WORLDCORP INC, 10-K/A, 1995-04-25

WORLDCORP INC
10-K/A, 1995-04-25
AIR TRANSPORTATION, NONSCHEDULED

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<PAGE>

================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

--------------

AMENDMENT #1 TO

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

--------------

For the fiscal year ended: December 31, 1994 Commission File Number 1-5351

WORLDCORP, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 94-3040585
(State of incorporation) (I.R.S. Employer Identification Number)

13873 Park Center Road, Suite 490, Herndon, VA 22071
(Address of Principal Executive Offices)
(703) 834-9200
(Registrant's telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class Name of Each Exchange on Which Registered
- ------------------- -----------------------------------------

Common Stock par value $1.00 per share New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------- -------

State by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ ].

The aggregate market value of the Common Stock held by non-affiliates of the
registrant on March 20, 1995, was approximately $132,342,957.

The number of shares of the registrant's Common Stock outstanding on March 20,
1995 was 15,795,743.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of WorldCorp, Inc.'s Notice of Annual Stockholder's Meeting and Proxy
Statement, to be filed within 120 days after the end of the registrant's fiscal
year, are incorporated into Part III of this Report.

"The registrant is filing via this Amendment No. 1 a material contract of World
Airways, certain pages of which, pursuant to a hardship exemption granted by the
Securities and Exchange Commission, are being filed in paper form only."

================================================================================

<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

WORLDCORP, INC.

By /s/ T. Coleman Andrews, III
------------------------------
T. Coleman Andrews, III
Chief Executive Officer, President, and Principal
Accounting Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

Signature Title Date
- --------- ----- ----

/s/ T. Coleman Andrews, III Chief Executive Officer, April 25, 1995
- ---------------------------
(T. Coleman Andrews, III) President, and Principal
Accounting Officer

/s/ William F. Gorog Director and April 25, 1995
- --------------------
(William F. Gorog) Chairman of the Board

/s/ John C. Backus, Jr. Director April 25, 1995
- -----------------------
(John C. Backus, Jr.)

/s/ James E. Colburn Director April 25, 1995
- --------------------
(James E. Colburn)

/s/ Patrick F. Graham Director April 25, 1995
- ---------------------
(Patrick F. Graham)

/s/ Juan C. O'Callahan Director April 25, 1995
- ----------------------
(Juan C. O'Callahan)

/s/ Geoffrey S. Rehnert Director April 25, 1995
- -----------------------
(Geoffrey S. Rehnert)

<PAGE>

WORLD AIRWAYS

1995 AMC CONTRACT

F11626-94-D0027

World Airways Inc.
Government Sales Dept
Jerry A. Carlon
(703) 834-9228
Revised 01 OCT 94

<PAGE>

F11626-94-D0027 P00001 Page 2 of 2

a. The purpose of this modification is to incorporate a new rate and fund the
contract.

b. Accordingly, Section B, pages B-1, B-5, and B-0007 through B-0028 are
deleted and replaced with the attached pages B-1, B-5 and B-0007 through
B-0028.

c. The SF 26, block 14, is changed to read "97X4930.5D14 685 6594 102 111300
04 58910 525300". Change block 15.G. is changed to read $205,267,848.26
Estimated) (Includes fixed award, expansion and reimburseables.)

<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

PART I - THE SCHEDULE
- ---------------------

SECTION B-SUPPLIES OR SERVICES AND PRICES/COSTS
- -----------------------------------------------

1. AIRLIFT SERVICES
- --------------------

CLIN AMOUNT
- ---- ------
<S> <C>

1000 PEACETIME AIRLIFT SERVICE--(FIXED REQUIREMENTS) $99,755,426.26
SUBCLINS 1002AA, 1003AA, 1006AA, 1007AA, 1008AA
1010AA, 1013AA, 1015AA, 1016AA, 1017AA, 1018AA,
1019AA, 1020AA, 1021AA, 1022AA, 1023AA, 1025AA,
1028AA, 1029AA, 1031AA, 1042AA, 1043AA
Airlift services to include passenger and/or cargo
as described in Section C, para. 1.

2000 EXPANSION AIRLIFT SERVICE ESTIMATED
$89,406,590
The government may from time to time during the
period of performance of this contract, subject
to the contractors acceptance, order expansion
airlift services. Expansion requirements are
unplanned, additional missions bought on delivery
order as described in Sec G, para 2. Expansion
may include, Channels, SAAMS, Exercises, L100,
and CAT A cargo requirements.

CONTRACTOR'S ENTITLEMENT BY CATEGORY

CAT B Cargo
Narrow Body 40.25%
Wide Body I 33.59%
Widw Body II 45.31%

CAT B Passenger
Narrow Body 45.27%
Wide Body I 34.29%
Wide Body II 43.22%

CAT B Combi 45.32%

CAT A Cargo 0.0%

Short Range 32.25%

3000 DATA--Data shall be provided to the US Government
as specified in part III, SECTION J, Contract Data
Requirements List (CDRL)--DD Form 1423. NSP

4000 CRAF ACTIVATION

The contractor grants the Government the unilateral
right to increase the airlift service to be performed
hereunder up to and including the full capacity of
all aircraft listed in Attachment 8 and other
related support services as set forth in Attachment 9,
entitled Civil Reserve Air Fleet (CRAF). Such airlift
services shall be ordered by delivery order except
for other related support services which shall be
ordered in accordance with the CHANGES clause.
</TABLE>

B-1
<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

STAGE I - This is airlift capability, from the long range international
-------
segment, committed to Commander, Air Mobility Command. It can be used to
perform airlift services when the AMC airlift force can not meet both deployment
and other traffic requirements simultaneously. CINCTRANS, on approval by the
Secretary of Defense (SECDEF), has the authority to activate Stage I of CRAF.

STAGE II - This is an airlift expansion identified for an airlift emergency
--------
not warranting national mobilization. CINCTRANS, on approval by the SECDEF,
has the authority to activate Stage II of CRAF.

STAGE III - CRAF Activation. This is the total CRAF airlift capability
---------
made available when required for DOD operations during major military
emergencies involving US forces.

The Secretary of Defense shall issue the order to CINCTRANS to
activate Stage III of the CRAF:

(1) In time of war or during a defense-oriented national emergency
declared by the President, or in time of national emergency declared by
Congress.

(2) In a national security situation short of a declared defense-
oriented national emergency.

<S> <C> <C>
5000 REIMBURSABLES Estimated at

The following subclins identify
additional charges not included in
the Uniform Rate which may be
recognized and reimbursed at cost if
incurred in the performance of this
contract.

5001 Tax, Customs, Immigration, Federal $7,734,709
Inspection Services Fees, Excess
Baggage and Passenger Facility
Charges (Para 2b(1) below)
Extraordinary Insurance Costs
(Approved by Contracting Officer)

5002 Fuel Adjustment (Para 2b(2) below) $3,867,354

5003 Demurrage (Reference para 2b(3), $3,867,354
below)

5004 Eurocontrol (Para 2b(4) below) $ 636,415

</TABLE>

2. PRICING
-------

a. Contract Line Item Numbers (CLINs) 1000 and 2000 (including
aeromedical) shall be priced as follows:

(1) Airlift services shall be paid at the price established for each
SUBCLIN. Such price shall be determined in accordance with AMC Uniform
Negotiated Rates and Rules incorporated by reference for International Long- and
Short-Range Commercial Augmentation. AMC will continue to conduct an annual
rate review in accordance with the Memorandum of Understanding (MOU) between the
contractors and AMC. Mileages will be determined in accordance with the
Commercial Operations Integrated System (COINS). Those missions that cannot be
flown at the mileages calculated in COINS will be paid override mileage.
Override mileage will be determined based on actual flight plans and mutually
agreed to by the contractor and contracting officer. The contracting officer
may also pre-

B-2
<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

approve extraordinary insurance costs applicable to a pending
mission when in the best interests of the government.

(2) CAT A cargo transportation services shall be paid at the one-way
CAT B ton mile rate, provided that, if a carrier has on file a tariff available
to the general public for equivalent unrestricted service which is less than the
above rate, then the tariff rate shall apply. In either case, the price shall be
calculated in accordance with the FY94 AMC Uniform Rates and Rules for long-
range airlift.

(a) The minimum weight of 3750 pounds on each pallet for the narrow-
body aircraft and 4980 pounds on each pallet for the wide-body aircraft times
the number of pallets in the consignment is the guaranteed minimum charge for
any consignment.

(b) If the total actual weight of cargo on all pallets in the
consignment exceeds the guaranteed minimum charge, payment for actual weight
shall be made. A consignment consists of pallets moving as one shipment, on the
same date and assigned a Goverment Bill Lading (GBL) Number or listed on a DD
Form 250 as one shipment.

(3) When requirements for SAAMs or Exercises exceed the 'Maximum
Standard Payloads' as set forth in Appendix A of the Rates and Rules, the
Government shall negotiate an ACL taking into consideration the Gross Take Off
Weight (as certified by the carrier), desired ACL and mission requirements.
Ferry on SAAMs or Exercises will be paid at the standard ACL or where allowable
cabin loads for various aircraft types are less, the government shall pay ferry
for the lower number of seats.

(4) The L-100 rate is negotiated along with a burn rate. The pegged
fuel price will be that price pegged in the FY95 AMC Uniform Rates and Rules.
The one way rate will be 196% of the negotiated round trip rate and the ferry
rate is 96% of the round trip negotiated rate.

b. Contract Line Item Number (CLIN) 5000 shall be priced as follows:

(1) CLIN 5001: The following additional charges may be recognized
under the terms of this contract: Transportation Tax; Head Tax; Custom Charges
as outlined in 19 USC 58c; Immigration Charges as outlined in 8 USC 1356(d);
Passenger Facility Charge Imposed by Commercial Airports, approved by the FAA
under the Aviation, Safety, and Capacity Expansion Act of 1990; and Federal
Inspection Service fee.

(2) CLIN 5002 - (Fuel Adjustments) The prices are subject to
adjustment for variances in fuel prices as set forth in the AMC Final Uniform
Negotiated Rates and Rules Appendix A. The L-100 fuel adjustments, upward or
dowmward from the pegged price, will be accomplished using the procedures
contained in the AMC Final Uniform Negotiated Rates and Rules.

(3) CLIN 5003 - (Demurrage) will be paid on completed cargo missions
when departure is delayed over 3 hours beyond scheduled block time and the delay
is Government controlled (See paragraph F-6). Payment of delays of fractions of
an hour will be calculated using normal rounding procedures, i.e., 29 minutes or
less will be dropped, 30 minutes or more will be rounded to the next whole hour.
Charges are as follows:

B-3
<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

(4) CLIN 5004 - (Eurocontrol) contractor will be reimbursed for
actual Eurocontrol charges included and submitted on the invoice for payment.
This applies to SUBCLIN 2030AA only.

c. CLIN 3000 is included in the AMC determined rate and shall not be
priced separately.

d. CLIN 4000 shall be priced as follows:

(1) Prices for airlift services during CRAF activation, Stage I, II
and III and during Commander, AMC, determined periods where volunteered airlift
is used in lieu of CRAF activated airlift shall be determined in the same manner
as for CLINs 1000 and 2000, except that one-way cargo and passenger missions
will be priced at the percentage of the round trip rate, identified as CRAF one-
way rate, in the AMC Negotiated Uniform Rates and Rules.

(2) For long-range international aircraft called up (See Atch 9, para
---------
2.18) under CRAF activation Stages I, II or III, there will be a guaranteed
average daily utilization of 8 hours flight time. If an aircraft fails to
achieve the guaranteed utilization, the contractor will be entitled to
additional compensation due to under utilization.

(a) The equation for computing compensation for under utilization is:

(guaranteed hours - actual hours) x 500 mph x ACL x rate =
compensation.

1. Flight time (actual hours) shall include all revenue hours
-
including paid ferry and any commercial flights operated during the CRAF
activation.

2. Actual hours will be increased by 8 hours for each time an
-
aircraft is unavailable to the Government for contractor controllable reasons.

3. The rate will be based on the AMC Negotiated Uniform Rate minus
-
any costs not expected to be incurred (i.e., fuel, meals, maintenance).

4. The underutilized hours will be converted to miles using an
-
average speed of 500 mph.

EXAMPLE:

(i) Tail number N123 with an ACL of 326 PAX is activated on the 5th of
the month.

