Report. All writings
heretofore or hereafter exhibited or delivered to the Lenders by or on behalf of
the Borrowers are and will be genuine and in all respects what they purport to
be.

     5.25.  Gas Imbalances.  As of the date of this Agreement, except as set
            --------------
forth on the Disclosure Schedule, on a net basis there are no gas imbalances,
take or pay or other prepayments with respect to the Borrowers' Oil and Gas
Properties which would require the Borrowers to deliver Hydrocarbons produced
from the Borrowers' Oil and Gas Properties at some future time without then or
thereafter receiving full payment therefor.

     5.26.  Development Drilling.  No Borrower has incurred any obligation for
            --------------------
development or exploratory drilling.

     5.27.  No Default. No event has occurred and is continuing which
            ----------
constitutes a Default.

                                  ARTICLE VI

                                   COVENANTS
                                   ---------

     During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:

     6.1.   Financial Reporting.  The Borrowers will maintain a system of
            -------------------
accounting established and administered in accordance with generally accepted
accounting principles, and furnish to the Lenders:

     (i)    Within 90 days after the close of each of its fiscal years, an
            unqualified audit report certified by independent certified public
            accountants acceptable to the Lenders, prepared in accordance with
            Agreement Accounting Principles on a consolidated and consolidating
            basis (consolidating statements need not be certified by such

                                    Page 41
<PAGE>

            accountants) for the Company and its Subsidiaries, including balance
            sheets as of the end of such period, related profit and loss and
            reconciliation of surplus statements, and a statement of cash flows,
            accompanied by (a) any management letter prepared by said
            accountants, and (b) a certificate of said accountants that, in the
            course of their examination necessary for their certification of the
            foregoing, they have obtained no knowledge of any Default or
            Unmatured Default, or if, in the opinion of such accountants, any
            Default or Unmatured Default shall exist, stating the nature and
            status thereof.

     (ii)   Within 45 days after the close of the first three quarterly periods
            of each of its fiscal years, for the Company and its Subsidiaries,
            consolidated and consolidating unaudited balance sheets as at the
            close of each such period and consolidated and consolidating profit
            and loss and reconciliation of surplus statements and a statement of
            cash flows for the period from the beginning of such fiscal year to
            the end of such quarter, all certified by its chief financial
            officer.

     (iii)  As soon as available, but in any event within 30 days after the
            beginning of each fiscal year of the Company, a copy of the plan and
            forecast (including a projected consolidated and consolidating
            balance sheet, income statement and funds flow statement) of the
            Company for such fiscal year.

     (iv)   Together with the financial statements required under Sections
            6.1(i) and (ii), a compliance certificate in substantially the form
            of Exhibit E signed by its chief financial officer showing the
            calculations necessary to determine compliance with this Agreement
            and stating that no Default or Unmatured Default exists, or if any
            Default or Unmatured Default exists, stating the nature and status
            thereof.

     (v)    Within 270 days after the close of each fiscal year, a statement of
            the Unfunded Liabilities of each Single Employer Plan, certified as
            correct by an actuary enrolled under ERISA.

     (vi)   As soon as possible and in any event within 10 days after the
            Borrowers knows that any Reportable Event has occurred with respect
            to any Plan, a statement, signed by the chief financial officer of
            the Borrowers, describing said Reportable Event and the action which
            the Borrowers propose to take with respect thereto.

     (vii)  As soon as possible and in any event within 10 days after receipt by
            the Borrowers, a copy of (a) any notice or claim to the effect that
            the Borrowers are or may be liable to any Person as a result of the
            release by the Borrowers or any other Person of any toxic or
            hazardous waste or substance into the environment, and (b) any
            notice alleging any violation of any federal, state or local
            environmental, health or safety Law or regulation by the Borrowers.

     (viii) Promptly upon the furnishing thereof to the shareholders of the
            Borrowers, copies of all financial statements, reports and proxy
            statements so furnished.

                                    Page 42
<PAGE>

     (ix)   Promptly upon the filing thereof, copies of all registration
            statements and annual, quarterly, monthly or other regular reports
            which the Borrowers file with the Securities and Exchange
            Commission.

     (x)    Such other information (including non-financial information) as the
            Agent or any Lender may from time to time reasonably request.

     (xi)   By May 15/th/ of each year, a Reserve Report prepared by Miller and
            Lents Limited or other independent petroleum engineer chosen by the
            Borrowers and acceptable to the Required Lenders (the "Independent
            Engineer"), which report shall be dated as of January 1 of such
            year, concerning the Oil and Gas Properties and interests owned by
            Borrowers which are located in or offshore of the United States and
            which have attributable to them proved oil or gas reserves. This
            report shall be satisfactory to Agent, shall contain sufficient
            information to enable the Borrowers to meet the reporting
            requirements concerning oil and gas reserves contained in
            Regulations S-K and S-X promulgated by the Securities and Exchange
            Commission, shall take into account any "over-produced" status under
            gas balancing arrangements, and shall contain information and
            analysis comparable in scope to that contained in the Initial
            Reserve Report, including the proven oil and gas reserves of the
            Borrowers as of the date of such report, any updated production
            history of the proven oil and gas reserves of the Borrowers as of
            such date, the discounted net present value (at a rate acceptable to
            the Lenders), the lease operating expenses attributable to the Oil
            and Gas Properties of the Borrowers for the prior twelve month
            period, together with any other information as to the operations of
            the Borrowers as reasonably requested by the Lenders. Together with
            such report, the Borrowers shall furnish to the Lenders such
            additional data and information concerning pricing, quantities, or
            volume of production from or attributable to the Oil and Gas
            Properties with respect thereto as the Lenders may reasonably
            request. This report shall distinguish (or shall be delivered
            together with a certificate from an appropriate officer of the
            Borrowers which distinguishes) those properties treated in the
            report which are Collateral from those properties treated in the
            report which are not Collateral.

     (xii)  By November 15/th/ of each year, and promptly following notice of an
            additional Borrowing Base redetermination under Section 2.2, a
            Reserve Report prepared as of the preceding October 1/st/ (or the
            first day of the preceding calendar month in the case of an
            additional redetermination) by petroleum engineers who are employees
            of the Borrowers, together with an accompanying report on Oil and
            Gas Property sales, Oil and Gas Property purchases and changes in
            categories, both in the same form and scope as the reports in clause
            (xi) above.

     (xiii) As soon as available, and in any event within forty-five (45) days
            after the end of each month, a report describing by lease or unit
            the gross volume of production and sales attributable to production
            during such month from the Oil and Gas Properties constituting
            Collateral and describing the related severance taxes, other taxes,
            leasehold operating expenses and capital costs attributable thereto
            and incurred during such month.

                                    Page 43
<PAGE>

     (xiv) As soon as available, and in any event within forty-five (45) days
           after the end of each fiscal quarter, a report setting forth volumes,
           prices and margins for all marketing activities of the Borrowers,

     (xv)  As soon as available, and in any event within forty-five days after
           the end of each fiscal quarter, a list, by name and address, of those
           Persons who have purchased production during such fiscal quarter from
           the Oil and Gas Properties constituting Collateral, giving each such
           purchaser's owner number for the Borrowers and each such purchaser's
           property number for each such mortgaged Oil and Gas Property.

     6.2.  Use of Proceeds. The Borrowers will use the proceeds of the Credit
           ---------------
Extensions for working capital, operating expenses and to refinance the
Indebtedness under the Existing Agreement. The Borrowers will not use any of the
proceeds of the Advances to purchase or carry any "margin stock" (as defined in
Regulation U) or extend credit to others for the purpose of purchasing or
repurchasing or carrying margin stock.

     6.3.  Notice of Default. The Borrowers will give prompt notice in writing
           -----------------
to the Lenders of the occurrence of any Default or Unmatured Default and of any
other development, financial or otherwise, which could reasonably be expected to
have a Material Adverse Effect.

     6.4.  Conduct of Business. Each Borrower will carry on and conduct its
           -------------------
business in substantially the same manner and in substantially the same fields
of enterprise as it is presently conducted and do all things necessary to remain
duly incorporated or organized, validly existing and (to the extent such concept
applies to such entity) in good standing as a domestic corporation, partnership
or limited liability company in its jurisdiction of incorporation or
organization, as the case may be, and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is conducted,
except where the failure to maintain such authority could not reasonably be
expected to have a Material Adverse Effect on the Company.

     6.5.  Taxes.  Each Borrower will timely file complete and correct United
           -----
States federal and applicable foreign, state and local tax returns required by
Law and pay when due all Taxes, assessments and governmental charges and levies
upon it or its income, profits or Property, except those which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been set aside in accordance with Agreement Accounting
Principles. At any time that any Borrower is organized as a limited liability
company, each such limited liability company will qualify for partnership tax
treatment under United States federal tax law.

     6.6   Trade Liabilities.  Each Borrower will timely pay all liabilities
           -----------------
owed by it on ordinary trade terms to vendors, suppliers, and other Persons
providing goods and services used by it in the ordinary course of its business,
except those which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves have been set aside in accordance
with Agreement Accounting Principles.

     6.7.  Insurance.  Each Borrower will maintain with financially sound and
           ---------
reputable insurance companies insurance on all their Property in such amounts
and covering such risks as is

                                    Page 44
<PAGE>

consistent with sound business practice, and the Borrowers will furnish to any
Lender upon request full information as to the insurance carried.

     6.8.  Compliance with Laws.  Each Borrower will comply with all Laws,
           --------------------
rules, regulations, orders, writs, judgments, injunctions, decrees or awards to
which it may be subject including, without limitation, all Environmental Laws.

     6.9.  Maintenance of Properties.  Each Borrower will do all things
           -------------------------
necessary to maintain, preserve, protect and keep its Property in good repair,
working order and condition in accordance with good industry practices all of
the Collateral and the Oil and Gas Properties owned by Borrowers including,
without limitation, all equipment, machinery and facilities, and will make all
necessary and proper repairs, renewals and replacements so that its business
carried on in connection therewith may be properly conducted at all times. The
state and condition of the Collateral and the Oil and Gas Properties owned by
the Borrowers will be fully preserved and maintained, except to the extent a
portion of such Oil and Gas Properties is no longer capable of producing
Hydrocarbons in economically reasonable amounts. Each Borrower will promptly pay
and discharge or cause to be paid and discharged all delay Rentals, royalties,
expenses and debt accruing under, and perform or cause to be performed each and
every act, matter or thing required by, each and all of the assignments, deeds,
leases, sub-leases, contracts and agreements affecting the Borrowers' interests
in its Oil and Gas Properties and will do all other things necessary to keep
unimpaired the Borrowers' rights with respect thereto and prevent any forfeiture
thereof or a default thereunder, except to the extent a portion of the Oil and
Gas Properties is no longer capable of producing Hydrocarbons in economically
reasonable amounts. The Borrowers will operate the Oil and Gas Properties owned
by the Borrowers or cause such Oil and Gas Properties to be operated in a
careful and efficient manner in accordance with the practices of the industry
and in compliance with all applicable contracts and agreements and in compliance
in all material respects with all Governmental Requirements.

     6.10  Inspection. Each Borrower will permit the Agent and the Lenders, by
           ----------
their respective representatives and agents, to inspect any of the Property,
books and financial records of the Borrowers, to examine and make copies of the
books of accounts and other financial records of the Borrowers, and to discuss
the affairs, finances and accounts of the Borrowers with, and to be advised as
to the same by, their respective officers at such reasonable times and intervals
as the Agent or any Lender may designate.

     6.11.  Dividends and Payments on Indebtedness. No Borrower will declare or
            --------------------------------------
pay any dividends or make any distributions on its capital stock (other than
dividends payable in its own capital stock) or redeem, repurchase or otherwise
acquire or retire any of its capital stock at any time outstanding, except that
any Borrower may declare and pay dividends or make distributions to another
Borrower. Except as provided below, no Borrower shall make any payments of
principal or interest on the Subordinated Indebtedness. Notwithstanding the
foregoing: (a) payments of principal and/or interest on the Veritas Indebtedness
shall be permitted provided that (i) they are limited to an amount which would
result in the Obligations not exceeding more than 80% of the Net Borrowing Base
following the making of such payments, or (ii) made out of the net proceeds of
equity offerings of the Company other than the first $5,000,000 in equity issued
to Guardian Energy Management Corp.; and (b) scheduled payments of principal and
interest on the Amerada Hess Indebtedness

                                    Page 45
<PAGE>

provided that no Default shall have occurred and be continuing at the time of,
or result from, any such payment.

     6.12.  Indebtedness.  No Borrower will directly or indirectly, create,
            ------------
incur or suffer to exist any Indebtedness, except:

     (i)    The Loans and the Reimbursement Obligations.

     (ii)   Indebtedness existing on the date hereof and described in Schedule
            6.12.

     (iii)  Indebtedness arising under Rate Management Transactions permitted
            under Section 6.25.

     (iv)   Indebtedness among Borrowers subordinated to the Obligations on
            terms and conditions satisfactory to the Agent and the Required
            Lenders.

     (v)    The Amerada Hess Indebtedness, the Guardian Indebtedness and the
            Veritas Indebtedness, provided such Indebtedness is subordinated to
            the Obligations on terms and conditions satisfactory to the Agent
            and the Required Lenders.

     (vi)   Indebtedness associated with bonds or surety obligations required by
            any governmental or regulatory authority in connection with the
            ownership or operating of the Oil and Gas Properties in the ordinary
            course of business.

     6.13.  Acquisitions and Merger. No Borrower will, directly or indirectly,
            -----------------------
acquire all or any substantial portion of the property, assets or stock of, or
interest in, any Person, or merge or consolidate with or into any other Person,
except that a Borrower may merge into another Borrower.

     6.14.  Sale of Assets.  No Borrower will, directly or indirectly, lease,
            --------------
sell or otherwise dispose of its Property to any other Person, except:

     (i)    Sales of inventory in the ordinary course of business.

     (ii)   Leases, sales or other dispositions of its Property that, together
            with all other Property of the Borrowers previously leased, sold or
            disposed of (other than inventory in the ordinary course of
            business) as permitted by this Section during the twelve-month
            period ending with the month in which any such lease, sale or other
            disposition occurs, do not constitute a Substantial Portion of the
            Property of the Borrowers.

Notwithstanding the foregoing, without the prior consent of the Lenders, no
Borrower will sell, assign, farmout, convey or otherwise transfer any Oil and
Gas Property or any interest in any Oil and Gas Property or any other
Collateral, except for (a) the sale of Hydrocarbons in the ordinary course of
business; (b) farmouts of undeveloped acreage and assignments in connection with
such farmouts; (c) the sale or transfer of equipment that is no longer necessary
for the business of the Borrowers or is replaced by equipment of at least
comparable value and use; and (d) during any consecutive twelve

                                    Page 46
<PAGE>

month period, sales in ordinary course of business of Oil and Gas Properties
which shall not exceed $100,000 in the aggregate, and will not materially impair
or diminish the value of the Collateral or the Borrowers' financial condition.

     6.15.  Investments and Acquisitions. No Borrower will, directly or
            ----------------------------
indirectly, make or suffer to exist any Investments (including without
limitation, loans and advances to, and other Investments in, Subsidiaries), or
commitments therefor, or to create any Subsidiary or to become or remain a
partner in any partnership or joint venture, or to make any Acquisition of any
Person, except:

     (i)    Cash Equivalent Investments.

     (ii)   Existing Investments in Subsidiaries and other Investments in
            existence on the date hereof and described in Schedule 6.15.

     6.16.  Liens. No Borrower will create, incur, or suffer to exist any Lien
            -----
in, of or on the Property of the Borrowers, except:

     (i)    Liens for taxes, assessments or governmental charges or levies on
            its Property if the same shall not at the time be delinquent or
            thereafter can be paid without penalty, or are being contested in
            good faith and by appropriate proceedings and for which adequate
            reserves in accordance with Agreement Accounting Principles shall
            have been set aside on its books.

     (ii)   Liens imposed by Law, such as carriers', warehousemen's and
            mechanics' liens and other similar liens arising in the ordinary
            course of business which secure payment of obligations not more than
            60 days past due.

     (iii)  Liens arising out of pledges or deposits under worker's compensation
            Laws, unemployment insurance, old age pensions, or other social
            security or retirement benefits, or similar legislation.

     (iv)   Utility easements, building restrictions and such other encumbrances
            or charges against real property as are of a nature generally
            existing with respect to properties of a similar character and which
            do not in any material way affect the marketability of the same or
            interfere with the use thereof in the business of the Borrowers.

     (v)    Liens in favor of the Agent, for the benefit of the Lenders, granted
            pursuant to any Collateral Document.

     6.17.  Capital Expenditures.  No Borrower will expend, or be committed to
            --------------------
expend, Capital Expenditures in excess of the amount of Capital Expenditures
approved by Required Lenders as set forth in the most-recent annual budget
furnished to Agent and Lenders pursuant to Section 6.1(iii).

     6.18.  Rentals. No Borrower will create, incur or suffer to exist
            -------
obligations for Rentals in excess of $500,000 during any one fiscal year on a
non-cumulative basis in the aggregate for the

                                    Page 47
<PAGE>

Borrowers; provided, however, the foregoing limitations shall not apply to oil
and gas leases entered into in the ordinary course of business.

     6.19.  Affiliates. No Borrower will enter into any transaction (including,
            ----------
without limitation, the purchase or sale of any Property or service) with, or
make any payment or transfer to, any Affiliate except in the ordinary course of
business and pursuant to the reasonable requirements of the Borrowers' business
and upon fair and reasonable terms no less favorable to the Borrowers than the
Borrowers would obtain in a comparable arms-length transaction.

     6.20.  Agreement to Deliver Collateral Documents. The Borrowers agree to
            -----------------------------------------
deliver to deliver, to further secure the Obligations whenever requested by the
Agent in its sole and absolute discretion, deeds of trust, mortgages, chattel
mortgages, security agreements, financing statements and other Collateral
Documents in form and substance satisfactory to the Agent for the purpose of
granting, confirming, and perfecting first and prior liens or security interests
in any real or personal Property now owned or hereafter acquired by the
Borrowers. The Borrowers also agree to deliver, whenever requested by the Agent
in its sole and absolute discretion, favorable title opinions from legal counsel
acceptable to the Agent with respect to any of the Borrowers' Oil and Gas
Properties designated by the Agent, based upon abstract or record examinations
to dates acceptable to the Agent and (i) stating that such Person has good and
defensible title to such properties and interests, free and clear of all Liens
other than Liens permitted under Section 6.16, (ii) confirming that such
properties and interests are subject to Collateral Documents securing the
Obligations that constitute and create legal, valid and duly perfected first
deed of trust or mortgage liens in such properties and interests and first
priority assignments of and security interests in the oil and gas attributable
to such properties and interests and the proceeds thereof, and (iii) covering
such other matters as the Agent may request.

     6.21.  Maintenance of Liens.  The Borrowers will perform such acts and
            --------------------
duly authorize, execute, acknowledge, deliver, file and record such additional
assignments, security agreements, deeds of trust, mortgages and other
agreements, documents, instruments and certificates as the Lenders may
reasonably deem necessary or appropriate in order to perfect and maintain the
Liens in favor of the Lenders and preserve and protect the Rights of the
Lenders.

     6.22.  Title Information.  By May 15/th/ and November 15/th/ of each year,
            -----------------
the Borrowers will deliver acquisition summaries, title opinions and due
diligence reports prepared in connection with the acquisition and the financing
of the acquisition of such Oil and Gas Properties prepared for the Borrowers or
the Person financing such acquisition and such additional title information in
form and substance acceptable to the Lenders as is requested so that the Lenders
shall have received, together with the title information previously received by
the Lenders, satisfactory title information covering Oil and Gas Properties
representing ninety percent (90%) of the value of such Oil and Gas Properties as
set forth in such Reserve Report, as such value is set forth therein.

     6.23.  Production Proceeds.  Notwithstanding that, by the terms of the
            -------------------
various Loan Documents, the Borrowers are and will be assigning to the Agent and
the Lenders all of the "Production Proceeds" (as defined therein) accruing to
the Property covered thereby, so long as no Default has occurred the Borrowers
may continue to receive from the purchasers of production all such Production
Proceeds, subject, however, to the Liens created under the Loan Documents, which

                                    Page 48
<PAGE>

Liens are hereby affirmed and ratified.  Upon the occurrence of a Default, the
Agent and the Lenders may exercise all rights and remedies granted under the
Loan Documents, including the right to obtain possession of all Production
Proceeds then held by the Borrowers or to receive directly from the purchasers
of production all other Production Proceeds.  In no case shall any failure,
whether purposed or inadvertent, by the Agent or the Lenders to collect directly
any such Production Proceeds constitute in any way a waiver, remission or
release of any of their rights under the Loan Documents, nor shall any release
of any Production Proceeds by the Agent or the Lenders to the Borrowers or any
Subsidiary constitute a waiver, remission, or release of any other Production
Proceeds or of any rights of the Agent or the Lenders to collect other
Production Proceeds thereafter.

     6.24.  General and Administrative Expense Limitation.  The Borrowers will
            ---------------------------------------------
not permit, on a combined basis, as of the close of any fiscal quarter, general
and administrative expenses of the Borrowers net of all COPAS and other expense
recoveries for the preceding four quarters, determined in accordance with the
Agreement Accounting Principles, to exceed $750,000 for such fiscal quarter.

     6.25.  Rate Management Transactions.  The Borrowers will not be a party
            ----------------------------
to or in any manner be liable on any Rate Management Transactions except:

     (i)    contracts entered into with the purpose of fixing prices on oil or
            gas expected to be produced by the Borrowers, provided that at all
            times: (a) no such contract fixes a price for a term of more than
            twelve (12) months; (b) the aggregate monthly production covered by
            all such contracts (determined, in the case of contracts that are
            not settled on a monthly basis, by a monthly proration acceptable to
            the Agent) for any single month does not in the aggregate exceed
            seventy-five percent (75%) of the Borrowers' aggregate Projected Oil
            and Gas Production anticipated to be sold in the ordinary course of
            such Persons' businesses for such month, (c) no such contract
            requires the Borrowers to put up money, assets, letters of credit or
            other security against the event of its non performance prior to
            actual default by such Person in performing its obligations
            thereunder, and (d) each such contract is with a counterparty or has
            a guarantor of the obligation of the counterparty who (unless such
            counterparty is a Lender or one of its Affiliates) at the time the
            agreement is made has long-term obligations rated AA or AA2 or
            better, respectively, by either Rating Agency or is an investment
            grade-rated industry participant. As used in this subsection, the
            term "Projected Oil and Gas Production" means the projected
            production of oil or gas (measured by volume unit or BTU equivalent,
            not sales price) for the term of the contracts or a particular
            month, as applicable, from properties and interests owned by the
            Borrowers which are located in or offshore of the United States and
            which have attributable to them proved oil or gas reserves, as such
            production is projected in the most recent report delivered pursuant
            to Section 6.1, after deducting projected production from any
            properties or interests sold or under contract for sale that had
            been included in such report and after adding projected production
            from any properties or interests that had not been reflected in such
            report but that are reflected in a separate or supplemental reports
            meeting the requirements of Section 6.1 above and otherwise are
            satisfactory to the Agent.

                                    Page 49
<PAGE>

     (ii)   contracts entered into by the Borrowers with the purpose and effect
            of fixing interest rates on a principal amount of indebtedness of
            such Person that is accruing interest at a variable rate, provided
            that (a) the aggregate notional amount of such contracts never
            exceeds seventy-five percent (75%) of the anticipated outstanding
            principal balance of the indebtedness to be hedged by such contracts
            or an average of such principal balances calculated using a
            generally accepted method of matching interest swap contracts to
            declining principal balances, (b) the floating rate index of each
            such contract generally matches the index used to determine the
            floating rates of interest on the corresponding indebtedness to be
            hedged by such contract and (c) each such contract is with a
            counterparty or has a guarantor of the obligation of the
            counterparty who (unless such counterparty is a Lender or one of its
            Affiliates) at the time the contract is made has long-term
            obligations rated AA or AA2 or better, respectively, by either
            Rating Agency or is an investment grade-rated industry participant.

The Borrowers shall at all times maintain Rate Management Transactions
consisting of contracts entered into with the purpose of fixing prices on oil or
gas expected to be produced by the Borrowers (a) with a term of not less than
nine (9) months, and (b) covering aggregate monthly production (determined, in
the case of contracts that are not settled on a monthly basis, by a monthly
proration acceptable to the Agent) for any single month of not less than fifty
percent (50%) of the Borrowers' aggregate Projected Oil and Gas Production
anticipated to be sold in the ordinary course of such Persons' businesses for
such month.

     6.26.  Operating Leases. No Borrower will enter into or remain liable
            ----------------
upon any Operating Lease, except for Operating Leases which have Operating Lease
Obligations of not more than $250,000 at any one time outstanding.

     6.27.  Sale of Accounts. No Borrower will sell or otherwise dispose of
            ----------------
any notes receivable or accounts receivable, with or without recourse.

     6.28.  Sale and Leaseback Transactions and other Off-Balance Sheet
            -----------------------------------------------------------
Liabilities. No Borrower will enter into or suffer to exist any (i) Sale and
-----------
Leaseback Transaction or (ii) any other transaction pursuant to which it incurs
or has incurred Off-Balance Sheet Liabilities, except for Rate Management
Obligations permitted to be incurred under the terms of Section 6.25.

     6.29.  Contingent Obligations.  No Borrower will make or suffer to exist
            ----------------------
any Contingent Obligation (including, without limitation, any Contingent
Obligation with respect to the obligations of a Subsidiary), except (i) by
endorsement of instruments for deposit or collection in the ordinary course of
business, and (ii) the Reimbursement Obligations.

     6.30.  Letters of Credit. No Borrower will apply for or become liable upon
            -----------------
or in respect of any Letter of Credit other than Facility LCs.

     6.31.  Financial Contracts. No Borrower will enter into or remain liable
            -------------------
upon any Financial Contract, except: Rate Management Transactions required under
Section 6.25.

                                    Page 50
<PAGE>

     6.32.     Financial Covenants. For purposes of calculating the following
               -------------------
financial covenants, Borrowers may make such calculations assuming the Guardian
Indebtedness has been converted into equity of the Company:

     6.32.1    Interest Coverage Ratio. The Company will not permit the ratio
               -----------------------
of (i) Consolidated EBITDA to (ii) Consolidated Interest Expense, determined as
of (a) December 31, 2000, for the two fiscal quarter period ending on such date,
(b) March 31, 2000, for the three fiscal quarter period ending on such date, and
(c) thereafter, as of the end of each of its fiscal quarters for the then most-
recently ended four fiscal quarters, to be less than 3.0 to 1.0.

     6.32.2    Minimum Net Worth. The Company will at all times maintain
               -----------------
Consolidated Net Worth of not less than the sum of (i) $26,000,000, plus (ii)
75% of Consolidated Net Income earned in each fiscal quarter beginning with the
quarter ending June 30, 2000 (without deduction for losses), plus (iii) 50% of
the net proceeds of any offering, sale, or other transfer of any capital stock
or other equity securities of any kind of the Borrowers after the date hereof.

     6.32.3    Current Ratio. The Company will not permit the ratio of (i) the
               -------------
Company's consolidated current assets to consolidated current liabilities to be
less than 1.0 to 1.0 at any time.  For purposes of this section, (a) the
Company's consolidated current assets will include the Available Borrowing Base
then available to be borrowed and (b) the Company's consolidated current
liabilities will exclude the Obligations and non-current suspended receivables.

     6.33      Subordinated Indebtedness.  No Borrower shall amend the terms and
               -------------------------
conditions of  any documents or instruments evidencing the Subordinated
Indebtedness.

                                  ARTICLE VII

                                   DEFAULTS
                                   --------

     The occurrence of any one or more of the following events shall constitute
a Default:

     7.1.      Any representation or warranty made or deemed made by or on
behalf of any Borrower to the Lenders or the Agent under or in connection with
this Agreement, any Credit Extension, or any certificate or information
delivered in connection with this Agreement or any other Loan Document shall be
materially false on the date as of which made.

     7.2.      Nonpayment of principal of any Loan when due, nonpayment of any
Reimbursement Obligation within one Business Day after the same becomes due, or
nonpayment of interest upon any Loan or of any commitment fee, LC Fee or other
obligations under any of the Loan Documents within five days after the same
becomes due.

     7.3.      The breach by any Borrower of any of the terms or provisions of
Section 6.2, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15, 6.16, 6.17, 6.18, 6.19, or
6.32.

                                    Page 51
<PAGE>

     7.4.  The breach by any Borrower (other than a breach which constitutes a
Default under another Section 7.3 of this Article VII) of any of the terms or
provisions of this Agreement which is not remedied within five days after
written notice from the Agent or any Lender.

     7.5.  Failure of any Borrower to pay when due any Indebtedness aggregating
in excess of $250,000 ("Material Indebtedness"); or the default by any Borrower
in the performance beyond the applicable grace period with respect thereto, if
any, of any term, provision or condition contained in any agreement under which
any such Material Indebtedness was created or is governed, or any other event
shall occur or condition exist, the effect of which default or event is to
cause, or to permit the holder or holders of such Material Indebtedness to
cause, such Material Indebtedness to become due prior to its stated maturity; or
any Material Indebtedness of any Borrower shall be declared to be due and
payable or required to be prepaid or repurchased (other than by a regularly
scheduled payment) prior to the stated maturity thereof; or any Borrowers shall
not pay, or admit in writing its inability to pay, its debts generally as they
become due.

     7.6.  Any Borrower shall (i) have an order for relief entered with respect
to it under the Federal bankruptcy Laws as now or hereafter in effect, (ii) make
an assignment for the benefit of creditors, (iii) apply for, seek, consent to,
or acquiesce in, the appointment of a receiver, custodian, trustee, examiner,
liquidator or similar official for it or any Substantial Portion of its
Property, (iv) institute any proceeding seeking an order for relief under the
Federal bankruptcy Laws as now or hereafter in effect or seeking to adjudicate
it a bankrupt or insolvent, or seeking dissolution, winding up, liquidation,
reorganization, arrangement, adjustment or composition of it or its debts under
any Law relating to bankruptcy, insolvency or reorganization or relief of
debtors or fail to file an answer or other pleading denying the material
allegations of any such proceeding filed against it, (v) take any corporate or
partnership action to authorize or effect any of the foregoing actions set forth
in this Section 7.6 or (vi) fail to contest in good faith any appointment or
proceeding described in Section 7.7.

     7.7.  Without the application, approval or consent of any Borrower, a
receiver, trustee, examiner, liquidator or similar official shall be appointed
for such Borrower or any Substantial Portion of its Property, or a proceeding
described in Section 7.6(iv) shall be instituted against any Borrower and such
appointment continues undischarged or such proceeding continues undismissed or
unstayed for a period of 30 consecutive days.

     7.8.  Any court, government or governmental agency shall condemn, seize or
otherwise appropriate, or take custody or control of, all or any portion of the
Property of any Borrower which, when taken together with all other Property of
the Borrowers so condemned, seized, appropriated, or taken custody or control
of, during the twelve-month period ending with the month in which any such
action occurs, constitutes a Substantial Portion.

     7.9.  Any Borrower shall fail within 30 days to pay, bond or otherwise
discharge one or more (i) judgments or orders for the payment of money in excess
of $250,000 (or the equivalent thereof in currencies other than U.S. Dollars) in
the aggregate, or (ii) nonmonetary judgments or orders which, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect,
which judgment(s), in any such case, is/are not stayed on appeal or otherwise
being appropriately contested in good faith.

                                    Page 52
<PAGE>

     7.10.  The Unfunded Liabilities of all Single Employer Plans shall exceed
in the aggregate $100,000 or any Reportable Event shall occur in connection with
any Plan.

     7.11.  Any Borrower or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that it has incurred
withdrawal liability to such Multiemployer Plan in an amount which, when
aggregated with all other amounts required to be paid to Multiemployer Plans by
the Borrowers or any other member of the Controlled Group as withdrawal
liability (determined as of the date of such notification), exceeds $100,000 or
requires payments exceeding $100,000 per annum.

     7.12.  Any Borrower or any other member of the Controlled Group shall have
been notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of Title IV
of ERISA, if as a result of such reorganization or termination the aggregate
annual contributions of the Borrowers and the other members of the Controlled
Group (taken as a whole) to all Multiemployer Plans which are then in
reorganization or being terminated have been or will be increased over the
amounts contributed to such Multiemployer Plans for the respective plan years of
each such Multiemployer Plan immediately preceding the plan year in which the
reorganization or termination occurs by an amount exceeding $100,000.

     7.13.  Any Borrower shall (i) be the subject of any proceeding or
investigation pertaining to the release by the Borrowers or any other Person of
any toxic or hazardous waste or substance into the environment, or (ii) violate
any Environmental Law, which, in the case of an event described in clause (i) or
clause (ii), could reasonably be expected to have a Material Adverse Effect.

     7.14.  Any Change in Control shall occur, provided , however, the exercise
of any rights to convert the Guardian Indebtedness to equity of the Borrowers
shall not be deemed a Change in Control so long as either Gene Miller or Kelly
E. Miller remains as the Chief Executive Officer of the Borrowers.

     7.15.  The occurrence of any "default", as defined in any Loan Document
(other than this Agreement) or the breach of any of the terms or provisions of
any Loan Document (other than this Agreement), which default or breach continues
beyond any period of grace therein provided.

     7.16.  Nonpayment by any Borrower of any Rate Management Obligation when
due or the breach by any Borrower of any term, provision or condition contained
in any Rate Management Transaction.

     7.17.  Any Collateral Document shall for any reason fail to create a valid
and perfected first priority security interest in any collateral purported to be
covered thereby, except as permitted by the terms of any Collateral Document, or
any Collateral Document shall fail to remain in full force or effect or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Collateral Document, or any Borrower shall fail to
comply with any of the terms or provisions of any Collateral Document.

     7.18.  The representations and warranties set forth in Section 5.15 (Plan
Assets; Prohibited Transactions) shall at any time not be true and correct.

                                    Page 53
<PAGE>

     7.19.  Any Borrower shall fail to pay when due any Operating Lease
Obligation, obligation with respect to a Letter of Credit, obligation under a
Sale and Leaseback Transaction or Contingent Obligation.

     7.20.  Borrowers shall fail to convert the Guardian Indebtedness to shares
of common stock of the Company prior to December 31, 2000.

                                 ARTICLE VIII

                ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
                ----------------------------------------------

     8.1.   Acceleration.  (i)  If any Default described in Section 7.6 or 7.7
            ------------
occurs with respect to the Borrowers, the obligations of the Lenders to make
Loans hereunder and the obligation and power of the LC Issuer to issue Facility
LCs shall automatically terminate and the Obligations shall immediately become
due and payable without any election or action on the part of the Agent, the LC
Issuer or any Lender and the Borrowers will be and become thereby
unconditionally jointly and severally obligated, without any further notice, act
or demand, to pay to the Agent an amount in immediately available funds, which
funds shall be held in the Facility LC Collateral Account, equal to the
difference of (x) the amount of LC Obligations at such time, less (y) the amount
on deposit in the Facility LC Collateral Account at such time which is free and
clear of all rights and claims of third parties and has not been applied against
the Obligations (such difference, the "Collateral Shortfall Amount").  If any
other Default occurs, the Required Lenders (or the Agent with the consent of the
Required Lenders) may (a) terminate or suspend the obligations of the Lenders to
make Loans hereunder and the obligation and power of the LC Issuer to issue
Facility LCs, or declare the Obligations to be due and payable, or both,
whereupon the Obligations shall become immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which the Borrowers
hereby expressly jointly and severally waive, and (b) upon notice to the
Borrowers and in addition to the continuing right to demand payment of all
amounts payable under this Agreement, make demand on the Borrowers to pay, and
the Borrowers will, forthwith upon such demand and without any further notice or
act, pay to the Agent the Collateral Shortfall Amount, which funds shall be
deposited in the Facility LC Collateral Account.

     (ii)   If at any time while any Default is continuing, the Agent determines
that the Collateral Shortfall Amount at such time is greater than zero, the
Agent may make demand on the Borrowers to pay, and the Borrowers will, forthwith
upon such demand and without any further notice or act, pay to the Agent the
Collateral Shortfall Amount, which funds shall be deposited in the Facility LC
Collateral Account.

     (iii)  The Agent may at any time or from time to time after funds are
deposited in the Facility LC Collateral Account, apply such funds to the payment
of the Obligations and any other amounts as shall from time to time have become
due and payable by the Borrowers to the Lenders or the LC Issuer under the Loan
Documents.

     (iv)   At any time while any Default is continuing, neither the Borrowers
nor any Person claiming on behalf of or through the Borrowers shall have any
right to withdraw any of the funds held in the Facility LC Collateral Account.
After all of the Obligations have been indefeasibly paid

                                    Page 54
<PAGE>

in full and the Aggregate Commitment has been terminated, any funds remaining in
the Facility LC Collateral Account shall be returned by the Agent to the
Borrowers or paid to whomever may be legally entitled thereto at such time.

     (v)    If, within ten (10)days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans and
the obligation and power of the LC Issuer to issue Facility LCs hereunder as a
result of any Default (other than any Default as described in Section 7.6 or 7.7
with respect to the Borrowers) and before any judgment or decree for the payment
of the Obligations due shall have been obtained or entered, the Required Lenders
(in their sole discretion) shall so direct, the Agent shall, by notice to the
Borrowers, rescind and annul such acceleration and/or termination.

     8.2.   Amendments.  Subject to the provisions of this Article VIII, the
            ----------
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrowers may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrowers hereunder or waiving
any Default hereunder; provided, however, that no such supplemental agreement
shall, without the consent of all of the Lenders:

     (i)    Extend the final maturity of any Loan, or extend the expiry date of
            any Facility LC to a date after the Facility Termination Date or
            forgive all or any portion of the principal amount thereof or any
            Reimbursement Obligation related thereto, or reduce the rate or
            extend the time of payment of interest or fees thereon or
            Reimbursement Obligations related thereto.

     (ii)   Reduce the percentage specified in the definition of Required
            Lenders.

     (iii)  Extend the Facility Termination Date, or reduce the amount or extend
            the payment date for, the mandatory payments required under Section
            2.3, or increase the amount of the Aggregate Commitment above
            $75,000,000, or increase the Commitment of any Lender hereunder or
            the commitment to issue Facility LCs, or permit any Borrower to
            assign its rights under this Agreement.

     (iv)   Amend this Section 8.2.

     (v)    Except as provided in the Collateral Documents, release all or
            substantially all of the Collateral.

No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent, and no Amendment of any
provision relating to the LC Issuer shall be effective without the written
consent of the LC Issuer.  The Agent may waive payment of the fee required under
Section 12.3.2 without obtaining the consent of any other party to this
Agreement.

     8.3.  Preservation of Rights. No delay or omission of the Lenders, the
           ----------------------
LC Issuer or the Agent to exercise any right under the Loan Documents shall
impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Credit Extension

                                    Page 55
<PAGE>

notwithstanding the existence of a Default or the inability of the Borrowers to
satisfy the conditions precedent to such Credit Extension shall not constitute
any waiver or acquiescence. Any single or partial exercise of any such right
shall not preclude other or further exercise thereof or the exercise of any
other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Lenders required pursuant to Section 8.2, and then only
to the extent in such writing specifically set forth. All remedies contained in
the Loan Documents or by Law afforded shall be cumulative and all shall be
available to the Agent, the LC Issuer and the Lenders until the Obligations have
been paid in full.

                                  ARTICLE IX

                              GENERAL PROVISIONS
                              ------------------

     9.1.   Survival of Representations; Joint and Several Obligations.  All
            ----------------------------------------------------------
representations and warranties of the Borrowers contained in this Agreement
shall survive the making of the Credit Extensions herein contemplated.  The
Obligations of Borrowers hereunder and under the other Loan Documents are joint
and several obligations and liabilities.

     9.2.   Governmental Regulation.  Anything contained in this Agreement to
            -----------------------
the contrary notwithstanding, neither the LC Issuer nor any Lender shall be
obligated to extend credit to the Borrowers in violation of any limitation or
prohibition provided by any applicable statute or regulation.

     9.3.   Headings.  Section headings in the Loan Documents are for
            --------
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.

     9.4.   ENTIRE AGREEMENT.  THE LOAN DOCUMENTS EMBODY THE ENTIRE AGREEMENT
            ----------------
AND UNDERSTANDING AMONG THE BORROWERS, THE AGENT, THE LC ISSUER AND THE LENDERS
AND SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS AMONG THE BORROWERS, THE
AGENT, THE LC ISSUER AND THE LENDERS RELATING TO THE SUBJECT MATTER THEREOF
OTHER THAN THE FEE LETTER DESCRIBED IN SECTION 10.13.

     9.5.   Several Obligations; Benefits of this Agreement.  The respective
            -----------------------------------------------
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such).  The failure of any Lender to perform any
of its obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder.  This Agreement shall not be construed so as to confer
any right or benefit upon any Person other than the parties to this Agreement
and their respective successors and assigns.

     9.6.   Expenses; Indemnification.
            -------------------------

     9.6.1  The Borrowers shall reimburse the Agent for any costs, internal
charges and out-of-pocket expenses (including attorneys' fees and time charges
of attorneys for the Agent, which attorneys may be employees of the Agent) paid
or incurred by the Agent in connection with the preparation, negotiation,
execution, delivery, syndication, review, amendment, modification, and

                                    Page 56
<PAGE>

administration of the Loan Documents.  The Borrowers also jointly and severally
agree to reimburse the Agent, the LC Issuer and the Lenders for any costs,
internal charges and out-of-pocket expenses (including attorneys' fees and time
charges of attorneys for the Agent, the LC Issuer and the Lenders, which
attorneys may be employees of the Agent, the LC Issuer or the Lenders) paid or
incurred by the Agent, the LC Issuer or any Lender in connection with the
collection and enforcement of the Loan Documents.  Expenses being reimbursed by
the Borrowers under this Section include, without limitation the cost and
expense of obtaining an appraisal of each parcel of real property or interest in
real property described in the relevant Collateral Documents, which appraisal
shall be in conformity with the applicable requirements of any law or any
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law), or any interpretation thereof, including, without
limitation, the provisions of Title XI of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, as amended, reformed or otherwise modified
from time to time, and any rules promulgated to implement such provisions and,
costs and expenses incurred in connection with the Reports described in the
following sentence.  The Borrowers acknowledge that from time to time Agent may
prepare and may distribute to the Lenders (but shall have no obligation or duty
to prepare or to distribute to the Lenders) certain audit reports (the
"Reports") pertaining to the Borrowers's assets for internal use by Agent from
information furnished to it by or on behalf of the Borrowers, after Agent has
exercised its rights of inspection pursuant to this Agreement.

     9.6.2  The Borrowers hereby further jointly and severally agree to
indemnify the Agent, the LC Issuer, each Lender, their respective affiliates and
each of their directors, officers and employees against all losses, claims,
damages, penalties, judgments, liabilities and expenses (including, without
limitation, all expenses of litigation or preparation therefor whether or not
the Agent, the LC Issuer or any Lender or any affiliate is a party thereto)
which any of them may pay or incur arising out of or relating to this Agreement,
the other Loan Documents, the transactions contemplated hereby or the direct or
indirect application or proposed application of the proceeds of any Credit
Extension hereunder except to the extent that they are determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the party seeking
indemnification. The obligations of the Borrowers under this Section 9.6 shall
survive the termination of this Agreement.

     9.7.   Numbers of Documents.  All statements, notices, closing documents,
            --------------------
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Lenders.

     9.8.   Accounting.  Except as provided to the contrary herein, all
            ----------
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles, except that any calculation or determination which is to be made on
a consolidated basis shall be made for the Company and all its Subsidiaries,
including those Subsidiaries, if any, which are unconsolidated on the Company's
audited financial statements.

     9.9.   Severability of Provisions.  Any provision in any Loan Document
            --------------------------
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the

                                    Page 57
<PAGE>

operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.

     9.10.  Nonliability of Lenders. The relationship between the Borrowers on
            -----------------------
the one hand and the Lenders, the LC Issuer and the Agent on the other hand
shall be solely that of borrower and lender. Neither the Agent nor any Lender
shall have any fiduciary responsibilities to the Borrowers. Neither the Agent,
the LC Issuer nor any Lender undertakes any responsibility to the Borrowers to
review or inform the Borrowers of any matter in connection with any phase of the
Borrowers's business or operations. The Borrowers agree that neither the Agent,
the LC Issuer nor any Lender shall have liability to the Borrowers (whether
sounding in tort, contract or otherwise) for losses suffered by the Borrowers in
connection with, arising out of, or in any way related to, the transactions
contemplated and the relationship established by the Loan Documents, or any act,
omission or event occurring in connection therewith, unless it is determined in
a final non-appealable judgment by a court of competent jurisdiction that such
losses resulted from the gross negligence or willful misconduct of the party
from which recovery is sought. Neither the Agent, the LC Issuer nor any Lender
shall have any liability with respect to, and the Borrowers hereby jointly and
severally waive, release and agree not to sue for, any special, indirect or
consequential damages suffered by the Borrowers in connection with, arising out
of, or in any way related to the Loan Documents or the transactions contemplated
thereby.

     9.11.  Confidentiality. Each Lender agrees to hold any confidential
            ---------------
information which it may receive from the Borrowers pursuant to this Agreement
in confidence, except for disclosure (i) to its Affiliates and to other Lenders
and their respective Affiliates, (ii) to legal counsel, accountants, and other
professional advisors to such Lender or to a Transferee, (iii) to regulatory
officials, (iv) to any Person as requested pursuant to or as required by Law,
regulation, or legal process, (v) to any Person in connection with any legal
proceeding to which such Lender is a party, (vi) to such Lender's direct or
indirect contractual counterparties in swap agreements or to legal counsel,
accountants and other professional advisors to such counterparties, and (vii)
permitted by Section 12.4.

     9.12.  Nonreliance. Each Lender hereby represents that it is not relying on
            -----------
or looking to any margin stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System) for the repayment of the Credit
Extensions provided for herein.

     9.13.  Disclosure. The Borrowers and each Lender hereby (i) acknowledge
            ----------
and agree that Bank One and/or its Affiliates from time to time may hold
investments in, make other loans to or have other relationships with the
Borrowers and its Affiliates, and (ii) waive any liability of Bank One or such
Affiliate of Bank One to the Borrowers or any Lender, respectively, arising out
of or resulting from such investments, loans or relationships other than
liabilities arising out of the gross negligence or willful misconduct of Bank
One or its Affiliates.

     9.14  Interest. It is the intention of the Parties to comply with
           --------
applicable usury Laws; accordingly, it is agreed that notwithstanding any
provisions to the contrary in any Loan Document, in no event shall any Loan
Document permit the collection of interest in excess of the maximum amount
permitted by such Laws. If any such excess of interest is contracted for,
charged or received under any Loan Document or if the maturity of the Obligation
is accelerated in whole or in part, or in the event that all or part of the
principal or interest of the Obligation shall be prepaid, so that under

                                    Page 58
<PAGE>

any of such circumstances the amount of interest contracted for, charged or
received under any Loan Document on the amount of principal actually outstanding
from time to time under the Obligation shall exceed the maximum amount of
interest permitted by applicable usury Laws, then in any such event (i) the
provisions of this Section 9.14 shall govern and control; (ii) no Person now or
hereafter liable for the payment of the Obligation shall be obligated to pay the
amount of such interest to the extent that it is in excess of the maximum amount
of interest permitted to be contracted for by, charged to or received from the
Person obligated thereon under the applicable usury Laws; (iii) any such excess
which may have been collected shall be either applied as a credit against the
then unpaid principal amount on the Obligation or refunded to the Person paying
the same, at the holder's option; and (iv) the effective rate of interest shall
be automatically reduced to the maximum lawful rate of interest permitted to be
contracted for by, charged to or received from the Person obligated thereon
under the applicable usury Laws as now or hereafter construed by the courts
having jurisdiction thereof. To the extent the Laws of the State of Texas are
applicable for purposes of determining the "Highest Lawful Rate," such term
shall mean the "weekly rate ceiling" from time to time in effect under Chapter
303 of the Texas Finance Code, as amended from time to time in effect, subject
to the Lender's right subsequently to change such method in accordance with
applicable law. The provisions of Chapter 346 of Tex. Finance Code Ann. (Vernon
1998), regulating certain revolving credit accounts shall not govern or in any
manner apply to the Obligation.

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

     9.16  Survival of Representations. All representations and warranties
           ---------------------------
herein contained or made in writing in connection with this Agreement shall
survive the execution and delivery of this Agreement and the making of the Loans
hereunder and shall continue in full force and effect until the Obligation shall
have been paid in full.

                                   ARTICLE X

                                   THE AGENT
                                   ---------

     10.1.  Appointment; Nature of Relationship. Bank One is hereby appointed
            -----------------------------------
by each of the Lenders as its contractual representative (herein referred to as
the "Agent") hereunder and under each other Loan Document, and each of the
Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents.  The Agent agrees to act as such
contractual representative upon the express conditions contained in this Article
X.  Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the contractual representative
of the Lenders with only those duties as are expressly set forth in this
Agreement and the other Loan Documents.  In its capacity as the Lenders'
contractual representative, the Agent (i) does not hereby assume any fiduciary
duties to any of the Lenders, (ii) is a "representative" of the Lenders within
the meaning of Section 9-105 of the Uniform Commercial

                                    Page 59
<PAGE>

Code and (iii) is acting as an independent contractor, the rights and duties of
which are limited to those expressly set forth in this Agreement and the other
Loan Documents. Each of the Lenders hereby agrees to assert no claim against the
Agent on any agency theory or any other theory of liability for breach of
fiduciary duty, all of which claims each Lender hereby waives.

     10.2.  Powers. The Agent shall have and may exercise such powers under
            ------
the Loan Documents as are specifically delegated to the Agent by the terms of
each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.

     10.3.  General Immunity. Neither the Agent nor any of its directors,
            ----------------
officers, agents or employees shall be liable to the Borrowers or any Lender for
any action taken or omitted to be taken by it or them hereunder or under any
other Loan Document or in connection herewith or therewith except to the extent
such action or inaction is determined in a final non-appealable judgment by a
court of competent jurisdiction to have arisen from the gross negligence or
willful misconduct of such Person.

     10.4.  No Responsibility for Loans, Recitals, etc. Neither the Agent nor
            -------------------------------------------
any of its directors, officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into, or verify (a) any statement, warranty
or representation made in connection with any Loan Document or any borrowing
hereunder; (b) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in Article IV, except
receipt of items required to be delivered solely to the Agent; (d) the existence
or possible existence of any Default or Unmatured Default; (e) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; (f) the
value, sufficiency, creation, perfection or priority of any Lien in any
collateral security; or (g) the financial condition of any Borrower of any of
the Obligations. The Agent shall have no duty to disclose to the Lenders
information that is not required to be furnished by the Borrowers to the Agent
at such time, but is voluntarily furnished by the Borrowers to the Agent (either
in its capacity as Agent or in its individual capacity).

     10.5.  Action on Instructions of Lenders. The Agent shall in all cases be
            ---------------------------------
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders. The Lenders hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so by
the Required Lenders. The Agent shall be fully justified in failing or refusing
to take any action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by the Lenders pro rata against any and
all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.

     10.6.  Employment of Agents and Counsel. The Agent may execute any of its
            --------------------------------
duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and

                                    Page 60
<PAGE>

attorneys-in-fact and shall not be answerable to the Lenders, except as to money
or securities received by it or its authorized agents, for the default or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care. The Agent shall be entitled to advice of counsel concerning the
contractual arrangement between the Agent and the Lenders and all matters
pertaining to the Agent's duties hereunder and under any other Loan Document.

     10.7.  Reliance on Documents; Counsel.  The Agent shall be entitled to rely
            ------------------------------
upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.

     10.8.  Agent's Reimbursement and Indemnification.  The Lenders agree to
            -----------------------------------------
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (i) for any amounts not
reimbursed by the Borrowers for which the Agent is entitled to reimbursement by
the Borrowers under the Loan Documents, (ii) for any other expenses incurred by
the Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents
(including, without limitation, for any expenses incurred by the Agent in
connection with any dispute between the Agent and any Lender or between two or
more of the Lenders) and (iii) for any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of the Loan
Documents or any other document delivered in connection therewith or the
transactions contemplated thereby (including, without limitation, for any such
amounts incurred by or asserted against the Agent in connection with any dispute
between the Agent and any Lender or between two or more of the Lenders), or the
enforcement of any of the terms of the Loan Documents or of any such other
documents, provided that (i) no Lender shall be liable for any of the foregoing
to the extent any of the foregoing is found in a final non-appealable judgment
by a court of competent jurisdiction to have resulted from the gross negligence
or willful misconduct of the Agent and (ii) any indemnification required
pursuant to Section 3.5.7 shall, notwithstanding the provisions of this Section
10.8, be paid by the relevant Lender in accordance with the provisions thereof.
The obligations of the Lenders under this Section 10.8 shall survive payment of
the Obligations and termination of this Agreement.

     10.9.  Notice of Default. The Agent shall not be deemed to have knowledge
            -----------------
or notice of the occurrence of any Default or Unmatured Default hereunder unless
the Agent has received written notice from a Lender or the Borrowers referring
to this Agreement describing such Default or Unmatured Default and stating that
such notice is a "notice of default". In the event that the Agent receives such
a notice, the Agent shall give prompt notice thereof to the Lenders.

     10.10. Rights as a Lender. In the event the Agent is a Lender, the Agent
            ------------------
shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Loans as any Lender and may
exercise the same as though it were not the Agent, and the term "Lender" or
"Lenders" shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent and
its Affiliates may accept

                                    Page 61
<PAGE>

deposits from, lend money to, and generally engage in any kind of trust, debt,
equity or other transaction, in addition to those contemplated by this Agreement
or any other Loan Document, with the Borrowers or any of its Subsidiaries in
which the Borrowers or such Subsidiary is not restricted hereby from engaging
with any other Person.

     10.11.  Lender Credit Decision.  Each Lender acknowledges that it has,
             ----------------------
independently and without reliance upon the Agent or any other Lender and based
on the financial statements prepared by the Borrowers and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents.

     10.12.  Successor Agent.  The Agent may resign at any time by giving
             ---------------
written notice thereof to the Lenders and the Borrowers, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint, on
behalf of the Borrowers and the Lenders, a successor Agent. If no successor
Agent shall have been so appointed by the Required Lenders within thirty days
after the resigning Agent's giving notice of its intention to resign, then the
resigning Agent may appoint, on behalf of the Borrowers and the Lenders, a
successor Agent. Notwithstanding the previous sentence, the Agent may at any
time without the consent of the Borrowers or any Lender, appoint any of its
Affiliates which is a commercial bank as a successor Agent hereunder. If the
Agent has resigned or been removed and no successor Agent has been appointed,
the Lenders may perform all the duties of the Agent hereunder and the Borrowers
shall make all payments in respect of the Obligations to the applicable Lender
and for all other purposes shall deal directly with the Lenders. No successor
Agent shall be deemed to be appointed hereunder until such successor Agent has
accepted the appointment. Any such successor Agent shall be a commercial bank
having capital and retained earnings of at least $100,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed Agent. Upon
the effectiveness of the resignation or removal of the Agent, the resigning or
removed Agent shall be discharged from its duties and obligations hereunder and
under the Loan Documents. After the effectiveness of the resignation or removal
of an Agent, the provisions of this Article X shall continue in effect for the
benefit of such Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other Loan
Documents. In the event that there is a successor to the Agent by merger, or the
Agent assigns its duties and obligations to an Affiliate pursuant to this
Section 10.12, then the term "Corporate Base Rate" as used in this Agreement
shall mean the prime rate, base rate or other analogous rate of the new Agent.

     10.13.  Agent's Fees. The Borrowers agrees to pay to the Agent, for its own
             ------------
account, the fees agreed to by the Borrowers and the Agent pursuant to that
certain letter agreement of even date herewith, or as otherwise agreed from time
to time.

                                    Page 62
<PAGE>

     10.14.  Delegation to Affiliates. The Borrowers and the Lenders agree that
             ------------------------
the Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX and X.

     10.15.  Execution of Collateral Documents. The Lenders hereby empower and
             ---------------------------------
authorize the Agent to execute and deliver to the Borrowers on their behalf the
Security Agreement(s) and all related financing statements and any financing
statements, agreements, documents or instruments as shall be necessary or
appropriate to effect the purposes of the Security Agreement(s).

     10.16.  Collateral Releases. The Lenders hereby empower and authorize the
             -------------------
Agent to execute and deliver to the Borrowers on their behalf any agreements,
documents or instruments as shall be necessary or appropriate to effect any
releases of Collateral which shall be permitted by the terms hereof or of any
other Loan Document or which shall otherwise have been approved by the Required
Lenders (or, if required by the terms of Section 8.2, all of the Lenders) in
writing.

     10.17.  Co-Agents, Documentation Agent, Syndication Agent, etc. Neither any
             -------------------------------------------------------
of the Lenders identified in this Agreement as a "co-agent" nor any
documentation agent or syndication agent shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. Without limiting the foregoing, none of
such Lenders shall have or be deemed to have a fiduciary relationship with any
Lender. Each Lender hereby makes the same acknowledgments with respect to such
Lenders as it makes with respect to the Agent in Section 10.11.

                                  ARTICLE XI

                           SETOFF; RATABLE PAYMENTS
                           ------------------------

     11.1.   Setoff. In addition to, and without limitation of, any rights of
             ------
the Lenders under applicable Law, if any Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of any Borrower may
be offset and applied toward the payment of the Secured Obligations owing to
such Lender, whether or not the Secured Obligations, or any part thereof, shall
then be due.

     11.2.   Ratable Payments. If any Lender, whether by setoff or otherwise,
             ----------------
has payment made to it upon its Outstanding Credit Exposure (other than payments
received pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than
that received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Outstanding Credit Exposure held by the other Lenders
so that after such purchase each Lender will hold its Pro Rata Share of the
Aggregate Outstanding Credit Exposure. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in

                                    Page 63
<PAGE>

proportion to their respective Pro Rata Shares of the Aggregate Outstanding
Credit Exposure. In case any such payment is disturbed by legal process, or
otherwise, appropriate further adjustments shall be made. If an amount to be
setoff is to be applied to Indebtedness of the Borrowers to a Lender other than
Indebtedness comprised of the Outstanding Credit Exposure of such Lender, such
amount shall be applied ratably to such other Indebtedness and to the
Indebtedness comprised of such Outstanding Credit Exposure.

                                  ARTICLE XII

               BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
               -------------------------------------------------

     12.1.   Successors and Assigns. The terms and provisions of the Loan
             ----------------------
Documents shall be binding upon and inure to the benefit of the Borrowers and
the Lenders and their respective successors and assigns, except that (i) no
Borrower shall have any right to assign its rights or obligations under the Loan
Documents and (ii) any assignment by any Lender must be made in compliance with
Section 12.3. The parties to this Agreement acknowledge that clause (ii) of this
Section 12.1, relates only to absolute assignments and does not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by any Lender of all or any portion of its rights under
this Agreement and any Note to a Federal Reserve Bank; provided, however, that
no such pledge or assignment creating a security interest shall release the
transferor Lender from its obligations hereunder unless and until the parties
thereto have complied with the provisions of Section 12.3. The Agent may treat
the Person which made any Loan or which holds any Note as the owner thereof for
all purposes hereof unless and until such Person complies with Section 12.3
provided, however, that the Agent may in its discretion (but shall not be
required to) follow instructions from the Person which made any Loan or which
holds any Note to direct payments relating to such Loan or Note to another
Person. Any assignee of the rights to any Loan or any Note agrees by acceptance
of such assignment to be bound by all the terms and provisions of the Loan
Documents. Any request, authority or consent of any Person, who at the time of
making such request or giving such authority or consent is the owner of the
rights to any Loan (whether or not a Note has been issued in evidence thereof),
shall be conclusive and binding on any subsequent holder or assignee of the
rights to such Loan.

     12.2.   Participations.
             --------------

     12.2.1  Permitted Participants; Effect.  Any Lender may, in the ordinary
             ------------------------------
course of its business and in accordance with applicable Law, at any time sell
to one or more banks or other entities ("Participants") participating interests
in any Outstanding Credit Exposure of such Lender, any Note held by such Lender,
any Commitment of such Lender or any other interest of such Lender under the
Loan Documents. In the event of any such sale by a Lender of participating
interests to a Participant, such Lender's obligations under the Loan Documents
shall remain unchanged, such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, such Lender shall remain
the owner of its Outstanding Credit Exposure and the holder of any Note issued
to it in evidence thereof for all purposes under the Loan Documents, all amounts
payable by the Borrowers under this Agreement shall be determined as if such
Lender had not sold such participating interests, and the Borrowers and the
Agent shall continue to deal solely and

                                    Page 64
<PAGE>

directly with such Lender in connection with such Lender's rights and
obligations under the Loan Documents.

     12.2.2  Voting Rights. Each Lender shall retain the sole right to approve,
             -------------
without the consent of any Participant, any amendment, modification or waiver of
any provision of the Loan Documents other than any amendment, modification or
waiver with respect to any Credit Extension or Commitment in which such
Participant has an interest which forgives principal, interest, fees or any
Reimbursement Obligation or reduces the interest rate or fees payable with
respect to any such Credit Extension or Commitment, extends the Facility
Termination Date, postpones any date fixed for any regularly-scheduled payment
of principal of or interest on any Loan in which such Participant has an
interest, or any regularly-scheduled payment of fees on any such Credit
Extension any such Loan or Commitment, releases any Guarantor of any such Credit
Extension or releases any collateral held in the Facility LC Collateral Account
(except in accordance with the terms hereof) or all or substantially all or any
other collateral, if any, securing any such Credit Extension.

     12.2.3  Benefit of Setoff. Each Borrower agrees that each Participant shall
             -----------------
be deemed to have the right of setoff provided in Section 11.1 in respect of its
participating interest in amounts owing under the Loan Documents to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under the Loan Documents, provided that each Lender shall retain the
right of setoff provided in Section 11.1 with respect to the amount of
participating interests sold to each Participant. The Lenders agree to share
with each Participant, and each Participant, by exercising the right of setoff
provided in Section 11.1, agrees to share with each Lender, any amount received
pursuant to the exercise of its right of setoff, such amounts to be shared in
accordance with Section 11.2 as if each Participant were a Lender.

     12.3.   Assignments.
             -----------

     12.3.1  Permitted Assignments. Any Lender may, in the ordinary course of
             ---------------------
its business and in accordance with applicable Law, at any time assign to one or
more banks or other entities ("Purchasers") all or any part of its rights and
obligations under the Loan Documents. Such assignment shall be substantially in
the form of Exhibit C or in such other form as may be agreed to by the parties
thereto. The consent of the Borrowers, the Agent and the LC Issuer shall be
required prior to an assignment becoming effective with respect to a Purchaser
which is not a Lender or an Affiliate thereof; provided, however, that if a
Default has occurred and is continuing, the consent of the Borrowers shall not
be required. Such consent shall not be unreasonably withheld or delayed. Each
such assignment with respect to a Purchaser which is not a Lender or an
Affiliate thereof shall (unless each of the Borrowers and the Agent otherwise
consents) be in an amount not less than the lesser of (i) $5,000,000 or (ii) the
remaining amount of the assigning Lender's Commitment (calculated as at the date
of such assignment) or outstanding Loans (if the applicable Commitment has been
terminated).

     12.3.2  Effect; Effective Date. Upon (i) delivery to the Agent of an
             ----------------------
assignment, together with any consents required by Section 12.3.1, and (ii)
payment of a $3,500 fee to the Agent for processing such assignment (unless such
fee is waived by the Agent), such assignment shall become effective on the
effective date specified in such assignment. The assignment shall contain a
representation by the Purchaser to the effect that none of the consideration
used to make the purchase of the

                                    Page 65
<PAGE>

Commitment and Outstanding Credit Exposure under the applicable assignment
agreement constitutes "plan assets" as defined under ERISA and that the rights
and interests of the Purchaser in and under the Loan Documents will not be "plan
assets" under ERISA. On and after the effective date of such assignment, such
Purchaser shall for all purposes be a Lender party to this Agreement and any
other Loan Document executed by or on behalf of the Lenders and shall have all
the rights and obligations of a Lender under the Loan Documents, to the same
extent as if it were an original party hereto, and no further consent or action
by the Borrowers, the Lenders or the Agent shall be required to release the
transferor Lender with respect to the percentage of the Aggregate Commitment and
Outstanding Credit Exposure assigned to such Purchaser. Upon the consummation of
any assignment to a Purchaser pursuant to this Section 12.3.2, the transferor
Lender, the Agent and the Borrowers shall, if the transferor Lender or the
Purchaser desires that its Loans be evidenced by Notes, make appropriate
arrangements so that new Notes or, as appropriate, replacement Notes are issued
to such transferor Lender and new Notes or, as appropriate, replacement Notes,
are issued to such Purchaser, in each case in principal amounts reflecting their
respective Commitments, as adjusted pursuant to such assignment.

     12.4.  Dissemination of Information. The Borrowers authorize each Lender to
            ----------------------------
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of Law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrowers, including without limitation
any information contained in any Reports; provided that each Transferee and
prospective Transferee agrees to be bound by Section 9.11 of this Agreement.

     12.5.  Tax Treatment. If any interest in any Loan Document is transferred
            -------------
to any Transferee which is organized under the Laws of any jurisdiction other
than the United States or any State thereof, the transferor Lender shall cause
such Transferee, concurrently with the effectiveness of such transfer, to comply
with the provisions of Section 3.5.4.

                                 ARTICLE XIII

                                    NOTICES
                                    -------

     13.1.  Notices. Except as otherwise permitted by Section 2.15 with respect
            -------
to borrowing notices, all notices, requests and other communications to any
party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party: (i)
in the case of the Borrowers or the Agent, at its address or facsimile number
set forth on the signature pages hereof, (ii) in the case of any Lender, at its
address or facsimile number set forth below its signature hereto or (iii) in the
case of any party, at such other address or facsimile number as such party may
hereafter specify for the purpose by notice to the Agent and the Borrowers in
accordance with the provisions of this Section 13.1. Each such notice, request
or other communication shall be effective (i) if given by facsimile
transmission, when transmitted to the facsimile number specified in this Section
and confirmation of receipt is received, (ii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid, or (iii) if given by any other means, when delivered
(or, in the case of electronic transmission, received) at the address specified
in this Section; provided that notices to the Agent under Article II shall not
be effective until received.

                                    Page 66
<PAGE>

     13.2.  Change of Address. The Borrowers, the Agent and any Lender may each
            -----------------
change the address for service of notice upon it by a notice in writing to the
other parties hereto.

                                  ARTICLE XIV

                                 COUNTERPARTS
                                 ------------

     This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Borrowers, the Agent, the LC Issuer
and the Lenders and each party has notified the Agent by facsimile transmission
or telephone that it has taken such action.

                                  ARTICLE XV

         CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
         ------------------------------------------------------------

     15.1.  CHOICE OF LAW.  THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
            -------------
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF TEXAS, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.

     15.2.  CONSENT TO JURISDICTION. THE BORROWERS HEREBY IRREVOCABLY SUBMITS TO
            -----------------------
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR TEXAS STATE COURT
SITTING IN HOUSTON, TEXAS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO ANY LOAN DOCUMENTS AND EACH BORROWER HEREBY IRREVOCABLY AGREES THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE
AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT
OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE
RIGHT OF THE AGENT, THE LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE
BORROWERS IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
THE BORROWERS AGAINST THE AGENT, THE LC ISSUER OR ANY LENDER OR ANY AFFILIATE OF
THE AGENT, THE LC ISSUER OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN HOUSTON, TEXAS.

     15.3.  WAIVER OF JURY TRIAL. EACH BORROWER, THE AGENT, THE LC ISSUER AND
            --------------------
EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF,

                                    Page 67
<PAGE>

RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED
THEREUNDER.

     15.4.  Amendment and Restatement. Borrower has heretofore been indebted to
            -------------------------
Lenders, as assignees, under the Existing Agreement. Upon the execution and
delivery of this Agreement by each of the parties hereto, any loans made under
the Existing Agreement and outstanding as of the date hereof shall be deemed
Loans made hereunder as of the date hereof and shall be deemed made under, and
evidenced by, the Notes and subject to the terms and conditions hereof and
thereof, and all accrued and unpaid interest on the Loans and all accrued and
unpaid fees and expenses under the Existing Agreement shall be deemed to be
outstanding under and governed by this Agreement. This Agreement amends and
restates the Existing Agreement in its entirety, and upon the effectiveness
hereto, all terms and provisions hereof shall supersede the terms and provisions
thereof.

                  REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

                                    Page 68
<PAGE>

     IN WITNESS WHEREOF, the Borrowers, the Lenders, the LC Issuer and the Agent
have executed this Agreement as of the date first above written.

BORROWERS:                          MILLER EXPLORATION COMPANY

                                    By: /s/ Kelly E. Miller
                                        ---------------------------------------
                                            Kelly E. Miller, President

                                    MILLER OIL CORPORATION

                                    By: /s/ Kelly E. Miller
                                        ---------------------------------------
                                            Kelly E. Miller, President

                                    Address for Borrowers:

                                    Miller Exploration Company
                                    3104 Logan Valley Road
                                    Traverse City, Michigan 49685-0348
                                    Attention: Kelly E. Miller
                                    Telephone: (616) 941-0004
                                    Fax: (616) 941-8312

LENDERS:                            BANK ONE, TEXAS, N.A.,
                                    Individually and as the Agent and LC Issuer
Commitment: $50,000,000.00
                                    By: /s/ Charles Kingwell-Smith
                                        ---------------------------------------
                                            Charles Kingswell-Smith
                                            First Vice President

                                    Address:

                                    Bank One, Texas, N.A.
                                    910 Travis
                                    Houston, Texas  77002
                                    Attention:  Charles Kingswell-Smith
                                    Telephone:  (713) 751-7803
                                    Fax:  (713) 751-3544

                                                   To Miller Exploration Company
                                                                Credit Agreement

                               Signature Page 1<PAGE>

                         AGREEMENT

                          BETWEEN

                 TRANS WORLD AIRLINES, INC.

                            AND

                     FLIGHT ATTENDANTS

                     IN THE SERVICE OF

                 TRANS WORLD AIRLINES, INC.

                     AS REPRESENTED BY

          INTERNATIONAL ASSOCIATION OF MACHINISTS

                            AND

                     AEROSPACE WORKERS

                       AUGUST 1, 1999

                              
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                        TABLE OF CONTENTS

ARTICLE                                                      PAGE

1    (A)    Recognition                                         1
     (B)    Scope                                               1
     (C)    Successorship and Parent Companies                  2
     (D)    Labor Protective Provisions                         3
     (E)    Bankruptcy                                          6
     (F)    Remedies                                            8
     (G)    Commuter Carriers, Code Sharing and Block Seating   9
     (H)    Definitions                                        12

2    DEFINITIONS

     (A)    Cabin Attendant                                     1
     (B)    Service Manager                                     1
     (C)    Employee                                            2
     (D)    Block-to-Block                                      2
     (E)    Domicile                                            2
     (F)    Satellite                                           2
     (G)    Deadhead                                            2
     (H)    Month                                               2
     (I)    (1)   Domestic Flight                               2
            (2)   International Flight                          2
            (3)   Tag Ends                                      3
     (J)    Operational Duty Hours                              3
     (K)    Reserve                                             3
     (L)    Standby Duty                                        3
            (1)   Residence Standby                             3
            (2)   Airport Standby                               3
     (M)    Wide-body Aircraft                                  3
     (N)    Ferry Flight Assignment                             3
     (O)    Average Line Value (ALV)                            3
     (P)    Daily Credit Rate                                   4
     (Q)    Alternate Line                                      4

3    PAY

     (A)    Hourly Rates Determined                             1
     (B)    Operational Duty Pay                                1
     (C)    Service Manager Override                            1
     (D)    Reserves                                            1
     (E)    Night Pay                                           1

                            Page i

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     (F)    Language of Destination                             1
     (G)    24 in 7                                             2
     (H)    Service Manager Emergency Downgrade                 2
     (I)    Random Drug/Alcohol Testing                         2
     (J)    Standby Penalties                                   2
     (K)    Vacation Increment Pay                              3
     (L)    Service Manager Temporary Upgrade                   3
     (M)    Special Assignment                                  3
     (N)    Deadhead                                            3
     (O)    Domestic Excess on Duty                             3
     Schedule A                                                 4
            Domestic Cabin Attendant                            4
            International Cabin Attendant                       4
            Domestic Flight Service Manager                     5
            International Flight Service Manager                5

4    EXPENSES

     (A)    Domestic Operations                                 1
            (1)   Expense Allowance                             1
            (2)   Other Expenses                                1
            (3)   Hotels                                        1
            (4)   Taxi Expense                                  1
            (5)   Domestic Ground Transportation                2
     (B)    International Operations                            2
            (1)   Rest Facilities                               3
            (2)   Room Selection                                3
            (3)   Expense Allowance                             3
            (4)   Other Expenses                                3
     (C)    General                                             3
            (1)   Additional Expenses                           3
            (2)   Lounges/Day Rooms                             3
            (3)   Operational Meetings/Training/Physicals       3
            (4)   Crew Meals                                    4
            (5)   Drug Testing                                  5
            (6)   Payment by Employee for Training              5
            (7)   Parking                                       5

5    UNIFORMS

     (A)    Standard Uniforms                                   1
     (B)    Purchase by Newhire Flight Attendants               1
     (C)    Basic Uniform Items                                 1
     (D)    Point Allowance System                              1

                            Page ii

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     (E)    Payroll Deduction of Uniform Items                  3
     (F)    Company Insignia                                    3
     (G)    Change in Uniforms                                  3
     (H)    Expense Cost in Change in Uniforms                  3
     (I)    New Accessory Items                                 3
     (J)    Review of Uniform Attire by Company and Union       3
     (K)    Terminated and Voluntarily Resigned Flight
              Attendants                                        4

6    HOURS OF SERVICE

     (A)(1) Full Line Flying - Scheduling of Maximum
              Flight Credit                                     1
     (A)(2) Alternate Line Flying - Scheduling of
              Maximum Flight Credit                             1
     (B)    Flight Credit Hours                                 1
     (C)    Flight Pay Hours                                    1
     (D)    Determination of Flight Credit and Pay Hours        2
     (E)    Trip Hours                                          2
            (1)   & (2) Trip Hours (Trip Rig)               2 & 3
            (3)   Duty Hours (Duty Rig) - Domestic              3
            (4)   Duty Hours (Duty Rig) - International         3
            (5)   Exclusions                                    4
            (6)   No Additional Duty Hours Under Certain
                  Circumstances                                 4
            (7)   Surface Transportation                        4
     (F)    Vacation Credit and Pay                             5
     (G)    Training/AER's Credit and Pay; Special
              Assignment                                        5
     (H)    Meetings or Courses                                 5
     (I)    Standby Duty                                        5
     (J)    Call-Out Pay                                        6
     (K)    Holding Pay                                         6
     (L)    Deadhead                                            6
     (M)    Supervisor Pay Assignments                          7
     (N)    Flight Time Limitations; Charters                   8
     (O)    Request for Relief from Duty                        8
     (P)    Non-Pay Status                                      8
     (Q)    Jury Duty                                           8
     (R)    FAA Minimum Rest Regulations                        9
            (1)   Domestic Operation                            9
            (2)   International Operations                     10
     (S)    24 in 7                                            11
     (T)    Rest Seats/Facilities                              11
     (U)    Guaranteed Days Off                                11
     (V)    Reserve Flight Attendants                          12
     (W)    Equipment Substitution                             12
     (X)    Enhanced Trip Option; BLIM; Quarterly Limitations  13
            (1)   Enhanced Trip Option                         13

                            Page iii

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            (2)   IP/BLIM                                      14
            (3)   Quarterly Minimums                           16
     (Y)    Drug/Alcohol Testing                               16
     (Z)    Guaranteed Trip Protection                         16

7    PASSES

     (A)    Passes                                              1
     (B)    Union Member System Board of Adjustment             1
     (C)    Reduced Rate Transportation on Union Business       1
     (D)    Jumpseat Authority                                  1
     (E)    Retired Employees                                   2
     (F)    Age 45 Retirement/Voluntary Termination             2
     (G)    Disability Retirement                               2
     (H)    Employee Pass Privileges                            2
     (I)    Improvements in Pass Policy                         2
     (J)    Furloughed/Displaced Flight Attendant Passes        2
     (K)    Emergency Pass Privileges                           3
     (L)    In-law Passes                                       3

8    SICK LEAVE

     (A)    Sick Leave Accrual                                  1
     (B)    Proof of Illness; Written Statement                 1
     (C)    Entitlement to Sick Leave Credit                    1
     (D)    Three (3) Banks                                     1
     (E)    Bid Run Flight Attendant                            1
              Trips Missed Personal Illness Bank                1
              Reserve Flight Attendant                          3
     (F)    Exhaustion of Sick Leave                            3
     (G)    Family Emergency                                    3
     (H)    Excess Flight Credit                                4
     (I)    Industrial Illness/Injury                           4
     (J)    Workers' Compensation Payments                      6
     (K)    Obligation to Prevent Sick Leave Abuse              6
     (L)    Flight Attendant Requirement When Calling Off Duty  6
     (M)    Posting of Sick Leave Accruals                      6
     (N)    Mid Pairing Illness/Injury                          7

9    VACATIONS

     (A)    Vacation Allowance                                  1
     (B)    Eligibility for Vacation                            2
     (C)    Vacations Not Cumulative; Rescheduling of
              Vacations                                         3

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     (D)    Terminating Employees                               3
     (E)    Increment Pay                                       4
     (F)    Transfer to Overseas Domicile                       4
     (G)    Flight Time                                         4
     (H)    Splitting of Vacation Periods                       4
     (I)    Voluntary Vacation Sellback                         4
     (J)    Personal Business Days                              5

10   SENIORITY GENERAL

     (A)    Seniority Accrual                                   1
     (B)    Furloughed Employees                                1
     (C)    Retention of Seniority                              1
     (D)    Transfers from In-Flight Services Department        1
     (E)    Transfers or Assignments to Other Duty              2
     (F)    Removal from Seniority List                         2
     (G)    Probationary Flight Attendants                      2
     (H)    Return to Active Duty                               2

11   SENIORITY LISTS

     (A)    Posting of Flight Attendant Seniority List          1
     (B)    Twice Yearly Postings                               1
     (C)    Protest                                             1
     (D)    Successor Transaction; Merger                       1

12   REDUCTION IN FORCE AND RECALL

     (A)    Furlough Notice                                     1
     (B)    Offer of Leaves Prior to Furlough                   1
     (C)    No Expense to Company                               2
     (D)    Notification of Address Change                      2
     (E)    Failure to Comply                                   2
     (F)    Seven Year Furlough Provision                       3
     (G)    Displacement Passes                                 3
     (H)    Recall/bypass Letter of Agreement                   3
     (I)    Furlough Pay                                        3
     (J)    Furlough Pay Exclusions                             3
     (K)    Recall Followed by Subsequent Furlough              4
     (L)    Amount of Furlough Pay                              5
     (M)    Union Notification                                  5

                            Page v

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13   FILLING OF VACANCIES

     (A)    Transfer Bids                                       1
     (B)    Special Bid Requests; Involuntary Assignments       1
     (C)    Displacement/Involuntary Assignment                 1
     (D)    Permanent Bids                                      1
     (E)    Temporary Vacancies                                 2
     (F)    Passes                                              2
     (G)    Mutual Transfers                                    2
     (H)    Service Manager Vacancies                           2
     (I)    Notification of Transfers                           2

14   TRANSFER EXPENSES

     (A)    Transfer Expenses                                   1
     (B)    Company-Requested Transfers                         1
     (C)    Newly-Established or Re-Established Domiciles       2

15   LEAVES OF ABSENCE

     (A)    Personal Leaves of Absence                          1
     (B)    Medical Leaves of Absence                           1
     (C)    Union Leaves of Absence                             1
     (D)    Return to Duty Following Personal Leave,
              Maternity Leave or Adoption Leave                 2
     (E)    Return to Duty Following Medical or Union Leave     2
     (F)    Military Leave                                      2
     (G)    Maternity Leave                                     2
     (H)    Adoption Leave of Absence                           3
     (I)    Paternity Leave                                     3
     (J)    Hardship Leave                                      3
     (K)    Requirements Upon Return from Leaves of Absence     4
     (L)    Copies of PTO/Leave Awards to be Furnished to
              Union                                             4
     (M)    Submission of Bid Preferences                       4

16   GRIEVANCE PROCEDURE

     (A)    Representation                                      1
            (1)   Union                                         1
            (2)   Company                                       2
            (3)   Policy                                        2
     (B)    Full-Time Representatives                           3
     (C)    Discipline and Discharge                            4
            (1)   Investigation                                 4

                            Page vi

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            (2)   Request for Step I Hearing                    4
            (3)   Failure to Request Step I Hearing             5
            (4)   Step I Hearing                                5
            (5)   Step I Decision                               5
            (6)   Company Time Limitations                      6
            (7)   No Pay Loss Prior to Written Step I Decision  6
            (8)   General                                       6
     (D)    Other Grievances                                    7
            (1)   Pre-Grievance                                 7
            (2)   Step I                                        7
     (E)    Appeals                                             8
            (1)   Step II                                       8
            (2)   System Board of Adjustment                    8
     (F)    System/General Grievance                            9
     (G)    General Procedures                                  9
            (1)   Time Limits for Grievance Filing              9
            (2)   Group/"et al" Grievances                      9
            (3)   Probationary Employees                       10
            (4)   Untimely Grievance Appeals                   10
            (5)   Ground Transportation                        10
            (6)   Stenographic Report                          10
            (7)   Work Day                                     10
            (8)   Participation                                11
            (9)   Grievance Settlement                         11
            (10)  Grievance Withdrawal                         11
            (11)  Streamlining Grievance/Arbitration
                    Procedures                                 11
            (12)  Non-Disciplinary Discussions                 12

17   SYSTEM BOARDS OF ADJUSTMENT

     (A)    Establishment of System Board of Adjustment         1
     (B)    Members                                             1
     (C)    Board Jurisdiction                                  2
     (D)    Board to Consider Dispute                           2
     (E)    Neutral Referee to Serve as Chairman                2
     (F)    Location                                            2
     (G)    Notice of Dispute                                   3
     (H)    Selection of Referee                                3
     (I)    Selection of Hearing Date                           3
     (J)    Waiver of Hearing                                   3
     (K)    Decision                                            3
     (L)    Extension of Time Limits                            4
     (M)    Representation; Witnesses                           4
     (N)    Back-Pay Calculation                                4

                            Page vii

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     (O)    Stenographic Report                                 5
     (P)    Filing of Transcripts/Records                       5
     (Q)    Expenses of Board Members                           5
     (R)    Witness Expenses                                    5
     (S)    Additional Expenses; Board Member Travel            5
     (T)    Non-Reprisal                                        5
     (U)    Non-Abridgement of Railway Labor Act                5

18   SCHEDULING OF FLIGHT ATTENDANTS

     (A)    General                                             1
     (B)    System Scheduling                                   1

            (1)   Scheduling Committee                          1
            (2)   Away From Domicile Policy                     1
            (3)   Change in Schedules/Availability of
                    Information                                 2
            (4)   Scheduling Committee Reimbursement            2
            (5)   Required Category Bids                        2
            (6)   Additional Category Bids                      2
     (C)    Domicile Scheduling                                 3
            (1)   General                                       3
     (D)    Domicile Scheduling Policy                          4
            (1)   Purpose                                       4
            (2)   General                                       4
            (3)   Preparation of Bid Runs                       5
            (4)   Flight Attendant Assignment and Bidding       6
            (5)   Awarding of Run Selections                   12
            (6)   Open Time Information                        14
            (7)   Utilization                                  14
                  (a)  Maximum Utilization                     14
                  (b)  Initial Projection                      14
                  (c)  Initial Balancing                       15
                  (d)  Company Balance Limitation              16
                  (e)  Reserve                                 16
                  (f)  Balancing and Limitations               16
                       1)   Company Same Day Calendar Balance  17
                       2)   Balance Avoidance                  21
                       3)   Automatic Trip Drop                22
                       4)   Trip Drop During Month             23
                       5)   No Automatic Trip Drop During
                              Month                            23
                  (g)  Bow-wave Option                         24
                  (h)  Excess Credit Hours                     24
                  (i)  Excess Pay Hours                        25
                  (j)  Requests for Open Time                  25
                  (k)  Unprotected Flights                     25

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                  (l)  Insufficient Reserves                   26
            (8)   Reserve                                      26
                  (a)  Vacation                                26
                  (b)  Reserve Complement                      26
                  (c)  Set-up Period/Call-in Period            26
                  (d)  Reserve Assignments                     27
                  (e)  Residence/Airport Standby               27
                  (f)  Release from Call-in Period/Emergency
                         Exception                             29
                  (g)  Call-In Requirements                    29
                  (h)  Unavailable During Call-In Period       29
                  (i)  Open Time Move-up                       29
                  (j)  Reserve Recording                       29
                  (k)  Reserve List                            30
                  (l)  Spread Days                             30
            (9)   Availability for Flight                      32
                  (a)  At Domicile and Satellite               32
                       1)   Sequence Notification/Balancing    32
                       2)   Return to Duty Deadline/"Soft
                              Time" Openings                   32
                       3)   Rights to Trip                     33
                  (b)  Unprotected Flight/Domicile Layover
                         Station                               33
                  (c)  Notification of Schedule Changes        33
            (10)  Trading of Flights                           34
            (11)  Legal Rest at Layover Station After One-Way
                    Trip                                       36
            (12)  Opposite End of Trip                         36
            (13)  Scheduled Times Posted/Published             36
            (14)  Ferry Flights                                36
     (DD)   Alternate Line Flying Scheduling                   36
     (E)    Charters                                           38
     (F)    Satellites                                         40
     (G)    Back-To-Back Flying                                41
              Chart:  Examples of Back-to-Back Flying          45
     (H)    Trip Hours Formula Pro-ration Charts               49

19   PERSONNEL FILE

     (A)    Maintenance                                         1
     (B)    Passenger Complaint Letters                         1
     (C)    Disciplinary Documents                              2
     (D)    Non-Disciplinary Documents                          2
     (E)    Inflight Observation Reports                        2
     (F)    "IER" File/Report                                   2
     (G)    Active Service                                      2

                            Page ix

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20   GENERAL

     (A)    Copies of Agreement                                 1
     (B)    Orders in Writing                                   1
     (C)    Flight Attendant Responsibility                     1
     (D)    Other Benefits                                      1
     (E)    Other Employment with the Company                   3
     (F)    Customer Service Panel                              3
     (G)    Information to be provided by the Company to IAM    3
     (H)    Railway Labor Act                                   4
     (I)    Miscellaneous                                       5
            (1)   Bulletin Boards                               5
            (2)   Addresses of Employees                        5
            (3)   Payroll Deduction for Union Dues              5
            (4)   Union Materials in flight Attendant
                    Mailboxes                                   5
            (5)   Overpayments                                  5
            (6)   Drug Testing Notification                     5
            (7)   No Unlawful Discrimination                    5
            (8)   Direct Deposit                                6

21   RETIREMENT

     (A)    Retirement Plan Amendments                          1
            (1)   Early Retirement                              1
            (2)   Lump Sum Distribution                         1
            (3)   Lump Sum Notice                               2
            (4)   Freeze of Benefit Accruals                    2
            (5)   Defined Benefit Plan                          2
            (6)   Retirement Savings Plan [401(k)]              3
     (B)    Summary of Retirement Plan                          3
            (1)   Type of Plan                                  3
            (2)   Participants                                  3
            (3)   Participant Eligibility                       3
            (4)   Normal Retirement Age                         3
            (5)   Normal Benefit Formula                        4
            (6)   Lump Sum Distribution                         5
            (7)   Disability Retirement                         5
            (8)   Normal Form of Benefit                        5
            (9)   Contingent Annuitant Option                   5
            (10)  Optional Forms of Benefits                    5
            (11)  Vesting in Pension Accrued to Date            5
            (12)  Employee Contributions                        6
            (13)  Unisex Option Factors                         6
     (C)    Retirement Savings Plan for Flight Attendants       6

                            Page x

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            (1)   Plan Restatement/401(k) and FSM
                    Contribution                                6
            (2)   Lump Sum                                      7
            (3)   Delivery of Contributions                     7
            (4)   Allocation of Employer Contribution           7
            (5)   Cooperation and Study                         8
            (6)   Effect of Triggering Event on 401(k) Plan     8
            (7)   Expense Reimbursement                         8
            Appendix                                            9
            Factors                                             9

22   INSURANCE BENEFITS

     (A)    Group Insurance                                     1
            (1)   Group Medical Benefit Plan                    1
     (B)    Prescription Drug Program                           5
            (1)   Mail Order Drug Plan                          5
            (2)   Acute Care Drug Plan                          6
     (C)    Dental Plan Benefits                                6
     (D)    Life Insurance                                      8
     (E)    Group Coverage General                              9
     (F)    Outline of Plans                                    9
            (1)   Medical Plan                                  9
            (2)   Short Term Disability                        15
            (3)   Long Term Disability                         16
            (4)   Accidental Death and Dismemberment           16
            (5)   Life Insurance                               17
            (6)   Continuation of Insurance                    18
            (7)   Work Stoppage                                18
            (8)   Flight Attendant Waiver of Medical Coverage  18
            (9)   New Hire Coverage                            19
            (10)  Retiree Medical Coverage                     19
            (11)  Bomb Insurance                               20
            (12)  Aviation Insurance                           20

23   PHYSICAL EXAMINATION

     (A)    Requirements                                        1
     (B)    Neutral Medical Examiner                            1
            (1)   Medically Unfit for Duty                      1
            (2)   Neutral Medical Examination                   1
     (C)    Procedural Letter of Understanding                  2
     (D)    Employee/Company Rights                             3

                            Page xi

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24   UNION SECURITY

     (A)    Union Dues Check-off                                1
     (B)    Union Security                                      1
     (C)    Returning to Position                               2
     (D)    Loss of Membership in Good Standing                 2
     (E)    System Board Protest                                3
     (F)    Execution of Time Limits                            4
     (G)    Discharge                                           4
     (H)    Notice                                              5
     (I)    Return to Employment Following Discharge or
              Resignation                                       5
     (J)    Notification to Employee                            5
     (K)    Company to Furnish Names                            5
     (L)    Dues and Initiation Fee Check-Off                   5
     (M)    Dues Check-Off Form to be Furnished to Company      6
     (N)    Remittance of Union Dues                            7
     (O)    Automatic Revocation of Union Dues Assignment       7
     (P)    Collection of Back Dues                             7
     (Q)    Deduction of Membership Dues From Paycheck          7
     (R)    Recognition of Union Representation                 8
     (S)    Indemnification of Company                          8
     (T)    Definition of Time Limits                           8

25   SAFETY COMMITTEE

     (A)    Establishment of Safety Committee                   1
     (B)    Notification of Accident or Incident                1
     (C)    Travel to Investigation Site                        1
     (D)    OSHA 2000 Logs                                      2
     (E)    Acquisition of New Aircraft or Reconfiguration of
              Existing Aircraft                                 2
     (F)    Advisory Capacity; Non-Liability of Union           2

26   AIRCRAFT CREW COMPLEMENT

     (A)    Basic Crew Complement                               1
     (B)    FAA Minimum Staffing Requirement                    1
     (C)    Additional Cabin Staffing                           2
     (D)    Demand Staffing - Variable Staffing (VSU)           2

27   REOPENERS

     (A)    Foreign Bases                                       1
     (B)    Merger, Purchase, Acquisition, Absorption           1
     (C)    Deregulation                                        1

                            Page xii

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     (D)    Wage Controls, Deferrals, Cut-Backs                 1

28   DURATION OF AGREEMENT

29   LETTERS AND AGREEMENTS

INDEX

                            Page xiii

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                              AGREEMENT
                               BETWEEN
                      TRANS WORLD AIRLINES, INC.
                               AND THE
                 FLIGHT ATTENDANTS IN THE SERVICE OF
                      TRANS WORLD AIRLINES, INC.
                        AS REPRESENTED BY THE
               INTERNATIONAL ASSOCIATION OF MACHINISTS

                              ARTICLE I

(A)  RECOGNITION

     In accordance with the certification R6482 made by the National
     Mediation Board on March 6, 1997, the Company hereby recognizes
     the International Association of Machinists and Aerospace Workers,
     hereinafter identified as the "IAM," as the duly designated and
     authorized representative of the Flight Attendants in the employ
     of the Company for the purposes of the Railway Labor Act, as
     amended.

     Absent agreements by the IAM, the Company agrees that it shall not
     extend recognition to any other labor organization or other entity
     as collective bargaining representative of TWA's Flight Attendants
     unless required by the NMB after exhaustion of NMB procedures.

(B)  SCOPE

     (1)  Except as provided in Article 1 (G) below, all present and
          future in-flight cabin service and safety duties of any form
          performed by or for the Company or any Affiliate shall be
          provided and performed by Flight Attendants on the TWA
          Flight Attendant System Seniority List in accordance with
          the terms and conditions of this Agreement. Such in-flight
          cabin service and safety duties shall include without
          limiting the generality of the foregoing all revenue and
          non-revenue flights, whether scheduled or unscheduled,
          (1) on the Company's or an Affiliate's aircraft, or (2) under
          the Company's or an Affiliate's operational control, or
          (3) over the Company's or an Affiliate's present and future
          routes, route authorities, and/or extensions thereof, or
          (4) subcontracted either to or for any other carrier or entity,
          or (5) conducted by any other carrier under the TWA name,
          logo or marks.

     (2)  Except as provided in Article 1 (G) below, (a) all
          individuals who undergo Flight Attendant training to perform
          the Company's or an Affiliate's in-flight cabin service and
          safety duties and (b) all individuals who train Flight
          Attendants to perform the Company's or an Affiliate's
          aircraft cabin service and safety duties, except as to (a)
          such safety duties included within Annual Emergency Reviews
          which may be performed by Flight Operations personnel and/or
          Flight Attendants and (b) initial factory-conducted training
          in newly

                           ARTICLE 1 / Page 1

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          purchased aircraft and aircraft equipment, shall be Flight
          Attendants on the TWA Flight Attendant System Seniority List
          subject to the terms and conditions of the Agreement.

     (3)  Absent written agreement by the IAM to the contrary, all
          present or future in-flight cabin service and safety duties
          of any form performed for any other carrier by Flight
          Attendants on the TWA Flight Attendant System Seniority List
          shall be performed under terms and conditions that are no
          less favorable than the comparable terms and conditions
          contained in the Agreement.

     (4)  Neither the Company nor any Affiliate shall, without the
          IAM's prior written consent, enter into any sale, lease,
          transfer or other disposition of the Company's or an
          Affiliate's aircraft, international routes or international
          route authority to any person(s) or entity (the "Buyer")
          where the Buyer or any air carrier that Controls or is under
          the Control of the Buyer uses such aircraft or international
          routes to provide or receive passenger feed to or from the
          Company pursuant to an agreement or an arrangement with the
          Company or an Affiliate other than an industry standard
          interline agreement or its substantial equivalent.

     (5)  Neither the Company nor any Affiliate shall establish any
          Flight Attendant domicile outside the United States or its
          territories without the IAM's prior written consent.

(C)  SUCCESSORSHIP AND PARENT COMPANIES

     (1)  The Company and its Affiliates shall require any successor,
          assignee, transferee, administrator, executor and/or trustee
          of the Company or of a Parent (a "Successor") resulting from
          the transfer (in a single transaction or in multi-step
          transactions) to the Successor of the majority beneficial
          ownership and/or Control of all or substantially all of the
          equity securities and/or assets of the Company (a
          "Successorship Transaction") to employ the Flight Attendants
          on the TWA Flight Attendant System Seniority List in
          accordance with the provisions of the Agreement and to
          assume and be bound by the Agreement.

     (2)  The Company and its Affiliates shall not conclude any
          agreement for a Successorship Transaction unless the
          Successor agrees in writing, as an irrevocable condition of
          the Successorship Transaction, to assume and be bound by the
          Agreement, to recognize IAM as the representative of the
          Successor's Flight Attendants, and to guarantee that the
          Flight Attendants on the TWA Flight Attendant System
          Seniority List will be employed by the Successor in
          accordance with the provisions of the Agreement.

                           ARTICLE 1 / Page 2

<PAGE>
<PAGE>

     (3)  The Company shall not conclude, facilitate or permit any
          agreement or arrangement that establishes any Parent that
          is, Controls or is under the Control of an air carrier
          unless the Parent agrees in writing to be bound by this
          Article 1 of the Agreement in the same manner as the
          Company.

(D)  LABOR PROTECTIVE PROVISIONS

     (1)  Successorship and Merger

          In the event of a Successorship Transaction in which the
          Successor is an air carrier or any person or entity that
          Controls or is under the Control of an air carrier (the
          "Merger Partner"), the Company shall, as a condition of the
          transaction, require the Merger Partner to agree, and the
          Merger Partner shall agree, to employ the Company's Flight
          Attendants and to integrate, on the basis of on-line
          seniority, the pre-merger Flight Attendant seniority lists
          of the Company and the Merger Partner in a fair and
          equitable manner pursuant to Sections 3 and 13 of the
          Allegheny-Mohawk Labor Protective Provisions ("LPPs").

     (2)  Flight Attendant Transfer Rights in Substantial Asset Sales.

          If the Company or any Affiliate, in a single transaction or
          a series of related transactions:

          (i)   sells, transfers or disposes of assets which have
                produced more than twenty (20%) percent of the gross
                operating revenue of the Company over the twelve (12)
                months preceding the closing of the asset sale,
                transfer or disposition; or

          (ii)  sells, transfers, or disposes of assets or operations
                which reduce(s) or reasonably can be expected to lead
                to a reduction in the level of available seat miles
                ("ASMs") operated by the Company at the closing of the
                asset sale, transfer or disposition by fifteen (15%)
                percent or more.

          (iii) sells, transfers or disposes of any international
                route or route authority; or

          (iv)  sells, transfers or disposes of ten (10%) or more of
                the Company's aircraft fleet as of the closing of the
                aircraft sale, transfer or disposition (except as part
                of a phased transport aircraft replacement program
                which is being diligently pursued in good faith by the
                Company, and pursuant to which the Company in fact
                replaces such aircraft within 180 days) to a person or
                entity or to a group of persons or entities acting in
                concert (the "Purchaser") that is, Controls

                           ARTICLE 1 / Page 3

<PAGE>
<PAGE>

                or is under the Control of an air carrier or that will
                operate as, Control or be under the Control of an air
                carrier following its acquisition of the Company
                assets (any such transaction or series of transactions
                that satisfies (i), (ii), (iii) or (iv) above, a
                "Substantial Asset Sale"), then:

                (a)  The IAM shall determine, in its sole discretion,
                     whether or not Flight Attendants from the TWA
                     Flight Attendant System Seniority List (the
                     "Transferring Flight Attendants") shall transfer
                     to the particular Purchaser(s) pursuant to the
                     Substantial Asset Sale. The number of
                     Transferring Flight Attendants shall be
                     determined by calculating the average Flight
                     Attendant staffing on a monthly basis over the
                     prior twelve (12) months attributable to the
                     international route or route authority, aircraft
                     and/or other assets or operations transferred to
                     the particular Purchaser in connection with the
                     Substantial Asset Sale. In addition to the above
                     requirements the Company shall use its
                     reasonable good faith efforts to have the
                     particular Purchaser offer employment to the
                     largest practicable number of TWA Flight
                     Attendants as Transferring Flight Attendants
                     under the terms of this Article 1(D); and

                (b)  The Transferring Flight Attendants shall be
                     selected on the basis of TWA system seniority on
                     the TWA Flight Attendant System Seniority List
                     from those Flight Attendants who are qualified,
                     or who with FAA required training can become
                     qualified, to serve on the aircraft, route, or
                     operation related to the Substantial Asset Sale.

                (c)  The Company and its Affiliates shall require
                     each particular Purchaser, and each particular
                     Purchaser shall agree, (i) to employ the
                     Transferring Flight Attendants; (ii) to pay the
                     Transferring Flight Attendants at no less than
                     the lesser of the rates of pay being paid by TWA
                     or the particular Purchaser for the applicable
                     seniority level at the time of the transfer; and
                     (iii) to integrate the Transferring Flight
                     Attendants into the Purchaser's Flight Attendant
                     seniority list in a fair and equitable manner
                     pursuant to Sections 3 and 13 of the Allegheny
                     Mohawk LPPs.

     (3)  Special Protections in a Carrier Fragmentation

                           ARTICLE 1 / Page 4

<PAGE>
<PAGE>

          (a)  If the Company sells, transfers or disposes of assets within
               any twelve (12) month period which, net of asset purchases
               or acquisitions during the same twelve (12) month period,
               (i) produced fifteen (15%) percent or more of the ASMs
               operated by the Company over the prior twelve (12) months,
               or (ii) produced fifteen (15%) percent or more of the
               Company's Flight Attendant staffing positions over the prior
               twelve (12) months, or (iii) produced fifteen (15%) percent
               or more of the Company's annual block hours over the prior
               twelve (12) months (the closing of any such transaction(s)
               which alone or in the aggregate satisfy the aforesaid
               percentage being referred to as a "Triggering Event), then

               (1)  no Flight Attendant on the Company's seniority list on
                    the date of the Triggering Event shall be furloughed
                    during the twelve (12) month period following the
                    Triggering Event, or shall be furloughed in
                    anticipation of any Triggering Event or for the
                    purpose of depriving any Flight Attendant of
                    protection under this paragraph; and

               (2)  during the time period in which any of the
                    restrictions described in this Article 1(D)(3) are in
                    effect, the Company will be permitted, at its
                    discretion, notwithstanding any other provision of the
                    Agreement, to require a Flight Attendant who would
                    have been furloughed but for the restrictions
                    described in this Article 1(D)(3) to utilize his or
                    her accrued unused vacation.

          (b)  The special protections described in this Article 1(D)(3)
               are in addition to the Flight Attendant transfer and
               seniority integration rights established in Article 1(D)(2)
               above in connection with Substantial Asset Sales. However,
               the Substantial Asset Sales governed by Article 1(D)(2)
               above shall not be counted in determining whether the
               Company has reached a Triggering Event (and thereby
               triggered the special protections) under this Article
               1(D)(3) in any twelve (12) month period.

          (c)  In addition, the special provisions described in this
               Article 1(D)(3) shall not apply if the Company can
               demonstrate, by clear and convincing evidence, based on all
               the information available at the time of the Triggering
               Event, that the asset sales, transfers or dispositions that
               result in a Triggering Event will not result, directly or
               indirectly, in the furlough of Company Flight Attendants
               during the 12 month period

                           ARTICLE 1 / Page 5

<PAGE>
<PAGE>
              following a sale, transfer, or disposition.

     (4)  General

          (a)  The Company shall not conclude or enter into any agreement
               for any transaction or series of transactions that
               constitute a Substantial Asset Sale or a Merger unless the
               particular Purchaser or the Merger Partner, as applicable,
               agrees in writing to offer employment and integrate TWA
               Flight Attendants in accordance with the terms of this
               Article 1(D) or as otherwise agreed to by the IAM. The
               Company will not engage in a multiple party sale transaction
               or any other corporate transaction with the purpose or
               knowing effect of avoiding the applicability of this
               Article 1(D).

          (b)  This Article 1(D) shall not apply to (i) any sale lease-back
               or any financing transaction in which the Company continues
               to use the financed assets in its operations or (ii) the
               sale of Trans World Express, Inc. ("TW Express, Inc.") or
               any or all of its assets.

          (c)  The rights and protections provided the IAM and the TWA
               Flight Attendants under this Article 1(D) are in addition to
               any other rights and protections contained in any other
               agreement involving the IAM and the TWA Flight Attendants
               including other provisions of this Agreement. In the event
               of a conflict between Article 1 and any other provision of
               this Agreement, this Article 1 shall control.

     (5)  Acquisition of Airline Assets

          In the event (i) the Company acquires international routes
          or 20 or more aircraft from another carrier (the "Seller")
          and (ii) the Company's acquisition of such routes or
          aircraft materially increases the Company's Flight Attendant
          staffing needs and (iii) the terms of the Company's purchase
          agreement with the Seller require the Company to employ
          certain of the Seller's Flight Attendants with lateral
          seniority or seniority integration rights, then a reasonable
          number of transferring Flight Attendants from the Seller
          shall be integrated into the TWA Flight Attendant System
          Seniority List in a fair and equitable manner pursuant to
          Sections 3 and 13 of the Allegheny-Mohawk Labor Protective
          Provisions ("LPPs").

(E)  BANKRUPTCY

     (1)  The Company and the IAM agree that the implementation of
          this Agreement constitute a complete restructuring of the
          parties' rights

                           ARTICLE 1 / Page 6

<PAGE>
<PAGE>

          and obligations under the IAM - TWA collective bargaining
          agreement and that such implementation has been negotiated
          in good faith as a part of an overall restructuring of the
          Company's rights and obligations with respect to its
          creditors, employees and other constituencies. In addition,
          the Company hereby represents and confirms that

          (a)  The IAM has made significant and quantifiable
               concessions in this Agreement which have substantially
               benefited all other creditor groups and have allowed
               the Company to avoid liquidation; and

          (b)  the Agreement has been negotiated in good faith by
               both parties on the basis of the Company's explicit
               representation that it will not seek, require or
               support any modification, alteration, revision or
               refection of any provision of this Agreement without
               the IAM's written consent, even if the Company is
               required to undergo additional reorganization or
               restructuring under the United States Bankruptcy Code
               or otherwise; and

          (c)  any request by the Company to modify, alter, revise or
               reject any provisions of the Agreement without the IAM's
               written consent would therefore be made in bad
               faith.

     (2)  As a result of the negotiations, agreements and
          representations described in the preceding Article 1(E)(1),
          in the event a petition under Chapters 7 or 11 of the
          Bankruptcy Code concerning the Company is filed, then:

          (a)  Neither the Company nor any Affiliate shall file any
               application seeking rejection or modification of any
               agreement between the Company and the IAM pursuant to
               11 U.S.C. Section 1113 or any other provision of the
               Bankruptcy Code, including a request to implement
               interim changes in the Agreement pursuant to 11 U.S.C.
               Section 1113(e).

          (b)  The Company and its Affiliates stipulate and agree
               that this Agreement permits the reorganization of the
               Company and assures that all creditors. The debtor and
               all affected parties are treated fairly and equitably
               in any reorganization within the meaning of 11 U.S.C.
               Section 11 13. The Company and its Affiliates shall
               actively oppose a rejection or modification of the
               Agreement or implementation of interim changes to the
               Agreement if proposed or supported by any other party.

                           ARTICLE 1 / Page 7

<PAGE>
<PAGE>

     (3)  In the event the Agreement is rejected or modified pursuant
          to 11 U.S.C. Section 1113 notwithstanding any provision
          herein, then the difference between the rates of pay, rules
          and working conditions established in this Agreement and the
          post-rejection rates of pay, rules and working conditions
          for the Company's Flight Attendants shall accrue and be
          treated as an expense of administration pursuant to 11
          U.S.C. Sections 503(B)(1)(A) and 507 and shall be paid as
          an administrative priority pursuant to 11 U.S.C. Sections
          503(b)(1)(A) and 507(a)(1).

(F)  REMEDIES

     (1)  The Company agrees, and shall require the particular
          Purchaser (or Successor or Merger Partner if applicable) to
          agree, to resolve all disputes concerning the interpretation
          or application of this Article 1 through final and binding
          arbitration on an expedited basis directly before the IAM -
          TWA System Board of Adjustment sitting with a neutral
          arbitrator. The dispute shall be filed with the Company
          within ten (10) days of the interpretation or application of
          Article 1 and shall be heard no later than fifteen (15) days
          following the submission to the System Board and decided no
          later than thirty (30) days after submission (the provisions
          of Articles 16 and 17 herein notwithstanding), unless the
          parties agree otherwise in writing; but in no event shall
          such arbitration delay the closing of the sale of the
          transferred assets. The IAM shall cooperate with the
          Company and the Purchaser in order that any dispute which is
          not decided at the time of closing will be arbitrated post-
          closing, with any determination to be binding on the
          Purchaser unless the Company and the Purchaser agree, with
          the consent of the IAM (which consent shall not be
          unreasonably withheld or delayed by the IAM), that such
          determination shall be and remain the sole obligation of the
          Company; provided that the Purchaser shall have the right to
          become a party to and to participate in any such arbitration
          which could become binding upon such Purchaser.

     (2)  The Company and the IAM agree that the rights and
          obligations contained in Article 1 of this Agreement are
          equitable in nature, that there are no adequate remedies at
          law for the enforcement of such rights and obligations, and
          that the IAM and the Company's Flight Attendants will be
          irreparably injured by any violation of this Article 1.  The
          parties therefore agree that, in addition to any other
          rights and remedies available under law or the Agreement,
          this Article 1 shall be enforced by equitable remedies,
          including injunctions and specific performance, against the
          Company, its Affiliates and others in privity with the
          Company.

     (3)  In addition, the parties agree that the equitable rights and
          obligations established in this Article 1 shall remain
          enforceable, through equitable relief and otherwise, until
          the Agreement is amended pursuant to Section 6 of the
          Railway Labor Act notwithstanding (a)

                           ARTICLE 1 / Page 8

<PAGE>
<PAGE>

          any filing concerning the Company under any chapter of the
          United States Bankruptcy Code, (b) any attempted alteration,
          modification or rejection of the Agreement pursuant to any
          provision of the Bankruptcy Code or otherwise, (c) any
          attempted sale of the property of the Company pursuant to
          any provision of the Bankruptcy Code or otherwise, or (d)
          any imposition of an automatic stay with respect to the
          Company's property.

(G)  COMMUTER CARRIERS, CODE SHARING AND BLOCK SEATING

     (1)  The Company, its subsidiaries and its corporate affiliates
          may acquire an ownership interest in commuter carriers and
          may operate such commuter carriers under the terms of
          separate collective bargaining agreements with the IAM
          provided any such commuter carriers comply with the
          restrictions contained in Sections 1(G)(2) through 1(G)(5)
          below.

     (2)  Except as agreed in the September 5, 1995 Letter of
          Agreement between TWA and ALPA pertaining to the use of ATR
          aircraft by Trans States, Inc., the Company, and its
          Affiliates will not operate, maintain any ownership interest
          in, or enter into any code sharing arrangement with, any
          United States air carrier as defined in 49 U.S.C.
          40102(a)(2) that operates any aircraft under the Company's
          designator code, name, logo or marks with: (a) a maximum
          seating capacity in excess of sixty (60) seats; (b) a
          maximum certified gross takeoff weight in excess of 60,000
          pounds; (c) a maximum certified cruising speed in excess of
          400 miles per hour; or (d) any jet aircraft as defined
          herein.  Any carrier that satisfies all of the restrictions
          contained in this Section 1 (G)(2) and that utilizes the
          Company's or an Affiliate's designator code is hereinafter
          referred to as a "TWA Commuter Carrier."  For purposes of
          this subsection (G), "Jet Aircraft" is defined as any
          aircraft that uses a turbine-driven engine without an
          external propeller.

     (3)  Notwithstanding the limitations in Section 1(G)(2) above,
          TWA Commuter Carriers may operate up to an aggregate of
          fifteen (15) Jet Aircraft with a maximum seating capacity of
          fifty (50) seats.

     (4)  In addition to the fifteen (15) Jet Aircraft referred in
          Section 1(G)(3) above, TWA Commuter Carriers may operate:
          (i) one additional Jet Aircraft for each additional three
          aircraft operated by TWA above its current fleet size of 184
          aircraft until the TWA fleet size reaches 200 aircraft; and
          (ii) one additional Jet Aircraft for each two aircraft
          operated by TWA exceeding 200 fleet aircraft.  The maximum
          seating capacity of the Jet Aircraft operated by TWA
          Commuter Carriers shall be:  fifty (50) seats while the
          Company's fleet size is less than 190; fifty-four (54) seats
          while the Company's fleet size is between 191 and 195;
          fifty-six (56) seats while the Company's fleet size is
          between 196 and 200; and sixty (60) seats while the
          Company's fleet size

                           ARTICLE 1 / Page 9

<PAGE>
<PAGE>

          exceeds 200.  The relationship of the Company's fleet size
          to the number of Jet Aircraft that may be operated by TWA
          Commuter Carriers and the average seating capacity of the
          Jet Aircraft that may be operated by TWA Commuter Carriers
          is shown in Section 1(G)(9) below.

     (5)
          (a)  In no event will TWA Commuter Carriers operate more
               than a maximum aggregate of thirty (30) Jet Aircraft,
               and in no event will the certificated seating capacity
               of any Jet Aircraft operated by any TWA Commuter
               Carrier exceed seventy (70) seats.

          (b)  If TWA owns (or leases) and operates regional jets,
               TWA employees covered by IAM Agreements shall perform
               all covered work.  If regional jets are operated by a
               wholly-owned subsidiary of TWA, TWA employees
               otherwise covered by IAM agreements shall perform all
               covered work, provided that the IAM and TWA enter into
               a new, separate agreement establishing fully
               competitive market rates and market working conditions
               for the performance of such work.  All work on
               regional jets operated by a commuter carrier shall be
               performed by the employees of the commuter carrier or
               its service provider.

     (6)  As a limited exception to the restrictions contained in
          Sections 1(G)(2), (3), (4), and (5) above, the Company may
          enter into or maintain code sharing agreements with

          (a)  carriers other than United States air carriers (as
               defined in 49 U.S.C. 40102(a)(2)) so long as the
               Company can demonstrate by clear and convincing
               evidence, that such code sharing arrangements: (i) do
               not result, directly or indirectly, in the furlough of
               any Company flight attendant or a reduction in pay
               status for any Company flight attendant (ii) do not
               directly or indirectly result in the involuntary
               furlough from his/her location of any active Mechanic
               & Related and Passenger Service Employees employed as
               of the signing and as listed on the Attached Exhibit A
               ("Active Employees").

          (b)  United States air carriers (as defined in 49 U.S.C.
               40102(a)(2)) other than TWA Commuter Carriers that
               permit such carriers to apply the Company's designator
               code to their operations within the United States and
               its territories as long as (i) the number of
               quarterly block hours operated by such carriers
               utilizing the Company's designator code does not
               exceed four percent (4%) of the total number of block
               hours operated by the Company for the same quarter

                           ARTICLE 1 / Page 10

<PAGE>
<PAGE>

               within the United States and its territories and (ii)
               the Company can demonstrate, by clear and convincing
               evidence, that such code sharing arrangements do not
               result, directly or indirectly, in the involuntary
               furlough of any IAM-represented employee or a
               reduction in pay status for any IAM-represented
               employee; provided, however, the IAM may, in its sole
               discretion, increase the total number of block hours
               available for such operations to up to ten (10%)
               percent of the total number of block hours operated by
               the Company for the same quarter within the United
               States; and

          (c)  The number of quarterly block hours specified in
               Section 1(G)(6)(b)(i) above, may be increased as
               follows:  If the Company's fleet size increases to 193
               aircraft, then the number shall be four and one-half
               (4.5%) percent; if the Company's fleet is at least 199
               aircraft, then the number shall be five (5.0%)
               percent.  The relationship between the Company's fleet
               size and the number of quarterly block hours that may
               be operated by such United States air carriers is
               shown in Section 1(G)(9) below.

     (7)  The Company and its Affiliate may only enter into block
          seating arrangement (i.e., the advance purchase of
          reservation of blocks of seats on other carriers for resale
          by the Company) aboard any aircraft operated by any person
          or entity other than the Company if and to the extent that
          the Company can demonstrate, by clear and convincing
          evidence, that such block seating arrangements do not
          result, in the involuntary furlough of any IAM-represented
          employee or a reduction in pay status for any IAM-
          represented employee.

     (8)  Mechanic & Related and Passenger Service Employees Listed on
          the Attached Exhibit "A" ("Active Employees") at a TWA
          location as of the date of signing shall not be
          involuntarily furloughed from that location as a direct
          result of a commuter carrier operating Regional Jets.  The
          Company will not furlough any Flight Attendant on the TWA
          Flight Attendant System Seniority List as a result of the
          acquisition, expansion over TWA's domestic route system or
          operation of regional jets by any TWA Commuter Carrier.

                           ARTICLE 1 / Page 11

<PAGE>
<PAGE>

     (9)  Summary Chart - Sections 1(G)(4), (5), and (6)

<TABLE>
<S>                         <C>                         <C>                       <C>
          Company           Quarterly Code              No. of Jet                Max. Avg.
          Aircraft          Share Domestic              Aircraft                  Seating
                            Block Hours That            That May Be               Capacity of
                            May be Operated             Operated by               Jet Aircraft
                            by US Air Carriers          TWA Commuter              Operated by
                            Other than TWA                                        TWA Commuter
                            Carriers                                              Carriers

          187-189           4.0%                        16                        50
          190-192           4.0%                        17                        54
          193-195           4.5%                        18                        54
          196-198           4.5%                        19                        56
          199-200           5.0%                        20                        56
          201+              5.0%                        21 + 1 for 2              60
                                                        thereafter up to
                                                        30 maximum
</TABLE>

     (10) In addition to and apart from the Jet Aircraft carrying only
          that TWA Commuter Carrier's and TWA's or Affiliate's
          designator code that TWA Commuter Carriers are otherwise
          authorized to operate by this Section 1(G), TWA Commuter
          Carriers may additionally operate a maximum of three (3) Jet
          Aircraft with a capacity of no more than seventy (70) seats
          for which that TWA Commuter Carrier has a code-sharing
          agreement involving both (a) TWA or an Affiliate and (b) a
          third-party code-sharing carrier ("Shared Code-Sharing Jet
          Aircraft").  These 3 Shared Code-Sharing Jet Aircraft are
          not subject to and will not count towards the maximum
          average seating limitations of Section 1(G)(4) and the 30
          aircraft aggregate limitation of Section 1(G)(5).  All other
          restrictions and limitations imposed by this Section 1(G)
          remain in effect for these Shared Code-Sharing Jet Aircraft.

     (11) Regional Jet Bids.  TWA will make its best efforts to submit
          competitive bids for all work performed on regional jets
          operated by Commuter Carriers ("Regional Jet Bids").  The
          Company shall schedule 2 meetings each year with the IAM to
          discuss the results of the Regional Jet Bids it has
          submitted and review those situations where it chose not to
          submit such bids.

(H)  DEFINITIONS

     The following definitions shall apply to the capitalized terms in
     the Article 1 of the Agreement:

     (1)  Agreement. The term "Agreement" means and includes this
          ---------
          collective bargaining agreement between IAM and the Company
          and any and all other agreements between IAM and the
          Company.

                           ARTICLE 1 / Page 12

<PAGE>
<PAGE>

     (2)  Control. Person or entity A shall be deemed to "Control"
          -------
          person or entity B if person or entity A, whether directly
          or indirectly,

          (a)  owns securities that constitute, are exercisable for
               or are exchangeable into twenty (20%) percent or more
               of (I) entity B's outstanding common stock or (ii)
               securities entitled to vote on the election of
               directors of entity B, or otherwise owns twenty (20%)
               percent or more of entity B, or

          (b)  maintains the power, right, or authority by contract
               or otherwise - to direct, manage or direct the
               management of a substantial portion of entity B's
               operations, or provides a substantial portion of the
               controlling management personnel of entity B; or

          (c)  maintains the power, right or authority to appoint or
               prevent the appointment of a majority of entity B's
               Board of Directors or similar governing body; or

          (d)  maintains the power, right or authority to appoint a
               minority of entity B's Board of Directors or similar
               governing body, if such minority maintains the power,
               right or authority to appoint or remove any of entity
               B's executive officers or any committee of entity B's
               Board of Directors or similar governing body, to
               approve a material part of entity B's business or
               operating plans, or debt or equity offerings.

     (3)  Parent. As used in the Agreement, the term "Parent" refers
          ------
          to any entity that Controls the Company, whether directly or
          indirectly through the Control of other Entities that
          Control the Company.

     (4)  Affiliate. As used in the Agreement, the term "Affiliate"
          ---------
          refers to (i) any person or entity that Controls the Company
          whether directly or indirectly through the Control of other
          entities, or (ii) any person or entity that the Company
          Controls, whether directly or indirectly through the Control
          of other entities, or (iii) any other corporate subsidiary,
          parent or division of the Company, or any other Affiliate.

                           ARTICLE 1 / Page 13

<PAGE>
<PAGE>

                               ARTICLE 2
                              DEFINITIONS

As used in this Agreement, the term

(A)  "Cabin Attendant" means an employee whose work shall include
     performing and assisting in the performance of all enroute cabin
     services, assisting ground personnel in the boarding process of
     each flight departure, including but not limited to the lifting of
     flight coupons in the gate area, and ground service to delayed or
     canceled passengers in a resourceful and gracious manner, and the
     responsibility to apply these services for the welfare, comfort,
     enjoyment and safety of passengers. A Cabin Attendant may be
     required to attend operational meetings, refresher training
     course, equipment checkouts, ditching drills, and similar
     procedures related to flight duties. A Cabin Attendant may, from
     time to time, be requested to participate in publicity and
     promotional assignments.

(B)  "Service Manager" means an employee who exercises jurisdiction and
     direct control over all cabin attendants in matters concerning all
     phases of their duties and responsibilities as set forth by
     Company procedures. Vacancies in the Service Manager
     classification shall be opened for bid on a systemwide basis to
     Flight Attendants who have two (2) years or more line seniority
     and a minimum one (1) year pay seniority. The work of a Service
     Manager shall include, but not be limited to the assignment,
     direction and reassignment where necessary of the work of the
     cabin crew complement. During the pre-flight briefing, standard
     positions, assignments and recognition of work positions by
     seniority bid preference will prevail. However, when a passenger
     imbalance exists among the cabins or service requirements justify,
     the Service Manager shall request volunteers from the cabin where
     least needed. If no Flight Attendant(s) volunteer, the Service
     Manager has the authority to reassign the most junior Flight
     Attendant(s) to the cabin where needed. When two (2) or more Cabin
     Attendants are assigned to a wide-bodied aircraft, or to any other
     aircraft requiring a Flight Service Manager, at least one (1) of
     them shall be a Service Manager. The Company shall assign a Flight
     Service Manager on all narrow-body aircraft which operate on
     flights outside the contiguous 48 United States, Alaska and Puerto
     Rico. A Service Manager will be familiar with all cabin duties, be
     capable or performing all such duties at the direction of the
     Company or whenever the requirements of the service justify. A
     Service Manager is responsible for developing, maintaining and
     furthering a harmonious team spirit among the cabin attendants. A
     Service Manager may be designated to perform necessary duties in
     connection with a flight cargo operation and may be required to
     attend operational meetings, refresher training courses, equipment
     checkouts, ditching drill, and similar procedures related to
     flight duties. A Service Manager may, from time to time, be
     requested to participate in publicity and promotional assignments.

                           ARTICLE 2 / Page 1

<PAGE>
<PAGE>

(C)  "Employee" as used herein, means Cabin Attendant or Service
     Manager. Flight Attendant as used herein shall be synonymous with
     Employee.

(D)  "Block-to-block" time shall mean that period of time beginning
     when an aircraft first moves from the ramp blocks, for the purpose
     of flight, and ending when the aircraft comes to a stop at the
     ramp blocks at the next point of landing.

(E)  "Domicile" means a location where Flight Attendants are
     permanently based.

(F)  "Satellite" means a location attached to a domicile and from which
     a Flight Attendant may bid to fly.

(G)  "Deadhead" means, pursuant to Article 6(L) of this Agreement, the
     air travel on flight segment(s) on which a Flight Attendant is not
     scheduled to actively engage in Flight Attendant duties as a
     member of the working crew; or, surface travel time via ground
     transportation airport to airport while on Company duty other than
     travel between co-terminals.

(H)  "Month" or "calendar month" as used in this Agreement shall mean
     the following inclusive periods:

     January          30 days                 1-30 January
     February         30 days                 January 31-March 1
                      (leap year 31 days)
     March            30 days                 2-31 March
     April            30 days                 1-30 April
     May              31 days                 1-31 May
     June             30 days                 1-30 June
     July             31 days                 1-31 July
     August           31 days                 1-31 August
     September        30 days                 1-30 September
     October          30 days                 1-30 October
     November         31 days                 October 31-November 30
     December         31 days                 1-31 December

(I)

     (1)  A "DOMESTIC FLIGHT" is any flight which operates within the
          North American continent and the Caribbean.  For pay
          purposes only (including expenses), flights to and from
          Mexico and the Caribbean will be compensated at
          international rates of pay.

     (2)  An "INTERNATIONAL FLIGHT" is any flight which either departs
          or arrives at a station outside the North American continent
          or the Caribbean.

                           ARTICLE 2 / Page 2

<PAGE>
<PAGE>

     (3)  International crews may be assigned to fly Domestic segments
          of International flights provided that a) the Domestic
          portion is a "tag end" to the origination or completion of
          the paired International flight; b) the Domestic and
          International flight segments are flown within a single on-
          duty period; c) both the Domestic and International segments
          have identical flight numbers.

(J)  "Operational Duty Hours" start with the time an employee is
     required to report for active flight duty, or does report for such
     duty, whichever is later, and end one-quarter hour for Domestic
     and one-half hour for International after the conclusion of block
     time at a station where a cabin attendant is released, or if the
     flight does not depart, operational duty hours end when the
     employee is released from such flight. Block-to-block and deadhead
     time are not included in operational duty hours. If an employee is
     released from duty at an intermediate station, operational duty
     hours shall end at time of release and shall recommence when the
     employee reports, or is required to report, whichever is later,
     for continuation of flight duty. The Company may waive a Flight
     Attendant's report time at a layover station in a non-routine
     situation, to no less than fifteen (:15) minutes, in which case,
     operational duty hours shall not be less than the originally
     scheduled operational duty hours, it being understood that such
     payment will not affect a commencement of an on-duty period or
     trip hours as defined in 6(E)(1).

(K)  "Reserve" means an employee who does not hold a monthly sequenced
     line of time.

(L)  Standby Duty

     (1)  A reserve Flight Attendant shall be considered to be on
          "residence standby" if she/he is informed that she/he must
          stand by the telephone in order to be available for
          immediate flight duty on other than her/his assigned flight.
          Those reserve Flight Attendants assigned to residence
          standby must be available to report for flight duty within
          two (2) hours via surface transportation of being assigned
          to a flight.

     (2)  A reserve Flight Attendant shall be considered to be on
          "airport standby" if she/he is informed that she/he must
          stand by, in uniform, at the airport in order to be
          available for immediate flight duty on other than her/his
          assigned flight.

(M)  A "wide-bodied aircraft" is defined as an aircraft configuration
     with two or more aisles.

(N)  An employee who is assigned to a "ferry flight" shall be
     considered as deadheading.

(O)  "Average Line Value" (ALV) means the weighted average credit value
     of the bid lines as published in the bid packages.

                           ARTICLE 2 / Page 3

<PAGE>
<PAGE>

(P)  "Fixed Daily Credit" is the number of hours of pay and credit
     fixed at a value of two hours thirty (2:30) minutes.

(Q)  "Alternate Line" is defined as a bid line which contains all
     flying within the first fifteen (15) days or the last fifteen (15)
     days of the bid month.  Alternate Lines shall be constructed
     between 32:30 and 45:00 credit hours.

                           ARTICLE 2 / Page 4

<PAGE>
<PAGE>

                               ARTICLE 3
                                  PAY

(A)  Except as otherwise provided herein, hourly rates of pay under the
     TWA-IAM Agreement shall remain, for the entire term of this
     Agreement as shown in Schedule "A" attached hereto.

(B)  Operational Duty Pay

     Each Flight Attendant shall be paid operational duty pay at the
     scheduled rate of $.48 per hour for each operational duty hour as
     defined in Article 2(J).

(C)  Service Manager Override

     Each Service Manager on wide-bodied aircraft shall receive the
     scheduled rate of $1.27 per hour for each hour of flight time,
     actual or scheduled, block-to-block time, whichever is greater,
     calculated on a leg-by-leg basis, in addition to any other
     compensation to which she/he is entitled pursuant to this Article.

(D)  Reserves

     (1)  All Flight Attendants who are on reserve during any part of
          a month shall receive not less than seventy-five (75) pay
          hours, provided, however, that the minimum 75-hour guarantee
          shall not apply to Flight Attendants whose monthly
          guarantees have been reduced pursuant to the provisions of
          Article 6(X) [Enhanced Trip Option] and/or Article
          18(D)(7)(f)(2)(c) [Balance Avoidance].

     (2)  Reserve Flight Attendants at domiciles which protect both
          International and Domestic flights shall be compensated at
          international rates of pay.

(E)  Night Pay

     A Flight Attendant shall receive the scheduled rate of $0.19 for
     each hour prorated to the nearest minute actually flown between
     the hours of 1800 and 0600 local time. The time of departure shall
     be the actual block out time of the flight. When changes in time
     zone occur in flight, the time zone at the station of last
     departure shall be used in computing the day and night flying for
     that leg of the flight.

(F)  Language of Destination

     A Flight Attendant who is eligible to receive pay pursuant to the
     Letters of Agreement No.s VII and VIII for Language of Destination
     shall receive the scheduled rate of $1.00 for each block hour
     flown during the month.  A Flight Attendant who is eligible to
     receive pay pursuant to the Letter of Agreement

                           ARTICLE 3 / Page 1

<PAGE>
<PAGE>

     dated June 25, 1997 shall receive the scheduled rate of $2.50 for
     each block hour flown for any applicable segment.

(G)  24 in 7

     A Flight Attendant who is not granted 24 hours relief during the
     seven (7) calendar days as specified in Article 6(S) shall be
     compensated at two hours thirty minutes (2:30) at her/his hourly
     rate.

(H)  Service Manager Emergency Downgrade

     In an emergency when it is necessary to assign a Service Manager
     to a lower classification, she/he shall receive no less than his
     current rate of pay. In such situations, the bid Service Manager
     shall be in charge.

(I)  Random Drug/Alcohol Testing

     A Flight Attendant will be paid one hour (no credit) at her/his
     hourly rate for each occasion she/he is subject to Random Drug
     and/or Alcohol Testing. The provisions of this section are not
     applicable to events of "follow-up testing" as defined in Letter
     XXV, the Random Substance Testing Letter of Agreement, or
     drug/alcohol testing for cause.

(J)  Standby Penalties

     (1)  Should a reserve Flight Attendant serve more than four (4)
          airport standby assignments, during any one bid month,
          she/he shall receive the scheduled rate of $19.73 for each
          additional airport standby assignment and such amount shall
          not be offset against base pay.

     (2)  Should a reserve Flight Attendant serve more than a total of
          five (5) airport standby assignments and/or residence
          standby assignments during any one bid period, she/he shall
          receive the scheduled rate of $19.73 for each additional
          airport standby assignment or residence standby assignment
          and such amount shall not be offset against base pay.

     (3)  For purposes of the two paragraphs immediately preceding, a
          single assignment of airport standby shall consist of any
          amount of time between one minute and eight (8) hours, not
          to exceed eight (8) consecutive hours.

          A single assignment of residence standby shall consist of
          any amount of time between one minute and 24 consecutive
          hours, not to exceed twenty-four (24) consecutive hours.
          For the purpose of Paragraphs 1)

                           ARTICLE 3 / Page 2

<PAGE>
<PAGE>

          and 2) above, a Flight Attendant shall not receive more than
          one (1) payment as scheduled above for each additional
          assignment so mentioned.

(K)  Vacation Increment Pay

     In addition to vacation pay and credit provided under Article
     6(F), an employee shall receive increment pay based upon the
     number of credited vacation pay hours times the following
     applicable rate:

     Domestic Service Managers and Cabin Attendants:   $.24
     International Cabin Attendants:                   $.17
     International Service Managers:                   $.77

(L)  Service Manager Temporary Upgrade

     The Company will pay a Flight Attendant the applicable Flight
     Service Manager rate of pay commensurate with her/his seniority
     for each flight assignment in which she/he is upgraded to the
     Flight Service Manager classification.

(M)  Special Assignment

     Flight Attendants on Special Assignment (SPA) shall be credited
     with two hours and fifty (2:50) minutes for each day of the
     special assignment or trips missed credit, whichever is greater,
     to a maximum of eighty-five (85:00) hours per month for their
     respective classifications.

(N)  Deadhead

     If an employee deadheads under Company orders on any and all
     flights to or from protecting a flight he/she shall receive one
     hundred percent (100%) pay/credit of such deadhead flight time for
     each hour or fraction thereof prorated at the applicable hourly
     rate.

(O)  Domestic Excess On-Duty

     A Domestic Flight Attendant exceeding fifteen (15) consecutive
     hours on duty shall be compensated at his/her hourly rate for all
     such hours in excess of fourteen (14) hours.  Such compensation
     shall not be offset against base pay and shall be in addition to
     that computed under Article 6(D).

                           ARTICLE 3 / Page 3

<PAGE>
<PAGE>
                  (SCHEDULE "A")
                  --------------

            DOMESTIC CABIN ATTENDANT
            ------------------------

                   HOURLY RATES
                   ------------

   Year              8/1/99               8/1/00
   1                 17.54                17.72
   2                 19.09                19.28
   3                 20.62                20.82
   4                 22.17                22.39
   5                 23.60                23.83
   6                 25.04                25.29
   7                 26.48                26.75
   8                 28.74                29.03
   9                 29.43                29.72
   10                30.00                30.30
   11                30.56                30.87
   12                32.22                33.35
   13                33.66                34.84

          INTERNATIONAL CABIN ATTENDANT
          -----------------------------

                   HOURLY RATES
                   ------------

   Year              8/1/99               8/1/2000
   1                 17.54                17.72
   2                 19.09                19.28
   3                 20.62                20.82
   4                 22.17                22.39
   5                 23.60                23.83
   6                 25.04                25.29
   7                 26.48                26.75
   8                 30.86                31.17
   9                 31.63                31.94
   10                32.24                32.56
   11                32.85                33.18
   12                34.70                35.91
   13                36.25                37.52

                           ARTICLE 3 / Page 4

<PAGE>
<PAGE>

         DOMESTIC FLIGHT SERVICE MANAGER
         -------------------------------

                   HOURLY RATES
                   ------------

   Year              8/1/99               8/1/2000
   3                 22.04                22.26
   4                 23.48                23.71
   5                 24.91                25.16
   6                 26.37                26.63
   7                 27.80                28.08
   8                 32.47                32.80
   9                 33.17                33.50
   10                33.92                34.26
   11                34.62                34.97
   12                36.51                37.79
   13                38.14                39.48

      INTERNATIONAL FLIGHT SERVICE MANAGER
      ------------------------------------

                  HOURLY RATES
                  ------------

   Years             8/1/99               8/1/2000
   3                 22.04                22.26
   4                 23.48                23.71
   5                 24.92                25.17
   6                 26.37                26.63
   7                 27.80                28.08
   8                 36.54                36.91
   9                 36.75                37.12
   10                37.90                38.28
   11                38.59                38.98
   12                40.64                42.07
   13                42.46                43.95

                           ARTICLE 3 / Page 5

<PAGE>
<PAGE>

                              ARTICLE 4
                              EXPENSES

(A)  DOMESTIC OPERATIONS

     When a Flight Attendant in Domestic Operations is on a trip away
     from his or her domicile or satellite on Company business, the
     following shall apply:

     (1)  Expense Allowance.  A Flight Attendant's expense allowance
          -----------------
          while engaged in operations away from his/her domicile
          and/or satellite shall be one dollar and eighty cents
          ($1.80) per hour for each hour or fraction thereof while
          away from domicile and/or satellite.  Expenses shall be paid
          commencing at report and ending at release.

     (2)  Other Expenses.  When Flight Attendants are on duty at
          --------------
          locations other than their regular domiciles, regular
          satellites or regular layover stations, or on special
          assignment for the Company, and transportation, laundry,
          cleaning, meals, lodging and tips are not provided by the
          Company, actual reasonable expenses will be allowed.

     (3)  Hotels
          ------

          (a)  Room Assignments.  In addition to the allowance
               ----------------
               provided in Paragraph (A)(1) of this Article, and
               except as provided in Letter XXXIV (Voluntary Release
               of Layover Hotel Rooms), the Company shall provide at
               regular layover stations, comfortable and adequate
               lodging so that each Flight Attendant will be assigned
               to a single room.

               Recommendations of the Union, as furnished by the
               President, District Lodge 142 or his designee, after
               he or she has had opportunity to consult with the
               Council involved, shall be considered before making
               any change in lodgings.  The quality of hotel rooms
               will not diminish when single rooms become effective
               for domestic Flight Attendants.

          (b)  In the event that regularly assigned lodging at
               layover stations is in use, the Company will provide
               other suitable lodging or the Flight Attendant will be
               allowed the reasonable actual expenses for other
               necessary lodging.

          (c)  Flight Attendants will check in and out of hotels in
               the normal manner and will pay any incidental expenses
               incurred by them such as telephone calls, room
               service, etc.

     (4)  Taxi Expense.  A Flight Attendant who does not receive two
          ------------
          (2) hours notice of flight departure when on reserve or on
          non-routine flights, will be allowed actual reasonable taxi
          expenses. Failure to give the

                           ARTICLE 4 / Page 1

<PAGE>
<PAGE>

          notice provided above must be verified by the Company
          representative notifying the Flight Attendant to report for
          flight duty.  Such payment will be based on the actual
          charges with the establishment of no maximum, except as
          limited by the reasonableness of the expenditure.

     (5)  Domestic Ground Transportation

          (a)  At other than his/her domicile or satellite, when
               courtesy car service is not provided by the layover
               hotel, Flight Attendants will be provided with ground
               transportation. The Company will arrange and pay for
               such transportation between the airport and the
               layover hotel and return, between airport and airport
               when on layover, or transiting and not on layover.

          (b)  If ground transportation as outlined in (a) above is
               not provided by the Company within forty-five (45)
               minutes after block-in or scheduled block-in
               (whichever is later) at the airport of arrival, Flight
               Attendants will be issued a taxi voucher for
               transportation to the layover hotel.  When more than
               one Flight Attendant is so affected, Flight Attendants
               shall be required to share taxis up to the maximum
               allowable passenger capacity of the taxis.

          (c)  If ground transportation as outlined in (a) above is
               not provided by the Company within fifteen (15)
               minutes of scheduled pick-up time at the hotel, Flight
               Attendants may take a taxi to the airport and will be
               reimbursed for the actual/reasonable cost of such taxi
               within three (3) working days after submission of a
               proper receipt and Company expense report. When more
               than one Flight Attendant is so affected, Flight
               Attendants shall be required to share taxis up to the
               maximum allowable passenger capacity of the taxis.

          (d)  Layovers of twenty (20) hours or more will continue to
               be scheduled at downtown hotels in those cities where
               downtown layovers are currently utilized, unless the
               Company and the Union mutually agree otherwise.
               Notwithstanding the above, Satellite pairings
               originating from Los Angeles, San Francisco, and San
               Diego shall not require a downtown hotel for layovers
               in excess of twenty (20) hours.

(B)  INTERNATIONAL OPERATIONS

     When a Flight Attendant in International Operations is on a trip
     away from his or her domicile or satellite on Company business,
     the following shall apply:

                           ARTICLE 4 / Page 2

<PAGE>
<PAGE>

     (1)  The Company will provide adequate rest facilities for
          employees and will provide facilities comparable to those
          used by other crew members.

     (2)  In selecting rooms at specific overseas hotels the following
          shall apply:

          On all aircraft involving Service Managers and Cabin
          Attendants, the Service Manager shall sign the hotel sheet
          first and then all other Cabin Attendants in order of their
          relative seniority.

     (3)  The Company will furnish suitable and adequate lodging and
          transportation at all stations where International crews lay
          over. Flight Attendants will be paid at the rate of Two
          Dollars ($2.00) per hour for each hour or fraction thereof
          while away from domicile or satellite. Expenses shall be
          paid commencing at report and ending at release at domicile
          or satellite.

          At any station where International crews are laying over and
          the employee is required to remain at the airport for four
          (4) hours or more, the Company will provide suitable meals.
          Where the employee is released from duty so that he or she
          may leave the airport, a minimum of six (6) hours at the
          applicable hourly rate shall be paid.

     (4)  When the Company does not provide such facilities as
          outlined above, reasonable actual expenses will be allowed
          therefor.

(C)  GENERAL

     (1)  In addition to the expenses allowed under paragraphs (A) and
          (B) above, the Company will allow additional expenses
          covering extraordinary conditions, including, but not
          limited to, transportation for attendance at meetings during
          nighttime hours. Such payment will be based on the actual
          charges with the establishment of no maximum, except as
          limited by the reasonableness of the expenditure.

     (2)  The Company will furnish suitable lounges with reclining
          chairs and/or liedown facilities to be used exclusively by
          Flight Attendants at layover stations, and at all locations
          where Flight Attendants are based, unless conditions at a
          particular layover or domicile prevent it. When lounges are
          not provided as outlined above and the turn time is
          scheduled for four (4) hours or more (block-to-block), upon
          request a day room will be provided at a ratio of one (1)
          room for every three (3) Flight Attendants.

     (3)

          (a)  A Flight Attendant required to attend operational
               meetings, training or refresher courses, for which
               credit is given under

                           ARTICLE 4 / Page 3

<PAGE>
<PAGE>

               Article 6(A), including probationary meetings, at
               his/her domicile or satellite, shall receive hourly
               expenses as provided in Article 4(A)(1) and Article
               4(B)(3) for each hour or fraction thereof, report to
               release.  At meetings where a suitable meal is
               provided by a Corporate Officer who is conducting the
               meeting, the expense allowance provided for herein
               shall not be applicable.

          (b)  When a Flight Attendant is required to attend
               operational meetings, training or refresher courses,
               for which credit is given under Article 6, including
               the probationary meetings, away from domicile, he/she
               shall receive expenses as provided in Article 4(A)(1)
               and Article 4(B)(3) for each hour or fraction thereof
               block out to block in at his/her domicile or
               satellite. At meetings where a suitable meal is
               provided by a Corporate Officer who is conducting the
               meeting or training where room and board is provided,
               the expense allowance provided for herein shall not be
               applicable.

          (c)  Flight Attendants shall receive 2:30 pay and credit
               and expenses in accordance with Article 4(A)(1) for
               the one-day Annual Emergency Review (AER) and all
               other training.  In the event a Flight Attendant fails
               the one-day AER training, he/she will not be paid for
               the first retest following the first failure.  A
               Flight Attendant shall receive 2:30 pay and credit and
               expenses for each day he/she is assigned to retraining
               subsequent to the second AER failure.

          (d)  In addition, when a Flight Attendant is required to
               take a physical in accordance with Article 23 at a
               location other than where his/her domicile or
               satellite is located, he/she will be entitled to
               receive the expense allowance set forth in paragraph
               4(A)(1) or 4(B)(3), as appropriate. Expenses in cases
               where the services of a Neutral Medical Examiner
               (N.M.E.) are required shall be handled in accordance
               with the provisions of Article 23.

          (e)  Flight Attendants will be provided single rooms during
               training away from domicile, except as provided in
               Letter XXXIV (Voluntary Release of Layover Hotel
               Rooms), and except where training is held at a "Breech
               type" facility.

     (4)  Crew Meals
          ----------

          The Company will insure that crew meals are available for
          Flight Attendants on those flight segments over four (4)
          hours where crew meals are provided for other crew members.
          Such crew meals shall be consumed only after the normal
          order of service has been complete

                           ARTICLE 4 / Page 4

<PAGE>
<PAGE>

          and only in those areas outlined in the Company's Flight
          Service Manual.  Crew meals will not be provided for flight
          segments scheduled for four (4) hours or less block-to-block
          except that the Company may, at its sole discretion, provide
          meals on an exception basis on such flights.

     (5)  Drug/Alcohol Testing
          --------------------

          The Company will reimburse the reasonable, actual
          transportation costs to and from the drug/alcohol testing
          facility, provided proper receipts and Company expense
          report are promptly submitted.  The provisions of this
          section are not applicable to events of "follow-up testing"
          as defined in Letter of Agreement XXV, the Random Substance
          Testing Letter of Agreement, or drug/alcohol testing for
          cause.

     (6)  Payment by Employee for Training
          --------------------------------

          No Flight Attendant in the regular scheduled service of the
          Company shall, after employment, be required to pay for any
          training required or conducted by the Company.

          During other than assigned training periods, the Company may
          make reference materials available to Flight Attendants, but
          such Flight Attendants will not be required to complete such
          materials or to take a test during their own time.

          In order to assist Flight Attendants in learning a foreign
          language, the Company will provide training facilities which
          will include record/tapes, equipment for sound reproduction,
          texts, and instructors for reasonable consultation and
          instruction during the learning process, which shall take
          place on the Flight Attendant's own time. Seniority and a
          demonstration of interest shall be considered in scheduling
          students for the program.

     (7)  Parking
          -------

          At the request of the Union, the Company will confer with
          and consider the recommendations of authorized Union
          representatives as to the adequacy of the parking areas and
          the quality of security measures at Company lots in which
          employees park their automobiles at domiciles. The Company
          shall furnish, at no cost to the Flight Attendant,
          sufficient parking spaces to accommodate all Flight
          Attendants assigned to a domicile or satellite.

          The Company shall provide active Flight Attendants monthly
          parking for one vehicle at a TWA domicile or reimburse the
          Flight Attendant for parking of one (1) vehicle at any
          station (receipts required), not to exceed the amount paid
          for one (1) vehicle at the STL domicile.

                           ARTICLE 4 / Page 5

<PAGE>
<PAGE>

                             ARTICLE 5
                             UNIFORMS

(A)  Standard Uniforms.  Standard uniforms as prescribed in Company
     -----------------
     regulations shall be worn by employees at all times while on duty
     and at such other times as may be prescribed.

(B)  Purchase by Newhire Flight Attendants.  Employees, with less than
     -------------------------------------
     one (1) full year of service as a flight attendant, shall be
     required to purchase two (2) uniforms comprised of the basic
     items as described in Paragraph (C) below.  The employee shall
     pay the actual cost of the basic uniform items as provided by the
     Vendor.

(C)  Basic Uniform.  The uniforms referred to in Paragraph (B) above
     -------------
     will consist of the following items:

     CABIN ATTENDANTS/ SERVICE MANAGERS

                            BASIC UNIFORM
     FEMALE:
     ------

     Dress or
     Blazer (2)
     Skirt or
     Pants (2)
     All-Weather Coat
     4 Uniform Shirts

     MALE:
     ----
     Blazer (2)
     Pants (2)
     All-Weather Coat
     4 Uniform Shirts

     UNISEX:
     ------
     Scarf/Tie
     Tie Bar
     Pocket Square
     Belt
     Wings
     Serving Garment (Vest/Smock)
     Sweater or Sweater Vest
     Epaulettes

(D)  Point Allowance System
     ----------------------

     Flight Attendants will be provided a monthly allowance based on
     active service, for the replacement of uniform items due to
     normal wear and for the acquisition of uniform pieces and
     accessory items.  A maximum of fifty (50%) percent of a

                           ARTICLE 5 / Page 1

<PAGE>
<PAGE>

     Flight Attendant's annual allowance granted in an odd year may be
     carried over for use in the following year.  All points shall be
     determined on a calendar year basis, to be determined January 1
     of each year and awarded no later than February 1 of each year.
     The points shall be awarded on a look-back basis.  For new
     employees with less than one (1) full year of service, as Flight
     Attendant, points shall be pro-rated.  All points must be used at
     the end of each even-numbered year, as points will not be carried
     forward into any odd year.  In addition, Flight Attendants shall
     receive 8.5 points per month for each month of active service for
     a Uniform Allowance Program. For purposes of this paragraph,
     active service is defined as any month in which a F/A completes
     the month with no less than 32:30. Upon ratification of this
     agreement, all F/As with greater than one year on-line seniority,
     will receive a full year's complement of 102 points, pro-rated
     from the month of ratification of the agreement.  The points
     awarded will be on an individual look-back basis in accordance
     with monthly active service for the previous calendar year.  Upon
     verification, uniform items that are torn or ripped during normal
     wear shall be replaced at no cost to the Flight Attendant.  Cabin
     attendants initially transferring to the FSM category shall
     receive required FSM accessories at no cost to the employee.

               Female Items                        Male Items
               ------------                        ----------

     Description             Points      Description             Points
     -----------             ------      -----------             ------

     All-Weather-Coat            45      All-Weather-Coat            45
     Single-Breasted Jacket      39      Single-Breasted Jacket      50
     Double-Breasted Jacket      41      Double-Breasted Jacket      51
     Blouse (SS)                  7      Shirt (SS)                   7
     Blouse (LS)                  8      Shirt (LS)                   8
     Tie                          3      Tie                          5
     Pants                       21      Pants                       21
     Skirt                       19
     Scarf                        6
     Maternity Jumper/Blazer     29
     Handbag                     12
     Sweater                      8      Sweater                      8
     Sweater Vest                 6      Sweater Vest                 6
     Belt                         3      Belt                         3
     Serving Garment              5      Serving Garment              5
     Pocket Square (Unisex)       1
     Epaulettes (Unisex)          1
     Tiebar (Unisex)              1      FSM Tie                      3
     FSM Tie                      3
     Rollerboard (Unisex)        34
     Dress                       38

     Flight Attendants will not be required to pay any shipping costs
     incurred for the shipping of uniform items.

                           ARTICLE 5 / Page 2

<PAGE>
<PAGE>

(E)  Payroll Deduction of Uniform Items.  In addition to the point
     ----------------------------------
     system, purchases of uniform items may also be made by payroll
     deduction with a maximum biweekly deduction of no more than $25.

(F)  Company Insignia and Uniform items Provided by the Company.  All
     ----------------------------------------------------------
     Company insignia and uniform items which are provided by the
     Company at its expense shall be issued on a loan basis, and upon
     termination for any reason, the employee may be required to return
     such uniform items and insignia to the Company. The Company
     retains the right to collect any and all uniform items and
     accessories in the possession of a Flight Attendant. In such case
     the Flight Attendant will receive full reimbursement for any items
     collected which the Flight Attendant has purchased.

(G)  Change in Uniforms.  When the Company contemplates making changes
     ------------------
     in style, color or material of the uniform, it will first consult
     with the IAM District Lodge 142 to solicit the Union's
     recommendations. Prior to selection of the uniform the District
     Lodge representatives will be given an opportunity to submit their
     recommendations which will be considered provided such
     recommendations are made within thirty (30) days after being
     solicited by the Company.

(H)  Expense Cost in Change in Uniforms.  During the term of this
     ----------------------------------
     Agreement, the Company may elect to change the basic uniform items
     as described in Paragraph (C) above.  In the event of a changeover
     which includes a new item and excludes the wearing of a present
     uniform item, such new item shall be initially issued at the
     Company's expense to all Flight Attendants who are on the line on
     the effective date of such uniform change.  The Company may also
     elect to change a basic uniform item which does not exclude the
     wearing of the present uniform item.  In that event, the employee
     may elect to acquire the new uniform either through the point
     system or by purchase.  The Company may also elect to provide this
     additional item to the employees at the Company's expense.  The
     Company and the Union shall meet to agree upon the point(s)
     allotted to any new uniform item.

(I)  New Accessory Items.  During the term of this Agreement, the
     -------------------
     Company may elect to offer new accessory items, including choices
     to basic items.  In that event, the Company and the Union shall
     meet to agree upon the point(s) allotted to these items.

(J)  Review of Uniform Attire by Company and Union.  The Union
     ---------------------------------------------
     Professional Standards Committee and the Union Safety Committee,
     together with representatives designated by the Company, shall
     review all items of uniform attire, including shoes, and shall
     develop standards and guidelines for such attire

                           ARTICLE 5 / Page 3

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<PAGE>

     so as to assure maximum employee safety and professional
     appearance.  Female Flight Attendants may, but are not required
     to, wear high-heeled shoes.

(K)  Terminated and Voluntarily Resigned Flight Attendants.  Flight
     -----------------------------------------------------
     Attendants who are terminated by the Company shall be required to
     return all uniform items to the Company and shall not be required
     to pay any outstanding balances due in connection with the
     purchase of the uniform item(s).  Flight Attendants who
     voluntarily leave the employment of the Company shall continue to
     be responsible for any outstanding balances due in connection with
     purchase of any uniform item(s).

                           ARTICLE 5 / Page 4

<PAGE>
<PAGE>

                                ARTICLE 6
                             HOURS OF SERVICE

(A)(1)  Full Line Flying - Scheduling of Maximum Flight Credit.  Flight
        ----------------
        Attendants shall be scheduled for flight duty so as not to
        exceed the monthly maximum flight credit.  Sixty-five (65)
        flight pay hours shall constitute the minimum pay guarantee
        and Eighty-five (85) flight credit hours shall constitute the
        maximum calendar monthly flight time except as otherwise
        provided in Articles 6(Y), 6(Z), 8(F) and 18(D)(7).

(A)(2)  Alternate Line Flying - Scheduling of Maximum Flight Credit.
        -----------------------------------------------------------
        Flight Attendants shall be scheduled for flight duty so as not
        to exceed the fifteen (15) day maximum flight credit.  Thirty-
        two hours thirty minutes (32:30) flight pay hours shall
        constitute the minimum pay guarantee and Forty-five (45) flight
        pay hours shall constitute the maximum calendar half-monthly
        flight time except as otherwise provided in Articles 6(Y), 6(Z),
        8(F), and 18(D)(7).

(B)     Flight Credit Hours.  For the purpose of (A) above, flight
        -------------------
        credit hours shall include the following:
        (1)   Actual or Scheduled block-to-block time, whichever is
              greater, calculated on a stop-by-stop basis.
        (2)   Trip hours as specified in (E)(2) below but as further
              qualified in (D) below.
        (3)   Duty hours as specified in (E)(3) and (E)(4) below but as
              further qualified in (D) below.
        (4)   Flight credit hours accrued under paragraph (E)(5)(b) below.
        (5)   Vacation time as specified in (F) below.
        (6)   Training time as specified in (G) below
        (7)   Special assignment as specified in (G) below.
        (8)   Operational meetings as specified in (H) below.
        (9)   Standby as specified in (I) below.
        (10)  Call-out time as specified in (J) below.
        (11)  Holding time as specified in (K) below.
        (12)  Pay assignment as specified in (M) below.
        (13)  Jury duty as specified in (Q) below.
        (14)  Sick Leave time as specified in Article 8.
        (15)  Personal Business day(s) as specified in (F) below.
        (16)  Deadhead Time.
        (17)  Guaranteed Trip Protection.

(C)     Flight Pay Hours.  For the purpose of (A) above, flight pay
        ----------------
        hours shall include the following only:
        (1)   Flight pay hours as computed in accordance with (D) below.
        (2)   Trip hours as specified in (E)(2) below but as further
              qualified in (D) below.
        (3)   Duty hours as specified in (E)(3) and (E)(4) below but as
              further qualified in (D) below.
        (4)   Flight pay hours accrued under paragraph (E)(5)(b) below.

                           ARTICLE 6 / Page 1

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<PAGE>

        (5)   Vacation time as specified in (F) below.
        (6)   Training time as specified in (G) below.
        (7)   Special assignment as specified in (G) blow.
        (8)   Operational meetings as specified in (H) above.
        (9)   Standby time as specified in (I) below.
        (10)  Call-out time as specified in (J) below.
        (11)  Holding time as specified in (K) below.
        (12)  Pay assignment as specified in (M) below.
        (13)  Jury duty as specified in (Q) below.
        (14)  Sick leave as specified under Article 8.
        (15)  Deadhead time as specified in (L) below; ferry as specified
              in (L) below.
        (16)  Surface transportation as specified in (L) below [excluding
              co-terminals in 6(E)(7)].
        (17)  Excess compensation accrued under paragraphs (R) and (D)(4)
              below.
        (18)  Personal Business day(s) as specified in (F) below.
        (19)  Guaranteed Trip Protection.

(D)     Determination of Flight Credit and Pay Hours.  When an employee
        --------------------------------------------
        returns to his or her domicile from a trip, he or she will be
        credited with flight credit and pay hours as determined in the
        following manner:

        (1)   His or her credit and pay for each leg of his or her trip
              will be the greater of actual block-to-block or scheduled
              block-to-block time on each leg.

        (2)   Additional credit and pay resulting from the application of
              paragraph (E)(3) and (4) below will be added to the greater
              of actual block-to block or scheduled block-to-block time on
              each leg.

        (3)   Deadhead time as set forth in (L) below, excess on-duty time
              as specified in (R) and (D)(4) below and any other flight
              pay hours accrued under this Article shall be added to the
              pay hours under (1) above.

        (4)   The flight credit and pay hours computed in (D)(1), (2), and
              (3) above for each trip shall be totaled and the result
              compared with the credit and pay earned under (E)(2) below,
              when applicable, and the employee shall be credited with the
              greater.

(E)     Trip Hours.
        ----------

        (1)   "Trip Hours" means all the time which passes from the time a
              Flight Attendant is required to report, or actually reports,
              whichever is later, at the airport of his or her domicile
              prior to proposed flight departure, until fifteen (:15)
              minutes after block-in time on the Domestic operation and
              until thirty (:30) minutes after block-in time on the
              International operation after arrival at his or her domicile
              for a legal rest, free from all duty with the Company. For
              purposes of this

                           ARTICLE 6 / Page 2

<PAGE>
<PAGE>

              paragraph and for purposes of Article 2(J), report times at
              domiciles for active Flight Attendants shall not be less
              than one (1) hour. In the case of reserves called out on an
              immediate basis, the time of actual report shall commence
              the trip hours and operational duty pay. If a Flight
              Attendant departs his or her domicile as a deadheading crew
              member for the purpose of protecting a flight, his or her
              Trip Hours shall commence at the block-out time of the
              flight except that where surface transportation is used for
              travel from the domicile for the purposes of working a trip,
              Trip Hours shall commence at the departure time of the
              surface transportation; if a Flight Attendant arrives at his
              or her domicile as a deadheading crew member, his or her
              Trip Hours shall be considered to end at the block-in time
              of the flight, except that where surface transportation is
              used for travel to the domicile from protecting a flight,
              Trip Hours shall be considered to end at the arrival time of
              the surface transportation.  When a Flight Attendant is
              requested to deadhead at Company request, the Flight
              Attendant shall not be required to report for such deadhead
              flight earlier than thirty (:30) minutes on the Domestic
              operation and one (1) hour on the International operation.

        (2)   One (1) for Four (4) Trip Hours.  For each trip a Flight
              -------------------------------
              Attendant shall receive on a prorated basis, one (1) hour
              flight credit and pay for each four (4) hours of trip hours
              as defined in (E)(1) above.

        (3)   Domestic Operation - One (1) for Two (2) Duty Hours; Duty
              ---------------------------------------------------------
              Averaging.  A Flight Attendant on the Domestic operation who
              ---------
              flies a flight or flights during an on-duty period as
              defined below, shall receive a minimum of one (1) hour of
              flight credit and pay for each two (2) hours of such on-duty
              time prorated, with a minimum of four (4) hours for a
              single on-duty period flight assignment or an average of
              four (4) hours per duty period for flights containing more
              than one duty period. The total duty credit for the entire
              pairing shall be compared to the total services performed
              and the Flight Attendant shall receive the greater. For
              purposes of this paragraph, an on-duty period means all time
              which passes from the time a Flight Attendant is required to
              report or actually reports, whichever is later, for his/her
              flight assignment and shall continue until fifteen minutes
              (:15) after block-in time. If a Flight Attendant commences
              or completes an on-duty period by deadheading, his/her on-
              duty period shall begin at the block-out or end at the
              block-in time of the flight. A Flight Attendant's on-duty
              period shall run continuously until broken by a scheduled or
              actual layover of not less than that required by paragraph
              (R) of this Article.

        (4)   International Operation - One (1) for Two (2) Duty Hours;
              ---------------------------------------------------------
              Duty Averaging; Excess on Duty.  A Flight Attendant on the
              ------------------------------
              International operation who flies a flight or flights during
              an on-duty period as defined below, shall receive a minimum
              of one (1) hour of flight credit and pay for each two (2)
              hours of such on-duty time prorated.

                           ARTICLE 6 / Page 3

<PAGE>
<PAGE>

              This shall apply only to the first fourteen (14) hours of
              such duty period with a minimum of four (4) hours for a
              single on-duty period flight assignment or an average of
              four (4) hours per duty period for flights containing more
              than one duty period.  The total duty credit for the entire
              pairing shall be compared to the total services performed
              and the Flight Attendant shall receive the greater. For
              purposes of this paragraph, an on-duty period means all time
              which passes from the time a Flight Attendant is required to
              report or actually reports, whichever is later, for his/her
              flight assignment and shall continue until thirty minutes
              (:30) after block-in time.  If a Flight Attendant commences
              or completes an on-duty period by deadheading, his/her on-
              duty period shall begin at the block-out or end at the
              block-in time of the flight. In a duty period which contains
              a working segment the on-duty hours shall include debriefing
              time. A Flight Attendant's on-duty period shall run
              continuously until broken by a scheduled or actual layover
              of not less than that required by paragraph (R) of this
              Article.

        (5)   Exclusions.  The provisions of (E)(2), (3) and (4) above
              ----------
              shall not apply:

              (a)  To flights in which a landing has not been made at an
                   airport other than the airport of takeoff; and

              (b)  To flights local in nature, except that Flight
                   Attendants assigned to such flights shall receive not
                   less than two (2) hours credit and pay for such
                   flights.

              (c)  While assigned to residence standby [airport standby
                   will be governed by the provisions of Article 6(I) and
                   18(D)(8)].

              (d)  Excess trip hours or on-duty hours resulting from a
                   Flight Attendant's request to deadhead on flights
                   other than those offered by the Company.

        (6)   No Additional Duty Hours Under Certain Circumstances.  If a
              ----------------------------------------------------
              strike, work-stoppage, picketing by other employee groups,
              personal reasons, or deadheading to or from domicile at his
              or her own request, except when the request is a result of a
              choice offered to him or her as a result of being an extra
              or excess crew member, results in additional Duty Hours or
              Trip Hours for a Flight Attendant, such additional Duty
              Hours or Trip Hours shall not be included in the computation
              outlined in (E)(2), (3) and (4) above.

        (7)   Surface Transportation.  Movement between the following
              ----------------------
              airports by surface transportation for purpose of taking out
              a flight or returning a flight, will not be considered as
              deadhead time.  Each Flight Attendant shall be compensated
              for such movement, at the Flight Attendant's domicile only,
              at the operational duty rates specified in Article 3(C).

                           ARTICLE 6 / Page 4

<PAGE>
<PAGE>

             Between                          Normal Travel Time
             Newark-LaGuardia                        1:15
             Newark-Kennedy                          1:30
             Kennedy-Islip                           1:00
             LaGuardia-Kennedy                        :45
             Los Angeles-Burbank                     1:15
             Los Angeles-Long Beach                   :40
             Los Angeles-Ontario                     2:15
             Midway-O'Hare                           1:30
             San Francisco-Oakland                   1:00
             San Francisco-San Joe                   1:00

             The travel time provided in this paragraph shall be
             considered as an extension of the trip hours defined in
             (E)(1) and duty hours defined in (E)(3) and (4) above, and
             of the on-duty provisions of paragraphs (R) and (D) of this
             Article.

(F)     Vacation Credit and Pay.  When a Flight Attendant is on vacation
        -----------------------
        he/she shall be credited and paid the fixed daily credit of 2:30
        for each day of vacation.

(G)     Training/AER's Credit and Pay; Special Assignment.  A Flight
        -------------------------------------------------
        Attendant shall be credited and paid the fixed daily credit of
        2:30, or receive credit on a trips missed basis, whichever is
        greater, for each day he/she is in training or refresher
        courses.  A Flight Attendant shall be credited and paid the
        fixed daily credit of 2:30 and expenses for Annual Emergency
        Review (AER). There shall be no credit and pay and expenses for
        the first retest.  In the event it is necessary to schedule an
        AER which conflicts with a trip, the Flight Attendant will be
        removed from the trip and will be subject to balance.
        Notwithstanding the provisions of this paragraph, pay credit and
        expenses will accrue if a Flight Attendant, subsequent to the
        second AER failure, is assigned to retraining.

        When a Flight Attendant is removed from flight for special
        assignment to non-flying duty, such Flight Attendant shall be
        paid and credited with 2:50 for each day of special assignment
        to a maximum of 85:00 hours per bid month for his/her respective
        classification, or receive credit for trips missed on a
        scheduled basis. In the application of this paragraph, the
        Flight Attendant will receive the greater of 2:50 credit and pay
        hours per day or the scheduled credit and pay generated by the
        flight from which removed, whichever is greater, to a maximum of
        85:00 hours.

(H)     Meetings or Courses.  No credit and pay will be given under (G)
        -------------------
        above for operational meetings or for training or refresher
        courses which are held in lieu of or in connection with
        operational meetings unless attendance at such meetings is
        required and such meetings exceed two meetings during the
        probationary period.

(I)     Standby Duty.  An employee who is assigned to standby duty, as
        ------------
        standby duty is defined in Article 2 hereof, shall receive
        flight credit and pay prorated on the

                           ARTICLE 6 / Page 5

<PAGE>
<PAGE>

        basis of one (1) hour credited for each eight (8) hours of
        assignment to standby duty, with a minimum of one (1) hour.  In
        the event that the actual flight time flown or commenced during
        such eight (8) hour period an employee is required to standby
        exceeds the time credited hereunder, this provision shall not
        apply.

        An employee who is assigned to airport standby duty as airport
        standby duty is defined in Article 2 hereof, shall receive a
        minimum of one (1) hour of flight credit for each two (2) hours
        of such airport standby time prorated. For any on-duty period
        involving assignment to airport standby, an employee shall
        receive no less than three (3) hours of credit for such on-duty
        period.