(ii) The aircraft operated for 100 flight hours for the remainder of the
month including 10 commercial hours.

(iii) Guaranteed utilization = 240 hours (30 days x 8 hrs)

(iv) Actual utilization = 100 hours

(v) Underutilized hours = 140 hours

(vi) 140 hours x 500 mph = 70,000 miles x 326 ACL = 22,820,000 seat miles
x .045 (actual rate to be determined = $1,026,900 compensation earned for the
month.

(b) The procedure for determining under utilization and compensation
will be based on documentation provided by the contractor. Contractor may
report to AMC at the end of each month, at the end of the contract period or
upon CRAF deactivation, total hours flown for each called up aircraft, the
number of contractor controllable delays, hours flown in

B-4
<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

commercial service, and hours flown in AMC service. Compensation for under
utilization will be accomplished at the end of the contract period or upon CRAF
deactivation, whichever comes first. Contractors must provide cost data to
determine the rate as soon as possible.

(c) Additionally, should the long-range international aircraft called
up, as defined in Attachment 9, para 2.14. under CRAF activation Stages I, II,
III not be required for the 30-day minimum guaranteed utilization period or not
be required for all or a portion of the 15 days between notification and
official release from call up, they will be compensated for not being utilized
at an amount not to exceed that calculated as provided in paragraph 2(b) above.
Carriers are obligated to utilize their best efforts to obtain commercial
business to minimize government costs.

(3) Prices for airlift called up under CRAF activation Stages I, II, and
III may be adjusted by negotiation between the contractor and the government
pursuant to the procedures in the CHANGES clause. The Memorandum of
Understanding (MOU) between the contractor and AMC shall serve as the guideline
for establishing prices and adjustments thereto. In establishing such prices,
it shall be presumed, unless the contractor presents evidence establishing that
an adjustment to the rate of compensation is appropriate, that prices computed
in accordance with the AMC Negotiated Uniform Rate applied to the mileage set
forth in COINS for the shortest route over which the type of aircraft involved
operated, constitutes equitable prices for such services. However,
consideration will be given but not limited to evidence so presented by the
contractor for aircraft called up which reflect reasonable incurred cost outside
the peacetime rate associated with call-up aircraft under CRAF activation.
Examples of such costs are:

1. Additional per diem expenses incurred to relocate personnel
-
required to assist in the flow of CRAF activated aircraft.

2. Additional security expenses for the safety of aircraft and
--
crew.

(4) Vectoring. If conditions require vectoring during CRAF activation or
periods where volunteered airlift is used in lieu of CRAF activated airlift, the
contracting officer will issue a change order in accordance with the Changes
clause. Vectoring is a change from the contracted route due to specific
military conditions in the mission operating environment which requires a
deviation from the contracted route. The change order will provide the area,
times, etc., for which vectoring will be recognized as a changed condition. A
change order authorizes submission of requests for price adjustments. To
expedite adjustments, periodic submissions are encouraged. The contractor
should document and support the baseline from which adjustment is requested in
addition to substantiation of the amount of the equitable adjustment in any
request submitted to the contracting officer.

e. The government shall also have the right at its sole option to order
other airlift service under the contract in accordance with and at the rate
specified by the contractor for service to the public which will, in the
judgment of the contracting officer, meet the government needs. In addition,
the government may, for airlift service not covered by the AMC Uniform Rates and
Rules, establish rates by negotiation.

3. MINIMUM GUARANTEE
-----------------

The total minimum guarantee to be awarded under this contract is
$99,755,426.56. This minimum can be satisfied by a combination of fixed and
expansion award when circumstances so dictate.

B-5
<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

4. NON-STOP SERVICE
----------------

Non-stop direct service shall be provided on those identified SUBCLINS. The
following headwinds identify those conditions in which the aircraft must meet
to fly non-stop.

<TABLE>
<S> <C>
OCT -43 KNOTS
NOV -46 KNOTS
DEC -42 KNOTS
JAN -36 KNOTS
FEB -32 KNOTS
MAR -36 KNOTS
APR -37 KNOTS
MAY -30 KNOTS
JUN -21 KNOTS
JUL -17 KNOTS
AUG -23 KNOTS
SEP -34 KNOTS
</TABLE>

5. FY95 UNIFORM NEGOTIATED RATES AND RULES
---------------------------------------

The FY94 rate was used to calculate the dollar values in this Section. Due
to computer complications, the FY95 rate will be incorperated via a unilateral
modification effective 1 OCT 94 when funding becomes available.

B-6
<PAGE>

F1162694D0027 .P00001
CAT B PAX

ITEM UNIT
NO. SUPPLIES/SERVICES QTY UNIT PRICE AMOUNT
- ------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
01002 CAT B ROUND TRIP
CARRIER ID: SCX AIRCRAFT TYPE: B727

01002AA KNGU - KNIP - MUGM - KNIP - KNGU 24 TRIPS $33,832.40 $811,977.60

PR #: FY9524

SCHEDULE:
OCT 7 14 21 28
NOV 4 11 18 26
DEC 2 9 16 23 30
JAN 6 13 20 27
AUG 18 25
SEP 1 8 15 22 29

(MILES: 2,748 X RATE: 0.087940)=
PER SEATS : $241.66 X ACL: 140 =
TRIP COST $33,832.40

Totals for trip(s) 24 TRIPS $33,832.40 $811,977.60

</TABLE>
NOTE: DEPART FRIDAY AT 0645Z ++(1200Z DST) APPROXIMATELY

B-0007
<PAGE>

F1162694D0027 .P00001
CAT B PAX

ITEM UNIT
NO. SUPPLIES/SERVICES QTY UNIT PRICE AMOUNT
- ------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
01003 CAT B ROUND TRIP
CARRIER ID: SCX AIRCRAFT TYPE: B727

01003AA KNGU - MUGM - MKJP - MUGM - KNGU 24 TRIPS $37,993.20 $911,836.80

PR #: FY9525

SCHEDULE:
OCT 4 11 18 25
NOV 1 8 15 22 29
DEC 6 13 20 28
JAN 3 10 17 24 31
AUG 22 29
SEP 5 12 19 26

(MILES: 3,086 X RATE: 0.087940)=
PER SEATS : $271.38 X ACL: 140 =
TRIP COST $37,993.20

Totals for trip(s) 24 TRIPS $37,993.20 $911,836.80

</TABLE>
NOTE: MILEAGE OVERRIDE
RON AT MKFP WITH A WEDNESDAY DEPARTURE AT 1100Z
DEPART TUESDAY AT 1030Z APPROXIMATELY

B-0008

<PAGE>

F1162694D0027 .P00001
CAT B PAX

ITEM UNIT
NO. SUPPLIES/SERVICES QTY UNIT PRICE AMOUNT
- ---------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
01006 CAT B ROUND TRIP
CARRIER ID: RIA AIRCRAFT TYPE: DC8

01006AA KNGU - KPHL - LPLA - LICZ * HECA - OBBI - FJDG - OBBI 53 TRIPS $289,361.10 $15,336,138.30
* HECA - LICZ - LPLA - KPHL - KNGU
PR #: FY9514

SCHEDULE:
OCT 1 8 15 22 29
NOV 5 12 19 26
DEC 3 10 17 27
JAN 3 7 14 21 28
FEB 4 11 18 25
MAR 4 11 18 25
APR 1 8 15 22 29
MAY 6 13 20 27
JUN 3 10 17 24
JUL 1 8 15 22 29
AUG 5 12 19 26
SEP 2 9 16 23 30

(MILES: 20,680 X RATE: 0.066630)=
PER SEATS : $1,377.91 X ACL: 210 =
TRIP COST $289,361.10

01006AC EUROCONTROL for Item 01006AA 53 TRIPS $7,523.39 $398,739.67
TRIP COST: $289,361.10 X
EUROCONTROL: 2.60%
EUROCONTROL PER TRIPS: $7,523.39

Totals for trip(s) 53 TRIPS $296,884.49 $15,734,877.97

</TABLE>
NOTE: INCLUDES FJDG-RPMM-FJDG SAAM EXTENSION ON
CLIN 1007 ON 15 OCT, 26 NOV, 7 JAN, 18 FEB, 1 APR,
13 MAY, 24 JUN, 5 AUG AND 16 SEP.

MILEAGE OVERRIDE

B-0009

<PAGE>

F1162694D0027 .P00001
CAT B PAX

ITEM UNIT
NO. SUPPLIES/SERVICES QTY UNIT PRICE AMOUNT
- ------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
01007 CAT B ROUND TRIP
CARRIER ID: RIA AIRCRAFT TYPE: DC8

01007AA FJDG * WSSS - RPHM * WSSS - FJDG 9 TRIPS $106,621.20 $959,590.80

PR #: FY9529

SCHEDULE:
OCT 18
NOV 29
JAN 20
FEB 21
MAR 4
APR 16
MAY 27
AUG 8
SEP 19

(MILES: 7,620 X RATE: 0.066630)=
PER SEATS : $507.72 X ACL: 210 =
TRIP COST $106,621.20

Totals for trip(s) 9 TRIPS $106,621.20 $959,590.80

</TABLE>
NOTE: THIS IS A SAAM EXTENSION TO CLIN 1006 TO BE FLOWN AS ONE MISSION.
*MILEAGE OVERRIDE.

B-0010

<PAGE>

F1162694D0027 .P00001
CAT B PAX

ITEM UNIT
NO. SUPPLIES/SERVICES QTY UNIT PRICE AMOUNT
- ------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
01008 CAT B ROUND TRIP
CARRIER ID: RIA AIRCRAFT TYPE: DC8

01008AA KNGU - KPHL - BIKF - KPHL - KNGU 6 TRIPS $72,787.68 $436,726.08

PR #: FY9515

SCHEDULE:
OCT 1 8 15 22 29
NOV 5

(MILES: 5,780 X RATE: 0.066630)=
PER SEATS : $385.12 X ACL: 189 =
TRIP COST $72,787.68

Totals for trip(s) 6 TRIPS $72,787.68 $436,726.08

</TABLE>
NOTE: DEPART SATURDAY AT 0130Z ++(0030Z DST/USA) APPROX.
REQUIRE DIRECT SERVICE: KPHL - BIKF - KPHL

B-0011

<PAGE>

F1162694D0027 .P00001
CAT B PAX

ITEM UNIT
NO. SUPPLIES/SERVICES QTY UNIT PRICE AMOUNT
- --------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
01010 CAT B ROUND TRIP
CARRIER ID: WOA AIRCRAFT TYPE: DC10

01010AA KCHS - KIAD * KBGR - EDAF - KBGR - KIAD - KCHS 9 TRIPS $198,900.90 $1,790,108.10

PR #: FY9520

SCHEDULE:
OCT 11 25
NOV 8 29
DEC 13 20
JAN 10 24
FEB 14

(MILES: 9,046 X RATE: 0.066630)=
PER SEATS : $602.73 X ACL: 330 =
TRIP COST $198,900.90

01010AC EUROCONTROL for item 01010AA 9 TRIPS $5,171.42 $46,542.78
TRIP COST: $198,900.90 X
EUROCONTROL: 2.60%
EUROCONTROL PER TRIPS: $5,171.42

Totals for trip(s) 9 TRIPS $204,072.32 $1,836,650.88

</TABLE>
NOTE: REQUIRE DIRECT SERVICE: KIAD-EDAF-KIAD. KIAD
ARRIVAL NLT 1300 LOCAL

B-0012

<PAGE>

F1162694D0027 .P00001
CAT B PAX

ITEM UNIT
NO. SUPPLIES/SERVICES QTY UNIT PRICE AMOUNT
- --------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
01013 CAT B ROUND TRIP
CARRIER ID: WOA AIRCRAFT TYPE: DC10

01013AA KATL - KPHL - EDAF - KPHL - KATL 9 TRIPS $202,946.70 $1,826,520.30

PR #: FY9523

SCHEDULE:
OCT 12 19
NOV 9 16
DEC 14 28
JAN 11 18
FEB 8

(MILES: 9,230 X RATE: 0.066630)=
PER SEATS : $614.99 X ACL: 330 =
TRIP COST $202,946.70

01013AC EUROCONTROL for Item 01013AA 9 TRIPS $5,276.61 $47,489.49
TRIP COST: $202,946.70 X
EUROCONTROL: 2.60%
EUROCONTROL PER TRIPS: $5,276.61

Totals for trip(s) 9 TRIPS $208,223.31 $1,874,009.79

</TABLE>
NOTE: REQUIRE DIRECT SERVICE: KPHL - EDAF - KPHL - KPHL
ARRIVAL NLT 1300 LOCAL.