(J)     Call-Out Pay.  An employee who reports for flight duty and is
        ------------
        not used will be granted two (2) hours of flight credit and pay
        unless such employee is not used due to his or her incapacity
        for flight duty.

(K)     Holding Pay.  Each time an employee is required by the Company
        -----------
        to accompany passengers to the scheduled destination when a
        flight terminates at another station, and each time an employee
        is required to remain with passengers prior to flight or
        following flight arrival at any station, he/she will receive
        flight pay and credit if the delay is one hour or more, subject
        to the following:

        (1)   Such pay and credit shall be granted for each hour or
              fraction thereof so spent and when such duty time is
              required by the Company.

        (2)   Scheduled ground time at an on-line station, thirty minutes
              ground time at a domestic off-line station and forty-five
              minutes ground time at an international off-line station
              shall not be counted and no credit and pay shall be given
              therefor.

        (3)   Credit and pay will be given for all time spent with
              passengers when required by the Company to remain with them
              or with the aircraft while other crew members and the
              passengers are served a meal in ground restaurant facilities
              during a scheduled stop at an on-line station. Flight
              Attendants will not be required to serve meals or beverages
              to passengers other than on board the aircraft.

        (4)   When holding time occurs at the conclusion of flight duty it
              shall be considered an extension of the trip hours as
              defined in paragraph (E)(1) and of the on-duty hours as
              defined in paragraphs (E)(3), (E)(4), (R) and (D) of this
              Article 6.

(L)     Deadhead.  If an employee deadheads under Company orders on any
        --------
        and all flight(s) to or from protecting a flight, he/she shall
        be credited with one hundred (100%) of such deadhead flight
        time for pay and credit purposes.

        If an employee deadheads on surface transportation to or from
        protecting a flight, he/she will be paid fifty percent (50%)
        flight time but no credit for the scheduled air time between the
        points traveled, provided that this provision shall not apply to
        surface transportation between co-terminals. Time spent in

                           ARTICLE 6 / Page 6

<PAGE>
<PAGE>

        deadhead transportation to and from duty assignment shall not be
        considered part of any rest period to which an employee is
        entitled under this Agreement. All time spent deadheading will
        be included in a Flight Attendant's on-duty period. A Flight
        Attendant whose on-duty period consists solely of deadhead shall
        not be entitled to the minimum trip credit provided in
        paragraphs (E)(3) and (4) above.  Flight Attendant scheduled to
        complete his/her flight assignment by a deadhead return to
        his/her domicile or satellite shall be permitted (upon
        notification to station Operations personnel) to proceed
        directly to a location other than his/her domicile or satellite
        provided that he/she does not depart prior to the scheduled
        departure time of his/her scheduled deadhead flight. When
        utilizing the provisions of this paragraph, a Flight Attendant
        shall be deemed to have actually performed the deadhead
        assignment as scheduled. The only exception shall be that
        his/her trip expenses shall terminate at the scheduled departure
        time of the scheduled deadhead flight. The Flight Attendant must
        submit an exception paycard upon return to his/her domicile or
        satellite.

        A Reserve Flight Attendant who utilizes the provisions of this
        paragraph shall telephone his/her crew schedule office and
        determine his/her status.

        Flight Attendants who are scheduled to deadhead may be assigned
        to work the flight. In such case the Flight Attendant's duty
        time shall commence at the normal report time for a working
        Flight Attendant or at the time the Flight Attendant is assigned
        to work, as determined by the Company, whichever is later, and
        be paid applicable flight pay and credit.

        Assignments to work instead of deadhead will be made only by
        Crew Schedule or Operational Planning.

        Assignments to work instead of deadhead will be in inverse
        seniority order from among those Flight Attendants who by
        working will not become illegal for a subsequent flight in the
        same trip or for a subsequent trip.

(M)     Supervisor Pay Assignment.  When an employee is removed from his
        -------------------------
        or her regularly scheduled, promotional, or charter flight, for
        training purposes, due to the assignment of a supervisor, or due
        to the special requirements of the particular flight, the Flight
        Attendant so removed shall:

        (1)   Be assigned the flight credit and pay hours she or he would
              have normally accrued had she or he taken the flight as
              scheduled; and

        (2)   When the removal is at the employee's domicile or satellite,
              be placed on the schedule for her or his next flight in the
              same position had she or he taken the flight as scheduled.
              An employee will not be credited for flight credit hours or
              receive pay for any period in which she or he is accruing
              actual flight time.

                           ARTICLE 6 / Page 7

<PAGE>
<PAGE>

        (3)   For purposes of training or refresher when a specific
              position on board the aircraft is required the assignor will
              displace the most senior cabin attendant scheduled for the
              flight and will assume the assignee's seniority.

        (4)   The Company reserves the right to displace any cabin
              attendant on any regularly scheduled, charter or promotional
              flight regardless of seniority. In such event, the assignor
              will assume the assignee's seniority.

        (5)   It is further understood that the procedures outlined herein
              are not to be considered optional on the part of either
              assignor or assignee.

        (6)   Except in emergency situations, supervisory personnel will
              not cover open flights without first assigning a reserve.

(N)     Flight Time Limitations; Charters.  The flight time limitations
        ---------------------------------
        provided in paragraph (A) of this Article shall include all
        flight time during which an employee is assigned on regularly
        scheduled, publicity, extra-section, charters, [except those
        charters operated under the provisions of Article 18(E)(2) and
        (3)], ferry, scenic and other flights on which he or she
        performs regular flight duties.

(O)     Request for Relief From Duty.  An employee assigned to a flight
        ----------------------------
        which has been delayed at his or her domicile or satellite may
        request relief four (4) hours after reporting for duty in
        connection with such flight. Relief will be supplied if a relief
        employee is available. The employee requesting such relief will
        remain on duty and depart with a flight unless a relief arrives
        prior to the flight's departure. An employee relieved pursuant
        to this section will be granted a minimum of ten (10) hours of
        rest immediately following his/her release. At the end of such
        rest period, he/she may be balanced in accordance with Article
        18.

(P)     Non-Pay Status.  During any calendar month when an employee is
        --------------
        in a non-pay status, such Flight Attendant will be credited with
        the applicable daily rate for flight time limitation purposes
        only.

(Q)     Jury Duty.  When a Flight Attendant is called to jury duty, the
        ---------
        Flight Attendant shall immediately notify the Company and the
        Company shall release the Flight Attendant from flight duty for
        the duration of such jury duty. For each day a Flight Attendant
        is required to be available for jury duty, the Flight Attendant
        shall be paid the daily credit rate, less any jury duty pay
        received. A Flight Attendant receiving pay and credit pursuant
        to this provision shall expeditiously report to his/her manager
        the amount of Government remuneration received. A Flight
        Attendant who suffers a loss of credit due to period(s) of jury
        duty shall not be subject to balance.

                           ARTICLE 6 / Page 8

<PAGE>
<PAGE>

(R)   FAA Minimum Rest Regulations.
      ----------------------------

      FAA minimum rest regulations are as follows:

<TABLE>
<CAPTION>
                                                                          Additional
                                       Operator May      If Rest Period   Flight
                                       Reduce Rest       Reduced, Next    Attendants
Scheduled            Prescribed        Period to No      Rest Must Be     Required on
Duty Period          Rest Period       Less Than         At Least         Each Flight
-----------          -----------       ---------         --------         -----------

<S>                  <C>               <C>               <C>              <C>
14 hours or less     9 hours           8 hours           10 hours         -
14-16 hours          12 hours          10 hours          14 hours         1
16-18 hours          12 hours          10 hours          14 hours         2
18-20 hours*         12 hours          10 hours          14 hours         3
</TABLE>

      *Duty periods longer than 18 hours may be assigned only for
      operations to or from outside the 48 contiguous states.

      (1)   Domestic Operation. A Flight Attendant on the Domestic
            ------------------
            operation will not be scheduled out of his/her domicile,
            satellite or layover station to be on duty for more than
            thirteen (13) consecutive hours. Such Flight Attendant shall
            not be required to remain on duty for more than fifteen (15)
            consecutive hours. A Flight Attendant who exceeds fifteen
            (15) hours on duty will be compensated at the appropriate
            hourly rate for all hours in excess of fourteen (14) hours.
            Such compensation will be in addition to that computed under
            Paragraph (D) of this Article. Notwithstanding the above, an
            employee who is scheduled to complete a flight assignment by
            deadhead return to domicile or satellite may be scheduled to
            a maximum of fifteen (15) hours on duty, provided that the
            working portions of such on-duty period do not exceed the
            normal on-duty limitations. For purposes of this section, an
            employee's on-duty period cannot be broken by an off-duty
            period of:

            (a)  Less than sixteen (16) hours at domicile after a
                 Domestic flight prior to taking an International
                 flight, except as provided under Article 18(G) [Back-
                 to-Back Flying]; or

            (b)  Less than ten (10) hours, at domicile or, in the case
                 of relief from duty at a point where adequate sleeping
                 accommodations are not provided in the immediate
                 vicinity of the airport; or

            (c)  Of less than eight (8) hours in the case of relief
                 from duty at any airport where suitable and adequate
                 sleeping accommodations are provided and available in
                 the immediate vicinity of the airport.  In accordance
                 with FAA minimum rest regulations, no less than nine
                 (9) hours may be scheduled but in actual operation,
                 such rest may be waived to eight (8) hours, in which
                 event the Flight

                           ARTICLE 6 / Page 9

<PAGE>
<PAGE>

                 Attendant must receive no less than ten (10) hours in
                 his/her next rest period.

            (d)  For purposes of this paragraph, immediately vicinity
                 of the airport shall be defined as not more than
                 fifteen (:15) minutes normal driving time.

                 An employee will not be assigned to any duty with the
                 Company during any rest period specified in this
                 section. For purposes of this section, the on-duty
                 period shall include the report time and debriefing
                 time as applicable.

      (2)   International Operation.  Flight Attendants shall receive
            -----------------------
            minimum rest periods at their domicile or satellite of no
            less than twenty-four (24) hours from release to report
            following any International flight, except as provided under
            Article 18(G) (Back-to-Back Flying).

            (a)  Rest periods shall commence upon the completion of the
                 thirty minute (:30) de-briefing time or upon release
                 from duty at domiciles and satellites.

            (b)  At International layover stations the Company shall
                 provide a minimum rest period of at least twelve (12)
                 hours scheduled from release to report and a minimum
                 rest of ten (10) hours actual from release to report;
                 provided, however, that rest following duty periods in
                 excess of fourteen (14) hours shall be provided in
                 accordance with (R) above.

            (c)  During the rest periods provided in this paragraph the
                 employee shall be free from all duty with the Company.

            (d)  An employee on the International operation will not be
                 scheduled out of his/her domicile, satellite or
                 layover station to be on duty in excess of fourteen
                 (14) consecutive hours, except to the extent
                 necessitated by a nonstop flight or to meet the
                 requirements of a military charter flight or to those
                 charter flights operated under the provisions of
                 Article 18(E)(2) and (3) [Charters]. Actual hours on
                 duty in excess of fourteen (14) will be compensated at
                 the appropriate hourly rate. Such compensation will be
                 in addition to that computed under paragraph (D) of
                 this Article.

            (e)  For purposes of this section, the on-duty period shall
                 include the report time referred to in paragraph
                 (E)(1) above and the thirty minute (:30) debriefing
                 time.

      NOTE:  An on-duty period consisting solely of deadheading shall
      not include debriefing time.

                           ARTICLE 6 / Page 10

<PAGE>
<PAGE>

(S)   Contractual relief from all duty for not less than twenty-four
      (24) consecutive hours must be granted any bid line Flight
      Attendant at his/her domicile or satellite at least once during
      any seven (7) consecutive calendar days. Contractual relief from
      all duty for not less than twenty-four (24) consecutive hours
      must be granted any reserve Flight Attendant at his/her domicile
      at least once during any seven (7) consecutive calendar days.
      FAR relief from all duty for not less than twenty-four (24)
      consecutive hours must be granted any reserve Flight Attendant
      at his/her domicile or layover station at least once during any
      seven (7) consecutive calendar days.

(T)   Rest Seats/Facilities.
      ---------------------

      (1) The Company shall provide adequate rest facilities for
          Flight Attendants on all flights and will provide facilities
          equal to those used by other crew members. On flight(s)
          scheduled for less than ten (10) hours flight time in a
          single on-duty period and so long as a First Class seat is
          blocked out for the cockpit crew on such flights, the
          Company will block one (1) First Class seat in the First
          Class cabin for use exclusively for Flight Attendants.  On
          international flight(s) scheduled for eight (8) or more
          hours flight time in a single on-duty period, and a seat is
          available after take-off, such seat on that flight may be
          used as a rest seat. Flight Attendants will be accorded the
          same prerogatives as may be extended to pilots under similar
          circumstances, including eating and sleeping. The provisions
          of this paragraph concerning rest facilities in the polar
          operation are satisfied on the basis that the Company will
          block and enclose two (2) First Class type seats in the
          First Class cabin for use exclusively by Flight Attendants.
          In addition, on international flight(s) scheduled for ten
          (10) or more hours flight time in a single on-duty period,
          the Company will block and curtain two (2) First Class seats
          in the First Class cabin for use exclusively by Flight
          Attendants.

      (2) In the event the Company operates aircraft larger than the
          B767 in its international operations and the block time in a
          single on duty period is ten (10) hours or more, the rest
          facilities provided exclusively for Flight Attendant use
          will be increased at a ratio of one (1) additional rest seat
          for each three (3) working Cabin Attendants above the B767
          bid staffing of seven (7) Cabin Attendants.  (For example,
          in the event the Company operates a 747 aircraft with
          thirteen (13) or more working Cabin Attendants [Flight
          Service Manager and 12 Flight Attendants or more], TWA will
          provide two (2) additional crew rest seats).

(U)   Guaranteed Days Off.  A Flight Attendant not on reserve shall
      -------------------
      receive a minimum of four (4) pre-scheduled two-day periods plus
      one (1) one-day period not pre-scheduled per month, at domicile,
      free from all duty with the Company. The two (2) day periods
      shall be indicated as such on the sequence bid sheets and shall
      be distributed throughout the month; however, one (1) two-day
      period will be subject to rescheduling as a result of initial
      balancing, but such period

                           ARTICLE 6 / Page 11

<PAGE>
<PAGE>

      must be rescheduled prior to the beginning of the bid month. Two
      (2) day periods for relief run holders will be established after
      the initial balancing. For purposes of this paragraph, the time
      for the commencement of days off shall be 0200 for each domicile
      and this time will not thereafter be changed unless mutually
      agreed to between the System Scheduling Committee and Vice
      President - In-Flight Services, at the Monthly Scheduling
      Meeting. After initial balancing has been accomplished, in the
      event that a Flight Attendant flies into a scheduled duty free
      period, such period shall commence at the designated time on the
      following day. If the entire duty free period is impinged upon,
      such period shall be rescheduled later in the bid month. Such
      duty free period shall not commence until the Flight Attendant
      has been released at domicile. If such rescheduling requires the
      removal of the Flight Attendant from a scheduled activity, the
      Company shall not be required to reschedule the two-day period
      unless the Flight Attendant calls Crew Schedule and requests the
      same. This specific request must be made to Crew Schedule no
      later than six (6) hours after the completion of the non-routine
      pairing that impinged on the guaranteed day off. Trades or
      request balance flights which result in interference with duty
      free periods shall not require the Company to reschedule the
      duty free period.

(V)   Reserve Flight Attendants.  Flight Attendants on reserve shall
      -------------------------
      be granted a reserve spread of twelve (12) days.  All reserve
      spreads shall be considered immovable with the exception of one
      (1) spread, identified on the monthly bid sheet, which shall not
      be moved more than forty-eight (48) hours except by mutual
      agreement or when necessary to accomplish training for the
      Flight Attendant. Assignment of reserve spreads shall be made in
      accordance with preference bid in seniority order.  A minimum of
      twenty percent (20%) of Cabin Attendant reserve spreads
      initially awarded shall consist of twelve (12) consecutive days.
      The remaining eighty percent (80%) of such Cabin Attendant
      reserve spreads shall be awarded as three, four, or six (6) day
      spreads, which in combination with the twelve day spread, may
      not exceed four (4) separate spreads.  Such Cabin Attendant
      Reserve spreads or combinations thereof may be discontinued by
      mutual consent of the parties with notification to the Director
      of Crew Schedule no later than the first of the month preceding
      the affected month.

(W)   Equipment Substitution.  Subject to the provisions of Paragraph
      ----------------------
      6(Z),

      (1) In the event that a different type of equipment should be
          substituted on any scheduled flight or flight segment of a
          Flight Attendant holding a bid run and such Flight Attendant
          is qualified on the substituted equipment he/she will fly
          such substituted equipment.

      (2) Should an equipment substitution as above occur at the
          Flight Attendant's domicile and the Flight Attendant is not
          qualified to fly the substituted equipment, the Company may
          require such Flight Attendant to protect any segment of such
          flight assignment. A Flight Attendant may be required to
          deadhead into position to protect any segment of the Flight
          Attendant's flight assignment.

                           ARTICLE 6 / Page 12

<PAGE>
<PAGE>

      (3) Should an equipment substitution as above occur at other
          than the Flight Attendant's domicile, the Flight Attendant
          shall be scheduled as an extra crew member in accordance
          with the Away From Domicile Scheduling Policy.

      (4) At Domicile

          (a)  Those bid Cabin Attendants who were originally
               scheduled on the flight and are qualified to fly the
               substituted equipment will be assigned to such flight
               in seniority choice order.  In the event no Cabin
               Attendant accepts the offer to work, the junior Cabin
               Attendant(s) may be assigned to work.

          (b)  In the event the substituted equipment does not
               utilize a Service Manager, the Service Manager will
               not be allowed to exercise his/her Flight Attendant
               seniority on the substituted equipment.

      (5) Away From Domicile

          (a)  Those bid Cabin Attendants who were originally
               scheduled on the flight and are qualified to fly the
               substituted equipment will be assigned to such flight
               in seniority choice order.  In the event no Cabin
               Attendant accepts the offer to work, the junior Cabin
               Attendant(s) may be assigned to work.

          (b)  In the event the substituted equipment does not
               utilize a Service Manager, the Service Manager will
               not be allowed to exercise his/her Flight Attendant
               seniority on the substituted equipment. The Service
               Manager may either be assigned to an open flight
               requiring a Service Manager or deadheaded to domicile.

(X)   Enhanced Trip Option; BLIM; Quarterly Limitations
      -------------------------------------------------

      (1) Enhanced Trip Option.
          --------------------

          (a)  Full-line Flight Attendants.  Full-line Flight
               ---------------------------
               Attendants may offer into open time trips ("ETO
               OFFER") which they would like to drop from their lines
               subject to Paragraph (3) below. If another Flight
               Attendant selects the offered trip from open time
               ("ETO TAKE"), the trip will be dropped from the
               offering Flight Attendant's line and placed in the
               receiving Flight Attendant's line. Until the offered
               trip is selected by another Flight Attendant, the
               offering Flight Attendant will remain responsible for
               the trip. A selected trip must not conflict with any
               existing assignments and all contractual legalities
               must be observed.

                           ARTICLE 6 / Page 13

<PAGE>
<PAGE>

          (b)  Alternate Line Flight Attendants.  Alternate Line
               --------------------------------
               Flight Attendants may not utilize ETO OFFER.
               Alternate Line Flight Attendants may utilize ETO TAKE
               up to the maximum credit limit of fifty-five (55:00)
               hours per month.

          (c)  The provisions of TWA/IFFA Arbitration Case No.
               81-0057 "Claimed Reserve Guarantee" shall not apply
               to Flight Attendants whose monthly guarantees have
               been reduced pursuant to the provisions of Paragraph
               6(X).

          (d)  The terms "initial line projection", "credit limit",
               "85:00 credit hours" and "guarantee" as used in
               Article 6 and Article 18, are applicable to a Flight
               Attendant who has exercised the Enhanced Trip Option.
               As described herein, those terms shall be construed
               to mean the increased or decreased values, as may be
               applicable, resulting from the application of the
               provisions of this Paragraph 6(X).

          (e)  LOD/ETO.  An ETO trip that has language of
               destination (LOD) assigned to the sequence shall have
               the LOD requirement considered prior to the
               processing of the ETO trip.  The LOD Flight Attendant
               who selects such a trip must be same language
               qualified as the LOD Flight Attendant offering the
               trip.

          (f)  ETO FOR RESERVES.  A reserve flight Attendant may add
               trips by utilizing the provision of the Enhanced Trip
               Option (ETO) in accordance with Art. 18(D)(8)(l)(3).
               Pay for such additional ETO trip(s) shall be paid
               over and above the Reserve Guarantee.

          (g)  SICK LEAVE ALLOWANCE/ETO UNDER 32:30.  Sick leave
               accrual shall not apply to a Flight Attendant who,
               through the use of the Enhanced Trip Option (ETO),
               reduces his/her time and as a result completes a
               month with less than 32:30 pay hours.

          (h)  VACATION ALLOWANCE UNDER 32:30.  Vacation accrual
               shall not apply to a Flight Attendant who, through
               the use of the Enhanced Trip Option (ETO), reduces
               his/her time and as a result completes a month with
               less than 32:30 pay hours.

(2)  IP/BLIM.
     -------

     (a)  IP/BLIM Decrease.  When the trip is dropped, the initial
          ----------------
          line projection ("IP") and Block Limitation "(BLIM")
          [established pursuant to the provisions of Article

                           ARTICLE 6 / Page 14

<PAGE>
<PAGE>

          18(D)(7)(c], the credit limit [initially 85:00 hours
          pursuant to the provisions of Article 6(A)], and the
          minimum guarantee [initially 65:00 pursuant to the
          provisions of Article 3] of the offering Flight Attendant
          will each be reduced by the amount of the credit of the
          dropped trip.

     (b)  IP/BLIM Increase.  The initial line projection and the
          ----------------
          credit limit of the Flight Attendant adding a trip through
          ETO will be increased by the number of credit hours of the
          trip received.  If the current Block Projection is less
          than the current Block Limitation (95:00 hours) and there
          is an ETO added trip, the current Block Limitation should
          be increased by the scheduled block value of the added ETO
          trip. If the current Block Projection is equal to or
          greater than the current Block Limitation, a new Block
          Limitation will be established. The scheduled value of each
          additional ETO trip will be added to the current Block
          Projection, and the value of such Block Projection becomes
          the new Block Limitation (BLIM). If a Flight Attendant adds
          a trip, by using ETO, and that trip extends over the end of
          a bid period and that Flight Attendant is then awarded
          reserve in the new month, the normal 85:00 hour reserve
          BLIM will remain in the new month. If that Flight Attendant
          is later moved up to an open time line, the added ETO block
          time will be added to the normal 95:00 BLIM.
          Notwithstanding the above, and purposes of this paragraph
          only, a flight Attendant who picks up the additional block
          time through actual operation, anytime during the month,
          shall not be subject to trip removal for exceeding the
          adjusted block cap limitation unless such projected monthly
          block time, including the additional block time, exceeds
          the adjusted block cap limit by more than one (1) hour.

     (c)  Exceeding BLIM.  A Flight Attendant may add a trip or
          --------------
          trips through open-time trading or self-balancing that
          exceeds the normal 95:00 Block Limitation or the adjusted
          Block Limitation established through ETO activity.  BLIM
          shall not be raised as a result of open-time trading or
          self-balancing pursuant to the terms of this Paragraph.

     EXCEPTION:  To recover loss of time pursuant to Article 6(Z) and
     Article 18(D)(7), the Company may balance a Flight Attendant up
     to the newly-established scheduled block hours.  (For example:  A
     Flight Attendant trades into a 2-day 10:00 hour trip that
     increases scheduled block hours from 90:00 hours to 100:00 hours.
     BLIM will remain at 95:00 hours.  In the event a Flight Attendant
     suffers a loss of time which would allow the Company to balance
     the Flight Attendant [whether through Article 6(Z) or Article
     18(D)(F)], the Company may not balance the Flight Attendant to
     exceed the newly-established

                           ARTICLE 6 / Page 15

<PAGE>
<PAGE>

     scheduled block hours of 100:00 hours.  At the Flight Attendant's
     sole option, he or she may elect to exceed the maximum block
     hours).

     (3)  Quarterly Minimums.
          ------------------

          (a)  Full-line Flight Attendants shall be required to accrue
               flight credit hours as defined in Article 6(B) of not less
               than 150:00 flight credit hours during each quarter.

          (b)  A quarter shall be defined as January, February, and March
               (1st Quarter), April, May, and June (2nd Quarter), July,
               August, and September (3rd Quarter), and October, November,
               and December (4th Quarter).

          (c)  Full-line Flight Attendants may offer trips into ETO which
               they would like to drop from their lines.  In no event may
               a Flight Attendant offer a trip into ETO which would
               require the offering Flight Attendant to be scheduled in
               excess of sixty-five (65:00) credit hours in Month 3 of the
               Quarter in order to satisfy the 150:00 hours quarterly
               minimum limitation.

          (d)  Excess credit carried forward as "bowwave" shall not be
               credited towards the quarterly minimum.  Bowwave used to
               drop trips shall be credited towards the quarterly minimum.
               In connection with Article 18(D)(7)(f)(4)(g)(2), a full-
               line Flight Attendant shall be entitled to drop trip(s) up
               to a maximum of twenty-five (25) flight credit hours per
               month.

(Y)  Drug/Alcohol Testing.  Drug/alcohol testing will not be
     --------------------
     considered an extension of an on-duty period. Nonetheless, if a
     Flight Attendant will not receive minimum rest between release
     from the drug/alcohol test and report for his/her next
     assignment, he/she shall be released from the next assignment
     provided a request is made to Crew Schedule as soon as
     practicable after the Flight Attendant becomes aware that he/she
     will not receive minimum rest, but in no case later than
     departure from the drug testing facility. Flight Attendants
     removed from assignment in accordance with this paragraph shall
     be treated as having suffered a loss of flight time credit due to
     illegality and shall be subject to balance in accordance with the
     provisions of Article 18.  A Flight Attendant who does not advise
     Crew Schedule before leaving the drug testing facility that a
     drug test has resulted in less than minimum rest may not
     thereafter be removed from his/her next assignment due to an
     untimely claim of having received less than minimum rest.

(Z)  Guaranteed Trip Protection.
     --------------------------

     (1)  Subject to Paragraph 3(a) and 3(b) below, Credit and Pay
          Protection will be provided for a bid Flight Attendant who
          suffers a loss of credit and pay on any trip of the month,
          including VFL trip(s), and a Reserve

                           ARTICLE 6 / Page 16

<PAGE>
<PAGE>

          Flight Attendant who trades into a trip on his/her
          scheduled days off as a result of all:

          (a)  Cancellations.
          (b)  Non-routine operations resulting in a loss of flight
               credit and pay including, but not limited to
               cancellation of flight segments and/or illegality of
               Flight Attendant(s) in connection with any trip.
          (c)  Equipment substitution.
          (d)  Inversals.
          (e)  Company-created errors.
          (f)  Move-ups.
          (g)  Transitions.
          (h)  Schedule changes.

     (2)  The Flight Attendant shall be protected for the original
          trip and shall receive flight credit and pay for the
          protected trip or the trip actually worked, whichever is
          greater.  For transitions, the Flight Attendant shall be
          protected for the original trip or the transition trip,
          whichever is greater.

     (3)  This Article provides for complete credit and pay
          protection under specific circumstances on a trip-by-trip
          basis.  As such, the loss of credit and balancing
          provisions shall be handled in accordance with Article
          6(Z)(5).  Should the Flight Attendant go non-routine and
          become illegal for his or her next flight activity, the
          Flight Attendant shall be protected for the affected trip
          provided that the "buffer" provisions contained herein have
          been satisfied.  (In the event the Company sequences a
          trip, initially balances a Flight Attendant, or
          progressively balances a Flight Attendant under Article
          18(D)(7) with less than the 12-hour buffer, the Flight
          Attendant shall be entitled to Trip Protection).

          Buffers.  Flight assignments that are the result of
          -------
          Flight Attendant trades (including  MTD, OTD, SBL, and ETO)
          shall be protected subject to the following:

          (a)  12-Hour Buffer.  A Flight Attendant must schedule
               himself or herself so that there is a minimum 12 hour
               duty-free period between the scheduled release time
               and scheduled report time of any 2 flight
               assignments.  Failure to provide the minimum 12 hour
               duty-free period between the 2 flight assignments
               eliminates trip protection for the 2nd flight
               assignment.

          (b)  16-Hour Buffer.  When a Flight Attendant is on a
               flight assignment (subsequent to block out of the
               first flight segment) and adds a flight assignment
               that is the next flight assignment, the Flight
               Attendant must provide a minimum

                           ARTICLE 6 / Page 17

<PAGE>
<PAGE>

               16 hour duty-free period from the scheduled release
               of the first flight assignment until scheduled report
               time of the next flight assignment.  Failure to
               provide the minimum 16 hour duty-free period
               eliminates trip protection for the added flight
               assignment.

     (4)  Credit and Pay Protection shall be provided for the entire
          value of the protected trip whether the trip operated
          totally within the current bid month or partially within
          the current bid month and partially within the following
          month.

     (5)  In exchange for such protection, the Company shall retain
          the right to recover lost flight credit on the same
          calendar days as the protected trip in accordance with the
          following procedures:

          (a)  When a loss of credit and pay as defined in paragraph
               6(Z)(1)(a)-(h) above occurs, the Company may balance
               the Flight Attendant on a recovery trip(s) at the
               domicile provided that such trip(s) is scheduled to
               return to the Flight Attendant's domicile and release
               the Flight Attendant on the same calendar day as the
               trip for which protected.  Such recovery trip(s)
               shall be scheduled to return the Flight Attendant to
               domicile in order to be legal for his/her next trip.
               The Company may balance the Flight Attendant on a
               recovery trip that is contained in hard time, soft
               time, or offered in ETO by another Flight Attendant.
               The Company may also balance the Flight Attendant on
               a recovery trip that has been previously assigned
               and/or partially flown by a Reserve Flight Attendant,
               except in cases where the Reserve Flight Attendant is
               flying on his or her days off.  In the event the
               Reserve Flight Attendant has reported for the
               previously assigned flight and/or has flown a portion
               of the trip, he or she shall be entitled to call-out
               pay or credit for the portion of the trip actually
               flown, whichever is greater, as provided in the
               Collective Bargaining Agreement.

          (b)  If, in actual operation, the recovery trip(s) causes
               the Flight Attendant to be illegal for his or her
               next scheduled trip, the Flight Attendant will be
               protected subject to Paragraph (3) above.

          (c)  If the Flight Attendant is subject to balance in
               accordance with the above provisions and immediately
               assignment cannot be made, he/she shall only be
               required to contact Crew Schedule during the next
               call-in for which he/she is legal, if applicable. The
               Company shall not balance the Flight Attendant on any
               flight which departs prior to the scheduled check-in
               of the original flight without the prior consent of
               the Flight Attendant. However, the Flight

                           ARTICLE 6 / Page 18

<PAGE>
<PAGE>

               Attendant may initiate contact at any time when a
               trip becomes available.

          (d)  In the case of multiple balance trips, the Flight
               Attendant must be notified of all balance trips
               simultaneously.

          (e)  "Trip Protection" Balance Trips.
               -------------------------------

               (1)  If the Flight Attendant self-balances on the
                    same calendar day(s) as the protected trip
                    (increases flight time), Guaranteed Trip
                    Protection shall still apply and the Flight
                    Attendant shall receive credit and pay for the
                    protected trip or the trip actually worked,
                    whichever is greater.  For trips that operate
                    on different day(s) or if the trip trade causes
                    a decrease in time, the Flight Attendant shall
                    lose the Guaranteed Trip Protection and shall
                    receive the total credit and pay of the trip(s)
                    actually flown.

               (2)  If the Flight Attendant places the "Trip
                    Protection" balance trip into ETO, it shall be
                    subject to the provisions of Article 6(X). In
                    the event another Flight Attendant selects the
                    offered trip from ETO or the offered trip is
                    used by Crew Schedule for any reason, the
                    offering Flight Attendant shall be entitled to
                    the credit for the difference between the
                    Guaranteed Trip Protection and the balance trip
                    that is dropped from his or her line.

               (3)  Prior to a "Trip Protection" balance trip being
                    placed in the Flight Attendant's line, he or
                    she may request Balance Avoidance in accordance
                    with Article 18(D)(7)(f)2.

          (f)  A Flight Attendant who has a pairing offered in ETO
               and that pairing cancels while in the ETO offer
               position, shall not be provided trip protection.  The
               Company will reduce the applicable credit and pay
               projection.

          (g)  The provisions of this Article 6(Z) shall not apply
               to trips that are affected by any TWA IAM-represented
               employees' unlawful work stoppage or unlawful job
               action, including that of TWA Flight Attendants.  The
               determination that there was an unlawful job action
               or work stoppage may only be determined by a Court of
               law or arbitration decision.  In the event there is a
               determination that there was an unlawful job action
               or work stoppage by IAM-represented employees,

                           ARTICLE 6 / Page 19

<PAGE>
<PAGE>

               the Company shall be entitled to recoup all
               overpayments relating to Trip Protection payments
               (i.e. the difference between the credit and pay of
               the protected trip(s) and the credit and pay of the
               trip(s) actually worked).  At the Company's option,
               the recoupment may be in one (1) lump sum.  The
               Company shall provide documentation relating to the
               recoupment of any overpayment.

                           ARTICLE 6 / Page 20

<PAGE>
<PAGE>
                              ARTICLE 7
                               PASSES

(A)  Passes.  Employees shall be entitled to personal transportation
     -------
     passes as issued in accordance with Company regulations. A Class
     3, positive term pass, or its equivalent, shall be granted to the
     Local Lodge 1997 President, Local Lodge 1997 Vice President,
     Local Lodge 1997 Secretary/Treasurer, Local Lodge 1997 Executive
     Board Members, Negotiating Committee, Grievance Representatives,
     and Full-time Representatives, for use on union business, subject
     to applicable Federal regulations.

(B)  Union Member System Board of Adjustment Passes.  Union members
     -----------------------------------------------
     of the System Board(s) of Adjustment who are required to travel
     on the Company's system in connection with official Union
     business shall be issued positive space passes, subject to
     applicable Federal regulations.

(C)  Reduced Rate Transportation on Union Business.  Reduced rate
     ----------------------------------------------
     transportation shall be available for employees on Union business
     to the same degree as for personal business in accordance with
     Company regulations. This in no way shall be construed as
     affecting the present policy regarding passes for Union business.
     Witnesses and representatives who are employees of the Company
     shall receive positive free transportation over the lines of the
     Company from the point of duty to the point of hearing and
     return.

(D)  Jumpseat Authority. The exclusive use of cabin jumpseat
     -------------------
     authority for personal business shall be granted to active Flight
     Attendants, on a first come, first served basis, in accordance
     with Company policy and procedures. On flights on which
     Additional Crew Members (ACM) and cabin jumpseat authority have
     been authorized, when a Flight Attendant is utilizing an XCAP for
     personal business, cabin passenger seat assignments shall be made
     among XCAPs and ACMs, regardless of rank, using Company
     seniority. The priorities of cabin attendant jumpseat authority
     shall be:

     XCAP 1    Essential Flight Attendant personnel proceeding to or
               from a flight assignment when no passenger seat is
               available.

     XCAP 2    Urgent Flight Attendant familiarization or Management
               personnel traveling to, from or on Company business.

     XCAP 3    Flight Attendant on family or personal emergency

     XCAP 4    Flight Attendant on Union business

     XCAP 5    Flight Attendant personal business--First come/First
               Served

     NOTE - The above is applicable to those Flight Attendants who are
     in an active status

                           ARTICLE 7 / Page 1

<PAGE>
<PAGE>

(E)  Retired Employees.  Employees who at the time of retirement are
     ------------------
     covered by this Agreement shall receive pass privileges in
     accordance with the policy and regulations specified in the
     Company Management Policy and Procedure Manual (provided federal
     law permits).  In addition to the above, employees who have
     fifteen (15) or more years of service with the Company and who
     retire under the Flight Attendant Retirement Plan at age fifty
     (50) shall be entitled to retiree term pass and reduced rate
     transportation privileges for self, spouse and eligible
     dependents.

(F)  Age 45 Retirement/Voluntary Termination.  Employees who
     ----------------------------------------
     voluntarily terminate or retire at age forty-five (45) with a
     minimum of fifteen (15) years of service will be provided with a
     calendar year complement of six (6) Class 9 adult trip passes and
     three (3) Class 9 children trip passes.  Employees who retire
     will also be entitled to receive unlimited reduced rates.
     However, employees who voluntarily terminate will be entitled to
     unlimited reduced rates on TWA and will receive reduced rates on
     other airlines only to the extent such is authorized by
     appropriate interline agreement between the Company and other
     airlines.

(G)  Disability Retirement.  Employees who disability retire with
     ----------------------
     fifteen (15) years of service will be entitled to receive a
     retirement term pass and reduced rate transportation privileges.

(H)  Employee Pass Privileges.  Employees will be afforded free and
     -------------------------
     reduced rate transportation as established by Company policy on
     the date of signing of this Agreement which will not be changed
     or discontinued during the term of this Agreement without first
     giving the Union thirty (30) days notice of the reason therefor
     and affording the Union an opportunity to confer with the
     Company.

(I)  Improvements in Pass Policy.  Any improvements in the pass
     ----------------------------
     policy which the Company extends to employees covered by a
     collective bargaining agreement will likewise be extended to
     Flight Attendants.

(J)  Furloughed/Displaced Flight Attendant Passes.  Flight
     ---------------------------------------------
     Attendants who are furloughed or displaced to another geographic
     location and remain active are entitled to unlimited Class 8
     displacement passes, service charge exempt, for a period not to
     exceed twelve (12) months.  Such service charge exempt Class 8
     passes shall be issued through the local pass office and shall be
     used between the on-line station nearest the Flight Attendant's
     residence and the new domicile and shall be limited to travel in
     connection with work assignments.

                           ARTICLE 7 / Page 2

<PAGE>
<PAGE>

(K)  Emergency Pass Privileges.  When a member of an employee's
     --------------------------
     immediate family dies or suffers serious illness, such employee
     will be granted emergency pass privileges in accordance with the
     Company's Management Policy and Procedure Manual.  The priority
     of any pass granted pursuant to this section shall not be less
     than the priority of such pass as provided in the Company's
     Management Policy and Procedure Manual on the effective date of
     this Agreement.  Immediate family as used in this paragraph shall
     mean spouse, children, father, mother, stepfather, stepmother,
     father-in-law, mother-in-law, sister, brother, stepbrother,
     stepsister, grandparents, and legal guardian.

(L)  In-law Passes.   Effective January 1, 2000, a Flight
     --------------
     Attendant's father-in-law and mother-in-law shall be afforded
     access to purchase up to eight (8) I.D. 90 tickets in a year for
     travel on TWA provided that such Flight Attendant's pass
     allotment benefit includes eligible dependent children.

                           ARTICLE 7 / Page 3

<PAGE>
<PAGE>

                             ARTICLE 8
                             SICK LEAVE

(A)  Sick Leave Accrual.  Sick leave allowance will accrue at the
     ------------------
     rate of 5.0 hours for each month of continuous service, to a
     maximum of seven hundred fifty (750) hours. A Flight Attendant on
     leave of absence or furlough status shall retain but not accrue
     sick leave credit.  Except as provided in Article 6(X) (Sick Leave
     Allowance/ETO), continuous service shall be considered as fifteen
     (15) days of service in a contractual month and less than fifteen
     (15) days shall not be considered.

(B)  Proof of Illness; Written Statement.  The Company may require
     -----------------------------------
     proof of illness or physical disability by doctor's certificate
     for illnesses of ten (10) or more days or where there has been an
     abuse of sick leave.  For illnesses of less than ten (10) days,
     the Company may require a written statement as to the nature of
     the extended illness.

(C)  Entitlement to Sick Leave Credit.  A bid Flight Attendant will
     --------------------------------
     be entitled to sick leave on the first day the Flight Attendant is
     unable to report for scheduled flight duty.  A reserve Flight
     Attendant will be entitled to sick leave on each day that the
     Flight Attendant is unavailable to be scheduled for reserve duty.

(D)  Three (3) Banks.  There shall be three types of banks:  (1)
     ---------------
     Industrial Injury Bank (consisting of 120 days or 288:00 hours @
     2:24 per day), (2) Trips Missed Personal Illness Bank; and (3)
     Master Personal Illness Bank.

(E)  Bid Run Flight Attendant.  A Flight Attendant who holds a bid
     ------------------------
     run and misses a trip or trips as a result of personal illness
     shall be paid as follows:

     (1)  Trips Missed Personal Illness Bank.
          ----------------------------------

          (a)  Flight Attendant with Sixty (60:00) Flight Credit
               -------------------------------------------------
               Hours in the Trips Missed Personal Illness Bank.  At
               -----------------------------------------------
               the beginning of each calendar year, a maximum of
               sixty (60:00) credit hours shall be deducted from the
               Flight Attendant's Master Personal Illness Bank and
               placed in the Flight Attendant's Trips Missed Personal
               Illness Bank to the extent that such Flight Attendant
               has accrued sick leave credit. The Trips Missed
               Personal Illness Bank shall be used for payment of
               trips missed up to sixty (60) flight credit hours.  A
               bid Flight Attendant, with a Sixty (60:00) Credit
               Hours in his or her Trips Missed Personal Illness
               Bank, shall receive credit for the value of trip(s)
               missed up to sixty (60) flight credit hours per
               calendar year. During any given month, a Flight
               Attendant who has sufficient flight credit hours in
               his or her Trips Missed Personal Illness Bank to cover
               a specific trip, shall be paid on the basis of the
               then scheduled flight pay for the trip missed.  If the
               flight credit hours in the Trips Missed Personal
               Illness Bank are not sufficient to cover a specific

                           ARTICLE 8 / Page 1

<PAGE>
<PAGE>

               trip, he or she will receive the daily credit rate of
               four (4:00) hours to be deducted from the Master
               Illness Personal Illness Bank for the scheduled flight
               duty.  Any leftover credit hours in the Trips Missed
               Personal Illness bank will remain.  Upon exhaustion of
               the Trips Missed Personal Illness Bank [below four
               (4:00) hours], the Flight Attendant will receive the
               daily credit rate of four (4:00) flight credit hours
               to be deducted from the Master Personal Illness Bank
               for the scheduled flight duty.  Under this Paragraph,
               a Flight Attendant's monthly flight credit may exceed
               72:00 flight credit hours.

          (b)  Flight Attendant with Less than Sixty (60:00) Flight
               ----------------------------------------------------
               Credit Hours in the Trips Missed Personal Illness
               -------------------------------------------------
               Bank.  At the beginning of each calendar year, a
               ----
               Flight Attendant who has less than sixty (60:00)
               flight credit hours in his or her Master Personal
               Illness Bank shall have that lesser amount placed in
               the Trips Missed Personal Illness Bank.  The Trips
               Missed Personal Illness Bank shall be used for payment
               of trips missed up to the amount of credit hours in
               the Flight Attendant's Trips Missed Personal Illness
               Bank. A bid Flight Attendant shall receive credit for
               the value of trip(s) missed up to the amount of flight
               credit hours contained in his or her Trips Missed
               Personal Illness Bank.  During any given month, a
               Flight Attendant who has sufficient flight credit
               hours in his or her Trips Missed Personal Illness Bank
               to cover a specific trip, shall receive credit for the
               value of the trip missed and be paid on the basis of
               the then scheduled flight pay for the trip missed.  If
               the flight credit hours in the Trips Missed Personal
               Illness Bank are not sufficient to cover a specific
               trip, he or she will receive the daily credit rate of
               four (4:00) flight credit hours to be deducted from
               the Master Personal Illness Bank for the scheduled
               flight duty.  Any leftover credit hours in the Trips
               Missed Personal Illness Bank will remain.  Upon
               exhaustion of the Trips Missed Personal Illness Bank
               [below four (4:00) hours], the Flight Attendant will
               receive the daily credit rate of four (4:00) hours to
               be deducted from his or her Master Personal Illness
               Bank for the scheduled flight duty.  Under this
               Paragraph, a Flight Attendant's monthly flight credit
               may exceed 72:00 flight credit hours.

     (2)  If, upon return to active status, the Flight Attendant's
          monthly flight credit is below 65:00 (if a Full Line Flight
          Attendant) or 32:30 (if an Alternate Line Flight Attendant),
          he or she shall be subject to balance pursuant to Article
          18(D)(7)(g).

                           ARTICLE 8 / Page 2

<PAGE>
<PAGE>

     (3)  Reserve Flight Attendant.  A reserve Flight Attendant
          ------------------------
          shall receive 4:00 flight credit hours for each day he or
          she is unavailable to be scheduled for reserve duty, which
          shall be deducted from the Master Personal Illness Bank.

     (4)  A Flight Attendant who is unavailable for scheduled flight
          duty or reserve duty for an entire bid month and who has
          exhausted his or her Trips Missed Personal Illness Bank
          shall receive a maximum of 72:00 flight credit hours which
          shall be deducted from his or her Master Personal Illness
          Bank.

     (5)  At the end of each calendar year, any unused Trips Missed
          Personal Illness hours shall be transferred to the Master
          Personal Illness Bank.

     (6)  A Flight Attendant who is unavailable for assignments other
          than flight duty, due to illness, will receive the daily
          credit rate of two hours and thirty (2:30) minutes for each
          day of assignment.  Such daily credit rate shall be deducted
          from the Master Personal Illness Bank.

(F)  Exhaustion of Sick Leave.  At such time as a Flight Attendant's
     ------------------------
     sick leave accrual is less than the daily credit rate of four
     (4:00) hours, the Flight Attendant's base pay shall be reduced by
     1/14 of the bi-weekly pay for each day of continued illness.  The
     Flight Attendant will receive the daily credit rate of four (4:00)
     hours for each day of scheduled duty when absent for flight time
     limitation purposes.

(G)  Family Emergency.
     -----------------

     (1)  When a member of a Flight Attendant's immediate family dies
          or suffers serious illness, the Flight Attendant shall, upon
          request, be placed on Family Emergency.  A Reserve Flight
          Attendant shall be paid four (4:00) flight credit hours for
          each day of unavailability for scheduled reserve duty,
          provided he or she has accrued sick leave.  A bid Flight
          Attendant shall be paid at the rate of four (4:00) flight
          credit hours for each day he or she is unavailable for
          scheduled flight duty, provided he or she has accrued sick
          leave.  The Flight Attendant's Master Personal Illness Bank
          shall be charged accordingly to the extent that such Flight
          Attendant has accrued sick leave credit.

     (2)  One occurrence of Family Emergency shall be defined as
          scheduled flight duty if a bid Flight Attendant or scheduled
          availability for reserve duty if a Reserve Flight Attendant
          within a seven (7) calendar day period.  A Flight Attendant
          shall be entitled to two (2) occurrences per calendar year.
          Upon request by the Flight Attendant, the two (2)
          occurrences may be used consecutively for a total of
          fourteen (14) consecutive calendar days.  If a bid Flight
          Attendant has scheduled flight duty or if a Reserve Flight
          Attendant is scheduled to

                           ARTICLE 8 / Page 3

<PAGE>
<PAGE>

          be available for reserve duty and he or she has exhausted
          Family Emergency days, those additional days used for Family
          Emergency will be categorized as without pay, and pay
          guarantee, will, therefore, be reduced accordingly. In the
          event a Flight Attendant's monthly pay guarantee falls below
          65:00 hours (if a full-line Flight Attendant) or below 32:30
          (if an alternate-line Flight Attendant), he or she may apply
          for Balance Avoidance in connection with Article
          18(D)(7)(f).  Upon return to duty, a Flight Attendant shall
          not be subject to balance provided his or her monthly pay
          guarantee remains above 65:00 hours (if a full-line Flight
          Attendant or above 32:30 (if an alternate-line Flight
          Attendant).

     (3)  Immediate family as used in this Paragraph (G) shall mean
          spouse, children, mother, father, stepfather, stepmother,
          father-in-law, mother-in-law, sister, brother, stepbrother,
          stepsister, grandparents, grandchildren, and legal guardian.

     (4)  In conjunction with such time off duty, an employee will be
          granted emergency pass privileges in accordance with the
          Company's Management Policy and Procedure Manual.  The
          priority of any pass granted pursuant to this section (G)
          shall not be less than the priority of such pass as provided
          in the Company's Management Policy and Procedure Manual on
          the effective date of this Agreement.  For purposes of this
          Paragraph, the Company shall not be required to expand the
          Management Policy and Procedure Manual to provide pass
          privileges to include emergency travel for a grandchild.

(H)  Excess Flight Credit.  During any month that a Flight Attendant
     --------------------
     has used sick leave credit (whether for family emergency or
     personal illness), any flight credit in excess of 85:00 hours
     shall be paid off and will not be carried forward.

(I)  Industrial Illness/Injury.  During an employee's absence due to
     -------------------------
     occupational illness or injury compensable under the applicable
     Workers' Compensation Law, he or she shall receive from the
     Company the following benefits:

     (1)  The bid Flight Attendant shall be paid on the basis of the
          then scheduled flight pay for the first trip missed and the
          Flight Attendant's Trips Missed Personal Illness Bank shall
          be charged accordingly, to the extent such Flight Attendant
          has accrued sick leave credit as provided in Paragraph (E).
          If such Bank has insufficient time to cover the entire trip
          missed, the Master Personal Illness Bank shall be charged at
          the daily credit rate of four (4:00) hours for each day of
          such scheduled duty. A reserve Flight Attendant shall be
          paid and credited the daily credit rate of four (4:00) hours
          for each day he or she is unavailable to be scheduled for
          reserve duty, up to a maximum of five (5) days, and the
          Flight Attendant's Master Personal Illness Bank shall be
          charged accordingly, to the extent such Flight Attendant has
          accrued sick leave credit.

                           ARTICLE 8 / Page 4

<PAGE>
<PAGE>

     (2)  Commencing with the second trip missed (or no later than the
          sixth day for a reserve) and for a total period of one
          hundred twenty (120) consecutive calendar days, a Flight
          Attendant shall be paid and credited the daily credit rate
          of 2:24 hours offset by no more than the Workers'
          Compensation payments for which the flight attendant is
          eligible.  Such credit (2:24 hr. [1 day]) shall be deducted
          from the Flight Attendant's Industrial Injury Bank for each
          day of such off-duty status.

     (3)  For the first month that a Flight Attendant is absent due to
          occupational illness or injury, his or her flight credit
          shall be:

          (a)  A bid Flight Attendant shall receive (i) the value of
               the first trip missed providing he or she has
               sufficient hours in the Trips Missed Personal Illness
               Bank and thereafter the daily credit rate of 2:24
               hours shall apply to each calendar day that the Flight
               Attendant is absent due to industrial illness or
               injury or (ii) four (4:00) hours for each day of
               scheduled flight duty of the first scheduled trip if
               the Flight Attendant does not have sufficient hours in
               his or her Trips Missed Personal Illness Bank and
               thereafter the daily credit rate of 2:24 hours shall
               apply for each calendar day that the Flight Attendant
               is absent due to industrial illness or injury.  Under
               this paragraph, a Flight Attendant's monthly flight
               credit may exceed seventy-two (72:00) flight credit
               hours.

          (b)  A reserve Flight Attendant shall receive four (4:00)
               hours for each day he or she is unavailable for
               reserve duty, up to a maximum of five (5) calendar
               days and thereafter the daily credit rate of 2:24
               hours shall apply for each calendar day that the
               Flight Attendant is absent due to industrial illness
               or injury.

     (4)  For all following months thereafter, a Flight Attendant
          shall receive daily credit of 2:24 hours for each calendar
          day absent up to a maximum of seventy-two (72:00) flight
          credit hours per month.

     (5)  Upon completion of the one hundred twenty (120) consecutive
          calendar days as referred to in (2) above, the Flight
          Attendant will advise the Company in writing that he/she
          elects to either receive Workers' Compensation or use their
          Master Personal Illness Bank:

          (a)  The bid Flight Attendant may use his or her Master
               Personal Illness Bank on the basis of the then-
               scheduled flight pay of the trip(s) missed during such
               subsequent period.  The scheduled flight credit of the
               trip(s) missed shall first be deducted from the Trips
               Missed Personal Illness Bank and thereafter, the
               flight credit shall be deducted from the Master
               Personal Illness Bank up to seventy-two (72:00) flight

                           ARTICLE 8 / Page 5

<PAGE>
<PAGE>

               credit hours per month and offset by no more than
               Workers' Compensation payments for which the employee
               is eligible.  The Flight Attendant shall be required
               to mock bid under this provision.

          (b)  A Flight Attendant without credit in his or her Trips
               Missed Personal Illness Bank or a reserve Flight
               Attendant shall have such credit deducted from the
               Master Personal Illness Bank up to seventy-two (72:00)
               flight credit hours per month offset by no more than
               Worker's Compensation payments, providing such Flight
               Attendant has accrued sick leave credit.

     (6)  When a Flight Attendant is off duty due to an industrial
          injury and is receiving pay from the Company under
          paragraphs (1), (2), and (3), above, such Flight Attendant
          shall continue to accrue vacation and sick leave. These
          benefits shall be in lieu of any other payment provided for
          in this article for all absences due to the same illness or
          injury, and no deduction shall be made from her/his sick
          leave account for the payment provided by (2) above;
          however, payments made under (2), (3), and (4) above will be
          offset by Worker's Compensation payments for which the
          employee is eligible. A Flight Attendant absent from work
          under this provision shall continue to accrue seniority,
          including seniority for vacation, sick leave, and pay
          purposes during such absence subject to Article 15(B) of
          this Agreement.

(J)  Workers' Compensation Payments.  Workers' Compensation payments
     ------------------------------
     due a Flight Attendant under paragraph (I) above will be mailed
     directly to the affected employee.

(K)  Obligation to Prevent Sick Leave Abuse.  The Flight Attendants
     --------------------------------------
     and the IAM recognize their obligations to prevent abuse for
     reasons other than illness or other abuses of such sick leave
     privileges, and pledge their wholehearted cooperation to the
     Company to prevent abuse.

(L)  Flight Attendant Requirement When Calling Off Duty.  A Flight
     --------------------------------------------------
     Attendant will only be required to make one (1) call to Crew
     Schedule when such Flight Attendant is to be off duty due to
     personal illness, family illness or industrial injury as well as
     the expected duration of his/her absence.  The Flight Attendant
     shall also provide a contact number which may be used by the
     Company for administrative purposes or to request a doctor's
     certificate.  A Flight Attendant will not be required to obtain
     permission to leave his/her contact number.  Furthermore, a Flight
     Attendant will not be disciplined solely for being unavailable at
     his/her contact number.

(M)  Posting of Sick Leave Accruals.  The Company will post current
     ------------------------------
     sick leave accruals for Flight Attendants on the monthly Flight
     Time Records (FTR).

                           ARTICLE 8 / Page 6

<PAGE>
<PAGE>

(N)  Mid Pairing Illness/Injury.
     --------------------------

     (1)  When a Flight Attendant calls off sick/injured midpairing
          and is unable to complete his/her next flight assignment,
          Operational Planning/Crew Schedule shall reconstruct the
          flight pairing to reflect that such assignment will be
          completed with a RETDO, return to domicile. A Flight
          Attendant who incurs illness or injury mid-pairing will be
          paid for the balance of the trip missed and returned to
          domicile, provided that the Flight Attendant has accrued
          sick leave credit in his or her Trips Missed Personal
          Illness Bank.  If such Bank has insufficient time to cover
          the entire trip missed, the Flight Attendant shall receive
          four (4:00) flight credit hours for each day that the Flight
          Attendant was unavailable for the scheduled flight duty.
          The Master Personal Illness Bank shall be charged
          accordingly.  In addition, the Flight Attendant shall
          receive flight credit for the portion of the trip actually
          worked. The Flight Attendant will be paid for the remainder
          of the original trip missed as scheduled, in accordance with
          the provisions of (E).

     (2)  In addition, if the Flight Attendant calls off sick/injured
          mid-pairing or becomes ill while at a layover station, the
          Flight Attendant will continue to receive normal trip
          expenses until return to Domicile or Satellite or upon
          arrival of the regularly scheduled turnaround flight,
          whichever is earlier.

     (3)  If the Flight Attendant is unable to return to Domicile or
          Satellite as normally scheduled, reasonable actual expenses,
          as determined by the Flight Attendant's Regional General
          Manager, will be paid for the period beyond that which is
          covered by trip expenses outlined above. Expenses of this
          nature include room (if not at a contract hotel), meals,
          telephone, transportation to and from the airport and
          transportation associated with required medical attention.
          Such expenses are to be reported on form G-118 by the Flight
          Attendant for approval by the supervisor. In the event the
          Flight Attendant is hospitalized away from Domicile or
          Satellite, reasonable actual expenses will not include rooms
          or meals.

                           ARTICLE 8 / Page 7

<PAGE>
<PAGE>
                              ARTICLE 9
                              VACATIONS

(A)  Vacation Allowance.  Employees based in the continental United
     ------------------
     States will be eligible for vacation according to the number of
     full months in the employ of the Company in the preceding
     calendar year, computed according to the following schedule:

              Calendar Days to Be Allowed for Vacation
      According to Number of Years of Service with the Company
  Completed Prior to January 1 of Year Vacation is Due to be Taken

Months Worked
   Prior to      4 Years     5 Through     8 Through     25 Years
  January 1      Or Less      7 Years       24 Years     and Over
  ---------      -------      -------       --------     --------
      1             1            1              2            3
      2             1            2              3            5
      3             2            3              5            8
      4             3            5              6           10
      5             4            6              8           13
      6             5            7             10           15
      7             6            9             11           18
      8             6           10             13           20
      9             7           11             14           23
     10             8           12             16           25
     11             9           13             18           27
     12            10           14             19           29

Effective January 1, 2001
-------------------------

Months Worked
   Prior to      4 Years     5 Through     8 Through     25 Years
  January 1      Or Less      7 Years       24 Years     and Over
  ---------      -------      -------       --------     --------
       1            1            2              2            3
       2            2            3              4            6
       3            3            4              6            9
       4            4            6              8           12
       5            5            7             10           15
       6            6            9             12           18
       7            7           10             14           21
       8            8           12             16           24
       9            9           14             18           27
      10           10           15             20           30
      11           11           17             22           33
      12           12           18             24           36

                           ARTICLE 9 / Page 1

<PAGE>
<PAGE>

Vacation allowance will accrue during each calendar month for which an
employee receives pay from the Company, whether she or he is working or
is on sick leave or vacation; however, an employee loaned to another
Company will not receive less vacation as a result of such loan than he
would have received if he had spent such loan time with this Company.
For the purpose of computing vacation accrual, any number of days off
duty on leave or furlough over 15 shall count as a whole month, and any
number up to and including 15 shall not be deducted from vacation
accrual. However, in accordance with Article 6(X)(7), such vacation
accrual shall not apply to a Flight Attendant who, through use of the
Enhanced Trip Option (ETO), reduces his/her time and as a result
completes a month with less than 32:30 pay hours.

(B)  Eligibility for Vacation.
     ------------------------

     (1)  An employee will become eligible for a vacation on January
          1 of each year, provided he/she has completed the
          probationary period or six (6) months with the Company,
          whichever is less. A schedule of available vacation periods
          for the succeeding year shall be posted by the Company by
          October 1 each year; however, the Company may commence the
          January vacation bid period on January 2 in order to insure
          flight protection for the preceding day. Employees shall
          bid and be awarded a vacation period on the basis of their
          domicile as of October 1. Preference of periods in which
          employees shall be permitted to take vacations shall be
          granted at each station in order of seniority, (including
          employees on a leave of absence) taking into consideration
          the requirements of the service. Employees shall file
          written preferences as to the period(s) for taking
          vacation, such preferences to be in the hands of the
          Company by November 15 each year. Vacation assignments
          shall be posted by the Company on or before December 1 and
          will remain posted through December 31. When vacation
          schedules have been established, senior employees will not
          be permitted to take the vacation period already assigned
          to junior employees. An employee's scheduled vacation
          period for the succeeding year shall not be changed because
          of a change in Domicile.

     (2)  Not less than three percent (3%) of the vacations posted in
          accordance with paragraph (C) above shall be scheduled in
          any calendar month. Further, no less than one and one-half
          percent (1 1/2%) of such vacation periods shall be
          scheduled in either the first or second half of any bid
          month. Vacation periods may be traded between employees at
          the same domicile provided such trades are effected prior
          to the fifteenth (15th) of the month preceding the first
          vacation period involved.

                           ARTICLE 9 / Page 2

<PAGE>
<PAGE>

(C)  Vacations Not Cumulative; Rescheduling of Vacations.
     ---------------------------------------------------
     Vacations shall not be cumulative and must be taken within the
     calendar year. When a vacation period has been scheduled it will
     not be changed without the employee's consent, except upon thirty
     (30) days written notice, unless the Company does not have
     sufficient employees to maintain schedules and, in no event,
     without fifteen (15) days written notice, except with the
     employee's consent. However, in the event Company operations in
     any year do not permit any employee his regular vacation during
     such year, he shall be so notified in writing by the Company and
     he may be permitted to take such vacation in the succeeding year.
     When an employee is not granted a vacation, due to the operation
     of this paragraph, for a previous year of service, such employee
     shall be granted vacation pay for such vacation earned and not
     received.

(D)  Terminating Employees.  Vacation allowance will be granted to
     ---------------------
     terminating employees in accordance with the following rules:

     (1)  Employees terminating because of layoff due to reduction in
          force or resigning after giving two weeks' written notice
          of such resignation shall be granted vacation pay for the
          period worked during the current calendar year in
          accordance with schedules set forth in this Article, and
          shall also be paid for vacation period due from a previous
          year and not taken.  Pay under this paragraph is to be
          computed on the basis of the fixed daily credit rate of
          2:30, for each day of accrued vacation, times the
          employee's base hourly rate.  In addition, the employee
          will receive increment pay calculated under paragraph (E)
          below.

     (2)  Employees terminating because of lay-off due to reduction
          in force, who received vacation allowance at the time of
          lay-off and who were recalled during the same calendar
          year, will after the start of the next calendar year,
          receive a vacation leave for the period served from the
          date of recall to the end of that calendar year. When a
          Flight Attendant is granted a personal leave of absence,
          accrued vacation credits will be retained unless the Flight
          Attendant has an outstanding indebtedness to the Company or
          requests to receive vacation pay.

     (3)  Employees terminating because of resignation without giving
          two week's written notice of such resignation or
          terminating because of discharge will not be eligible for
          vacation allowance except for a vacation due from a
          previous year and not yet received.

     (4)  In the case of the death of an employee, the vacation pay
          due shall be paid to his executor, administrator, or legal
          heir.

                           ARTICLE 9 / Page 3

<PAGE>
<PAGE>

     (5)  An employee shall not be eligible to receive vacation pay
          until he or she has completed the probationary period or
          six (6) months of service with the Company, whichever is
          less.

(E)  Increment Pay.  In addition to vacation pay and credit provided
     -------------
     under Article 6(F), an employee shall receive increment pay based
     on the number of credited vacation pay hours times the following
     applicable rates listed in Article 3(L) for:

          Domestic Cabin Attendants and Service Managers
          International Cabin Attendants
          International Service Managers

(F)  Transfer to Overseas Domicile.  When an employee based in the
     -----------------------------
     United States is to be transferred to an overseas domicile, every
     effort will be made to extend the date of transfer for a
     sufficient period to enable him/her to take all accumulated
     vacation to date prior to departing for his overseas domicile.

(G)  Flight Time.  During any calendar month that an employee is on
     -----------
     vacation, his flight time for the period not on vacation during
     such month shall, on a pro rata basis, not exceed the normal
     flight time except as provided in 18(D)(7)(c)2)c); and when a
     vacation period extends from one month into the next month, the
     same conditions shall apply to such two months.

(H)  Splitting of Vacation Periods.  A vacation period with a
     -----------------------------
     minimum of fifteen (15) days may be split into three (3) segments
     with a minimum of five (5) consecutive days in each split. If due
     ten (10) to fourteen (14) days vacation, the Flight Attendant may
     elect one split with a minimum of five (5) consecutive days in
     the split. Providing that the seniority and the number of
     vacation days due will permit, a Flight Attendant will have the
     option to bid (a) for a single vacation period, i.e., no split;
     (b) for one split, i.e., two parts; or (c) for two splits, i.e.,
     three parts. Requests for such split vacations shall be submitted
     at the time vacations are bid and shall be awarded in seniority
     order at the same time that initial vacation awards are granted.
     The initial vacation award shall not be moved or changed as a
     result of an employee being awarded a split vacation. An employee
     may specify a minimum five (5) days split as well as the maximum
     number of days which he/she is willing to accept as a split
     vacation award and may be granted any number within that range.

(I)  Voluntary Vacation Sellback.
     ---------------------------

     (1)  Sixty (60) days prior to the beginning of the bid period in
          which a Flight Attendant's vacation is scheduled, he/she
          may notify the Company that he/she wishes to sell his/her
          vacation back to the Company. The Company may, at its
          option, buy the Flight Attendant's vacation. If the Company
          decides to do so, the Flight Attendant will be notified of
          the Company's acceptance no less than thirty (30) days
          prior to the beginning of the bid period, and a check will
          be issued to

                           ARTICLE 9 / Page 4

<PAGE>
<PAGE>

          the Flight Attendant on the 25th of the vacation month, for
          the full value of the vacation (fixed daily rate of 2:30
          per day).  The Flight Attendant shall then be considered by
          the Company as available to fly for the entire vacation
          period.

     (2)  A Flight Attendant may elect to fly on his/her vacation
          without advance notification to the Company and fly only
          those trips he/she elects to fly to the extent the trips
          are available to him/her through the regular open time
          processes or through Enhanced Trip Option (ETO).

(J)  Personal Business Days.
     ----------------------

     Once during each calendar year an employee, upon request, will be
     granted up to three (3) days of urgent personal business and such
     days shall be deducted from the employee's current year vacation
     allowance. A Flight Attendant who has exhausted all vacation will
     have such occurrence deducted from the following year's vacation
     accrual.  Options as provided in (I) above may not be utilized
     with Personal Business Days.

                           ARTICLE 9 / Page 5

<PAGE>
<PAGE>
                               ARTICLE 10
                           SENIORITY GENERAL

(A)  Seniority Accrual.  Seniority shall begin to accrue from the
     -----------------
     date of employment as a Flight Attendant and shall continue to
     accrue during such period of employment as a Flight Attendant
     except as otherwise provided in this Agreement. When Flight
     Attendants have equal seniority, their relative seniority shall
     be determined on the basis of their length of employment with the
     Company, or if the length of their Company employment is equal
     then their surname shall be listed in order of age as determined
     by date of birth as shown in the Company's personnel records (the
     oldest of them being listed first, the next oldest second, etc.).
     As to those Flight Attendants who are assigned to the line on or
     after July 1, 1976, if the length of Company employment is equal
     as between two Flight Attendants, then their surname shall be
     listed upon the seniority list on the basis of the last four (4)
     digits of the Flight Attendants social security number, with the
     Flight Attendant with the lowest last four (4) digits being
     deemed the senior.

(B)  Furloughed Employees.  Seniority shall govern all employees in
     --------------------
     case of furlough due to reduction in forces, re-employment after
     furlough, (subject to Article 12(G)) choice of vacancies, and
     preference of assignment to equipment, provided the employee is
     deemed sufficiently qualified by the Company for the operation
     involved, except that the term "sufficiently qualified" as used
     herein shall be applied the same as it was on July 31, 1969. In
     addition, qualifications or lack thereof on any equipment will
     not be used as a basis for denying seniority in cases of bidding
     or reduction in force. If a Flight Attendant bids and is awarded
     a line of time on equipment on which such Flight Attendant is not
     qualified, the provisions of Article 6(G) will apply during such
     training. In the event a senior employee is not considered
     sufficiently qualified, the Company will, upon request, discuss
     the matter with the employee and furnish reasons therefor, in
     writing.

(C)  Retention of Seniority.  Any employee given special assignment,
     ----------------------
     or Ambassador Club receptionist assignment, and any employee lent
     to a subsidiary, affiliate, or other company, shall retain and
     continue to accrue seniority and shall have the option to return
     to coverage under this Agreement.  Employees accepting (a)
     promotion to supervisory positions, or (b) promotions to
     positions with duties directly associated with functions
     performed by employees covered by this Agreement, will retain and
     continue to accrue seniority in the classification from which
     promoted.

(D)  Transfers from In-Flight Services Department.  Employees
     --------------------------------------------
     authorized by the Company to transfer from the In-Flight Services
     Department to another department within the Company at their own
     request will retain, for six (6)

                           ARTICLE 10 / Page 1

<PAGE>
<PAGE>

     months after the date of transfer, seniority accrued to the date
     of transfer, and thereafter they shall lose all Flight Attendant
     seniority and their names will be removed from the seniority
     list(s).

(E)  Transfers or Assignments to Other Duty.  Seniority shall not in
     --------------------------------------
     any respect govern transfers or assignment to non-flying duty,
     supervisory duty, or special assignment duty.

(F)  Removal from Seniority List.  Any employee who resigns or who
     ---------------------------
     is dismissed from the service of the Company shall thereupon
     forfeit all previously accrued seniority, and the employee's name
     will be removed from the seniority list(s).

(G)  Probationary Flight Attendants.   Flight Attendants shall be on
     ------------------------------
     probation during their first eight (8) thirty-day incremental
     periods of active service with the Company as a Flight Attendant
     under this Agreement. The provisions of paragraph (B) above as
     pertains to preference of assignment to equipment shall not apply
     to an employee until completion of the probationary period.
     Flight Attendants' names will appear on the Flight Attendant
     seniority list regardless of probationary status. Nothing in this
     Agreement shall be construed to prevent the Company from
     releasing a Flight Attendant during the probationary period
     regardless of her or his position on the system seniority list.
     If a probationary Flight Attendant, starting from the date the
     Flight Attendant is assigned to the line, is absent sixteen (16)
     days or more during a thirty (30) day increment period, the
     Flight Attendant will be required to serve an additional thirty
     (30) day period.  Active service shall include Days-off,
     vacation, and Special Assignment and shall not be counted as
     absences for purposes of determining absence during any thirty
     (30) day increment.  UBS shall not be counted as active service
     for purposes of this Paragraph (G).  If a Flight Attendant is
     furloughed during the probationary period due to a reduction in
     force, such Flight Attendants shall be required to serve only
     that time when added to his/her prior time will comply with the
     eight (8) thirty-day incremental period.

(H)  Return to Active Duty.  Upon return from a position described
     ---------------------
     in paragraph (C) above, an employee shall be permitted to return
     to the classification and domicile held prior to such assignment
     or may exercise system seniority on an existing vacancy in the
     classification held prior to such assignment provided the
     employee is qualified to perform the work of the job. An employee
     who is displaced by such exercise of seniority may in turn
     exercise displacement rights within the classification, seniority
     permitting or into a lower classification, seniority permitting.
     If the domicile of an employee is changed through the exercise of
     seniority rights, the Company will provide space available
     transportation over the Company's lines to the extent permitted
     by law and by Company regulations, but all other expenses
     incidental thereto shall be borne by the employee.

                           ARTICLE 10 / Page 2

<PAGE>
<PAGE>
                              ARTICLE 11
                           SENIORITY LISTS

(A)  Posting of Flight Attendant Seniority List.  The Company shall
     ------------------------------------------
     post a Flight Attendant System Seniority list containing the
     names of all Flight Attendants indicating classification and
     operation on a bulletin board and such list shall be available at
     all times at all stations where Flight Attendants are based. In
     addition, the Company shall post a domicile seniority list by
     classification and operation on bulletin boards at all stations.

(B)  Twice Yearly Postings.  Within ten (10) days after January 1,
     ---------------------
     and July 1 of each year, three (3) copies of the revised and
     updated Flight Attendant Seniority List, one (1) in payroll
     number order, one (1) in alphabetical order and one (1) in
     seniority number order, shall be posted, said list to be up-to-
     date as of January 1 and July 1. Additionally, copies of said
     list will be provided to the Union, along with the seniority
     information on a computer disk.  Additionally, with each list
     provided, the Company shall provide a list of all changes,
     additions, and deletions and their respective effective dates for
     each between the previous list and the current list.

(C)  Protest.  Each employee entitled to be listed on the list
     -------
     referred to in (A) above shall be permitted a period of forty-
     five (45) days after posting of such list in which to protest in
     writing to the company any omission or incorrect posting
     affecting his or her seniority. In the event such employee does
     not file a written protest within forty-five (45) days after the
     list is posted, he or she shall not thereafter be entitled to
     file such protest. Such protests directed to any revision of the
     original list shall be strictly confined to errors or changes
     occurring subsequent to the posting of the previous seniority
     list, except that typographical or clerical errors may be
     corrected at any time.

(D)  Successor Transaction; Merger.  In the event the Company is
     -----------------------------
     involved in any Successor Transaction in which the Successor is
     an air carrier or any person or entity that Controls or is under
     the Control of an air carrier (the "Merger Partner"), the Company
     shall require the Merger Partner to agree, and the Merger Partner
     shall agree to employ the Company's IAM Flight Attendants and to
     integrate the pre-merger IAM Flight Attendant Seniority Lists of
     the Company and the Merger partner pursuant to the IAM merger
     policy if the Merger Partner's employees are represented by the
     IAM and otherwise pursuant to Section 3 and 13 of the Allegheny-
     Mohawk Labor Protective Provisions ("LPPs").

                           ARTICLE 11 / Page 1

<PAGE>
<PAGE>

                               ARTICLE 12
                     REDUCTION IN FORCE AND RECALL

(A)   Furlough Notice.  When Flight Attendants are to be furloughed
      ---------------
      due to a reduction in force, at least fifteen (15) days notice of
      such reduction will be given the Flight Attendant to be laid off,
      except that such notice will not be required in instances wherein
      a temporary reduction is occasioned by strikes or other work
      stoppages, grounding of a substantial number of the Company's
      aircraft, or other circumstances beyond the Company's control.

(B)   Offer of Leaves Prior to Furlough.  In those instances requiring
      ---------------------------------
      notification in (A) above, the Company will, prior to giving such
      notification, post a bulletin in all domiciles indicating the
      anticipated number of Flight Attendants to be furloughed by
      domicile and will offer an equivalent number of leaves of absence
      at those domiciles where the reduction will occur. The actual
      number and duration of such leaves to be granted at each domicile
      will be determined by the Company.

      When Flight Attendants are furloughed due to a reduction in force
      the Flight Attendants with the least system seniority in the job
      classification at the domiciles where the reduction occurs will be
      given furlough notice as specified in (A) above. At the time of
      issuing said furlough notice, the Company will post a bulletin in
      all domiciles containing the following information:

      1.   Names of those Flight Attendants receiving furlough notices.

      2.   Locations where vacancies exist by classification.

      3.   The names, location and classification wherein the least
           senior Flight Attendants who are subject to displacement are
           based.

      (The information required to be posted in accordance with the
      provisions of paragraph (B) 3 above, will not be required when no
      further displacements will occur.)

      Flight Attendants who have been issued furlough notice shall,
      within seven (7) days of such notice being issued, send a telegram
      to the Company specifying their desire to accept the furlough or
      indicating those locations and classifications into which they
      will accept a transfer or displacement, in order of their
      preference. Telegram notifications shall be addressed to the
      Manager - Flight Resources, TWA, 11495 Natural Bridge Road,
      Bridgeton, MO 63044. Once having indicated their preferences for
      filling vacancies, displacement or furlough, Flight Attendants
      will not be permitted to refuse the award of said option. Exercise
      of displacement rights shall be as specified below and the

                           ARTICLE 12 / Page 1

<PAGE>
<PAGE>

      Flight Attendant may only displace another Flight Attendant with
      less system seniority at a location specified in the above
      mentioned bulletin.

      (1)  When all telegram preferences have been received from Flight
           Attendants who have been issued furlough notice the Company
           shall award vacancies or displacement in system seniority
           order.

      (2)  Flight Attendants who are furloughed due to a reduction in
           force or who have been displaced may elect any of the
           options set forth below for his/her respective
           classification:

      SERVICE MANAGER:

      1.   Bid any Service Manager vacancy on the system.
      2.   Displace the most junior Service Manager on the system.
      3.   Displace the most junior Cabin Attendant at the same
           domicile.
      4.   Displace the most junior Cabin Attendant on the system.
      5.   Furlough.

      CABIN ATTENDANTS:

      1.   Bid any Cabin Attendant vacancy on the system.
      2.   Displace the most junior Cabin Attendant on the system.
      3.   Furlough.

(C)   No Expense to Company.  Changes in Domicile as a result of
      ---------------------
      exercising displacement options shall be without expense to the
      Company but non-positive air transportation on the Company's
      system shall be furnished to the extent permitted by law and in
      accordance with Company regulations. Flight Attendants who are
      displacing will exercise their system seniority in the Flight
      Attendant position for purposes of vacation, rates of pay, sick
      leave and bidding provisions of this agreement.

(D)   Notification of Address Change.  An employee who has been
      ------------------------------
      furloughed due to a reduction in force shall file his/her address
      with the domicile Regional General Manager and thereafter shall
      promptly advise the Company of any change in address.

(E)   Failure to Comply.  An employee on furlough shall not be
      -----------------
      entitled to preference in re-employment and his/her name shall be
      removed from the seniority list if he/she does not comply with the
      requirement of paragraph (D) of this Article, or if he/she does
      not notify the Company in writing or by telegraphing of his/her
      intention to return to the service within fifteen (15) days of
      sending notice offering re-employment; or if he/she does not
      return to the service of the

                           ARTICLE 12 / Page 2

<PAGE>
<PAGE>

      Company on or before the date specified in the notice offering
      such re-employment.

(F)   Seven Year Furlough Provision.  Employees furloughed due to a
      -----------------------------
      reduction in force on return to duty within seven (7) years from
      the furlough date, shall be allowed, for seniority purposes but
      not for purposes of determining future pay rate, all time accrued
      prior to returning to duty. At the end of seven (7) years after
      the date of furlough, the furlough shall expire and the employee's
      name shall be removed from the seniority list(s).

(G)   Displacement Passes.  Flight Attendants who are furloughed and
      -------------------
      displace to another geographic location are entitled to unlimited
      Class 8 displacement passes, service charge exempt, for a period
      not to exceed one (1) year.  Such service charge exempt Class 8
      passes shall be issued through the local pass office and shall be
      used between the on-line station nearest the Flight Attendant's
      residence and the new domicile and shall be limited to travel in
      connection with work assignments.

(H)   Recall/Bypass Letter of Agreement. In accordance with the April
      ---------------------------------
      23, 1991, Recall/Bypass Letter of Agreement, furloughed Flight
      Attendants shall indicate in order of preference those
      domiciles/classifications to which they will accept assignment.
      All Flight Attendants, whether active, on furlough or on a 12(B)
      leave of absence who have a recall right to the Flight Service
      Manager position, shall be merged into a single list and recalled
      in seniority order to Flight Service Manager. Consistent with the
      Recall/Bypass provisions, Cabin Attendant vacancies will be filled
      by active Flight Attendants in seniority order, with a priority
      recall right to the domicile(s) where the vacancies exist. Any
      vacancies remaining will be filled in seniority order from those
      Flight Attendants on furlough or 12(B) leave. Transfers to
      domiciles will then be made in seniority order from among those
      Flight Attendants who have standing bids on file. The priority
      of recall to the domicile(s)/classification(s) will apply only
      to the first available vacancy offered in the domicile(s)/
      classification(s) to the furloughed or displaced employee.

(I)   Furlough Pay.  A Flight Attendant who is furloughed due to
      ------------
      reduction in force shall receive furlough pay as provided in
      paragraph (K) of this Article, subject to the limitations and
      conditions set forth therein.

(J)   Furlough Pay Exclusions.  A Flight Attendant will not be
      -----------------------
      eligible for or receive furlough pay if any of the following
      conditions exist:

      (1)  The Flight Attendant has not completed at least one (1) year
           with the Company, on pay status in a position covered by
           this Agreement. For the purpose of this paragraph "pay
           status" includes all time spent in a

                           ARTICLE 12 / Page 3

<PAGE>
<PAGE>

           position covered by the Agreement, exclusive of leaves of
           absence or furlough.

      (2)  The Flight Attendant remains in the employ of the Company in
           any position.

      (3)  The Flight Attendant fails to exercise his/her seniority
           which would enable the Flight Attendant to remain in the
           employ of the Company, except where such exercise of
           seniority would require moving to a new geographic location.

      (4)  The Flight Attendant is dismissed for cause, resigns,
           retires, or accepts personal time off.

      (5)  The Flight Attendant has been furloughed as a result of a
           temporary reduction occasioned by strikes or other work
           stoppages, grounding of a substantial number of the
           Company's aircraft, other circumstances beyond the Company's
           control, or a seasonal schedule reduction of less than four
           (4) months duration.

(K)   Recall Followed by Subsequent Furlough.  An employee recalled to
      --------------------------------------
      work under the terms of this Article after being on furlough for
      more than four (4) months who is again furloughed under conditions
      that would entitle him/her to furlough pay, shall be entitled to
      the amount specified for his/her service with the Company in
      accordance with paragraph (L) of this Article, less the dollar
      amount received on the occasion of the previous furlough;
      provided, that such dollar amount deduction shall not be made if
      such employee completes at least one additional year of active
      service with the Company under this Agreement from the date on
      which he/she reported for duty upon the occasion of the prior
      recall.

                           ARTICLE 12 / Page 4

<PAGE>
<PAGE>

(L)   Amount of Furlough Pay.  The amount of furlough pay under this
      ----------------------
      paragraph shall be based on the length of active service with the
      Company as above defined in paragraph (J). It shall be computed on
      the Flight Attendant's base pay at the time of furlough as
      follows:

      Years of Service                  Benefit
      ----------------                  -------
            1 year                      2 weeks
            2                           3
            3                           4
            4                           5
            5                           7
            6                           8
            7                           9
            8                           10
            9                           11
            10                          12
            11                          14
            12 or more                  16

(M)   Union Notification.  TWA shall provide to the IAM one (1) copy
      ------------------
      of each furlough, recall and displacement notice whenever such
      activity occurs.

                           ARTICLE 12 / Page 5

<PAGE>
<PAGE>

                               ARTICLE 13
                         FILLING OF VACANCIES

(A)   Transfer Bids.  Flight Attendants who desire to transfer to a
      -------------
      different Domicile or classifications may file a permanent bid in
      writing with the Company, stating the station(s) and/or
      classification(s) (listing them in order of preference, if more
      than one) to which they desire to transfer. However, employees
      will not be permitted to transfer until the completion of their
      probationary period, unless a lesser restriction is determined by
      the Company.  All bids must be filed with the Director Crew
      Resources and Administration, TWA, 11495 Natural Bridge Road,
      Bridgeton, Missouri 63044. When vacancies occur in positions
      expected to last ninety (90) days or longer, the employees having
      the most system seniority, subject to the provisions of Article
      12(H), who are qualified to perform the job and who have bids on
      file, will be offered an opportunity to transfer and fill the
      vacancy. Any employee transferring to fill such vacancy shall be
      available to begin the assignment on the date set by the Company,
      which shall be not less than seven (7) days from the date notified
      of the assignment. An employee shall be allowed a reasonable
      period between the time he/she is relieved of duties and the time
      required to report at the new location. Such time shall be
      established in advance and shall be dependent upon the means of
      travel.