B-0013

<PAGE>

F1162694D0027 .P00001
CAT B PAX

ITEM UNIT
NO. SUPPLIES/SERVICES QTY UNIT PRICE AMOUNT
- ------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
01015 CAT B ROUND TRIP
CARRIER ID: WDA AIRCRAFT TYPE: DC10

01015AA KPHL - EDAF * HECA - OEDR * HECA - EDAF - KPHL 17 TRIPS $325,419.60 $5,532,133.20

PR #: FY9527/FY9526

SCHEDULE:
JUN 7 14 21 28
NOV 5 12 19 26
AUG 2 9 16 23 30
SEP 6 13 20 27

(MILES: 14,800 X RATE: 0.066630)=
PER SEATS : $986.12 X ACL: 330 =
TRIP COST $325,419.60

01015AC EUROCONTROL for Item 01015AA 17 TRIPS $8,460.91 $143,835.47
TRIP COST: $325,419.60 X
EUROCONTROL: 2.60%
EUROCONTROL PER TRIPS: $8,460.91

Totals for trip(s) 17 TRIPS $333,880.51 $5,675,968.67
</TABLE>

NOTE: REQUIRE DIRECT SERVICE: KPHL - EDAF, EDAF - KPHL
RETURN KPHL NET 0600L & WLT 1200L FRIDAY (1100-
1700z++)
325 POUNDS PER PAX FOR PLANNING
MILEAGE OVERRIDE

B-0014
<PAGE>

F1162694D0027 .P00001
CAT B PAX

ITEM UNIT
NO. SUPPLIES/SERVICES QTY UNIT PRICE AMOUNT
- --------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
01016 CAT B ROUND TRIP
CARRIER ID: WOA AIRCRAFT TYPE: MD11

01016AA KSTL - KLAX * PANC - RKSO - ROON - RKSO * PANC - KLAX 12 TRIPS $406,767.60 $4,881,211.20
- KSTL

PR #: FY9516

ALTERNATE:
KSTL - KLAX * PANC - RJTY - RKSO - RJTY * PANC - KLAX
- KSTL

SCHEDULE:
APR 5 12 19 26
MAY 3 10 17 24
AUG 2 9 16 23

(MILES: 16,958 X RATE: 0.066630)=
PER SEATS : $1,129.91 X ACL: 360 =
TRIP COST $406,767.60

Totals for trip(s) 12 TRIPS $406,767.60 $4,881,211.20

</TABLE>
NOTE: REQUIRE DIRECT SERVICE: KLAX-RJTY, RJTY-KLAX
ANTICIPATED ROUTE IS ALTERNATE ROUTE.

B-0015
<PAGE>

F1162694D0027 .P00001
CAT B PAX

ITEM UNIT
NO. SUPPLIES/SERVICES QTY UNIT PRICE AMOUNT
- ---------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
01017 CAT B ROUND TRIP
CARRIER ID: EIA AIRCRAFT TYPE: B747

01017AA KSTL - KLAX - PANC - RKSO - ROON - RKSO - PANC - KLAX 16 TRIPS $451,964.00 $7,231,424.00
- KSTL

PR #: FY9516

ALTERNATE:
KSTL - KLAX - PANC - RJTY - RKSO - RJTY - PANC - KLAX
- KSTL

SCHEDULE:
JAN 18 25
FEB 1 8 15 22
MAR 1 8 15 22 29
AUG 30
SEP 6 13 20 27

(MILES: 16,958 X RATE: 0.066630)=
PER SEATS : $1,129.91 X ACL: 400 =
TRIP COST $451,964.00

Totals for trip(s) 16 TRIPS $451,964.00 $7,231,424.00

</TABLE>
NOTE: NOTE: ANTICIPATED ROUTE IS ALTERNATE ROUTE.
REQUIRE DIRECT SERVICE: KLAX-RJTY, RJTY-KLAX_OR
KLAX-RKSO, RKSO-KLAX

B-0016
<PAGE>

F1162694D0027 .P00001
CAT B PAX

ITEM UNIT
NO. SUPPLIES/SERVICES QTY UNIT PRICE AMOUNT
- ---------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
01018 CAT B ROUND TRIP
CARRIER ID: WOA AIRCRAFT TYPE: MD11

01018AA KSTL - KLAX * PANC - RKSO - ROON - RKSO * PANC - KLAX 13 TRIPS $406,767.60 $5,287,978.80
- KSTL

PR #: FY9517

ALTERNATE:
KSTL - KLAX * PANC - RJTY - ROON * RJTY * PANC - KLAX
- KSTL

SCHEDULE:
APR 2 9 16 23 30
MAY 7 14 21
JUL 30
AUG 6 13 20 27

(MILES: 16,958 X RATE: 0.066630)=
PER SEATS : $1,129.91 X ACL: 360 =
TRIP COST $406,767.60

Totals for trip(s) 13 TRIPS $406,767.60 $5,287,978.80

</TABLE>
NOTE: ANTICIPATED ROUTE IS ALTERNATE ROUTE. REQUIRE
DIRECT SERVICE: KLAX-RJTY, ROON-KLAX

B-0017
<PAGE>

F1162694D0027 .P00001
CAT B PAX

ITEM UNIT
NO. SUPPLIES/SERVICES QTY UNIT PRICE AMOUNT
- -----------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
01019 CAT B ROUND TRIP
CARRIER ID: E1A AIRCRAFT TYPE: B747

01019AA KSTL - KLAX * PANC - RKSO - ROON - RKSO * PANC - KLAX 15 TRIPS $451,964.00 $6,779,460.00
- KSTL
PR #: FY9517

ALTERNATE:
KSTL - KLAX * PANC - RJTY - RODN * RJTY * PANC - KLAX
- KSTL

SCHEDULE:
JAN 15 22 29
FEB 5 12 19 26
MAR 5 12 19 26
SEP 3 10 17 24

(MILES: 16,958 X RATE: 0.066630)=
PER SEATS : $1,129.91 X ACL: 400 =
TRIP COST $451,964.00

Totals for trip(s) 15 TRIPS $451,964.00 $6,779,460.00

</TABLE>
NOTE: NOTE: ANTICIPATED ROUTE IS ALTERNATE ROUTE.
REQUIRE DIRECT SERVICE:KLAX-RJTY, RDON-KLAX OR
KLAX-RKSO, RKSO-KLAX

B-0018
<PAGE>

F1162694D0027 .P00001
CAT B PAX

ITEM UNIT
NO. SUPPLIES/SERVICES QTY UNIT PRICE AMOUNT
- ------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
01020 CAT B ROUND TRIP
CARRIER ID: WOA AIRCRAFT TYPE: MD11

01020AA KSTL-KLAX * PANC-RKSO-RODN * RJTY * PANC-KLAX 3 TRIPS $403,650.00 $1,210,950.00
- KSTL

PR #: FY9518

SCHEDULE:
OCT 4 18
JAN 5

(MILES: 16,828 X RATE: 0.066630)=
PER SEATS : $1,121.25 X ACL: 360 =
TRIP COST $403,650.00

Totals for trip(s) 3 TRIPS $403,650.00 $1,210,950.00

</TABLE>
NOTE: REQUIRE DIRECT SERVICE: KLAX-RKSO, RODN-KLAX

B-0019
<PAGE>

F1162694D0027 .P00001

CAT B CGO

ITEM UNIT
NO. SUPPLIES/SERVICES QTY UNIT PRICE AMOUNT
- -----------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
01021 CAT B ROUND TRIP
CARRIER ID: EIA AIRCRAFT TYPE: B747

01021AA KDOV - EDAF - KDOV 81 TRIPS $185,776.20 $15,047,872.20

PR #: FY9501

ALTERNATE:
KDOV - EDAR - KDOV

SCHEDULE:
OCT 21 26 28
NOV 2 4 9 11 16 18 23 25 30
DEC 2 7 9 14 16 21 23 28 30
JAN 4 6 11 13 18 20 25 27
FEB 1 3 8 10 15 17 22 24
MAR 1 3 8 10 15 17 22 24 29 31
APR 5 7 12 14 19 21 26 28
MAY 3 5 10 12 17 19 24 26 31
JUN 2 7 9 14 16 21 23 28 30
JUL 5 7 12 14 19 21 26 28

(MILES: 7,984 X RATE: 0.258540)=
PER TONS : $2,064.18 X ACL: 90.0 =
TRIP COST $185,776.20

01021AC EUROCONTROL for Item 01021AA 81 TRIPS $6,687.94 $541,723.14
TRIP COST: $185,776.20 X
EUROCONTROL: 3.60%
EUROCONTROL PER TRIPS: $6,687.94

Totals for trip(s) 81 TRIPS $192,464.14 $15,589,595.34

</TABLE>
NOTE: Depart Wednesday at 2200Z and Friday at 0400Z,
approximately.

Alternate Route Mileage: 7932

B-0020
<PAGE>

F1162694D0027 .P00001
CAT B CGO

<TABLE>
<CAPTION>
ITEM UNIT
NO. SUPPLIES/SERVICES QTY UNIT PRICE AMOUNT
- ------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
01022 CAT B ROUND TRIP
CARRIER ID: EWW AIRCRAFT TYPE: DC8

01022AA KNGU - LERT - LIZC - LERT - KNGU 18 TRIPS $115,389.00 $2,077,002.00

PR #: FY9502

ALTERNATE:
KNGU - LERT - LIRN - LERT - KNGU

SCHEDULE:
OCT 15 22 29
DEC 3 10 17 24
JAN 7 14 21 28
MAR 4 11 18

(MILES: 9,918 X RATE: 0.258540)=
PER TONS : $2,564.20 X ACL: 45.0 =
TRIP COST $115,389.00

01022AC EUROCONTROL for Item 01022AA 18 TRIPS $4,154.00 $74,772.00
TRIP COST: $115,389.00 X
EUROCONTROL: 3.60%
EUROCONTROL PER TRIPS: $4,154.00

Totals for trip(s) 18 TRIPS $119,543.00 $2,151,774.00

NOTE: DEPART SATURDAY AT APPROXIMATELY 1800Z.

DUE TO THE POSSIBLE RUNWAY CLOSURE AT SIGONELLA
(LICZ) OPERATION MAY BE REQUIRED THROUGH
CAPODICHIND(LIRN).

ALTERNATE ROUTE MILEAGE: 9866
</TABLE>

B-0021
<PAGE>

F1162694D0027 .P00001
CAT B CGO

ITEM UNIT
NO. SUPPLIES/SERVICES QTY UNIT PRICE AMOUNT
- ------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
01023 CAT B ONE WAY
CARRIER ID: EWW AIRCRAFT TYPE: DC8

01023AA KNGU - BIKF 32 TRIPS $60,332.85 $1,930,651.20

PR #: FY9503

SCHEDULE:
OCT 3 11 17 24 31
NOV 7 14 21 28
DEC 5 12 19 27
JAN 3 9 17 23 30
FEB 6 13 21 27
MAR 6 13 20 27
AUG 21 28
SEP 5 11 18 25

(MILES: 2,881 X RATE: 0.465370)=
PER TONS : $1,340.73 X ACL: 45.0 =
TRIP COST $60,332.85

Totals for trip(s) 32 TRIPS $60,332.85 $1,930,651.20

</TABLE>
NOTE: DEPART KNGU AT APPROXIMATELY 1800Z

B-0022
<PAGE>

F1162694D0027 .P00001
CAT B CGO

ITEM UNIT
NO. SUPPLIES/SERVICES QTY UNIT PRICE AMOUNT
- --------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
01025 CAT B ROUND TRIP
CARRIER ID: WOA AIRCRAFT TYPE: MD11

01025AA KDOV * EINN * HECA - DERY - DEDR * HECA - EDAR - KDOV 21 TRIPS $307,764.86 $6,463,062.06

PR #: FY9540

SCHEDULE:
OCT 7 14 21 28
NOV 4 11 18 25
DEC 2 9 30
JUL 28
AUG 4 11 18 25
SEP 1 8 15 22 29

(MILES: 14,517 X RATE: 0.258540)=
PER TONS : $3,753.23 X ACL: 82.0 =
TRIP COST $307,764.86

01025AC EUROCONTROL for Item 01025AA 21 TRIPS $11,079.53 $232,670.13
TRIP COST: $307,764.86 X
EUROCONTROL: 3.60%
EUROCONTROL PER TRIPS: $11,079.53

Totals for trip(s) 21 TRIPS $318,844.39 $6,695,732.19

</TABLE>
NOTE: *MILEAGE OVERRIDE (SEE SECTION B, PARA.2.A.(1))

B-0023
<PAGE>

F1162694D0027 .P00001
CAT B CGO

ITEM UNIT
NO. SUPPLIES/SERVICES QTY UNIT PRICE AMOUNT
- ------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
01028 CAT B ONE WAY
CARRIER ID: EIA AIRCRAFT TYPE: B747

01028AA KSUU - PHIK - PGUA - RODN 4 TRIPS $320,113.80 $1,280,455.20

PR #: FY9507

SCHEDULE:
MAR 3 10 17 24

(MILES: 7,643 X RATE: 0.465370)=
PER TONS : $3,556.82 X ACL: 90.0 =
TRIP COST $320,113.80

Totals for trip(s) 4 TRIPS $320,113.80 $1,280,455.20

</TABLE>
NOTE: DEPART FRIDAY AT APPROXIMATELY 1600Z.