(B)   Special Bid Requests; Involuntary Assignments.  If no bids are
      ---------------------------------------------
      on file at the time the vacancy occurs, special bids may be
      requested for filling the vacancy. If no qualified employee
      expresses a desire to transfer, the vacancy may be filled by
      assigning the most junior qualified employee to the position, or,
      in the Company's discretion, by hiring a new employee. When
      special bids are requested, the bulletin will state the numbers of
      vacancies to be filled, the Domicile of each vacancy, and a
      reasonable deadline date after which bids will not be considered,
      which date will not be less than ten (10) days after the date the
      bulletin is posted. Bids under this paragraph must be made by
      telegram addressed to the appropriate Company official named in
      (A) of this Article.

(C)   Employees involuntarily assigned pursuant to paragraph (B) above
      shall have prior rights to displacement in lieu of the most junior
      employees at the station where the displacement occurs. Such
      employee shall have the prerogative of returning to the Domicile
      from which the involuntary assignment was made.

(D)   Permanent Bids.  The Company will, at least once each month,
      --------------
      post a list of all standing (permanent) bids for all
      classifications at all domiciles where Flight Attendants are
      based. If a Flight Attendant fails to withdraw a standing
      (permanent) bid prior to the bid being awarded, the Flight
      Attendant will not be permitted to refuse the award, except in
      cases due to a hardship.

                           ARTICLE 13 / Page 1

<PAGE>
<PAGE>

(E)   Temporary Vacancies.  Vacancies expected to continue ninety (90)
      -------------------
      days or less will be considered as temporary vacancies. Employees
      may file a bid for temporary vacancy on the permanent bid form
      described in paragraph (A) above. Such temporary vacancies
      expected to be more than fifteen (15) days will be bulletined and
      such bulletin will state the number of vacancies to be filled at
      each Domicile. If sufficient bids for temporary vacancies are not
      received, the Company will assign the most junior qualified
      employee at the nearest station having an excess where the vacancy
      exists. Likewise, in case of temporary vacancies of less than
      fifteen (15) days, the Company will assign the most junior
      qualified employee at the nearest station where the vacancies
      exist. Employees assigned temporary vacancies will be allowed an
      expense allowance of $32.00 per day in addition to the expenses
      under Articles 4(A)(1), 4(A)(2), 4(A)(3)(b), 4(B)(3), and 4(B)(4),
      as appropriate. In addition, the Company will provide suitable
      lodging for a Flight Attendant on temporary assignment at the
      temporary domicile. In the event the Company fails to provide
      suitable lodging, the Flight Attendant will be allowed the
      actual/reasonable expenses for the necessary lodging. Single trip
      assignments involving a change in geographic location will be
      considered temporary assignments for purposes of this Paragraph
      13(E); however, the trip formula under Article 6(E) will be
      calculated as if the Flight Attendant was based at the temporary
      domicile. Employees, in lieu of receiving an expense allowance of
      $32.00 per day may elect to receive a pass (Class 6, Non-
      Positive).  This expense allowance shall be payable for single
      trip assignments.

(F)   Passes.  Successful bidders shall pay their own moving expenses
      ------
      to their new station, except that the Company shall furnish Flight
      Attendants and members of the employee's immediate family who are
      residing with, and dependent upon the employee, a one-way (Class
      6) non-positive transportation on the Company's system to the
      extent permitted by law and in accordance with Company
      regulations.

(G)   Mutual Transfers.  Mutual transfer requests shall be processed
      ----------------
      no later than five (5) days after normal transfers are processed
      but not later than the 15th of the month.

      Mutual transfer awards shall be posted within forty-eight (48)
      hours of the award.  The awarding of either transfer (normal or
      mutual) will cancel all other transfer requests on file.

      System bid preferences for mutual transfers shall be matched
      against each other in system seniority order and permanent mutual
      transfers shall be awarded to the extent that there are matched
      preferences on file.

      Flight Attendants may mutually trade across categories provided
      that each Flight

                           ARTICLE 13 / Page 2

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<PAGE>

      Attendant is qualified, trained and available.

      Once a mutual transfer has been awarded, neither Flight Attendant
      can transfer for a period of six (6) months.

      Flight Attendants on probation cannot transfer until the
      completion of their probationary period unless a lesser
      restriction is determined by the Company.

(H)   Service Manager Vacancies.  Vacancies in the Service Manager
      -------------------------
      classification shall be opened for bid on a systemwide basis by
      Flight Attendants who have served as a Flight Attendant for two
      (2) years or more.

      If sufficient bids are not received to fill vacancies, Flight
      Attendants at the location where the vacancy exists will be
      assigned in inverse order of seniority from among those qualified
      Flight Attendants.

      A successful bidder to a vacancy in the Service Manager position
      shall be restricted to that position for a period of six (6)
      months from the date such vacancy is filled.

      Names of successful bidders will be posted at each domicile where
      employees in the status concerned are based.

(I)   Notification of Transfers.  TWA shall provide to the IAM:
      -------------------------

      (1)  One (1) copy of the transfer request list to be delivered to
           the Union by overnight delivery immediately following
           transfer processing;

      (2)  One (1) copy of each transfer message, to be furnished
           following the processing of all transfers.

                           ARTICLE 13 / Page 3

<PAGE>
<PAGE>

                               ARTICLE 14
                           TRANSFER EXPENSES

(A)   Transfer Expenses.  Flight Attendants transferred from one
      -----------------
      domicile to another within the United States at Company request
      shall be allowed to select one (1) of the following two (2)
      options for moving household effects:

      (1)  Option 1 - Company provided moving expenses.
           -------------------------------------------

           5,000 pounds - Single employee
           10,000 pounds - Employee + 1 dependent
           1,000 pounds - each additional dependent

      (2)  Option 2 - Flight Attendant provided moving expenses.
           ----------------------------------------------------
           Moving expenses handled by the Flight Attendant
           individually shall allow for a sum of money equal to the
           existing tariff for moving up to a maximum of 10,000 pounds
           of household effects between the two points.  This
           reimbursement shall be based upon submission of verifiable
           receipts of expenses incurred when moving the primary
           residence.

      (3)  Enroute Travel Expenses.  If the Flight Attendant elects
           -----------------------
           to drive his or her own automobile to the point of
           relocation, he or she shall be reimbursed at a mileage rate
           equal to the amount allowed by the federal government for
           federal employees for the most direct AAA mileage between
           the domicile from and to which he or she is being
           transferred, plus en route expense at the rate of Two
           ($2.00) dollars per hour based upon 400 miles travel per
           day.  A Flight Attendant who does not drive to his or her
           new domicile will be allowed en route expenses for twenty-
           four (24) hours at Two ($2.00) Dollars per hour.

      (4)  Relocation Expense.  A Flight Attendant will be allowed
           ------------------
           Four Hundred ($400.00) Dollar relocation expense.

(B)   Company-Requested Transfers.  In Company-requested transfers,
      ---------------------------
      the Company will furnish space available transportation for the
      transferring Flight Attendant, to the extent permitted by law and
      in accordance with applicable Company regulations.

      (1)  In all transfers, if traveling other than by car, such
           Flight Attendant shall be allowed enroute travel time
           following legal rest as follows: JFK-STL or STL-JFK, two (2)
           days.

                           ARTICLE 14 / Page 1

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<PAGE>

      (2)  A Flight Attendant transferring, but not at the request of
           the Company, will be allowed sufficient time off to drive
           400 miles per day as prescribed in Paragraph (A) above.

      (3)  A Flight Attendant who transfers permanently from one
           domicile to another will not be required to report for
           flight duty within twenty-four (24) hours of his or her
           arrival at the domicile to which he/she is so transferred.
           At the Flight Attendant's option, the twenty-four (24) hour
           period may be waived.

(C)   Newly-Established or Re-Established Domiciles.
      ---------------------------------------------

      (1)  Successful bidders to newly established or re-established
           Domiciles will be considered transferred at Company request
           for purposes of this Article. Such newly established Flight
           Attendant domiciles shall be so considered for a period of
           not less than nine (9) months from the effective date of the
           first bid to such domicile, provided that the Flight
           Attendant moves within twelve (12) months of effective date
           of his/her transfer. This provision shall not apply to
           bidders for a vacancy which was created by a Flight
           Attendant leaving such domicile.

      (2)  Flight Attendants transferring from domiciles closed after
           the date of signing this Agreement, will be considered as
           transferring at Company request and paragraph (A) of this
           Article 14 will apply, provided such Flight Attendants move
           within twelve (12) months of such closing.

                           ARTICLE 14 / Page 2

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<PAGE>

                               ARTICLE 15
                           LEAVES OF ABSENCE

(A)   Personal Leaves of Absence.  When the requirements of the
      --------------------------
      service will permit, an employee may be granted a personal leave
      of absence for a period not in excess of one hundred and eighty
      (180) days, upon receipt by the employee's supervisor of a written
      request, setting out the reasons therefor. When such leave is
      granted, the employee shall retain, and shall continue to accrue
      seniority, except for pay purposes. Such leave may be extended for
      additional periods not to exceed ninety (90) days each, when
      approved in writing by the employee's supervisor. If the employee
      engages in other employment within the field of aviation without
      prior written permission of the Company, she or he shall be deemed
      to have resigned and her or his name will be removed from the
      seniority list.

(B)   Medical Leaves of Absence.  When leaves of absence are granted
      -------------------------
      by the Company because of sickness or injury, an employee's
      seniority shall accrue, except for pay purposes, until he or she
      is able to return to duty or is found to be unfit for such duty,
      except that in no case shall leave for sickness or injury exceed a
      total continuous period of five (5) years.  Return to duty after
      such leave shall be subject to a reasonable trial period not to
      exceed ninety (90) days. When leave of absence is granted for
      industrial injury, an employee's seniority shall accrue for pay
      purposes. Applications for medical leave and medical leave
      extensions (MED-356s) shall include an attachment, with space for
      Flight Attendant signature, providing "In the event of any dispute
      concerning my medical status and/or related employment rights, I
      authorize TWA to release my medical records to the IAM."

(C)   Union Leaves of Absence.  Up to six (6) employees accepting
      -----------------------
      full-time employment with the IAM, as officers or representative,
      shall be granted, if requested, an indefinite leave of absence by
      the Company for the period so employed so long as the IAM remains
      the exclusive bargaining agent of employees covered by this
      Agreement.  Under such leaves such employee(s) shall continue to
      accrue seniority and shall have all employee benefits that can be
      reasonably continued in effect during his/her leave of absence.
      Upon his/her return from such leave of absence, the employee(s)
      will be credited with the maximum vacation, sick leave, and
      occupational illness or injury allowances provided by the
      Agreement then in effect for employees of like seniority provided
      that such employee(s) have been on leave of absence at least one
      (1) year.  Further, upon return from said leave each individual
      shall be returned to active status in his/her domicile, and,
      seniority permitting, in his/her classification.  Flight
      Attendants granted leaves under this paragraph shall be considered
      active under the provisions of Article 7(d).

                           ARTICLE 15 / Page 1

<PAGE>
<PAGE>

(D)   Return to Duty Following Personal Leave, Maternity Leave, or
      ------------------------------------------------------------
      Adoption Leave.  Immediately after expiration of a leave of
      --------------
      absence granted under paragraphs (A), (G) or (H) of this Article,
      a Flight Attendant may exercise bidding privileges on any vacancy
      existing on the system. If such employee fails to become a
      successful bidder, she or he may displace the least senior
      employee in her or his status on the operation to which the
      returning employee was assigned immediately prior to the leave,
      provided that such employee is senior to the employee being
      displaced. If the returning employee does not displace, she or he
      will immediately be placed on furlough status and the provisions
      of Article 12 shall apply.

(E)   Return to Duty Following Medical or Union Leave.  Immediately
      -----------------------------------------------
      after the expiration of a leave of absence granted under (B) or
      (C) of this Article, a Flight Attendant may displace the least
      senior employee in her or his status at the location where the
      returning employee was assigned immediately prior to the leave,
      provided that such employee is senior to the employee being
      displaced. If unable to so displace because of seniority, the
      provisions of (D) of this Article shall apply.

(F)   Military Leave.  When an employee is granted a leave of absence
      --------------
      for extended active military duty, he or she shall retain, and
      continue to accrue seniority until ninety (90) days after
      termination of such active duty. Return to duty with the Company
      from such leave shall not entitle the employee to any greater
      relative seniority than would have occurred had the employee not
      taken such military leave. As soon as possible, but in no event
      later than the completion of the ninety (90) day period mentioned
      in this paragraph, an employee hereunder will displace the least
      senior employee in her or his status at the location where the
      returning employee was assigned immediately prior to the leave,
      provided that such employee is senior to the employee being
      displaced. If unable to so displace because of seniority, the
      provisions of (D) of this Article shall apply.

(G)   Maternity Leave.
      ---------------

      A female employee, upon discovery that she is pregnant, shall
      notify the Company and provide medical certification of the
      pregnancy.  A Flight Attendant may be allowed to work up through
      the twenty-seventh week of pregnancy at which time she will be
      disqualified from flight duty subject to the following
      restriction:

      Upon certification that the pregnancy has been classified as a
      "high risk" pregnancy, a Flight Attendant will immediately qualify
      for a leave under this Article.  In the event the Company
      disagrees with the treating physician's report, the Flight
      Attendant will be required to provide a second opinion.  The
      second opinion shall be from a doctor, selected by the Flight
      Attendant, who is not

                           ARTICLE 15 / Page 2

<PAGE>
<PAGE>

      affiliated with the Flight Attendant's personal physician.  The
      cost of the second opinion shall be paid by the Company.  The
      second opinion shall be final and binding on the parties.  In no
      event shall the company require the Flight Attendant to attend a
      company-designated physical examination.

      Use of sick bank hours and/or medical leave will continue up to
      six (6) weeks from the birth of the baby, or eight weeks if
      delivery is by Caesarian. A Flight Attendant may request a
      maternity leave of absence for up to six (6) months following the
      date of delivery. An employee granted a maternity leave under the
      provisions of this paragraph shall continue to accrue seniority
      during such leave but shall not accrue vacation, sick leave or
      longevity for pay purposes and shall not be eligible for sick
      leave benefits for time lost as a result of pregnancy. To support
      the request for such a leave, the employee will be required to
      submit a physician's statement verifying the pregnancy. At the
      conclusion of the leave of absence following the date of delivery,
      the employee must be available to return to active flight duty
      unless additional leave is requested and supported by her
      physician's statement indicating that additional time is
      necessary.

(H)   Adoption Leave of Absence.   The Flight Attendant who so
      -------------------------
      requests shall be granted an adoption leave of absence, commencing
      with the date that the Flight Attendant takes  physical custody of
      the child.  The Flight Attendant shall provide the appropriate
      documentation to the General Manager of the Domicile (or his/her
      designee) which shall indicate the scheduled delivery date of the
      child to the Flight Attendant.  In the event the scheduled
      delivery date is delayed by more than five (5) days, the Flight
      Attendant shall notify the General Manager in order to revise the
      start date of the adoption leave.  Such leave shall be available
      for the period requested, but in no event for more than ninety
      (90) days.  In order to qualify for the leave, the child to be
      adopted cannot have resided in the Flight Attendant's residence
      for any extended period of time prior to the adoption and cannot
      be the natural child of the Flight Attendant nor the natural child
      of the Flight Attendant's spouse, if applicable.  The Flight
      Attendant's seniority shall continue to accrue, except for pay
      purposes, while on an adoption leave of absence.

(I)   Paternity Leave.  Flight Attendants will be allowed Paternity
      ---------------
      Personal Time Off of one (1) month's duration.

(J)   Hardship Leave.  In hardship situations a Flight Attendant will
      --------------
      be permitted to take a leave of absence pending the award of a
      transfer. Once awarded, the leave of absence will be terminated
      and the Flight Attendant will be permitted to proceed directly to
      the new Domicile for reprocessing and duty assignment. This
      procedure will apply only in hardship situations and shall be
      contingent on the following:

                           ARTICLE 15 / Page 3

<PAGE>
<PAGE>

      (1)  The initial leave and any extensions thereto will be
           contingent on operational requirements.
      (2)  The transfer request shall include an accurate telephone
           contact and address for notification of transfer and must be
           clearly marked, "HARDSHIP - WILL TERMINATE LEAVE ON
           TRANSFER."
      (3)  The Flight Attendant's supervisor and the Union shall
           determine the Flight Attendant's eligibility for hardship
           transfer.

(K)   Requirements Upon Return from Leaves of Absence.  Flight
      ------------------------------------------------
      Attendants returning from leaves of absence under this Article 15
      must meet the Company standards required to be met prior to the
      leave.

(L)   Copies of PTO/Leave Awards to be Furnished to Union.  TWA shall
      ---------------------------------------------------
      provide to the IAM one (1) copy of PTO/Leave Awards, to be
      provided whenever such activity occurs.

(M)   Submission of Bid Preferences.  A Flight Attendant on any leave
      -----------------------------
      of absence under this agreement, shall be allowed to submit
      his/her bid preferences before return to active service in the
      month preceding his/her return.  The Flight Attendant shall be
      required to notify the Company no less than fifteen (15) days
      prior to the bid month.

                           ARTICLE 15 / Page 4

<PAGE>
<PAGE>

                               ARTICLE 16
                          GRIEVANCE PROCEDURE

(A)   Representation

      In the processing of disputes or grievances that may arise under
      this Agreement the parties will be represented as follows:

      (1)  Union

           (a)  The Union will be represented by full-time
                representatives as in (B) below.

           (b)  In addition the Union will be represented by other
                properly designated representatives at each Domicile.

           (c)  The Union will be further represented by those
                representatives designated by IAM District Lodge 142
                President and Directing General Chairman for dealing
                with the general officials of the Company.

           (d)  When the Union provides at least two weeks notice, up
                to fifty (50) Flight Attendants may be removed at any
                one time from active duty for Union business at Union
                expense; provided, however, that with respect to each
                domicile and status, the number of Flight Attendants
                so removed shall not exceed twenty percent (20%) of
                the total number of Flight Attendants holding reserve
                schedules for such domicile and status. In the event
                that there are less than five (5) Flight Attendants
                holding reserve schedules within a domicile and
                status, at least one (1) Flight Attendant may be
                removed from active duty for Union business. The
                notice shall include the name(s) of the individual(s)
                who are to be removed, and specify the inclusive
                date(s) on which such removal(s) is/are to be
                effective. In cases where two weeks' notice is not
                possible, the Company will permit additional Flight
                Attendants to be removed from active duty for Union
                business, operational requirements permitting.

           (e)  Should the Union desire that more than fifty (50)
                Flight Attendants be removed from active duty for
                Union business at Union expense, the Union shall
                notify the Company of the name(s) of the individual(s)
                who are to be removed, and specify the inclusive
                date(s) on which such removal(s) is/are to be
                effective. Such notice shall be received by the
                Company not later than thirty-five (35) days prior to
                the first day of the bid month in which the additional
                Flight Attendants are to be removed from active duty.
                If operational requirements permit, the Company may
                waive the thirty-five (35) day notice for any
                removal(s).

                           ARTICLE 16 / Page 1

<PAGE>
<PAGE>

      (2)  Company

           (a)  The Company will be represented at each domicile by
                the General Manager or his/her properly designated
                representative, who will be empowered to settle local
                grievances or disputes to the extent and in the manner
                as hereinafter provided.

           (b)  The Company will be further represented on a system-
                wide basis for dealing with the IAM District Lodge 142
                President and Directing General Chairman or his or her
                designated representative(s).

      (3)  Policy.  In order to facilitate the conduct of Union-
           Management business in an orderly and businesslike manner,
           it is agreed:

           (a)  The Company will provide the full-time
                representative(s) at the domiciles specified in (B)(2)
                below with space for a single office with an intra-
                base telephone in the In-Flight Services area no later
                than thirty (30) work days following the signing of
                this Agreement.

           (b)  All representatives will be allowed free access and
                availability to all work areas within their respective
                areas of representation in order to conduct their
                business in a proper, efficient and expedient manner.
                In so doing, they will contact the appropriate
                Departmental Manager or his/her designee.

           (c)  The Company and the Union will, at all times, keep
                each other advised, through written notice, of any
                changes in its authorized representatives. The Company
                will, in writing, advise the IAM of the names of the
                Manager designees who will function as Step I hearing
                officers. In this connection the Company further
                understands that such Manager designee shall not be
                changed unless the individual functioning as the named
                designee ceases to occupy such position in the In-
                Flight Services organization. In such instance the
                Company will then designate another Manager designee
                within the time period prescribed herein.

                           ARTICLE 16 / Page 2

<PAGE>
<PAGE>

           (d)  The President and Directing General Chairman of
                District Lodge 142 and/or his/her designated
                representatives shall be permitted at any time to
                enter the facilities of the Company for the purpose of
                representing employees covered by this Agreement,
                after notifying the Company official in charge.

           (e)  The Company and the Union will make every effort to
                keep to a minimum the time spent in disposing of
                grievances, disputes and complaints.

(B)   Full-time Representatives

      (1)  Full-time representative(s) will be empowered to settle all
           local grievance(s) or disputes not involving changes in
           policy or the intent or purposes of the Agreement.

      (2)  There shall be seven (7) full-time representatives to be
           assigned as the President and Directing General Chairman of
           IAM District Lodge 142 determines.

      (3)  Full-time representatives shall be considered to be on
           special assignment under this Agreement. They shall be
           compensated by the Company at the rate of 2:50 hours per
           day to a maximum of 85 hours per month for their respective
           classifications. Such representative(s) will also receive
           2:50 hours per day while they are on vacation, sick leave,
           industrial injury/illness, family illness and jury duty.

      (4)  Full-time representatives will continue to accrue company,
           job, pay and vacation seniority. Accordingly, as such, these
           representatives will continue to accrue the monthly sick
           leave allowance, referred to in Article 8, as appropriate,
           vacation days in Article 9(A) and be entitled to all other
           benefits, consistent with their respective classifications,
           which active Flight Attendants under the Agreement are
           entitled to receive. These benefits include but shall not be
           limited to the following:  Pass and reduced rate privileges,
           insurance and retirement benefits.

      (5)  Notwithstanding the provisions of Article 12, full-time
           representatives shall not be subject to furlough or
           displacement while serving in such capacity at an active
           domicile. If the Company, pursuant to the provisions of the
           Agreement, closes a domicile, the full-time representative
           who may be assigned to such domicile would then become
           subject to the provisions of Article 12.

                           ARTICLE 16 / Page 3

<PAGE>
<PAGE>

(C)  Discipline and Discharge

     (1)   Investigation

           (a)  In no event will a Flight Attendant be disciplined or
                discharged from the Company without a thorough,
                impartial and expeditious investigation of the alleged
                cause.  Prior to such investigation, the Company will
                provide the Flight Attendant and the full-time Union
                representative with a written notice advising them of
                such investigation.  This written notice shall include
                the subject matter or precise nature giving rise to
                such investigation.  In addition, the Company will
                provide the full-time Union representative with any
                and all all documents it intends to use as part of the
                Article 16 investigatory meeting prior to such
                meeting.  Such documents may be redacted.

          (b)   In meetings for the purpose of investigation of any

                matter which may lead to or result in the application
                of discipline or discharge, the Company will advise
                the Flight Attendant, in writing, prior to such
                meeting that he/she is entitled to a Union
                representative. Such Union representative will be
                present if the Flight Attendant so desires.

          (c)   At the conclusion of such investigation, the Company
                will notify the Flight Attendant and full-time
                representative, in writing, of any discipline or
                discharge action intended by the Company.  Such
                notice to the Flight Attendant shall be sent, in
                writing by certified mail, return receipt requested,
                and will contain the precise charge or charges. This
                notice may be hand delivered by the Company to the
                Union if the signature of the full-time representative
                is secured at the time of delivery.  Alternate methods
                of notification to the Union may be utilized provided
                proof of delivery is available.  In the event there is
                no intended discipline or discharge, the Flight
                Attendant and the Union Representative will be so
                notified.

     (2)   Request for Step I Hearing.  No Flight Attendant shall be
           disciplined or discharged without a hearing, provided that
           within ten (10) work days after the Flight Attendant
           receives the notification in writing of the intended
           discipline or discharge as stipulated above, the Flight
           Attendant or a Union representative makes written request
           for a hearing to the domicile General Manager.

                           ARTICLE 16 / Page 4

<PAGE>
<PAGE>

     (3)   Failure to Request Step I Hearing  If the Flight Attendant
           or the full-time Union representative fails to request a
           hearing within the prescribed time limits, the Company may
           thereafter effect discipline or discharge and shall notify
           the Flight Attendant by certified mail, return receipt
           requested, of such action. In such case the discipline or
           discharge shall be final.  If the Company fails to provide a
           Step I hearing as requested within the ten (10) day time
           frame, no discipline or discharge shall be implemented.

     (4)   Step I Hearing

           (a)  When a hearing, as provided in (2) above, is
                requested, such hearing shall be held by the General
                Manager - In-Flight Services or his/her manager
                designee within ten (10) work days after the Flight
                Attendant or Union representative requests such
                hearing.

           (b)  Not later than the day prior to such hearing, the
                Company shall furnish the Union representative with a
                copy of all grievance related materials which the
                Company plans to introduce at the hearing. The Company
                may not present any grievance related materials at the
                hearing that were not furnished to the Union
                representative no later than 3:00 PM the prior
                business day.

           (c)  Postponement.   Upon written request, either party
                ------------
                shall be granted a postponement of hearing not in
                excess of ten (10) work days in which to prepare and
                secure the presence of witnesses. Upon written request
                from the Flight Attendant or the Union, the Company
                will make available at such hearing consistent with
                operational requirements, witnesses who are employed
                by it. Notwithstanding the provisions of (7) below, a
                Flight Attendant requesting postponement of the
                initial hearing as provided in this paragraph may be
                removed from active flight duty and from the payroll
                for the duration of such postponement.  However, in
                the event the grievance is sustained at the initial or
                any subsequent hearing, all elements of pay shall be
                restored as provided in Article 17(N).  In the event
                the Company and the Union shall mutually agree to
                postpone a Step I hearing, no removal from active
                flight duty or payroll shall occur.  Nothing in
                Article 16 shall require that the grievant be present
                at the Step I hearing.

     (5)   Step I Decision

           A notification to the employee and the full-time
           representative of the decision of such hearing is to be
           mailed and postmarked no later than

                           ARTICLE 16 / Page 5

<PAGE>
<PAGE>

           ten (10) work days after the close of the hearing.  A copy
           of the decision will be sent by certified mail, return
           receipt requested to the employee.  Alternate methods of
           notification may be utilized provided proof of delivery is
           available.  Such proof of delivery must include the Flight
           Attendant's signature.  A copy of the decision will be sent
           to the Union and the designated IAM District Lodge 142
           representative via facsimile transmission (with
           acknowledgement of receipt by the Union returned via
           facsimile transmission) or via hand-delivery with written
           acknowledgement of receipt or by alternate method that
           provides proof of delivery.

     (6)   If the Company does not adhere to the time limitations set
           forth in (C)(4)(a) and (5) above, the contemplated
           discharge/discipline will not be implemented.

     (7)   No Pay Loss Prior to Written Step I Decision

           (a)  Except as otherwise provided in (d), no Flight
                Attendant shall be removed from active flight duty and
                the payroll until after the full-time Union
                representative receives and signs for the written
                decision.

           (b)  No discharge or discipline shall be effected during
                the time when the Flight Attendant involved is on
                reserve spread, vacation, legal rest or flight
                assignment.

           (c)  The Company shall make every reasonable effort to
                contact the employee to inform him/her of removal from
                flight status, if applicable.

           (d)  In cases involving violence, destruction of Company
                property, use of alcohol or drugs, and theft, the
                Flight Attendant may be removed from active flight
                duty and from the payroll at any time prior to the
                Step I decision.  Such time will be used to offset any
                discipline assessed as a result of a Step I decision.

     (8)   General

           (a)  Discipline and discharge may be assessed only for just
                cause, after consideration is given to the gravity of
                the offense, seniority and the work record of the
                employee involved.

           (b)  If, as a result of any hearing as provided in this
                Agreement, an employee is exonerated, such employee
                shall be reinstated without loss of seniority and
                shall be paid for such time lost in an amount which
                the employee would have ordinarily earned had she/he
                been continued in service

                           ARTICLE 16 / Page 6

<PAGE>
<PAGE>

                during such period. In the administration of this
                provision it is agreed that a Flight Attendant will
                receive all elements of back pay and benefits as
                further calculated and identified in Article 17(N).
                Further, if as a result of any hearing as provided
                herein an employee is exonerated, all personnel
                records shall be cleared of the charge, including IER.

(D)   Other Grievances

      Any Flight Attendant or group of Flight Attendants covered by this
      Agreement who have a grievance concerning any action of the
      Company affecting them except matters involving discipline or
      dismissal shall have such grievance considered in accordance with
      the following procedure.

      (1)  Pre-Grievance

           Any employee and/or Union Representative having a grievance
           not involving discipline or discharge shall make every
           reasonable effort to discuss the grievance with the Manager
           - Flight Attendants or his/her designated representative
           prior to filing such grievance.  In the event the written
           pregrieve has not been answered within fifteen (15) work
           days, following receipt of the pre-grievance by the Company,
           the Union may be proceed to Step I.

      (2)  Step I

           (a)  If the employee or the Union representative is unable
                to secure satisfactory adjustment in the pre-
                grievance, the Union representative will, if in
                his/her opinion the grievance is justified, present
                the written grievance to the Domicile General Manager
                - In-Flight Services.

           (b)  A hearing, conducted by the General Manager - In-
                Flight Services or his/her manager designee shall be
                held not later than ten (10) work days after the
                presentation of the written grievance.

           (c)  The Union Representative may file and sign grievances
                on behalf of the employee or groups of employees.

           (d)  A decision, in writing, by the General Manager - In-
                Flight Services or his/her manager designee shall be
                rendered not later than ten (10) work days after the
                close of such hearing.  A copy of the decision will be
                sent by certified mail, return receipt requested to
                the employee.  Alternative methods of notification may
                be utilized provided proof of delivery is available.
                Such proof of delivery must include the Flight
                Attendant's signature.  A copy of the decision will be
                sent to the Domicile Chairperson and designated IAM
                District

                           ARTICLE 16 / Page 7

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<PAGE>

                Lodge 142 representative via facsimile transmission
                (with acknowledgement of receipt returned by the Union
                to the Company via facsimile transmission or by hand-
                delivery with written acknowledgement of receipt or by
                alternate method which provides proof of delivery.

(E)  Appeals

     (1)   Step II

           (a)  If the decision in Step I under (C)(5) or (D)(2)(d) is
                unsatisfactory, the Domicile Chairperson may refer the
                matter to the District General Chairperson who may
                appeal the matter to the TWA Labor Relations
                Department, One City Centre, 18th Floor, 515 N. Sixth
                Street, St. Louis, MO 63101. The notice of appeal must
                be made in writing and sent by facsimile transmission
                (with acknowledgement of receipt returned by the
                Company via facsimile transmission) or certified mail,
                return receipt requested, or an alternative method
                that provides proof of delivery within twenty (20)
                work days after receipt of the Step I decision.  In
                the event the notice is sent via facsimile
                transmission, the original notice shall be sent by
                U.S. first class regular mail to the TWA Labor
                Relations Department.

           (b)  Within thirty (30) work days after the Step II appeal
                is received by the Company, an official of the Labor
                Relations Department and IAM District 142 General
                Chairperson or his/her designee will meet and endeavor
                to reach a settlement of the issues involved in the
                matter appealed.

           (c)  If the issues are resolved to the satisfaction of the
                officials at the hearing, the parties shall, prior to
                adjournment of the meeting, issue a joint written
                statement setting forth the resolution of the
                issue(s).

           (d)  If the matter appealed is not resolved, the official
                of Labor Relations Department who heard the appeal
                shall, within five (5) work days following adjournment
                of the meeting, issue a written decision setting forth
                the Company's position on the issue(s).

           (e)  Flight Attendant discharge grievances shall
                automatically proceed to Step II without the  request
                or requirement of an appeal.

      (2)  System Board of Adjustment.  If the Step II decision is
           unsatisfactory, the IAM District 142 General Chairperson or
           his/her designee may appeal the matter to the System Board
           of Adjustment as provided for

                           ARTICLE 16 / Page 8

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<PAGE>

           in Article 17, provided such appeal is made within thirty
           (30) work days after the date of receipt by the Union of
           the Step II decision.  There shall be a 5-year statute of
           limitations within which time to have the matter heard
           before the System Board of Adjustment, except where waived
           by mutual agreement of the parties.  The 5-year limitation
           shall commence upon receipt of the Step II decision.

(F)   System/General Grievance.

      (1)  Grievances relating to corporate or In-Flight Services
           departmental policies or interpretations of the Agreement
           having applicability beyond a single domicile, which cannot
           be settled by the Domicile General Manager and the Domicile
           Chairperson, shall be submitted, in writing, by the
           President-Directing General Chairperson or his/her designee
           to the Company's Vice-President-Labor Relations.
                                                          -

      (2)  No later than ten (10) work days following the receipt of
           the grievance the issue shall be discussed by the Vice
           President-Labor Relations or his/her designee and the
           President-Directing General Chairperson or his/her designee.

      (3)  If a satisfactory settlement is not reached during the
           discussion, the Vice President - Labor Relations or his/her
           designee shall issue to the offices of the IAM District 142
           a written decision setting forth its position on the
           issue(s) no later than ten (10) work days after the
           conclusion of the discussion.

      (4)  The Union may then proceed directly to the System Board of
           Adjustment three (3) member Board.

      (5)  The Company and the Union shall select a neutral referee in
           accordance with Article 17.

(G)   General Procedures

      (1)  Time Limits for Grievance Filing

           All grievances except those involving discharge and
           discipline must be filed promptly after the cause giving
           rise to the grievance is evident and no grievance will be
           valid if not filed within thirty (30) work days of the date
           the employee knew or could reasonably be expected to have
           known of the grievance.

      (2)  Group/"et al" Grievances

           When the policy or action complained of in a grievance
           similarly affects more than one grievant, the Union may
           process the grievance in the name of an individual employee
           on behalf of all employees affected by the Company policy or
           action. Any settlement or decision

                           ARTICLE 16 / Page 9

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<PAGE>

           shall be applicable to all employees so affected by the
           policy or action complained/grieved of, provided that such
           employees file their claim with the Company within forty-
           five (45) work days of the date of the decision.

      (3)  Probationary employees

           Nothing in this Agreement shall extend the right of
           investigation and hearing to an employee who, during the
           probationary period, is disciplined or discharged for cause,
           except that such employee will be notified at the meeting of
           the reasons therefor.

      (4)  Untimely Grievance Appeals

           If any decision rendered by the Company under the provisions
           of this Article is not appealed within the time limits
           prescribed herein for such appeals, the decision of the
           Company shall become final and binding. Time limits may be
           extended by mutual agreement.

      (5)  Ground Transportation

           Witnesses and representatives who are employees of the
           Company shall receive positive free transportation over the
           lines of the Company from the point of assignment or
           residence to the point of which they must appear as
           witnesses and return, to the extent permitted by law.

      (6)  Stenographic Report

           When it is mutually agreed that a stenographic report is to
           be taken of the investigation and hearing in whole or in
           part, the cost will be borne equally by both parties to the
           dispute. In the event it is not mutually agreed that a
           stenographic report of the proceedings shall be taken, any
           written record available taken of such investigation and
           hearing made by either of the parties to the dispute shall
           be furnished to the other party to the dispute upon request,
           provided that the cost of such written record so requested
           be borne equally by both parties to the dispute.

      (7)  Work Day

           In the time limits outlined herein "work" day shall be
           defined as exclusive of Saturdays, Sundays and holidays.

                           ARTICLE 16 / Page 10

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<PAGE>

      (8)  Participation

           It is understood that either or both the designated IAM
           District 142 representative and the Vice President Labor
           Relations or his/her authorized designee may intervene and
           participate in the handling of a grievance or dispute at any
           level of the grievance procedure.

      (9)  Grievance Settlement

           If at any point in the grievance procedure prior to the
           rendering of the Step I decision, the issue in question is
           resolved to the mutual satisfaction of the parties, such
           resolution shall be committed to writing on a form provided
           by the Union. The form will be completed so as to include
           the statement of grievance, date of settlement, name of
           grievant(s), employee payroll number, employee domicile, IAM
           grievance case number and a concise statement indicating the
           terms of settlement. Should the terms of settlement provide
           for monetary payment, the grievant(s) shall receive such
           payment by means of a local office draft, no later than
           seventy-two (72) hours after the settlement is concluded.
           The form shall be signed by the General Manager or Manager
           designee and the full-time Union representative.

      (10) Grievance Withdrawal

           The Union's decision to withdraw grievances, not to process
           or appeal a grievance to the next step shall not in any way
           prejudice its position on the issues involved or serve as
           precedent in later grievances.

      (11) Streamlining Grievance/Arbitration Procedures

           TWA and the IAM hereby jointly recognize the mutual benefits
           of timely, expeditious and economical resolution of Flight
           Attendant and the IAM grievances arising under this
           Agreement. The parties therefore agree to continue
           discussions and, where agreed, to institute new and amended
           grievance and arbitration procedures, on either a trial or
           permanent basis, in order to facilitate these objectives.
           TWA agrees that when monetary compensation to Flight
           Attendant(s) is required by either voluntary settlement or
           System Board Award, it shall, within thirty (30) days of
           such settlement or Award, pay such required compensation to
           the affected Flight Attendant(s) and provide notice of such
           payment together with the computation to the IAM.

                           ARTICLE 16 / Page 11

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<PAGE>

(H)   Non-Disciplinary Discussions.

      The Company shall have the right to open non-disciplinary
      discussions with a Flight Attendant relating to their employment
      responsibilities.  The Flight Attendant shall be entitled to have
      a Union representative attend any such discussion.  Prior to such
      discussion, The Company will advise the Flight Attendant and the
      IAM Union Representative of the matter or matters to be discussed.
      The discussion shall take place during regular business hours.
      Any Company notation and related documents concerning the
      discussion shall be filed in the Flight Attendant's personnel file
      in accordance with Article 19(D).  For the purpose of this
      paragraph non-disciplinary discussion and notations regarding such
      discussion(s) shall not be subject to the grievance procedures
      contained in this Article 16.

                           ARTICLE 16 / Page 12

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                               ARTICLE 17
                      SYSTEM BOARDS OF ADJUSTMENT

(A)  Establishment of System Board of Adjustment.  In compliance with
     -------------------------------------------
     Section 204, Title II, of the Railway Labor Act, as amended, there
     is hereby established System Boards of Adjustment for the purpose
     of adjusting and deciding disputes which may arise under the terms
     of the Flight Attendants' Agreement and which are properly
     submitted to it after exhausting the procedures for settling
     disputes as set forth in Article 16.

(B)  Members.  The System Board of Adjustment shall consist of three
     -------
     (3) members; one (1) appointed by the Company, one (1) appointed
     by the Union and one (1) selected by the parties from a standing
     panel of eight (8) referees.  Each of the parties shall name four
     (4) individuals who shall serve on this panel.

     (1)  Either party may cause the services of a Referee on the
          eight (8) member standing panel to be terminated at anytime,
          (except as to cases already scheduled for hearing) upon
          thirty (30) days written notice to the other party and to
          the Referee whose services are being terminated.
          Replacement members shall be provided for as in (2) below.
          Each party is limited to two (2) such replacements in any
          calendar year.

     (2)  In the event a vacancy or vacancies on the eight (8) member
          panel of Referee exists, the party who originally appointed
          the referee to the panel must thereafter appoint a new
          referee to the panel.

     (3)  The parties may agree to select a Referee who is not a
          member of the eight (8) member panel to hear a case with the
          Company and the Union Board members and such panel, will,
          for such case, constitute the System Board of Adjustment.
          Should the Company and the Union be unable to agree upon the
          selection of such Referee, they may make joint request to
          the National Mediation Board to name an "Ad Hoc" Arbitrator.

     (4)  The Company and the Union member of the Board shall serve
          until their successor is duly appointed.

     (5)  Secretary to the Board.
          -----------------------

          The Office of "Secretary to the Board" shall alternate
          January 1 of each year between the Company member of the
          Board and the Union member of the Board with the Union
          member serving on even numbered years and the Company member
          serving on odd numbered years.

          The responsibilities of the Secretary shall include, but are
          not limited to, setting the Arbitration Docket, scheduling
          of hearing dates, contract with neutral member(s), and all
          correspondence relating to the

                           ARTICLE 17 / Page 1

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<PAGE>

          administrative matters of the System Board of Adjustment.
          The date of hearing by the System Board of Adjustment will
          be set by the Secretary at a time mutually agreeable to the
          parties and subject to the availability of the Arbitrator
          selected to serve as the neutral referee.

(C)  Board Jurisdiction.  The Board shall have jurisdiction over
     ------------------
     disputes between any employee covered by this Agreement and the
     Company growing out of grievances, interpretation or application
     of any of the terms of this Agreement.  The jurisdiction of the
     Board shall not extend to propose changes in hours of employment,
     basic rates of compensation, or working conditions covered by this
     Agreement or any amendment.  Unless the Company and the Union
     agree upon a combination of cases to be presented to a Referee,
     each case presented to the Board shall be treated as a separate
     case; except those grievances involving more than one (1) employee
     or incident concerning an alleged violation with similar facts and
     circumstances which shall be treated as one case.

(D)  Board to Consider Dispute.  The Board shall consider any dispute
     -------------------------
     properly submitted to it by the President/General Chairman of the
     Union or his/her authorized representative, or by the chief
     operating official of the Company or her/his authorized
     representative, when such dispute has not been previously settled
     in accordance with the terms provided for in this Agreement,
     provided that notice of the dispute is filed with the Company and
     the Union members of the Board, with copy to the Company or Union,
     as may be appropriate, within forty-five (45) work days after the
     decision in the last step of the grievance procedure.  The date of
     notice shall determine the order for considering cases, unless the
     parties mutually agree otherwise.

(E)  Neutral Referee to Serve as Chairman.  The neutral member
     ------------------------------------
     (Referee) shall preside at the meetings and hearings of the Board
     and shall be designated as Chairman of the System Board of
     Adjustment.  It shall be the responsibility of the Chairman to
     guide the parties in the presentation of testimony, exhibits, and
     arguments at hearing to the end that a fair, prompt, and orderly
     hearing of the dispute is afforded.

(F)  Location.  The Board shall meet at such location or locations
     --------
     where the parties may agree, generally to be the location(s) where
     the grievance arose or the location most convenient to the
     majority of the individuals necessary to the proceedings.  If the
     parties cannot agree to a location, then the Secretary to the
     Board shall promptly request in writing with notice to the parties
     that the Chairperson, in consultation with the Company's and
     Union's designees to the Board, determine the location or
     locations where the Board will convene.

                           ARTICLE 17 / Page 2

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<PAGE>

(G)  Notice of Dispute.  The notice of disputes referred to the Board
     -----------------
     shall be addressed in writing to the Company member and the Union
     member jointly and shall include a statement of:

     1)   Question or questions at issue
     2)   Statement of facts
     3)   Position of appealing party
     4)   Position of the other party

     A copy of the notice of dispute shall be served upon the other
     party.

(H)  Selection of Referee.  Upon filing the notice of dispute, the
     --------------------
     Company and the Union Board members shall within five (5) work
     days, select a Referee to sit with the Board to settle the dispute
     and the Secretary of the Board shall advise the appealing party
     and other party of the name and address of the Referee.  If the
     Board members are unable to agree upon a Neutral Referee within
     five (5) work days, a joint request will be directed to the
     Chairman of the National Mediation Board for the appointment of a
     Neutral Referee.  A copy of the notice of dispute shall be
     forwarded by the Secretary of the Board to the Neutral Referee who
     has been appointed or selected to serve in this manner. All
     subsequent documents filed with the Board shall be addressed to
     all three members, with copy to the other party or parties.

(I)  Selection of Hearing Date.  The Neutral Referee shall set a date
     -------------------------
     for hearing scheduled within thirty (30) days after her/his
     appointment.  If the Neutral Referee is a member of the standing
     panel and cannot serve during this thirty (30) day period, the
     parties may agree to another date or to another member of the
     standing panel who is available during this same period or the
     parties shall jointly petition the Chairman of the National
     Mediation Board to assign a Neutral Referee.

(J)  Waiver of Hearing.  If neither party or the Chairman requests a
     -----------------
     hearing, such hearing shall be waived.  If either party desires a
     hearing to present evidence or oral argument to the Board, or if
     the Referee desires that evidence or arguments be presented by
     either party, request for hearing shall be made to the Board and
     served upon the parties within fifteen (15) days after the
     appointment of the Neutral Referee.  If such request is served,
     the hearing shall be held within thirty (30) days of the date the
     request is served at a time mutually satisfactory to the Chairman
     and the Company and Union members of the Board.

(K)  Decision.
     --------

     (1)  Following the hearing, the Board shall convene in Executive
          Session, unless the parties mutually agree otherwise.  In no
          event shall a decision be issued until after an Executive
          Session has been held if either the Company or the Union
          Board Member has requested such session.

                           ARTICLE 17 / Page 3

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<PAGE>

     (2)  The three (3) member System Board shall consider the dispute
          pending before it, and a majority vote of the Board shall be
          final, binding, and conclusive upon the Company and the
          Union and anyone they may represent having an interest in
          the dispute.  The decision by the three (3) member System
          Board shall be rendered within thirty (30) work days after
          the close of the hearing if written briefs are not filed by
          either party or within thirty (30) work days after the
          submission of written briefs.  If written briefs are
          submitted by either party, the briefs shall be due within
          thirty (30) days following the close of the hearing, unless
          the time limits are extended by mutual consent of the
          parties.

     (3)  In the event there is to be no hearing, the Chairman shall
          set a date which is agreeable to the Board members, for an
          Executive Session of the Board.  The Board shall issue its
          decision at the conclusion of the Executive Session, if
          possible.  However, a written award will be rendered to the
          parties not later than thirty (30) work days following the
          Executive Session.

(L)  Extension of Time Limits.  The time limits expressed in this
     ------------------------
     Article may be extended by mutual agreement of the parties to this
     Agreement.

(M)  Representation; Witnesses.  Employees covered by this Agreement
     -------------------------
     may be represented at Board hearings by such person or persons as
     they may choose and designate, and the Company may be represented
     by such person or persons as it may choose to designate.  Evidence
     may be presented either orally or in writing or both.  The Board
     may, at the request of either the Union member or the Company
     member, call any witnesses who are employed by the Company and who
     may be deemed necessary to the dispute.

(N)  Back-Pay Calculation.  In System Board cases involving
     --------------------
     disciplinary suspension or discharge, any award of back pay will
     be as set forth below.  Unless otherwise provided in the award,
     the Employee will be entitled to contributions to 401(k) and
     retirement plan, restoration of sick leave accrual and vacation,
     and payment for actual unreimbursed medical expenses that would
     have been covered by Company provided medical benefits had she/he
     not been held out of service.  Unreimbursed medical expenses will
     include medical insurance premiums paid by the employee.

     For purposes of calculating the amount of back pay due, the
     Company shall be required to calculate the total number of flight
     hours flown by the Employee during the previous twelve (12) months
     of active flight service.  The total number of flight hours shall
     be divided by twelve (12) to establish her/his monthly average
     flight hours.  The monthly average flight hours shall then be
     multiplied by the rate(s) of pay then in effect for the period of
     time in question.  For periods of less than a full month, the
     average monthly flight hours shall be divided by 30 to establish
     the daily flight hours.  The daily flight hours shall then be
     multiplied by the rate(s) of pay then in effect to determine the
     pay due for any period of time of less than a full month.  The
     Company shall be required to

                           ARTICLE 17 / Page 4

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<PAGE>

     reimburse the Employee for Language of Destination pay (LOD), if
     applicable, Service Manager Overide, if applicable, and
     operational duty pay based on the same twelve (12) month "look
     back" formula.  The Company shall provide the Union with all
     records to substantiate proper payment to the Employee.

(O)  Stenographic Report.  If the parties mutually agree, a
     -------------------
     stenographic report will be made.  The costs of such report shall
     be borne equally.

(P)  Filing of Transcripts/Records.  The Chairman's copy of any
     -----------------------------
     transcripts and/or all records of cases will be filed at the
     conclusion of each case in a place to be provided by the Company,
     and will be accessible to Board members and to the parties.

(Q)  Expenses of Board Members.  Each of the parties will assume the
     -------------------------
     compensation, travel expense, and other expenses of the Board
     member selected by it.  The expenses and reasonable compensation
     of the Referee selected shall be borne equally.

(R)  Witness Expenses.  Each of the parties will assume the
     ----------------
     compensation, travel expense, and other expenses of the witnesses
     called or summoned by it.  Witnesses who are employees of the
     Company shall receive positive free transportation over the lines
     of the Company from the point of assignment or residence to the
     point at which they must appear as witnesses and return, to the
     extent permitted by law.

(S)  Additional Expenses; Board Member Travel.  The Company and the
     ----------------------------------------
     Union members, acting jointly, shall have the authority to incur
     such other expenses as in their judgment may be deemed necessary
     for the proper conduct of business of the Board, and such expenses
     shall be borne one-half by each of the parties hereto.  Board
     members who are employees of the Company shall be granted
     necessary leave of absence for the performance of their duties as
     Board members.  Board members shall be furnished positive free
     transportation over the lines of the Company for the purpose of
     attending meetings of the Board, to the extent permitted by law.

(T)  Non-Reprisal.  It is understood and agreed that each and every
     ------------
     Board member shall be free to discharge her/his duty in an
     independent manner, without fear that her/his individual relations
     with the Company or with the Union may be affected in any manner
     by any action taken by her/him in her/his capacity as a Board
     member.

(U)  Non-Abridgement of Railway Labor Act.  Nothing herein shall be
     ------------------------------------
     construed to limit, restrict, or abridge the rights or privileges
     accorded either to the employees or to the Company, or to their
     duly accredited representatives, under the provisions of the
     Railway Labor Act, as amended.

                           ARTICLE 17 / Page 5

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                               ARTICLE 18
                    SCHEDULING OF FLIGHT ATTENDANTS

(A)  General

     It is the intent and purpose of this Article to provide for Flight
     Attendant participation in the development of Flight Attendant
     Scheduling Policies and Procedures that will promote the most
     efficient and economical operation of flights, the best possible
     pairing or grouping of flights into bid runs, the most equitable
     assignment of flying time to domicile, the most reasonable degree
     of stability of bids at each domicile, and the intent that Article
     6 operate so as to effect favorable working conditions. Consistent
     with the above, the general concept of seniority will be given
     appropriate recognition. The assignment of time to domiciles and
     the pairing or grouping of runs to effect the purpose of Article 6
     will not be done in such a manner as to effect a general
     deterioration of working conditions and domicile stability. The
     Company and the Flight Attendant representatives will consult with
     regard to the above as outlined herein, the Company retaining the
     right to determine the geographical location of domiciles, the
     assignment of flight time to domiciles, and the pairing or
     grouping of flights for purposes of bid runs.

(B)  System Scheduling

     (1)  A Scheduling Committee composed of a minimum number of
          domestic and international representatives, as determined by
          the IAM, but not more than one representative, from each
          domicile, may be designated to consult with the Company
          concerning all Flight Attendant scheduling problems of the
          entire system not covered by the Scheduling Policies. In
          addition, the System Scheduling Committee shall consult with
          the Director - Crew Resources and Administration as to the
          allocation of commercial flying time to the various
          domiciles, the pairing or grouping of flights into bid runs,
          and the stabilization of bids at each domicile.

          The Average Line Value(s) will be made available to the
          Scheduling Committee at or before the monthly meeting of the
          Committee. The daily credit rates will be published in the
          monthly bid packages.

          The System Scheduling Committee may request re-pairing or
          regrouping of Flight Attendant assignments allocated to the
          domicile(s), and the Company may allow such re-pairing or
          re-grouping; provided, however, that such action by the
          Company will not alter the Company's rights as provided in
          (A) of this Article.

     (2)  Whenever the Company intends to change the Away From
          Domicile Policy, it shall seek the recommendations of the
          President-Directing Chairman, IAM District Lodge 142 or
          his/her designees in this regard

                           ARTICLE 18 / Page 1

<PAGE>
<PAGE>

          and will give them full consideration prior to making any
          such change. If on such an occasion the President-Directing
          General Chairman of District Lodge 142 or such members
          thereof as the President designates, and will give full
          consideration to any recommendations of the Committee prior
          to making any such change.

          When any of the provisions of the Away From Domicile
          Policies or procedures are in conflict with any of the
          provisions of the Working Agreement, the Agreement shall
          govern.

     (3)  The Company will notify the System Scheduling Committee
          whenever a change is planned in flight schedules which would
          result in an increase or decrease in the bid requirements at
          a domicile. Proposed flight schedules, trip pairings, and
          information concerning charter flights and the domicile(s)
          by which they will be protected will be furnished to the
          Committee on the earliest practicable date such information
          can be made available by the Company which will normally be
          no later than twenty (20) days prior to the beginning of the
          month or bid period covered in the schedules.

     (4)  Flight Attendant members of the System Scheduling Committee
          shall be entitled to expenses as provided in Article 4(A)(1)
          and not more than three (3) such Flight Attendant members
          shall be entitled to reimbursement for flight credit and pay
          loss incurred while attending meetings convened by the
          Company for the purpose provided in (A) above. Reimbursement
          of such flight credit and pay loss shall be paid by the
          Company on a trips missed basis.

     (5)  The number of Service Manager and Cabin Attendant bids
          required for each domicile shall be determined as follows:

          (a)  Every month the Company will publish a single bid
               package for each Flight Attendant category and
               domicile. Individual published sequences shall not
               contain both domestic and international flight
               pairings unless otherwise provided herein. At
               domiciles where both Domestic and International
               flights are flown, a Flight Attendant shall indicate
               his/her choice of operations via his/her monthly bid
               sheet.

          (b)  Domicile bid runs shall include all known commercial
               flight time assigned to that domicile which can be
               sequenced. The Company may publish lines of any value
               to a maximum of eighty-five (85:00) credit hours.
               Nothing in this paragraph shall require the Company to
               post bid sequences that yield less than sixty-five
               (65:00) credit hours.

     (6)  In addition to the number of bids in each bid category at
          each domicile as provided in (5) above, additional bids in
          the Cabin Attendant and

                           ARTICLE 18 / Page 2

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          Service Manager categories at each domicile shall be
          established which will be sufficient to perform all reserve
          duties and to assure that Flight Attendants holding a bid
          run as a result of the domicile bid preference sheet will
          fly in accordance with the established scheduling policies
          except in unusual circumstances.

(C)  Domicile Scheduling

     (1)  General
          (a)  A Domicile Scheduling Committee shall be established
               at each domicile to consult with the Regional General
               Manager - In-Flight Services concerning all problems
               of Flight Attendant scheduling that are of concern
               only to that domicile.

          (b)  All changes or amendments to the Domestic Domicile
               Scheduling Policy as contained in this Article shall
               be mutually agreed to: however, the Vice President In-
               Flight Services may make temporary changes in such
               Scheduling Policy when such changes are required to
               continue efficient operation of flights. In such an
               event, the Vice President In-Flight Services shall,
               without delay, consult the General Chairpersons or
               their designee for the purpose of resolving a mutually
               approved amendment to cover the problems which
               required the temporary changes. For the purpose of
               this paragraph, the Domestic Domicile Scheduling
               Policy will be limited to those matters and procedures
               relating to orderly methods of scheduling Flight
               Attendant personnel.

          (c)  In each category at each domicile bid runs at each
               domicile bid runs shall be posted and bid in
               accordance with this Article and shall not be
               constructed to exceed eighty-five (85:00) flight
               credit hours. For the purposes of this paragraph
               relief runs" shall be construed to be bid runs.

          (d)  Concurrently with posting and bidding of bid runs, as
               provided in (c) above, Flight Attendant reserve
               schedules shall be posted and bid.  A Flight attendant
               may bid and be assigned a bid run or a reserve
               schedule in his/her category.  Flight Attendants who
               do not hold a bid run shall hold a reserve schedule.

                           ARTICLE 18 / Page 3

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(D) Domicile Scheduling Policy

     (1)  Purpose - To establish a policy outlining the methods to be
          used to schedule Flight Attendants out of their respective
          Domiciles/Satellites.

     (2)  General
          (a)  Whenever a change of flight times, stops, layover
               points occurs on the domicile flight assignments, or
               if flights are added or deleted after the closing of
               bid preference period, the decision regarding posting
               of new preference sheets shall be made by the Regional
               General Manager, In-Flight Services of the respective
               Domicile after consulting with the local scheduling
               representative(s). Such decision is to be made on the
               basis of the extent of such changes and the time of
               the month.

               At the time the bid package is distributed to all
               Flight Attendants at the domicile it shall contain a
               cover letter, all commercial flights which can be
               sequenced, the number of relief runs as required and
               Flight Attendant reserve sequences.

               1)   The following information shall be included in
                    the pairings:
                    (a)  Flight number
                    (b)  Equipment
                    (c)  Deparure Time
                    (d)  Crew Change Station
                    (e)  Scheduled Stops
                    (f)  Arrival Time
                    (g)  Layover Station and Time
                    (h)  Total Trip Hours
                    (i)  Total Scheduled Block-To-Block
                    (j)  Deadhead in a flight pairing
                    (k)  Total round-trip credit/pay
                    (l)  Pairing number

               2)   In construction of bid lines the following
                    information shall be included, as appropriate in
                    the bid lines or reserve schedules:

                    (a)  Originating flight number or in the case
                         of deadhead, it will show deadhead and the
                         first operating flight.
                    (b)  The number of required Flight Attendants
                         per line.

                           ARTICLE 18 / Page 4

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                    (c)  Total credit and total pay per flight and
                         per line.
                    (d)  Bid line sequence number.
                    (e)  Reserve spreads/prescheduled duty free
                         days.
                    (f)  Day and date of departure and return to
                         domicile.
                    (g)  Type(s) of equipment.
                    (h)  Layover destination (International only).

               3)   The cover letter shall contain the following
                    information:

                    (a)  Dates of Bid duration.
                    (b)  Domicile.
                    (c)  Times of reserve call-in periods and an
                         example.
                    (d)  Closing time and date of submission of
                         Flight Attendant option form as specified
                         in (7)(f).
                    (e)  Sequence notification time and date.

     (3)  Preparation of Bid Runs

          (a)  The scheduling of Flight Attendants out of each
               Domicile or satellite shall be in accordance with
               seniority and the provisions of the Agreement. Since
               all situations cannot be covered, any question of
               interpretation should be brought to the attention of
               the Regional General Manager, In-Flight Services of
               the respective Domicile. If such interpretation is not
               satisfactory to the Flight Attendant involved, he/she
               shall nevertheless follow instructions received from
               the Regional General Manager, In-Flight Services of
               the respective Domicile without prejudice to the
               Flight Attendant's rights under Article 16 of the
               Agreement.

          (b)  In each category at each Domicile, bid runs shall be
               posted and bid in accordance with this Article. The
               minimum number of relief runs anticipated shall be
               indicated in the bid package. Relief bids will be
               constructed after completion of initial balancing and
               shall be construed to be bid runs.

          (c)  International pairings and domestic pairings published
               in the bid package will be sequenced separately.
               Relief runs and open time lines may contain both
               international and domestic pairings.

                           ARTICLE 18 / Page 5

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          (d)  All flights which cannot be included in a published
               sequence shall be listed separately at the back of the
               monthly bid package.

          (e)  One Cabin Attendant reserve complement and one Service
               Manager reserve complement shall be established at each
               domicile in order to protect open flights on both
               operations.

          (f)  Concurrently with posting and bidding of bid runs, as
               provided in (b) above, Cabin Attendant reserve spreads
               shall be posted and bid. These reserve run selections
               shall be posted in such a manner as to reflect the
               date of the projected reserve spread for each Cabin
               Attendant awarded a reserve run selection. A Cabin
               Attendant may bid and be assigned a bid run or reserve
               spread. Each Cabin Attendant who does not hold a bid
               run shall hold a reserve spread.  Concurrently with
               posting and bidding of bid runs, as provided in (b)
               above, Service Manager reserve spreads shall be posted
               and bid. These reserve run selections shall be posted
               in such a manner as to reflect the date of the
               projected reserve spread for each Service Manager
               awarded a reserve run selection. A Service Manager may
               bid and be assigned a bid run or reserve spread. Each
               Service Manager who does not hold a bid run shall hold
               a reserve spread.

     (4)  Flight Attendant Assignment and Bidding

          Every month the Company will publish a single bid package
          for each Flight Attendant category and domicile. Individual
          published sequences shall not contain both domestic and
          international flight pairings unless otherwise provided
          herein.

          Once having been awarded a bid to a location with both
          Domestic and International flying, a Flight Attendant shall
          indicate his/her choice of operations via his/her monthly
          bid sheet.

          At domiciles where both Domestic and International flights
          are flown, the Company may publish one bid package for the
          purposes of Flight Attendant bidding on either operation.

          Bid packages shall be distributed no later than the twelfth
          (12th) day of each month. Flight Attendants will be allowed
          a minimum of eight (8) days, information permitting, to
          express their preferences. Closing date of the bids as
          indicated on the cover letter of the bid package shall be no
          earlier than the twentieth (20th) of the month.

          The date and time of closing of bids as indicated on the
          cover letter

                           ARTICLE 18 / Page 6

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          shall be final and binding in all instances.

          The System Scheduling meeting as specified in paragraph
          18(B) above shall be conducted as early in the month as
          possible, but in no event later than the sixteenth (16th)
          day of the month.

          (a)  Each Flight Attendant should indicate a minimum of six
               (6) choices on the preference sheet regardless of
               seniority. Such choices should include at least two
               (2) separate flight assignments. Reserve Flight
               Attendants desirous of being moved up to a pattern of
               open flights that can be developed into a line of time
               subsequent to the initial balance and prior to the 7th
               day of the month should indicate "open time" by
               placing the word "open" in the appropriate block on
               the bid preference sheet.

               [EXAMPLE IMAGE NOT DISPLAYED]

          (b)  Each run selection shall be numbered and lettered. Run
               selections may be made singularly or in series. For
               series bidding, the run numbers must be side by side
               with a dash in the position column in between.

               Example:

               Series Bid: 999Z - A bid in ascending run order for
               all runs and available positions: 110-11 5Z - A bid in
               ascending run order for all inclusive runs and
               available positions: 140-137C - A bid in descending
               run order for all inclusive runs and positions for the
               first three (3) positions only. A bid of 999Z will not
               subject a Flight Attendant to being awarded any
               satellite sequence unless a Flight Attendant's bid
               preferences include at least one sequence for a
               specific satellite. If a domicile has more than one
               satellite in any given month a bid of 999Z will only
               subject a Flight Attendant to being awarded the
               satellite that he/she had indicated in his/her bid
               preferences.

               Position: "A" signifies a bid for the senior Cabin
               Attendant position, B signifies that either "A" or B
               is acceptable, "C"

                           ARTICLE 18 / Page 7

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               signifies that either "A", "B" or "C" is acceptable,
               etc. "Z" in the position column always means a bid for
               all available positions.

               [EXAMPLE IMAGE NOT DISPLAYED]

               NOTE: The "A", "B" and "C" in no way relate to the
               position or duties Flight Attendants will assume on
               the airplane.

          (c)  Each Flight Attendant shall indicate in the identified
               box on the bid preference sheet his/her preference(s):

               Line fifty (50):      bow-wave/initial balance:
                                     initial down balance; back-to-
                                     back flying (waive and/or
                                     defer): and bow-wave payoff. A
                                     Flight Attendant must indicate
                                     with a "yes" or no A failure
                                     to so indicate shall result in
                                     a default to "no".

               Line fifty-one (51):  flights for initial balance
                                     purposes. Such preferences may
                                     be identified by flight
                                     number(s).

               Line fifty-two (52):  voluntary Annual Emergency
                                     Review (AER) preference. A
                                     Flight Attendant who fails to
                                     enter a date preference may be
                                     assigned to an AER in his/her
                                     prior, due or grace month on
                                     any date that he/she is legal.
                                     A Flight Attendant must
                                     indicate preferences only for
                                     those dates on which he/she
                                     wishes to attend. Each date
                                     must be followed

                           ARTICLE 18 / Page 8

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                                     by the letter "Y" or "N". Y
                                     indicates that a Flight
                                     Attendant is willing to attend
                                     training on a Guaranteed Day
                                     Off (GDO). "N" indicates that
                                     a Flight Attendant is
                                     unwilling to attend training
                                     on a GDO. A date not followed
                                     by the letter "Y" or "N" will
                                     result in the Flight Attendant
                                     not being scheduled if that
                                     date is a GDO.

               [EXAMPLE IMAGE NOT DISPLAYED]

               A Flight Attendant may bid for the AER as follows:

               1.   With respect to the "prior" month:

                    a.   Bid for specific date(s):
                         If requested date available- awarded.

                         If unavailable - no assignment in the
                         prior month.

                    b.   Bid for any date:

                         If a date is available - assign any date.

                    c.   Decline assignment in the prior month.

                         No assignment.

                    d.   Silent, i.e., no bid.

                         Assign any date.

               2.   With respect to the "due/base" month:

                         a.   Bid for specific date(s):
                              If requested date available -awarded.

                           ARTICLE 18 / Page 9

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                            If unavailable - assign any date.

                       b.   Silent, i.e., no bid. Assign any date

                  3.   With respect to the "grace" month:

                       a.   Bid for specific date(s):
                            If requested date available -awarded.

                            If unavailable - assign any date.

                       b.   Silent, i.e., no bid:

                            Assign any date

          NOTE: If a Flight Attendant's bid for an AER conflicts with
          a flight in the sequence which he/she has bid, the bid for
          the sequence will take precedence. In the event the Company
          changes a Flight Attendant's AER "due/base" month, the
          Company will notify the Flight Attendant in writing or in
          the JXCAF not later than the first week of the bid period
          preceding the Flight Attendant's new "prior" month.

          A Flight Attendant who bids for a relief run or a Flight
          Attendant who is subject to move-up to an open line of time
          may express her/his relief run preferences and balance
          preferences as outlined below by listing the appropriate
          letter code on line(s) fifty-three (53) through fifty-eight
          (58) of the bid sheet. To the extent possible preferences
          will be awarded in the order listed.

                  Action Code       Preference
                  -----------       ----------
                  A                 Specific dates off
                  B                 Weekends off
                  C                 Charter Flights
                  D                 Domestic Flights
                  E                 Consecutive days off at any time
                  F                 Long Flights
                  G                 Short Flights
                  I                 International Flights
                  K-K               Back-to-Back Flights
                  L                 Layover
                  M                 Limousine
                  P                 Late departure - early arrival
                  S                 Satellite
                  T                 Turnaround Flights
                  W                 Specific departure date
                  Z                 Deadhead

                           ARTICLE 18 / Page 10

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          (d)  When two Cabin Attendants desire to fly together
               during a bid period, the senior of the two shall not
               submit sequence preferences. The senior Cabin
               Attendant must list on the bid sheet or by computer
               input the name and payroll number of the Cabin
               Attendant with whom he/she wishes to fly, and may
               indicate such additional preferences as specified in
               paragraph (c) above other than sequence preferences.
               The junior Cabin Attendant must list all the bids and
               must also write the name and payroll number of the
               Cabin Attendant with whom he/she wishes to fly. If the
               junior Cabin Attendant fails to write the name and
               payroll number of the senior Cabin Attendant, the
               senior Cabin Attendant shall be handled in accordance
               with paragraph (5)(d) below.

               NOTE: If a senior Cabin Attendant enters any bid
               preferences the request for partner preference is
               negated.

          (e)  It will be the responsibility of each Flight Attendant
               to ensure that his/her bid preference is submitted by
               the time and date of the closing of bid preferences.
               Bid preferences may be submitted through computer
               input, the automated bid preference form and telegram
               or U.S. mail. Non receipt of a bid preference sheet
               will be handled in accordance with paragraph (5)(d)
               below.

          (f)  Flight Attendants who are absent from their Domicile
               by reason of vacation, illness, personal time off,
               leaves of absence or irregular flight operations
               during the period preferences are posted for bid shall
               be responsible for having their preferences submitted.
               Valid excuses will not be limited to the above. Under
               unusual circumstances permission may be obtained from
               the Regional General Manager - In-Flight Services to
               bid by telegram.

               Bid preferences sent by telegram or U.S. Mail must be
               received by the Regional General Manager prior to the
               time and date of the close of bid preferences. If the
               above bid preferences are submitted by either telegram
               or certified U.S. Mail the Company will not be
               responsible for the non-receipt of any bid preferences
               submitted in accordance with the above.

          (g)  The Company will ensure that the bid packages for
               every domicile and category will be available at each
               domicile in order to provide information to Flight
               Attendants transferring per paragraphs (5)(e) and (f)
               below.

                           ARTICLE 18 / Page 11

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     (5)  Awarding Of Run Selections

          (a)  Run selections shall be awarded in accordance with
               seniority and posted. Every effort shall be made to
               post the run selection awards within forty-eight (48)
               hours after the time and date of the closing of the
               bid preferences.

               Flight Attendants may call Crew Schedule during
               specified hours for bid results.  Those specified
               hours will be indicated on the cover letter of the bid
               package.  If the bid results are not posted forty-
               eight (48) hours prior to the beginning of the new bid
               period, Flight Attendants may call Crew Schedule other
               than the specified times indicated on the cover letter
               for results.

               At each domicile for each classification, copies of
               the alphabetical listing of monthly bid awards will be
               available for use by Flight Attendants.  In addition,
               one (1) copy of the Bid Results as applicable to each
               domicile, in alphabetical, seniority and run order,
               shall be provided on a monthly basis by each domicile
               to a Union representative designated by the IAM.

          (b)  Pursuant to Paragraph (4)(d) above, when awarding
               bids, the senior Cabin Attendant will be by-passed
               until the junior Cabin Attendant with whom he/she
               wishes to fly is reached.  If there is only one
               position on a sequence, neither Cabin Attendant will
               be awarded it since they requested to fly together.

          (c)  Flight Attendants who will be unavailable for the
               entire period will be by-passed in the awarding of
               bids.  However, those Flight Attendants who are
               expected to be on personal illness, industrial injury
               or jury duty for thirty (30) days or more during a bid
               period may be awarded a bid run, seniority permitting.
               In the event a Flight Attendant returns to duty during
               the month, he/she will be given a sequence of open
               flights or a reserve schedule.

          (d)  If a Flight Attendant fails to bid or submits
               insufficient bid, her/his assignment, after all other
               awards have been made, shall be in seniority order and
               in the following order: A run selection, relief run
               selection, a pattern of open flights or reserve.
               However, in any month in which it is necessary to re-
               bid due to schedule changes, a Flight Attendant who
               was absent from her/his Domicile during the period in
               which bid

                           ARTICLE 18 / Page 12

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<PAGE>

               preference sheets were posted for bid shall be awarded
               a bid in accordance with her/his original bid for the
               month.

               NOTE: If the run selection originally bid by such
               Flight Attendant has been eliminated because of the
               scheduled change, and a re-bid occurs as specified
               above she/he would be awarded a sequence based on
               her/his original bid preferences.

          (e)  A Flight Attendant who is scheduled to transfer to
               another Domicile or who will resign during a bid
               period shall be entitled to bid at her/his present
               Domicile only if she/he will be available at her/his
               present Domicile for a minimum of fifteen (15) days
               during such bid period; otherwise, she/he will be
               assigned to a pattern of open flights or reserve.

          (f)  If a Flight Attendant's request for transfer to a new
               Domicile is awarded prior to or during the period bid
               preference sheets are posted at her/his new Domicile
               and she/he will be available for a minimum of fifteen
               (15) days during the subsequent bid period, such
               Flight Attendant may file a bid by either hand-
               delivered telegram or certified U.S. mail, addressed
               to the Regional General Manager - In-Flight Services.
               Such bid must be received by the Regional General
               Manager - In-Flight Services prior to the closing of
               bids at that station. In the event such a bid is not
               received, the Flight Attendant will be assigned to a
               bid line, relief line or open time line, or may also
               be assigned to reserve, whichever is available.  Under
               extenuating circumstances, such as short notice of
               transfer or emergencies, her/his supervisor may, on
               occasion, accept telephone bids from the transferee.

          (g)  Bid sequences, other than reserve sequences, shall not
               be traded.

          (h)  Bid sequences not covered by bid shall be assigned in
               order of seniority.

          (i)  Flight assignments which form a complete relief run
               selection will normally be constructed by the first
               day of the bid period but in no case later than 0001
               of the fourth (4th) day of such bid period. In no case
               will the relief run holder be considered a reserve
               during any part of the bid period.

                           ARTICLE 18 / Page 13

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          (j)  If, subsequent to the initial balancing, but prior to
               the 7th day of the month, there is open time that can
               be developed into additional Flight Attendant lines of
               time, such lines may be awarded in seniority order
               amongst the following: Insufficient bidders,
               transferees or Flight Attendants holding a reserve
               run selection who have indicated a preference for Open
               Time.

          (k)  Subject to reserve availability, Flight Attendants
               who bid or are assigned a reserve run selection in any
               bid period they are scheduled for vacation, may have
               their reserve spread(s) attached to their vacation,
               upon request to the Flight Attendant category planner.

          (l)  The Company shall provide four (4) copies of the Crew
               Activity Display (JXCAF) microfiches monthly to IAM.
               The Company shall provide to the IAM one (1) copy of
               each JXCAF microfiche for the period March 1986
               through the effective date of this Agreement.

     (6)  Open Time Information

          (a)  The Company shall provide Open Time information, on
               both commercial and charter flights, through computer
               terminals on Company property. Such computer terminals
               and open time information shall be available to the
               Flight Attendants on a twenty four (24) hour basis.

               The following information will be included in the Open
               Time computer display: 1) pairing number; 2) flight
               number; 3) date of departure; 4) departure time; 5)
               departure station; 6) arrival date; 7) arrival time;
               and 8) total trip block, credit and pay.

     (7)  Utilization

          (a)  The Company shall have the prerogative of obtaining
               maximum utilization of each Flight Attendant's monthly
               available flight hours.

          (b)  Initial Projection

               The published credit value of each Flight Attendants
               awarded sequence shall establish the Flight Attendants
               initial line projection for the bid period. A Flight
               Attendant

                           ARTICLE 18 / Page 14

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               will be subject to initial balance if his/her
               projected credit for the bid period, including inbound
               credit, is less than (a) the credit guarantee or (b)
               the published credit value minus five credit hours.

          (c)  Initial Balancing

               1)   The purpose of initial balancing is to correct
                    any illegality as specified in Article 6 in a
                    bid line which is a result of time carried over
                    from the previous month or time flown in the
                    previous month or to increase a projection which
                    was lowered due to instances such as vacation,
                    personal illness, industrial injury, family
                    emergency, leaves of absence, PTO, or special
                    assignment. However, a Flight Attendant will not
                    be initially balanced solely by reason of low
                    original projection.

               2)   In order to minimize the incidents of initial
                    balancing, the Company will comply with the
                    following procedures:

                    a)   The Company will not engage in automatic
                         trading of flights.

                    b)   In the event the published monthly
                         sequences are low, the Company will not
                         unilaterally increase them.

                    c)   Inbound time which does not overlap with
                         another trip shall not occasion initial
                         balancing or automatic trip drop even
                         though the Flight Attendant's inbound time
                         when added to the scheduled projection
                         exceeds eighty-five (85) flight credit
                         hours. Flight Attendants at their option
                         will not be down balanced if their monthly
                         projection exceeds eighty-five (85) credit
                         hours as a result of vacation, personal
                         illness, industrial injury, family
                         emergency, leaves of absence, PTO,
                         training, Company required meeting or
                         special assignment. In no event, however,
                         may the full line Flight

                           ARTICLE 18 / Page 15

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                         Attendant exceed ninety-five (95) hours
                         block-to-block or fifty-five (55) hours
                         for the alternate line Flight Attendant.

                    d)   A Flight Attendant may indicate in the
                         appropriate box on line fifty (50) of the
                         monthly bid preference sheet his/her
                         request to use excess credit (bow-wave)
                         carried forward from the previous month
                         (if he/she has a sufficient amount to
                         increase the line projection to no less
                         than his/her initial projection minus five
                         (5) hours to avoid initial balancing. Such
                         request will be granted in seniority
                         order, reserve availability permitting.

                         Use of excess credit to avoid initial
                         balancing shall not result in make-up base
                         pay. Failure to indicate this request on
                         the bid sheet will result in initial
                         balancing as otherwise specified in this
                         Article.

               3)   Flight Attendants will have the ability to
                    request an initial balance for the beginning,
                    middle or end of month; however, in the event
                    the Company is unable to grant the request, such
                    balance shall be accomplished by assignment of
                    any available trip(s), and such assignment will
                    be made at the time such initial balances are
                    normally made. The Company will not engage in
                    automatic trading of flights.

          (d)  After initial balancing, except when no other Flight
               Attendant is available, a Flight Attendant shall not
               be further balanced, subject to the provisions of
               Article 6(Z) and paragraph (f)1) below.

          (e)  Reserve

               The Company may schedule a Flight Attendant holding a
               reserve schedule to a maximum of eighty-five (85)
               block hours per bid month.

          (f)  Balancing and Limitations:

               The Company may schedule a full-line Flight Attendant
               holding a bid run to complete his/her last bid trip of
               the

                           ARTICLE 18 / Page 16

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               month, if at the time of leaving his/her domicile, the
               scheduled flight time block-to-block for the trip to
               be flown prior to the end of the month will not, when
               added to his/her already accumulated block-to-block
               hours, total more than ninety-five (95) hours. A
               Flight Attendant shall receive pay and credit for the
               portion of the trip flown during that month.  The
               balance of the pay and credit for the trip (including
               penalty) shall be paid and credited in the subsequent
               month.  Flight Attendants exceeding the ninety-five
               (95) hour block-to-block limit through the use of the
               Enhanced Trip Option shall be covered by the
               provisions of Article 6(X).  Provided that the trip is
               not scheduled to fly into the "no fly zone" of the
               subsequent month, the Company may schedule an
               alternate line Flight Attendant to complete his/her
               last bid trip of the month, if at the time of leaving
               his/her domicile, the scheduled flight time block-to-
               block for the portion of the trip flown prior to the
               end of the month will not, when added to his/her
               already accumulated block-to-block hours, total more
               than fifty-five (55) hours, provided that the trip is
               not scheduled to fly into the "no fly zone" of the
               subsequent month.  If the trip is scheduled to operate
               during the "fly zone" of the subsequent month, a
               Flight Attendant shall receive pay and credit for the
               portion of the trip flown during the month that the
               trip originates.  The balance of the pay and credit
               for the trip (including penalty) shall be paid and
               credited in the subsequent month.

               1)   a)   Company Same Calendar Day Balance (When
                         the Flight is not provided "Guaranteed
                         Trip Protection" under Article 6(Z).

                         In the event a Flight Attendant,
                         subsequent to initial balancing, suffers a
                         loss of credit due to cancellations,
                         illegalities, transitions, schedule
                         changes, non-routine operations, AER
                         assignment, no shows, illegality due to
                         drug testing or equipment substitution and
                         the provisions of Article 6(Z) -
                         Guaranteed Trip Protection - do not apply,
                         the Flight Attendant will be subject to
                         balance to restore the loss of time only
                         (except as provided in paragraph e) below)
                         on the same calendar days as originally
                         scheduled prior to the loss of credit.

                           ARTICLE 18 / Page 17

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                    b)   Flight Attendant Responsibility To Call In
                         To Obtain Balance Trip.

                         All Flight Attendants  subject to "same
                         calendar day" balance under the provision
                         must contact Crew Scheduling as soon as
                         such loss occurs, and if not balanced at
                         that time, must contact Crew Schedule
                         following the completion of FAA rest or,
                         at his/her option, during the reserve
                         call-in periods applicable to the calendar
                         day(s) of the originally scheduled flight,
                         until balanced.  Such balance may consist
                         of more than one (1) flight and such
                         flight(s) need not be assigned
                         simultaneously.

                    c)   No Further Balance If Flight Attendant
                         Self Balances To Within Five (5) Hours
                         Below Initial Line Projection.

                         If not yet balanced by the Company, Flight
                         Attendants may balance themselves as long
                         as the balance flight(s) increase their
                         projections to be not more than 5:00 below
                         their initial line projection. The credit
                         limitation for any Company balance in this
                         event will be 5:00 over initial line
                         projection.

                    d)   After Same Calendar Days No Balance If
                         Above Credit Guarantee.

                         In the event there is a loss of credit
                         which does not result in a below-guarantee
                         credit projection, and the Company does
                         not "same calendar day" balance the Flight
                         Attendant, the Flight Attendant will not
                         be subject to balance. The Flight
                         Attendant may at any time take trip(s)
                         from open time to increase or replace the
                         credit as long as the prevailing credit
                         limitations are not exceeded.

                    e)   Flight Attendant 48-Hour Opportunity

                           ARTICLE 18 / Page 18

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                         To Correct Projection If Company Does Not
                         Balance For Below-Guarantee Credit
                         Projection During Same Calendar Days.

                         In the event of a loss of flight time
                         which results in a below guarantee credit
                         projection, and the Company does not "same
                         calendar day" balance the Flight
                         Attendant, the Company, at any time after
                         48 hours has elapsed since the end of the
                         last required reserve call-in period
                         described in paragraph b) above, may
                         balance such low projected Flight
                         Attendant with a trip(s) to bring the
                         projection to the guarantee; provided,
                         however, that if there are less than 72
                         hours remaining in the bid month, the 48-
                         hour provision shall not apply. A Flight
                         Attendant who has a below guarantee credit
                         projection and who is subject to balance
                         due to the provisions of this paragraph
                         must thereafter contact Crew Schedule
                         during each reserve call-in period until
                         the low projection is cured.

                    f)   Protection For Below-Guarantee Initial
                         Credit Projection.

                         In the event of a loss of flight time by a
                         Flight Attendant who has a below-guarantee
                         initial credit projection (64:59 or less),
                         such Flight Attendant will not be subject
                         to Company balance until the loss of
                         flight time exceeds two (2) hours.

                    g)   Other Below-Guarantee Credit Loss; Company
                         Opportunity For Immediate Balance; Flight
                         Attendant Opportunity To Correct
                         Projection.

                         Notwithstanding the provisions of
                         paragraph i) below, in the event a Flight
                         Attendant suffers a loss of credit which
                         results in a below-guarantee credit
                         projection, such as a net loss of credit
                         due to a period of illness being paid at
                         the daily rate of 4:00, the Company may

                           ARTICLE 18 / Page 19

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                         balance the Flight Attendant at the time
                         of the return-to-duty call by assigning a
                         trip departing no earlier than twelve (12)
                         hours after the return to duty call;
                         provided, however, that the Flight
                         Attendant may waive the twelve (12) hour
                         restriction. If the Company balance is not
                         accomplished at that time, the Flight
                         Attendant will have 48 hours to bring the
                         credit projection to guarantee before the
                         Company may balance the Flight Attendant;
                         provided, however, that if there are less
                         than 72 hours remaining in the bid month,
                         the 48-hour provision shall not apply. The
                         Company may, as a result of such balance,
                         increase the credit in the balanced Flight
                         Attendant's line no more than five (5)
                         hours above the initial line projection;
                         in such event the Company shall endeavor
                         to assign a balance trip having only such
                         hours as is necessary to increase the
                         Flight Attendant's line to the initial
                         line projection, but in no event in excess
                         of 85:00 credit hours.

                    h)   Flight Attendant Responsibility To Call In
                         When Below Guarantee Credit Projection Not
                         Corrected.

                         A bid Flight Attendant who, after the
                         expiration of the periods described in
                         this paragraph (f), is still projected
                         below credit guarantee must contact Crew
                         Schedule during the reserve call-in
                         periods until the low credit projection is
                         corrected or unless a request for balance
                         avoidance is granted by the Company.

                    i)   No Balance For Jury Duty.

                         A Flight Attendant who suffers a loss of
                         credit due to a period(s) of jury duty
                         shall not be subject to balance.

                    j)   Other Below-Guarantee Losses And Balance.

                         All other losses of credit resulting in a

                           ARTICLE 18 / Page 20

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                         below guarantee credit projection may
                         subject the Flight Attendant to immediate
                         balancing.

                    k)   Bow-wave Used to Avoid Progressive
                         Balance:

                         Notwithstanding the above, a Flight
                         Attendant may request that his/her excess
                         credit be used (if he/she has a sufficient
                         amount to make up for the flight time
                         loss) to avoid progressive balancing and
                         has not utilized the 25-hour per month
                         bow-wave limit. Such request shall be
                         granted in seniority order and subject to
                         operational requirements. Further, such
                         request must be made immediately upon
                         return to domicile or if at domicile at
                         the time the under-projection occurs. If
                         the Flight Attendant does not indicate
                         this request, he/she shall be
                         progressively balanced in accordance with
                         the above paragraph. Use of excess credit
                         to avoid balancing shall not result in
                         make-up base pay.

                    l)   Request Balance:

                         Notwithstanding the foregoing, nothing in
                         this section (D)(7) precludes a Flight
                         Attendant from requesting and being
                         awarded a balance trip.

                    m)   Whenever a bid Flight Attendant is removed
                         from flight assignment because of a
                         Company-created error, the Flight
                         Attendant will be paid no less than the
                         scheduled value of the flight assignment
                         and shall be subject to the provisions of
                         Article 6(Z).
               2)
                    a)   Balance Avoidance

                         Flight Attendants who are subject to
                         balance shall be provided an opportunity
                         to avoid balancing. Requests to avoid
                         balancing must be telephoned to Crew
                         Schedule. The decisions of Crew Schedule
                         to reduce the base guarantee

                           ARTICLE 18 / Page 21

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                         and/or the initial projection to avoid
                         balancing, or to avoid same calendar day
                         balance when the current projection is not
                         more than five (5) hours below the initial
                         projection, will depend on the forecast of
                         availability of reserves and operational
                         considerations. Crew Schedule's decision
                         will be based on the circumstances at the
                         time of the request.

                    b)   Avoidance of Balance When at or Above
                         Credit Guarantee

                         When a Flight Attendant suffers a loss of
                         time or trades down where his/her credit
                         is more than five (5) hours below his/her
                         initial projection, the Flight Attendant
                         may call Crew Schedule after the bid month
                         has begun to request a reduction in
                         his/her IP to the then current credit
                         projection plus five (5) hours.  Such
                         request, if accepted, shall remove the
                         Flight Attendant from the balance list. A
                         Flight Attendant who suffers a loss of
                         time or trades down below this reduced
                         Initial Projection shall be subject to
                         balance in accordance with the terms of
                         this Article.

                    c)   Avoidance of Below Guarantee Balancing

                         When a Flight Attendant suffers a loss of
                         time where his/her credit is projected
                         below the applicable credit guarantee, the
                         Flight Attendant may call Crew Schedule
                         after the bid month has begun to request a
                         reduction in his/her credit guarantee to
                         the then current projection. A reduction
                         of the same amount will be made in the pay
                         guarantee.

               3)   Automatic Trip Drop

                    All credit hours accrued, as provided in this
                    paragraph (f), in excess of eighty-five (85)
                    hours shall be paid and credited in the
                    following month for a full-line Flight Attendant
                    or forty-five (45) hours for an alternate line
                    Flight Attendant. Such

                           ARTICLE 18 / Page 22

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                    pay and credit carried forward may result in an
                    over-projection of the Flight Attendant in the
                    new month. When such over-projection is
                    equivalent to or greater than the credited time
                    of an entire trip (commencing and terminating
                    within a month) in the Flight Attendant's
                    projection in the current month, a flight shall
                    be deleted from his/her bid run projection up to
                    a maximum of 25:00 hours (if a full-line Flight
                    Attendant) or a maximum of 12:30 hours (if an
                    Alternate Line Flight Attendant). When a Flight
                    Attendant is over-projected as specified above
                    the Flight Attendant must select the flight
                    assignment to be deleted from his/her current
                    bid run projection, subject to reserve
                    availability, as outlined in (7)(g) below. If
                    the Flight Attendant does not make the
                    selection, the Company will designate the trip
                    or trips to be deleted. If such deletion reduces
                    the projection below the Flight Attendant's base
                    pay, exclusive of the credit brought forward,
                    such reduction shall not result in make-up base
                    pay. Notwithstanding the foregoing, a full-line
                    Flight Attendant who has accrued credit hours in
                    excess of eighty-five (85) hours or an
                    alternate-line Flight Attendant who has accrued
                    credit hours in excess of fifty-five (55) hours
                    may exercise the option in paragraph (7)(g)
                    below.

               4)   Trip Drop During Month

                    If subsequent to the forty-eight (48) hour
                    period as specified in (7)(g) below, a Flight
                    Attendant accrues excess credit hours which
                    would require a complete trip within a month to
                    be dropped, the Flight Attendant must
                    immediately upon return to domicile from the
                    trip which caused the over-projection advise
                    Crew Schedule of his/her preference of trip(s)
                    to be dropped. If such deletion reduces the
                    projection below the Flight Attendant's base
                    pay, exclusive of the credit brought forward,
                    such reduction shall not result in make-up base
                    pay.

               5)   No Automatic Trip Drop During Month:

                    If the Flight Attendant does not immediately
                    upon return to domicile from the trip that
                    caused the over projection advise the Company of
                    the trip(s) to be deleted he/she will not be
                    removed from a

                           ARTICLE 18 / Page 23

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                    trip(s) and will fly his/her flights as
                    scheduled subject to paragraph (f) above. Any
                    such credit in excess of eighty-five (85) hours
                    will be carried forward into the following month
                    or paid to the Flight Attendant as specified on
                    the option form defined in paragraph (g) below.

          (g)  Bow-wave Option

               As specified in the cover letter of the bid package,
               but in no case less than forty-eight (48) hours after
               bids have been awarded and posted, Flight Attendants
               may deposit in the locked box, or receptacle provided
               for that purpose, a form identifying his/her option.
               On such form the Flight Attendant may indicate:

               1)   Payment for all accrued excess credit, including
                    excess credit as determined in Article 6(X), and
                    corresponding bank deduction for credit accrued
                    in the current bid period; or

               2)   Trip(s) up to twenty-five (25) hours for full-
                    line Flight Attendants or twelve hours thirty
                    minutes (12:30) for alternate line Flight
                    Attendants which are to be dropped in the
                    succeeding bid period by reason of over-
                    projection as specified in (7)(f)4) above; or

                    Failure to submit a form or failure to request
                    payment for excess credit will automatically
                    result in the application of the provisions of
                    paragraph (7)(f)4) above. The Flight Attendant
                    selection of the trip(s) to be deleted will be
                    honored subject to reserve availability. If the
                    Flight Attendant has not indicated the trip(s)
                    to be deleted, the Company will make the
                    designation.

               3)   Excess credit carried forward as bow-wave shall
                    not be credited towards the Quarterly Minimum.
                    Bow-wave used to drop trip(s) shall be credited
                    towards the Quarterly Minimum.

                    NOTE:  A Flight Attendant's Bow-wave bank shall
                    be capped at a maximum of 100 credit hours.  Any
                    credit in excess of 100 hours shall be paid
                    pursuant to Paragraph (i) below.

          (h)  In the event that a Flight Attendant accrues excess
               credit hours, the pay and credit for such hours shall
               not be offset

                           ARTICLE 18 / Page 24

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               against the Flight Attendant's base pay or any other
               form of pay and credit, except as provided in
               paragraphs (4) and (5) above.

          (i)  Notwithstanding the limitations contained in paragraph
               4) above, when a Flight Attendant changes category
               during a month in which excess credit (Bow Wave) has
               been brought into such month, such excess credit will
               be counted toward the monthly limitation, but the
               excess pay shall be paid to such Flight Attendant at
               the appropriate earned rate.

          (j)  Flight Attendants who are subject to balance and who
               have not requested and been awarded an open time
               flight may be assigned to cover open flights at their
               Domiciles or to cover open flights at their satellite
               stations within their respective categories in
               seniority order.

               Operational requirements permitting, requests for open
               time flights for purposes of trading and/or self
               balance shall be honored in accordance with the
               provisions of Article 6(X) [Enhanced Trip Option].

               NOTE: In the event of an equipment substitution a
               Service Manager may be balanced in accordance with
               Article 6(W)(4)(b). In the event the substituted
               equipment does not utilize the Flight Service Manager,
               the Flight Service Manager will not be permitted to
               exercise his/her Flight Attendant seniority on the
               substituted equipment.)

          (k)  Any flights which are not protected in accordance with
               paragraphs (c) and (j) above, shall be classified as
               open flights and will be covered in the following
               order;

               1)   Covering FSM Openings

                    All flight time which cannot be covered by
                    Flight Attendants holding a run selection shall
                    be assigned to reserve Flight Attendants. One
                    reserve complement will be established at each
                    combined location in order to protect all open
                    positions on both domestic and international
                    operations. In the event a Service Manager
                    position is available due to circumstances as
                    outlined above, the working cabin crew will
                    apply the concepts of consensus decision making
                    to determine which crew member is best qualified
                    and will fulfill the Service Manager
                    responsibility. The individual so designated
                    must be on a parallel pairing and must

                           ARTICLE 18 / Page 25

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                    fulfill the Service Manager responsibility for
                    the entire pairing. The Cabin Attendant will be
                    compensated for each flight assignment in which
                    she/he is upgraded and will receive the
                    applicable Service Manager rate of pay.

               2)   Inverse Seniority - Assign the most junior
                    qualified Flight Attendant in the category.

          (l)  After exhausting the order for covering open flights
               as outlined in paragraph (k) above, in order to ensure
               the availability of legal and qualified Flight
               Attendants, only when insufficient reserves are
               available or legal, the most junior qualified Cabin
               Attendant required for such protection may be placed
               on residence standby status.

     (8)  Reserve

          (a)  A Flight Attendant who is scheduled for vacation may
               bid and be awarded, seniority permitting, a reserve
               schedule.

          (b)  All flight time which cannot be covered by
               Flight Attendants holding a run selection shall
               be assigned to reserve Flight Attendants in that
               category.  One reserve complement for each
               category shall be established at each combined
               location in order to protect open flights on
               both Domestic and International operations.

          (c)  Whenever flight openings are known in advance, a
               reserve shall be assigned as far in advance as
               practicable subject to the following procedures:
               A one-hour reserve assignment set-up period
               shall precede each call-in period.  For the
               purpose of receiving assignments, call-in
               periods for reserves shall be between the hours
               of 2000 and 0100 and between the hours of 1000
               and 1300.  Only those known open flights
               departing not earlier than four (4) hours nor
               later than twenty (20) hours after the end of
               the call-in period shall be assigned to a
               reserve Flight Attendant.

               Example 1: During a call-in period commencing at
               2000 on the 10th, a reserve may be assigned to a
               flight departing between 0500 and 2059 on the
               11th.

               Example 2: During a call-in period commencing at
               1000 on the 10th, a reserve may be assigned to a
               flight departing no

                           ARTICLE 18 / Page 26

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                    earlier than 1700 on the 10th nor later than
                    0859 on the 11th.

               (d)  During the call-in period as mentioned in (c)
                    above, the Company may assign a reasonable
                    number of reserves to residence standby and
                    airport standby to protect unanticipated open
                    flights, Assignments to residence standby and
                    airport standby shall not commence earlier than
                    two (2) hours after the end of the respective
                    call-in period except as provided for in (f)
                    below.

               (e)  Standby duty shall be defined as specified below:

                    1)   Residence Standby

                         A reserve Flight Attendant shall be
                         considered to be on residence standby if
                         she/he is informed that she/he is assigned
                         to residence standby and that she/he must
                         standby the telephone in order to be
                         available for immediate flight duty. A
                         reserve will not be assigned to a
                         residence standby period for more than
                         twenty-four (24) consecutive hours. The
                         Company may release a reserve on residence
                         standby for a period not in excess of two
                         (2) hours, operational requirements
                         permitting. Those reserve Flight
                         Attendants assigned to residence standby
                         must be available to report for flight
                         duty within two (2) hours via surface
                         transportation of being assigned to a
                         flight.

                    2)   Airport Standby

                         Reserve Flight Attendants may be called to
                         the airport without specific flight
                         assignments on a standby basis.  Flight
                         Attendants assigned to airport standby
                         will be considered on duty for the
                         purposes of 6 (I) and 6(R) from the time
                         they report until they are released from
                         such duty or from the time they report for
                         such duty until actual release time of the
                         last flight of a trip assignment flown
                         during that on-duty period. Airport
                         standby duty shall not be scheduled for
                         more than eight (8) consecutive hours and
                         shall not commence prior to 0600 nor after
                         2200. When a reserve Flight Attendant
                         reports for airport standby duty and is
                         not given a flight assignment, she/he
                         shall be released and shall not be
                         assigned any other duty

                           ARTICLE 18 / Page 27

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                         with the Company earlier than the next
                         calendar day.  In no event may such
                         release be less than ten (10) hours. The
                         Flight Attendant shall be free from all
                         duty with the Company until his/her next
                         regularly scheduled call-in period.

                    3)   Standby Rotation

                         During any bid month a reserve Flight
                         Attendant will not be assigned to
                         residence standby and/or airport standby
                         for more than three (3) occasions unless
                         all other reserves in the domicile who are
                         legal and available during such call-in
                         period have been assigned a minimum of
                         three (3) residence standby assignments
                         and/or airport standby assignments.

                    4)   Standby Penalties

                         Should a reserve Flight Attendant serve
                         more than four (4) airport standby
                         assignments, during any one bid month,
                         she/he shall receive standby penalty pay
                         pursuant to Article 3(K) for each
                         additional airport standby assignment and
                         such amount shall not be offset against
                         base pay.

                    5)   Should a reserve Flight Attendant serve
                         more than a total of five (5) airport
                         standby assignments and/or residence
                         standby assignments, during any one bid
                         month, she/he shall receive standby
                         penalty pay pursuant to Article 3(K) for
                         each additional airport standby assignment
                         or residence standby assignment and such
                         amount shall not be offset against base
                         pay.

                    6)   For purposes of the two paragraphs
                         immediately preceding, a single assignment
                         of airport standby shall consist of any
                         amount of time between one minute and 8
                         hours, not to exceed 8 consecutive hours.

                         A Single assignment of residence standby
                         shall consist of any amount of time
                         between one minute and 24 consecutive
                         hours, not to exceed twenty-four (24)
                         consecutive hours. Further for purposes of
                         paragraphs 4) and 5) above, a Flight
                         Attendant shall not receive more than one
                         (1) standby

                           ARTICLE 18 / Page 28

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                         penalty payment for each additional
                         assignment so mentioned.

               (f)  During the call-in periods as outlined in
                    paragraph (c) above, the Company may also assign
                    a reserve Flight Attendant to training, an AER
                    or any other Company required assignment.  Those
                    Flight Attendants not assigned to flight
                    assignments, airport standby, residence standby,
                    training, AER or any other Company required
                    assignment will be free from all duty with the
                    Company, until his/her next call-in period.
                    However, during an emergency situation, if Crew
                    Schedule contacts a Flight Attendant for
                    assignment to a specific flight, residence
                    standby or airport standby, the Flight
                    Attendant, if legal, must accept the assignment.

               (g)  Reserves not on their reserve spread, vacation,
                    FAA rest or on off duty status must contact Crew
                    Schedule twice daily during the call-in periods,
                    unless released by the reserve recording as
                    specified in paragraph (j) of this Article.

               (h)  A Reserve Flight Attendant who is unavailable
                    during the call-in period due to FAA rest or
                    flight assignment, may be assigned during the
                    call-in period.  Upon return to domicile and
                    upon completion of FAA rest, such Flight
                    Attendant must contact Crew Schedule to be
                    advised of his/her status.

               (i)  If subsequent to initial balancing but prior to
                    the seventh day of the month, there is open time
                    that can be developed into additional Flight
                    Attendant lines of time, such line will be
                    subject to the provisions of Paragraphs
                    18(D)(5)(i) and 18(D)(5)(j) and may be awarded
                    to those reserve Flight Attendants who have
                    indicated a preference for Open Time. The total
                    number of open time lines available to reserves
                    will be awarded in seniority order.

               (j)  The Company will provide a recorded message for

                    Reserve Flight Attendants. The recorded message
                    will list by name and by groups or numbers those
                    reserves that will be required to contact Crew
                    Scheduling during the next call-in period. Such
                    recording shall be updated no later than two (2)
                    hours prior to the commencement time of each
                    call-in period. All other reserves not so listed
                    will be released until the next call-in period
                    except as provided in (h) above.

                           ARTICLE 18 / Page 29

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               (k)  For scheduling purposes at the beginning of the
                    month, a reserve Flight Attendant shall be
                    assigned his/her relative position on the
                    reserve list on a first-legal, first-out basis
                    consistent with paragraph 8(c) above. If a
                    Flight Attendant's assignment to a Domicile
                    occurs subsequent to the first day of the bid
                    period he/she shall be given, for scheduling
                    purposes only, credit on a prorated basis as if
                    he/she had been available at the commencement of
                    the bid period. The Company reserves the right
                    to deviate from first-legal, first-out
                    scheduling subsequent to the first day of the
                    bid period in order to equalize flight time and
                    assignment to residence standby/airport standby
                    status as defined in paragraph (e) above.

               (l)  1)   The number of days of reserve spread is to
                         be determined on a pro rata basis as
                         follows:

                               Duty Days
                         Actual or Anticipated     Reserve Spread
                           (Including Spread)           Days

                         1 to 2                          0
                         3 to 4                          1
                         5 to 7                          2
                         8 to 10                         3
                         11 to 12                        4
                         13 to 14                        5
                         15 to 17                        6
                         18 to 19                        7
                         20 to 21                        8
                         22 to 23                        9
                         24 to 25                        10
                         26 to 28                        11
                         29 to 31                        12

                    2)   If a Flight Attendant arrives at her/his
                         Domicile (or satellite station if so
                         assigned) after the scheduled commencement
                         of her/his reserve spread, the Flight
                         Attendant's reserve spread will be
                         rescheduled to commence at 2400 that day.

                    3)   Flight Attendants will not be scheduled
                         for any duty during their spread by the
                         company. Reserve Flight Attendants may add
                         trip(s) by utilizing the

                           ARTICLE 18 / Page 30

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                         Enhanced Trip Option (ETO) or adding trips
                         from open time during their spread.  Such
                         trips may not be added to the spread any
                         earlier than 48 hours prior to the
                         departure of the requested flight and must
                         be totally within:

                         a)   a fixed scheduled spread (DOF); the
                              report time for the added trip(s)
                              must commence no earlier than the
                              second day of the spread and the
                              scheduled arrival must be no later
                              than 2359 hours of the next to last
                              day of the spread;

                         b)   a fixed  spread (DOF) or a movable
                              spread (DOM) either of which are in
                              progress; the report time for the
                              added trip(s) may commence on the
                              first day of the spread and the
                              scheduled arrival must be no later
                              than 2359 hours of the next to last
                              day of the spread.

                    4)   Reserve Flight Attendants may mutually
                         trade their spreads with other reserves,
                         however, four (4) available days between
                         spreads shall be maintained within the bid
                         period. Reserve Flight Attendants may
                         mutually trade two (2) six (6) day
                         spreads, if such spreads are in their
                         lines, for a twelve (12) day spread.
                         Those twelve (12) consecutive day spreads,
                         initially awarded, which are vacated as a
                         result of Reserve Flight Attendants being
                         moved up to relief lines or open time
                         lines shall be included in the open time
                         computer display for trading purposes.
                         Reserves may trade into a twelve (12) day
                         spread up to the maximum number of the
                         original awards.

                    5)   Assignment of reserve spread shall be made
                         in accordance with preference bid in
                         seniority order. A reserve spread so
                         awarded shall be considered immovable with
                         the exception of one (1) spread,
                         identified on the monthly bid sheet, which
                         shall not be moved more than forty-eight
                         (48) hours except by mutual agreement or
                         when necessary to accomplish training for
                         the Cabin Attendant.

                           ARTICLE 18 / Page 31

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     (9)  Availability for Flight

          (a)  At Domicile and Satellite

               1)   The Company will publish a sequence notification
                    date and time in the monthly bid package for
                    each domicile and category. All Flight
                    Attendants holding bid and relief lines and
                    Cabin Attendants holding reserve will be
                    responsible for the scheduled activities in
                    their respective lines as of that date and time.
                    Those bid Flight Attendants who are subject to
                    balancing shall, when legal, be available to
                    domicile Crew Schedule until such balancing is
                    completed. In the event a Flight Attendant will
                    be illegal or unavailable for any bid flight in
                    her/his sequence she/he shall bear the
                    responsibility of advising her/his domicile Crew
                    Schedule of such illegality or unavailability
                    for flight duty at the time she/he becomes aware
                    of the illegality or unavailability. Similarly
                    the Company will make every effort to contact
                    the Flight Attendant to notify him/her of an
                    illegality for a trip and/or balance which is
                    the result of an illegality or a flight time
                    loss.

               2)   A Flight Attendant who is off duty for personal
                    illness, industrial injury, family emergency or
                    jury duty, must contact Crew Schedule and return
                    to duty no later than two and one-half (2:30)
                    hours prior to the commencement of the call-in
                    period in which her/his domicile flight would be
                    assigned. A Flight Attendant, who is off duty
                    for personal illness, industrial injury family
                    emergency or jury duty; and who holds a
                    satellite flight, must contact Crew Schedule and
                    return to duty no later than two and one-half
                    (2:30) hours prior to the commencement of the
                    call-in period in which a reserve Flight
                    Attendant is assigned the positioning flight at
                    the commencement of the pairing. A Flight
                    Attendant who fails to contact Crew Schedule and
                    return to duty, prior to such deadline, will
                    lose all rights to that trip. Those flights
                    vacated at 0730 and 1930 respectively will
                    become "soft openings". If such vacated flights
                    are not used for balancing purposes, they will
                    be released for open time trading and self
                    balancing not later than 0800 and 2000,
                    respectively.

                           ARTICLE 18 / Page 32

<PAGE>
<PAGE>

                    Domicile flights not taken in open time by line
                    holders may be assigned to reserves at 0900 and
                    2100, respectively. Satellite flights not taken
                    in open time by line holders may be assigned as
                    a domicile pairing and assigned to reserves at
                    0900 and 2100, respectively. A Flight Attendant
                    on Union Business, who has been removed from a
                    flight that is currently a soft opening, will
                    lose all rights to that trip per the policy as
                    stated above. In all cases, should a Flight
                    Attendant return to duty after a reserve has
                    been assigned, Crew Schedule will make one
                    attempt to call the reserve Flight Attendant at
                    her/his normal contact. If successful, the line
                    holder may be placed on her/his original flight
                    and the reserve may be given another assignment
                    or released to the next call-in period.

               3)   Flight Attendants who have not checked in when
                    required by the Company to so report, prior to
                    scheduled departure of his/her flight will
                    forfeit his/her right to the trip at the time a
                    Flight Attendant notified to protect the flight
                    has left his/her residence, unless it will cause
                    a delay to the flight. Any bid Flight Attendant
                    not departing on his/her flight may be
                    reassigned or subject to balance under Paragraph
                    (7)(f)(1)(a) preceding.

          (b)  At a Domicile Layover Station If a Service Manager or
               Cabin Attendant cannot be contacted at his/her
               designated crew call time prior to the departure of
               his/her flight, the provisions of Section E(2)(h) of
               the Away From Domicile Policies shall be adhered to.
               If it is necessary to call out a reserve to protect
               the flight the reserve will protect the flight unless
               the Service Manager or Cabin Attendant to whom the
               flight was originally assigned arrived at the airport
               in sufficient time to board the plane without
               incurring a flight delay.

          (c)  Notification of Schedule Changes

               The Company agrees that timely notification of
               schedule changes to Flight Attendants is a necessity.
               The primary responsibility for this function rests
               with the individual TWA station personnel. Airport
               Operations staff will issue the necessary instructions
               to each station so that Flight Attendant personnel
               receive schedule change notifications. Further, the
               Company agrees to review with IAM the application of
               pay penalties associated with non-standard

                           ARTICLE 18 / Page 33

<PAGE>
<PAGE>

               reporting where the failure is through no fault of the
               Flight Attendant.

     (10) Trading of Flights

          Trips may be exchanged by mutual agreement between Flight
          Attendants within the same classification based at the same
          domicile upon the following conditions:

          (a)  Flight Attendants may submit open flight trades into
               pairings up to one hour prior to the last call-in
               period that the first departure of such affected
               pairing would be assigned. This provision applies to
               Domestic and International domicile flights only.

               On the International operation, trips may be exchanged
               at layover station by submitting a request to Station
               Operations which will seek the approval of Operational
               Planning. A Flight Attendant so trading may not make
               himself/herself illegal for any subsequent scheduled
               assignment within the bid month.

               For flights departing from satellite locations, trades
               may be submitted no later than 16 hours prior to
               departure on both domestic international operations.

          (b)  There is no limit as to the number of mutual flight
               trades. Flight Attendants at both domicile and
               satellite locations may submit mutual trades up to the
               report time of the first departure of such affected
               pairings.

          (c)  There is no limit as to the number of open flight
               trades. A bid holder may trade one or more flights,
               taking trip(s) from open time (other than a trip
               offered by another Flight Attendant pursuant to the
               Enhanced Trip Option) and returning trip(s) from the
               line into open time.

          (d)  A Flight Attendant, through trading, may not reduce
               his/her line projection below his/her applicable
               guarantee.  In the event a Flight Attendant through
               trading, reduces his/her line projection more than
               5:00 below the applicable initial line projection,
               that Flight Attendant shall, within 48 hours from the
               end of the next reserve call-in period following the
               trade which produced the low line projection, restore
               his/her line projection by self-balancing to a value
               not more than

                           ARTICLE 18 / Page 34

<PAGE>
<PAGE>

               5:00 below the initial line projection.  In the event
               the Flight Attendant fails to restore sufficient time
               within 48 hours as described in the preceding
               sentence, the Flight Attendant will be subject to
               balance and the Company may thereafter at any time
               balance such low projected Flight Attendant with a
               trip(s) to bring the projection at least to a value of
               5:00 below initial projection; provided, however, that
               if there are less than 72 hours remaining in the bid
               month, the 48-hour provision shall not apply.  A
               Flight Attendant who, as a result of trading, has a
               line projection more than 5:00 below the initial
               projection and who is subject to balance due to the
               provisions of this paragraph must thereafter contact
               Crew Schedule during each reserve call-in period until
               the low projection is cured.  In the event a Flight
               Attendant is on a trip, the duties of which prevent
               the Flight Attendant from contacting Crew Schedule
               during the prescribed reserve call-in period(s), such
               Flight Attendant must contact Crew Schedule not later
               than the end of the trip.  The Company may, as a
               result of such balance, increase the credit in the
               balanced Flight Attendant's line no more than five (5)
               hours above the initial line projection; in such event
               the Company shall endeavor to assign a balance trip
               having only such hours as is necessary to increase the
               Flight Attendant's line to the initial projection, but
               in no event in excess of 85 credit hours.  In
               accordance with Article 6(X), a Flight Attendant shall
               have, at his/her option, the ability to exceed ninety-
               five (95) block hours through trading.

          (e)  Trades into open flight(s) shall be permitted in
               accordance with this article, however, the Company
               requirements for available open flights for training
               and balancing purposes shall be given consideration
               prior to the processing of such trades. The number of
               trades creating additional open flights on any one day
               will be limited to the availability of qualified
               reserves at the domicile.

          (f)  Crew Schedule will allow trades to be processed during
               each reserve set-up hour but the trade must not affect
               that reserve setup hour. All trade requests during the
               reserve set-up hours must be self input via the
               computer, as they will not be accepted by telephone.

          (g)  A listing of open, unassigned AER training dates shall
               be made available through the CAMS system display and

                           ARTICLE 18 / Page 35

<PAGE>
<PAGE>
               Flight Attendants will be allowed to trade into such
               open AER dates.  In addition, Flight Attendants may
               make mutual trades of AERs through CAMS.

     (11) Legal Rest at Layover Station After One-Way Trip

          (a)  When a Flight Attendant is required to deadhead to
               his/her Domicile or Satellite station after flight
               assignment, he/she shall return to his/her Domicile or
               Satellite station on the first available flight for
               which legal, unless otherwise indicated in the flight
               pairing.  In no way will the above nullify the
               provisions of Article 6(L) which allows Flight
               Attendants to proceed to a location other than their
               domicile.

          (b)  The only exception to paragraph (a) above shall be
               when a Flight Attendant (other than a reserve Cabin
               Attendant) obtains permission from the Regional
               General Manager - In-Flight Services or his/her
               designated representative at the Flight Attendant's
               Domicile to remain at the layover station for an
               additional period of time.

               For the purpose of this paragraph, Crew Schedule will
               not be considered the designated representative.

     (12) A Flight Attendant's schedule shall not be changed at the
          opposite end of the trip without permission of the Flight
          Attendant affected unless it is the Company's opinion that
          an emergency exists.

     (13) A Flight Attendant will receive no less than the projected
          time of his/her monthly bid sequence should, in reality, the
          scheduled times posted for bid be less than those published.
          A Flight Attendant will not be balanced as a result of the
          application of this provision.

     (14) On all ferry flights where a Flight Attendant crew is
          deadheading, the Service Manager in charge on wide-body
          equipment is responsible for the performance of cabin duties
          while in flight and will be paid full flight credit/pay
          including report and release, and receive legal rest as a
          working crew member.

(DD) Alternate Line Flying Scheduling.
     --------------------------------

     (1)  The provisions of Article 18(A) and (B) shall apply in their
          entirety to this Article.

     (2)  Published lines of time shall consist of construction ranges
          of a minimum of 32:30 credit hours and a maximum of 45:00
          credit hours.  Under no circumstances may a Flight Attendant
          be scheduled to

                           ARTICLE 18 / Page 36

<PAGE>
<PAGE>

          exceed fifty-five (55:00) credit hours.

     (3)  In any bid month, alternate lines shall be divided into two
          (2) parts.  Alternate lines shall be constructed so that the
          published lines of time shall be flown during the first
          fifteen (15) days of the month or the last fifteen (15) days
          of the month.  The days that a Flight Attendant is available
          to fly or available for any other Company activity (such as
          training) shall be defined as a "fly zone."  The days that a
          Flight Attendant is not available to fly or not available
          for any other Company activity (such as training) shall be
          defined as a "no fly zone."  Neither the Company nor the
          Flight Attendant may schedule any activity during the "no
          fly zone."

     (4)  Lines designated as alternate lines shall be clearly
          designated as such in the monthly bid package.

     (5)  The Company shall determine the pairings to be used in
          connection with the construction of the Alternate Lines.
          The Company shall only use domicile pairings in construction
          of alternate lines.

     (6)  The number of alternate month vacancies to be offered for
          each quarter not to exceed 13% of the average number of
          equivalent full month bid positions published during the
          corresponding quarter of the previous year.  The number of
          Flight Attendants participating in the Alternate Line
          Program shall be determined by the number of  Flight
          Attendant who request to be in the Alternate Line Program
          not to exceed the percentage as identified above.  Under no
          circumstances may the Company publish Alternate Lines in
          excess of the number of Flight Attendants requesting to
          participate in the Alternate Line Program.

     (7)  Flight Attendants shall apply to fly alternate lines on a
          quarterly basis.  Bids shall be awarded in seniority order.
          Quarters shall consist of January, February, and March (1st
          Quarter); April, May, and June (2nd Quarter); July, August,
          and September (3rd Quarter); and October, November, and
          December (4th Quarter).  In order to be considered,
          applications must be submitted no later than the 1st day of
          the month sixty (60) days prior to the beginning of any
          quarter.  TWA shall notify the Flight Attendants on or
          before the 10th day the following month of participation in
          the Alternate Line Program.  For example, a Flight Attendant
          who wishes to apply for the 1st Quarter (January, February,
          and March) shall be required to submit his or her
          application no later than November 1.  TWA shall notify the
          Flight Attendant on or before November 10.

                           ARTICLE 18 / Page 37

<PAGE>
<PAGE>

     (8)  Flight Attendants participating in the Alternate Line
          Program shall be paid for vacation days if those days are
          scheduled in the "no fly zone."  Those vacation days
          scheduled during the "fly zone" shall be handled in
          accordance with Article 6(B) and 18(D)(7).

     (9)  Flight credit in excess of 45:00 shall be considered excess
          credit and shall be handled in accordance with Article
          18(D)(7)(G).

     (10) Flight Attendants participating in the Alternate Line
          Program may not place trips into ETO Offer but may elect to
          take ETO trips subject to the limitations contained in
          Paragraph (2) above.

(E)  Charters

     (1)  All Charter time which is assigned to a domicile and which
          is known prior to the bid period will be included in the
          domicile relief run requirements. Relief runs will be
          completed no later than 0001 of the fourth day of the new
          month and such runs shall be constructed so as to consist of
          at least sixty-five (65) flight credit hours. All charter
          time which cannot be placed in such run selections shall be
          handled as open time. As soon as relief runs are constructed
          as above, the duty free periods as required in Article 6(V)
          will be inserted in the lines and shown as such in the Crew
          Activity Display. The Company will provide the Union with a
          copy of the monthly charter schedule and revisions thereto.

          Known open time will be made available through computer
          terminals on Company property. Trades into such open time
          will be processed and honored subject to the availability of
          reserves to cover the resultant open trips.

          The Company reserves the right to assign Flight Attendants
          to any charter flight when a purchaser so requests by name
          or qualification. In such cases the Company shall be
          prepared to document that the request is a bona tide request
          of the purchaser.

     (2)  Extended Charter or Special Interest Flights:

          The provisions of this Article notwithstanding, an "Extended
          Charter" or "Special Interest" Flight(s) is a flight(s)
          chartered by a single chartering agency or interest, the
          length and/or nature of which requires or would deem
          desirable the continuous assignment of the same employee
          and/or employees for a total period scheduled to be

                           ARTICLE 18 / Page 38

<PAGE>
<PAGE>

          away from the Domicile in excess of three hundred and forty
          hours (340:00).

          (a)  An employee assigned to such flight as outlined in (2)
               above, shall receive flight credit hours for no less
               than the following:

               1)   Actual or scheduled block-to-block time,
                    whichever is greater, calculated on a stop-by-
                    stop basis.

               2)   Trip hours as outlined in Article 6 computed as
                    follows:

                    1:4.00 credit hours to a maximum of 340 trip
                    hours.
                    1:4.00 pay hours to a maximum of 340 trip hours.

                    All trip hours in excess of those outlined
                    above, are to be credited and paid on the basis
                    on one (1) hour for each six (6) trip hours,
                    prorated.

                    (a)  Notwithstanding the provisions of Article
                         6 all credit accrued, as a result of (a)
                         above, shall be paid and credited in the
                         month earned, except as otherwise provided
                         in this Article 18(D)(7).

                    (b)  An employee assigned to an "Extended
                         Charter" or "Special Interest" flight(s)
                         for a continuous period in excess of
                         thirty (30) days, may, after thirty (30)
                         days, request relief from such assignment
                         from the Regional General Manager - In-
                         Flight Services and such relief will be
                         granted provided notice of at least
                         seventy-two (72) hours is given.

     (3)  Off-line and Special On-line charters are non-military
          charter operations defined as follows:

          (a)  An off-line charter is a charter flight operating
               between two (2) regular airports, at least one of
               which is not a TWA regular or provisional airport. If
               a Flight Attendant deadheads or ferries on the
               aircraft between such airports or between two regular
               TWA stations to commence, continue

                           ARTICLE 18 / Page 39

<PAGE>
<PAGE>

               or end such flights, the provisions of this paragraph
               and paragraph (b) will apply.

          (b)  A special On-line charter is a charter flight which
               may be operated between airports between which TWA
               does not serve in scheduled service on a non-stop
               basis. Revenue load carried on such charter must be
               bona fide charter sales and not consolidation of
               canceled scheduled flights. If an intermediate stop is
               made at a regular TWA station, additional revenue load
               must be limited to consolidation of the original
               charter or to the boarding of charter passengers on a
               segment that does not compete with regularly scheduled
               non-stop service.

          (c)  For charter flights operated under this subparagraph
               3, the Domestic thirteen hour maximum scheduled on
               duty limitation of Article 6(R)(2)(d) shall be
               increased to thirteen and one-half (13 1/2) hours and
               the International fourteen (14) maximum scheduled on-
               duty limitation of Article 6(R)(4) shall be increased
               to fifteen (15) hours.  All other provisions of
               Article 6 shall apply.

(F)  Satellites

     (1)  Satellites may be established by the Company at any city
          served by TWA at present or in the future.  Satellite lines
          of time may be posted for bid at any domicile.

     (2)  Satellite lines of time shall consist only of pairings
          operating out of the satellite airport and shall be
          identified by separate code and posted for bid in a domicile
          bid package. Unsequenced pairings that originate and
          terminate at a satellite shall be placed into open time and
          awarded in accordance with Flight Attendant open time
          preferences.

     (3)  Satellite lines of time shall only be awarded to Flight
          Attendants bidding such lines on their monthly bid
          preference sheet. Flight Attendants will not be
          involuntarily assigned to such lines. Flights in lines of
          time not awarded will be handled as unsequenced time as in
          paragraph 2 above.

     (4)  Flight Attendants awarded satellite lines of time shall
          report directly to the satellite. Mailboxes and suitable
          free parking shall be provided to Flight Attendants holding
          a line of time at the satellite. All duty limitations, trip
          credit. duty credit and expenses for flights originating and
          terminating at the satellite shall be based on satellite
          report and release times for Flight Attendants awarded
          satellite lines of time.

                           ARTICLE 18 / Page 40

<PAGE>
<PAGE>

     (5)  Reserve coverage of satellite flights shall be provided by
          domicile reserves. Should the Company decide to staff
          reserves at a satellite, the Company may advertise and award
          satellite reserve lines to Flight Attendants who bid such
          reserve lines.  The proportion of satellite reserve lines to
          domicile reserve lines shall be determined by the Company.
          For a Flight Attendant awarded a satellite reserve line, the
          roles of the domicile and satellite shall be reversed for
          the purpose of the provisions of this letter.

     (6)  Domicile reserves, domicile inversed Flight Attendants and
          domicile Flight Attendants involuntarily balanced on or
          involuntarily assigned to open satellite flights shall be
          provided Class B transportation (or positive off line if
          appropriate) from the domicile to the satellite. For all
          Flight Attendants assigned satellite flights under this
          paragraph, expenses, trip credit and duty credit provided in
          the working agreement shall be based on domicile report and
          release times. Duty limitations will be the same as the
          rescheduled maximums in Articles 6(R) and 6(D) of this
          Agreement for the originating and terminating duty periods
          of such flight assignment. A Flight Attendant may elect to
          report directly to the satellite under this paragraph and
          will then have his trip and duty limitations and credit and
          expenses based on the satellite report and release times.

     (7)  Flight Attendants trading into satellite flights, requesting
          balance on satellite flight or awarded open satellite
          flights in accordance with open time preferences shall be
          handled as in paragraph 4 above.

     (8)  The Company shall have the option to assign a Reserve Flight
          Attendant from the Saint Louis (STL) or New York (JFK)
          domicile, to any open Satellite Flight(s). Such assignment
          shall not be considered a temporary assignment pursuant to
          Article 13(E).

(G)  Back-To-Back Flying

     (1)  Back-to-Back flying will be available to Flight Attendants
          through self balance/trade and the Enhanced Trip Option
          (ETO). Back-to-Back flying may also be available through bid
          award and relief/open time award.

     (2)  Back-to-Back flying may result in either a waiver of rest or
          a deferral of rest in association with international flying.
          A waiver of rest will result in no less than twelve hours
          (12:00) of actual rest between flight pairings, where an
          international flight pairing is involved. A deferral of rest
          will result in no less than twelve hours (12:00) of rest
          between pairings, where an international flight pal ring is
          involved, and the amount of rest deferred between the first
          and second pairings will be added to the full legal rest
          following the second pairing, unless

                           ARTICLE 18 / Page 41

<PAGE>
<PAGE>

          prevented by FAA rest requirements.

     (3)  On line fifty (50) of the bid input format there will be
          options available to Flight Attendants to elect either to
          waive or defer, to no less than 12:00 hours, their required
          legal rest following an international flight pairing (or
          following a domestic flight pairing prior to an
          international flight pairing). These options are available
          to bid line holders only. When the Flight Attendant
          indicates a "yes" in both boxes, the waiver of rest will
          apply to that bid month. A Flight Attendant opting for the
          deferral of rest, must have full legal rest plus the
          deferred rest from the first trip in the pair following the
          second trip of the Back-to-Back pair. If the Flight
          Attendant does not indicate "yes" in the waive or defer box
          and is not awarded a Back-to-Back sequence, such Flight
          Attendant shall always require full legal rest following an
          international flight pairing, unless he/she exercises the
          automatic waive option by trade/self-balance/ETO.

     (4)  The Company may, with timely concurrence of the System
          Scheduling Committee, publish international sequences in the
          bid package with Back-to-Back flying at each domicile and
          satellite. No domestic trips may be sequenced in the bid
          package with international trips. Back-to-Back pairings in
          sequences must depart on consecutive calendar days and be
          scheduled to have no less than 20:00 hours rest between the
          two pal rings. The awarding of a sequence with Back-to-Back
          flying results in an automatic deferral of rest for the
          entire bid month. Flight Attendants who are awarded Back-to-
          Back trips as part of a published sequence may not decline
          such trips and, subject to the election on line fifty (50)
          of the bid sheet to waive and/or defer rest, will be deemed
          to have agreed to waive or defer rest, as appropriate, in
          accordance with paragraph (G)(2) above. Once having
          indicated "yes" in the waiver box the waiver shall only be
          used in actual operation and shall have priority over the
          automatic deferral.

     (5)  A Flight Attendant desiring "Back-to-Back" flying in a
          relief/open time sequence must bid the COREL option code "K-
          K" in his/her specific COREL preferences. In order to defer
          rest in the construction of relief open time awards, the
          Flight attendant must indicate "yes" in the defer box for
          bid preferences. Indicating "no" in the defer box when the
          "K-K" option is requested could result in consecutive day
          flying, but would require full legal rest between trips. In
          the construction of relief/open time sequences the waiver of
          rest cannot be used; however, if the Flight Attendant
          indicates "yes" in the waive box the waiver shall, in actual
          operation, have priority over the automatic deferral.

                           ARTICLE 18 / Page 42

<PAGE>
<PAGE>

     (6)  If the Flight Attendant has elected "no" in both the waive
          and defer box such Flight Attendant may exercise a trip-by-
          trip waiver of the rest through trading, self-balance and
          ETO in association with international flying. An automatic
          waiver of rest shall occur when a Flight Attendant's trade,
          self-balance or ETO results in less than the required legal
          rest. In no event will a Flight Attendant's rest be less
          than twelve (12:00) hours, or as required by FAA minimum
          rest.

     (7)  The Back-to-Back option transition from one month to the
          next shall always be governed by the bid award and/or waive
          or defer preferences of the new bid month. This applies to
          both bid line holders and reserves.

     (8)  Rest associated with international "Back-to-Back" flying to
          be taken prior to the first trip in the new bid month shall
          be waived, if necessary, when the Flight Attendant indicates
          "yes" in the waive box and is a bid line holder in the new
          month. Rest associated with international "Back-to-Back"
          flying to be taken prior to the first trip in the new bid
          month shall be deferred, if necessary, when the Flight
          Attendant indicates "yes" in the defer box, "no" in the
          waive box and is a bid line holder in the new month. This
          would apply even if the Flight Attendant was a reserve in
          the old bid month. Reserve Flight Attendants will receive a
          minimum of 24:00 hours rest after an international trip
          preceding their next reserve assignment.

     (9)  Rest associated with international flying to be taken prior
          to the first trip in the new bid month must be full legal
          rest as required under Articles 6(R) and (U) of this
          Agreement if the Flight Attendant has placed "no" in the
          waive box, "no" in the defer box, has not been awarded a
          published "Back-to-Back" sequence, or is a reserve in the
          new bid month.

     (10) Flight Attendants who fly Back-to-Back trips and suffer a
          loss of flight time shall be subject to balance in
          accordance with Article 6(Z) or Article 18(D)(7), as
          applicable.

     (11) A Flight Attendant who has exercised any option that results
          in waived or deferred rest in her/his sequence and suffers a
          loss of time may be balanced on the same calendar days in
          the same manner as the Back-to-Back option in effect for the
          affected pairings in accordance with Article 6(Z). A Flight
          Attendant who elects to waive rest may be balanced to no
          less than twelve (12:00) hours, or rest as required by FAA
          minimums, between trips. A Flight Attendant who elects to
          defer rest may be balanced to no less than twenty (20:00)
          hours between trips. In cases where the Flight Attendant has
          indicated "yes" in both the waive and defer boxes on line
          fifty (50) of the bid input format, the waive option shall
          take precedence over the option to defer. The day/number of
          waivers/deferrals need not be identical to the

                           ARTICLE 18 / Page 43

<PAGE>
<PAGE>

          day/number of waivers/deferrals affected.

     (12) Flight Attendants who are scheduled to receive full legal
          rest between trips, and later incur pairing changes which
          result in less than full legal rest between trips, would
          normally be removed from their next scheduled trip as the
          result of not receiving full legal rest. However. if the
          Flight Attendant indicated "yes" in the waive box or defer
          box on line fifty (50) of her/his bid preferences, that
          option will be used to determine her/his required legal
          rest.

          The following chart indicates the rest and balancing
          requirements. on a scheduled basis, as determined by a
          Flight Attendant's election on the bid input format to waive
          and/or defer rest:

          BOX 3         BOX 4
          WAIVE         DEFER       REST
          -----         -----       ----

A. IF -   NO            NO          Full legal rest after every flight.

B. IF -   NO            YES         Defer international rest down to
                                    12:00 hours to be taken after second
                                    trip of "back-to-back" pair. Company
                                    may defer only a maximum of 4:00
                                    hours down to 20:00 for balancing
                                    purposes.

C. IF -   YES           NO          Waiver of rest down to 12:00 - no
                                    deferral of rest. Company may also
                                    waive rest down to no less than
                                    12:00 hours for balancing purposes.

D. IF -   YES           YES         Waiver of rest down to 12:00 hours
                                    no deferral of rest.  Company may
                                    also waive rest down to no less than
                                    12:00 hours for balancing purposes.
                                    (Same as "C") Waive option takes
                                    precedence over defer option.

                           ARTICLE 18 / Page 44

<PAGE>
<PAGE>

<TABLE>
                                 EXAMPLES OF BACK-TO-BACK FLYING

<CAPTION>
TYPE OF INTERNATIONAL TRIP           SCHEDULED REST                    ACTUAL REST

<S>                                  <C>                               <C>
1. Bid Flight Attendant trades/      Scheduled rest following the      If the actual rest is less
   self-balances/ETOs into an        international trip is equal       than 24:00 but 12:00 or
   international or domestic trip    to or greater than 12:00 but      greater, the second trip
   such that an international        less than 24:00 at the time       remains in the line. If
   trip precedes a domestic or       of the MTD/OTD/SBL/ETO            the actual rest following
   international trip.               and the second trip               the international trip is
                                     departs no later than the         less than 12:00, the
                                     next calendar day. This           second trip is removed
                                     establishes an automatic          from the line. Flight
                                     waiver down to 12:00 hours.       Attendant becomes subject
                                                                       to balance on the same days
                                                                       as originally scheduled for
                                                                       the second trip.

2. Bid Flight Attendant who has      Scheduled rest following the      If the actual rest following
   not elected to defer or waive     international trip must be        the international trip is
   rest and who has not been         24:00 or greater.                 less than 24:00, the second
   awarded a back-to-back                                              trip is removed from the line.
   sequence is balanced on an                                          Flight Attendant becomes subject
   international or domestic trip                                      to balance on the same days
   which follows an international                                      as originally scheduled for
   trip; or is balanced on an                                          the second trip.
   international trip that precedes
   a previously scheduled
   international or domestic trip.

                           ARTICLE 18 / Page 45

<PAGE>
<PAGE>

<CAPTION>
TYPE OF INTERNATIONAL TRIP           SCHEDULED REST                    ACTUAL REST

<S>                                  <C>                               <C>
3. Bid Flight Attendant who has      Scheduled rest following          If the actual rest is less
   elected to defer rest or who      the international trip            than 24:00 but 12:00 or greater,
   has been awarded a published      is 20:00 or greater.              that portion of the rest not
   back-to-back sequence and has                                       taken between the first and
   elected not to waive rest, is                                       second pairing is deferred
   balanced on an international of                                     until after the second trip;
   domestic trip which follows an                                      the second trip remains in
   international trip; or is                                           the line. If the actual rest
   balanced on an international                                        following the international
   trip which precedes a previously                                    trip is less than 12:00, the
   scheduled international or                                          second trip is removed from
   domestic trip.                                                      the line. Flight Attendant becomes
                                                                       subject to balance on the same
                                                                       days as originally scheduled for
                                                                       the second trip.

4. Reserve Flight Attendant is       Scheduled rest following the      If the actual rest
   assigned an international or      international trip must be        following the international
   domestic trip which follows       24:00 or greater.                 trip is less than 24:00,
   an international trip.                                              the second trip is removed
                                                                       from the line. Normal
                                                                       reserve assignment
                                                                       provisions will apply.

                           ARTICLE 18 / Page 46

<PAGE>
<PAGE>

<CAPTION>
TYPE OF INTERNATIONAL TRIP           SCHEDULED REST                    ACTUAL REST

<S>                                  <C>                               <C>
5. Flight Attendant who is           Scheduled rest following          If the actual rest following
   awarded a relief run containing   international trip must           the international trip is
   an international or domestic      be 24:00 or greater.              less than 24:00, the second
   trip following an international                                     trip is removed from the line.
   trip but who did not elect on                                       Flight Attendant becomes
   the monthly bid sheet a                                             subject to balance on the
   preference to waive or defer                                        same days as originally
   rest.                                                               scheduled for the second trip.

6. Flight Attendant who is awarded   Scheduled rest following          If the actual rest is less than
   a relief run containing an        the international trip            24:00 but 12:00 or greater,
   international ordomestic trip     must be 20:00 or greater.         that portion of the rest not
   following an international trip                                     taken between the first and
   and who elected on the monthly                                      second pairing is deferred
   bid sheet a preference to defer                                     until after the second trip;
   rest and did not elect to waive                                     the second trip remains in the
   rest.                                                               line. If the actual rest following
                                                                       the international trip is less than
                                                                       12:00, the second trip is removed
                                                                       from the line. Flight Attendant
                                                                       becomes subject to balance on the
                                                                       same days as originally scheduled
                                                                       for the second trip.

                           ARTICLE 18 / Page 47

<PAGE>
<PAGE>

<CAPTION>
TYPE OF INTERNATIONAL TRIP           SCHEDULED REST                    ACTUAL REST

<S>                                  <C>                               <C>
7. Flight Attendant who is awarded   Scheduled rest following          If the actual rest following
   an international sequence which   each international trip           the international trip is
   contains trips not leaving the    must be 24:00 or greater.         less than 24:00, the second
   next calendar day; and the                                          trip is removed from the line.
   Flight Attendant did not elect                                      Flight Attendant becomes subject
   to waive or defer rest.                                             to balance on the same days
                                                                       as originally scheduled for the
                                                                       second trip.

8. Bid Flight Attendant who has      Scheduled rest following          If the actual rest following
   elected to waive rest is          the international trip            the international trip is
   balanced on an international      must be 12:00 or greater.         less than 12:00, the second
   or domestic trip which follows                                      trip is removed from the line.
   an international trip; or is                                        Flight Attendant becomes subject
   balanced on an international                                        to balance on the same days
   trip which precedes a previously                                    as originally scheduled for
   scheduled international or                                          the second trip.
   domestic trip.
</TABLE>

                           ARTICLE 18 / Page 48

<PAGE>
<PAGE>

(H)   Trip Hours Formula Pro-ration Charts

      Pro-ration Chart for Trip Hours Formula 1:4:00
      Trip          Hours of       Trip        Hours of
      Hours          Credit        Hours        Credit
      :01                         176:00         44:00
      Thru            4:00        180:00         45:00
      16:00                       184:00         46:00
      20:00           5:00        188:00         47:00
      24:00           6:00        192:00         48:00
      28:00           7:00        196:00         49:00
      32:00           8:00        200:00         50:00
      36:00           9:00        204:00         51:00
      40:00          10:00        208:00         52:00
      44:00          11:00        212:00         53:00
      48:00          12:00        216:00         54:00
      52:00          13:00        220:00         55:00
      56:00          14:00        224:00         56:00
      60:00          15:00        228:00         57:00
      64:00          16:00        232:00         58:00
      68:00          17:00        236:00         59:00
      72:00          18:00        240:00         60:00
      76:00          19:00        244:00         61:00
      80:00          20:00        248:00         62:00
      84:00          21:00        252:00         63:00
      88:00          22:00        256:00         64:00
      92:00          23:00        260:00         65:00
      96:00          24:00        264:00         66:00
      100:00         25:00        268:00         67:00
      104:00         26:00        272:00         68:00
      108:00         27:00        276:00         69:00
      112:00         28:00        280:00         70:00
      116:00         29:00        284:00         71:00
      120:00         30:00        288:00         72:00
      124:00         31:00        292:00         73:00
      128:00         32:00        296:00         74:00
      132:00         33:00        300:00         75:00
      136:00         34:00        304:00         76:00
      140:00         35:00        308:00         77:00
      144:00         36:00        312:00         78:00
      148:00         37:00        316:00         79:00
      152:00         38:00        320:00         80:00
      156:00         39:00        324:00         81:00
      160:00         40:00        328:00         82:00
      164:00         41:00        332:00         83:00
      168:00         42:00        336:00         84:00
      172:00         43:00        340:00         85:00

                           ARTICLE 18 / Page 49

<PAGE>
<PAGE>

      Credit for Minutes Over 16:00 Hours

      Trip Hours     Credit       Trip Hours       Credit

      :01               :00        1:58-2:01          :30
      :02- :05          :01        2:02-2:05          :31
      :06- :09          :02        2:06-2:09          :32
      :10- :13          :03        2:10-2:13          :33
      :14- :17          :04        2:14-2:17          :34
      :18- :21          :05        2:18-2:21          :35
      :22- :25          :06        2:22-2:25          :36
      :26- :29          :07        2:26-2:29          :37
      :30- :33          :08        2:30-2:33          :38
      :34- :37          :09        2:34-2:37          :39
      :38- :41          :10        2:38-2:41          :40
      :42- :45          :11        2:42-2:45          :41
      :46- :49          :12        2:46-2:49          :42
      :50- :53          :13        2:50-2:53          :43
      :54- :57          :14        2:54-2:57          :44
      :58-:1:01         :15        2:58-3:01          :45
      1:02-1:05         :16        3:02-3:05          :46
      1:06-1:09         :17        3:06-3:09          :47
      1:10-1:13         :18        3:10-3:13          :48
      1:14-1:17         :19        3:14-3:17          :49
      1:18-1:21         :20        3:18-3:21          :50
      1:22-1:25         :21        3:22-3:25          :51
      1:26-1:29         :22        3:26-3:29          :52
      1:30-1:33         :23        3:30-3:33          :53
      1:34-1:37         :24        3:34-3:37          :54
      1:38-1:41         :25        3:38-3:41          :55
      1:42-1:45         :26        3:42-3:45          :56
      1:46-1:49         :27        3:46-3:49          :57
      1:50-1:53         :28        3:50-3:53          :58
      1:54-1:57         :29        3:54-3:57          :59
                                   3:58-4:00         1:00

          In the computation of the "Trip Hours" formula, pay credit
     generated by same shall be computed as an extension of the final
     portion of the last leg flown as an operating Flight Attendant.

                           ARTICLE 18 / Page 50

<PAGE>
<PAGE>

                               ARTICLE 19
                             PERSONNEL FILE

(A)  A personnel file shall be maintained for each employee in the
     employ of the Company, containing all records and reports,
     including electronic ("IER") file/reports, involving said
     employee. All records and reports shall be opened for inspection
     by the flight attendant or the flight attendant's  specifically
     authorized Union representative upon appointment during normal
     business hours.  For hearing and investigative purposes, a flight
     attendant's file shall on request be made available to the flight
     attendant or her/his specifically authorized Union representative
     upon appointment during normal business hours.

(B)  Passenger Complaint Letters

     (1)  A passenger complaint letter shall not be placed in a flight
          attendant's personnel file unless:

          (a)  The flight attendant is clearly identified in the
               letter.

          (b)  The alleged misconduct or disservice was something
               over which the flight attendant had control.

          (c)  The letter is reviewed with the flight attendant and
               she/he is afforded the opportunity to add her/his
               comments to the letter.

          (d)  The name of the person writing such a report or letter
               is clearly identified to the Company.  The Company
               will provide a copy of the letter of complaint to the
               affected flight attendant after deleting the
               identification of the sender.

     (2)  All passenger complaint letters will be removed at the first
          opportunity from the employee's file after a period of
          twelve (12) months of active service from the date of the
          receipt, provided there has been no other infractions during
          that period.  The letters shall be removed at the flight
          attendant's request.  In the event other passenger complaint
          letters are received at any time during the said twelve (12)
          months, the letter will be retained for an additional twelve
          (12) months, after which time the documents shall be removed
          from the flight attendant's file upon request.

                           ARTICLE 19 / Page 1

<PAGE>
<PAGE>

(C)  Disciplinary Documents.

     (1)  Documents two (2) years or older reflecting discipline or
          reprimand will not be considered by the Company in assessing
          discipline nor will they be introduced in support of such
          action.  The Company will consider any disciplinary action
          taken against a flight attendant as cleared from her/his
          record after a two (2) year period of active service.

     (2)  A flight attendant may attach comments to any disciplinary
          document that is placed in her/his file.

     (3)  Such documents upon the flight attendant's request shall be
          removed from her/his file after the expiration of the two
          (2) year period.  Any such document removed from the flight
          attendant's file will be date-stamped to reflect removal
          from the personnel file, placement in the corporate file,
          and shall not be used for the purpose of assessing
          discipline.

     (4)  The flight attendant's record including notations may be
          cleared earlier, when, in the judgment of the Company,
          her/his performance warrants such action.

(D)  Non-Disciplinary Documents.  As provided in Article 16(H), the
     Company shall have the right to make a notation in the flight
     attendant personnel file indicating that such discussion was held.
     A copy of such notation shall be provided to the flight attendant.
     In no event shall such notation or discussion be used by the
     Company in assessing discipline, except as to indicate prior
     counseling relating to the same subject matter.  Any notations
     shall be subject to removal by the flight attendant as provided in
     Paragraph (C).

(E)  Inflight observation reports shall be removed from the flight
     attendant's personnel file after two (2) years of active service
     from date of issuance upon request from the flight attendant. A
     flight attendant may attach comments to any observation reports
     placed in her/his file.

(F)  Any matters contained in a flight attendant "IER" file/report
     shall, as appropriate, be subject to the same terms and conditions
     contained in Paragraphs (B) and (C) above.

(G)  For definitional purposes, active service shall exclude any period
     of time while on furlough or leave of absence which may be
     granted to the flight attendant.

                           ARTICLE 19 / Page 2

<PAGE>
<PAGE>

                               ARTICLE 20
                                GENERAL

(A)  COPIES OF AGREEMENT

     Within sixty (60) days of signing this Agreement, the Company will
     provide each employee with a copy, printed and bound in a pocket-
     sized booklet which shall include Letters of Understanding,
     Amendments, or Addenda to the Agreement. Any Amendments to the
     Agreement completed subsequently shall be printed in similar
     format and distributed by the Company to each employee for
     inclusion in the Agreement within sixty (60) days of signing of
     such Amendments.  The Agreement will have the complete title of
     the organization on the cover, will contain an appropriate
     printer's union logo, will contain an index of materials contained
     herein, including letters and examples of Back-to-Back Flying.

(B)  ORDERS IN WRITING

     All orders to Flight Attendants involving a change in Domiciles,
     promotions, demotions, furloughs, and leaves of absence shall be
     stated in writing, except that when time does not permit,
     assignments of Flight Attendants shall not require a written
     order. Such assignments shall be confirmed later in writing.

(C)  FLIGHT ATTENDANT RESPONSIBILITY

     Flight Attendants have a responsibility to exercise reasonable
     prudence in safeguarding Company property entrusted to them,
     including money, however, Flight Attendants are not guarantors and
     where circumstances indicate there is a loss despite the exercise
     of reasonable prudence the Flight Attendant will not be held
     liable.

(D)  OTHER BENEFITS

     (1)  In the event that flying on International Operations shall
          cause an increase in premium for personal life insurance
          policies carried by an employee hereunder, the Company will,
          upon prompt submission of proof, reimburse such employee for
          such increased premium.

     (2)  Any Flight Attendant who while engaged in Company business
          becomes missing, interned, or held as a hostage shall be
          entitled to monthly compensation as provided below, until
          released from such internment or hostage or, if missing,
          until death is established in fact or is presumed in
          accordance with this rule. Such monthly compensation shall
          be equal to the rate being paid to such employee at the time
          she or he becomes missing, interned, or held as hostage.
          Said monthly compensation will be paid to the beneficiary or
          beneficiaries

                           ARTICLE 20 / Page 1

<PAGE>
<PAGE>

          designated by said employee and filed with the Company. If
          the whereabouts or existence of an employee is not
          reasonably ascertained or established within twenty-four
          (24) months of disappearance, she or he shall be presumed to
          be dead.

     (3)  Where obvious inequalities in the cost of living between
          stations outside the United States are such as to constitute
          a marked difference in the monthly income of Flight
          Attendants of equal pay status after fixed and continuing
          expenses have been deducted, the Company shall adjust the
          inequalities by means of a station allowance to cover cost
          of living differential which shall not be less than the cost
          of living differential paid to any other Company flight crew
          member stationed at the same domicile.

     (4)  If the Flight Attendant is injured or becomes ill while at a
          layover station, the Flight Attendant will continue to
          receive normal trip expenses until return to Domicile or
          Satellite or upon arrival of the regularly scheduled
          turnaround flight, whichever is earlier.

          If the Flight Attendant is unable to return to Domicile or
          Satellite as normally scheduled, reasonable actual expenses,
          as determined by the Flight Attendant's Regional General
          Manager, will be paid for the period beyond that which is
          covered by trip expenses outlined above. Expenses of this
          nature include room (if not at a contract hotel), meals,
          telephone, transportation to and from the airport and
          transportation associated with required medical attention.
          Such expenses are to be reported on form G-118 by the Flight
          Attendant for approval by the supervisor. In the event the
          Flight Attendant is hospitalized away from Domicile or
          Satellite, reasonable actual expenses will not include rooms
          or meals.  Under exceptional circumstances wherein a Flight
          Attendant is unable, by reason of illness, to visit a
          physician and one is summoned, payment for these services
          will be reimbursed under the provisions of Article 4(C)(1)
          of the TWA-IAM Working Agreement.  Any employee who
          becomes sick or injured as a result of having been outside
          the United States on Company business, due to causes related
          to his/her occupation or to the living and health conditions
          peculiar to the countries in which she or he performed
          services, shall be properly hospitalized at Company expense.
          If the sickness or injury necessitates treatment or
          convalescence in the United States, such employee shall be
          returned by the Company to the United States in a passenger
          seat, positive space. This provision shall apply to
          recurrences of the same sickness or injury so long as the
          Flight Attendant remains an employee of the Company.

                           ARTICLE 20 / Page 2

<PAGE>
<PAGE>

(E)  OTHER EMPLOYMENT WITH THE COMPANY

     Flight Attendants will be given consideration in other types of
     employment with the Company if, in the opinion of the Company,
     they are properly qualified for such positions.

(F)  CUSTOMER SERVICE PANEL

     The Vice President In-Flight Services and the President-Directing
     Chairman or designated IAM District 142 representative are
     mutually committed to the consistent delivery of TWA's In-Flight
     Service product in accordance with TWA's Customer Service
     Standards.  A panel, to be known as the "Customer Service Panel"
     co-chaired by the Vice President In-Flight Services and the
     President-Directing Chairman designated IAM District 142
     representative, or their designees, will meet on a quarterly basis
     to review the appropriateness of the Company's handling of in-
     flight performance feedback.

(G)  INFORMATION TO BE PROVIDED BY THE COMPANY TO IAM

     TWA shall provide prospectively (and retroactively where
     indicated) the following documents and reports to IAM so long as
     these documents and reports continue to be prepared. In the event
     that TWA ceases to prepare such documents but continues to
     maintain the information contained therein, TWA shall provide the
     information in whatever form or format it deems convenient.
     Nothing contained herein shall require TWA to prepare reports or
     maintain information of any kind.

     (1)  JXCAF Microfiche
     (2)  Transfer Request List
     (3)  Transfer Message
     (4)  Furlough, Recall and Displacement Notices
     (5)  Bid Results (Alphabetical, Seniority and Run order)
     (6)  PTO/Leaves
     (7)  Other Documents. All documents specifically addressed in the
          settlement dated September 9, 1985, in the Central Crew
          Schedule Lawsuit will be furnished as required.
     (8)  Dues Notices Should an arbitration arise out of the
          application of Article 24, the Company shall furnish to IAM
          District 142 and Local Lodge 1997 no later than seven (7)
          days prior to the arbitration, its file copy and return
          receipt green card from the letter of notification to the
          affected individual.
     (9)  TWA will provide the IAM with hardware (CRT, Terminal,
          Printer) and software (CAMS, PARS, DRS access, and PROFS
          access) which will be used to assist the IAM in providing
          service and representation to its members.  Such access will
          be provided no later than November 1, 1994, and will
          include, but not be limited to:  i) all information

                           ARTICLE 20 / Page 3

<PAGE>
<PAGE>

          currently available to Flight Attendants via Company
          CRT/Home Access; and ii) the following codes:

      CAMS INQUIRIES

      JXCAF =  F/A Monthly Schedules (Unsuppressed & Suppressed)
      JXSKF =  Sick Leave Bank
      JXQIF =  (SPV, IER, FAQ)
      JXMHF =  Category Change History
      JXCIF =  Pairing History
      JXSHF =  Sequence History
      JXHAF =  Lost Time History
      JXTIF =  Transfer Requests on File
      JXRVF =  Reserve List
      JXSLF =  Stand-by List
      JXOPF =  Open Time Flights (All)
      JXEIF =  Block Time History Inquiry
      JXFSF =  Flight Staffing (Unrestricted)
      JXTW  =  Training History

      DRS

      G/IFS/SUM         =     IFS Summary
      G/APS/TVL/RRT     =     Reduced Rate Information
      G/IFS/JIA (TIA)   =     Central Crew Scheduling - Pages
      G/IFS/TRN/P04     =     In-Flight Training Course Codes
      GM/OPS/CRW        =     Mask to Operations Planning
      <F*>Special Operations Mask to Central Crew Scheduling/Operations
      Planning from IAM

Access to PROFS for all IAM Representatives
Access to MOBIUS for six (6) grievance representatives as designated by
District Lodge 142

      PARS

      4L*F#/DAMON STA         = S.P.I.L.
      WPDF#/DAMON STA         = POST DEPARTURE LOAD

      TWA will provide such other computerized data as may be required
      pursuant to the Central Scheduling lawsuit settlement.  In addition,
      the IAM shall be provided such other information necessary to the
      Union in its participative, joint decision making role.

(H)   RAILWAY LABOR ACT

      Nothing in this Agreement shall be construed to limit or deny any
      Flight Attendant hereunder any rights or privileges to which he or
      she may be entitled under the provisions of the Railway Labor Act,
      as amended.

                           ARTICLE 20 / Page 4

<PAGE>
<PAGE>

(I)  MISCELLANEOUS

     (1)  The Company shall provide and make available at each
          Domicile a bulletin board to be used exclusively by the
          Union. The board shall be similar in size and construction
          to boards provided other associations or unions at that
          base. All notices posted on this board shall be signed or
          initialed by a duly authorized representative of the Union.
          The Union may make Bulletin Boards available at Satellite
          Locations. These Bulletin Boards will be supplied and paid
          for by IAM and will be for their exclusive use.

     (2)  The Company shall furnish the Union upon request the
          printed list of current addresses of employees.

     (3)  The Company shall also furnish a computer diskette to the
          Union regarding Article 24 payroll deductions for Union Dues
          check-off.

     (4)  Official Union bulletins, newsletters, notices, etc., may be
          distributed in employees' mail boxes if they have been
          approved for such distribution by the Vice-President - In-
          Flight Services or his/her designee.

     (5)  When a Flight Attendant receives an overpayment from the
          Company, the Flight Attendant shall have the option of
          repaying such overpayment in a lump sum or at the rate of
          $50 per biweekly paycheck. This shall not apply in cases of
          terminating employees, Flight Attendants taking leaves of
          absence or any overpayment resulting from the terms of the
          Enhanced trip Option provisions under Article 6.

     (6)  Commencing with the effective date of this Agreement, TWA
          will provide, on a monthly basis, a list of the names and
          payroll numbers of Flight Attendants who were tested and the
          dates of testing. Upon specific request from IAM in each
          instance TWA will thereafter provide the IAM with a copy of
          TWA Employee Drug/Alcohol Test Notification/Verification
          form for the applicable Flight Attendant who has been tested
          as outlined in Article 6(Y).

     (7)  There shall be no unlawful discrimination against employees
          covered by this Agreement because of race, sex, religion,
          sexual orientation, creed, age, color, handicap or
          disability, or national origin, veteran status including
          veteran, Vietnam era veteran or special disabled veteran
          status. Neither the Company nor the Union will condone acts
          of sexual harassment. The Company agrees not to unlawfully
          discriminate against any employee because of Union
          membership or activity and the Union agrees not to
          unlawfully discriminate against any employee based on non-
          membership in the Union. This paragraph

                           ARTICLE 20 / Page 5

<PAGE>
<PAGE>

          reaffirms the longstanding mutual practice of both parties
          to this Agreement.

     (8)  Effective January 1, 2000, at the Flight Attendant's option,
          the Company shall provide direct deposit of all pay and
          expense checks, by electronic transfer, to the bank or
          financial institution of the Flight Attendant's choice. If
          the Flight Attendant utilizes the electronic direct deposit,
          his/her paycheck stub will be available at his/her domicile
          or the Flight Attendant may provide a self-addressed stamped
          envelope of appropriate size with the domicile
          administration for the purpose of mailing his/her paycheck
          stub.

                           ARTICLE 20 / Page 6

<PAGE>
<PAGE>

                               ARTICLE 21
                               RETIREMENT

(A)  Unless alternate dates are specified below, the Company has
     amended the Retirement Plan for Flight Attendants effective as of
     March 7, 1986, and as further effective January 8, 1993, and
     September 22, 1994. Except as specifically amended hereunder, all
     provisions of the Retirement Plan for Flight Attendants as amended
     and in effect August 1, 1981, shall remain in full force and
     effect.

     (1)  Early Retirement

          A Member who retires early on or after the attainment of age
          forty-five (45) shall be entitled to receive, at his/her
          election, either:

          (a)  A retirement income commencing on his/her normal
               retirement date in an amount calculated under the
               provisions of Article (B)(5) below for normal
               retirement but on the basis of his/her Continuous
               Employment up to such early retirement; or

          (b)  Effective March 7, 1986, a retirement income
               commencing on the first of any earlier month equal to
               the retirement income described in (a) above reduced
               by 5/12% for each month by which the commencement date
               precedes age 60. Notwithstanding the foregoing, the
               retirement income of any Member who commences the
               receipt of early retirement income hereunder
               subsequent to March 7, 1986, shall be based on the
               greater of:

               1)   the Member's accrued benefit as of March 6,
                    1986, reduced by 4/12% for each month by which
                    the commencement date precedes age 60; or

               2)   the Member's accrued benefit as of the date
                    benefits commence, reduced by 5/12% for each
                    month by which the commencement date precedes
                    age 60.

     (2)  Lump Sum Distribution

          Effective March 7, 1986, the monthly benefit will be reduced
          by five per cent (5%) for each year by which the termination
          date precedes age sixty (60), with the lump sum actuarial
          adjustments computed on the basis of two per cent (2%) over
          the prevailing interest rate of the Pension Benefit Guaranty
          Corporation, but not higher than the highest percentage
          permitted by law.

                           ARTICLE 21 / Page 1

<PAGE>
<PAGE>

          NOTE:  As a result of the change in the reduction factor from
          four per cent (4%) to five per cent (5%), a Flight Attendant
          will receive the greater of:

          (a)  A lump sum calculated by reducing the monthly benefit
               accrued prior to March 7, 1986, by four per cent (4%)
               for each year by which the termination date precedes
               age sixty (60); or

          (b)  A lump sum calculated by reducing the monthly benefit
               accrued during the employee's total continuous service
               by five per cent (5%) for each year by which the
               termination date precedes age sixty (60).

     (3)  Lump Sum Notice

          Effective September 1, 1992, the requirement for a six-month
          notice of election in order to receive a lump sum
          distribution is eliminated.

     (4)  Freeze of Benefit Accruals

          The Retirement Plan for Flight Attendants of Trans World
          Airlines, Inc. has been amended to freeze future benefit
          accruals after December 31, 1992. Earnings after December
          31, 1992, will not be taken into account in computing
          benefits under the Plan. No person who is not a Plan Member
          or former Member on December 31, 1992, shall become a Member
          on or after January 1, 1993.

     (5)  Defined Benefit Plan

          (a)  If the IAM elects to have a spin-off of its portion
               (The Retirement Plan For Flight Attendants of Trans
               World Airlines, Inc.) of the Employee's Plan, and such
               spin-off occurs, then TWA shall not object to the
               selection by the IAM of a person or entity to act as
               the benefits administrator for the spun-off IAM
               portion unless and until that Plan is terminated or
               transferred to the control of the PBGC.

          (b)  The spin-off shall comply with the provisions of the
               Comprehensive Settlement Agreement providing for such
               a spin-off. The actuarial assumptions for such spin-
               off shall be determined by the Plan's actuary and
               approved by the IAM and PICHIN Corp. Nothing herein
               shall narrow or otherwise limit the rights of the
               Company or the IAM to legally challenge those
               assumptions on the basis that they are detrimental to
               the lAM or non-contract employees.

          (c)  If a Triggering Event occurs and if the IAM does not
               elect to have its plan spun off, the Company and the
               IAM shall

                           ARTICLE 21 / Page 2

<PAGE>
<PAGE>

               select a person or an entity reasonably agreeable to
               both parties and use their respective best efforts to
               cause such entity to act as a benefits administrator
               for the Employee's Plan until that Plan is terminated
               and transferred to the control of the PBGC.

     (6)  Retirement Savings Plan [401(k)]

          Effective November 1, 1988, the Trust Plan for Pursers of
          Trans World Airlines, Inc. has been amended and restated to
          include a 401(k) feature available to all TWA Flight
          Attendants and has been renamed "The Retirement Savings Plan
          for Flight Attendants of Trans World Airlines, Inc." Company
          contributions for recognized service under the former
          Pursers' Plan continue under the restated Plan for Flight
          Service Managers who qualify under the plan eligibility
          standards. Effective September 1, 1992, but subject to the
          provisions of Article 21(C), TWA will include and extend
          payment of Company contributions to Flight Service Managers
          on both the International and Domestic operations.

(B)  Summary of Retirement Plan

     The Summary of your Plan and your Rights as a Plan Participant as
     required by the Employee Retirement Income Security Act of 1974
     appears in the TWA booklet entitled, "Your TWA Retirement Plan for
     Flight Attendants" as amended and in effect on August 1, 1981; and
     further amended effective January 1, 1986; and as further amended
     March 7, 1986; and as further amended effective January 8, 1993.

     (1)  Type of Plan: Fixed

     (2)  Participants:

          Flight Attendant Employees who have met the eligibility
          requirements specified in the Plan.

     (3)  Participant Eligibility:

          Notwithstanding paragraph (A)(4) above, all Flight
          Attendants in active service who have completed one Year of
          Service shall automatically become Members of the Retirement
          Plan. Membership shall be effective on the first day of the
          month coincident with or next following the completion of
          one Year of Service. This provision shall also be applicable
          to those Flight Attendants on furlough or authorized leave
          of absence upon their return to active service.

     (4)  Normal Retirement Age: Age sixty (60).

                           ARTICLE 21 / Page 3

<PAGE>
<PAGE>

     (5)  Normal Benefit Formula:

          (a)  For participants in the Plan on and after August 1,
               1981:

               Past Service:

               2.0% of gross earnings per month for each year of
               Continuous Employment from date of hire to July 31,
               1981, less any unpaid absences. Gross earnings are the
               average monthly earnings for calendar years 1979,
               1980, 1981.  Average monthly earnings will be
               determined by dividing the total earnings as a Flight
               Attendant for the calendar years 1979, 1980 and 1981
               by the total number of months of active service as a
               Flight Attendant during these years. ("Months of
               active service" will be determined by dividing the
               total number of days of active service as a Flight
               Attendant during 1979, 1980 and 1981 by 30.44, which
               is the average number of days per month during this
               period.)

               Flight Attendants who had no earnings during these
               years will be credited with the average of the average
               monthly earnings for such years of the next most
               senior and the next most junior Flight Attendants who
               had earnings in the same category and same division on
               the System Seniority List on January 1, 1982.

               Future Service:

               For service on and after August 1, 1981 or the actual
               date the Employee becomes a Member of the Plan if
               subsequent to August 1, 1981, an annual benefit equal
               to 2% of each year's gross earnings after that date.

          (b)  Participants in the Plan prior to August 1, 1981 will
               receive the greater of (i) the benefit described above
               or (ii) the benefit accrued through July 31, 1981
               under the prior Plan.

               Temporary Annuity Supplement:

               A temporary annuity will be provided to Flight
               Attendants, while alive, who are receiving normal,
               early or disability retirement income and who have
               accumulated ten (10) or more years of credited Plan
               participation, equal to 50% of a normal, early or
               disability retiree's pension on a life annuity basis
               to a maximum of $250 per month to be paid only from
               age 60 to age 62 or the earliest age at which non-
               disability social security benefits become available.
               Such temporary annuity supplement will not be subject
               to early retirement reduction factors or a joint and
               survivor or other option

                           ARTICLE 21 / Page 4

<PAGE>
<PAGE>

               elections; nor shall it be included in the
               determination of any lump sum settlements; nor shall
               it be applicable to vested terminations.

     (6)  Lump Sum Distribution

          Age forty-five (45); lump sum benefit reduced according to
          Plan provisions for each year by which the termination date
          precedes age sixty (60), with actuarial adjustments as
          provided in the Plan.

     (7)  Disability Retirement:

          Ten (10) years of Company service: benefit equal to accrued
          pension to date of disability retirement.

     (8)  Normal Form of Benefit:

          If unmarried, life annuity; if married, fifty percent (50%)
          Automatic Qualified Joint and Survivor Annuity actuarially
          reduced, unless employee opts out.

     (9)  Contingent Annuitant Option:

          (a)  Members may elect a joint annuitant not less than six
               (6) months prior to commencement of benefits.

          (b)  For married participants who retire subsequent to
               January 1, 1976, an actuarially equivalent fifty
               percent (50%) joint and surviving spouse pension will
               be provided unless the participant has, with proper
               notice, elected another available option.

     (10) Optional Forms of Benefits:

          Joint annuities above fifty percent (50%); level income,
          lump sum.

     (11) Vesting in Pension Accrued to Date:

          A participant will become one hundred percent (100%) vested
          in the pension accrued to date, upon completion of ten (10)
          or more years of continuous service with the Company, (with
          due consideration for Breaks in Service or reinstatement of
          service prior to a Break in Service, to the extent permitted
          under ERISA). Effective January 1, 1989, A participant will
          become one hundred percent (100%) vested in the pension
          accrued to date, upon completion of five (5) or more

                           ARTICLE 21 / Page 5

<PAGE>
<PAGE>

          years of continuous service with the Company, (with due
          consideration for Breaks in Service or reinstatement of
          service prior to a Break in Service, to the extent permitted
          under ERISA).

     (12) Employee Contributions:

          None. The Plan Sponsor will assume the full cost of the
          Retirement Plan for Flight Attendants. Consequently, the
          Plan will be non-contributory for all Flight Attendants.

     (13) Unisex Option Factors:

          A single set of factors, equally applicable to male or
          female participants, is to be used where the form of pension
          is other than a life annuity. This table will reflect the
          relative proportion of males versus female participants
          currently and in near future, as well as the likely
          proportion of each sex on this form of pension.
          Representatives of the IAM will have the opportunity to
          review these factors.

(C)  Retirement Savings Plan for Flight Attendants of Trans World
     Airlines, Inc.