B-0024
<PAGE>

F1162694D0027 .P00001
CAT B CGO

ITEM UNIT
NO. SUPPLIES/SERVICES QTY UNIT PRICE AMOUNT
- --------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
01029 CAT B ROUND TRIP
CARRIER ID: EIA AIRCRAFT TYPE: B747

01029AA KSUU - PHIK - PGUA - ROON - PGUA - PHIK - KSUU 2 TRIPS $355,683.60 $711,367.20

PR #: FY9508

SCHEDULE:
SEP 22 29

(MILES: 15,286 X RATE: 0.258540)=
PER TONS : $3,952.04 X ACL: 90.0 =
TRIP COST $355,683.60

Totals for trip(s) 2 TRIPS $355,683.60 $711,367.20

</TABLE>
NOTE: Depart Friday at approximately 1600Z.

B-0025
<PAGE>

F1162694D0027 .P00001
CAT B MIX

ITEM UNIT
NO. SUPPLIES/SERVICES QTY UNIT PRICE AMOUNT
- ---------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
01031 CAT B ROUND TRIP
CARRIER ID: RIA AIRCRAFT TYPE: DC8

01031AA KNGU - LERT - LICZ * HECA - OKBK - OBBI - OMFJ - OBBI 51 TRIPS $177,681.74 $9,061,768.74
- OKBK * HECA - LICZ - LERT - KNGU

PR #: FY9528

ALTERNATE:
KDOV - EDAF - LICZ * HECA - OKBK - OBBI - OMFJ - OBBI
- OKBK * HECA - LICZ - EDAF - KDOV

SCHEDULE:
OCT 13 20 27
NOV 3 10 17 24
DEC 1 8 15 22 29
JAN 5 12 19 26
FEB 2 9 16 23
MAR 2 9 16 23 30
APR 6 13 20 27
MAY 4 11 18 25
JUN 1 8 15 22 29
JUL 6 13 20 27
AUG 3 10 17 24 31
SEP 7 14 21 28

(MILES: 16,690 X RATE: 10.646000)=
PER SEATS/TONS : $77,681.74 X ACL: 1.0 =
TRIP COST $177,681.74

01031AD Stop charges for Item 1031AA
(QTY: 510 X COST: $1,449.00)= 51 TRIPS $14,490.00 $738,990.00
TOTAL MISC EXPENSE: $738,990.00

Totals for trip(s) 51 TRIPS $177,681.74 $9,800,758.74

</TABLE>
NOTE: LOAD: 10 PALLETS AND 35 PAX
CONTRACTOR WILL BE PAID $1,449.00 FOR EACH OF 10
STOPS ON THIS ROUTE FOR A TOTAL OF $14,490.00 PER
TRIP.

CONTRACTOR WILL BE REIMBURSED FOR ACTUAL
EUROCONTROL CHARGES AS A REIMBURSABLE EXPENSE.

B-0026
<PAGE>

F1162694D0027 .P00001
CAT B PAX

ITEM UNIT
NO. SUPPLIES/SERVICES QTY UNIT PRICE AMOUNT
- --------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
01042 CAT B ROUND TRIP
CARRIER ID: WOA AIRCRAFT TYPE: DC10

01042AA KPHL - LPLA - LIPA - LTAG - LIPA - LPLA - KPHL 13 TRIPS $261,657.00 $3,401,541.00

PR #: FY9512

ALTERNATE:
KPHL - LPLA - LIPA - LTAF - LIPA - LPLA - KPHL

SCHEDULE:
JUN 2 9 16 23 30
JUL 7 14 21 28
AUG 4 11 18 25

(MILES: 11,900 X RATE: 0.066630)=
PER SEATS : $792.90 X ACL: 330 =
TRIP COST $261,657.00

01042AC EUROCONTROL for Item 01042AA 13 TRIPS $6,803.08 $88,440.04
TRIP COST: $261,657.00 X
EUROCONTROL: 2.60%
EUROCONTROL PER TRIPS: $6,803.08

Totals for trip(s) 13 TRIPS $268,460.08 $3,489,981.04

</TABLE>
NOTE: REQUIRE DIRECT SERVICE KPHL-LPLA AND LPLA-KPHL

B-0027
<PAGE>

PAGE>

F1162694D0027 .P00001
CAT B PAX

ITEM UNIT
NO. SUPPLIES/SERVICES QTY UNIT PRICE AMOUNT
- ---------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C>
01043 CAT B ROUND TRIP
CARRIER ID: WOA AIRCRAFT TYPE: DC10

01043AA KPHL - LERT - LIRN - LICZ * HECA - OBBI 13 TRIPS $335,316.30 $4,359,111.90
* HECA - LICZ - LIRN - LERT - KPHL
PR #: FY9513

SCHEDULE:
JUN 6 13 20 27
JUL 4 11 18 25
AUG 1 8 15 22 29

(MILES: 15,250 X RATE: 0.066630)=
PER SEATS : $1,016.11 X ACL: 330 =
TRIP COST $335,316.30

01043AC EUROCONTROL for item 01043AA 13 TRIPS $8,718.22 $113,336.86
TRIP COST: $335,316.30 X
EUROCONTROL: 2.60%
EUROCONTROL PER TRIPS: $8,718.22

Totals for trip(s) 13 TRIPS $344,034.52 $4,472,448.76
</TABLE>
NOTE: MILEAGE OVERRIDE

B-0028
<PAGE>

SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027
PART I - THE SCHEDULE

SECTION C - DESCRIPTION/SPECS/WORK STATEMENT

1. GENERAL DESCRIPTION OF SERVICE

a. Contractor shall provide international long and/or short range
airlift services. Services are to include passenger, cargo and/or aeromedical
transportation as stated in SECTION B and in accordance with the specifications
set forth in Attachments 1 through 7, 9 through 11 and Exhibit A. Cargo (and/or
baggage during CRAF operations) may include hazardous material classes 1 through
9 as defined in the International Air Transport Association Dangerous Goods
Regulation. Passenger service shall in no event be less than that afforded
economy class passengers, commensurate with customs, practices and standard
procedures of particular airports and countries, and this contract.

b. Contractor shall operate in accordance with Federal Aviation
Administration (FAA) approved manuals, (applicable copies of which shall be
aboard each aircraft), appropriate provisions of Federal Aviation Regulation
(FAR) 121, applicable International Civil Aviation Organization (ICAO)
recommended practices and standard procedures, appropriate emergency response
guidebook/manual, and this contract.

c. The Contractor, in furnishing services hereunder shall provide,
except as otherwise specifically set forth in the contract, all personnel,
facilities, supplies, and equipment to support and perform air transportation
services called for under this contract. Contractor shall be self-supporting at
all bases of operation.

2. CONTRACT REQUIREMENTS

The contractor (or in the case of a Contractor Team Arrangement, the
entity of the Contractor Team Arrangement operating the aircraft) shall conform
and adhere to these requirements throughout the term of the contract:

(1) Shall meet requirements set forth in AMC FARS 5352.247-1001
incorporated in Section H, paragraph 17.

(2) Shall participate in the Civil Reserve Air Fleet (CRAF) Program
and maintain a minimum of 30 percent of a contractor's passenger fleet or 15
percent of a contractor's cargo fleet in their wide-body equivalents.
Contractor's operating both cargo and passenger aircraft must maintain their
commitment in each type.

(3) The Contractor shall provide and maintain a minimum of four
qualified cockpit crews per aircraft as required by Attachment 9 of this
contract, exclusive of those with Reserve or National Guard commitments, and
material to enable at least 10 hours per day utilization of each aircraft as
required in Attachment 9. Cockpit crew members must be US. citizens and
eligible for a SECRET clearance. The Contractor shall submit a list of the
names of the crew members within 15 days if requested by the Contracting
Officer.

(a) Contractors who do not have sufficient crews for all of their
aircraft may arrange with other contractors for the necessary crews. Contractor
may employ such crews on a full-time basis; however, arrangements could include
standby or temporary crews as long as their names appear on the contractor's
list of current and qualified crew members provided to the FAA.

(b) In the event cockpit crews are obtained through contractual
arrangement with another contractor, they must be US citizens and eligible for a
Secret clearance. If during any period of contract performance, including
activation of CRAF, the contractor for reasons beyond its control is unable to
provide either the personnel or the material necessary to operate aircraft for a
minimum of 10 hours per day, the contractor shall still be obligated to provide
the aircraft listed on Attachment 8, and the Government shall have the

C-1
<PAGE>

SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

right to operate such aircraft. The exercise of such right is contingent upon
the provision by the Government of adequate financial protection to the
contractor/carrier and any lessor(s). In such event, the compensation, which
would otherwise be paid to the Contractor under the terms of this contract,
shall be reduced by the amount which the Contracting Officer finds to represent
the services and material not furnished by the Contractor, and related overhead
and profit.

(4) The Contractor shall at all times during the contract period,
including any extension described elsewhere in the contract, maintain control
over the aircraft listed on Attachment 8, to the extent necessary to assure the
Contractor's ability to meet its guarantee under CRAF. The Contractor shall, at
any time or times during the contract period, furnish to the Contracting Officer
upon demand, evidence that demonstrates the required control of said aircraft.
The Contractor shall not part with control of any aircraft accepted by AMC and
listed on Attachment 8 unless the loss is beyond the control of the Contractor,
such as aircraft accident, or the Contracting Officer, at his option, has agreed
to the substitution of other acceptable CRAF aircraft, as appropriate, and has
accomplished such substitution by contract modification. Examples of failure to
maintain control within the intent of this paragraph are as follows; (1) failure
to retain US registry, (2) leasing of aircraft to unapproved foreign
contractors, (3) dry leasing of aircraft to US airlines or aircraft operators
not possessing a temporary or permanent certificate issued by the DOT and, (4)
removal of aircraft from active utilization (in storage, out of service, or
parked) and not flyable for reasons other than maintenance, repair, or overhaul.
Aircraft temporarily removed from active utilization that are mission capable
within 24 hours are considered to meet the control requirements of this
contract. The parties agree that failure of the Contractor to maintain control
of any aircraft listed on Attachment 8, unless loss of the control is beyond the
control of the Contractor, such as aircraft accident, or approved by the
Contracting Officer, will constitute failure to have a currently existing
capability to perform services called for, and will justify termination of this
contract under the clause entitled "Default." In lieu of Default, the
Government, at its option, may, by unilateral contract modification, reduce its
purchase of airlift services for passengers or cargo, or both, during the
remaining period of the contract by an amount equal to the award share for the
remaining period of the contract attributable, under the formula used to
determine the original contract award entitlement, to the aircraft removed from
the AMC contract creditable mobilization base and deleted from Attachment 8.
Nothing in this paragraph shall limit the right of the Contracting Officer to
terminate this contract for cause for reasons other than failure to maintain
control of the above mentioned aircraft.