     (1)  Effective November 1, 1988, the Trust Plan for Pursers of
          Trans World Airlines, Inc. has been amended and restated to
          include a 401(k) feature available to all TWA Flight
          Attendants and has been renamed "The Retirement Savings Plan
          for Flight Attendants of Trans World Airlines, Inc." Company
          contributions for recognized service under the former
          Pursers' Plan continue under the restated Plan for Flight
          Service Managers who qualify under the plan eligibility
          standards. Effective September 1, 1992, TWA will include and
          extend payment of Company contributions to Flight Service
          Managers on both the International and the Domestic
          operations, provided, however that:

          (a)  The Company 5% contribution to the Retirement
               Savings/401(k) Plan accounts of Flight Service
               Managers for recognized service pursuant to Exhibit B,
               Section B(3)(B) of the Agreement in Principle signed
               August 13, 1992, shall continue to be suspended
               pursuant to the Agreement in Principle dated August
               13, 1992 until the day prior to the amendable date of
               this Agreement. Thereafter, Flight Service Managers
               shall become eligible to receive contributions for
               recognized service under the Plan, which contributions
               shall be borne by and distributed from the Company
               defined contribution payment required by the
               Comprehensive Settlement Agreement dated January 8,
               1993, between and among TWA, Labor, PBGC, Unsecured
               Creditors' Committee and the Icahn Affiliates.

                           ARTICLE 21 / Page 6

<PAGE>
<PAGE>

          (b)  Payments pursuant to this agreement shall be made
               monthly, and the Retirement Savings Plan for Flight
               Attendants shall be amended so as to provide for such
               monthly contribution to participant accounts.

     (2)  A vested Plan member upon termination at age forty-five (45)
          or later may elect to receive a lump sum of the Accumulation
          Units credited to the member's account as of termination
          date.

     (3)  Delivery of Contributions

          The contributions required to be made by the Company for the
          benefit of IAM members pursuant to the arbitrator's
          allocation decision and award, which decision and award
          allocated among the four employee groups receiving the
          contributions required to be made by the Company pursuant to
          Section 15 of the Comprehensive Settlement Agreement of
          1993, shall, unless otherwise agreed in writing by the
          Company and the IAM, be made in accordance with such
          arbitration decision and award and paid over to the trustee
          for the 401(k) Plan by the Company at the end of the plan
          year to which the contributions are attributable. Evidence
          of payment by the Company to the trustee will be provided to
          the IAM showing the total contribution and confirming that
          the percentage is in accordance with the arbitration
          decision and award.

     (4)  Allocation of Employer Contribution for Plan Years beginning
          on or after January 1, 1993

          Employer Contributions to be allocated for any Plan Year
          beginning on or after January 1, 1993, shall be allocated to
          the respective Employer Contribution Accounts for each
          Eligible Participant. Each Eligible Participant's
          Compensation received during the Plan Year while a
          Participant shall be weighted by multiplying such
          Compensation by the applicable factor set forth in Appendix
          A (attached to and made a part of the Plan) based on the
          Participant's age as of January 1 of the year following the
          Plan year for which such contribution is made. The
          allocation of the Employer's Contribution shall be made to
          each such Participant on a pro rata basis according to the
          ratio that such weighted Compensation for the Eligible
          Participant for the Plan Year bears to the weighted
          Compensation for all such Eligible Participants for the Plan
          Year. (Capitalized terms in this paragraph shall be defined
          as in the existing 401(k) Plan).

                           ARTICLE 21 / Page 7

<PAGE>
<PAGE>

     (5)  Cooperation and Study

          The Company in its capacity as representative of the non-
          contract workers and the IAM shall work together in good
          faith to study all material problems in connection with, and
          to provide for, administration of all relevant retirement
          trusts related to the IAM and/or non-contract workers in
          the event of Triggering Events, as defined below. Such study
          shall include the possibility of transferring administration
          of IAM plans to entities organized by or designated by the
          IAM but, in such event, the expense shall continue to be
          borne by the Company.

     (6)  Effect of Triggering Event on 401(k) Plan

          (a)  "Triggering Event" shall mean liquidation, merger,
               petition in bankruptcy, amalgamation, winding up or
               other like event affecting the Company or other event
               agreed by the Company and the IAM.

          (b)  If a Triggering Event occurs, the IAM shall have the
               option of becoming the plan sponsor/administrator of
               the 401(k) Plan, or the IAM may select an entity as
               plan sponsor/administrator. The option to become or
               select the plan sponsor/administrator shall continue
               to be exercisable until final liquidation, merger or
               winding up of the Company.

          (c)  The IAM shall have the option of requesting that the
               401(k) Plan and Retirement Savings Plan for the
               benefit of non-contract workers be included under a
               common sponsor/administrator, provided that such
               sponsor/administrator is reasonably acceptable to both
               the IAM and the Company. Other TWA Defined
               Contribution plans that are not terminated or
               transferred to another corporate sponsor may be
               transferred and included under the common sponsor/
               administrator if the Company and the IAM shall so
               agree.

     (7)  Expense Reimbursement

          The Company shall reimburse the IAM for its reasonable out-
          of-pocket costs and expenses, including professional fees,
          (a) in studying and negotiating the agreement concerning
          administration contemplated in Section (5) above and up to
          five thousand dollars ($5,000) (b) in amending the IAM ESOP
          to reflect the new securities issuable to the IAM in
          connection with the restructuring initiated by the Company.

                           ARTICLE 21 / Page 8

<PAGE>
<PAGE>

     APPENDIX

     In accordance with the provisions of Section 2 of the amendment to
     the 401(k) Plan, an Eligible Participant's Compensation for any
     Plan Year beginning on or after January 1, 1993 for which a
     contribution is made shall be multiplied by the applicable factor
     set forth below based on such Participant's age as of the
     Valuation Date for which the contribution is being made. For
     purposes of said Section 2, an Eligible Participant's age is
     determined as of the birthday in the calendar year preceding the
     Valuation Date for which the contribution is being made. (The
     factors set forth below are based on an interest rate of 7.5% and
     an assumed retirement age of 60.)

     FACTORS
     AGE                                       7.5%

     20 & UNDER                                0.0554
     21                                        0.0596
     22                                        0.0640
     23                                        0.0688
     24                                        0.0740
     25                                        0.0796
     26                                        0.0855
     27                                        0.0919
     28                                        0.0988
     29                                        0.1063
     30                                        0.1142
     31                                        0.1228
     32                                        0.1320
     33                                        0.1419
     34                                        0.1525
     35                                        0.1640
     36                                        0.1763
     37                                        0.1895
     38                                        0.2037
     39                                        0.2190
     40                                        0.2354
     41                                        0.2531
     42                                        0.2720
     43                                        0.2925
     44                                        0.3144
     45                                        0.3380
     46                                        0.3633
     47                                        0.3906
     48                                        0.4199
     49                                        0.4513
     50                                        0.4852
     51                                        0.5216
     52                                        0.5607
     53                                        0.6028

                           ARTICLE 21 / Page 9

<PAGE>
<PAGE>

     54                                        0.6480
     55                                        0.6966
     56                                        0.7488
     57                                        0.8050
     58                                        0.8653
     59                                        0.9302
     60 & OVER                                 1.0000

                           ARTICLE 21 / Page 10

<PAGE>
<PAGE>

                               ARTICLE 22
                           INSURANCE BENEFITS

Except as specifically amended hereunder, all provisions of the Summary
Plan Description and Article 22 of the agreement dated November 1, 1994
except as amended by the provisions of the following group benefits,
shall remain in full force and effect:

(A)  Group Insurance

     (1)  Effective November 1, 1994, the Group Medical Benefit Plan
          (the "Plan") will be a plan that incorporates a Preferred
          Provider Organization ("PPO") and provides two levels of
          comprehensive benefits based upon whether the service is
          obtained through the PPO network ("In-Network") or outside
          the PPO network ("Out-of-Network"). Employees who live in
          areas where no PPO network is available are paid in
          accordance with the In-Network benefits.

          (a)  The Group Medical Benefit Plan shall provide for the
               following schedule of benefits:

<TABLE>
-----------------------------------------------------------------------------------------
<CAPTION>
        PLAN FEATURES               PPO IN-NETWORK OR              PPO OUT-OF-NETWORK
        ---- --------                NO PPO AVAILABLE              ------------------
                                     ----------------
-----------------------------------------------------------------------------------------
<S>                          <C>                              <C>
      Annual Deductible                $200 family                  $600 individual
                                   All members combined         $1800 family (3 persons)
-----------------------------------------------------------------------------------------
      Retiree Deductible               $200 family                  $600 individual
   For those retiring after        All members combined         $1800 family (3 persons)
            8/1/99
-----------------------------------------------------------------------------------------
          Applies to             All expenses except for              All expenses
                             office visits, routine physical      except Chiropractic
                                exams, immunizations, in-
                                hospital confinements, out
                                     patient surgery
-----------------------------------------------------------------------------------------
     Deductible carryover                  None                           None
-----------------------------------------------------------------------------------------
         Co-Insurance                    90%/10%                Plan pays 70%/30% after
                                   Plan pays 90% after            deductible based on
                              deductible; but for physician      reasonable & customary
                                visits pays 100% after $10
                                      office co-pay
-----------------------------------------------------------------------------------------
    Employee co-insurance        $1,000 individual/$3,000       $3,000 individual/$9,000
   limits per calendar year       family plus deductible         family plus deductible
                                 ($1,000 per individual,        ($3,000 per individual,
                                  3 individual at $1,000      3 individual at $3,000 each
                                     each for family)                 for family)
-----------------------------------------------------------------------------------------
       Lifetime Maximum                 Unlimited                      Unlimited
           Benefit
-----------------------------------------------------------------------------------------
</TABLE>

                           ARTICLE 22 / Page 1

<PAGE>
<PAGE>

NOTE: Covered expenses from Out-of-Network providers will be based on
the reasonable and customary fee for that geographical area.

          (b)  Hospital Expense Benefits

               In-Network, the Plan will pay 90% of hospital charges
               for room and board, services and supplies, no
               deductible. Out-of-Network, the Plan will pay 70% of
               hospital charges for room and board, services and
               supplies, after the annual deductible has been
               satisfied. Covered Expenses under the Medical Plan
               shall include in-hospital expenses incurred for
               newborn children.

          (c)  Inpatient Surgical Expense Benefits

               In-Network, the Plan will pay 90% of surgeon charges,
               after the annual deductible has been satisfied. Out-
               of-Network, the Plan will pay 70% of surgeon charges,
               after the annual deductible has been satisfied.

          (d)  Outpatient Surgical Expense Benefits

               In-Network, the Plan will pay 90% of hospital and
               surgeon charges, no deductible. Out-of-Network, the
               Plan will pay 70% of doctors visit charges, after the
               annual deductible has been satisfied.

          (e)  In-Hospital Doctors Visit Benefits

               In-Network, the Plan will pay 90% of doctors visit
               charges, after the annual deductible has been
               satisfied. Out-of-Network, the Plan will pay 70% of
               doctors visit charges, after the annual deductible has
               been satisfied.

          (f)  Doctor's Office Visit Benefits

               In-Network, the Plan will pay 100% of doctor's office
               visit charge, after a $10 co-payment. Out-of-Network,
               the Plan will pay 70% of doctor's visit charges, after
               the annual deductible has been satisfied.

          (g)  Chiropractic Care Benefits

               Chiropractic benefits will be paid subject to
               reasonable and customary charges with no deductible
               and will be limited to 20 visits per member per year.
               These visits are not subject

                           ARTICLE 22 / Page 2

<PAGE>
<PAGE>

               to medical necessity.

          (h)  Preventive Health Care Benefits

               In-Network, after a $10 office visit co-payment, the
               Plan will pay for routine physical exams, including
               Pap smears and mammograms, not to exceed the
               following:

               Six (6) visits, including immunizations, up to 1 year
               of age; no coverage for immunizations beyond age 1;
               One (1) visit per calendar year from ages 1 through 5
               years;
               One (1) visit every calendar year, age 6 and older.

               Effective 8/1/1999, Pap smears, mammograms,
               proctosigmoidoscopys and PSA tests will be a covered
               expense eligible for submission every calendar year.
               No preventive health care benefits are payable Out-of-
               Network.

          (i)  Diagnostic X-ray and Laboratory Expense Benefits

               In-Network, the Plan will pay 100% of expenses for
               outpatient x-rays and laboratory tests for diagnosis
               of an injury, illness or pregnancy, up to $500 per
               year for all illnesses and up to $500 for each
               accident. Expenses in excess of $500 will be paid at
               90% after the annual deductible has been satisfied.
               Out-of-Network, the Plan will pay 100% of expenses for
               outpatient x-rays and laboratory tests for diagnosis
               of an injury, illness or pregnancy, up to $500 per
               year for all illness and up to $500 for each accident.
               Expenses in excess of $500 will be paid at 70% after
               the annual deductible has been satisfied.

          (j)  Pre-Admission Testing Expense Benefits In-Network,

               The Plan will pay 100% of expenses for outpatient
               tests ordered by a physician as a planned preliminary
               to inpatient admission within four (4) days, no
               deductible. Out-of-Network, the Plan will pay 70% of
               expenses for outpatient tests ordered by a physician
               as a planned preliminary to inpatient admission within
               tour (4) days, after the annual deductible has been
               satisfied.

          (k)  Pre-Admission Certification and Continued Stay Review

               Pre-Admission Certification and Continued Stay Review
               (PAC/CSR) is a process performed through a utilization
               review program that is used to certify the medical
               necessity and length of any inpatient hospital confinement.
               PAC/CSR will be required under the Plan. If Pre-Admission

                           ARTICLE 22 / Page 3

<PAGE>
<PAGE>

               Certification is not received four (4) days prior to a
               planned admission, a $300 penalty will be assessed.
               Hospital charges otherwise payable will be reduced by
               50% for any day in excess of the number of days that
               have been certified through PAC/CSR. No benefits will
               be paid for hospital expenses incurred during a
               hospital confinement for which Pre-Admission
               Certification was performed but which was not
               certified as medically necessary. All eligible
               employees should call TWA Special Health Services to
               obtain certification for in-patient mental, nervous
               and substance abuse confinements.

          (l)  Second Opinion Surgical Benefits

               In-Network, the Plan will pay 100% of reasonable and
               customary expenses for a second opinion as to the need
               for non-emergency surgery. Out-of-Network, the Plan
               will pay 70% of reasonable and customary expenses for
               a second opinion as to the need for non-emergency
               surgery, after the annual deductible has been
               satisfied.

          (m)  Free-Standing Surgical Facility Expense Benefits

               In-Network, the Plan will pay 90% of expenses incurred
               in a Free-Standing Surgical Facility. Out-of-Network,
               the Plan will pay 70% of expenses incurred in a Free-
               Standing Surgical Facility, after the annual
               deductible has been satisfied.

          (n)  Supplemental Accident Expense Benefits

               In-Network, the Plan will pay 100% of physician
               charges for treatment of an injury during the 90-day
               period following an accident, up to a maximum of $300
               per calendar year. Physician charges exceeding $300
               will be paid at 90% after the annual deductible has
               been satisfied. Out-of-Network, the Plan will pay 100%
               of physician charges for treatment of an injury during
               the 90-day period following an accident, up to a
               maximum of $300 per calendar year. Physician charges
               exceeding $300 will be paid at 70% after the annual
               deductible has been satisfied.

          (o)  Skilled Nursing Facility Expense Benefit

               After the annual deductible has been satisfied, the
               Plan will

                           ARTICLE 22 / Page 4

<PAGE>
<PAGE>

               pay 80% of Skilled Nursing Facility expenses for room
               and board, services and supplies for medical care and
               treatment up to 60 days of confinement per calendar
               year. Payment for room and board will be based on the
               facility's most common semi-private room charge.

          (p)  Home Health Care Benefits

               In-Network, the Medical Plan shall pay 90% of expenses
               for up to 60 home health care visits per calendar
               year, after $50 of the $200 deductible has been
               satisfied.  Out-of-Network, the Medical Plan shall pay
               70% of expenses for up to 60 home health care visits
               per calendar year, after the full deductible has been
               satisfied.

          (q)  Hospice Care Benefits

               The Medical Plan shall pay 80% of hospice care
               expenses, incurred in a hospice care facility or at
               home, after the $200 annual deductible has been
               satisfied, up to a maximum lifetime benefit of $10,000
               per individual.

          (r)  Medical Plan Prescription Drug Benefits

               The Plan will pay based on hospital affiliation for
               prescription drug expenses, after the applicable
               family deductible has been satisfied, for drugs
               administered in a hospital facility.  Employees who
               live in an area where there is a pharmacy, but there
               is no INTEQ network pharmacy available, will submit
               their prescription drug claims for reimbursement at
               80% through their third party company authorized
               administrator for medical claims.

(B)  Prescription Drug Program

     Effective November 1, 1994, the Prescription Drug Program will
     include the Mail Order Maintenance Drug Plan and an Acute Care
     Drug Plan.

     (1)  The Mail Order Drug Plan provides for the following schedule
          of benefits:

          (a)  $5 co-payment for generic drugs;

          (b)  $15 co-payment for brand name drugs when generic is
               not available;

          (c)  Co-payment for brand name drugs when generic drug is
               available will be $5 plus the difference in generic
               and brand

                           ARTICLE 22 / Page 5

<PAGE>
<PAGE>

               name ingredient costs;

          (d)  Initial prescriptions will be limited to 30 days.
               Subsequent prescriptions may be filled for up to 90
               days.

     (2)  The Acute Care Drug Plan provides for the following schedule
          of benefits:

          (a)  Employees issued prescription drug cards for use at
               participating pharmacies;

          (b)  All drug prescriptions must be submitted through the
               Inteq Drug Plan (Acute and/or Mail Order).  However,
               drugs dispensed in conjunction with hospital visits
               will continue to be processed through Third Party
               Administrator; Employees who live in an area where
               there is a pharmacy (but there is no Inteq network
               pharmacy available, will continue to submit their
               prescription drug claims for reimbursement through
               their third party company authorized administrator for
               medical claims;

          (c)  Five dollar ($5.00) co-pay for generic drugs or 30%
               for brands when no generic substitution is available;

          (d)  Five dollar ($5.00) co-pay plus the difference in
               ingredient cost between brand and generic when generic
               substitution is available.

          (e)  Effective August 1, 1999, there shall be no
               deductible.  All drug prescriptions will be submitted
               through the Inteq Drug Plan. (Acute or Mail Order).

(C)  Dental Plan Benefits

     The Group Dental Plan effective October 1, 1999 includes a
     Preferred Provider Organization (PPO) which provides three (3)
     levels of comprehensive benefits based upon whether the service is
     obtained through the PPO network (In-Network), outside the PPO
     network (Out-of-Network), or through a voluntarily elected Dental
     Health Maintenance Organization (DHMO) to be effective January 1,
     2000. Employees who live in areas where no PPO network is
     available are paid in accordance with the In-Network benefits. In-
     Network shall

                           ARTICLE 22 / Page 6

<PAGE>
<PAGE>

     be defined as at least two (2) general practitioners within a ten
     (10) mile radius.  Features of the Group Dental Plan are as
     follows:

<TABLE>
                                      DENTAL HMO
----------------------------------------------------------------------------------------
<CAPTION>
     DENTAL             BENEFITS PAYABLE           DEDUCTIBLE            MAXIMUM
     SERVICE
----------------------------------------------------------------------------------------
<S>                   <C>                             <C>                 <C>
    Class I<F*>       100% of network fees            None                None
----------------------------------------------------------------------------------------
   Class II<F*>       90% of network fees             None                None
----------------------------------------------------------------------------------------
   Class III<F*>      80% of network fees             None                None
----------------------------------------------------------------------------------------
   Class IV<F*>       60% of network fees             None                None
----------------------------------------------------------------------------------------

<CAPTION>
                                   IN-NETWORK (PPO)
----------------------------------------------------------------------------------------
     DENTAL               BENEFITS             DEDUCTIBLE               MAXIMUM
     SERVICE              PAYABLE
----------------------------------------------------------------------------------------
<S>                 <C>                   <C>                     <C>
     Class I          100% of network             None             $3000 per calendar
   (Preventive)             fees                                     year per member
   (Oral Exams)                                                   inclusive of Class I,
     (X-rays)                                                           II, III
----------------------------------------------------------------------------------------
     Class II        90% of network fees    $100 per calendar      $3000 per calendar
      (Minor                                 year per member         year per member
   Restorative)                           inclusive of Class II   inclusive of Class I,
   (Periodontal)                                 and III                II, III
    (Fillings)
   (Root Canals)
----------------------------------------------------------------------------------------
     Class III      60% of network fees     $100 per calendar      $3000 per calendar
      (Major                                 year per member         year per member
   Restorative)                           inclusive of Class II   inclusive of Class I,
     (Crowns)                                    and III                II, III
     (Bridges)
    (Dentures)
----------------------------------------------------------------------------------------
     Class IV       50% of network fees    $100 per member for      $1500 per member
  (Orthodontics)                          life inclusive of Class       for life
                                                   IV.
----------------------------------------------------------------------------------------

                           ARTICLE 22 / Page 7

<PAGE>
<PAGE>

<CAPTION>
                                  OUT-OF-NETWORK (PPO)
----------------------------------------------------------------------------------------
     DENTAL               BENEFITS             DEDUCTIBLE               MAXIMUM
     SERVICE              PAYABLE
----------------------------------------------------------------------------------------
<S>                 <C>                    <C>                     <C>
     Class 1        100% of reasonable            None              $500 per calendar
  (Preventive)         and customary                                 year per member
  (Oral Exams)            charges
    (X-rays)
----------------------------------------------------------------------------------------
    Class II         75% of reasonable            None              $1250 per calendar
     (Minor            and customary                                  year per member
  Restorative)            charges
  (Periodontal)
   (Fillings)
  (Root Canals)
----------------------------------------------------------------------------------------
    Class III        50% of reasonable       $100 per calendar      $1500 per calendar
     (Major            and customary          year per member         year per member
   Restorative)           charges           inclusive of Class
    (Crowns)                                        III
    (Bridges)
    Dentures)
----------------------------------------------------------------------------------------
    Class IV         50% of reasonable       $100 per member for     $1500 per member
 (Orthodontics)        and customary       life inclusive of Class       for life
     charges                IV.
----------------------------------------------------------------------------------------

<FN>
<F*>Classes for DHMO same as for PPO
</TABLE>

(D)  Life Insurance

     (1)  Basic and Additional Life Insurance

          Basic life insurance shall be provided in accordance with
          the schedule in paragraph (E)(8) below. Additional life
          insurance will be made available to each Flight Attendant as
          follows:

     (2)  Spouse Life Insurance

          The Company will provide coverage for spouse in the amount
          of five thousand dollars ($5,000).

     (3)  Child Life Insurance

          The Company will provide coverage for eligible dependent
          children in the amount of two thousand five hundred dollars
          ($2,500) dollars.

                           ARTICLE 22 / Page 8

<PAGE>
<PAGE>

(E)  Group Coverage General

     (1)  The Company agrees to continue group basic life and
          medical/dental coverage for Flight Attendants furloughed for
          a period of ninety (90) days from date of furlough. The
          insurance coverage shall be that in effect on the date of
          furlough.

          Flight Attendants can elect, only during this ninety (90)
          day period, to purchase this same coverage, as a package, at
          the prevailing group rates for an additional twenty-four
          (24) months. If elected, this option takes effect on the
          ninety-first (91st) day from date of furlough. This coverage
          is not renewable if cancelled at any time.

     (2)  Flight Attendants married to other TWA Employees: In the
          event that a Flight Attendant elects family coverage and the
          spouse incurs a claim, the spouse's plan will be primary,
          making payment first. The Flight Attendant's plan will be
          secondary for the spouse, just as it would if the spouse
          were employed elsewhere with employee only coverage unless
          the spouse's TWA plan provides otherwise. Medical/Dental
          benefits will be coordinated between the two plans so that
          the two plans may pay up to 100% of incurred covered
          expenses, but no more than 100%.

     (3)  Flight Attendants in need of care for substance abuse or
          mental emotional illness shall have access to Special Health
          Services whether or not such Flight Attendant is in job
          jeopardy.

          The Summary of your Plan and your rights as a Plan
          participant as required by the Employee Retirement Income
          Security Act of 1974 appears in the TWA booklet entitled TWA
          Group Benefits for Flight Attendants effective January 1,
          1989 and October 1989, and as further effective November 1,
          1994, and January 1, 1995.

(F)  Outline of Plans

     (1)  Medical Plan:

          (a)  Type of Plan: Comprehensive Medical 90/10 (In-
               Network); 70/30 Out-of-Network.

          (b)  Inpatient Hospital Charges In Network is 90%, after
               the Out-of-Network deductible 70% of reasonable and
               customary charges for semi-private room and board,
               services and supplies. Surgeon's and anesthesiologists
               fees for surgery performed while an inpatient; and
               physician's (other than surgeon's) charges for visits
               during hospital confinement (note: if surgery is
               performed, any visit on the

                           ARTICLE 22 / Page 9

<PAGE>
<PAGE>

               day of surgery is excluded); and ambulance.

               Pre-admission tests will be covered as an In-Patient
               Hospital expense with First Dollar Coverage, 100% of
               reasonable and customary charges established by
               locale, with no deductible, if performed within four
               days of a planned admission. [See 22(A)]) above.]

               Hospital bed and board charges incurred between Friday
               noon and Sunday noon will not be covered if admitted
               to the hospital during that period unless medical care
               is administered during that period or the admitting
               physician is in attendance.

               Hospital Pre-admission Certification and Continued
               Stay Review; PAC/CSR Requirements:

               Pre-Admission Certification (PAC) and Continued Stay
               Review (CSR) refer to the process used to certify the
               medical necessity and length of any Hospital
               Confinement as a registered bed patient. PAC and CSR
               are performed through a utilization review program
               directed by Third Party Administrator. PAC should be
               requested by the employee or her/his Family Member or
               the Employee's Physician for each Inpatient Hospital
               admission. CSR should be requested, prior to the end
               of the certified length of stay, for continued
               inpatient Hospital Confinement.

               Expenses incurred for which benefits would otherwise
               be paid under this Plan will not include the first
               $300 of Hospital charges made for each separate
               admission to the Hospital as a registered bed patient
               unless PAC is received: (a) prior to the date of
               admission; or (b) in the case of an emergency
               admission, certification must be made within 48 hours.

               The amount otherwise payable under this Plan for the
               Hospital charges listed below will be reduced by 50%:

               Hospital charges for Bed and Board and necessary
               services and supplies, during a Hospital Confinement
               for which PAC is performed, which are made for any day
               in excess of the number of days certified through PAC
               or CSR, even if such charges are determined to be
               medically necessary.

                           ARTICLE 22 / Page 10

<PAGE>
<PAGE>

               No benefits are payable for any Hospital charges made
               during any Hospital Confinement as a registered bed
               patient: (a) for which PAC was performed; but (b)
               which was not certified as medically necessary.

               In any case, those expenses incurred for which payment
               is excluded by the terms set forth above will not be
               considered as expenses incurred for the purpose of any
               other part of the medical plan, except for the
               "Coordination of Benefits" section.

               The Review Organization is an organization with a
               staff of Registered Graduate Nurses who perform the
               PAC and CSR process in conjunction with consultant
               Physicians.

               As of July 1, 1988, all Flight Attendants should call
               TWA Special Health Services to obtain approval for
               inpatient substance abuse and psychiatric admissions.

               Admissions for such care which are not pre-certified
               by Special Health Services will result in out-of-
               pocket costs to the employee, as described above.

          (c)  Hospital Out-Patient for:

               1)   Emergency care immediately following an accident.
               2)   Surgery.
               3)   Chemotherapy.

          (d)  Maximum amounts payable:

               If a Flight Attendant or one of the Flight Attendant's
               Family Members incurs Covered Expenses as the result
               of an injury, sickness or pregnancy, payment will be
               based on the percentages listed below subject to the
               specific benefit maximums.

               100% of Covered Expenses for charges made by a
               Physician for treatment of an injury during the 90-day
               period following the accident, but not more than a
               maximum of $300 per calendar year. This benefit is
               payable only for treatment of an injury. Charges in
               excess of this maximum will be considered under other
               Covered Expenses which are subject to the Plan
               deductible and payable at 90% In-Network (70% Out-of-
               Network);

                           ARTICLE 22 / Page 11

<PAGE>
<PAGE>

               90% of Covered Expenses for charges made by a Hospital
               for outpatient "emergency care" of an injury within 48
               hours after the injury is received. Outpatient care in
               an out patient facility of an injury for charges will
               be covered at 90% of covered expenses for In-Network
               services or 70% for Out of Network. after deductible.
               This benefit is payable only for treatment of an
               injury;

               100% of Covered Expenses for charges made by a
               Hospital for tests performed as an outpatient ordered
               by a Physician as a planned preliminary to admission
               within four days;

               In-Network, 90% of Covered Expenses (Out-of-Network,
               70% after deductible) for charges made by a Hospital
               for chemotherapy treatment performed on an outpatient
               basis;

               In-Network, 90% of Covered Expenses (Out-of-Network,
               70% after deductible) for charges made by a Free-
               Standing Surgical Facility or the outpatient
               department of a Hospital for or in connection with
               outpatient surgery;

               100% after $10 co-payment for physician office visit
               charges.

               However:

               In-Network, 90% of Covered Expenses (Out-of-Network,
               70% after deductible) for charges made by a Physician
               for anesthesia or the performance of a surgical
               procedure, including post-operative care, if performed
               in a Free Standing Surgical Facility, the outpatient
               department of a Hospital or a physician's office;

               100% of Covered Expenses for charges for outpatient
               X-ray examinations and laboratory tests for diagnosis
               of an injury, sickness or pregnancy while not confined
               in a Hospital, up to $500 for each accident, and $500
               for all sicknesses in a calendar year;

               Charges in excess of these maximums will be considered
               under other Covered Expenses subject to the Plan
               deductible;

               100% of Covered Expenses for charges made by a
               Physician for consultation and charges for X-ray
               examinations and laboratory tests in connection with
               obtaining a second surgical opinion prior to
               performance of a surgical

                           ARTICLE 22 / Page 12

<PAGE>
<PAGE>

               procedure.

          (e)  Diagnostic X-Ray and Lab Test: Up to five hundred
               dollars ($500) for all illness per calendar year per
               individual. Applies only for diagnosing illness, not
               preventive. Up to five hundred dollars ($500) per
               accident per individual.

          (f)  Maternity: Covered as any other illness.

          (g)  Skilled Nursing Facility: 80% after deductible for up
               to sixty (60) days confinement per person per calendar
               year based on semi-private room rate.

          (h)  Maximum: Unlimited per individual per lifetime.

               Deductible: In-Network, two hundred dollars ($200) per
               calendar year per family; (Out-of-Network, six hundred
               dollars [$600] per individual/one thousand eight
               hundred dollars [$1,800] per family) maximum 3
               individuals.

               Stop Loss: In-Network after deductible, if an
               individual's out-of-pocket Covered Expenses exceed
               $1,000 (maximum 3 individuals, $3,000 per family)
               or Out-of-Network after deductible of $3,000 per
               individual (maximum 3 individuals, $9,000 per family).
               The Plan pays 100% of any further Covered Expenses
               incurred by that individual in that calendar year.

          (i)  Mental Illness:

               Covered Expenses in connection with Non-Hospital
               confined treatment of mental illness or functional
               nervous disorder, payment will be made at 80% of
               Covered Expenses for charges incurred from a
               psychiatrist or licensed clinical psychologist during
               a calendar year. The maximum visits in any one (1)
               calendar year will be thirty five (35).

          (j)  Exclusive Provider Care

               The Company shall provide for an "Exclusive Provider"
               organization network for mental illness, substance
               abuse, and/or psychiatric inpatient care.

               1)   There will be no change in existing levels for
                    in-hospital treatment for mental illness and
                    substance

                           ARTICLE 22 / Page 13

<PAGE>
<PAGE>

                    abuse in Exclusive Provider Facilities.

               2)   Except as provided in (4)(b) below, in-hospital
                    treatment for mental illness and substance abuse
                    in Non-Exclusive Provider Facilities will be
                    covered at fifty percent (50%) of reasonable and
                    customary covered charges after deductible.

               3)   The Company and Union will jointly designate
                    hospitals or freestanding facilities as
                    Exclusive Providers for the treatment of mental
                    illness, functional nervous disorders, alcohol
                    abuse, or drug abuse on the basis of the quality
                    of care and competitive cost structures. The
                    list of Exclusive Providers may be changed by
                    mutual agreement in order to satisfy these
                    criteria.

               4)   (a)  The Company and Union will jointly
                         designate a minimum number of such
                         facilities in order to provide a
                         reasonable choice of quality facilities in
                         a given geographic area while affording
                         the Company an opportunity to negotiate
                         significant discounts on provided
                         services.

                    (b)  For Flight Attendants and their dependents
                         not residing within one of the twelve
                         designated regions and requiring inpatient
                         mental health and/or substance abuse
                         treatment, TWA will recognize, for the
                         purpose of reimbursement, charges that do
                         not exceed the seventy-fifth percentile
                         for similar services provided within the
                         same geographic area.

          (k)  Home Health Care

          (l)  Coordination of Benefits: YES.

          (m)  Dependent Definition: Spouse, children to twenty-one
               (21) years; students to age twenty-three (23) and
               still an employees dependent; mentally or physically
               handicapped children to any age, so long as one (1)
               parent remains covered under the Plan. However,
               coverage for a dependent child will continue through
               December 31 of the year in which the child attains age
               21 or age 23 if the child is

                           ARTICLE 22 / Page 14

<PAGE>
<PAGE>

               enrolled as a full-time student.

          (n)  Financing: Paid by Company.

          (o)  Furloughed Employees: Coverage continued for ninety
               (90) days. May be continued at Flight Attendant's
               expense for an additional twenty-four (24) months.

          (p)  No-Fault Integration: Excludes benefits for medical
               and dental expenses to the extent the individual is
               indemnified for those expenses under the mandatory
               portion of any "No Fault" automobile insurance policy.

          (q)  Retired Employees prior to August 1, 1999: Coverage
               includes hospitalization and surgical. Improvements
               negotiated for active Flight Attendants will also
               apply to Flight Attendants who have officially retired
               on or after November 1, 1994, at age 50 or over who
               retire under the Flight Attendant Retirement Plan at
               age 50 or over disability retired while eligible. If
               retired prior to November 1, 1994  benefit will not be
               changed.

     (2)  Short Term Disability

          (a)  Basic Earnings: 50% of base pay; maximum $400 per
               week.

          (b)  Duration: If unable to perform own occupation, payable
               if disability commences:

               PRIOR to reaching age 61, until no longer disabled, or
               up to five (5) years from date of disability or up to
               age 65, whichever comes first.

               AFTER age 61 or older, until no longer disabled or for
               period based on age at disablement (e.g., 3 1/2 years
               if age 62, reduced per schedule to 1 year if age 69),
               whichever occurs first.

               All payments will be discontinued when Flight
               Attendant actually retires or on 70th birthday.

          (c)  Waiting Period: The later of: (a) 1st day of
               disability due to an accident, or (b) the 4th day of
               disability due to sickness (unless confined to
               hospital before 4th day - then with 1st day of
               hospital confinement or (c) day after the TWA Sick
               Leave pay is exhausted.

                           ARTICLE 22 / Page 15

<PAGE>
<PAGE>

          (d)  Exclusions:

               No payment will be made for any disability:

               (1)  which is caused by an injury arising out of, or
                    in the course of any employment for wage or
                    profit;

               (2)  which is caused by sickness for which the
                    Employee is entitled to benefits under any
                    Workers' Compensation Legislation;

               (3)  which commences during any period of work
                    stoppage by any class of employee;

               (4)  during which the Employee is not regularly
                    treated by a Physician;

               (5)  during any period of work stoppage by the class
                    of Employees to which the Employee belonged on
                    the date the disability began;

               (6)  following the date of the Employee's actual
                    retirement.

          (e)  Integration: State disability laws; social security
               after fifteen (15) months from the date the Flight
               Attendant becomes disabled.

          (f)  Financing: Paid by Company.

     (3)  Long-Term Disability

     (4)  Accidental Death and Dismemberment

          (a)  Basic monthly earnings              Amount of Coverage
               less than $600                           $ 12,500
               $ 600 but less than 800                  $ 15,000
                 800 but less than 1,200                $ 17,500
               1,200 but less than 2,400                $ 20,000
               2,400 or more                            $ 25,000

          (b)  Financing: Paid by Company.

          (c)  Restrictions: Risks Excepted - The insurance does not
               cover, and no payment will be made for, any loss which
               results

                           ARTICLE 22 / Page 16

<PAGE>
<PAGE>

               directly or indirectly from

               1)   Suicide or intentionally self-inflicted injury,
                    while sane;

               2)   Infection (except pus-forming infections
                    resulting from an accident, cut or wound),
                    disease, war or any act of war.

     (5)  Life Insurance

          (a)  Basic Monthly Earnings             Basic Insurance

               less than $ 600                         $27,500
               $ 600 but less than 800                  30,000
                 800 but less than 1,200                32,500
               1,200 but less than 2,400                35,000
               2,400 or more                            40,000

          (b)  Additional Life Program

               Effective January 1, 2000 the existing Voluntary
               Additional Life Insurance for IAM represented
               employees will be replaced by a new program described
               below.  The key provisions are:

               (1)  Guaranteed issue upon portability when
                    terminating or retiring from TWA;

               (2)  Guaranteed issue up to plan maximum or $150,000
                    whichever is lower for new enrollees;

               (3)  Guaranteed rates for three years;

               (4)  Rates shall remain fixed upon portability at
                    retirement;

               (5)  An additional Life Insurance program will be
                    made available for spouses and children of
                    active employees that will include limited
                    portability.

                           ARTICLE 22 / Page 17

<PAGE>
<PAGE>

          Provisions of Additional Life Program at Portability

          ----------------------------------------------------
                                            Employee Rates
          ----------------------------------------------------
            (Rate / $1000 of Covered       Age         Rate
            Payroll)Volume - #
                                           < 30        0.10
                                          30-34        0.15
                                          35-39        0.20
                                          40-44        0.25
                                          45-49        0.40
                                          50-54        0.70
                                          55-59        1.10
                                           60+         2.10
          ----------------------------------------------------

     (6)  Continuation of Insurance

          Should an active Flight Attendant or a Flight Attendant on
          approved medical leave die, dependent medical and dental
          coverage then in effect shall continue for twenty-four (24)
          months to eligible dependents and to the spouse until
          remarriage or twenty-four (24) months, whichever is earlier.

     (7)  Work Stoppage

          Should another group cause a work stoppage, the Flight
          Attendant benefits plans shall continue (except for existing
          Disability Claims).

     (8)  Flight Attendant Waiver of Medical Coverage

          (a)  All active Flight Attendants shall be permitted to
               waive TWA sponsored medical coverage in accordance
               with the following terms:

               (1)  The employee must certify in writing that he or
                    she is covered by another (non-TWA) medical
                    plan.

               (2)  The employee must certify in writing that the
                    waiver of his or her medical benefits is not
                    prohibited by any court order or court-approved
                    settlement.

               (3)  The waiver must also be signed by the employee's
                    spouse.

                           ARTICLE 22 / Page 18

<PAGE>
<PAGE>

               (4)  Election forms for waiving medical benefits must
                    be received by TWA between November 1 and
                    November 30 of the year preceding the calendar
                    year for which the waiver applies.

               (5)  The waiver shall remain in effect for a one-year
                    period commencing January 1. If, however, an
                    employee who waived TWA coverage subsequently
                    loses his or her other coverage prior to the
                    expiration of the one year period, TWA medical
                    coverage shall be reinstated as of the date
                    written notification is received by TWA. TWA
                    may, however, request documentation with respect
                    to the employee's loss of other coverage and may
                    refuse or delay reinstatement of that employee's
                    benefits at TWA's sole discretion.

          (b)  An employee shall receive $500.00 for each full year
               that he or she is not covered by TWA's medical plan.
               All such payments shall be paid to the employee at the
               end of the year. In the event an employee's coverage
               is reinstated as provided in paragraph (A)(5) above,
               the employee shall not receive any payment for the
               year in which coverage is reinstated.

               (1)  Medical benefits for purposes of this waiver
                    program shall include dental benefits.

               (2)  TWA reserves the right to terminate or modify
                    this waiver program if it is determined that the
                    tax-qualified status of TWA's medical plans are
                    adversely affected or if it is determined that
                    the waiver program adversely affects TWA's costs
                    or liabilities.

     (9)  New Hire Coverage

          Effective with the signing of this Agreement, a 120-day
          waiting period will be required for all new hire employees'
          dependents for Medical/Dental/Prescription Drug, and Life
          Insurance coverage begins.

     (10) Retiree Medical Coverage

          Effective October 1, 1999, a new Post-65 PPO Medical Plan,
          administered by a Company authorized Third Party
          Administrator will

                           ARTICLE 22 / Page 19

<PAGE>
<PAGE>

          be made available to TWA retirees.  The current 65 Plus
          enrollees will be given the option of converting to the
          new Post-65 PPO Medical Plan or remaining under the old 65
          Plus Plan.  All future retirees will only be eligible for
          the new Post-65 PPO Medical Plan.

          The Post-65 PPO Medical Plan premiums will be $45.05 per
          month per member for the duration of the Collective
          Bargaining Agreement.

     Provisions of this Post-65 PPO Medical Plan are:

<TABLE>
     ------------------------------------------------------------------------------
<CAPTION>
                            Post-65 PPO Medical Plan

     ------------------------------------------------------------------------------
                                       In-Network               Out-of-Network
     ------------------------------------------------------------------------------
     <S>                            <C>                      <C>
        Annual Deductible                 $750                      $1,000
                                         $1,500                     $2,000

     ------------------------------------------------------------------------------
        Hospital Coverage                 90%                80% after deductible
                                    after deductible             and $200 per
                                                                 confinement

     ------------------------------------------------------------------------------
           Coinsurance                    90%                        80%
         Scheduled/Units            after deductible           after deductible

     ------------------------------------------------------------------------------
          Out-of-Pocket                  $2,000                     $3,000
             Maximum                     $4,000                     $6,000

     ------------------------------------------------------------------------------
          Doctor Office                   90%                        80%
              Visit                 after deductible           after deductible

     ------------------------------------------------------------------------------
           Prescription                Brand 80%                  Brand 80%
                                      Generic 90%                Generic 90%

     ------------------------------------------------------------------------------
           Plan Maximum                     $1,000,000 per insured
     ------------------------------------------------------------------------------
</TABLE>

     (11) Bomb Insurance.  Bomb Insurance for all IAM employees will
          be increased to $200,000.00.

     (12) Aviation Insurance.  Aviation Insurance for all IAM
          employees will be increased to $200,000.00.

                           ARTICLE 22 / Page 20

<PAGE>
<PAGE>

                               ARTICLE 23
                         PHYSICAL EXAMINATIONS

(A)  REQUIREMENTS

     An employee shall not be required to submit to any Company
     physical examinations in excess of one (1) in any twelve-month
     period without the employee's consent unless it is apparent that
     his or her health or physical condition is seriously impaired, in
     which case the employee's personal physician shall be furnished a
     copy of the Company's medical examiner's report, when so requested
     in writing by the employee.

(B)  (1)  Flight Attendants Considered Medically Unfit for Duty.  The
          term "medically unfit" as used herein means a prognosis or
          finding by the Company that the Flight Attendant is, and
          will continue to be, disabled with limitations which will
          preclude the Flight Attendant from performing the duties of
          a Flight Attendant for a period of time which will exceed
          the five (5) year maximum period for a medical leave of
          absence.  A Flight Attendant who has been found by the
          Company to be medically unfit to perform the duties of a
          Flight Attendant shall be administratively dismissed subject
          to the provisions outlined below.  The Company shall inform
          the Flight Attendant and the IAM Full-Time Representative of
          its findings and its intent to administratively dismiss the
          Flight Attendant, by Certified Mail, Return Receipt
          Requested.

     (2)  NEUTRAL MEDICAL EXAMINATION
          ---------------------------
          In the event the Company's physician considers that an
          employee does not meet the physical requirements of the job
          as determined by the Company, or in the event the Company's
          physician considers that an employee meets the physical
          requirements of the job as determined by the Company, and in
          either event the employee's physician has made a contrary
          determination, the employee shall have fifteen (15) calendar
          days from the date he/she is notified of the contrary
          determination, to elect to have a third party impartial
          physician who specializes in the treatment of the medical
          condition at issue make a determination resolving the
          contrary determination.  If the employee elects a third
          impartial physician to make such a determination, a third
          impartial qualified physician will be selected by the
          Company from the predetermined, mutually agreed upon medical
          panels to examine the employee. Pending review by a third
          impartial physician, the employee shall remain in his or her
          current status.  The decision of the third impartial
          physician will determine the employee's ability to meet the
          physical requirements of the job (i.e. whether the employee
          should return to work or not return to work) and shall be
          final and binding upon the Company and the Employee.  For
          Flight Attendants, the decision of the third impartial
          physician will determine the employee's ability to meet the
          physical requirements of the job [i.e. whether the

                           ARTICLE 23 / Page 1

<PAGE>
<PAGE>

          employee shall return to work or not return to work or
          determine whether or not the employee is permanently unfit
          to return to work under the meaning of Article 15(b)].

          The predetermined medical panels will be mutually agreed
          upon by both the Company and the Union and will consist of
          physicians who will be board certified in their respective
          specialties.  The third impartial physician's determination
          shall be final and binding upon the Company and the employee
          on the issue submitted.  The parties further agree that they
          shall establish the procedures, forms, and guidelines to be
          used by the impartial physician in making the determination
          as to fitness to return to work.  The Union shall be
          entitled to review and approve the Regional Medical Panel
          facility for determination as to whether or not such
          facility shall be entitled or qualified to provide the
          services herein described.  The parties shall each appoint
          one (1) individual for purposes of making the selections.
          All facilities must be a teaching hospital or affiliated
          with a medical school.

          The parties agree that if the third impartial physician
          determines that the employee has continuously met the
          physical requirements of the job as determined by the
          Company, and the Company has held that employee out of
          service pending this determination, the employee will be
          reinstated and paid for sick/industrial pay or wages, as
          appropriate.  If, however, the employee has held himself/
          herself out of service pending this determination, the
          employee will receive no back pay for the time period
          that the third impartial physician determines that the
          employee should have been in service for the Company.  In
          the event the third impartial physician determines that the
          employee is unable to return to work and should remain on
          medical leave, the employee shall be returned to his or her
          medical leave status.  The expense of the employee's
          physician will be borne by the employee; the expense of the
          Company's physician will be borne by the Company; and the
          expense of the impartial physician will be borne by the
          Company.

(C)  Procedural Letter of Understanding.  The Procedural Letter of
     Understanding (No. LII) will provide the parameters to be followed
     in the selection and implementation of Article 23(B) Medical
     Facilities and the procedures to facilitate the application of
     Article 23(B).

                           ARTICLE 23 / Page 2

<PAGE>
<PAGE>

(D)  Employee/Company Rights

     Any information obtained by or as a result of a Company physical
     examination shall be confidential between and/or among the doctor,
     the employee, and those supervisory and administrative personnel
     concerned with the employee's physical condition.  The above
     notwithstanding, there is no intent to restrict the use of medical
     information necessary to arrive at a correct medical diagnosis or
     to interfere with the processes of this selection or the grievance
     sections of this Agreement, or to interfere with or prevent
     investigations required in legal processes.

                           ARTICLE 23 / Page 3

<PAGE>
<PAGE>

                               ARTICLE 24
                             UNION SECURITY

(A)  Union Dues Check-off.  The Company shall provide the District
     --------------------
     with union dues collected in connection with Union Dues Check-off
     no later than the 25th day of the month for which the dues have
     been collected.

(B)  Union Security
     --------------

     (1)  Each employee now or hereafter employed as a flight
          attendant covered by this Agreement shall, as a condition of
          continued employment within sixty (60) days following the
          beginning of such employment or the effective date of this
          Agreement, whichever is later become a member of the Union,
          and shall maintain membership in good standing (as described
          below) in the Union so long as this Section remains in
          effect; provided, that such condition shall not apply to any
          employee to whom such membership is not available upon the
          same terms and conditions as generally applicable to any
          other member of his/her occupation or with respect to any
          employee to whom membership is denied or terminated for any
          reason other than the failure of the employee to tender the
          initiation and reinstatement fees, assessments, and monthly
          dues uniformly required of other employees in her/his
          occupation as a condition of acquiring or retaining
          membership.

     (2)  The condition of payment shall be met if the amount due is
          tendered to the Local Lodge Financial Secretary of the Union
          in person or is mailed to him/her within the prescribed time
          limits or if the employee has executed a valid assignment
          and authorization for checkoff of Union initiation,
          reinstatement, assessments and dues.

     (3)  For purpose of this Agreement "membership in good standing
          in the Union" shall consist of the payment by the employee
          not later than the last day of the following calendar month
          and initiation, reinstatement, fees and assessments (not
          including fines and penalties) which are uniformly required
          of other members of his/her classification as a condition of
          acquiring ore retaining membership, provided however, that
          the time limits prescribed in the preceding portion of this
          sentence shall not apply to employees beginning employment
          in work covered by this Agreement who shall, instead be
          required to fulfill the requirements of "membership in good
          standing" within sixty (60) days following the beginning of
          such employment.

     (4)  Employees on leave of absence, including sick leave, must
          maintain membership in good standing in the Union.

     (5)  Any employee who has not held membership in good standing
          with the Union at any time on or after March 6, 1947, who
          was in the employ of the Company previous to such date shall
          not be required, as

                           ARTICLE 24 / Page 1

<PAGE>
<PAGE>

          a condition of continued employment, to become a member of
          the Union as set out above.  However, any such employee who,
          subsequent to the effective date of this Article and during
          the term of this Agreement, joins the Union, must thereafter
          maintain his/her membership in the Union as provided in (A)
          above.

(C)  Returning to Position.
     ---------------------

     (1)  When a person holding seniority under this Agreement returns
          from a position in which he was not covered by the
          Agreement, he/she will assume his/her obligation to the
          Union within seven (7) calendar days after return in the
          same manner, as if he had been continuously employed in such
          position from the effective date of this Article.

     (2)  Persons on military leave holding seniority under this
          Agreement shall not be required to maintain good standing in
          the Union.  However, when the employee returns to a position
          covered by this Agreement, he/she will assume his/her
          obligation to the Union within seven (7) calendar days after
          return in the same manner as if he/she had been actively
          employed in such position on the effective date of this
          Article.

(D)  Loss of Membership in Good Standing.  When an employee begins
     -----------------------------------
     employment or loses his good standing membership in the Union,
     because of failure to pay dues and initiation, reinstatement fees
     and assessments, the following procedures shall be observed:

     (1)  The Local Financial Secretary for the Union for the
          particular location involved shall notify the employee by
          registered or certified letter, return receipt requested,
          with copies to the President-General Chairman, District
          Lodge 142 IAM, 400 NE 32nd Street, Kansas City, MO 64116 and
          the Company's Director - Labor Relations, In-Flight, that
          the employee is delinquent in the payment of dues,
          initiation or reinstatement fees and assessment as specified
          herein and accordingly is subject to discharge as an
          employee of the Company.  Such letter shall also notify the
          employee that she or he make the required payment to the
          Financial Secretary of the Union's local lodge with
          jurisdiction at the location where he/she works within
          fifteen (15) calendar days of the date of mailing of the
          notice or be subject to discharge under the terms of the
          Agreement. If the notice above is not received by the
          employee or is delayed in reaching such employee as the
          result of the employee's failure to keep both the Company
          and the Union informed as to his or her correct current
          mailing address, no extension in the time limit specified in
          the original notice is required.

                           ARTICLE 24 / Page 2

<PAGE>
<PAGE>

     (2)  Upon the expiration of the fifteen (15) day period following
          the mailing of the notice in subsection (1) above, if the
          employee still remains delinquent, the President-General
          Chairman of the Union may certify in writing to the
          Company's Director - Labor Relations, In-Flight, that the
          employee has failed to make the required payment within the
          fifteen (15) day grace period and is, therefore, to be
          discharged.

     (3)  Within seven (7) calendar days after receipt by the Company
          of the certified letter set forth in (2) above that the
          employee is to be discharged the Company shall discharge the
          employee from its service for failure to pay or tender dues,
          reinstatement or initiation fees or assessments under this
          Article.

(E)  System Board Protest
     --------------------

     (1)  If the employee discharged or to be discharged under this
          Article contends that he or she is not properly subject to
          discharge under the terms of this Article, he or she may
          protest such action to the Trans World Airlines Flight
          Attendants' System Board of Adjustment provided that such
          protest in writing is mailed to the Board prior to the
          expiration of the seven (7) days set forth in paragraph D(3)
          of this Article.  If the employee fails to file a protest
          with the Board, his/her discharge shall be effective upon
          the expiration of the fifteen (15) day period as set forth
          in paragraph (D)(3).

     (2)  If a protest is filed as provided in (1) above, such protest
          shall be submitted in triplicate to the Chairman of the
          System Board of Adjustment, with one copy to be mailed in
          care of the Director Labor Relations, In-Flight,  TWA, One
          City Centre, 18th Floor, 515 N. Sixth St., St. Louis, MO
          63101 and the other copy to be mailed in care of the
          President-General Chairman of the Union. The letter to the
          Chairman of the Board and both copies shall be sent by
          certified mail, return receipt requested. In the event no
          protest is so filed within the above time limits, the action
          will be considered as proper and will be final and binding
          upon all parties concerned. Within ten (10) days of receipt
          of such a protest, the System Board of Adjustment will meet
          and consider the dispute. A representative of the Company, a
          representative of the Union, and the employee affected will
          be allowed to present to the Board all evidence and argument
          which is pertinent to the issue. Prior to the expiration of
          the work day following such Board meeting, the Board will
          issue either a majority decision or a notice of deadlock. If
          a majority decision is issued, it will be final and binding
          upon all parties concerned. If a deadlock is reached, and if
          at the time

                           ARTICLE 24 / Page 3

<PAGE>
<PAGE>

          of the deadlock the Board cannot agree upon a neutral to sit
          with the Board to decide the dispute, the Board will
          immediately request the National Mediation Board to appoint
          a neutral, and the Board will meet with him at the earliest
          opportunity and decide the dispute. At the meeting of the
          Board, sitting with a neutral, a representative of the
          Union, a representative of the Company and the employee
          affected will be allowed to present to the Board all
          evidence and argument which is pertinent to the issue. A
          majority decision of the Board, including the neutral, will
          be issued within five (5) days after such meeting and will
          be final and binding upon all parties concerned. The
          expenses and reasonable compensation of the neutral selected
          as provided herein shall be borne equally by the parties to
          this Agreement.

     (3)  The provisions of Article 16 shall not apply to disputes
          arising under this Article, and the provisions of the
          Agreement establishing a System Board of Adjustment shall
          apply to such disputes except as they are superseded by the
          above provisions relating to procedures for handling
          disputes.

     (4)  During the period a protest is being handled under the
          provisions of this paragraph (E) and until after final award
          by the System Board of Adjustment the employee shall not be
          discharged from the Company as a result of alleged non-
          compliance with the terms and provisions of this agreement.
          If a decision is made that the employee should be
          discharged, the discharge shall be effected the day
          following the issuance of the decision. In the event a
          reduction in force occurs during such time as an employee's
          status is being protested under the provisions of this
          Article, such employee will be considered as having
          seniority under this Agreement for purposes of effecting the
          reduction.

     (5)  Should an arbitration arise out of the application of this
          Article, the Company shall furnish to IAM no later than
          seven (7) days prior to the arbitration, its file copy and
          return receipt green card from the letter of notification to
          the affected individual.

(F)  Extension of Time Limits.  Time limits specified in this Article
     ------------------------
     may be extended in individual cases only, and then only by written
     agreement between the Company and the Union.

(G)  Discharge.  An employee discharged under the provisions of the
     ---------
     Article shall be deemed to have been "discharged for just cause"
     within the meaning of the terms of the Agreement.

                           ARTICLE 24 / Page 4

<PAGE>
<PAGE>

     (H)  Notice.  Unless otherwise specified in this Article 24, all
          ------
          letters and notices provided for by this Article shall be sent by
          certified mail, return receipt requested. Such letters and notices
          or copies sent to the Union shall be addressed to the President-
          General Chairman, District Lodge 142, 400 NE 32nd Street, Kansas
          City, MO 64116 while those sent to the Company shall be directed
          to the Director-Labor Relations, In Flight, TWA, One City Centre,
          18th Floor, 515 N. Sixth St., St. Louis, MO 63101.

     (I)  Return to Employment Following Discharge or Resignation.  When
          -------------------------------------------------------
          an employee is discharged or resigns, she or he will be considered
          as a new employee for purposes of this Article if she or he
          returns, at a later date, to pay status under this Agreement.

     (J)  Notification to Employee.  Both the Union and the Company, or
          ------------------------
          either of them, shall have the right at any time, to notify
          individual employees directly of any provisions of this Agreement.

     (K)  Company to Furnish Names.  When new employees are hired or
          ------------------------
          transferred into classifications covered by this Agreement the
          Company will furnish monthly to the Union the names,
          classification, point of employment and payroll register number of
          such new employees. The Company will furnish to the Union the
          names, present and previous classification, point of employment
          and payroll register number of all employees who may transfer out
          of classifications covered by the Agreement; in addition, the
          Company will furnish to the Union the names, location, payroll
          register number and status of employees covered by the Agreement
          who terminate their payroll status for any reason, such listings
          will be furnished monthly.

                          DUES AND INITIATION FEE CHECK-OFF

     (L)  During the life of this Agreement the Company will deduct from the
          pay of each member of the Union and remit to the Union initiation
          fees and monthly membership dues uniformly levied in accordance
          with the Railway Labor Act, as amended, and the constitution and
          by-laws of the Union, provided such member of the Union
          voluntarily executes the agreed form, which is hereinafter
          included in this Agreement to be known as "check-off form", which
          shall be prepared and furnished by the Union. The Company will not
          be required to deduct initiation fees and monthly membership dues
          from the pay of employees covered by this Agreement unless (i) the
          Company has received a check-off form and has not received a
          notice of revocation thereof, and (ii) the dues for the employee
          conform to the applicable dues for employees of his or her
          classification at his or her point on the system.

                           ARTICLE 24 / Page 5

<PAGE>
<PAGE>

                      ASSIGNMENT AND AUTHORIZATION
                    FOR CHECK-OFF OF INITIATION FEES
                             AND UNION DUES

TO:  TRANS WORLD AIRLINES, INC.

     I,                             , (print name), hereby assign to
        ----------------------------
     the International Association of Machinists and Aerospace Workers:
     A sum of money to cover (initiation)(reinstatement), or
     (assessments) from the wages earned by me as your employee which
     sum is to be certified by the District Secretary-Treasurer of the
     Union.

     I also assign a sum to be designated by the District Secretary-
     Treasurer of the Union to cover the standard monthly membership
     dues, or such monthly membership dues as may hereinafter be
     established by the Local Lodge, as dues for employees in my
     present or future classification under the Agreement earned by me
     or to be earned by me as an employee of Trans World Airlines, Inc.
     and I hereby authorize and direct you to deduct that amount from
     my first pay period following my sixtieth (60th) day of employment
     and remit the same to the District Secretary-Treasurer of the
     Union.

     This authorization and direction is made subject to the provisions
     of the Railway Labor Act, as amended, and in accordance with
     existing agreement between the Union and the Company.

     Employee Register No.
                           --------------------------------------------

     Classification:
                     --------------------------------------------------

     Date:
           ------------------------------------------------------------

     ------------------------------------------------------------------
     Signature of Employee

     ------------------------------------------------------------------
     City/State

(M)  Dues Check-Off Form to Be Furnished to Company.  When a member
     ----------------------------------------------
     of the Union properly executes such check-off form, the President-
     General Chairman of the Union shall forward the original signed
     copy to the Manager of Payroll, Kansas City Administrative Center,
     Kansas City, Missouri 64195. A check-off form must be completed in
     a legible manner or it will be returned to the President-General
     Chairman of the Union for correction. Any notice of revocation as
     provided for in this Section or the Railway Labor Act, as amended,
     must be in writing, signed by the employee and two copies
     delivered by certified mail, addressed to the President-General
     Chairman of the Union.  Dues deductions will be continued until
     one (1) copy of such notice of revocation is received by the
     Manager of Payroll, Kansas City Administrative

                           ARTICLE 24 / Page 6

<PAGE>
<PAGE>

     Center, Kansas City, Missouri 64195, from the President-General
     Chairman of the Union. Check-off forms and notices received by the
     Manager of Payroll will be stamp-dated on the date received and
     will constitute notice to the Company on the date received and not
     when mailed.

(N)  Remittance of Union Dues.  When a check-off form, as specified
     ------------------------
     herein, is received by the Manager of Payroll fifteen (15) days or
     more before the issuing date of the first bi-weekly paycheck of
     the month, deductions will commence with such paycheck and
     continue thereafter until revoked or canceled as provided in this
     Article. The Company will remit a check to the Union in payment of
     all dues collected as soon as practicable after the pay day on
     which deductions are made, but no later than the 25th day of the
     month. The remittance of Union membership dues by the Company to
     the office of the Financial Secretary of District Lodge 142 will
     be accompanied by two (2) copies of a list for each location which
     includes (1) names, (2) employee register numbers, (3) location
     numbers, and (4) individual amounts deducted.

(O)  Automatic Revocation of Union Dues Assignment.  An employee who
     ---------------------------------------------
     has executed a check-off form and who has been (1) transferred or
     promoted to a job not covered by the Agreement, (excluding
     transfers or promotions on a "Temporary" or "Acting" basis),
     (2) who quits or resigns from the Company, or is (3) otherwise
     terminated from the employ of the Company, shall be deemed to have
     automatically revoked his/her assignment as of the date of such
     action and if he/she (1) transfers back or returns to a job
     covered by the Agreement, (2) is rehired, or (3) re-employed,
     further deductions of Union dues will be made only upon execution
     and receipt of another check-off form.

     No deductions of Union dues will be made from the wages of any
     Flight Attendant who has executed a check-off form and who has
     taken a leave of absence without pay or who has been laid off.
     Upon return to work as a Flight Attendant, deductions will be
     automatically resumed, provided the Flight Attendant has not
     revoked the assignment in accordance with the other appropriate
     provisions of this Agreement and of the Railway Labor Act, as
     amended.

(P)  Collection of Back Dues.  Collection of any back dues owed at
     -----------------------
     the time of starting deductions for an employee, collection of
     dues missed because the employee's earnings were not sufficient to
     cover the payment of dues for a particular pay period, and
     collection of dues missed because of accidental errors in the
     accounting procedure, will be the responsibility of the Union and
     will not be the subject of payroll deduction. It will be the
     Union's responsibility to verify apparent errors with the
     individual Union member before the representative contacts the
     Company's Manager of Payroll.

(Q)  Deduction of Membership Dues From Paycheck.  Deductions of
     ------------------------------------------
     membership dues shall be made from one (1) paycheck each month
     provided there is a balance in the paycheck sufficient to cover
     the amount after all other deductions authorized by the employee
     or required by law have been justified. In the event of
     termination of employment, there shall be no obligation of the
     Company to

                           ARTICLE 24 / Page 7

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<PAGE>

     collect dues until all such other deductions (including money
     claims of the Company and the Credit Union) have been made, and
     such obligation to collect dues shall not extend beyond the pay
     period in which the employee's last day of work occurs.

(R)  Recognition of Union Representation.  This Article shall be in
     -----------------------------------
     force only so long as the Union continues as the recognized
     representative of the employees under this Agreement.

(S)  Indemnification of Company.  The Union shall indemnify and save
     --------------------------
     the Company harmless against all forms of liability that shall
     arise out of or by reason of action taken by the Company which
     action was requested by the Union under the provisions of this
     Article. It is agreed that the Company will promptly notify the
     Union of all claims of liability made against the Company pursuant
     to such action taken by the Company, and the Company will make
     every reasonable effort to defend itself against such liability.

(T)  Definition of Time Limits.  For purposes of calculating the time
     -------------------------
     limits prescribed in this Article, the term "days" shall be
     understood to mean calendar days unless otherwise specified.

                           ARTICLE 24 / Page 8

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<PAGE>

                               ARTICLE 25
                            SAFETY COMMITTEE

(A)  Establishment of Safety Committee.  There is established a
     ---------------------------------
     Flight Attendant Safety Committee which shall consist of three (3)
     members designated by the Union and three (3) members designated
     by the Company.

     (1)  The Safety Committee shall meet quarterly or on a more
          frequent basis should a need arise.  To ensure prompt
          resolution of issues and the provide necessary focus and
          attention to safety concerns, resources of all support
          groups under the control or jurisdiction of the Vice-
          President Flight Operations shall be made available to the
          Committee, to the IAM and to In-Flight Services.  Such
          support group shall include Industrial Safety, Maintenance
          Engineering, Ground and In-Flight Support Services and
          Flight Safety.

     (2)  Any recommendations of the Union members of the Safety
          Committee will be considered in relation to all matters
          affecting the safety of Flight Attendants.

     (3)  The Company shall assume all costs for three (3) IAM
          designees  who are members of the Accident Investigation
          Team and Critical Incident Response Program (CIRP),
          including Critical Incident Response Team. The Company  will
          also assume all costs related to initial and recurrent
          training and equipment purchases for three (3) members who
          are so designated by the IAM.  The three (3) Team members
          will be compensated on a trips missed or daily rate basis,
          whichever is greater. All out of pocket expenses incurred by
          the three (3) team members  shall be paid by the Company.

(B)  Notification of Accident or Incident.  In the event of an
     ------------------------------------
     accident or incident involving a TWA aircraft, a hostage or
     assault situation, or a mid-trip injury or illness requiring the
     hospitalization of a Flight Attendant, TWA Systems Operational
     Control shall notify the IAM Director of Safety and Health or
     other IAM designee via electronic pager.  The Union shall be
     included in the current notification process that has been
     established in conjunction with the Company.  A Company designee,
     or the Company members of the Safety Committee, shall, upon
     request, confer with the Union Director of Safety and Health or
     IAM designee, or the Union members of the Safety Committee, to
     provide other relevant information and discuss matters pertaining
     to the affected Flight Attendants.

(C)  Travel to Investigation Site.  In addition, the Company shall
     ----------------------------
     arrange positive space on-line transportation (or the same
     transportation used by TWA in the positioning of its personnel) to
     the Union Director of Safety or IAM designee, Accident
     Investigation Team Members and CIRP Team members for travel from
     any location to the site of any accident, incident,
     injury/casualty situation,

                           ARTICLE 25 / Page 1

<PAGE>
<PAGE>

     assault or hostage-taking incident, so that, IAM can participate
     in any investigation regarding Flight Attendant procedures or
     duties or the role of the Flight Attendants in the specific
     situation and provide aid to affected Flight Attendants covered by
     this Agreement.

(D)  OSHA 2000 Logs.  On a quarterly basis, the Company shall provide
     --------------
     to the IAM Director of Safety copies of the current OSHA 2000 log
     maintained at each domicile.

(E)  Acquisition of New Aircraft or Reconfiguration of Existing
     ----------------------------------------------------------
     Aircraft. In the process of acquisition of new aircraft or
     --------
     redesign/reconfiguration of existing aircraft, the Company shall
     notify the Union of the major changes in aircraft configuration or
     interior design expected in the implementation of the new or
     redesigned/reconfigured aircraft. To the extent possible and/or
     practical, prior to the introduction of the new/reconfigured
     aircraft, the Company will arrange to meet with the Union for
     purposes of the Union offering comments and suggestions in the
     interests of cabin safety and efficiency. The Company will provide
     on-line positive space transportation for two (2) designees of the
     Union to attend the meeting.

(F)  Advisory Capacity; Non-Liability of Union.  It is agreed that
     -----------------------------------------
     the Safety and Health Committee acts exclusively in an advisory
     capacity regarding Health and Safety related issues and that the
     Union, and its officers, agents and employees shall not be liable
     for any unsafe working condition or work-connected injuries,
     disabilities or diseases which may result from the implementation
     of Union suggestions and/or recommendations.

                           ARTICLE 25 / Page 2

<PAGE>
<PAGE>

                               ARTICLE 26
                        AIRCRAFT CREW COMPLEMENT

(A)  BASIC CREW COMPLEMENT

     The Company has agreed to basic crew complements by equipment
     type, both Domestic and International for commercial and charter
     flights.

     (1)  International

          Type of Aircraft                    Basic Crew Complement
          ----------------                    ---------------------

          747                                 1 FSM          9 C/As
          747 SP                              1 FSM          7 C/As
          1011                                1 FSM          7 C/As
          767                                 1 FSM          4 C/As
          767-300                             1 FSM          4 C/As
          727-231/737/MD-80/DC-9-50           1 FSM          3 C/As
          DC-9-10/30/40                       1 FSM          2 C/As

     (2)  Domestic

          Type of Aircraft                    Basic Crew Complement
          ----------------                    ---------------------

          747                                 1 FSM          8 C/As
          747SP                               1 FSM          6 C/As
          1011                                1 FSM          6 C/As
          767                                 1 FSM          4 C/As
          767-30                              1 FSM          4 C/As
          727-231/737/MD-80/DC-9-50                          3 C/As
          DC-9-10/30/40                                      2 C/As

     Note:  The Company shall assign a Flight Service Manager on all
     aircraft which operate outside the contiguous 48 United States,
     Alaska and Puerto Rico.

(B)  FEDERAL AVIATION ADMINISTRATION MINIMUM STAFFING REQUIREMENT

     Type of Aircraft              FAA Minimum
     ----------------              -----------

     747                                  9
     747SP                                6
     1011                                 6
     767                                  4
     767-300                              5
     727-231/MD-80/DC-9-50                3
     DC9-10/30/40                         2

                           ARTICLE 26 / Page 1

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<PAGE>

     On commercial and charter flights where there is no service the
     Company reserves the right to operate such flights pursuant to FAA
     staffing requirements.

     Note:  FAA minimum requirement is one (1) Flight Attendant per
     every fifty (50) passenger seats.

(C)  ADDITIONAL CABIN STAFFING

     Cabin Attendant staffing in addition to the above for all
     International and Domestic flights shall be determined by the
     Company in accordance with requirements of service and projected
     loads.

(D)  DEMAND STAFFING - VARIABLE STAFFING (VSU)

     TWA and the IAM mutually acknowledge that the segment-by-segment
     Cabin Attendant staffing, i.e. variances from Basic Crew
     Complement as determined by aircraft type, operation, service
     requirements, etc., in individual flight segments will:  (a)
     materially affect the work load of Flight Attendants comprising
     the Cabin Crew; (b) enhance the Company's ability to respond
     quickly to market and service demands in an ever-changing airline
     transportation environment and; (c) provide TWA the opportunity
     for greater Cabin Attendant utilization and efficiency.  It is
     therefore agreed that, subject to the following conditions and
     notwithstanding the provisions above, TWA may establish a variable
     cabin staffing unit or program (VSU) whereby, on a segment-by-
     segment basis, Cabin Attendant crew staffing levels may be
     increased above, or reduced below, those contained in the Basic
     Crew Complement in effect in actual operation at the time of the
     Agreement.

     (1)  TWA, in consultation with the IAM Scheduling Committee, and
          based on projections then made as to passenger load and
          service requirements, may construct for bid pairings and/or
          segments with a Cabin Attendant Crew Complement at, above,
          or lower than that prescribed in the Basic Crew Complement;

     (2)  At any time following construction of monthly pairings,
          and throughout the month, the Company's [VSU/Operational
          Planning Unit/Scheduling Unit - as appropriate] may decide
          to staff additional Cabin Attendants on any segment(s)
          based on passenger load, service requirements, marketing/
          competitive consideration, or any other reason;

     (3)  Subject to the provisions of Article 18(D)(7), VSU
          additional postings/pairings shall be posted in open time
          and made available to bidholders for self-balance;

     (4)  VSU positions not filled by bidholders shall be placed in a
          pool from which reserve assignments will be made during the
          appropriate call-in periods;

                           ARTICLE 26 / Page 2

<PAGE>
<PAGE>

     (5)  Staffing of Flight Service Managers as required by this
          Agreement shall not be reduced by virtue of provisions of
          this Section (D);

     (6)  Consistent with the principles of participative management
          embodied in this Agreement, and in recognition of employee
          ownership of this Airline, TWA's VSU Director or other
          appropriate designer shall meet regularly with, and as
          requested by, the IAM Director of Scheduling to jointly
          review VSU variable staffing determinations; trends in Crew
          Planning; market and competitive considerations affecting
          cabin staffing; and any other matters that may be relevant
          to determination of cabin staffing levels and requirements
          as well as Cabin Attendant in-flight work load.  The
          function will be incorporated into an existing operational
          department.

                           ARTICLE 26 / Page 3

<PAGE>
<PAGE>

                               ARTICLE 27
                               REOPENERS

(A)  Foreign Bases
     -------------

     Should the Company decide to establish foreign bases outside the
     contiguous forty-eight (48) United States and Washington, D.C., it
     shall promptly notify the IAM. Thereafter conferences may,
     irrespective of any provisions of Article 28 (Duration) of the
     Agreement be initiated by either the Company or the Union under
     the provisions of the Railway Labor Act, as amended, for the
     purpose of negotiating rates of compensation, rules and working
     conditions with respect thereto.

(B)  Merger, Purchase, Acquisition, Absorption
     ------------------------------------------

     In the event the Company purchases, acquires or absorbs another
     airline or portions thereof, or in the event the Company or a
     portion thereof is purchased, acquired or absorbed by another
     airline, or in the event the Company merges with another airline,
     the Company will promptly notify the Union and conferences may
     irrespective of any provisions of Article 28 (Duration) of the
     Agreement, be initiated by either the Company or the Union under
     the provisions of the Railway Labor Act, as amended for the
     purpose of negotiating rates of compensation, rules and working
     conditions with respect thereto.

(C)  Deregulation
     -------------

     In the event that the Company, because of the enactment of Federal
     legislation on the deregulation of the Air Transport industry,
     undertakes a major restructuring of its existing routes which
     seriously and adversely affects the Company and/or the employees
     covered by this Agreement, conferences may, irrespective of any
     provisions of Article 28 (Duration) of the Agreement, be initiated
     by either the Company or the Union under the provisions of the
     Railway Labor Act, as amended for the purpose of negotiating rates
     of compensation, rules and working conditions for such operation.

(D)  Wage Controls, Deferrals, Cut-Backs
     -----------------------------------

     Should the Federal Government institute any form of wage controls,
     review or reporting requirements, the parties to this Agreement
     shall meet and jointly prepare any and all reports to be filed
     with the Government. Further, should any portion of this
     Collective Bargaining Agreement be deferred or cut back by action
     of the Federal Government, the Union irrespective of any
     provisions of Article 28 (Duration) of such Agreement, shall have
     the right to initiate conferences under the provisions of the
     Railway Labor Act, as amended, for the purpose of negotiating
     rates of compensation in compliance with Government requirements.

                           ARTICLE 27 / Page 1

<PAGE>
<PAGE>

                               ARTICLE 28
                         DURATION OF AGREEMENT

This Agreement signed this 1st day of August, 1999 shall supersede and
take precedence over all agreements, supplemental agreements,
amendments, letters of understanding, except those contained herein, and
similar documents executed between the Company and the Union prior to
signing of this Agreement, except as modified herein.

Except as specified in this Agreement, this Agreement shall be effective
August 1, 1999, shall remain in effect until January 31, 2001, and
thereafter shall renew itself without change for yearly periods after
the amendable date unless written notice of intended change is served in
accordance with Section 6, Title 1 of the Railway Labor Act, as amended,
by either party hereto, at least 90 days prior to the amendable date in
each year.

IN WITNESS WHEREOF, the parties have signed this Agreement on August 1,
1999

For the Company:
Trans World Airlines, Inc.
/s/ William F. Compton
President and Chief Executive Officer

Witness:
Bette E. Dubinsky
Director, Labor Relations

Terry L. Hayes
Managing-Director, Labor Relations

For the Flight Attendants in the Service of Trans World Airlines, Inc.
as Represented by the International Association of Machinists and
Aerospace Workers

/s/ William O'Driscoll
President and Directing General Chairman

/s/ Sherry L. Cooper                /s/ Michael Woicekowski
General Chairperson                 IAM Negotiating Committee Member

/s/ Art Teolis                      /s/ Cynthia Jones
General Chairperson                 IAM Negotiating Committee Member

/s/ C.W. Numrich
General Chairperson

                           ARTICLE 28 / Page 1

<PAGE>
<PAGE>

                                  ARTICLE 29
                           LETTERS AND AGREEMENTS

<TABLE>
<CAPTION>
SUBJECT                                                         LTR. NO.           PAGE

<S>                                                              <C>                 <C>
In-Flight Service Performance Policy                                   I              3
Labor Advisory Board                                                  II              6
Revised Attendance Control Program                                   III              8
Language of Destination [8/1/78]                                      IV             13
Language of Destination [9/1/92]                                       V             16
Language of Destination - German Corridor                             VI             18
Language of Destination [5/31/94]                                    VII             20
In-Flight Sales Incentive Program [6/8/89]                          VIII             21
In-Flight Sales Incentive Program [3/15/91]                           IX             22
In-Flight Sales Incentive Program [1/27/93]                            X             23
In-Flight Sales Incentive Program [3/6/94]                            XI             24
In-Flight Sales Incentive Program [9/22/94]                          XII             25
Joint Statement of Marketing Objective [9/22/94]                    XIII             26
Paycheck Distribution                                                XIV             27
Retirement Savings Plan Investment Committee                          XV             28
Retirement 'A' Plan Rollover                                         XVI             30
Ozark Flight Attendants Entry into TWA Retirement Plan
    [6/15/90 and 7/1/90]                                            XVII             31
Recall/Bypass                                                      XVIII             35
Advocate on Furlough [4/5/95]                                        XIX             42
Flight Service Manager - Narrowbody                                   XX             43
Flight Service Manager Rotating Reserve                              XXI             44
Redeployment of In-Flight Service Supervisors [6/6/76]              XXII             45
Redeployment of In-Flight Service Supervisors [7/21/76]            XXIII             46
CAMS Home Access/Reserves Over Cap                                  XXIV             47
Random Substance Testing [9/22/94]                                   XXV             50
Joint Drug Policy (Appendix Letter of Agreement)                    XXVI             55
Drug Test Technician [5/18/95]                                     XXVII             58
Maternity Leaves of Absence - Unemployment                        XXVIII             59
747 SP Agreement                                                    XXIX             60
Re-Engineering of TWA [9/22/94]                                      XXX             64
Order of Removal -- Ground Service Manual [9/22/94]                 XXXI             70
Preferential Bidding [9/22/94]                                     XXXII             71
IFFA-TWA pay Study Committee                                      XXXIII             72
Voluntary Release of Layover Hotel Rooms [9/22/94]                 XXXIV             73
Direct Report [5/31/94]                                             XXXV             74
PTO Computer Mask [6/1/94]                                         XXXVI             75
Code 4/UBS Override [7/28/94]                                     XXXVII             76
Professional Standards [8/1/94]                                  XXXVIII             77
Ok'ing Reserve Assignment
     and Changes to Bid Awards [2/9/95]                            XXXIX             80
Reserve Spreads [4/19/95]                                             XL             81
Workers' Compensation Task Force                                     XLI             82

                         ARTICLE 29 / Page 1

<PAGE>
<PAGE>

Amendment to Article 24 (R) -- Deduction of
     Membership Union Dues [10/10/95]                               XLII             83
Reserve Spreads                                                    XLIII             84
Downtown Layover Hotels                                             XLIV             85
Reserve Trading                                                      XLV             86
Reserve Assignment Set-up/Call-in Periods                           XLVI             88
Union Dues                                                         XLVII             90
Uniforms                                                          XLVIII             91
Mental Health/Substance Abuse Program                               XLIX             93
757 Staffing Agreement                                                 L             94
Pension Plan Contributions                                            LI             96
Procedural Letter of Understanding (Article 23(B))                   LII             97
</TABLE>

                         ARTICLE 29 / Page 2

<PAGE>
<PAGE>

LETTER I - IN-FLIGHT SERVICE PERFORMANCE POLICY

                        LETTER OF AGREEMENT
               IN-FLIGHT SERVICE PERFORMANCE POLICY

                          I. PHILOSOPHY

A. TWA is committed to providing a superior service to its customers.
   Every employee of TWA is expected to be dedicated and sensitive to this
   commitment.

B. Well developed competitive standards of service, when consistently
   applied, will ensure that our customers perceive excellence in TWA. All
   members of TWA In-Flight Services and IFFA are expected to be committed
   to:

   1.   Professional presentation of TWA's on-board product;

   2.   Personal attention, to each TWA customer consistent with the
        delivery of overall service, passenger load, staffing and
        duration of flight;

   3.   A helpful, courteous, and responsive attitude;

   4.   A gracious and friendly cabin atmosphere;

   5.   A cooperative team spirit.

C. To these ends, TWA In-Flight Services is committed to fully
   supporting its Flight Attendants by providing guidance, counseling and
   positive reinforcement necessary for the achievement of customer service
   excellence.

            II. ANALYSIS OF PERFORMANCE FEEDBACK

A. Delivery of In-Flight Service in accordance with TWA's Customer
   Service philosophy and standards will be measured through feedback
   received from, but not limited to the following:

   1.   Customers;
   2.   TWA Flight Attendants;
   3.   Supervisors;
   4.   IFFA;
   5.   Quality assurance observers;
   6.   Company employees;
   7.   Outside contractors, e.g., catering and security personnel.

B. Reflecting the high level of service normally provided by TWA
   Flight Attendants, the majority of In-Flight Service feedback is
   positive. In accordance with existing practice positive feedback
   will be relayed to Flight Attendants with letters/notes of
   appreciation and will also be included in their personnel files.

C. Negative feedback will be carefully and fairly analyzed. Such
   analysis shall be conducted so as to pursue the truth, to qualify,
   validate or invalidate a negative report/perception. The factors
   to be considered in the analysis may include, but are not limited
   to:

   1.   Relevant flight reports/flight attendant feedback;
   2.   Pilot debrief reports;

                         ARTICLE 29 / Page 3

<PAGE>
<PAGE>

    3.  Station reports;
    4.  Quality assurance reports;
    5.  Customer correspondence and feedback;
    6.  Passenger load and aircraft staffing;
    7.  Delays;
    8.  Provisioning discrepancies;
    9.  Mechanical problems; and
   10.  Emergency situations.

D. Where such information exists and provides adequate explanation
   for any perceived service deficiency, no further action will be
   taken.

E. Where follow-up action with the involved Flight Attendant(s) is
   determined to be necessary, the In-Flight Service Supervisor must
   view each individual as a separate and distinct case. Along with
   the provisions of the contract and the perceived discrepancy, the
   supervisor must consider:

   1.   The entire two-year time frame of each Flight Attendant's
        performance record;
   2.   The nature of each prior discrepancy;
   3.   The frequency of prior discrepancies;
   4.   Treatment of similar Flight Attendants in similar
        circumstances;
   5.   The overall work record and seniority of the Flight
        Attendant;
   6.   The gravity of the instant discrepancy; and
   7.   The Supervisor's own feelings as to the necessity for and
        probable success of the discipline -- a "common sense" rule
        that asks the question, "Will a correction occur without the
        imposition of discipline?"

F. When valid constructive performance feedback is received that
   warrants dissemination to the Flight Attendant, but -- in the
   Supervisor's judgement -- does not warrant an informal or formal
   disciplinary meeting, such feedback shall be routed to the Flight
   Attendant, for her/his information.