(5) Any non-certificated member of a Contractor Team Arrangement must
be an indirect air carrier, exercising effective ownership or control of the
aircraft.

b. Contractors who are using Mobilization Value Points (MVPs)
transferred from another carrier, as identified in Attachment 8A, must be
qualified to participate in the CRAF Program and commit their own aircraft (e.g.
at least 30 percent of a contractor's passenger fleet or 15 percent of a
contractor's cargo fleet in wide-body equivalents. A contractor operating both
passenger and cargo aircraft must commit the minimum from each type of
aircraft.). The contractor must submit a Certificate of Use (as set forth
below). The use of MVPs is solely for the transferee to increase its total MVPs
for determining peacetime fixed and expansion business. MVPs that are
transferred must remain so for the entire contract period, including any
peacetime option exercises. Transferred MVPs cannot be redistributed during the
contract period. In the event of CRAF activation, the MVPs will revert to the
transferor for the entire period of the activation.

CERTIFICATE OF USE
OF
MOBILIZATION VALUE POINTS

I, Vance Fort (name), Senior Vice President, Government
--------------------- ------------------------------------
and Legal Affairs (title) for World Airways, Inc. (transferee) hereby
- ------------------- --------------------------
certify that on 11 MAY 94 (date), American Airlines (transferor)
---------------------- ----------------------
has authorized World Airways, Inc. (transferee) the use of
-------------------------
143.9897(number) Mobilization Value Points for obtaining entitlement for the
- --------
FY95 contract, F116-94-D0027 The aircraft from which the MVPs were derived are
-------------
as follows:

C-2
<PAGE>

SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

A/C TYPE & SER # NUMBER OF MVPS
- ------------------- --------------
<S> <C>

DC10-10/N126AA 2.547201
DC10-10/N127AA 2.547201
DC10-10/N128AA 2.547201
DC10-10/N129AA 2.547201
DC10-10/N130AA 2.547201
DC10-10/N131AA 2.547201
DC10-10/N132AA 2.547201
DC10-10/N133AA 2.547201
DC10-10/N134AA 2.547201
DC10-10/N135AA 2.547201
DC10-10/N166AA 2.547201
DC10-30/N137AA 9.651697
DC10-30/N143AA 9.651697
DC10-30/N144AA 4.770849
DC10-30/N163AA 4.770849
B767-200ER/N312AA 3.525911
B767-200ER/N313AA 3.525911
B767-200ER/N315AA 3.525911
B767-200ER/N316AA 3.525911
B767-200ER/N317AA 3.525911
B767-200ER/N321AA 3.525911
B767-200ER/N322AA 3.525911
B767-200ER/N323AA 3.525911
B767-200ER/N324AA 3.525911
B767-200ER/N325AA 3.525911
B767-200ER/N328AA 3.525911
B767-200ER/N329AA 3.525911
B767-200ER/N330AA 3.525911
B767-200ER/N332AA 3.525911
B767-200ER/N335AA 3.525911
B767-200ER/N336AA 3.525911
B767-200ER/N338AA 3.525911
B767-200ER/N373AA 3.525911
B767-200ER/N378AA 3.525911
B767-200ER/N379AA 3.525911
B767-200ER/N380AA 3.525911
B767-200ER/N368AA 4.433740
B767-200ER/N370AA 4.433740
B767-200ER/N372AA 4.433740
</TABLE>

I further certify that:

(1) Except as specified in the contract, the use of these points is
irrevocable and is for the entire period of the FY95 contract to include any
option exercised for peacetime business;

C-3
<PAGE>

SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

(2) World Airways, Inc. (transferee) is committing its own
-----------------------
aircraft to the CRAF Program in the minimum amounts required to be a CRAF
contractor (currently 30 percent of a contractor's passenger fleet or 15 percent
of a contractor's cargo fleet in wide-body equivalents. A contractor operating
both passenger and cargo aircraft must commit the minimum from each type of
aircraft.) and is otherwise eligible to participate in these contracts.

TRANSFEREE World Airways, Inc.
----------------------------
SIGNATURE
-------------------------------
TITLE SVP, Government and Legal Affairs
----------------------------------

DATE OF EXECUTION 7/22/94
------------

CERTIFICATE OF USE
OF
MOBILIZATION VALUE POINTS

I, Vance Fort , Senior Vice President, Government and Legal Affairs
------------ -----------------------------------------------------
for World Airways, Inc. hereby certify that on 03 MAY 94, Continental
------------------------- --------- ------------
Airlines (transferor) has authorized World Airways, Inc. (transferee) the
- --------- -----------------------
use of 127.4264 long range and 304.0 short range Mobilization Value Points for
obtaining entitlement for the FY95 contract, F11626-94-D0027. The aircraft from
which the MVPs were derived are as follows:
<TABLE>
<CAPTION>

A/C TYPE & SER # NUMBER OF MVPS
- ------------------- --------------
<S> <C>

LONG RANGE
B747-100/N17010 7.170004
B747-100/N17011 7.170004
B747-200/N78019 15.84094
B747-200/N33021 15.84094
B747-200/N17025 7.920468
DC10-10/N68041 2.353055
DC10-10/N68042 2.353055
DC10-10/N68043 2.353055
DC10-10/N68044 2.353055
DC10-10/N68046 2.353055
DC10-10/N68047 2.353055
DC10-30/N12061 5.936574
DC10-30/N12064 5.936574
DC10-30/N13066 5.936574
DC10-30/N13067 5.936574
DC10-30/N14062 5.936574
DC10-30/N14063 5.936574
DC10-30/N19072 5.936574
DC10-30/N19073 5.936574
DC10-30/N68060 5.936574
DC10-30/N68065 5.936574

SHORT RANGE
B727-200/N8885Z 12.67
B727-200/N8886Z 12.67
B727-200/N66734 12.67
</TABLE>

C-4
<PAGE>

SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027
<TABLE>
<S> <C>

B727-200/N69735 12.67
B727-200/N69736 12.67
B727-200/N93738 12.67
B727-200/N69741 12.67
B727-200/N79745 12.67
B727-200/N79746 12.67
B727-200/N79748 12.67
B727-200/N79749 12.67
B727-200/N79750 12.67
B727-200/N73751 12.67
B727-200/N76752 12.67
B727-200/N79754 12.67
B727-200/N511PE 12.67
B727-200/N77780 12.67
B727-200/N27783 12.67
B727-200/N16784 12.67
B727-200/N33785 12.67
B727-200/N519PE 12.67
B727-200/N10791 12.67
B727-200/N232PE 12.67
B727-200/N45793 12.67
</TABLE>

I further certify that:

(1) Except as specified in the contract, the use of these points is
irrevocable and is for the entire period of the FY95 contract to include any
option exercised for peacetime business;

TRANSFEREE World Airways, Inc.
----------------------------
SIGNATURE
-------------------------------
TITLE SVP, Government and Legal Affairs
----------------------------------

DATE OF EXECUTION 7/22/94
----------------

CERTIFICATE OF USE
OF
MOBILIZATION VALUE POINTS

I, Vance Fort , Senior Vice President, Government and Legal Affairs
----------- ----------------------------------------------------
for World Airways, Inc. (transferee) hereby certify that on 04 MAY 94,
------------------------ ----------
USAIR (transferor) has authorized World Airways, Inc. (transferee) the use of
- ------ ----------------------
23.2695 Mobilization Value Points for obtaining entitlement for the FY95 F11626-
94-D0027 contract. The aircraft from which the MVPs were derived are as
follows:

A/C TYPE & SER # NUMBER OF MVPS
- ------------------- --------------

C-5
<PAGE>

SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

I further certify that:

(1) Except as specified in the contract, the use of these points is
irrevocable and is for the entire period of the FY95 contract to include any
option exercised for peacetime business;

TRANSFEREE World Airways, Inc.
----------------------------
SIGNATURE
-------------------------------
TITLE SVP, Government and Legal Affairs
----------------------------------

DATE OF EXECUTION 7/22/94
--------------------

C-6
<PAGE>

SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

3. MAINTENANCE

a. The contractor shall furnish an aircraft for each flight capable
of completing the flight without requiring regularly scheduled maintenance.

b. No scheduled maintenance except en route or turnaround service and
safety of flight items shall be accomplished at military installations under the
terms of this contract except as otherwise authorized by the Administrative
Contracting Officer (ACO) when deemed to be in the best interest of the
Government. Request for performance of maintenance other than en route or turn-
around servicing, shall be submitted to the Contract Administrator and the local
Operations Center/Command Post. It shall be the responsibility of the
Contractor to arrange for all scheduled aircraft maintenance and to provide for
movement of aircraft to and from their selected maintenance activity without
charge to the Government. Such movement to and from selected maintenance
activity shall not become part of scheduled route operations. If any
maintenance service is to be performed including en route, turnaround, safety of
flight, or scheduled maintenance during ground time of aircraft, Contractor
shall notify the local Operations Center/Command Post as follows:

(1) Specific type of maintenance to be performed;

(2) Anticipated duration;

(3) Type of Government Furnished Service desired in conjunction with
performance of the turnaround or en route maintenance service;

(4) Any reimbursable support desired in conjunction with
performance of the turnaround or en route maintenance service; and

(5) Any change in status or type of work to be performed subsequent
to initial notification to Operations Center/Command Post will be immediately
communicated to the Operations Center/Command Post.

c. The Operations Center/Command Post will coordinate the above
information with Maintenance Control to assure proper spotting of the aircraft
in relation to the degree of hazard associated with the maintenance work to be
performed. Quality Assurance Evaluator (QAE) and any other interested base
agencies will also be notified by the Operations Center/Command Post. Except as
otherwise specified in the contract, no charge will be made for any Government
furnished services required to perform en route turnaround maintenance checks
and servicing. If any services or material are required to perform other than
turnaround maintenance checks and servicing, such services or material will be
provided on a reimbursable basis in accordance with Air Force Regulation (AFR)
55-20 and Air Force Manual (AFM) 67-1, Vol I, Part I, Chapter 10, SECTION O,
Subsection 2. Requests for reimbursable services will be passed from the
Operations Center/Command Post to the CONCOR who will arrange for performance of
the required services. Contractor shall comply with the Air Force "Foreign
Objects Damage Program" in accordance with AFR 66-33.

4. AMC TACC OPERATIONS CENTERS

AMC TACC Operations Centers are primarily concerned with mission
monitoring/status and only under cases of extreme emergency will guidance be
provided by the Operations Center as it pertains to mission accomplishment. All
other problems shall be directed to the ACO or appropriate Contract
Administrator for resolution.

5. SPECIAL ASSIGNMENT AIRLIFT MISSIONS or EXERCISE MISSIONS

When positioning at the initial on-load station for a Special
Assignment Airlift Mission (SAAM) or Exercise mission, the contractor shall
provide the AMC mission identifier, aircraft tail number, and ETA to the
cognizant division within the AMC/TACC Operations Center. This information
shall be reported as soon as the aircraft departs the last station prior to
positioning at the on-load station originating the SAAM or Exercise

C-7
<PAGE>

SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

mission. If a mission will be delayed beyond the scheduled or contractual
positioning time, contractor shall report the cause for delay and the estimated
revised ETA to the cognizant division within HQ AMC/TACC Operations Center.

6. UNLAWFUL SEIZURE

The Contractor, in performance of this contract, shall have
established a program to prevent unlawful seizure of aircraft. At airports,
bases, and air terminals where there is a Air Mobility Command (AMC) presence or
where US forces are present and responsible for deployment/redeployment of
forces, the military will be responsible for security processing of passengers
at on/off load. At en route/technical stops and at locations where there is no
AMC or military presence, security processing of passengers shall be the
responsibility of the contractor. At these locations, the Contractor shall
satisfy the requirements of the FAA security program for scheduled/charter
operations in commercial service. Contractor shall establish procedures for
off-load of baggage of gate "No Show" passengers unless that baggage has
received customs preclearance. Copies of the Contractor's program shall be
furnished to the Administrative Contracting Officer (ACO) upon request.