G. When it is determined, based on the steps covered above, that the
   Flight Attendant's service performance has been below TWA's
   published standards, and further action is deemed appropriate, the
   following shall apply:

   1.   The primary objective of the In-Flight Service Performance
        Policy being positive reinforcement, perceived performance
        deficiencies shall be addressed primarily through
        instruction and counseling between the Supervisor and the
        Flight Attendant. Discipline, including letters of
        reprimand, may be utilized:

        (a)  where there is a basis for believing that improvement
             will not result from positive reinforcement through
             instruction and/or counseling; or

        (b)  where prior instruction or counseling for similar
             performance deficiency(ies) have failed to yield
             required improvement; or

        (c)  where the Flight Attendant's action/inaction,
             considered alone, constitutes more than a performance
             deficiency, but

                         ARTICLE 29 / Page 4

<PAGE>
<PAGE>

             rather a violation of General Rules of Conduct or
             Personal Rules of Conduct or any action deemed gross
             misconduct.

   2.   When the Supervisor schedules a meeting with the Flight
        Attendant, notice of such meeting shall be provided to the
        Flight Attendant and to the IFFA Full-time domicile
        representative in accordance with Article 16.

   3.   When disciplinary action resulting from negative performance
        feedback is warranted, such discipline shall be handled in
        accordance with the steps of Progressive discipline and
        Article 16 Progressive discipline and Article 16 Progressive
        discipline and Article 16 Progressive discipline and Article
        16 Progressive discipline and Article 16 Progressive
        discipline and Article 16 Progressive discipline and Article
        16 Progressive discipline and Article 16 Progressive
        discipline and Article 16 progressive discipline and Article
        16.

        a.   When a Flight Attendant receives performance feedback
             which warrants a conference, a discussion will be
             scheduled. The Supervisor will outline the Customer
             Service Philosophy/Standards and establish a clear
             understanding of why the employee's action/discrepancy
             warrants attention. When validated by the
             investigatory hearing and when appropriate, in
             accordance with the steps of progressive discipline, a
             formal warning letter may be sent to the employee,
             notifying the employee of the Supervisor's intent to
             take disciplinary action.

        b.   If the specific performance and/or behavior
             deficiency(ies) identified are considered egregious in
             nature and validated by the investigatory hearing, it
             may result in a disciplinary letter of warning with
             disciplinary suspension or a letter of intent to
             terminate employment.

                         ARTICLE 29 / Page 5

<PAGE>
<PAGE>

LETTER II              LETTER OF AGREEMENT
                       LABOR ADVISORY BOARD

                                             September 1, 1992

Ms. Victoria L. Frankovich
President
Independent Federation of Flight Attendants
630 Third Avenue
New York New York 10017

Dear Ms. Frankovich:

This will confirm our agreement reached during negotiations that Trans
World Airlines, Inc. ("TWA") will establish and maintain a Flight
Attendants' Labor Advisory Board of which the initial members shall be a
Vice Chairman of TWA and two representatives of the Independent
Federation of Flight Attendants ("IFFA"). The Labor Advisory Board will
meet at least quarterly and at least five (5) business days prior to
each quarterly scheduled TWA Board of Directors (the "Board") meeting
and, to the extent practicable, each special Board meeting. At the
option of any of its members, such meeting may be had by telephone.
Otherwise, such meetings shall be held at the TWA offices in Mt. Kisco,
New York or at such other location in the New York metropolitan area as
the members shall select.

The IFFA representatives who are members of the Flight Attendants' Labor
Advisory Board shall have the right to submit twenty (20) typewritten
pages in length to the Board in connection with any regularly scheduled
meeting or, to the extent practicable, any special meeting. If not
satisfied with the report concerning the Board's consideration of any
such written presentation or suggestion, with the unanimous agreement of
all of its members, the Labor Advisory Board shall have the right to
appear at the next regular Board meeting or the next special Board
meeting, to the extent practicable, for the purpose of making such
presentation or suggestion in person.

If any other craft or class of employees of TWA represented by a labor
organization shall obtain more favorable corporate governance
participation rights than those provided for in this letter, TWA shall
extend such more favorable corporate governance participation rights to
IFFA. TWA's representative of the Flight Attendants' Labor Advisory
Board shall serve as the Flight Attendants' Labor Advisory Board's
official liaison with Senior management of TWA and the Board. The
responsibilities of TWA's representative on the Labor Advisory Board
shall be to advise the Senior management of TWA and the Board. As
appropriate, TWA agrees to make members of Senior management available
to the Labor Advisory Board on reasonable notice.

If the Vice Chairman initially designated by TWA to serve on the Labor
Advisory Board shall be unavailable for any reason to serve in the
capacity specified in this letter, the

                         ARTICLE 29 / Page 6

<PAGE>
<PAGE>
TWA Board shall, after consultation with the other members of the Flight
Attendants' Labor Advisory Board, designate a successor who shall be
reasonably acceptable to the remaining members of the Flight Attendants'
Advisory Board.

Very truly yours,

William L. Schecter
ACCEPTED AND AGREED

-------------------------------
Victoria L. Frankovich

                         ARTICLE 29 / Page 7

<PAGE>
<PAGE>

LETTER III        REVISED ATTENDANCE CONTROL PROGRAM

The following program calls for the elimination of any requirement for
Flight Attendants to attend discussions regarding legitimate illnesses
or dependability discrepancies with a Management person through the
"Second Warning" letter in the Company Attendance Control Program.
Individual attendance control letters will not be subject to the
grievance procedure but the grievances of any Flight Attendants
progressing to the "Final Warning" and "Intent to Terminate" stages, if
timely appealed, will be scheduled on a monthly basis to have their case
heard before a Neutral Arbitrator at an expedited arbitration.

1. After each dependability discrepancy or recorded absence from
   duty, a Flight Attendant's attendance record for the past 24
   months (in the form of a copy of a printed JXHAF record) will be
   deposited in the Flight Attendant's mailbox after the Flight
   Attendant's return to duty. A copy of the attendance record will
   also be delivered to the domicile Union Representative after the
   Flight Attendant's return to duty. A pre-printed note will be
   attached to each record indicating that an absence or
   dependability discrepancy was recently recorded and that the
   Flight Attendant should insure that the record is correct. If it
   appears that an error has been made, the Flight Attendant should
   contact his/her supervisor to resolve the discrepancy within 30
   days of the date of distribution of the JXHAF record.

2. After each dependability discrepancy or recorded absence from
   duty, a Flight Attendant's attendance record will be reviewed. If
   the record is sufficient to warrant concern by management, a non-
   disciplinary note will be attached to the JXHAF record containing
   the same information as the note in item 1 above but will also
   indicate that the attendance record indicates a pattern of absence
   or dependability that requires the Flight Attendant's attention.
   The note ("Informal Warning Notice") will inform the Flight
   Attendant that if a correction in attendance is not noted the
   Flight Attendant may be placed on the Company Attendance Control
   Program. A copy of the note and the JXHAF record will be placed in
   the Flight Attendant's personnel file under Article 19 and the
   Union will receive a copy.

3. Flight Attendants who have received an "Informal Warning Notice"
   will progress to a "First Warning" if they continue to incur
   absences and/or dependability discrepancies that are considered to
   be excessive by the Company. If the record indicates a frequency,
   length or pattern of absence or undependability that is considered
   excessive by the Company, the Company will notify the Flight
   Attendant that the Flight Attendant is being placed on an
   Attendance Control Program. Notification will take the form of a
   certified letter written to the Flight Attendant's address of
   record, delivered after the Flight Attendant's return to duty,
   indicating why the dependability is considered unsatisfactory and
   including a copy of the JXHAF for the past twenty-four (24) months
   containing the most recent absence or dependability discrepancy.
   This letter is considered to be the "First Warning" (Letter A) and
   will inform the Flight Attendant that a correction in attendance
   and/or dependability is expected or the Flight Attendant will
   progress to the next stage in the Attendance Control Program. A
   copy of the "First Warning" letter will be placed in the Flight
   Attendant's personnel file and the Union will receive a copy.

                         ARTICLE 29 / Page 8

<PAGE>
<PAGE>

4. Flight Attendants who have received a "First Warning" will
   progress to a "Second Warning" if they continue to incur absences
   and/or dependability discrepancies that are considered to be
   excessive by the Company. Notification of the "Second Warning"
   (Letter B) will be by certified mail to the Flight Attendant's
   address of record after the Flight Attendant's return to duty and
   will include a copy of the JXHAF for the past twenty-four (24)
   months containing the most recent absence or dependability
   discrepancy. "Letter B" will indicate why the dependability is
   considered unsatisfactory and inform the Flight Attendant that a
   correction is expected or the Flight Attendant will progress to
   the next stage in the Attendance Control Program. A copy of the
   "Second Warning" letter will be placed in the Flight Attendant's
   personnel file and the Union will receive a copy.

5. Flight Attendants who have received "Formal Warning" letters (A,
   B, or C) and who incur additional absences or dependability
   discrepancies that warrant concern on the part of the Company but
   do not necessarily indicate a need to progress to the next level
   in the Attendance Control Program may receive an "Exception
   Letter" (Letter E). "Letter E" will indicate why the latest
   absence or dependability discrepancy is of concern and that a
   correction in attendance dependability continues to be expected or
   the Flight Attendant will progress to the next stage in the
   Attendance Control Program. A copy of "Letter E" will be placed in
   the Flight Attendant's personnel file and the Union will receive a
   copy.

6. Access to the grievance procedure for the receipt of JXHAF
   Attendance Records, the attached "Informal warning notice", "First
   Warning" or "Second Warning" letters is limited to the question of
   whether or not the absence and/or discrepancy have been accurately
   recorded on the attendance record. Attendance records or
   dependability discrepancies to which no objection has been
   indicated in writing by the Flight Attendant within 30 days of
   distribution of the JXHAF record will be considered to be accurate
   and not subject to grievance as to the occurrence of the absence
   or discrepancy.

7. Flight Attendants who have received a "Second Warning" and
   continue to incur absences and/or dependability discrepancies that
   are considered to be excessive by the Company will be scheduled
   for a discussion and investigation under Article 16. Based on the
   outcome of the investigation, a letter of "Final Warning" (Letter
   C) may be sent. "Letter C", sent via certified mail, to both the
   Flight Attendant's address of record and the IFFA Full-time
   domicile representative, will indicate why the Flight Attendant's
   dependability is considered unsatisfactory and inform the Flight
   Attendant that a correction is expected or the Flight Attendant
   will be subject to termination of employment. Flight Attendants
   receiving a "Final Warning" letter will be scheduled to have their
   cases reviewed by a Neutral Arbitrator at the next expedited
   attendance arbitration, scheduled in accordance with Paragraph 9.
   At issue in this expedited arbitration is the just cause for the
   Company's actions, pursuant to Article 16(C)(8) of the Agreement,
   taking into account each of the "Formal Warning" letters measured
   against the Flight Attendant's overall attendance record,
   consistent with Article 19(B) of the Agreement.

                         ARTICLE 29 / Page 9

<PAGE>
<PAGE>

8.  Flight Attendants who have received a "Final Warning" and continue
    to incur absences and/or dependability discrepancies that are
    considered to be excessive by the Company will be scheduled for a
    discussion and investigation under Article 16. Based on the
    outcome of the investigation, a letter of "Intent to Terminate"
    (Letter D) may be sent. "Letter D", sent via certified mail, to
    both the Flight Attendant's address of record and the IFFA Full-
    time domicile representative, will indicate why the Flight
    Attendant's dependability is considered unsatisfactory and inform
    the Flight Attendant that the Company intends to terminate the
    Flight Attendant's employment. Flight Attendants receiving an
    "Intent to Terminate" letter will be scheduled to have their cases
    reviewed by a Neutral Arbitrator at the next expedited attendance
    arbitration, scheduled in accordance with Paragraph 9. At issue in
    this expedited arbitration is the just cause for the Company's
    Intent to Terminate, pursuant to Article 16(C)(8) of the
    Agreement, taking into account the Flight Attendant's attendance
    record subsequent to the issuance of a Final Warning Letter as
    upheld by the Neutral Arbitrator pursuant to Paragraph 7 above.

9.  Expedited attendance arbitrations before a Neutral Arbitrator will
    be scheduled, to the extent practical, in the third calendar week
    at each domicile. If four or fewer total "Final Warning" and/or
    "Intent to Terminate" letters have been issued by the last day of
    the preceding month at the domicile, the scheduled arbitration may
    be postponed by the Company until no later than the following
    month, or, upon mutual concurrence between the Company and the
    Union, be combined with a scheduled expedited arbitration at
    another domicile. Not later than the day prior to such hearing the
    Company will provide the Union with copies of all grievance
    related materials that the Company plans to introduce at the
    hearing. The Company will not be required to provide documents
    already furnished to the Union under paragraphs 1 through 8,
    above. Any Flight Attendant whose grievance was the subject of an
    expedited arbitration shall have the right to attend, or decline
    to attend, the expedited arbitration hearing. If the Flight
    Attendant is precluded from attending the scheduled expedited
    arbitration by an assigned Company duty, the Company will agree to
    remove the Flight Attendant from the assigned duty and credit the
    Flight Attendant with the daily rate for the day(s) of the
    expedited arbitration. Based on the length of the assigned duty
    the Flight Attendant was removed from, the Flight Attendant may be
    subject to balance under the terms of Article 18.

10. Flight Attendants achieving twelve (12) consecutive months of
    perfect attendance, or 24 consecutive months of dependability that
    is considered by the Company to be acceptable, will be removed
    from the Attendance Control Program.

11. Nothing in any of the preceding paragraphs is intended to prohibit
    the Flight Attendant from initiating discussions, meetings or
    phone conversations with management regarding the Flight
    Attendant's attendance record or the Company Attendance Control
    Program.

/s/ William L. Schecter

/s/ Victoria L. Frankovich

                         ARTICLE 29 / Page 10

<PAGE>
<PAGE>

1. The base measurement for determining the success of the Revised
   Attendance Control Program will be an average of the Flight
   Attendant total monthly pay hours charged to Personal Illness (Pay
   code 1) and Industrial Injury (Pay codes 21 and 22) per active
   Flight Attendant (MA 210) in the years 1989, 1990 and 1991 (i.e.,
   5.21 average monthly pay hours lost per Flight Attendant).

2. Should the Company's average annual pay hours charged to Personal
   Illness and Industrial Injury decrease, when compared with the
   base measurement, in any of the years covered by the term of this
   Agreement, the Company shall return the savings to the Flight
   Attendants achieving perfect attendance in the comparison year.

   a.   The amount of savings shall be determined in the following
        way:

        (1)  Determine the average annual pay hours per average
             active Flight Attendant charged to Personal Illness
             and Industrial Injury in the comparison year by
             totaling the pay hours charged to codes 1, 21 and 22
             and dividing that total by the average active Flight
             Attendant headcount listed in Management Account (MA
             210).

        (2)  Subtract the comparison year average active pay hours
             charged to personal illness and industrial injury
             [determined in Paragraph 2(a)(1)] from the base
             measurement average pay hours [determined in Paragraph
             1] to obtain the average pay hours saved. If the
             number is positive, a saving has occurred.

        (3)  Multiply the average pay hour savings [determined in
             Paragraph 2(a)(2)] by the average active Flight
             Attendant headcount (MA 210) in the comparison year to
             obtain total pay hours saved.

        (4)  Multiply total pay hours saved [determined in
             Paragraph 2(a)(3)] by the average annual pay hour rate
             in the comparison year employed by the Payroll
             Department in determining the charges assigned to lost
             time in MA 218 (total Flight Attendant pay per month
             divided by total Flight Attendant pay hours for the
             month). This yields the dollar savings associated with
             the reduced lost time in the comparison year.

   b.   The bonuses will be distributed to individual Flight
        Attendants by no later than May 1 of each year.

   c.   The gross amount of the individual Flight Attendant bonus
        shall be determined by dividing equally the savings
        [determined in Paragraph 2(a)(4)] by the number of Flight
        Attendants on the seniority list on December 31 of the
        comparison year who were active for the entire year and who
        achieved perfect attendance in the comparison year.

   d.   Such comparison of and distribution of savings, if
        applicable, shall continue so long as the Revised Attendance
        Control Program stays in place. In the event the Revised
        Attendance Control Program is

                         ARTICLE 29 / Page 11

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<PAGE>

        modified or terminated, the comparison of and distribution
        of savings, if applicable, shall continue for the term of
        this Agreement, regardless of what attendance control
        program may be in effect, and shall then terminate one week
        prior to the amendable date of the Agreement, absent
        agreement to the contrary. Further, it is the intent of the
        parties that, absent such agreement to the contrary, this
        provision is not subject to the status quo provisions of the
        Railway Labor Act.

3. The Revised Attendance Control Program is being implemented by the
   Company as a test program. The duration of the test shall be
   twenty-four (24) months following its implementation, after which
   the Company shall have the right to continue or to terminate this
   test program and revert to the current attendance control program
   or such other program it may devise which is not in conflict with
   the collective bargaining agreement. Should the Company elect to
   terminate this test program, it shall provide IFFA sixty (60) days
   advance notice in writing. Further, the Company shall, upon
   request, consult with IFFA regarding the Company's plans to revise
   its attendance control program, but the Company shall be under no
   obligation to secure the agreement of IFFA prior to implementing
   any such revision to its attendance control program.

4. In the event the Company elects to terminate the Revised
   Attendance Control Program, each Flight Attendant's attendance
   record for the twenty-four (24) months preceding such termination
   will be reviewed and the appropriate discussion pursuant to the
   Attendance Control Program which was in effect prior to this
   Agreement will be initiated at such time when a Flight Attendant's
   subsequent attendance record so warrants.

5. The parties recognize that it is in their mutual interests to
   attempt to find means to reduce lost time, avoid undue criticism
   of Flight Attendants, limit the amount of time spent in filing and
   processing grievances and to return to Flight Attendants in the
   form of bonuses the benefit of improved attendance. The parties
   further recognize that it is in their mutual interests to
   accomplish these objectives through fair, consistent and equitable
   application of the Revised Attendance Control Program. To these
   ends, the Customer Service Panel to be established pursuant to
   this Agreement will, at its quarterly meetings, review the
   application of the Revised Attendance Control Program and confer
   regarding any suggested improvements to the program and/or
   problems brought before the Panel.

                         ARTICLE 29 / Page 12

<PAGE>
<PAGE>

LETTER IV - LANGUAGE OF DESTINATION (8/1/78)

                        LETTER OF AGREEMENT

                              BETWEEN

                     TRANS WORLD AIRLINES, INC.

                                AND

                        THE FLIGHT ATTENDANTS

                          IN THE SERVICE OF

                     TRANS WORLD AIRLINES, INC.

                       AS REPRESENTED BY THE

           INDEPENDENT FEDERATION OF FLIGHT ATTENDANTS

THIS LETTER OF AGREEMENT is made and entered into in accordance with the
provisions of Title II of the Railway Labor Act, as amended by and
between TRANS WORLD AIRLINES, INC. (hereinafter known as "Company") and
the Flight Attendants as represented by the INDEPENDENT FEDERATION OF
FLIGHT ATTENDANTS.

                             WITNESSETH:

                       LANGUAGE OF DESTINATION

It is agreed that procedures will be established whereby the Company may
assure that one Flight Attendant on each narrow bodied aircraft (two on
each wide bodied aircraft) speak the foreign language of destination,
(LOD) as determined by the Company.

Entry into the LOD program shall be voluntary in nature and
participation in the LOD program shall be limited to those Flight
Attendants who have successfully completed qualifying language
examinations (maximum one test per language). Such examinations shall be
administered at Company expense by an outside language expert(s). An
employee who successfully passes the LOD exam to qualify for the Purser
position will also be considered to have volunteered for the program and
to be LOD qualified under the provisions of this Letter. Flight
Attendants who have successfully completed the examination will not be
subject to retesting in fluency more frequently than one each five (5)
years.

Incumbent Flight Attendants will not be disqualified from their current
classifications nor lose any rights to status previously held by reason
of failure to pass a language examination or by reason of failure to
submit to a language examination as described above. However, such
Flight Attendants will not be designated as qualified for the LOD
position.

Without regard to the language of destination requirement, recognition
of all work positions by seniority bid will prevail on a flight by
flight basis.

LOD Flight Attendants will not be cross-utilized between the Domestic
and International operations as a result of their LOD qualifications.
When the language capability on International is reduced to such level
that the Company will shortly lose its ability to provide language of
destination on each flight, priority bidding rights to International
shall be accorded those Domestic Flight Attendants who successfully
complete a language

                         ARTICLE 29 / Page 13

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<PAGE>

examination or the Company may assign language qualified Flight
Attendants out of training. In such event, the Company will be prepared
to establish that the number of vacancies requiring a specific language
exceed the number of Flight Attendants on International who speak the
required language.

In case of reduction in the level of International operations at a given
location, resulting in a reduction in Flight Attendants, such Flight
Attendant reductions shall be in inverse order of seniority among the
Flight Attendants at the location and without regard to the language of
destination requirement.

Language of destination Flight Attendants shall be required to use their
language capability while on board the aircraft only.

In processing trades, the language of destination requirement will be
considered.

Bidding procedures will be established incorporating the following
principles:

   a.   Award Service Manager and Purser bids in seniority order.

   b.   If Service Manager and/or Purser does not meet language of
        destination requirement, block last slot(s) on sequence.

   c.   Award Cabin Attendant bids in seniority order. However, the
        Company will not be required to award the last slot(s) to a
        Cabin Attendant if such Cabin Attendant does not meet the
        LOD requirement not previously filled on that sequence. If
        through the bidding process the LOD requirement is not met,
        the company may assign the most junior LOD qualified Cabin
        Attendants who have not bid those LOD flights. Such
        assignment will be in seniority order to the open sequences
        in sequential order.

Effective December 1, 1978, LOD Flight Attendants may bid or be assigned
a bid sequence requiring any one of their LOD qualifications each month.

When more than one classification of Flight Attendants on a sequence
speaks the language of destination, the designated LOD Flight
Attendant(s) will be in the following order of assignment to that
sequence, i.e., Service Manager, Purser, senior LOD qualified Cabin
Attendant. The LOD designated Flight Attendant(s) will be identified
during the monthly bid awards and such Flight Attendant(s) will be paid
$1.25 for each block hour flown during that month.

It is understood that the provisions in the third paragraph of Articles
18-A(E)(1)and 18-B(E)(1) do not apply to language qualifications.
However, if LOD is required on Domestic or International charters, LOD
Flight Attendants will be assigned to charters and paid $1.25 for each
block hour actually flown on those charters. Further, they will also be
paid, if applicable, the greater of the charter flight or the bid flight
from which they were removed. In addition, if on a scheduled basis, the
charter so assigned necessitates removal

                         ARTICLE 29 / Page 14

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<PAGE>

from a subsequent bid trip(s) due to illegality, he/she shall be
credited and paid for such trip(s) as though he/she had flown such
subsequent trip(s). In no event will an LOD Flight Attendant be balanced
under the provisions of this paragraph.

This entire Letter of Agreement shall become effective August 1, 1978.

For TRANS WORLD AIRLINES, INC.

/s/ J. C. Hilly

WITNESS:

Mary Kay Bain
M. J. Conroy
D. J. Crombie
G. M. Moran
Hank Ward

For THE INDEPENDENT FEDERATION
OF FLIGHT ATTENDANTS

/s/ Arthur Teolis

WITNESS:

V. L. Frankovich
Mary Ellen Miller
C. W. Numrich
Roberto E. Veitia

                         ARTICLE 29 / Page 15

<PAGE>
<PAGE>

LETTER V - LANGUAGE OF DESTINATION - [9/1/92]

September 1, 1992

Ms. Victoria L. Frankovich
President
Independent Federation of Flight Attendants
630 Third Avenue
New York, New York 10017

Dear Ms. Frankovich:

This will confirm our agreement reached during negotiations that Letter
of Agreement No. VI (Language of Destination) shall be amended as
follows:

   1.   The Company may, without restriction, designate the language
        of each LOD position on international flights. The number of
        LOD positions on each flight shall not exceed the current
        limitation of two (2) positions on wide-body aircraft and
        one (1) position on narrow-body aircraft, except as provided
        by the TWA-IFFA Letter of Agreement dated July 20, 1988
        ("German Corridor").

   2.   Flight Attendants freely and without restriction will be
        allowed to permanently remove themselves from the LOD
        program with regard to any language or languages. TWA shall
        have the right to retest Flight Attendants who seek to re-
        enter the program.

   3.   If the Company renews drafting of Language of Destination
        qualified Flight Attendants on International, TWA agrees,
        prior to the effective date of such drafting, to meet with
        IFFA representatives to discuss and attempt to work out
        alternative resolutions prior to the implementation of any
        involuntary LOD assignments.

   4.   Introduction of LOD on Domestic Flights.

        a.   The LOD program is amended to include flights to San
             Juan. Any Cabin Attendant involuntarily assigned to an
             LOD position on a domestic San Juan flight who could
             otherwise hold an international line will be handled
             in accordance with the agreement signed July 20, 1988,
             regarding this subject.

        b.   In order to provide language capability from time to
             time on certain domestic flights, excluding flights to
             San Juan, where, owing to marketing or code sharing
             arrangements, the Company will carry groups of
             passengers whose primary language is not English, the
             Company may designate one (1) LOD position for the
             required language on such domestic flights. In such
             cases the Company will inform the IFFA Scheduling
             Committee of the affected flights, the language to be
             utilized, the expected duration of the requirement and
             the nature of the group generating the need for LOD.
             Except

                         ARTICLE 29 / Page 16

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<PAGE>

             for flights to San Juan, there will be no
             drafting/involuntary LOD assignment on domestic
             flights.

   5.   TWA-IFFA LOD Joint Cooperation. The Company and the Union
        will, upon request by either party, confer regarding the LOD
        program and its administration and discuss means of
        enhancing the program and resolving problems. It is further
        agreed:

        a.   The Company will provide IFFA with the names of Flight
             Attendants who are in the LOD program on not less than
             a quarterly basis;

        b.   The Company will confer monthly with the IFFA
             Scheduling Committee chairperson prior to the posting
             of bids concerning the specific designation and
             assignment of LOD sequences and pairings.

        Further, it is understood by the parties that all references
        to the Purser category shall be deleted in the application
        of Letter No. VI.

                                       Very truly yours,

                                       William L. Schecter,
                                       Staff Vice President
                                       Labor Relations -- TWA

Agreed and Accepted

Victoria L. Frankovich

President -- IFFA

                         ARTICLE 29 / Page 17

<PAGE>
<PAGE>

LETTER VI - LANGUAGE OF DESTINATION - GERMAN CORRIDOR

                         LETTER OF AGREEMENT

                               BETWEEN

                      TRANS WORLD AIRLINES, INC.

                                AND

            INDEPENDENT FEDERATION OF FLIGHT ATTENDANTS

                             REGARDING

                          GERMAN CORRIDOR

                      LANGUAGE OF DESTINATION

   Notwithstanding the conditions governing the Language of
Destination Program outlined in Letter of Agreement VI of the 1981-1984
Agreement and the Flight Attendant Pay and Work Rules document dated
July 28, 1986, it is agreed that:

   1)   All German qualified LOD Flight Attendants based at the
        domicile(s) where pairings originate which include Intra-
        Germany flying may bid (or be assigned if a Cabin Attendant)
        to those German LOD pairings.

   2)   The Company will have the ability to staff one hundred
        percent (100%) German LOD capability on each bid sequence to
        a maximum of one Flight Service Manager and three Cabin
        Attendants.

   3)   One hundred percent (100%) German language coverage for
        German corridor flights will take precedence over all
        requests for trades and self-balances. In the event of
        insufficient bids, involuntary Cabin Attendant LOD
        assignments will be made in inverse order of seniority.

   4)   All German LOD Cabin Attendants participating in this
        marketing program by being awarded or assigned a monthly
        sequence will receive Two Dollars ($2.00) for each block
        hour flown during the month. All German LOD flight Service
        Managers participating in this marketing program by being
        awarded a monthly sequence will receive Two Dollars and
        Fifty Cents ($2.50) for each block hour flown during the
        month. Additionally, LOD qualified Flight Attendants who
        mutually trade into, are balanced on or otherwise assigned
        to a German corridor pairing will be paid Two Dollars
        ($2.00)/Two Dollars and Fifty Cents ($2.50), whichever is
        applicable, per each block hour flown on such pairing.

   5)   Additionally, the Company will pay those Cabin Attendants
        who are initially awarded an international sequence and are
        subsequently assigned to the LOD position on designated
        domestic flights at the international rates, if applicable.

                         ARTICLE 29 / Page 18

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<PAGE>

   6)   All assignments to any Language of Destination pairing or
        sequence will take precedence over rotating reserve
        obligations.

   7)   Effective September 1, 1988, Flight Attendants participating
        in the LOD program may exercise their option to be
        temporarily removed from such program up to six (6) times a
        year on a bi-monthly basis. A LOD Flight Attendant cannot be
        inversed into an LOD during a month in which he/she has
        opted out of the program.

   8)   German corridor pairings will be sequenced together to the
        extent possible. However, if necessary to achieve maximum
        utilization, German corridor pairings can be sequenced with
        pairings with German gateway destinations.

   This agreement does not in any way affect or prejudice either
party's position in connection with outstanding grievances and/or
existing litigation.

Dated: July 20, 1988

On Behalf of Trans World Airlines, Inc.:

/s/ Sharon K. Faris
    Director - Labor Relations

Witness:

/s/ Jill Swaya
    Director - Flight Attendant
    Contract Administration

On Behalf of Independent Federation of Flight Attendants:

/s/ Vicki Frankovich
    President

Witness:

/s/ Karen Lantz
    Vice-President

/s/ Cynthia de Figueiredo
    Representative

                         ARTICLE 29 / Page 19

<PAGE>
<PAGE>

LETTER VII - LANGUAGE OF DESTINATION [MAY 31, 1994]

                                                May 31, 1994

Ms. Victoria Frankovich
President
IFFA
630 Third Avenue
New York, New York 11017

Dear Ms. Frankovich:

It is hereby agreed that Flight Service Managers and Cabin Attendants
shall be paid for use of the Language of Destination (LOD) when they
work a flight segment(s) utilizing a language for which they are LOD
qualified.

A mask will be available through the computer, which shall be completed
by the FSM on the completion of such trip for which pay is required for
services performed. This mask will be routed to the FSM's domicile. Upon
receipt of the mask by the domicile, the designated supervisor will
verify the LOD qualifications of the Flight Attendants and send such
information to CAMS Control for payment. Payment for LOD of less than
$100.00 shall be reflected in the by-weekly pay check.

If this letter accurately reflects your understanding, please sign
below.

                                       Very truly yours,

                                       /s/ Bette E. Dubinsky
                                       Manager - Labor Relations

                                       Accepted and Agreed:

                                       /s/ Victoria Frankovich

                         ARTICLE 29 / Page 20

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<PAGE>

LETTER VIII - INFLIGHT SALES INCENTIVE PROGRAM [6/8/89]

June 8, 1989

Ms. Victoria Frankovich
President
Independent Federation of Flight Attendants
630 Third Avenue
New York, NY 10017

Dear Ms. Frankovich:

This will confirm the agreement reached in negotiation between Trans
World Airlines and the Independent Federation of Flight Attendants
regarding the Ambassador Boutique.

Effective immediately, the Ambassador Boutique incentive program shall
be amended to award cash bonuses totalling 5% of on-board sales
transactions to Flight Attendants.  Each Flight Attendant will receive a
bonus of 4% for items he or she sells on the aircraft which would
include such items as Ambassador Boutique products, headsets and liquor,
and such additional items or services as may be determined by the In-
Flight Services department, on a commission basis to be determined by
said department at the time, not to exceed a total of 5%.  The Flight
Service Manager will receive a bonus of 1% of each item sold by members
of his/her crew.

                                         Very Truly Yours,

                                         J.W. Hoar

Agreed and Accepted:

/s/ Victoria L. Frankovich

                         ARTICLE 29 / Page 21

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Letter IX - IN-FLIGHT SALES INCENTIVE PROGRAM [3/15/91]

March 15, 1991

Ms. Karen Lantz
Vice President
Independent Federation of Flight Attendants
630 Third Avenue
New York, NY 10017

Dear Ms. Lantz:

This will confirm the agreement reached between Trans World Airlines and
the Independent Federation of Flight Attendants regarding the
distribution of the Sales Incentive override on domestic narrow-body
equipment.

Each April 1, 1991, with the removal of the Flight Service Manager
position for domestic narrow-body equipment, the 1% override from all
onboard sales previously distributed to the Flight Service Manager will
not be issued to the Cabin Attendant designated per Company procedures
to perform all pre and post inventories of the sale liquor product and
completion of the liquor papers and sales incentive report.  All other
provisions of the June 8, 1989 agreement between Trans World Airlines
and the Independent Federation of Flight Attendants remain in effect.

                                 Sincerely,

                                 Judith Zimmer
                                 Manager
                                 Flight Attendant Contract
                                 Administration

Agreed and Accepted by:
/s/ Karen Lantz

                         ARTICLE 29 / Page 22

<PAGE>
<PAGE>

LETTER X - INFLIGHT SALES INCENTIVE PROGRAM [1/27/93]

Ms. Victoria Frankovich
President
Independent Federation of
Flight Attendants
630 Third Avenue
New York, NY 10017

Dear Ms. Frankovich:

As we have discussed, TWA will shortly discontinue the sale of liquor
and headsets on certain international flights. This letter will confirm
our agreement concerning the payment of an additional override to flight
service managers on such flights.

It is agreed that, effective January 31, 1993, on such flights the $1.00
wide-body override paid to flight service managers shall be increased to
$1.25 per hour.

This agreement is intended to govern the payment of the additional
override only so long as TWA is not charging passengers for liquor or
headsets on such flights. If, at a later date, TWA reinstitutes such
charges, then the additional $0.25/hour override shall be discontinued.

If the foregoing accurately reflects the terms of our agreement, please
sign this letter where indicated below.

Very truly yours,

William L. Schecter

AGREED AND ACCEPTED:

/s/ Victoria Frankovich/WMH

Date: February 1, 1993

                         ARTICLE 29 / Page 23

<PAGE>
<PAGE>

LETTER XI - IN-FLIGHT SALES INCENTIVE PROGRAM [3/6/94]

                          Letter of Agreement
                                Between
                       Trans World Airlines, Inc.
                                  and

Flight Attendants employed by Trans World Airlines, Inc. as represented by
            the Independent Federation of Flight Attendants

RE: Sales Incentive Program

   This will confirm our understanding that monies due and owing to
Flight Attendants in payment of the Sales Incentive Program will be held
and issued only when the amount owed exceeds $10.00.

   Any monies earned will automatically accumulate in the Flight
Attendant's account, and the Flight Attendant will be paid in the
quarter his/her respective bank reflects a $10.00 or higher balance.

   Any Flight Attendant to terminate employment will, of course, be
paid in full regardless of the balance.

---------------------------------------   --------------------------------
Consent and Concur                        Consent and Concur
William Schecter                          Victoria Lee Frankovich
Staff Vice President - Labor Relations    President
Trans World Airlines, Inc.                Independent Federation of
                                          Flight Attendants

                         ARTICLE 29 / Page 24

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LETTER XII - IN-FLIGHT SALES INCENTIVE PROGRAM [9/22/94]

          1994 IN-FLIGHT SALES LETTER OF AGREEMENT

Recognizing the mutual benefits to TWA and Flight Attendants from
increases in in-flight sales, a joint TWA-IFFA In-Flight Sales Committee
is established.  The Committee will consist of IFFA Representatives,
employees selected by TWA from its In-Flight Services department and
Flight Attendants jointly selected by TWA and IFFA who have demonstrated
ability to generate in-flight sales.

The Committee will review strategies and procedures to increase the
level of in-flight sales.  Such review will include an analysis of the
relative benefits to TWA and the Flight Attendant workforce of
increasing the sales commission paid.

The Committee will convene and commence its efforts by November 1, 1994.
Flight Attendants jointly selected by TWA and IFFA will be paid by the
Company.

TRANS WORLD AIRLINES, INC.

By:  /s/ Thomas Gorski
           Vice-President, In-Flight Services
           Dated: September 22, 1994

INDEPENDENT FEDERATION OF FLIGHT ATTENDANTS

By:  /s/ Victoria L. Frankovich
           President
           Dated: September 22, 1994

                         ARTICLE 29 / Page 25

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<PAGE>

LETTER XIII [9/22/94]

              JOINT STATEMENT OF MARKETING OBJECTIVE

TWA's marketing department and the IFFA have a common interest in
promoting increased revenues for TWA and increased earning potential for
IFFA members.

To that end, TWA and IFFA shall enter into negotiations 1) to create a
marketing organization whose initial purpose is to promote TWA to travel
agencies and corporate travel services and 2) increase earnings
potential for members of IFFA.  All personnel must 1) meet TWA's and
IFFA's approval and 2) pass a TWA approved training course.

Signed by:

Trans World Airlines, Inc.
/s/ Thomas Gorski
Vice-President, Inflight Services
Date: September 22, 1994

IFFA
/s/Victoria L. Frankovich
President
Date: September 22, 1994

                         ARTICLE 29 / Page 26

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<PAGE>

LETTER XIV - PAYCHECK DISTRIBUTION

                                             June 4, 1993

Ms. Vicki Frankovich
President
Independent Federation of
  Flight Attendants
630 Third Avenue
New York, NY 10017

Dear Vicki:

This letter will confirm our agreement concerning the change of payday
and paycheck distribution for the Flight Attendant work force.

The transition process for this change will begin with the pay period
ending July 11, 1993. All checks will be mailed to the domiciles and to
salary directives on Monday, July 12, 1993. These checks will be dated
July 13, 1993 and will be available for domicile distribution on
Tuesday, July 13, 1993. Checks for the following pay period ending July
25, 1993 will reflect a date of July 29, 1993 and will be available for
domicile distribution on Thursday, July 29, 1993. Checks will be mailed
to salary directives on Monday, July 26, 1993, arriving at most
destinations by Thursday, July 29, depending upon location and zip code.

Thereafter, the Flight Attendant paychecks will be available for
domicile distribution on Thursday following the close of the pay period.
The Flight Attendant checks will bear a Thursday date. They will
continue to be mailed on Mondays, unless preempted by a holiday which
may require a Tuesday mailing. Thursday domicile distribution will
remain constant. If a holiday occurs on Thursday, the domicile checks
will be made available on Wednesday.

This process has been scheduled to coincide with the distribution of
overtime and expense checks on July 25th.

If the foregoing accurately reflects your agreement and understanding,
please sign below.

Very truly yours,
Alan R. English
Director, Labor Relations

AGREED AND ACCEPTED BY:
Victoria Frankovich

                         ARTICLE 29 / Page 27

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LETTER XV - RETIREMENT SAVINGS PLAN INVESTMENT COMMITTEE

                         LETTER OF AGREEMENT

                            BY AND BETWEEN

                     TRANS WORLD AIRLINES, INC.

             AND THE FLIGHT ATTENDANTS IN THE SERVICE OF
                      TRANS WORLD AIRLINES, INC.

                          AS REPRESENTED BY

            THE INTERNATIONAL FEDERAL OF FLIGHT ATTENDANTS

   This Letter of Agreement is made by and between Trans World
Airlines, Inc. (the "Company") and the Flight Attendants in the service
of the Company as represented by the IFFA (the "Union").

   The Company and the Union hereby agree to adopt an amendment to
the Retirement Savings Plan for Flight Attendants of Trans World
Airlines, Inc., as amended and restated effective December 1, 1988, (the
"Plan"), in accordance with the following:

   1.   The Investment Committee under the Plan shall select,
        monitor and replace the Plan's Trustee(s), custodian(s),
        Recordkeeper(s), Plan Administrator (which shall not be the
        Company, to the extent possible), investment manager,
        annuity providers, accountants, auditors, other service
        providers and employees of the Plan. All of the fees,
        expenses and compensation of the service providers and
        employees so selected (except the costs incurred by the
        Company to perform administrative functions which cannot be
        transferred to a third party) shall be borne by the Plan,
        allocated to individual participants Accounts on a basis
        weighted by the dollar balances of their accounts.

   2.   The Investment Committee shall determine all investment
        options and strategies, which must be deemed "prudent by
        ERISA standards", and the overall investment structure must
        be in compliance with the safe harbor guidelines issued by
        the Department of Labor for participant directed plans.

   3.   Investment options and strategies must be comparable or
        superior in quality and expected return when compared to
        current Plan investments, giving consideration to manager
        performance, portfolio risk, returns, and other
        characteristics generally used to evaluate quality for
        investment portfolios.

   4.   The Investment Committee may agree to daily valuation of the
        Plan at

                         ARTICLE 29 / Page 28

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<PAGE>

        such time as it deems appropriate.

   5.   The Plan shall permit rollover contributions to the maximum
        extent permissive under the law.

   6.   The Investment Committee shall determine all the procedural
        rules applicable to participants' investment directions.

   7.   At such time as distribution of a Participant's Account(s)
        is permitted, the Participant will be given the additional
        option to leave his/her Account(s) is the Plan, continue
        self-direction of the Accounts, and direct that
        distributions be made to him/her at such times and in such
        amounts as he/she specifies, in accordance with reasonable
        rules promulgated by the Plan Administrator and subject to
        applicable law.

   8.   In the event of a shutdown or liquidation of the Company the
        Investment Committee shall continue in its capacity under
        the provisions of the Plan until all Plan assets have been
        distributed. In this regard, rollover contributions of
        member-participant account(s) to other qualified plan(s)
        shall be allowed to the maximum extent permissible under the
        law.

   9.   The selection, monitoring and replacement (to the extent
        determined necessary by the Investment Committee) of the
        Plan's Trustee(s), custodian(s), Recordkeeper(s), Plan
        Administrator, investment managers, annuity providers,
        accountants, auditors, other service providers and employees
        of the Plan shall be executed expeditiously upon order of
        the Investment Committee. In the event that the Investment
        Committee is unable to secure a third-party Plan
        Administrator, whether prohibited by cost or the third-party
        Administrator's inability to perform required Plan services,
        TWA will remain Plan Administrator.

   10.  All Plan amendments necessary to implement this agreement
        will be made by the Company and the Union as soon as
        practical following execution of the Agreement, and such
        amendments shall comply with all aspects of ERISA and other
        pension regulations.

IN WITNESS HEREOF the parties have executed this Letter of Agreement
this 5th day of January, 1993.

             TRANS WORLD AIRLINES, INC.
             By: William S. Schecter
WITNESS:
             INDEPENDENT FEDERATION OF FLIGHT ATTENDANTS
             By: William M. Hoffman
WITNESS:
Norma J. Adams

                         ARTICLE 29 / Page 29

<PAGE>
<PAGE>

LETTER XVI - RETIREMENT "A" PLAN ROLLOVER

                                                    September 8, 1993

William M. Hoffman
Vice President
IFFA
630 Third Avenue
New York NY 10017

Dear Bill:

This will confirm our agreement to amend the Retirement Savings Plan for
Flight Attendants of Trans World Airlines. Inc. (401(k) Plan) to
provide that, effective January 1, 1993, Flight Attendants who terminate
and elect to take their A-Plan benefit in the form of a lump sum may
roll over such lump sum directly into the 401(k) Plan. If the foregoing
correctly reflects your understanding or our agreement, please sign in
the place indicated below and return this letter to my office.

                                              Very truly yours,

                                              Alan R. English
                                              Director, Labor Relations

AGREED AND ACCEPTED:

William M. Hoffman

Dated: 9/9/93

                         ARTICLE 29 / Page 30

<PAGE>
<PAGE>

LETTER XVII - OZARK FLIGHT ATTENDANTS ENTRY INTO TWA RETIREMENT PLAN
[6/15/90 AND 7/1/90]

                        SETTLEMENT AGREEMENT
                        ---------- ---------

In settlement of President's Grievance Case 89-5001, former Ozark Flight
Attendants will be covered under the TWA Retirement Plan for Flight
Attendants under the following provisions:

*  Former Ozark Flight Attendants will become eligible for the TWA
   Retirement Plan for Flight attendants on the later of October 1,
   1987, or the first day of the calendar month on or after
   completion of one year of combined service with TWA and Ozark.

*  Benefits accrued to a former Ozark Flight Attendant under the TWA
   Retirement Plan for Flight Attendants will be equal to the larger
   of:

   -    benefits as normally determined under the TWA Retirement
        Plan for Flight Attendants for the period of service
        beginning on and after October 1, 1987; or

   -    benefits as normally determined under the provisions of the
        former Ozark Retirement Plan accrued for the period from
        October 1, 1987, through June 30, 1990 except as modified
        below,

        -    In calculating the benefits for special early
             retirement under the former Ozark Plan, service with
             TWA will be included.

        -    In calculating the benefits under the former Ozark
             Plan for a former Ozark Flight Attendant who retires
             early before age 55, the benefit reduction for early
             retirement will be 5% per year below the age 55 and 4%
             per year between the ages of 65 and 55.

        -    The value of the five year certain normal form under
             the Ozark Plan will be recognized by increasing the
             accrued benefit under the Ozark Plan for the period
             from October 1, 1987 through June 30, 1990 by 2%.

        -    Disability Benefits will be determined solely on the
             basis of the TWA Plan.

        -    Optional forms of benefits will be determined using
             the applicable factors under the TWA Plan unless doing
             so would result in some cutback in benefits in which
             case the Ozark optional retirement factors will be
             applied.

                         ARTICLE 29 / Page 31

<PAGE>
<PAGE>

*  For purposes of determining eligibility to participate in the TWA
   Plan and of determining eligibility for benefits under the Ozark
   and TWA Plans, service with Ozark and TWA will be combined.
   However, except for early retirement eligibility as described
   above and pre-retirement survivor benefits as described below, the
   provisions of the Ozark Plan pertaining to eligibility for
   benefits will be applicable to benefits determined under the Ozark
   Plan and the provisions for eligibility for benefits under the TWA
   Plan will be applicable to benefits determined under that Plan.

*  The TWA Plan provides for commencement of pre-retirement spouse's
   benefits at age 50 if the participant's death occurs before age 50
   and charges for the death benefit protection, whereas, the Ozark
   Plan provides for commencement of benefits at age 55 if death
   occurs before age 55 and does not charge for the death benefit
   protection. The rules under the TWA Plan will be applied to
   whichever death benefit is larger as determined above for early
   retirement. The former Ozark employees will be charged for the
   death benefit protection beginning on July 1, 1990.

*  The supplemental benefit payable to age 62 upon retirement at age
   60, shall be limited to the benefit accrued from October 1, 1987.

Attached is the suggested amendment to the TWA Retirement plan for
Flight Attendants to include former Ozark Flight Attendants in the Plan
beginning October 1, 1987.  Such amendments may be modified by the
Company if required to obtain an Internal Revenue Service approval of
such amendment provided that such modifications do not alter the intent
of this agreement.

--------------------------          ----------------------------
William M. Hoffman                  Sharon K. Faris
Independent Federation              Trans World Airlines
of Flight Attendants

--------------------------          ----------------------------
Karen Lantz                         Tom McNally
Union Board Member                  Company Board Member

--------------------------          ----------------------------
Marylou Thurau                      Diane Scott
Union Board Member                  Company Board Member

Dated: June 15, 1990

                         ARTICLE 29 / Page 32

<PAGE>
<PAGE>

          SUGGESTED AMENDMENT TO RETIREMENT PLANS FOR THE
          -----------------------------------------------
            TWA RETIREMENT PLAN FOR FLIGHT ATTENDANTS
            -----------------------------------------

*  Add the following to Article 1.17 (Plan): Effective July 1, 1990,
   the provisions of the pension plan that covered employees who were
   Flight Attendants of Ozark Air Lines, Inc. (referred to herein as
   Ozark Plan") are incorporated into this plan and such Ozark Plan
   shall have no further accrual of benefits with respect to any
   employee under such plan subsequent to June 30, 1990. Any former
   Ozark Flight Attendant who became an employee of the Company as a
   result of the merger of the Company and Ozark Air Lines, Inc.
   (referred to herein as Ozark Flight Attendant') will accrue
   benefits under this Plan subsequent to October 1, 1987. Benefits
   payable to such Ozark Flight Attendants under this Plan shall be
   the greater of (a) benefits accrued under the Ozark Plan for the
   period from October 1, 1987, through June 30, 1990, or (b)
   benefits accrued under this Plan subsequent to October 1, 1987.
   All benefits accrued with respect to such employees subsequent to
   October 1, 1987, will be paid from this Plan. It is not intended
   to include all of the applicable provisions pertaining to
   eligibility and determination of benefits with respect to such
   former Ozark Flight Attendants under the provisions of this Plan
   and should there be any ambiguity as a result of protecting the
   benefits accrued through June 30, 1990, under such Ozark Plan,
   that ambiguity will be resolved by applying the provisions of such
   Ozark Plan.

*  Add a new section (d) to Article 2.3 (Entry into Plan) as follows:
   Any other provisions of this Plan notwithstanding, an Ozark Flight
   Attendant shall become a Member of this Plan on the later of (i)
   October 1, 1987, or (ii) completion of one Year of Service.

*  Add the following to Article 1.27 (Year of Service) as follows:
   For purposes of determining eligibility for vesting benefits and
   other benefits under this Plan, any other provisions of this Plan
   notwithstanding, an Ozark Flight Attendant shall be credited with
   a year of service under this Plan for each Year of Continuous
   service under the Ozark Plan. In determining years of Continuous
   Service under the Ozark Plan, the Ozark plan as amended through
   the date of merger of the Company and Ozark Air Lines, Inc. shall
   be applicable. Such Years of Continuous Service shall be combined
   with the Years of Service credited under this plan provided,
   however, there shall be no duplication of Years of Service for any
   Ozark Flight Attendant.

*  Add the following sentence to Article 5.1 (B): Such recalculations
   and reductions with respect to benefits accrued under the former
   Ozark Plan for the period from October 1, 1987, through June 30,
   1990, shall be determined in accordance with such former Ozark
   Plan.

*  Add the following sentence to Article 5.2: This benefit
   calculation with respect to any Ozark Flight Attendant shall be
   limited to the benefit accrued under this

                         ARTICLE 29 / Page 33

<PAGE>
<PAGE>

   Plan from October 1, 1987.

*  Add a new sentence at the end of Article 7.2 (b) (iii) as follows:
   An Ozark Flight attendant shell be charged for this protection
   during the period that it is in effect from July 1, 1990.

                         ARTICLE 29 / Page 34

<PAGE>
<PAGE>

LETTER XVIII - RECALL/BYPASS

                                                   April 23, 1991

Ms. Victoria Frankovich
President, Independent Federation of
  Flight Attendants
630 Third Avenue
New York, NY 10017

Dear Ms. Frankovich:

This letter of Agreement shall: 1) reiterate, clarify and supplement the
existing recall precedence and procedures as specified in Article 12(E)
and 12(G) of the TWA/IAM Working Agreement signed April 12, 1983, as
modified by the lawfully implemented work rules and 2) confirm our
agreement regarding the implementation of new recall bypass provisions.

I. RECALLS:

   A.   Subject to and consistent with the recall bypass provisions
        contained in section II below, Flight Service Manager
        vacancies are filled by recalling as follows:

        All Flight Attendants, whether active, on furlough or on a
        12(B) leave of absence who have a recall right to the Flight
        Service Manager position, shall be merged into a single list
        and recalled in seniority order to Flight Service Manager.

        In the event an active Cabin Attendant refuses recall to the
        Flight Service Manager position, the Cabin Attendant shall
        forfeit all priority recall rights.

        In the event an inactive Flight Attendant [on furlough or
        12(B) leave] refuses recall to active status, he/she shall
        forfeit entitlement to preference in reemployment and be
        removed from the TWA Flight Attendant System Seniority List.

   B.   Subject to and consistent with the recall bypass provisions
        contained in section II below, Cabin Attendant vacancies are
        filled in the following order:

        1.   Active Flight Attendants (FSM and C/A, in seniority
             order, with a priority recall right to the domicile(s)
             where the vacancies exist.

        2.   Active Flight Attendants (FSM and C/A), in seniority
             order, with a priority recall right to a domicile(s)
             where vacancies were created due to the operation of
             "1" above,

                         ARTICLE 29 / Page 35

<PAGE>
<PAGE>

        3.   A continuation of the process in "2" above if further
             vacancies were created.

        4.   Furlough of any excess Cabin Attendants at a domicile.
             Such Cabin Attendants may elect to displace to
             vacancies remaining unfilled by the operation of "1"
             through "3" above, elect furlough or elect 12(B)
             leave.

        5.   Any vacancies remaining after the operation of "4"
             above are system vacancies and are filled in seniority
             order from those Flight Attendants (FSM and C/A) on
             furlough or 12(B) leave.

        6.   Flight Attendants currently on a 12(B) leave of
             absence as of the signing of this Agreement may
             either, 1) retain their right upon recall to active
             status to displace, seniority permitting, the most
             junior Flight Attendant at the domicile from which
             they took a 12(B) leave or, 2) may exercise the new
             recall bypass provisions contained in section II
             below. Flight Attendants on 12(B) leaves who elect to
             utilize the new bypass provisions shall, while
             forgoing the displacement option, remain on the
             priority recall list indefinitely with the ability to
             change their bypass and/or recall preferences as
             described in paragraph 11(D) below. The provisions of
             this paragraph are applicable only to Flight
             Attendants on a 12(B) leave as of the date of this
             Agreement and shall not be applicable to Flight
             Attendants electing a 12(B) leave in conjunction with
             furlough subsequent to the date of this Agreement.

        In the event an active Cabin Attendant refuses priority
        recall to domicile, he/she shall forfeit all priority recall
        rights.

        In the event an inactive Flight Attendant [on furlough or
        12(B) leave] refuses recall to active status, he/she shall
        forfeit entitlement to preference in reemployment and be
        removed from the TWA Flight Attendant System Seniority List.

II. RECALL BYPASS

    Flight Attendants shall have a recall bypass option. Upon furlough
    or displacement, Flight Attendants shall submit, on a form
    specified by the Company, their choices regarding the combination
    of domicile and category position(s) (e.g. JFK C/A or STL-FSM): 1)
    to which they will accept recall and/or, 2) for which they desire
    to elect recall bypass.

    A.  When vacancies are to be filled by recall, Flight Attendants
        who have submitted a Recall/Bypass Preference Form
        indicating a bypass

                         ARTICLE 29 / Page 36

<PAGE>
<PAGE>

        election for the domicile/category vacancy being filled,
        shall be skipped over (bypassed) and recall shall be offered
        to the next junior person who has not elected bypass. Flight
                                          ---
        Attendants are eligible to indicate their preferences for
        recall or bypass as follows:

        1.   Active FSMs:
             a.   Accept priority recall to a FSM position at the
                  domicile from which they were furloughed/displaced;
             b.   Accept priority recall to the domicile from
                  which they were furloughed/displaced to fill a
                  C/A vacancy; or
             c.   Bypass priority recall to FSM and/or original
                  domicile.

        2.   Active C/As:
             a.   Accept priority recall to the domicile from
                  which they were furloughed/displaced; or
             b.   Bypass priority recall to domicile.

        3.   Inactive [Furloughed/12(B) Leave] FSMS:
             a.   Accept priority recall to the FSM position at
                  the domicile from which they were furloughed/
                  displaced;
             b.   Accept recall to the FSM position at one or more
                  other domiciles;
             c.   Accept recall to the C/A position at one or more
                  domiciles; or
             d.   Bypass recall to any one or more domicile/category
                  positions.

        4.   Inactive [furlough/12(B) Leave] C/As:
             a.   Accept priority recall to the domicile from
                  which they were furloughed/displaced;
             b.   Accept recall to one or more other domiciles; or
             c.   Bypass recall to one or more domiciles.

   B.   Recall/Bypass Preference Forms will be maintained on file by
        the Company and will be utilized when filling vacancies.

   C.   Once a Flight Attendant has been granted priority recall to
        the domicile/category from which he/she was originally
        furloughed/displaced, the Flight Attendant shall be removed
        from the priority recall list.

                         ARTICLE 29 / Page 37

<PAGE>
<PAGE>

   D.   Flight Attendants may change their preferences for
        Recall/Bypass by submitting a new form to the Company.
        Submission of a new form shall invalidate and supersede an
        existing form on file. All valid (fully completed) forms
        received by the Company by the close of business on the
        business day immediately preceding the announcement of a
        recall shall be effective for that recall. Any form received
        subsequent to the time specified above shall be effective
        for a subsequent recall.

   E.   A Bypass election for either all domicile/category positions
        or for any one, or more, domicile/category positions shall
        remain valid until:

        1.   Replaced by a new Recall/Bypass Preference Form, as
             described in paragraph 11(D) above, which indicates a
             desire for recall to a domicile/category position or
        2.   For furloughed Flight Attendants, at the expiration of
             all recall rights after seven (7) years on furlough.

   F.   Should a Flight Attendant, whether active, on furlough or on
        12(B) leave, with a priority recall right submit an unsigned
        or otherwise incomplete Recall/Bypass Preference Form or
        fail to submit a Form, he/she shall be deemed to have
        selected recall to all domicile/category positions for which
        eligible, as indicated in paragraph 11(A) above.

   G.   In the event that all Flight Attendants with remaining
        priority or other recall rights to a domicile/category have
        elected bypass, the vacancy(s) shall be filled in accordance
        with Article 13 of the TWA/IAM Working Agreement signed
        April 12, 1983 followed by new hire Flight Attendants.

        Flight Attendants who have canceled their bypass election,
        by submitting a new Recall/Bypass Preference Form, for a
        domicile/category where vacancies exist shall be recalled
        before any transfers are awarded. Should the Company be
        hiring Flight Attendants, Flight Attendants who have
        canceled their bypass election, by submitting a new Recall/
        Bypass Preference Form, for a domicile/category where
        vacancies exist shall be recalled provided they have
        submitted their cancellation before the next group of
        applicants are hired by the Company. To be effective, the
        new Recall/Bypass Preference Form must be received by the
        close of business on the business day immediately preceding
        the action (transfer or hiring). Notwithstanding the
        foregoing, the Company may, at its option, cancel bypass
        options and recall Flight Attendants before hiring new
        Flight Attendants. Such a cancellation of bypass options
        would only occur after all other provisions for filling of
        vacancies had been satisfied, other than the hiring of new
        Flight Attendants. In such case, the cancellation of a
        Flight Attendant's bypass option and recall shall be
        accomplished in inverse seniority order from among Flight
        Attendants then on furlough or 12(B) leave. The inverse
        order of

                         ARTICLE 29 / Page 38

<PAGE>
<PAGE>

          recall applies only to Flight Attendants who have had their
          bypass option(s) canceled by the Company.

     H.   In the event a domicile is closed, all priority recall
          rights for that domicile shall terminate and Flight
          Attendants will no longer have priority recall rights to
          that domicile. Such action will not affect any recall right
          to the Flight Service Manager category.

     I.   Flight Attendants may voluntarily remove themselves from the
          Priority Recall List, thereby relinquishing their priority
          recall right, by submitting such an election in writing to
          the Company.

III. TIME ON FURLOUGH

     The maximum time a Flight Attendant may remain on furlough as
     specified in Article 12(E) of the TWA/IAM Working Agreement
     signed April 12, 1983 shall be extended from five (5) years to
     seven (7) years.

                                   Very truly yours,
                                   Alan R. English
                                   Director, Labor Relations

AGREED AND ACCEPTED:
/s/ Victoria Frankovich

                         ARTICLE 29 / Page 39

<PAGE>
<PAGE>

                  RECALL/BYPASS PREFERENCE FORM
                     FLIGHT SERVICE MANAGERS

CHOOSE THE DOMICILES AND POSITIONS TO WHICH YOU WILL ACCEPT
RECALL. PUT A "l" IN THE BOX NEXT TO YOUR FIRST CHOICE, "2" NEXT
TO YOUR SECOND CHOICE, ETC. DO NOT DUPLICATE ANY NUMBER. IF
YOU DO NOT DESIRE TO ACCEPT RECALL TO A PARTICULAR DOMICILE/
POSITION, ENTER A "0" IN THE BOXES NEXT TO THE DOMICILES/POSITIONS THAT
ARE NOT ACCEPTABLE.YOU WILL BE BYPASS" IF RECALL IS OFFERED TO A
DOMICILE/POSITION WHICH YOU MARK "0". LEAVING A BOX BLANK IS EQUIVALENT
TO PUTTING A "0" IN THE BOX.

YOU WILL BE SUBJECT TO RECALL TO ANY DOMICILE/POSITION FOR
WHICH YOU HAVE PLACED A NUMBER OTHER THAN "0" IN THE BOX. YOU WILL BE
RECALLED TO YOUR FIRST CHOICE IF THAT DOMICILE/POSITION IS AVAILABLE.

IF YOU WISH UNCONDITIONAL BYPASS AT THIS TIME (MEANING THAT YOU DO NOT
WISH TO BE RECALLED TO ANY POSITION) PLACE A ZERO "0" IN EVERY BOX
BELOW. YOU MUST SUBMIT A NEW FORM WHEN YOU WISH TO BE CONSIDERED FOR
RECALL.

FILL IN YOUR NAME AND PAYROLL NUMBER IN THE BOX BELOW. SIGN
AND DATE THIS FORM AND RETURN IT BY U.S. MAIL OR FACSIMILE TO
THE ADDRESS BELOW.  ONLY SIGNED FORMS WILL BE ACCEPTED.

                 [EXAMPLE IMAGE NOT DISPLAYED]

  -------------------------------
   SIGNATURE          DATE

           -----------------
JFK C/A
           -----------------

           -----------------
STL C/A
           -----------------

           -----------------
LAX C/A
           -----------------

                         ARTICLE 29 / Page 40

<PAGE>
<PAGE>

           -----------------
JFK FSM
           -----------------

           -----------------
STL FSM
           -----------------

           -----------------
LAX FSM
           -----------------

Return to
Director - Flight Crew Resources
Trans World Airlines, Inc.
(Address)

                         ARTICLE 29 / Page 41

<PAGE>
<PAGE>

LETTER XIX - ADVOCATE ON FURLOUGH [4/5/95]

                                                       April 5, 1995

Ms. Victoria L. Frankovich
President
Independent Federation of Flight Attendants
720 Olive Avenue, Suite 1700
St. Louis, MO 63101

Dear Vicki:

This letter confirms our agreement that any Flight Attendant who is on a
furloughed status or 12(B) leave may apply for the IFFA representative
and/or advocate positions as described in the re-engineering portion of
the 1994 TWA-IFFA Collective Bargaining Agreement.

If a furloughed Flight Attendant or individual on 12(B) leave is a
successful candidate for such position, she/he may be recalled to the
active Flight Attendant payroll out of seniority order, in order to
commence the job duties of an IFFA representative and/or advocate.

If the foregoing accurately states the terms of our agreement, please
sign this letter where indicated below and return one copy to me.

Very truly yours,

/s/ Bette E. Dubinsky
Director
Labor Relations, Inflight

Agreed and Accepted
/s/ Victoria L. Frankovich

                         ARTICLE 29 / Page 42

<PAGE>
<PAGE>

LETTER XX - FLIGHT SERVICE MANAGER - NARROWBODY

                                                     February 22, 1991

Ms. Victoria L. Frankovich, President
Independent Federation of Flight Attendants
630 Third Avenue
New York, New York 10017

Dear Ms. Frankovich:

This letter shall confirm the various discussions of the parties
regarding the removal of Flight Service Managers from domestic narrow
body equipment and the possible removal at some future time on
international narrow body equipment.

The Company maintains that it has the inherent right to remove Flight
Service Managers on narrow body equipment unilaterally. IFFA's position
is that the removal of Flight Service Managers from narrow body
equipment is subject to the collective bargaining process.

Notwithstanding the parties' respective positions on this matter, the
Union has agreed not to file a grievance or institute court action
contesting the Company's present action of removing Flight Service
Managers on domestic narrow body equipment. Similarly, should the
Company at a later date remove Flight Service Managers from
international narrow body flights, the Union has agreed not to file a
grievance or institute court action contesting the removal. The Company
has agreed not to cite the Union's failure to grieve this matter in any
future dispute of this nature.

Should the Company, having now removed Flight Service Managers on
domestic narrow body flights or, at some later time, on international
narrow body flights, subsequently re-institute the position of Flight
Service Manager, then such action would negate this agreement. Were the
Company to again remove Flight Service Managers from either domestic or
international narrow body flights, IFFA would be free to undertake any
challenge as it may then deem fit.

The resolution of this matter is without prejudice to either parties'
position on the underlying issues.

If the foregoing accurately states the terms of our agreement, please
sign this letter where indicated below.

                                 Very truly yours,
                                 William L. Schecter
AGREED AND ACCEPTED:
/s/ Victoria L. Frankovich

                         ARTICLE 29 / Page 43

<PAGE>
<PAGE>

LETTER XXI -  FLIGHT SERVICE MANAGER - ROTATING RESERVE

                                           October 11, 1978

Mr. Arthur Teolis
President
Independent Federation
of Flight Attendants
630 Third Avenue
New York, New York 10017

Dear Mr. Teolis:

This will confirm our understanding reached during negotiations that if
the Union notifies the Company in writing that Pursers and International
Service Managers have requested that their reserve responsibilities be
rotated at a particular domicile, the Company will meet with a
representative of your office within sixty (60) days of receipt of the
written notification to develop the necessary procedures required to be
implemented in order to effect the reserve responsibility rotation.

Very truly yours,

/s/ J. C. Hilly
Vice President-Labor Relations

Agreed and Accepted:

/s/ Arthur Teolis
Arthur Teolis

                         ARTICLE 29 / Page 44

<PAGE>
<PAGE>

LETTER XXII - REDEPLOYMENT OF IN-FLIGHT SERVICE SUPERVISORS [6/6/76]

June 6, 1976

Mr. Ernest Mitchell
Vice President Air Transport Division
Transport Workers Union of America
1980 Broadway
New York, NY 10023

Dear Mr. Mitchell:

Upon notification from you of the ratification of the Agreement
effective June 6, 1976, the Company will re-deploy its In-Flight Service
Supervisors who will not be assigned to perform productive work covered
by the Agreement between the Company and the TWU. This re-deployment
will be completed by September 10, 1976.

Very Truly Yours,

/s/ D.J. Crombie
Senior Vice President-
Administration

                         ARTICLE 29 / Page 45

<PAGE>
<PAGE>

LETTER XXIII - REDEPLOYMENT OF IN-FLIGHT SERVICE SUPERVISORS [7/21/76]

July 21, 1976

Mr. Ernest Mitchell
Vice President Air Transport Division
Transport Workers Union of America
1980 Broadway
New York, New York 10023

Dear Mr. Mitchell:

I understand that there may have been some misunderstanding regarding
the use of the word "re-deploy" in D. J. Crombie's letter of June 6,
1976, on the subject of the In-Flight Service Supervisor.

To avoid any possible misinterpretation of the Company's intention
regarding this matter, let me restate unequivocally the Company's
position.

The Company will discontinue its practice of assigning In-Flight Service
Supervisors on all TWA aircraft. This commitment will be fully in effect
not later than September 10, 1976.

Very truly yours,

/s/  J. C. Hilly
Staff Vice President-Labor Relations

                         ARTICLE 29 / Page 46

<PAGE>
<PAGE>

LETTER XXIV - CAMS HOME ACCESS/RESERVES OVER CAP

January 4, 1990

Ms. Victoria Frankovich
President
Independent Federation of Flight Attendants
630 Third Avenue
New York, NY 10017

Dear Ms. Frankovich:

I. TWA will allow Flight Attendants to subscribe voluntarily to a
   service ("Home Access") whereby Flight Attendants for their
   personal use only may have limited access to TWA's Crew
   Administrative Management System ("CAMS") using personal computers
   or other compatible terminal devices. The Home Access service will
   be PARS Travel Information Service ("PTIS") which those Flight
   Attendants who wish to subscribe must apply and contract with
   directly.

   The form of Home Access provided to Flight Attendants will be
   substantially similar to the form of Home Access provided to TWA's
   pilots. TWA will provide not less than the below enumerated CAMS
   and PARS functions through Home Access for so long as these
   functions are available to Flight Attendants through CAMS computer
   terminals at the crew domiciles and for so long as the PTIS
   contracted service is in effect.

   CAMS

   JXBDF  JXBGF  JXBPF       JXBUF  JXCAF
   JXFSF  JXGCF  JXNXF       JXOPF  JXPI
   JXSLF  JXTIF  JXTRADE     JXTRF  JXTW
   JXVDF  JXVGF  JXVIF       JXVPF  JXVUF

   PARS

   2     KC    KD    KGB   MB
   MD    MU    MT    S     VINR
   4A    4F    4WL   FDH   FFL
   FIP   FTP   FWI   FFI   FIA
   FOV         FWD

   In addition, JXROF, the new over-cap function for reserves, will
   be provided. TWA will issue brochures describing Home Access for
   Flight Attendants.  PTIS will charge $5.00 to each Flight
   Attendant who subscribes to the service to establish an individual
   account. Thereafter, PTIS will charge $20.00 monthly for the Home
   Access subscription. The amounts charged by PTIS are subject to
   change as described in "Dial CAMS Enrollment Agreement" contained
   in the

                         ARTICLE 29 / Page 47

<PAGE>
<PAGE>

      brochure. Access to CAMS for each account is limited to a total of
      one hundred (100) CAMS and/or PARS transactions daily. The $20.00
      monthly fee charged by PTIS provides for two (2) hours of network
      usage monthly as described in the brochure. TWA will not make
      payroll deductions of amounts due PTIS; a Flight Attendant who
      subscribes to Home Access will remain individually responsible for
      payment of PTIS' charges.

      Flight Attendants who choose to subscribe to Home Access must sign
      the "Computer Communications/Facilities Protection Policy"
      Agreement. A Flight Attendant's signature on the Computer
      Communication/Facilities Protection Policy shall not constitute a
      waiver by IFFA or the individual Flight Attendant of any right
      and protection granted by the TWA/IAM Working Agreement, nor does
      it imply that any allegation of misuse of Home Access will
      automatically result in discipline or discharge or satisfy just
      cause provisions. All such questions will be resolved in
      accordance with Article 16 grievance procedures.

II.   TWA may, at its sole discretion, offer to Flight Attendants who
      hold reserve schedules the ability to waive the monthly flight
      limits as described in Article 18-A(D)(7)(d) of the Working
      Agreement signed April 12,1983. TWA will not make such offers to
      any Flight Attendants who hold reserve schedules unless TWA also
      offers to Flight Attendant who are line holders in the same status
      and at the same domicile the opportunity to exceed the applicable
      Cap in accordance with existing rules.

      When offered by TWA, a reserve Flight Attendant who elects to
      waive the monthly limit must notify the Company either by CAMS
      function JXROF or by telephone advise to Crew Schedule. Once a
      Flight Attendant has elected to waived the monthly limit that
      waiver may not be revoked.

      As the result of the waiver, the adjusted reserve monthly limit
      will be the applicable monthly Cap plus ten hours (10:00),
      provided that the adjusted limited will not exceed 85:00 hours
      (accumulated credit hours plus the scheduled block-to-block flight
      time to be flown on the last trip prior to the end of the month).

      TWA agrees to:

      a.   process the Home Access subscription applications received
           from Flight Attendants;

      b.   make available through CAMS and Home Access a new CAMS
           function, JXROF for use by reserve Flight Attendants who
           elect to waive the monthly limits as described above. The
           reserve adjusted monthly limit provisions of this agreement
           will be implemented no later than the February 1990 bid
           month.

III.  Either TWA or IFFA may, by written notice given to the other by
      certified mail, return receipt requested, on or before May
      21, 1990, terminate this agreement in its entirety effective July
      31, 1990. In the event of such termination, all

                         ARTICLE 29 / Page 48

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<PAGE>

      provisions of this agreement will become null and void after July
      31, 1990.

      In the event neither party gives such notice, this agreement shall
      thereafter remain in effect until terminated or changed by
      agreement of the parties or by operation of law.

If the above correctly sets forth our agreement, please execute both
copies of this letter and return one fully executed copy to the
undersigned.

                       Very truly yours,

                       TRANS WORLD AIRLINES, INC.

                       By:
                       ----------------------------------
                       John C. Crowe
                       Vice President - Operations
                       Administration

Attachment

Accepted and Agreed:

INDEPENDENT FEDERATION OF FLIGHT ATTENDANTS

By: Vicki Frankovich
Date: January 9, 1990

                         ARTICLE 29 / Page 49

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<PAGE>

LETTER XXV - RANDOM SUBSTANCE TESTING [9/22/94]

LETTER OF AGREEMENT

JOINT TWA-IAM POLICY REGARDING SUBSTANCE ABUSE

AND SUBSTANCE TESTING

Preamble

The primary goal of this policy is to encourage employees who are
experiencing difficulty with drugs or alcohol to undertake immediate and
effective measures to address such problems voluntarily. While the
emphasis is on voluntary treatment, the parties recognize the need for
the enforcement of reasonable rules for regulating employee conduct in
the work place. Recognizing that a Flight Attendant's misuse of drugs or
alcohol on the job not only endangers the Flight Attendant but also
threatens the safety of co-workers, members of the traveling public and
emergency personnel, it is the policy of TWA and the IAM to protect the
health and safety of all employees and passengers of the Company. For
this reason, TWA and the IAM agree to the following Policy regarding
Drug and Alcohol Use and Testing:

I.    Testing - The first step in addressing the problem of drugs and
      alcohol in the workplace is that of identifying the substance
      abuser. Therefore, testing shall be conducted under the following
      circumstances.

      1.   When there is a reasonable suspicion that an employee is
           under the influence of or impaired by alcohol or drugs, that
           employee may be required to undergo testing to confirm or
           disprove the suspicion. This is called testing "for cause".
           Any employee refusing to submit to a test where reasonable
           suspicion exists shall be discharged.

      2.   An employee who has been found to be under the influence of
           or impaired by alcohol or drugs within the preceding two
           years may be tested at any time. This is called "follow-up"
           testing.

      3.   Employees will be tested as required by regulations of the
           Department of Transportation or other governmental agency.
           Such testing includes both testing for cause and random
           testing, post-accident testing, return to duty testing,
           follow-up testing and pre-employment testing.

II.   Rehabilitation

      The TWA-IAM Special Health Services Program ("SHS") is an employee
      assistance program jointly administered by the Company and the
      IAM. Through SHS TWA offers treatment for employees who suffer
      from drug or alcohol dependency and encourages employees in the
      need of such treatment to seek help before they violate any of the
      foregoing rules. Flight Attendants in

                         ARTICLE 29 / Page 50

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<PAGE>

      need of assistance who contact SHS representative and who elect to
      seek rehabilitation under SHS auspices, will, to the extent
      possible, be referred for appropriate treatment within their own
      communities. The cost of treatment will be paid through the group
      medical insurance policy. When a Flight Attendant, having engaged
      in the prohibited use of drugs or alcohol, requests the assistance
      of Special Health Services, such request and any referral will be
      held in strict confidence. Neither supervisor personnel nor Union
      officials, excluding Company and Union designated SHS
      representatives, will be informed of the nature of a Flight
      Attendant's participation in the program without her/his consent.
      If a Flight Attendant must be absent from work in order to
      participate in the program, such absence will normally be coded in
      the Company attendance records as a "personal illness".

III.  Disciplinary Guidelines

      A.   Flight Attendants who are found actually drinking or possessing
           alcohol or using or posses sing drugs while on duty, or within
           twelve (12) hours prior to reporting for duty, will be subject to
           discipline up to and including discharge in accordance with
           Articles 16 and 17 of the Agreement and shall be subject to such
           additional penalties as may be required by Federal Aviation
           Administration regulations.

      B.   The Company's knowledge of off duty possession or use of
           drugs or alcohol by a Flight Attendant within twenty-four
           (24) hours of the time such Flight Attendant reports for
           duty shall not be used as grounds for discipline for the
           first occurrence but may be grounds for testing such Flight
           Attendant.

      C.   Flight Attendants who are suspected of drug or alcohol use
           who are first offenders and who are not involved in conduct
           which would otherwise subject them to discipline but who
           test positive will not be discharged, but may be required to
           successfully complete a rehabilitation program implemented
           and supervised by TWA and IAM personnel.

      D.   Flight Attendants involved in conduct which would otherwise
           subject them to discipline and who are suspended and test
           negative shall be returned to work and made whole for such
           suspension before discipline is assessed concerning such
           conduct.

      E.   Flight Attendants who are involved in conduct which would
           otherwise subject them to discipline and who test positive
           may be disciplined for the incident. They may not, however,
           be disciplined for using drugs or alcohol if the instance is
           the first occurrence under the policy. If such employee
           receives discipline less than discharge, then such employee
           shall, if required by TWA's Medical Review Officer (MRO) or,
           in the

                         ARTICLE 29 / Page 51

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<PAGE>

           case of alcohol, by TWA's Special Health Services, be
           required to successfully complete a rehabilitation program
           supervised by TWA and IAM personnel. Flight Attendants who
           do not successfully complete the rehabilitation program may
           be discharged.

      F.   Except as provided in (A) above, and to the extent not
           inconsistent with requirements of the Department of
           Transportation, Flight Attendants who, for the first time,
           test positive for drugs or alcohol as a result of random
           tests conducted pursuant to requirements of the Department
           of Transportation or other governmental agency or otherwise
           pursuant to this Agreement shall be subject to the following
           terms.

           1.   TWA shall initiate an investigatory meeting with the
                Flight Attendant pursuant to Article 16(C)(1)(a) and
                (b) of the IAM-TWA Agreement. Such meeting, which the
                Flight Attendant must attend, shall be held within
                three (3) business days following the notification to
                the Company by the Medical Review Officer (MRO) of a
                positive test result. Such meeting may be postponed by
                mutual agreement for up to five (5) business days if
                there are exceptional circumstances which would
                prevent the Flight Attendant from attending the
                meeting within the normal three (3) day time limit. In
                such meeting the Flight Attendant shall be given the
                opportunity to execute a last-chance letter of
                agreement (as per attached Appendix). The deadline for
                execution of the Letter of Agreement may be extended
                no later than five (5) work days following this
                meeting.

           2.   A Flight Attendant who refuses to execute the last-
                chance letter of agreement shall not be given a second
                chance pursuant to this Policy, but shall instead be
                treated in accordance with all relevant provisions of
                Articles 16 and 17 of the IFFA-TWA Agreement.

           3.   A Flight Attendant executing the last-chance letter of
                agreement may not return to active service without
                approval(s), if any, required by regulations of the
                Department of Transportation or other governmental
                agency. In most instances return to active service
                will be coordinated upon the Flight Attendant's
                participation in the substance abuse rehabilitation
                program selected by the Flight Attendant from the list
                provided by TWA's Special Health Services as
                determined in accordance with Section II above. If
                such participation is deemed necessary, the Flight

                         ARTICLE 29 / Page 52

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<PAGE>

                Attendant must successfully complete the approved
                rehabilitation program as a condition of return to
                active service.

           4.   Upon return to active service, a Flight Attendant will
                be subject to unannounced follow-up testing as
                directed by the Medical Review Officer for a period of
                up to two (2) years.

           5.   The Flight Attendant's continued employment after
                returning to active service shall also be conditioned
                upon TWA Special Health Services continual review and
                approval of the Flight Attendant's successful
                participation in the required after care, if any, as
                determined by the approved rehabilitation program.

           6.   Flight Attendants who refuse to submit to tests
                required by this Agreement shall be subject to
                discipline, including discharge, subject to Articles
                16 and 17 of the Agreement.

      G.   Any Flight Attendant entering a rehabilitation program after
           testing positive will be subjected to follow-up testing
           during the course of the program and for no less than three
           months after successful completion of the program. However,
           in no event shall such follow-up testing period exceed two
           years from the Flight attendants return to work and if such
           Flight Attendant tests positive as a result of the follow-up
           tests, she/he may be discharged. Any Flight Attendant who
           tests positive within two years from the date she/he
           executes a Last Chance Agreement pursuant to this policy may
           be discharged. A Flight Attendant who tests positive at any
           time after two years from the date she/he executes a Last
           Chance Agreement pursuant to this policy shall be referred
           to a joint Company-Union committee for disposition of
           her/his case. Such committee shall be made up of one Company
           and one Union representative. If such committee cannot
           agree, the case shall be submitted to a neutral party
           jointly selected by the parties who is considered to be an
           expert in matters of this kind and such neutral shall have
           authority to make final determination which shall be binding
           upon both parties.

IV.   Procedural Guidelines - Drug Testing A Flight Attendant who is
      required to submit to drug testing as required by regulations of
      the Department of Transportation or other governmental agencies
      shall be required to give a split sample in accordance with
      Federal Regulations. The split sample will be submitted to the
      NIDA-certified laboratory selected by the Company whereupon the
      primary sample will be tested. If the result of that test is
      verified positive by

                         ARTICLE 29 / Page 53

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<PAGE>

      the MRO, the Flight Attendant may request to have the split sample
      tested by another NIDA certified laboratory selected from a list
      of NIDA-certified laboratories, provided that such a request for
      additional testing is made within seventy-two (72) hours of the
      Flight Attendant being notified of a positive result. The Flight
      Attendant will be responsible for any costs related to the
      testing, but not the collection of the split sample (e.g.
      administrative costs, mailing costs, testing costs, etc.). In the
      event TWA agrees to pay the costs of or related to the testing for
      any other employee group, TWA shall pay such costs for Flight
      Attendants. If the results of both tests are positive, the final
      result will be deemed conclusively a positive and the validity of
      the tests is not subject to further review or challenge If the
      result of the test of the primary sample is positive and the
      result of the split sample is negative the final result will be
      deemed a negative. When a follow-up test is conducted on a Flight
      Attendant who has executed a last chance letter of agreement, and
      a split sample is collected and the results of both tests are
      positive, the final result will be deemed conclusively a positive
      and neither the validity of the tests nor the discharge of the
      Flight Attendant shall be subject to further review or challenge
      When a split sample is provided and the result of the tests of the
      primary sample is positive and the result of the test of the split
      sample is negative, the final result will be deemed a negative.

V.    General Should any of this policy be in conflict with existing or
      future Federal laws or regulations, the parties agree that they
      shall meet to amend this policy to comply with such Federal laws
      or regulations Should state or local laws be found to be
      inconsistent with this policy and binding upon TWA and its
      employees, the parties shall meet and agree upon how the policy
      shall be applied in such states.

AGREED AND ACCEPTED

For IFFA:

By

/s/ Victoria L. Frankovich, President
Date: September 22, 1994

For TWA:

By

/s/ William L. Schecter
Vice President, Labor Relations
Date: September 22, 1994

                         ARTICLE 29 / Page 54

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<PAGE>

LETTER XXVI -                   JOINT DRUG POLICY
                          (APPENDIX LETTER OF AGREEMENT)

                            DATE

Name Flight Attendant
Address
City, State, Zip

Dear
    ---------------

On         , you were tested for drugs (or alcohol) pursuant to the
   --------
procedures which have been adopted pursuant to federal regulations and
approved by the FAA. The test sample submitted by you on that date
tested positive for drugs (or alcohol) in your system. [For drug tests
only, add the following:] The result was reviewed by TWA's Medical
Review Officer ("MRO") who verified the result and determined that there
was no legitimate explanation for the test result that is consistent
with permissible drug use.