7. UNUSUAL WEATHER CONDITIONS

a. Contract missions will be permitted into military stations under
either actual or forecast typhoon/hurricane condition I or II, provided such
flights are conducted in accordance with Federal Aviation Regulation's
applicable provisions of the USAF Foreign Clearance Guide, regulations of the
foreign country in which the station is located, and have the approval of the
departure and destination station AMC commander (base commander where there is
no AMC commander). This approval must be obtained prior to originating each
flight segment entering the above forecast conditions. There are no
restrictions relative to actual or forecast typhoon condition III or IV.

b. Whenever possible, every effort should be made to delay a civil
mission at the originating station in instances when severe weather (for
example, a typhoon) is forecast for the terminating station, rather than permit
the mission to proceed to an en route station and then be delayed.

8. AIR ROUTE TRAFFIC CONTROL CLEARANCE OF AIRCRAFT

a. The Contractor shall use the appropriate FAA or ICAO clearance
form when clearing aircraft from civil airports. When clearing from military
installations, DD Form 175, Military Flight Plan, or appropriate FAA or ICAO
clearance form may be used. Civil aircraft commanders are vested with self-
clearance authority; therefore, military clearance officers are not required to
sign clearance.

b. The DD Form 2401, Civil Aircraft Landing Permit, issued to the AMC
contract carriers constitutes prior approval for landings at AF bases only while
performing bona fide US Government AMC contract missions. Commanders are
authorized to impose a penalty landing fee for any aircraft which lands at an AF
base without prior authority (a valid DD Form 2401) except for bona fide
emergency landings. Unauthorized landings constitute a violation and the base
commander will take action in accordance with AFR 55-20, Use of United States
Air Force Installations by Other Than United States Department of Defense
Aircraft.

9. FLYING IN CONTROLLED AIRSPACE

All contract flights shall fly over established airways, domestic or
international, and in controlled airspace. Exception may be made to this
requirement where it is impractical to follow airways or fly in controlled
airspace, provided airways are intersected at the first practical point and
departed at the last practical radio navigational fix near destination, or when
area control or established airways do not exist within a flight information
region. Economic considerations will not justify deviation from this procedure.

10. BLUE BARK PASSENGER/CARGO

C-8
<PAGE>

SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

Occasionally survivors of deceased military or civilian personnel of
the DOD are carried on contract missions. The code name assigned by AMC to
these passengers is BLUE BARK. The originating station Quality Assurance
Evaluator (QAE) will tell the local contractor representative of the names of
the BLUE BARK passengers on board. The contractor shall ensure that these
passengers are afforded the utmost courtesy throughout their trip. When such
passengers are terminating at a civil airport the contractor shall notify the
QAE at the nearest AMC terminal. The QAE will make sure that proper onward
handling is provided. Cargo accompanied by a BLUE BARK Passenger at the civil
airport normally is accepted from the Government at plane side and delivered to
the Government at plane side, unless directed by special contract provisions
requiring pickup and delivery at a particular location.

11. SCHEDULED TRAFFIC STOPS/OPERATIONAL STOPS

a. A scheduled traffic stop is a military required stop and scheduled
arrival/departure time must be met by the contractor.

b. An operational stop is one made by the contractor for their own
convenience. At such stops, the contractor has the right to depart the aircraft
upon completion of its own required ground operations. The Government may
on/off-load passengers or cargo at operational stops if this does not interfere
with the contractor's ground operations or delay their departure. Even though
operational stops are reflected in the published schedule, the contractor may
overfly such stops and AMC may not force the contractor to land at such stations
for the purpose of on/off-loading traffic. Special care must be taken to make
sure any off-load or on-load of passengers at operational stops do not conflict
with the diplomatic clearance or customs required of the country involved.

12. UNAUTHORIZED TRANSPORT OF PERSONNEL ON FERRY SEGMENTS

Under provisions of the AMC airlift service contracts only those
Government personnel traveling for contract administration purposes are
authorized transportation on the ferry segments of AMC contract flights.

13. ROUTE SUPPORT

a. Where support items or personnel are required for performance of
this contract, the contractor, with ACO approval, may transport route support
items and personnel, including support for aircraft not operationally ready, in
belly compartments, in any space available on a ferry segment of any trip, and
in unused guaranteed standard ACL space which may exist due to nongeneration of
Government traffic. However, in any such case, authorized by the ACO, any
passengers and/or cargo displaced by said route support will result in
appropriate reduction in payment to the contractor for such flight in accordance
with the terms of Section G, para 11.b. Deficit Traffic. The contractor will
not be charged for use of Government 463L pallets nor for on/off-loading
services in connection with moving route support cargo. Route support personnel
are employed by the contractor for route support and are required for
performance of this contract.

b. A request received by the contractor for transportation of route
support cargo for other AMC contractors will be referred to the ACO, who may, at
his/her discretion, permit such transportation.

c. Contractor requests for transportation of route support personnel
or equipment on military and all AMC contract aircraft shall be referred to the
ACO. The ACO will, in his/her sole discretion, decide whether or not to permit
such transportation.

d. The contractor route support items including the baggage of the
crews shall be stowed aboard the aircraft in a place that will not restrict or
impede the immediate off-load at destination points of cargo and/or the personal
baggage of passengers. The contractor's crew members shall not transport
motorized cycles or like equipment on passenger flights.

C-9
<PAGE>

SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

14. REFERENCED PUBLICATIONS AND FORMS

Publications and forms referenced in this contract are listed in
Atch 10.

15. CONTRACTOR TEAM ARRANGEMENT

The term Contractor Team Arrangement as used in this contract includes
any and all permissible team arrangements identified in the Federal Acquisition
Regulation and supplements thereto. Any teaming arrangements proposed for
fulfillment of the requirements of this contract are subject to approval by the
Government. All teaming arrangements must be documented and defined in a
teaming arrangement agreement or similar document which defines the roles,
responsibilities, and relationships of the parties thereto. All agreements must
be signed by all parties thereto.

16. AIRFIELD RESTRICTIONS/SPECIAL AIRFIELDS

a. Air carriers are reminded that restrictions exist at military and
commercial airfields worldwide. Department of Defense (DoD) restrictions are
listed in the Air Mobility Command (AMC) publication entitled "Summary of
Airfield Restrictions." This publication can be obtained by contacting the
following office:

HQ AMC/XOVT
402 SCOTT DRIVE, UNIT 3A1
SCOTT AFB, IL 62225-5302
TELEPHONE: 618/256-4508/3112
FAX: 618/256-5692

b. In addition to airfields listed with restrictions, certain
airfields are identified as "special airports" that have unique hazards and
operating procedures requiring special training, increased awareness, and
familiarity on the part of air crews. Just as the FAA-designated "special
airports" are listed in the FAA Circular 121-455-1D, DoD also list "special
airports/airfields" in the above AMC publication requiring training, awareness
and familiarity.

c. This contract requires that at least one pilot member of an air
crew, operating a DoD mission into a FAA or DoD-designated special
airport/airfield, shall have performed pilot duties to that airport within the
past 6 months or reviewed a FAA-accepted pictorial detailing the appropriate
airfield hazards within 30 days prior to performing the DoD mission. NOTE: At
Guantanamo Bay NAS, Cuba, DoD missions performed by commercial air carriers in
approach Category C and above are restricted to landing on Runway 28, daylight
only.

d. Air carriers shall insure that air crews are adequately briefed on
all restrictions at applicable airfields (including "special
airport/airfields"). and properly trained before performing any DoD mission into
these airfields.

C-10
<PAGE>

SOLICITAION NUMBER: F11626-94-ROOO1
CONTRACT NUMBER: F11626-94-D0027

PART I - THE SCHEDULE

SECTION E - INSPECTION AND ACCEPTANCE

1. The following clauses are incorporated by reference:

FAR
NUMBER CLAUSE TITLE DATE

52.246-4 INSPECTION OF SERVICES--FIXED PRICE FEB 1992

DEFENSE
FAR SUP CLAUSE TITLE DATE

252.246-7000 MATERIAL INSPECTION AND RECEIVING REPORT DEC 1991

2. INSPECTION AND ACCEPTANCE OF SERVICES

a. Government inspection and acceptance of services under this
contract will be accomplished at the aerial port of debarkation (APOD) by an
authorized Government representative. The AMC Form 8, Civil Aircraft
Certificate, or DD Form 250 is the document used for certifying transportation
services rendered by the Contractor pursuant to the terms of this contract.

b. The Air Mobility Command (AMC) reserves the right to inspect,
conduct onsite capability surveys, perform ramp inspections, conduct cockpit
observation flights, and initiate performance evaluations of the Contractor
during all phases of this contract.

E-1
<PAGE>

SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

PART I - THE SCHEDULE

SECTION F - DELIVERIES OR PERFORMANCE

1. PERIOD OF PERFORMANCE

a. Performance of this contract shall begin 01 October 1994, or the
date of award, whichever occurs later. It shall continue through 30 September
1995 unless sooner terminated or extended by the Government under the
provisions of this contract. All flights in progress at midnight of the last
day of the contract shall not be affected by the expiration of this contract.

b. If, during the period of this contract including any extension
pursuant to this paragraph, the Government gives notice to the Contractor of the
declaration of an airlift emergency or national emergency, or of the activation
of CRAF, as described in Attachment 9, the parties agree that the giving of such
notice will extend this contract for the purpose of permitting the Government to
order additional airlift services throughout the period of the emergency, and/or
extend the Contractor's commitment to the CRAF program for the entire period of
CRAF activation, and for up to six months thereafter.

2. SCHEDULES - CATEGORY "B"

a. For the purposes of this paragraph "Schedules" shall mean the
detailed arrangements regarding the days and time of day of the flight
operations required to perform the air transportation services called for under
this contract. To the extent such schedules are not specified in this contract,
they shall be established by agreement between the Contractor and the ACO or the
contracting officer's representative (COR) in accordance with the provisions of
this paragraph. Scheduling for CAT B will be done at TACC/DOO.

b. Schedule Formation and Coordination.

(1) Category B Cargo trips on fixed buy.

AMC will provide proposed schedules for contractor coordination not
later than 30 calendar days prior to the month of operation. Contractor shall
provide in writing the following, to TACC/DOO, within three (3) working days
after verbal or other notification of the proposed AMC schedule;

(a) confirmation of proposed schedule; or

(b) a proposed alternative schedule.

(2) Category B Passenger trips on fixed buy.

AMC will provide proposed schedules for contractor coordination not
later than 120 calendar days prior to the month of operation. Contractor shall
provide in writing the following, to TACC/DOO, within three (3) working days
after verbal or other notification of the proposed AMC schedule;

(a) confirmation of proposed schedule; or

(b) a proposed alternative schedule.

(3) Category B Expansion Requirements.

F-1
<PAGE>

SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

All trips ordered under peacetime expansion provisions will be
scheduled no later than 72 hours after notice of order; require confirmation
within 24 hours, and will be ordered in accordance with SECTION G.

c. Schedules may be revised upon request of either the Government or
the contractor, provided the requester provides notice a minimum of 12 hours
prior to the scheduled departure of the trip involved and the requested change
is mutually agreed upon.

3. SCHEDULES-SCHEDULED SERVICE CARGO-CATEGORY "A"

The government will notify the contractor of scheduled service, CAT "A" cargo
for medical supplies (MEDEX) and Air Line of communications (ALOC) requirements
via telephone or otherwise. Each shipment will be assigned an individual
Government Bill of Lading (GBL) number.

4. TRIP CANCELLATION -CATEGORY B (Peacetime)

a. General. The Contracting Officer may unilaterally cancel an
occasional mission, provided notification is given the Contractor. Any verbal
notification will be confirmed in writing. Large scale cancellations or long
term reduction of requirements will not normally be covered by this paragraph.
Any reference to days in this clause means a continuous 24-hour period. All
"days" in this clause refer to "calendar days".

(1) A cancellation charge will be paid on missions canceled with
notification given within the timeframes noted below. (Times are all prior to
scheduled departure.) The cancellation charge will be applied to the trip price
for the route segment only (ferry, Eurocontrol surcharge or any other
additional charges will not be included). The charges are as follows:

a. Seven days or less:

Passenger -- 31.8%
Cargo -- 31.6%

b. 8 to 14 days:

Passenger -- 19.8%
Cargo -- 21.8%

c. 15 to 30 days:

Passenger -- 11.3%
Cargo -- 10.2%

d. 31 to 45 days: Passenger -- 7%

31 to 75 days: Cargo -- 7%

e. Beyond 45 days: Passenger -- 0.0%

Beyond 75 days: Cargo -- 0.0%

(2) Missions bought less than 14 days prior to the operating date and
subsequently canceled will be paid a cancellation charge of 19.8% for passenger
and 21.8 % for cargo.

(3). Contractor may elect to accept replacement missions in lieu of
cancellation charge.

b. No Cost Cancellations

F-2
<PAGE>

SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

(1) The Government will accrue one no-cost cancellation per quarter
(ending Dec, Mar., Jun., and Sep.) from all contractors (in the event of a
teaming arrangement, each individual member of the team) who have operated 30 or
more missions during the previous quarter (maximum 4 per contract period).
These no-cost cancellations may be applied to either basic or expansion buys.

(2) No-cost cancellations may be used by the Government in lieu of
paying a cancellation charge for missions canceled with at least 7 days notice
and can be used at any time during the contract periods. If a mission is
canceled with less than 7 days notice, the application of a no-cost cancellation
is subject to mutual agreement.

(3) No-cost cancellations will not be carried over from the current
contract to the next contract.

5. DIVERSIONS AND REROUTES - CATEGORY B MISSIONS ONLY

a. Diversions: The en route rerouting of a trip due to hostilities,
weather, medical emergency or natural disaster, constitutes a diversion. Both
the Government and the contractor have the right to divert any trip for these
reasons. The Contractor shall be paid the AMC rate for Government directed
diversions.

b. Reroute: The changing of a trip's route to other than that which is
specified in SECTION B or in a Delivery Order. The Contractor grants the
Government the right to reroute trips, subject to mutual agreement of the
parties. Contractor shall be paid at the AMC rate for the reroute trip using
Great Circle Statute Miles from airport to airport, for mileage computation.

6. CATEGORY B MISSION POSITIONING - PEACETIME

a. Aircraft must be positioned at the originating station prior to
scheduled departure as indicated below. Positioning of an aircraft means the
placing of an aircraft at a specific departure point. Complete crew must be
available at the aircraft not less than one hour prior to scheduled departure
time. (Pilot crew members may be in operations preparing flight plans,
receiving weather briefing, etc., provided they comply with company Operations
Manuals.) EARLY POSITIONING IS NOT AUTHORIZED UNLESS PRIOR COORDINATION AND
APPROVAL HAS BEEN OBTAINED.

(1) Cargo Missions:

Palletized Loading Bulk Loading and Rolling Stock

1-13 pallets - 2 hours 1-25 ton ACL - 4 hours
14-18 pallets - 2 1/2 hours 26 or more tons ACL - 5 hours
19 or more pallets - 4 hours

At stations where concurrent loading and servicing is not authorized, 1 hour
will be added to the required positioning times. When the Government requires
an aircraft to be bulk loaded, the Government will notify the Contractor 24
hours in advance of scheduled departure time and the schedule will be revised to
provide adequate time for loading and unloading. NOTE: See Attachment 1,
paragraph 2.5.7 for baggage off-loading times.

(2) Mixed Missions: 2 hours

(3) Passenger Missions:
----------------------

250 or less ACL - 2 hours
251 or more ACL - 3 hours

b. Ground times for passenger or cargo missions at en route stations shall
be as follows:

F-3
<PAGE>

SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

(1) Operational Stops - Not in excess of 2 hours.
----------------------

(2) Traffic Stops - Minimum of 1 1/2 hours and a maximum of 3
------------------
hours.

NOTE: See Attachment 1, paragraph 2.5.7 for baggage off-loading
times.

c. Ground times at turnaround stations of round trip missions shall be
-----------------------------------------------------------------------
as follows:
- -------------

(1) Cargo Missions:

1-13 pallets - 2 1/2 hours

14-18 pallets - 3 hours

19 or more pallets - 5 hours

(2) Passenger Missions:

250 or less ACL - 3 1/2 hours

251 or more ACL - 4 1/2 hours

d. Off-loading times at destination (terminating) station, including
aircraft servicing time, shall be as follows:

(1) Cargo Missions:

Palletized Loading Bulk Loading and Rolling Stock

1-7 pallets - 45 minutes 1-25 tons - 2 hours
8-13 pallets - 1 hour 26 or more tons - 3 hours

14-18 pallets - 1 hour, 15 minutes
19 or more pallets - 3 hours

(2) Passenger Missions:

250 or less ACL - 2 hours

251 or more ACL - 3 hours

NOTE: See Attachment 1, paragraph 2.5.7 for baggage off-loading
times.

e. Contractor shall adhere to operating hour restrictions at all stations
transited.

7. GOVERNMENT CONTROLLABLE DELAYS - CAT B CARGO (DEMURRAGE)

Compensation will accrue to the contractor for departure delays of more than 3
hours beyond the scheduled block time on completed cargo missions when delay is
Government controllable. Demurrage charges are limited to delays in loading or
unloading but exclude delays due to damage resulting from the negligence of
government personnel. The compensation will be as set forth in SECTION B.
Delays due to Act of God, ATC or contractor controllable reasons will not be
compensated. Demurrage applies to peacetime business only.

F-4
<PAGE>

SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

EXAMPLE:

B747 cargo aircraft is scheduled to depart at 0700. Departure is delayed due
to a broken K-loader until 1140 (4 hours 40 minutes Government controlled
delay). Contractor is entitled to demurrage payment of $2492. (1 hour 40
minutes rounded to the next whole hour compensable).

F-5

<PAGE>

SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

PART I - THE SCHEDULE

SECTION G - CONTRACT ADMINISTRATION DATA

1. EXPANSION ALLOCATION

a. Entitlement will be calculated in the same manner as calculated for the
fixed, peacetime airlift award and described in paragraph b, below. The sub-
categories are described in (1) below. Teaming Arrangements (TAs) are to be
aware that when two entities of a TA make an acceptable offer under expansion
business, the TA agent will be asked to make the decision which contractor will
perform the mission. Factors used to determine the acceptability of an offer
include aircraft type, aircraft weight capacity, date of availability and total
cost. The Contracting Officer will determine which offers are acceptable based
on entitlement and suitability of aircraft meeting the requirement. For example,
there is a SAAM requirement for 350 pax and offers are received from a B747 at
the ACL of 400 and a DC10-30 that is capable of carrying the full requirement
(paid at 330 according to the AMC Uniform Rates and Rules). Since the
requirement does not fall within the Standard ACL ranges, suitability of the
aircraft and type of requirement will be the determining factor for award.

(1) Passenger: Cargo:

Wide Body - Wide Body - Wide Body -
Wide Body - 1(PWB1) 2(PWB2) 1(CWB1) 2(CWB2)
- --------------------------- --------------- -------------- --------------

B747 DC10-30 B747 DC10-30
MD11 DC10-10 MD-11
L1011

Narrow body aircraft, combination aircraft, short-range aircraft and
Category A cargo do not have subcategories.

b. Ordering of expansion business will be allocated monthly based on
entitlement calculated by dividing each carrier's mobilization points by the
total points of all carriers offering in a category. Entitled long-range
carriers mobilization points will be recalculated six months after contract
start date, to include any additional aircraft added to the CRAF . These
percentages are calculated for every category. Long range carriers who are
awarded a contract for offering to Stages I, II and III after closing of the
Request for Proposal (RFP) will only be considered for business after entitled
carriers decline the business until the next recalculation of MV points, which
will be recomputed at the beginning of each quarter (October, January, April,
July). Short range carriers offering to Stages II and III after closing of the
RFP will be considered for expansion business only after entitled carriers
decline the business until the next recalculation of MV points at the beginning
of each quarter (October, January, April, July). If more than one nonentitled
carrier offers on expansion business, award will be made to the carrier who has
committed the most aircraft in wide body equivalents or B727 equivalents to the
CRAF. The MV points will be recalculated at the beginning of each quarter to
adjust for expansion business entitlement for any new carriers or additional
aircraft commitments by current contractors. Recalculated entitlement
percentages will be utilized on expansion business only. Entitlement not used in
one month may not be carried over to a future month. If a contractor does not
operate in a particular category, the entitlement is distributed among those
contractors who offer. Such service shall be ordered in accordance with the
procedures set forth in this SECTION. The Government is not undertaking any
obligation to issue orders for services and will issue such orders only when it
is considered in the best interest of the Government. The Government may from
time to time purchase services to be performed by aircraft other than those
specified herein. Aircraft must meet all other terms and conditions outlined
elsewhere in this contract.

2. DELIVERY ORDERS

a. The Government will request and contractors shall submit offers for
expansion airlift via the electronic, coded bulletin board or telefax. An offer
submitted via the bulletin board or telefax is considered a firm offer that,
when accepted by the government, becomes binding. Issuance of a delivery order
(DD Form 1155) serves as

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SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

government acceptance of the contractor's offer. Delivery orders shall set forth
(1) the services being ordered, (2) performance date, (3) price, (4) fund cite,
and (5) any other pertinent information. In emergencies, offers may be
requested, submitted, and accepted by telephone or telefax. Contractors shall
confirm telephone offers in writing (by bulletin board or telefax) within 24
hours. The government will issue a delivery order confirming emergency orders.
An executed copy of each delivery order will be mailed to the contractor.

3. RECEIPT FOR SERVICES PERFORMED

a. An AMC Form 8 will be issued for each Category (CAT)-B mission to be
performed under this contract. This document will be used for payment purposes
as well as certifying the transportation services rendered by the Contractor
pursuant to the terms of this contract. The AMC Form 8 will be prepared and
appropriate remarks entered at each station by the Government. The Government
will provide the Contractor representative the AMC Form 8 who, in-turn, shall be
responsible for insuring that it is aboard the aircraft from origin to final
destination of the mission. At final destination station, the Contractor's
representative shall sign the AMC Form 8 certifying that the services were
performed in accordance with the contract. The Government representative at
final destination will retain one copy of the AMC Form 8 to be mailed to HQ
AMC/XOKMA, 402 Scott Dr Unit 3A1, Scott AFB IL 62225-5302. The original and one
copy will be returned to the Contractor's representative. The contractor shall
be responsible to provide a completed copy of the AMC Form 8 with submission of
the payment voucher.

b. CAT A Cargo. A DD Form 250 will be issued by the Quality Assurance
Evaluator (QAE), indicating the amount of CAT A cargo moved by flight
number/date. The frequency of issue of the DD Form 250 will be as mutually
agreed between the Government and the Contractor. Sufficient copies of the DD
Form 250 with waybills will accompany the shipment to the receiving activity.
Upon receipt of the Scheduled Service (CAT-A) cargo at the destination, an
authorized Government representative will sign/date in Item 22 of the DD Form
250 to verify acceptance of the shipment. The Contractor shall attach two copies
of the DD Form 250 and applicable waybills to his billing and submit them to HQ
AMC/XOKM, 402 Scott Dr Unit 3A1, Scott AFB IL 62225-5302 for payment.
Authorization for payment of CAT A cargo shipment requires that the
signed/accepted DD Form 250 is received by HQ AMC/XOKM.

c. Pacific Stars and Stripes payment procedures follow those established
in paragraph b. above for CAT A cargo. The actual pounds shipped are identified
on the DD Form 250 which is prepared and certified by the Director of Logistics
at Pacific Stars and Stripes.

4. ADDRESS TO MAIL PAYMENT
- -

Offeror should indicate below the address to which payments should be mailed if
such address is different than that shown on the solicitation, offer, and award
form.

NAME WOA/EIA/RIA/EME/SCX
-------------------

ADDRESS c/o The Boatmen's National Bank; LB ID #700005, PO Box 501
----------------------------------------------------------

CITY/STATE/ZIP Scott AFB, IL 62225
-------------------

5. ELECTRONIC FUNDS TRANSFER

A payment to the contractor by the government may be accomplished by the
electronic transfer of funds directly into a designated bank account. Offer
should indicate below the account to which payments should be transferred if
such service is desired.

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SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

NAME OF BANK______________________________

NAME OF ACCOUNT___________________________

ACCOUNT NUMBER_____________________________

ABA (ROUTING ) NUMBER_________________________

6. PAYMENT FOR CONTRACT SERVICES

a. General. Public Voucher for Transportation Services (SF Form 1113) may
be ordered from Superintendent of Documents, US. Government Printing Office,
Washington DC. 20402, (202) 783-3238.

b. CAT-B (Full Plane Load) Charter Movements - Passenger and Cargo
Transportation. Contractor shall submit the SF 1113, original and two copies,
along with the AMC Form 8, Civil Aircraft Certificate, directly to DAO-DE
AMC/FS, 402 Scott Dr Unit 1K1, Scott AFB IL 62225-5311, reflecting the below
listed information. No more than one month's service will be submitted on a
single SF 1113.