Under the Joint TWA-IAM Drug and Alcohol Policy, you are hereby
provided a one time second chance to avoid discharge and secure return
to active service as a TWA Flight Attendant. This one-time second chance
is subject to the following:

   1.   You will initially be removed from active service from Trans
        World Airlines with the ability to return to active service.
        As a condition of such return you will, if deemed necessary,
        enroll in or will have completed an approved drug (alcohol)
        rehabilitation program prescribed by TWA's Special Health
        Services ("SHS"). If such participation is deemed necessary
        by SHS, you must successfully complete the approved
        rehabilitation program and receive authorization to return
        to active service.

   2.   By signing this letter of agreement, you agree that your
        subsequent return to active service is conditioned upon your
        compliance with all requirements set forth in the Joint TWA-
        IAM Drug and Alcohol Policy and this letter.

   3.   This letter of agreement shall constitute a full and final
        resolution concerning your positive drug (alcohol) test, and
        TWA disciplinary or other action as a result of such
        positive test; and you agree not to file any new grievances,
        complaints, or claims of any nature against TWA or IAM in
        connection with your positive test, discipline, or other
        action taken as a result thereof.

                         ARTICLE 29 / Page 55

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<PAGE>

It is important to understand, however, that the option to enroll in a
rehabilitation program and sign this letter of agreement provides you a
one-time opportunity for return to active service as a Flight Attendant.
This one-time opportunity for return to active service will not be
repeated if you violate the Joint TWA-IAM Drug and Alcohol Policy in
the future. Return to active service is contingent upon satisfactory
completion of the rehabilitation program, evaluation and full compliance
with all post rehabilitation requirements. If you do not agree to all
conditions as set forth in this letter of agreement, you shall be
discharged from Trans World Airlines, Inc., subject only to procedures
of Articles 16 and 17 of the TWA-IAM Basic Agreement. The requirements
for participation in the rehabilitation program are as follows: You must
enter a drug (or alcohol) rehabilitation program jointly approved by TWA
and IAM and successfully complete (or have completed) such program in
accordance with SHS guidelines and objectives to the satisfaction of
TWA's Medical Review Officer and/or TWA SHS. While actively
participating in the rehabilitation program, you will be coded as on
"Personal Illness". Before return to active service, you will undergo
another drug (alcohol) test, must pass that test, and be released to
return to active duty by the MRO and/or TWA SHS in accordance with
applicable governmental regulations.

In addition, you must comply with the following requirements after
completing the program:

   1.   You will abstain from the use of medically unauthorized
        drugs or illegal substances (alcohol).

   2.   You agree to undergo further drug (alcohol) tests for a
        period of up to two (2) years, as determined following your
        return to duty, on an unannounced basis, at any time to
        ensure that you remain drug (alcohol)-free.

If you fail to comply with any of the above conditions or in the event
that such a test reveals unlawful drug or alcohol use, you understand
that you will be discharged from TWA and no mitigating factors will be
considered and there will be no additional opportunity for reinstatement
or for continued employment with TWA.

If you accept the terms and conditions of this letter of agreement and
agree to be bound by the provisions of the Joint TWA-IAM Drug and
Alcohol Policy you must sign and date the original of this letter and
return it to me. A copy of this letter of agreement will remain in your
personnel file for a period of two (2) years. I wish to make it clear to
you that whether or not you sign this letter of agreement is your
personal decision.

I urge you to make sure that you understand completely all of the terms
and conditions of this Agreement and that you consult with a Union
representative or any other person(s) you wish before making this
decision.

                                 Very truly yours,

                                 In-Flight Services

                         ARTICLE 29 / Page 56

<PAGE>
<PAGE>

I accept all of the terms and conditions of this letter of agreement for
rehabilitation and return to active service and agree to comply with all
of my obligations as stated above. I acknowledge that I fully understand
all of such terms and conditions and that I have had ample opportunity
to review them.

Date:
     --------------------------   --------------------------------------
                                  (Flight Attendant)

Agreed and Accepted:

IAM Representative

                         ARTICLE 29 / Page 57

<PAGE>
<PAGE>

LETTER XXVII - DRUG TEST TECHNICIAN

Originally dated 5/18/95
Amended August 1, 1999

This letter confirms that all drug testing notification of Flight
Attendants shall be provided through ACARS notification and non-IAM
employee notification at domiciles.  Inflight shall work with the IAM to
establish an appropriate "drug notification" form to be hand-delivered
to Flight Attendants at the domiciles.  At outlying stations, individual
notifications shall be accomplished by the Station Manager.  If the
Station Manager is not on-duty at the time of the scheduled
notification, the Employee-in-Charge (E.I.C.) shall provide the
individual notification using the appropriate "drug notification" form.

This letter confirms the agreement concerning those instances when a
testing technician is not present at the drug/alcohol test facility at
the time a Flight Attendant reports for a random drug and/or alcohol
test.

Once notified of a random test, the Flight Attendant must proceed
immediately to the test facility upon arrival of her/his flight. The
Flight Attendant will be required to wait for the testing technician at
the test facility for (1) one hour after scheduled or actual block in of
her/his flight, whichever is later. If the testing technician does not
appear at the test site within the time frame of one (1) hour as
specified above, the Flight Attendant must request authorization to
depart the test facility from her/his domicile supervisor on duty,
during normal In- Flight office hours who will authorize such release.
After close of normal office hours, the Flight Attendant must contact
the Crew Schedule Manager on Duty who will authorize her/his departure
from the test facility. If the test technician appears at the test
facility prior to the Flight Attendants receiving authorization to
depart, the Flight Attendant will be expected to proceed with the test.

/s/ Terry Hayes
    Vice-President Labor Relations
    TWA

/s/ Sherry Cooper
    IAM

Dated: 8/1/99

                         ARTICLE 29 / Page 58

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<PAGE>

LETTER XXVIII - MATERNITY LEAVES OF ABSENCE - UNEMPLOYMENT

October 11, 1978

Mr. Arthur Teolis
President
Independent Federation
of Flight Attendants
630 Third Avenue
New York, New York 10017

Dear Mr. Teolis:

Re: Unemployment Insurance - Maternity Leaves of Absence

This will confirm our recent discussions wherein I indicated that the
Company will not oppose or controvert any application for unemployment
insurance by a Flight Attendant who is required, pursuant to the
provisions of Article 15(G), to take a maternity leave of absence.
However, this policy will be applicable only so long as Flight
Attendants do not receive sick pay and/or disability pay for pregnancy.

Very truly yours,

/s/ J. C. Hilly
Vice President
Labor Relations

Agreed and Accepted:

/s/ Arthur Teolis

                         ARTICLE 29 / Page 59

                              
<PAGE>
<PAGE>

LETTER XXIX - 747SP AGREEMENT

Dated: New York, New York, November 3, 1980

As the result of negotiations conducted between the Independent
Federation of Flight Attendants ("Union") and Trans World Airlines,
Inc. ("Company"), pursuant to Article 27(B) of the present Contract, the
parties have agreed to the following modifications of their current
collective bargaining agreement. These modifications shall effect only
and solely the B-747-SP aircraft fleet presently operated by the Company
and any additions thereto, which may be operated in the future:

A. Excess on Duty for Long Haul Flights

   On B-747-SP flights scheduled for 12 hours or more block to block,
   flight attendants shall receive $10.00 per hour or fraction
   thereof prorated for each hour actually flown in excess of 12
   hours block to block.

   Such compensation shall be in addition to any other form of
   payment under the Agreement and shall not be offset or reduced in
   any way whatsoever.

   The amount earned under this provision shall not count towards
   quarterly pay or credit limitation.

B. Crew Rest Provisions (Bunks)

   In addition to the provisions of Paragraph 6(B)(S) of the current
   collective bargaining agreement between the parties, the Company
   shall provide a self-contained, walled, well-ventilated bunk
   compartment which may be used only by flight attendants who serve
   as productive crew members on B-747-SP aircraft utilized on
   nonstop flights scheduled for 12 or more block to block hours
   duration.

   The compartment may be placed in any zone on the aircraft and will
   be large enough to accommodate at least four (4) bunks and
   mattresses of adequate size and will have a safe means of access
   to the upper bunks. The bunks will be equipped with individual
   black-out curtains, emergency oxygen masks, reading lights and
   fresh air outlets.

   On any B-747-SP flight which has a scheduled block-to-block time
   of between 10:00 and 11:59 hours, the Company will provide four
   (4) First Class seats for exclusive use by flight attendants for
   rest and sleeping purposes. These four (4) First Class seats shall
   be blocked and curtained as soon as possible by the Company but in
   no case later than 15 days after the date of signing of this
   agreement. (For purposes of this provision, First Class seats are
   defined as being

                         ARTICLE 29 / Page 60

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<PAGE>

   those non-sleeper reclining type First Class seats which have the
   same dimensions as the normal non-sleeper First Class seat.) It is
   understood, however, that such blocked and curtained First Class
   seats may be located in the area designated "A zone", the "upper
   deck" or the left side of "B zone" in rows 15 and 16. They may
   also be placed along a bulkhead on the left or right side of the
   fuselage in "B zone" only if "B zone" is reconfigured to include
   all First Class type seats as its regular seat complement.

C. Minimum Rest at Layover Station

   Scheduled Flight Time    Scheduled Rest Time     Actual Rest Time
   (block-to-block)         (release to report)     release to report)
   ----------------         -------------------     ------------------
   :00 - 12:00                         12:00                  12:00
   12:01 - 14:00                       24:00                  24:00
   14:01 and over                      42:00                  39:00

   For purpose of this provision, the rest period is defined as being
   free from all duty with the Company.

   If a Flight Attendant is released at a scheduled layover station,
   the above-referenced rest periods are based upon the scheduled
   block-to-block time on the flight which assigned.

   In instances of a non-scheduled stop where the flight attendants
   are released for rest, the actual rest due will be determined by
   the actual block-to-block flight time flown during the on-duty
   period as dictated by the following chart:

                                                Actual Rest
   Actual Block-to-Block                     (release to report)
   ---------------------                     -------------------
   :00 - 12:00                                           12
   12:01 - 14:00                                         24
   14:01 and over                                        39

D. Crew Complement

   1.   International

        (i)  Long Haul (4 hours or more scheduled block-to-block)

             8 Cabin Attendants )
             1 Flight Purser    ) +2 additional Cabin Attendants
             1 Service Manager  ) at penalty points of  253 & 277.

             In addition:

             + 1 additional Cabin Attendant on flights scheduled
             with block-to-block of 12:00 hours or more with
             passenger load of 170 + 1 additional Cabin Attendant
             on flights scheduled

                         ARTICLE 29 / Page 61

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<PAGE>

              with block-to-block of 14:00 hours or more with
              passenger load of 250.

        (ii)  Short Haul/Intra-European (3:59 hours or less
              scheduled block-to-block)

              7 Cabin Attendants )
              1 Flight Purser    )  +1 additional Cabin Attendant
              1 Service Manager  )  at penalty point of  225.

        (iii) Charter

              10 Cabin Attendants
              1 Flight Purser
              1 Service Manager

              In addition:

              +1 additional Cabin Attendant on flights scheduled
              with block-to-block of 12:00 hours or more with
              passenger toad of 200 +1 additional Cabin Attendant on
              flights scheduled with block-to-block of 14:00 hours
              or more with passenger load of 250.

   2.   Domestic

        (i)   Long Haul (4 hours or more scheduled block-to-block)

              8 Cabin Attendants )  +2 additional Cabin Attendants at
              1 Service Manager  )  penalty points of 230 & 258.

                                    OR

                                    +1 additional Cabin Attendant on
                                    flights operated between 2000 and
                                    0800, local time, that have meal
                                    service at penalty point of 230.

                                    OR

                                    +0 additional Cabin Attendant on
                                    flights operated between 2000 and
                                    0800, local time, that have no meal
                                    service.

                         ARTICLE 29 / Page 62

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<PAGE>
        (ii)  Short Haul (3:59 hours or less scheduled block-to-
              block)

              7 Cabin Attendants )  +1 additional Cabin Attendant at
              1 Service Manager  )  penalty point of 200.

                                    OR

                                    +0 additional Cabin Attendant
                                    on flights operated between
                                    2000 and 0800, local time,
                                    that have no meal service.

        (iii) Charter

              10 Cabin Attendants )
              1 Service Manager   ) At all times

   3.   General Provisions for International & Domestic

        (i)   Meal service will be defined as anything served on any
              type of tray.

        (ii)  No meal service will include the service of liquor,
              beverage, peanuts, donuts or the like.

        (iii) All basic and additional flight attendant positions
              listed above will be protected by the provisions of
              Article 26.

E. This Agreement is subject to ratification by IFFA membership and
   approval by their Executive Board.

IN WITNESS WHEREOF the parties have signed this Agreement on November 3,
1980.

For the Company:              For the Flight Attendants in the
                              Service of Trans World Airlines, Inc. as
TRANS WORLD AIRLINES, INC.    Represented by the Independent
                              Federation of Flight Attendants

Allen S. Mathers              Victoria L. Frankovich
Director - Labor Relations    Vice President
Flight Attendants

WITNESS:                      WITNESS:
Hank Ward                     John Salvador

                         ARTICLE 29 / Page 63

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<PAGE>

LETTER XXX - RE-ENGINEERING OF TWA [9/22/94]

                         LETTER OF AGREEMENT

                        RE-ENGINEERING OF TWA

Preamble

This Agreement represents a fresh beginning and a new direction in the
entire relationship between TWA and the IAM. It embodies principles of
meaningful participative management of the airline and all aspects of
TWA operations as they affect Flight Attendants both on and off the job;
acknowledges employee ownership and the correlative interests of Flight
Attendant-owners in the determination of objectives and methods of
achieving the highest quality of customer service and TWA prosperity;
recognizes that the purpose of management personnel and policy is to
provide support for its employees in the performance of In-flight
service and safety, and to eliminate and correct problems in the work
environment that interfere with or distract from high quality work
performance on an individual or collective basis.  This Agreement
therefore commits TWA and the IAM to a reengineering of the In Flight
Service Department, full integration of the IAM and the Flight
Attendants (collectively the IAM) into all areas and aspects of TWA
operations affecting Flight Attendants, and joint decision-making on all
such matters. Self-managed teams will be the basic building blocks of
the In-Flight organization.

Recognizing that a re-engineering process including the improvement of
TWA services, enhancement of Flight Attendant work environment and
quality of life, and increase in job satisfaction and earning potential
- is an ongoing responsibility; this document represents a living and
flexible covenant. TWA and the IAM shall, after its execution, continue
to meet, negotiate, solve problems and improve employment opportunity on
an ongoing basis.

1. Consensus Decision-Making and Responsiveness to Flight Attendants.

   Decisions involving the airline as a whole, In-Flight Services and
   individual Flight Attendants, affect all Flight Attendants both on
   and off the job. Best value decisions will be most supportive of
   the In-Flight Services mission, philosophy and values and will be
   arrived at through established steps of consensus decision making.
   Any Flight Attendant problem or complaint, arising in connection
   with any aspect of the job, will be taken seriously and addressed
   promptly in recognition of the value and worth that each employee
   brings to this airline. In a re-engineered workplace, TWA and the
   IAM mutually share the obligation of responsiveness to Flight
   Attendants.

   Flight Attendants, as represented by the IAM, have valuable
   experience and insights and possess a wealth of knowledge and
   skills that are recognized and will be utilized to the mutual
   advancement of the airline and the Flight Attendants.

   To these ends, in matters relating to operation of the airline as
   they affect Flight Attendants, policy shall be established and
   implemented by TWA and the IAM,

                         ARTICLE 29 / Page 64

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   as co-equals, on the basis of joint decision-making and co-
   responsiveness to Flight Attendant employment matters, within the
   following structure:

   a.   President and Directing General Chairman - District Lodge
        ---------------------------------------------------------
        142 or designee(s) TWA President and Senior Officers: all
        ------------------
        matters and issues relating to overall airline policy
        including, but not limited to, finance; airline expansion
        and contraction; airline acquisition replacement/employment
        policy affecting all TWA employees including Flight
        Attendants; and the overall implementation of and
        improvement upon terms of this Agreement. (see paragraph 6
        below)

   b.   General Chairpersons or designees - President and Vice
        ---------------------------------
        President - TWA Vice President, In-Flight Services and
        Department Heads: all matters and issues including
        administration and oversight, relating to In-Flight policy
        and procedures; all TWA operations as they affect Flight
        Attendants; and an overall implementation and improvement
        upon terms of this Agreement not performed in accordance
        with (a) above.

   c.   At each domicile, IAM Domicile Chair - General Manager and
        Managers, In Flight: all matters and issues relating to this
        Agreement, and its improvement, affecting the individual
        domicile and Flight Attendants within the Domicile and its
        satellites, including grievances arising under Article 16.

   d.   At each Domicile, three (3) IAM Representatives - TWA
        Domicile Coordinators (Supervisor): all matters and issues,
        relating to the providing of needed support for Flight
        Attendants within the domicile; and all matters relating to
        individual Flight Attendants or specific problems of one or
        more Flight Attendants involving interpretation of this
        Agreement or benefits, rights, and protection provided
        herein. Flight Attendants will be empowered and encouraged
        to exercise their responsibility and authority. They will be
        given the opportunity to use common sense, solve problems
        and exceed customer expectations.

   e.   IAM Medical, Safety, Workers' Compensation/Benefits/Payroll
        Directors/Representatives (2) - TWA Director Medical; TWA
        Director Safety, TWA Director Workers' Compensation, TWA
        Director Benefits and TWA Director Payroll: all matters
        relating to individual Flight Attendant claims, problems and
        complaints relating to the aforesaid, respecting the right
        of the Flight Attendant to request confidentiality. In
        addition and in coordination with the domicile, the
        development by no later than January 1, 1995 of (1) the
        precise Flight Attendant job description - with updates as
        needed thereafter - including nature and extent of physical
        requirements; (2) programs designed to rehabilitate injured
        workers for earliest return to the job including such
        programs as, work hardening, and wellness programs.

                         ARTICLE 29 / Page 65

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   f.   IAM Director In-Flight Service Operations and Training -
        TWA In-Flight Service Operations and Training Designee: in
        coordination with the domiciles, all matters relating to
        operations and training of Flight Attendants including but
        not limited to new hire training, Annual Emergency Reviews,
        equipment and service training, and training of Flight
        Attendants in the ongoing re-engineering of the Airline as
        specified in this Agreement; and determination of need for,
        and selection of, Flight Attendants for Special or other
        Assignment in connection with temporary or permanent duties
        related to In-Flight Operations and Training.

   g.   IAM Director Flight Attendant Crew Operations and
        Scheduling Representatives - TWA Director Flight Attendant
        Crew Operations; Managers Crew Resources, Crew Schedule,
        Operational Planning and Variable Staffing Unit: all matters
        relating to policy and procedures in connection with
        construction of pairings/sequences; reserve utilization,
        away from domicile reassignment; amendments to, or
        improvement of, the Away From Domicile Scheduling Policy;
        and policies/procedures in implementing and enhancing
        efficiency of operation through the Variable Cabin Staffing
        provisions of the Agreement.

   h.   IAM Director Professional Standards and Special Health
        Services - TWA Director Special Health Services and other TWA
        personnel: all matters relating to overall administration of
        Professional Standards and Special Health Services policy as
        applied to Flight Attendants on general as well as
        individual basis.

2. Training

   Training will be essential to introduce the In-Flight team members
   to the concepts of union-management partnership, team building,
   self-management, conflict resolution and consensus decision
   making. The ongoing training objective will also focus on
   application of people skills. It is Therefore Agreed:

   a.   Such training shall be jointly developed by representatives
        of In-Flight Services and the IAM in conjunction with such
        other personnel and/or outside consultant(s) as may be
        jointly determined.

   b.   Flight Attendants shall have the ability to participate in
        forty (40) hours of training each year to enhance their
        understanding of the issues described herein.

   c.   Such training may be provided in crew briefings, specific
        training sessions, home study, recommended reading, videos,
        seminars or other methods as determined in accordance with
        (a) and (b) above.

                         ARTICLE 29 / Page 66

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3. Flight Attendant Crew Schedule and Operational Planning

   The timely, efficient and professional delivery of in-flight
   services to TWA passengers is central to the overall mission and
   success of the airline. TWA and the IAM mutually recognize (1)
   the overall importance of the In-Flight Services Department, to
   both TWA and to working Flight Attendants, in the delivery of TWA
   service and product and (2) the unique expertise and resources of
   the personnel, including Flight Attendants, IAM representatives
   and In-Flight management employees, within the In-Flight Services
   Department in determining the means and methods of delivery of in-
   flight service to the traveling public.

   Consistent with the foregoing and with principles of Participative
   Management embodied in this Agreement, the IAM and TWA agree:

   (1)  TWA, the IAM, and outside consultants shall continue to
        explore the most feasible and most efficient manner of
        integrating TWA's Crew Scheduling, Operational Planning,
        Crew Allocation and Resources and Variable Staffing Unit
        into the In-Flight Services Department, TWA operational
        needs and Flight Attendant work schedules.

   (2)  Effective immediately and irrespective of jurisdictional
        placement issues specified in (1) above, the IAM Scheduling
        Director and Advocates/Representatives shall, in addition to
        assisting individual Flight Attendants in the resolution of
        specific questions, problems and complaints related to
        scheduling or operational planning, work with TWA Scheduling
        and Operational Planning, Crew Allocation and Resources and
        Variable Staffing Unit personnel and, together with such
        personnel, determine Scheduling, Operational Planning and
        Crew Allocation and Resource policies and resolve issues of
        general applicability to Flight Attendants; by no later than
        January 1, 1995, IAM representatives and TWA representatives
        shall jointly determine the administrative structure of the
        Flight Attendant Scheduling and Operational planning, Crew
        Allocation and resources and Variable Staffing Unit
        functions and operation within the In-Flight Services
        Department, including lines of authority and reporting.

4. IAM Representatives

   With the exception of the President, Vice President, and in
   addition to the six (6) representatives enumerated in Article 16,
   the IAM representatives specified herein shall be paid by TWA in
   the manner set forth in Article 16.

5. IAM Representation

   Nothing contained in the Agreement shall abrogate in any way the
   rights of union representation, in grievance or otherwise, of any
   Flight Attendant. Any issue, grievance or complaint may be
   resolved by TWA and the IAM through

                         ARTICLE 29 / Page 67

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   the co-equal lines of decision-making or through the procedures of
   Article 16. Any Flight Attendant may invoke the procedures of
   Article 16 over any matter or dispute arising out of the
   Agreement.  If such dispute is not resolved either through joint
   decision-making or Article 16, it may be submitted to the final
   and binding dispute resolution procedures specified in Article 17.
   In proceedings conducted under Article 17, no joint decision maker
   directly involved in the issue at question shall participate as a
   member of the System Board determining the issue. Neither
   statements made, positions taken by the IAM representative, nor
   the fact that the IAM representative concurred in, the challenged
   decision, shall be referred to or introduced into evidence in such
   System Board proceeding.

6. Management/Labor Advisory Task Force

   The Management/Labor Advisory Task Force ("Task Force")
   established in 1994 shall become a permanent part of the corporate
   structure. Participation on the Task Force by the most senior
   officials of both the Company and its three largest unions
   highlights the joint commitment to the re-engineering effort and
   creates a decision making forum for action.

   The Task Force will meet at least once a month and will have the
   authority to create similar committees throughout the Company.
   These other committees may be department specific, issue specific,
   or cross departmental and/or operational lines. All such
   committees shall ultimately report to the Task Force. The Task
   Force shall continuously monitor all aspects of the Company
   including its structure, policies, procedures, long and short term
   business and financial plans, communications strategies, and any
   and all other matters involving the Company. The Company shall
   institute procedures to ensure that the recommendations of the
   Task Force and the committees are promptly acted upon.

   The Company shall pay the flight pay loss and expenses of the IAM
   representatives on the Task Force and all such committees and
   shall provide the necessary and appropriate insurance coverage for
   the performance of the duties of each IAM representatives.

   The Task Force Committee structure shall become a part of the
   company's Management Policies and Procedures Manual.

7. Filling of Positions in In-Flight

   In redefining the role of front line management, In-Flight
   Services and the IAM commit to the concepts of self-management,
   empowerment, consensus decision making, and team building. To that
   end, In-Flight Services and the IAM shall, no later than November
   1, 1994 begin to jointly develop and administer a recruitment and
   selection process for all In-Flight personnel.

                         ARTICLE 29 / Page 68

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8.  Access to Information

    The Company shall provide to the General Chairpersons of District
    Lodge 142 or their designee of the IAM or her/his representative,
    a monthly report setting forth information on the Company. The
    Company shall provide to the IAM's representatives on the Task
    Force and its related committees such information as may be
    required to carry out their work.

9.  Management Consultant

    By March 31, 1995, the Company shall retain a management
    consulting firm to fully review and analyze the Company's
    management structure. The members of the Task Force shall be
    entitled to meet regularly with this firm following its retention
    and to review its results prior to implementation.

10. Communication Improvement

    The Company shall make a good faith effort to improve
    communications within management and between management and the
    employees.  The IAM and the Company agree to meet and to set
    goals achieving such improvement, including staff meetings, road
    shows, newsletters, surveys and financial updates. The IAM shall
    make its expertise and resources reasonably available to assist
    the Company in improving its communication with employees
    represented by the IAM.

TRANS WORLD AIRLINES, Inc.
By: Thomas Gorski
    Vice-President, In-Flight Services
    Date: September 22, 1994

INDEPENDENT FEDERATION
OF FLIGHT ATTENDANTS
By: Victoria L. Frankovich
    President
    Date: September 22, 1994

Amended to integrate IAM and its organizational levels by:

TRANS WORLD AIRLINES, Inc.

/s/ Terry L. Hayes
Vice President, Labor Relations

IAM

/s/ Sherry L. Cooper
General Chairperson

Date: August 1, 1999

                         ARTICLE 29 / Page 69

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LETTER XXXI - ORDER OF REMOVAL - GROUND SERVICE MANUAL [9/22/94]

                    Dated:  September 9, 1994

                      ORDER OF REMOVAL - GSM

The Company agrees to review with IFFA the Order of Removal in the
Ground Service Manual, specifically as it applies to XCAP and ACM
classifications, and make those corrections necessary to bring the
manual into contractual compliance.

TRANS WORLD AIRLINES, Inc.

By: /s/ Thomas Gorski
Vice-President, Inflight Services
Date: September 22, 1994

INDEPENDENT FEDERATION OF FLIGHT ATTENDANTS

By: /s/ Victoria L. Frankovich
President
Date: September 22, 1994

                         ARTICLE 29 / Page 70

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LETTER XXXII - PREFERENTIAL BIDDING [9/22/94]

IFFA and TWA agree to a test of a Preferential Bidding Program.

1.    The test will be conducted for a six (6) month period using a
      mutually agreed upon Flight Attendant location and category.

2.    The test will commence as soon as practical once a mutually agreed
      upon vendor of a Preferential Bidding Program has been selected.
      Progress reports will be provided IFFA monthly with a targeted
      start-up date of 4/30/95.

3.    During the first two (2) months of the test period, Flight
      Attendants will submit bid preferences utilizing both the current
      TWA Crew Allocations-generated bid package and the vendor
      Preferential Bidding Program. Flight Attendants will fly the lines
      of the time that they are awarded from the TWA Crew Allocations
      CAMS bid award process.

4.    Beginning with the third month of the test period Flight
      Attendants will bid and fly lines of time awarded by the
      Preferential Bidding System.

5.    At the conclusion of the 6-month test period, IFFA and TWA will
      jointly evaluate the results. If the decision is made to implement
      the program on a permanent basis, system-wide application will be
      made as soon as practical.

6.    IFFA Representatives will meet with TWA Representatives on a
      monthly basis to review the bid awards, determine bid request
      satisfaction levels, correct bid award errors and identify
      outstanding problems concerning the bidding process.

NOTE: If the test proves successful and preferential bidding is
      implemented on a permanent basis, Article 18(A), (B), (C) and (D)
      will be affected, and the parties shall promptly meet to award
      related provisions so as to be consistent with preferential
      bidding.

TRANS WORLD AIRLINES, INC.
/s/ William L. Schecter
Vice President, Labor Relations
Date: September 22, 1994

IFFA
By: Victoria L. Frankovich
President
Date: September 22, 1994

                         ARTICLE 29 / Page 71

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LETTER XXXIII - IFFA-TWA PAY STUDY COMMITTEE

September 24, 1994

There is hereby established a Joint Pay Study Committee consisting of
the IFFA president or her/his designee and two other members appointed
by IFFA, and the Vice President, In-Flight Services or her/his designee
and two members appointed by In-Flight Services.

The Committee shall review and make recommendations concerning revisions
in Flight Attendant pay structure based on industry averages; pay
simplification; equalization of International and Domestic pay; and
correction of contract/pay inequities and anomalies.

The Committee shall commence its review no later than January 1, 1995.

TRANS WORLD AIRLINES, Inc.

/s/ Thomas Gorski
Vice-President, In-Flight Services
Date: September 22, 1994

INDEPENDENT FEDERATION OF FLIGHT ATTENDANTS

/s/ Victoria L. Frankovich
President
Date: September 22, 1994

                         ARTICLE 29 / Page 72

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LETTER XXXIV - VOLUNTARY RELEASE OF LAYOVER HOTEL ROOMS [9/22/94]

              VOLUNTARY RELEASE OF LAYOVER HOTEL ROOMS

TWA and IFFA agree to continue the Voluntary Release of Layover Hotel
Rooms.

The program will provide for a $10.00 rebate for each voluntary release
of an eligible hotel room on the domestic and international operations.
In order to qualify for this rebate, the Flight Attendant must follow
agreed-upon procedures and notify the Company at least twelve (12 hours
prior to the arrival of the inbound flight for the specific layover. A
listing of eligible hotels at which this voluntary release of rooms is
applicable will be provided.

Representatives of TWA and IFFA will continue to establish the
procedures with the Director of Hotel Administration no later than
November 1, 1994.

TRANS WORLD AIRLINES, INC.

/s/ Thomas Gorski
Vice-President, In-Flight Services
Date: September 22, 1994

INDEPENDENT FEDERATION OF FLIGHT ATTENDANTS

/s/ Victoria L. Frankovich
President
Date: September 22, 1994

                         ARTICLE 29 / Page 73

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LETTER XXXV - DIRECT REPORT [5/31/94]

May 31, 1994

Ms. Victoria Frankovich
President
Independent Federation of Flight Attendants
630 Third Avenue
New York, NY 10017

Dear Ms. Frankovich:

A Flight Attendant who is scheduled to begin his/her flight assignment
by a deadhead flight segment(s) out of his/her domicile/satellite shall
be permitted, upon notification to Crew Schedule, to report directly to
the departure station of the first working flight segment of such flight
assignment. The notification to Crew Schedule must occur no later than
two (2) hours prior to the departure of the domicile/satellite deadhead
flight segment, giving Crew Schedule sufficient time to stand up the
appropriate Flight attendants if necessary.

A Flight Attendant utilizing the provisions described in this letter of
agreement, will be required to fill out a computer mask showing the
waived deadhead. The Flight Attendant shall be deemed to have actually
performed the deadhead assignment as scheduled except that his/her trip
expenses shall commence at the scheduled departure time of the first
segment that the Flight Attendant actually protects.

In the event that a layover is scheduled prior to the first segment
actually worked by the Flight Attendant, he/she shall be provided with
the necessary hotel accommodations. The Flight Attendant shall be
required to notify the JFK Hotel Desk, using the 800 number or the mask
entry in the bid package to cancel any hotel accommodations that are not
needed.

The ability to "direct report" cannot be utilized for deadheads
associated with charter or reserve assignments.

If this letter accurately reflects your understanding, please indicate
by signing below.

                            Very truly yours,

                            /s/ Bette Dubinsky
                            Manager - Labor Relations

Agreed and Accepted:
/s/ Victoria Frankovich

                         ARTICLE 29 / Page 74

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LETTER XXXVI - PTO COMPUTER MASK [6/1/94]

                                                June 1, 1994

Ms. Victoria Frankovich
President
Independent Federation of Flight Attendants
630 Third Avenue
New York, NY 10017

Dear Ms. Frankovich:

It is agreed that the company shall adjust the computer mask used by the
Flight Attendants to request whole month, half month, specific dates or
any range of days off for PTO. The awarding of the PTO, including last
minute/short notice PTO, shall always be on a first come, first serve
basis, via such computer request, documenting the date and time of each
request.

The award of all requests will be by domicile positions and listed in
order of input by type of PTO requested, i.e. all full month requests
will be listed on a report by domicile/position, all first half month
will be listed on a different report by domicile/position.

The PTO computer mask for the month will be available forty-five (45)
days prior to the start of the specific month and will be open,
accepting all requests until the actual contract month has come to an
end.

If this letter accurately reflects your understanding, please indicate
by signing below.

                                  Very truly yours,

                                  /s/ Bette E. Dubinsky
                                  Manager, Labor Relations
BED/bw

Agreed and Accepted:

Victoria Frankovich

                         ARTICLE 29 / Page 75

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LETTER XXXVII - CODE 4/UBS OVERRIDE [7/28/94]

July 28, 1994

William L. Schecter
Vice President - Labor Relations
Trans World Airlines, Inc.
Building 60, Terminal 4A
JFK International Airport
Jamaica, NY 11430
                                   Re: IFFA-TWA
                                       Code 4/UBS Override
                                       -------------------

Dear Mr. Schecter:

This letter will confirm our agreement concerning the IAM's obligation
to reimburse TWA for payroll-related and non-payroll-related benefits
and other TWA employment costs, in excess of salary, associated with the
removal of Flight Attendants from TWA flight duty at IAM request for
purposes of union-related business (Code 4/UBS override). It is
understood and agreed:

(1)   TWA forever releases and forgives IFFA of and from any debt or
      obligation, if any, that may exist on IFFA's part, which IFFA
      expressly denies, in connection with Code 4/UBS override for
      Flight Attendants removed from TWA flight duty on Code 4/UBS at
      IFFA's request prior to August 1, 1994; this release shall become
      effective upon payment by IFFA to TWA of the Code 4/UBS salary and
      override (computed at 35% of salary), if any, for the period prior
      to August 1, 1994.

(2)   IFFA shall pay TWA Code 4/UBS override equal to forty (40%) of
      salary of Flight Attendants removed from TWA flight duty, on and
      after August 1, 1994, on Code 4/UBS at IFFA's request for purposes
      of union-related business.

If the foregoing accurately reflects your understanding, please signify
by signing below.

                                         Sincerely,

                                         /s/ Victoria Frankovich

Agreed and Accepted

/s/ William L. Schecter

                         ARTICLE 29 / Page 76

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LETTER XXXVIII - PROFESSIONAL STANDARDS COMMITTEE

                        LETTER OF AGREEMENT

                              BETWEEN

                  TRANS WORLD AIRLINES. INC. (TWA)

            AND THE FLIGHT ATTENDANTS AS REPRESENTED BY

                              THE IAM

WHEREAS, it is in the best interests of TWA, its Flight Attendants and
the travelling public to ensure the highest standards of safety and
service among its Flight Attendants; and

WHEREAS, it is in the best interests of TWA and its Flight Attendants to
ensure the most productive work environment with the earliest possible
resolution of disputes of problems within the Flight Attendant
workforce; and

WHEREAS, certain job performance issues are best addressed and resolved
by and among peers.

NOW THEREFORE, IT IS AGREED:

The Company agrees that disputes that arise regarding employee conflicts
and professional conduct which may come to the Company's attention may
be referred to the IAM Professional Standards Committee.

The Company further agrees that this Letter will be utilized and applied
in exactly the same manner as Letter of Agreement VII is applied as
contained in the TWA-ALPA Agreement.

Whenever TWA refers an issue to the IAM Professional Standards
Committee, the Committee shall normally have a period of thirty (30)
days or such longer period as may be designated by mutual agreement,
during which to attempt to resolve the problem. During such thirty day
(or longer) period. TWA agrees to hold in abeyance any action it may
have commenced or contemplated taking. At or before the end of the
thirty day or longer period the IAM Professional Standards Committee
shall make a verbal report to appropriate management either that "the
problem is resolved" or that the "IAM Professional Standards Committee
is unable to be of any further assistance".

In the event that successful resolution of a problem is not attained by
the committee within the above thirty day (or longer) period. TWA is
then free to take whatever action it deems appropriate in order to
resolve the problem. In cases where TWA would elect to

                         ARTICLE 29 / Page 77

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commence or continue disciplinary proceedings the delay caused by the
thirty day (or longer) period to arrive at a successful resolution, will
not be raised by the IAM as supporting its position. In cases where TWA
commenced adverse action against a Flight Attendant prior to referring
the issue to the IAM Professional Standards Committee, the disciplinary
time clock will stop and the thirty day (or longer) period in which the
IAM Professional Standards Committee attempted to resolve the problem
shall not count toward the established time limits for the filing of a
grievance. After the thirty day (or longer) period has past. the Company
shall resume the time limit count continuing from the last day the count
was suspended and prior to referring the issue to the IAM Professional
Standards Committee.

TWA further agrees that no IAM Professional Standards Committee member
will be asked or required by TWA to testify in any disciplinary case
that has been previously referred to the Committee by TWA.

IT IS FURTHER AGREED:

That TWA shall, in connection with any case referred by it and if so
requested by the IAM Professional Standards Committee, encourage any
employee involved in a dispute to work with the Committee to attempt to
attain an amicable and equitable resolution of the problem.

IT IS FURTHER AGREED:

That it will be the solemn responsibility of the members of the IAM
Professional Standards Committee to uphold the highest standards of
safety, service and professionalism among the work force and will
accomplish that by;

   1)   Aiding in the resolution of flight conduct problems which
        affect the safety and/or the professional conduct of a
        flight.

   2)   Aiding in the resolution of conflicts between Flight
        Attendants when these conflicts may affect the safety and/or
        the professional conduct of a flight.

   3)   Aiding in the resolution of conflicts between a Flight
        Attendant, a member of another employee group, or another
        individual when the conflict may affect the safety and/or
        professional conduct of a flight.

   4)   Promoting understanding that Flight Attendant conduct off
        the aircraft has a favorable or unfavorable reflection upon
        the profession, therefore, such conduct must be addressed if
        it reflects negatively upon the profession.

   5)   Proceeding with respect for the individual by offering
        supportive peer counseling which protests the individuals
        self-esteem.

                         ARTICLE 29 / Page 78

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   6)   Promoting the highest standards of professional conduct
        through regular communication with the Flight Attendant
        group through newsletters and other such vehicles.

IT IS FURTHER AGREED:

That, the proceedings of the IAM Professional Standards Committee shall
be kept and remain confidential to the fullest extent practicable.

That the provisions of this Letter of Agreement and the procedures
delineated herein shall in no way alter or diminish TWA's authority to
ensure proficiency and air safety nor shall they abridge or infringe
upon TWA's, the IAM's or a Flight Attendant's rights under the IAM - TWA
Collective Bargaining Agreement.

AGREED AND ACCEPTED:
Trans World Airlines, Inc.
/s/ TERRY L. HAYES

IAM
/s/ SHERRY L. COOPER

                         ARTICLE 29 / Page 79

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LETTER XXXIX - OK'ING RESERVE ASSIGNMENT AND CHANGES TO BID AWARDS
[2/9/95]

February 9, 1995

Ms. Victoria Frankovich
President
Independent Federation of Flight Attendants
720 Olive Street, Suite 1700
St. Louis, MO 63101

Dear Ms. Frankovich:

It is agreed that the Company will allow Flight Attendants to O.K.
reserve assignments and changes to line holder bid awards via computer
input, except during the hours of 0900 and 1000 and 2100 and 2200 daily,
local domicile time. The ability to O.K. via computer will be effective
with the sequence notification date and time as published in the Flight
Attendant bid packages.

If the foregoing accurately states the terms of this agreement, please
sign one copy where indicated below and return that fully executed copy
to my office.

                                 Very truly yours,

                                 /s/ Bette E. Dubinsky
                                 Director
                                 Labor Relations, Inflight

BED: jdc

Agreed and Accepted:

/s/ Victoria Frankovich

                         ARTICLE 29 / Page 80

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LETTER XL - RESERVE SPREAD [4/19/95]

April 19, 1995

Ms. Victoria Frankovich
President
IFFA
720 Olive Street, Suite 1700
St. Louis, MO 63101

Dear Ms. Frankovich:

This letter will confirm our agreement concerning the expansion of
options for reserve spreads. The reserve spread options may include
three, four, five and ten day spreads and may be discontinued by mutual
consent of the parties with notification to the Director of Crew
Scheduling no later than the first of the month preceding the effected
month.

If the foregoing accurately states the terms of this agreement, please
sign one copy where indicated and return that fully executed copy to my
office.

                       Very truly yours,

                       /s/ Bette E. Dubinsky Director
                       Labor Relations, Inflight

BED:jdc

Agreed and Accepted:

/s/ Victoria Frankovich

                         ARTICLE 29 / Page 81

<PAGE>
<PAGE>
LETTER XLI - WORKERS' COMPENSATION TASK FORCE

                        LETTER OF AGREEMENT

                           BETWEEN IFFA

                   AND TRANS WORLD AIRLINES, INC.

IFFA and TWA agree that a reduction in the cost of workers' compensation
is in the best interest of the Company and the work force. Therefore,
TWA commits to establishing a joint task force to reduce such cost. The
task force shall consist of representatives of TWA, ALPA, IAM, and IFFA.
The initial meeting of the task force shall be held no later than
10/30/94.

The task force shall determine specific measures, which if implemented,
will reduce workers' compensation costs to or below industry averages.
Should TWA and, individually or collectively, any or all of the labor
unions agree, such task force may be developed into a Joint Medical
Board which shall be responsible for maintaining or improving upon these
savings by reviewing:

   a)   facilities
   b)   providers
   c)   fee schedules
   d)   legal requirements
   e)   associated costs
   f)   risk assessment
   g)   problem case reviews

The task force shall immediately identify any and all areas of cost
savings, related to workers' compensation and such cost saving
determinations shall be implemented at the earliest practicable date,
but no later than July 1, 1995.

TRANS WORLD AIRLINES, Inc.
By: /s/ Thomas Gorski
Vice-President, In-Flight Services
Date: September 22, 1994

INDEPENDENT FEDERATION OF FLIGHT ATTENDANTS
By: /s/ Victoria Frankovich
President
Date: September 22, 1994

                         ARTICLE 29 / Page 82

                              
<PAGE>
<PAGE>

LETTER XLII - AMENDMENT TO ARTICLE 24(R) - DEDUCTION OF MEMBERSHIP UNION
DUES [10/10/95]

October 10, 1995

Ms. Sherry Cooper
President
Independent Federation of Flight Attendants
720 Olive Street, Suite 1700
St. Louis, MO 63101

Dear Ms. Cooper:

This is to confirm the Agreement of the parties that the deduction of
membership union dues pursuant to Article 24(R) of the TWA-IFFA
Collective Bargaining Agreement will be amended as follows:

Deductions of membership dues shall be made from one (1) paycheck each
month provided there is a balance in the paycheck sufficient to cover
the amount after all other deductions authorized by the employee
relating to health benefits or pension benefits or required by law have
been justified. In the event of termination of employment, there shall
be no obligation of the Company to collect dues until all such other
deductions (including money claims of the Company and the Credit Union)
have been made, and such obligation to collect dues shall not extend
beyond the pay period in which the employee's last day of work occurs.

This letter will not affect any other provision of the TWA-IFFA
Agreements.

If the foregoing accurately reflects our understanding please sign where
indicated below.

                            Very truly yours,

                            /s/ Philip B. Whitcomb
                            Staff Vice President
                            Labor Relations
PBW:jdc

Agreed and Accepted:

/s/ Sherry Cooper

                         ARTICLE 29 / Page 83

<PAGE>
<PAGE>

LETTER XLIII - RESERVE SPREADS

August 8, 1995

Michael McDermott
Director, Contract and Scheduling
Independent Federation of Flight Attendants
720 Olive Street, Suite 1700
St. Louis, MO 63101

Dear Michael:

This letter will cancel and supersede my letter dated April 19, 1995.
This letter will confirm our agreement concerning the expansion of
options for reserve spreads. The reserve spread option may include two,
three, four, five and ten day spreads which in combination may not
exceed four separate spreads. Such Reserve Spreads or any combinations
thereof may be discontinued by mutual consent of the parties with
notification to the Director of Crew Scheduling no later than the first
of the month preceding the effected month.

If the foregoing accurately states the terms of this agreement, please
sign one copy where indicated and return that fully executed copy to my
office.

                  Very truly yours,

                  /s/ Bette E. Dubinsky
                  Director
                  Labor Relations, In Flight

Agreed and Accepted:

/s/ Michael McDermott

                         ARTICLE 29 / Page 84

                              
<PAGE>
<PAGE>

LETTER XLIV - DOWNTOWN LAYOVER HOTELS

August 23, 1995

Ms. Bette Dubinsky
Director, Labor Relations
Trans World Airlines, Inc.
One City Centre
515 N. Sixth Street
St. Louis, MO 63101

Re:  Downtown Layover Hotels

Dear Ms. Dubinsky:

In accordance with the IFFA/TWA Collective Bargaining Agreement,
downtown layover hotels are required for Flight Attendants whose
layovers are scheduled for 24 or more hours. During non-routine
operations, occasionally Flight Attendants who are scheduled for
downtown layovers end up with less than 24 hours from release to report
and depending on the amount of delay related to non-routine operations,
a Flight Attendant's legal rest could be jeopardized.

In order to ensure that Flight Attendants receive sufficient rest at
layover stations, IFFA and TWA agree that scheduled downtown layover
hotels may be moved to an airport hotel location where the time from
release to report is reduced to less than 12 hours.

If you agree with the above, please indicate by signing below and return
one fully-executed copy to me.

                            Very truly yours,

                            /s/ Michael McDermott
                            Director, Contract Administration

AGREED AND ACCEPTED:
/s/ Bette Dubinsky
TWA Director, Labor Relations

cc: V. Frankovich
    B. Hoffman
    N. Adams
    B. Jolley
    Full-Time Reps.

                         ARTICLE 29 / Page 85

<PAGE>
<PAGE>

LETTER XLV - RESERVE TRADING

August 24, 1995

Michael McDermott
Director, Contract and Scheduling
Independent Federation of Flight Attendants
720 Olive Street, Suite 1700
St. Louis, MO 63101

Dear Michael:

This letter of agreement confirms our understanding permitting Reserve
Cabin Attendants to mutually trade flights and expand the parameters
governing the Open Trading of their Spread Days.

A. Mutual Trading of Flights:
   -------------------------

   Reserve Cabin Attendants may mutually trade their entire assigned
   pairing no later than the report time of the first affected
   pairing provided:

   1.   Pairings operate on the same calendar days.

   2.   Both pairings are of the same operation.

        a.   Domestic to Domestic
        b.   International to International

B. Additional Trading of Spread Days:
   ---------------------------------

   All Reserve Spreads vacated due to move-ups prior to the beginning
   of the new month shall be placed in international open time for
   trading.

   1.   All trades must maintain a period of four (4) days of
        availability between spread days.

   2.   Trades must result in combinations that do not exceed four
        separate spreads.

   3.   Spreads may be traded not later than fifteen (15) hours
        prior to the first spread affected.

   4.   Effective with this agreement, two (2), three (3), four (4),
        and five (5) day spreads, which are on the open flight list,
        shall be available for trading prior to, but not on/after
        the first day of the new month. Any additional move-ups
        which occur on or after the first day of a new month, shall
        not create additional reserve spread trading, except those
        of a ten (10) day spread duration.

                         ARTICLE 29 / Page 86

<PAGE>
<PAGE>

If the foregoing accurately states the terms of this Agreement, please
sign one copy where indicated and return one fully-executed original to
my office.

                               Very truly yours,
                               /s/ Bette E. Dubinsky
                               Director
                               Labor Relations, In Flight

Agreed and Accepted

/s/  M. McDermott

                         ARTICLE 29 / Page 87

<PAGE>
<PAGE>

LETTER XLVI - RESERVE ASSIGNMENT SET-UP/CALL-IN PERIODS

September 28, 1995

Ms. Victoria L. Frankovich
President
Independent Federation of Flight Attendants
720 Olive Street, Suite 1700
St. Louis, MO 63101

Re: P.M. Reserve Assignment Set-up and Call-in Periods

Dear Ms. Frankovich:

This letter will confirm our agreement concerning the change in the
start time of the PM. Reserve Assignment Set-up Period and the PM.
Reserve Call in Period.

1. The P.M. Reserve Assignment Set-up Period shall begin at 1900
   (previous time was 2100).

2. The P.M. Reserve Call-in Period shall begin at 2000 (previous time
   was 2200).

3. The end time of the P.M. Reserve Call-in Period remains unchanged,
   ending at 0100.

4. It is further understood and agreed that all procedures requiring
   a Reserve Flight Attendant returning from a status that ends at
   midnight remain in effect.

5. A Flight Attendant who is off duty and is scheduled on a flight
   that is normally covered from the P.M. Set-up period will lose all
   rights to such trip at 1730 local domicile time. Any flight that
                               --------------
   is vacated will become a soft opening and if said flight is not
   used for balancing, it will be released for trading and self-
   balancing not later than 1800 local domicile time.

6. Trading will be suspended during the Set-up period from 1900 to
   2000.

7. Only those known open flights departing not earlier than four (4)
   hours nor later than twenty (20) hours after the end of the Call-
   in period shall be assigned to a Reserve Flight Attendant.

                         ARTICLE 29 / Page 88

<PAGE>
<PAGE>

If the foregoing accurately states the terms of this Agreement, please
sign one copy where indicated and return one fully-executed original to
my office.

                              Very truly yours,
                              /s/ Bette E. Dubinsky Director
                              Labor Relations, In Flight
BED:jdc

Agreed and Accepted
/s/ Victoria L. Frankovich

                         ARTICLE 29 / Page 89

<PAGE>
<PAGE>

LETTER XLVII - UNION DUES

October 10, 1995

Ms. Sherry Cooper
President
Independent Federation of Flight Attendants
720 Olive Street, Suite 1700
St. Louis, MO 63101

Re: Dues Deduction

Dear Ms. Cooper:

This is to confirm the Agreement of the parties that the deduction of
membership union dues pursuant to Article 24(R) of the TWA-IFFA
Collective Bargaining Agreement will be amended as follows:

Deductions of membership dues shall be made from one (1) paycheck each
month provided there is a balance in the paycheck sufficient to cover
the amount after all other deductions authorized by the employee
relating to health benefits or pension benefits or required by law have
been justified.

In the event of termination of employment, there shall be no obligation
of the Company to collect dues until all such other deductions
(including money claims of the Company and the Credit Union) have been
made, and such obligation to collect dues shall not extend beyond the
pay period in which the employee's last day of work occurs.

This letter will not affect any other provision of the TWA-IFFA
Agreements.

If the foregoing accurately reflects our understanding please sign where
indicated below.

                                    Very truly yours,

                                    /s/ Philip B. Whitcomb
                                    Staff Vice-President
                                    Labor Relations, TWA

Agreed and Accepted by:

/s/ Sherry Cooper

                         ARTICLE 29 / Page 90

<PAGE>
<PAGE>

LETTER XLVIII - UNIFORMS

February 7, 1996

Ms. Sherry Cooper, President
IFFA
720 Olive Street, Suite 1700
St. Louis, MO 63101

Dear Sherry:

As discussed, TWA has acquired new vendors for Flight Attendant uniform
items. Presently, the prices stated in the contract, Article 5(C)(2),
are inconsistent with the actual prices paid by TWA to the vendors for
additional/accessory uniform items.

The enclosed comparison chart reflects the differences that presently
exist between TWA costs and the IFFA contract. As is apparent several
of the items are considerably less in price than as stated in the
contract, enabling us to pass the savings onto the Flight Attendant work
force. An increase is noted for shirts and the unisex tie, while the
Flight Attendant wings, service stars and hash marks remain the same.

By this Letter of Agreement, the parties concur that the prices as
stated on the enclosed form reflect the costs that will be paid by all
Flight Attendants for additional/accessory uniform items.

If the foregoing accurately reflects our understanding please sign where
indicated below.

                              Yours truly,

                              /s/ Bette E. Dubinsky
                              Director, Labor Relations
                              In-Flight

BED:jdc

Agreed and Accepted:

/s/ Sherry Cooper

                         ARTICLE 29 / Page 91

<PAGE>
<PAGE>

                     FLIGHT ATTENDANT UNIFORM COMPARISON
                     BETWEEN TWA COST AND IFFA CONTRACT

      Uniform Item                         TWA Cost     IFFA Contract
      Double-Breasted Blazer - Female       $109.50               N/A
      Single-Breasted Blazer - Female        104.50               N/A
      Double-Breasted Blazer - Male          144.50               N/A
      Single-Breasted Blazer - Male          139.50               N/A
      Skirt                                   49.50               N/A
      Slacks - Female                         57.50               N/A
      Trousers                                55.00               N/A
      Longsleeve Blouse/Shirt                 19.35             15.00
      Shortsleeve Blouse/Shirt                17.15             13.13
      Epaulet Covers                           2.50              3.13
      Serving Garment - Female                13.95             29.88
      Serving Garment - Male                  13.95             26.81

      Handbag                                 31.50             37.50
      Suitcase                                45.00             56.25
      Topcoat                                115.00               N/A
      Collar Bar                               2.25              2.58
      Pocket Square                             .50               .94
      Unisex Tie                               6.75              6.56
      Bias Cut Scarf                           3.50              6.06
      Belt                                     5.75              8.44
      Sweater                                 18.75             30.63
      Sweater Vest                            15.00             25.00
      F/A Wings                                6.25              6.25
      FSM Wings                               10.15             11.25
      Floppy Bow Tie                 Stock depleted              2.31
      FSM Pouch                                1.53              1.84
      Attache                                 50.12             62.65
      Service Stars                             .45               .45
      Hash Marks                                .45               .45
      Maternity Jumper                        60.00             61.88
      Maternity Blouse                Not available             66.00

2/5/96

                         ARTICLE 29 / Page 92

<PAGE>
<PAGE>

LETTER XLIX - MENTAL HEALTH/SUBSTANCE ABUSE PROGRAM

April 18, 1996

Ms. Sherry Cooper, President
Independent Federation of Flight Attendants
720 Olive Street, Suite 1700
St. Louis, MO 63101

Subject: Mental Health/Substance Abuse Program

Ref: My Correspondence Dated January 16, 1996

Dear Ms. Cooper:

Thank you for reviewing the company's proposal for an updated Mental
Health/Substance Abuse Benefit Plan. This letter will confirm the
agreement reached during the 1994 negotiations to modify the Mental
Health/Substance Abuse benefits as described in the enclosed universal
schedule which will replace the existing schedules that provide
different benefit levels for each employee group.

If the foregoing and the enclosed schedule reflects your understanding
of the changes we have agreed to, please sign this letter where
indicated below and return one copy to me.

                       Very truly yours,

                       /s/ Bette E. Dubinsky
                       Director
                       Labor Relations In Flight

Agreed and Accepted

/s/ Sherry Cooper

                         ARTICLE 29 / Page 93

<PAGE>
<PAGE>

LETTER L - 757 STAFFING

                                            June 12, 1998

Sherry L. Cooper
IAM General Chairperson
IAM Local Lodge 1997

Dear Ms. Cooper:

With regard to the Boeing 757 staffing, the following are the terms of
the agreement reached between Trans World Airlines, Inc. and the
International Association of Machinists:

   1.   Effective August 1, 1998, the basic crew staffing for 757
        commercial and charter flights is established as one (1) FSM
        plus four (4) Cabin Attendants on Domestic flights; and one
        (1) FSM plus five (5) Cabin Attendants on International
        Flights.

   2.   The Company will determine crew staffing on all 757 aircraft
        for International, Domestic, commercial and charter flights
        at or above FAA minimum requirements.  Additional crew
        staffing above the FAA minimum requirements may be published
        in the monthly bid package or may be established by the
        Variable Cabin Staffing Unit (VSU) based on the following
        criteria:

        Service Type                        % Revenue Load
        ------------                        --------------
        Hot Meal                            70%
        Snack or cold meal                  85%

   3.   For under-staffing payment purposes, the Company will be
        required to make an under-staffing payment when it does not
        operate 757 commercial or charter flights with the basic
        crew staffing.

   4.   For under-staffing payment purposes, the Company will be
        required to make an under-staffing payment when crew
        staffing as published in the monthly bid package or
        additional staffing established by the VSU is not provided
        on a 757 flight segment where the actual total revenue
        passenger load is 70% or greater.  When the actual total
        revenue passenger load is less than 70%, the Company will
        not be required to make such under-staffing payment.

   5.   Such under-staffing payment, when required, shall be made to
        each crew member who actually worked the flight segment in
        accordance with the following formula:
        (a)  Number of crew members under-staffed
        (b)  Number of hours of flight segment (block-to-block)
        (c)  $10.00 per hour or fraction thereof pro-rated per
             Flight

                         ARTICLE 29 / Page 94

<PAGE>
<PAGE>
                          Attendant absent.

        Multiply (a) x (b) x (c) = amount each Flight Attendant will
        receive as an understaffing payment in addition to all other
        compensation earned.

   6.   Effective August 1, 1998, for pay purposes only, 757 flights
        arriving or departing to or from Mexico and Caribbean
        stations will be deemed "International" and Flight
        Attendants working such flights will be compensated at the
        appropriate International rates of pay set forth in Article
        3 of the CBA.

   7.   For staffing purposes, 757 flights arriving or departing to
        or from Mexico and Caribbean stations will continue to be
        deemed "Domestic" with a basic crew staff level of one (1)
        FSM plus four (4) Cabin Attendants.

   8.   For scheduling purposes, 757 flights arriving or departing
        to or from Mexico and Caribbean stations will continue to be
        deemed "Domestic" and subject to all applicable provisions
        of Article 6 and Article 18 of the CBA.

   9.   The under-staffing payment provisions will become effective
        July 1, 1998 based on the July bid package.

   10.  This agreement is effective upon execution by the parties,
        is incorporated in the collective bargaining agreement
        signed September 22, 1994 and is subject to all provisions
        of the Railway Labor Act, as amended.

If this letter accurately reflects our agreement, please sign below.

                                    Very truly yours,

                                    /s/ Philip B. Whitcomb
                                    Vice-President - Labor Relations

Agreed and Accepted by:
/s/ Sherry L. Cooper
General Chairperson, IAM

                         ARTICLE 29 / Page 95

<PAGE>
<PAGE>

LETTER LI - PENSION PLAN CONTRIBUTIONS

March 31, 2000

Mr. William O'Driscoll
President-Directing General Chairperson
District Lodge 142
International Association of Machinists
  and Aerospace Workers
400 NE 32nd Street
Kansas City, MO 64116

Dear Mr. O'Driscoll

This letter will confirm our agreement that TWA will make certain
contributions to the IAM National Pension Plan.  Effective March 1,
2001, TWA will begin contributions on behalf of eligible IAM represented
employees to the IAM National Pension Fund, National Pension Plan $0.50
per hour to a maximum of 173 hours per month based on flight credit
hours of up to seventy-three (73) hours per month multiplied by two
point three seven (2.37).

The terms and conditions of such contributions, including employee
eligibility, shall be set forth in the National Pension Plan Contract.
The actual contribution shall be calculated as follows:

(Flight Credit Hours (up to 73 hours) x 2.37 x hourly contribution
($0.50) = total monthly contribution.)

If this letter accurately reflects our agreement, please sign this
letter where indicated below.

                            Very truly yours,

                            Terry L. Hayes
                            Vice President-Labor Relations
                            Trans World Airlines, Inc.

TLH:jdc

Agreed and Accepted:

/s/ William O'Driscoll

                         ARTICLE 29 / Page 96

                              
<PAGE>
<PAGE>

LETTER LII
         PROCEDURAL LETTER OF UNDERSTANDING FOR ARTICLE 23(B)

This Letter of Understanding will provide the parameters to be followed
in the selection and implementation of Article 23(B) Medical Facilities
and the procedures to facilitate the application of Article 23(B).

REGIONAL MEDICAL FACILITIES

The parties agree to establish Regional Medical Facilities within one
hundred twenty (120) days of ratification of a new Collective Bargaining
Agreement.  Regional Medical Facilities will be chosen by the parties in
the areas named below.  Regional Medical Panels will be chosen from
Board-certified physicians on staff at the facilities.  The purpose of
the Regional Medical Panels is to have a physician render an impartial
finding of medical condition at issue before him/her as outlined under
the provisions of Article 23(B) of the TWA-IAM Flight Attendant
Agreement.  Either party shall have the right to require a review and
approval of any Medical Panel facility every eighteen (18) months.

The third impartial physician's determination shall be final and binding
upon the Company and the employee on the issue submitted.

The parties agree to establish Regional Medical Panels for the following
areas:

NY Metro Area   STL  MCI  LAX  SFO  ORD
Southeastern  US (ATL/FL area)
ORF  DEN  PHX  BOS  SEA

SPECIALTIES
The Regional Medical Panels will consist of the following specialties:

1. Cardiology
2. Internal Medicine
3. Neurology
4. Orthopedics
5. Obstetrics/Gynecology
6. Occupational Medicine
7. Psychiatry/Licensed Clinical Psychologist (For Flight Attendants,
   the treating physician shall determine whether the examination
   shall be by a psychiatrist or a licensed clinical psychologist).
8. Otolaryngology

The parties agree that it may be necessary to increase the number of
specialties to encompass the area of medicine that may be required in
the application of Article 23(B). In the event the employee requires
the services of a specialty not included in the existing panel, the
parties will expand the list to include such specialty on a case-by-case
basis. The parties further agree that there shall be at least two (2)
physicians in each specialty on the Regional Medical Panel at each
location.

                         ARTICLE 29 / Page 97

<PAGE>
<PAGE>

TRAVEL/MISCELLANEOUS

In the event a Flight Attendant resides more than 100 miles from any
established Regional Medical Panel, he/she shall have three (3) options
when attending an impartial medical examination:
(1)   The Flight Attendant may choose to attend an impartial medical
      examination at the STL Regional Medical location; or
(2)   The Flight Attendant may choose to attend an impartial medical
      examination at a Regional Medical location most convenient for
      travel from his or her residence; or
(3)   The Flight Attendant may request an impartial medical examination
      at a location more convenient to his/her residence.  In this
      event, the Flight Attendant's treating physician shall provide TWA
      Medical Services with the names of three (3) physicians (along
      with the appropriate curriculum vitae).  TWA Medical Services
      shall select one of the three physicians for the scheduling of the
      impartial medical examination.  The doctors shall not be
      affiliated with the treating physician and shall be board-
      certified in the field related to the medical examination.

In all events the Flight Attendant shall notify TWA Medical Services of
his or her choice of one (1) of the three (3) options within fifteen
(15) days following the Company's notice of the Flight Attendant's
ability to request a third party medical examination.  In the event the
Flight Attendant selects the third option, his or her treating physician
shall provide TWA Medical Services with the names of the three (3)
physicians no more than fifteen (15) days following the Flight
Attendant's choice of the third option.

If any employee is required to travel to an area where the Article 23(B)
Medical Panel physician is located, the Company shall provide positive
space air transportation on TWA for the 23(B) examination.  If the
employee has to provide his or her own transportation, the Company will
reimburse the employee for other and reasonable actual expenses such as
mileage and tolls.  The Company shall reimburse the employee for such
other reasonable and actual expenses such as hotel and meals when
necessitated by the travel.  Mileage and other reimbursements will be
governed by the provisions of the TWA Management Policy and Procedures
Manual and will require the submission of a TWA Expense Report (Form
G-118).

Example: If an employee based at MCO elects to invoke Article 23(B) and
the Medical Panel physician is located at TPA, the Company will
reimburse the employee for expenses incurred for the purpose of
attending the examination.

                         ARTICLE 29 / Page 98

<PAGE>
<PAGE>

                           INDEX

SUBJECT                                                  ARTICLE
A

Accident/Incident                                        25(B)
Accidental Death and Dismemberment                       22(F)(1)
Accident Investigation Team                              25
Acquisition of Redesigned/Reconfigured Aircraft          25(E)
Addresses of Employees                                   20(J)
Adoption Leave                                           15(H)
Airport Standby                                          2(L)(2)
                                                         18(D)(8)(e)
Alternate Line Flying                                    6(A)(2)
                                                         6(X)
Alternate Line Flying Definition                         2(Q)
Attendance Control Program                               29
Automatic Trip Drop                                      18(D)(7)(f)
Availability for Flight                                  18(D)(9)
Average Line Value (ALV)                                 2(O)
Awarding of Run Selections                               18(D)(5)
Away From Domicile Policy                                18(B)(2)

B

B-747 Letter of Agreement                                29
Back Dues                                                24(Q)
Back-to-Back Flying                                      18(G)
Balance, Not Further                                     18(D)(7)(g)
Balance Avoidance (RIP, RGU)                             18(D)(7)(f)
Balancing and Limitations                                18(D)(7)(f)
Balancing, Company Same Calendar Day                     18(D)(7)(f)(1)
                                                         6(Z)
Balancing, Family Emergency                              8, 18
Balancing, Initial                                       18(D)(7)(c)
Balancing, Personal Illness                              8, 18
Bankruptcy                                               1
Bow-wave Option                                          18(D)(7))g)
Buffers                                                  6(Z)
Bulletin Boards                                          20(J)
Bulletined Vacancies                                     13(B)

C

Cabin Attendant                                          2(A)
Cabin Staffing, Additional                               26(C)
Calendar Month Limitations, Vacation                     9(G)
Call Out                                                 18(D)(8)(g)
Call-in Requirements, Reserve                            18(D)(8)(g)

                          INDEX / Page 1

<PAGE>
<PAGE>

CAMS Home Access                                         20
Cancellation of Bids on File                             13(D)
Category Bids, Additional                                18(B)(6)
Change in Address                                        12(D)
Change in Schedules/Availability of Information          18(B)(3)
Chart Examples of Back-to-Back Flying                    18(G)(12)
Charters                                                 18(E)
Chiropractic Care                                        22
Codeshares                                               1
Co-Terminal                                              6(E)(7)
Company Balance Limitation                               18(D)(7)(f)
Company Insignia                                         5(D)
Company Maximum Block Hours, Reserve                     18(D)(7)(e)
Company Same Day Calendar Balance                        18(D)(7)(f)(1)
                                                         6(Z)
Confirmation of Illness                                  8(B)
Contact While on Medical                                 8(L)
Continuation of Insurance                                22(F)(6)
Copies of Agreement                                      20(A)
Corporate Governance                                     1
Crew Complement, Basic                                   26(A)
Crew Meals                                               4(C)(4)
Crew Rest                                                6(T)
Customer Service Panel                                   20(G)

D

Daily Credit Rate                                        2(P)
                                                         18(F)
Daily Credit Rate, Sick Leave                            8(D)
Daily Credit Rate, Industrial                            8(I)
Deadhead Pay                                             3(CC)
Deductible                                               22(A)
Deduction of Membership Dues, Letter of Agreement        24, 29
Dental Insurance Plan Benefit                            22(C)
Dental Plan                                              22(C)
Deregulation                                             27(D)
Direct Report, Letter of Agreement                       29
Disability Retirement                                    21(B)(7)
Disability Retirement Pass                               7(G)
Discharge, Union Security                                24(F)
Discipline and Discharge                                 16(C)
Discipline/Reprimand                                     19(B)
Displacement/Involuntary Assignment                      13(C)
Displacement, Leave Expiration                           15(D)
Displacement Options                                     12(B)
Displacement Passes                                      12(G) & (M)
                                                         7(G)

                          INDEX / Page 2

<PAGE>
<PAGE>

Domestic Excess On Duty                                  3(DD)
                                                         6(R)(1)
Domestic Flight                                          2(I)
Domicile                                                 2(E)
Domicile Scheduling                                      18(C)
Domicile Scheduling Policy                               18(D)
Downtown Layovers (Domestic)                             4(A)(5)
Drug Testing, Duty                                       6(Y)
Drug Testing, Expense                                    4(C)(5)
Drug Testing Letters of Agreement                        29
Dues and Initiation Fee Check-Off                        24(M)
Dues and Initiation Fee (Letter of Agreement)            29
Duty Hours                                               6(D)
Duty Hours (Duty Rig) - Domestic                         6(E)(3)
Duty Hours (Duty Rig) - International                    6(E)(4)
Duty/Trip Hours, Additional                              6(E)(6)

E

Early Retirement                                         7
                                                         21(A)(1)
Employee                                                 2(C)
Enhanced Trip Option (ETO)                               6(X)
Equipment Substitution                                   6(W)
Excess Credit Hours                                      18(D)(7)(h)
Excess Pay Hours                                         8(G)
                                                         18(D)(7)(i)
Exclusive Care Provider                                  22(E)(1)(j)
Expense Allowance (Domestic)                             4(A)(1)
Expense Allowance (International)                        4(B)(3)
Expenses, General                                        4(C)
Expenses Subject to Deductible and Coinsurance           22(A)

F

FAA Minimum Staffing Requirement                         26(B)
FAA Rest                                                 6(R)
FAA Rest, Reserve                                        6(S)
Family Emergency                                         8(G)
Family Emergency Passes                                  7(K)
Fatigue, Calling Off On                                  6
Ferry Flight Assignment                                  2(N)
Filing of Permanent Bids for Transfer                    13(A)
Filling of Vacancies (Temporary Assignment)              13
Fixed Daily Credit                                       2
Flight Attendant Assignment and Bidding                  18(D)(4)
Flight Attendant Illness                                 8(D)
Flight Credit Hours                                      6(B)
Flight Pay Hours                                         6(C)

                          INDEX / Page 3

<PAGE>
<PAGE>

Flight Service Manager, Narrowbody                       29
Flight Service Manager, Rotating Reserve                 29
Flight Service Manager, SPA/FUR                          29
Flight Service Manager Vacancies                         13(I)
Flight Time Limitations                                  6(N)
Foreign Bases                                            27(A)
Full-Time Union Representatives                          16(B)
Furlough, Expiration                                     12(F)
Furlough, Notice of Reduction                            12(A)
Furlough, Options/Leaves of Absence                      12(B)
Furlough, Re-employment                                  12(E)
Furlough, Subsequent                                     12(K)
Furlough Pay                                             12(I)
Furlough Pay, Disqualification                           12(J)
Furlough Pay, Amount                                     12(L)

G

Grievance Procedure, Accessibility of
Transcripts and Records                                  17(E)(7)
Grievance Procedures, Appeals                            16(E)
Grievance Procedure, Company Time Limitations            16(C)(6)
Grievance Procedure, Failure to Request Step 1 Hearing   16(C)(3)
Grievance Procedure, General                             16(G)
Grievance Procedure, Investigation                       16(C)(1)
Grievance Procedure, No Pay Loss Prior to Written
Step 1 Decision                                          16(C)(7)
Grievance Procedure, Other Grievances                    16(D)
Grievance Procedure, Policy                              16(A)(3)
Grievance Procedure, Pre-Grievance                       16(D)(1)
Grievance Procedure, General (District) Grievance        16(F)
Grievance Procedure, Non-Disciplinary Discussions        16(H)
Grievance Procedure, Representation                      16(A)
Grievance Procedure, Request for Step 1 Hearing          16(C)(2)
Grievance Procedure, Untimely Grievance Appeals          16(G)(4)
Grievance Procedure, Work Day                            16(G)(7)
Grievance Settlement                                     16(G)(9)
Ground Transportation                                    4(A)(5)
Group Insurance                                          22(A)
Group Insurance, General                                 22(E)
Group/"et al" Grievances                                 16(G)(2)
GTP (Guaranteed Trip Protection)                         6(Z)
Guaranteed Days Off, Prescheduled 48's                   6(U)
Guaranteed Days Off, Reserves                            6

H

HMO Benefits                                             22
Hardship Leave                                           15(J)

                          INDEX / Page 4

<PAGE>
<PAGE>

Holding Time                                             6(K)
Home Health Care                                         22
Hotel Rebate                                             29

I

Industrial Injury                                        8(I)
In-Flight Performance                                    29
In-Flight Sales                                          29
Information to be Provided by Company to IAM             20(H)
Initial Balancing                                        18(D)(7)(c)
Initial Projection                                       18(D)(7)(b)
Insufficient Reserves                                    18(D)(7)(l)
Insufficient Sick Hours                                  8(F)
Insurance Benefits, Maximum Amount                       22(F)(1)(d)
Insurance, Outline of Insurance Plans                    22(F)
Insurance, Preadmission Certification/Continued
  Stay Review                                            22(A)(1)(k)
International Flight                                     2(I)(2)

J

Joint Drug Policy (Appendix Letter of Agreement)         29
Jumpseat Authority                                       7(D)
Jury Duty                                                6(Q)
Jury Duty, No Balancing                                  18(D)(7)(f)(1)(i)

L

Labor Advisory Board                                     29
Labor Protective Provisions                              1(D)
Language of Destination                                  29
Language of Destination, Pay                             3(U)
Language of Destination, Pay (757)                       29
Language Training                                        4(C)(6)
Late Check-In, Rights to Trip                            18(D)(9)(a)(3)
Layover Hotels, Downtown                                 4
Layover Hotels, Room Selection                           4(B)(2)
Leaves, Return from Leave/Company Standards              15(K)
Leaves, Return from Leave/Vacancies                      15(D)
Legal Rest at Layover Station After, One-Way Trip        18(D)(110
Legal Rest/Scheduled on Duty - Domestic                  6(R)(1)
Legal Rest/Scheduled on Duty - International             6(R)(2)
Life Insurance                                           22(D)
                                                         22(F)(5)
Local Flights                                            6(E)(5)
Lodging Expenses                                         4(A)(3)
Lounges/Day Rooms                                        4(C)(2)

                          INDEX / Page 5

<PAGE>
<PAGE>

Lump Sum Distribution                                    21(A)(2)
                                                         21(B)(6)
Lump Sum Notice                                          21(A)(3)
Lump Sum Rollover, Letter of Agreement                   29

M

Maternity Leave                                          15(G)
Maternity Leave Unemployment, Letter of Agreement        29
Medical Insurance                                        22
Medical Leaves                                           15(B)
Medically Fit for Duty                                   23(B)(2)
Medically Unfit for Duty                                 23(B)(1)
Mergers, Purchase, Acquisition, Absorption               27(C)
Military Leave                                           15(F)
Minimum Pay and Monthly Maximum Flight Credit
     Full-Month Flying                                   6(A)(1)
     Half-Month Flying                                   6(A)(2)
Miscellaneous Accident Program                           22
Month                                                    2(H)
Moving Expenses                                          14(A)
Mutual Transfers                                         13(H)

N

Neutral Medical Examiner                                 23(B)
Neutral Medical Panels Letter of Agreement               29
Night Pay                                                3(T)
No Unlawful Discrimination                               20(J)(7)
Non-pay Status/Flight Time Limitations                   6(P)
Normal Retirement Age                                    21(B)(4)

O

Ok'ing Assigments, Letter of Agreement                   29
Open Time Information                                    18(D)(6)
Open Time Move-up                                        18(D)(8)(i)
Operational Duty Hours                                   2(J)
Operational Duty Pay                                     3(Q)
Operational Meetings/Training                            6(H)
Operational Meetings/Training/Physicals                  4(C)(3)
Orders in Writing                                        20(B)
OSHA 2000 Logs                                           25(D)
Other Company Department, Transfer                       10(D)
Other Employment with the Company                        20(E)
Overpayments                                             20(J)(5)
Overseas Transfers                                       9(F)
Ozark-TWA Retirement, Letter of Agreement                29

                          INDEX / Page 6

<PAGE>
<PAGE>

P

Parking Areas                                            4(C)(7)
Parking at Other Stations                                4(C)(7)
Passes, Employee/Union Transportation                    7(C)
Passenger Complaint Letters                              19
Passes, Grievance                                        16(E)(5)
                                                         17(E)(9)
Passes, Inlaw                                            7
Passes, Me-Too Pass Policy                               7(I)
Paternity Personal Time Off                              15(I)
Pay Assignments                                          6(M)
Pay Charts                                               3(A)
Pay Study Committee, Letter of Agreement                 29
Pay, 24 in 7                                             3(V)
Paycheck Distribution                                    29

Paycheck Dues Deduction                                  24(M) - (R)
Payment for Training                                     4(C)(6)
Personal Leaves and Other Employment                     15(A)
Personnel File                                           19(A)
Personnel File, Documents One (1) Year or Older          19
Personnel File, Documents Two (2) Years or Older         19(B)
Physical Examinations                                    23(A)
Preferential Bidding                                     29
Preparation of Bid Runs                                  18(D)(3)
Prescription Drug Program                                22(B)
Probationary Employees                                   10(G)
Probationary Period                                      19(G)
Professional Standards                                   29
PTO Computer Mask Letter of Agreement                    29

R

Railway Labor Act                                        17(E)
Railway Labor Act                                        20(I)
Random Drug Testing Pay                                  3(X)
Recall/Bypass Letter of Agreement                        29
Recall/Bypass Preferences & Transfers                    12(H)
Recognition                                              1(A)
Reduced Rates                                            7(E)-(G)
Reduction in Force/Recall/Preference to Assignment       10(B)
Re-engineering TWA                                       29
Regional Jets                                            1
Release from Call-in Period                              18(D)(8)(g)
Relief After 4 Hours                                     6(O)
Relief from Duty, 24 in 7 - Domestic                     6(S)
Reserve                                                  2(K)
Reserve Assignments                                      18(D)(8)(c)
Reserve Complement                                       18(D)(8)(b)

                          INDEX / Page 7

<PAGE>
<PAGE>

Reserve Guarantee                                        3(S)
Reserve List                                             18(D)(8)(k)
Reserve Recording                                        18(D)(8)(j)
Reserve Spreads                                          6(V)
Reserve, Maximum Block Scheduled                         18(D)(7)(e)
Reserve, Set-up Period/Call-in Period                    18(D)(8)(c)
Reserve Trading                                          29
Residence Standby                                        2(L)
Retirement Passes - Age 45                               7(F)
Retirement Passes - Age 50                               7(E)
Retirement Plan, Summary                                 21(B)
Retirement Savings Plan [401(k)]                         21(C)
Retirement Savings Plan Investment Committee Letter      29
Retirement, Contingent Annuitant Option                  21(B)(9)
Retirement, Freeze of Benefit Accruals                   21(A)(4)
Retirement, Lump Sum Option                              21
Retirement, Optional Forms of Benefit                    21(B)(10)
Retirement, Participant Eligibility                      21(B)(3)

S

Safety Committee, Composition                            25(A)
Satellite                                                2(F)
Satellites                                               18(F)
Scheduling Committee                                     18(B)(1)
Scheduling Committee, Reimbursement                      18(B)(4)
Scheduling, General                                      18(A)
Scheduling, Maximum Utilization                          18(D)(7)(a)
Scope                                                    1(B)
Seniority Lists, Posting                                 11(A)
Seniority Lists, Protest                                 11(C)
Seniority, Accruals                                      10(A)
Seniority, Retention                                     10(C)
Sequence Notification/Balancing                          18(D)(9)(a)
Service Manager                                          21(B)
Service Manager Emergency Downgrade                      3(W)
Service Manager Override                                 3(R)
Service Manager Temporary Upgrade                        3(AA)
Short Term Disability                                    22(F)(2)
Sick Leave Allowance                                     8(A)(1)
Sick Leave, Prevention of Sick Leave Abuse               8(K)
Sick Leave, Return to Duty Deadline                      18(D)(9)(a)(2)
Soft Time Openings                                       18(D)(9)(a)(2)
Special Assignment                                       3(BB)
Special Assignment/Loan/Promotion                        10(C)
Special Care Facility, Inpatient Care Limitation         22
Split Vacations                                          9(H)
Spread Days                                              18(D)(8)(l)
Staffing - 757                                           29

                          INDEX / Page 8

<PAGE>
<PAGE>

Standby Duty                                             2(L)
                                                         6(I)
Standby Penalties                                        3(Y)
Standby, Residence/Airport Standby                       18(D)(8)(e)
Statute of Limitations (Grievances)
Step 1 Hearing                                           16(C)(4)
System Board of Adjustment                               17
System Board of Adjustment, Jurisdiction                 17(E)(2)
System Scheduling                                        18(B)

T

Tag Ends                                                 2(I)(3)
Taxi Expense                                             4(A)(4)
Temporary Vacancies                                      13(E)
Terminating Employee Vacation Pay                        9(D)
Time Limits for Grievance Filing                         16(C)(2)
                                                         16(G)(1)
Trading of Flights                                       18(D)(10)
Trading, Requests for Open Time                          18(D)(7)(j)
Training and Special Assignment                          6(G)
Transfers at Company Request                             14(C)
Transfers, Expense and Mileage                           14(A)
Transfers, Travel Time and Report for Duty               14(B)
Trip Drop During Month                                   18(D)(7)(f)(5)
Trip Drop, No Automatic Trip Drop During Month           18(D)(7)(f)(6)
Trip Hours (Trip Rig)                                    6(E)
Trip Hours Formula Proration Charts                      18(H)
Trip Pay and Credit                                      6(D)
Trips Missed PIL Bank                                    8(D)
                                                         8(E)(1)

U

Unavailable During Call-in Period, Reserve               18(D)(8)(h)
Uniform Items, Basic/Additional                          5(B)
Uniform Point System                                     5(D)
Union Business Override (UBS) Letter of Agreement        29
Union Leaves                                             15(C)
Union Materials in Flight Attendant Mailboxes            20(J)(4)
Union Security, Delinquency                              24(E)
Union Security, Membership  in Good Standing             24(A)
Union Security, Requirement to Maintain Membership       24(B)
Union Security, Revocation of Dues Check-off             24(N)
Unprotected Flight/Domicile Layover Station              18(D)(9)(b)
Unprotected Flights                                      18(D)(7)(k)
Utilization                                              18(D)(7)

                          INDEX / Page 9

<PAGE>
<PAGE>

V

Vacation, Bidding and Posting Procedures                 9(B)
Vacation, Reserve                                        18(D)(8)(a)
Vacation Credit and Pay                                  6(F)
Vacation Increment Pay                                   3(Z)
Vacations, Accrual and Days Allowed                      9(A)
Variable Staffing Unit (VSU)                             26

W

Wage Controls, Deferrals, Cut-Backs                      27(E)
Wellness Program                                         22
Wide-body Aircraft                                       2(M)
Workers' Compensation Payments                           8(I)
Workers' Compensation Task Force                         29

X

XCAP-ACM Removal Letter of Agreement                     29
XCAP Procedures                                          7(D)

                          INDEX / Page 10

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