(1) Contract/Delivery Order Number (Example: F11626-90-D0001/D.O.
6001/Item 1).

(2) Mission number, as applicable, routing and date.

(3) Price per passenger/ton and per trip.

(4) Ferry charge per trip, as applicable.

(5) Eurocontrol per trip, as applicable.

(6) Total price per passenger/cargo trip (Trip price plus any
applicable Ferry and/or Eurocontrol).

(7) Applicable International Air Transportation Taxes, Federal US
Transportation Taxes (Public Law 97-248), Customs, and Immigration charges,
Passenger Facility Charge Imposed by Commercial Airport approved by the FAA
under the Aviation Safety and Capacity Expansion Act of 1990 and Federal
Inspection Service fees.

(8) A certification of actual ferry routing and mileage for all ferry
except for round trips where the ferry mileage is between the originating
station and the terminating station. Ferry certification shall include aircraft
tail number, ferry routing as flown, actual miles flown, and certifying
signature. Contractor shall be paid either the contracted ferry miles or actual
ferry miles flown, whichever is less.

c. CAT A cargo (Less than Plane Load) Movement. Contractor shall submit
the SF 1113, original and two copies along with the DD Form 250, or GBL for
MEDEX and ALOC movements, directly to HQ AMC/XOKM, 402 Scott Dr, Unit 3A1, Scott
AFB IL 62225-5302, reflecting the below listed information. No more than 1
month's service will be submitted on a single SF 1113.

(1) Identify as "CAT A cargo".

(2) Contract/Delivery Order Number

(3) Period of Performance (Month and Year).

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SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

(4) Subtotals for each of the following: Pallets/Tons, customs, and
Agricultural Fees.

(5) Support documentation attached to SF 1113 shall include the
contractor's name and contract number; period of performance (month and year);
call number; number of pallets and pounds or per pallet or pound rate and
extended price; and calculation for fee(s).

(6) Medical supplies (MEDEX) and Air Line of Communications (ALOC)
scheduled service (CAT A) cargo. A US Government Bill of Lading (GBL), SF 1103,
will be completed at the originating location. The GBL shall annotate the
contractors name, the contract number, date of shipment, destination of cargo,
weight, and quantity of pallets, and Transportation Control Numbers (TCN). This
document will be used for certifying services rendered by the contractor. The
GBL will be certified by signature of an authorized government representative at
the receiving activity in Block 18 and returned with the contractor's agent. The
original certified GBL shall be submitted to the following address:

DAO-DEAMC/FS
402 Scott Drive Unit 1K1
Scott AFB, Illinois 62225-5311

7. PAYMENT OF LANDING AND PARKING FEES

a. The Contractor shall pay all required airport service fees and charges;
such fees and charges are not reimbursable (see subparagraph b, below, for
special additional requirements for Rhein-Main AB, Germany, herein). The
fees/charges include landing and parking fees at airports that the Contractor
operates to/from or transits in the performance of AMC contract flights, both
domestic and international.

b. To confirm payment of landing and parking fees at Rhein-Main AB,
Germany, the following procedures have been agreed to between HQ USAFE, Ministry
of Finance, Office of Defense Costs, Federal Republic of Germany (FRG), Federal
Ministry of Finance, Bonn, and the 435th Military Airlift Wing (435 MAW), Rhein-
Main AB, Germany:

(1) Contractors operating CAT-B missions into Frankfurt/Rhein-Main AB
GE, shall forward copies 2 and 3 of their invoices to OL-A, DET 4, AMCOS, APO
New York 09097-5000, within 10 calendar days after payment is made, but not
later than 30 calendar days after landing. The paid invoices shall be certified
and show the applicable AMC mission number.

(2) If the Contractor is unable to furnish both a second and third
invoice copy, the third copy and a reproduced second copy will be satisfactory.

(3) Invoices shall be accompanied by a cover sheet identifying the
AMC CAT-B flights by mission number.

8. AIR FORCE ADMINISTRATIVE CONTRACTING OFFICE (ACO)

The ACO for this contract is:

Bob Simpson or Olivia Hitsman Telephone: (618)256-5771
FAX: (618)256-2804

HQ AMC/XOKM
402 Scott Dr., Unit 3A1 Western Union:442474
Scott AFB IL 62225-5302 Passenger Reservation Center

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SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

9. SCHEDULE RELIABILITY - CAT-B MISSIONS ONLY

a. The Contractor's schedule reliability rate shall be computed for a
three-month period by subtracting the total number of Contractor-controllable
delays during the 3-month period from the Contractor's total number of scheduled
originating and turnaround station departures in that 3-month period, and
dividing the remainder by the Contractor's total number of scheduled originating
and turnaround station departures for the period. In the event a Contractor had
a CRAF contract the previous year, the schedule reliability for the final 2
months of the previous year will be used in determining schedule reliability for
the first 2 months of this contract. This reliability rate computation shall be
made as of 2400 hours GMT on the last day of each calendar month. The
originating station is defined as the initial on-load station of a mission. The
turnaround station is defined as that station of a round-trip mission where the
mission number changes, or initial backhaul on-load station of a round-trip
SPECIAL ASSIGNMENT AIRLIFT MISSION (SAAM).

b. The schedule reliability rate, which is based on the combination of
total departures in both 21 AF and 15 AF, may be measured and enforced in three
ways, and each carrier performing hereunder is obligated to meet the standard in
each of those ways. First, the requirement applies to all service performed
under this contract by any one carrier. Second, in the event of a Contractor
Team Arrangement , the reliability requirement applies also to the aggregate
performance under the contract by all members of the Contractor Team
Arrangement. (Each member of the Contractor Team Arrangement bears joint and
severable liability for failure of either the Contractor Team Arrangement in the
aggregate, or its individual carrier members performing hereunder, to meet the
schedule reliability requirement.) Third, for each carrier performing under this
contract, as part of a Contractor Team Arrangement, the requirement applies in
the aggregate to all service performed by that carrier under its CRAF contract
with AMC.

c. A delay shall be deemed to have occurred at the originating or
turnaround station if the Contractor's aircraft departs the blocks more than 20
minutes after the scheduled departure time. The scheduled departure time shall
be as established pursuant to SECTION F, paragraphs entitled "Schedules" and
"CAT-B Mission Positioning", and published in the Operations Bulletin as amended
by scheduling messages; the scheduled departure time at turnaround stations
shall be subject to revision as herein- after provided. A delay at originating
and turnaround stations, caused by factors beyond the control and without the
fault or negligence of the Contractor, shall be considered as Contractor-
uncontrollable; a delay for any other reason shall be considered Contractor-
controllable. The Contractor-uncontrollable delay time experienced at the
originating and en route stations on a mission shall be added to the scheduled
departure time at the turnaround station for purposes of determining the
scheduled departure time at the turnaround station on that mission.
Additionally, if missions are scheduled back-to-back with an aircraft that
experienced a Contractor-uncontrollable delay, this uncontrollable delay time
shall be added to the scheduled departure time of the subsequent AMC mission
with the resultant delay charged as Contractor-uncontrollable. This will give
the Contractor sufficient recovery time to return to schedule or obtain
substitute service for his follow-on missions. However, the Contractor-
controllable delay time experienced on a previous mission shall not be added to
the scheduled departure time at the originating station for any subsequent
mission. In the latter instance, the Contractor is required to originate his
next mission, on schedule, with his own aircraft or substitute service.

d. The Contractor and in the case of a Contractor Team Arrangement, each
carrier, shall maintain an 80 percent schedule reliability rate as the minimum
acceptable standard of performance, based on 30 or more departures from
originating or turnaround stations during a 3-month period. Where volume is less
than 30 departures, reliability will be reviewed on a case-by-case basis.
Failure to maintain an 80 percent schedule reliability rate for a 3-month period
will be reason for termination, pursuant to the Contract Clause entitled
"Default." However, nothing in this paragraph shall limit the right of the
Government to terminate this contract for cause for other reasons or to limit
any other rights and remedies provided the Government by law or under this
contract.

e. It is understood that, should a schedule reliability rate fall below an
average of 85 percent for a 3-month period, the Government may elect not to
order expansion transportation services pursuant to this SECTION of this
contract.

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SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

10. CONTRACTOR POINT OF CONTACT

The Contractor shall furnish to the ACO at HQ AMC:

a. The name of a person and point of contact who will serve as a liaison
between the Contractor and the ACO and,

b. The name of a person and point of contact who will serve as liaison
between the Contractor and the Contract Administrator (CA) for each station
transited. This person must have authority to adjust schedules, engage
substitute service, and make decisions pertinent to the airlift service, in the
name of the Contractor.

11. DISCREPANCY PERFORMANCE RATE

a. A discrepancy performance rate shall be computed on a monthly basis to
determine the level of contract violations. This rate is computed by dividing
the total number of mission segment inspections performed during the period into
the total number of discrepancies for that period. Mission segment inspections
shall be performed at all stations in the routing, including origination,
turnaround and en route, where the aircraft can be inspected by a QAE or CA. The
discrepancy performance rate shall be computed as soon as possible after the
monthly discrepancy reports are received by HQ AMC/XOKM.

b. A discrepancy shall be established whenever the Contractor's aircraft
or service is in violation of the terms and conditions of this contract and
shall be documented on a Contract Violation Notice, AMC Form 166b. During an
inspection, each type of discrepancy will be listed only once on an AMC Form
166b (e.g., 10 seats torn-one discrepancy, 100 meals without date stamps-one
discrepancy, etc.). An AMC Form 166b will not be issued for a contractor
controllable delay since these violations are included in the schedule
reliability rate.

c. The minimum acceptable standard of performance under this contract
shall be a discrepancy performance rate not to exceed 10 percent, as an average,
for a consecutive 3-month period with a total of 30 or more departures from
originating and turnaround stations. Where volume is less than 30 departures,
discrepancies will be reviewed on a case-by-case basis. Failure to maintain an
average discrepancy rate of 10 percent or less may be reason for termination,
pursuant to the clause entitled "Default". However, nothing in this paragraph
shall limit the right of the Government to terminate this contract (for cause
for other reasons) or to limit any other rights and remedies provided the
Government by law or under this contract. The Government may elect not to order
expansion transportation service pursuant to this SECTION of this contract.

12. EXTENDED PARKING

a. Requests for extended parking privileges exceeding 8 hours will be
reviewed on an individual basis and may be honored consistent with the
availability of space, equipment, and manpower resources. Extended ground time
exceeding 8 hours will be requested and concurrence or nonconcurrence received
through the local operations center, in coordination with deputy commander for
maintenance/chief of maintenance, and aerial port manager. Evaluation of the
contractor's request for extended parking privileges will be considered based on
the following:

(1) Positioning of aircraft in advance of time stipulated in the
contract so as to prevent delays due to weather, crew limitations, or other
reasons.

(2) Back-to-back scheduling of aircraft for a follow-on AMC mission.

(3) Other programmed mission requirements.

(4) Aircraft programmed or scheduled for subsequent commercial
operation on termination of a military mission at a military station will not be
granted extended parking privileges.

b. Use of the following procedures in requesting approval for extended
parking:

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SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

(1) Contractor may submit a request any time prior to arrival of the
aircraft. If the request is prior to mission execution, the approval should
come through the HQ AMC TACC/DOO scheduler. While the mission is in execution,
approval should be via the TACC/DOC.

(2) The local operations center will coordinate the request with the
deputy commander for maintenance/chief of maintenance, and squadron/port
operations office, and will advise the contractor whether the request has been
approved, or disapproved prior to the arrival of aircraft.

(3) The TACC Current Operations (DOOM) scheduler will intervene at
the contractor's request if these procedures result in denial.

c. If approval is granted for extended parking privileges, it will be
subject to the following criteria:

(1) Taxiing crews required when towing services are not available for
the immediate respotting of an aircraft from a terminating mission shall be
contractor-furnished. Towing equipment/crews required in the repositioning of
an aircraft resulting from the above action, or from a maintenance area, shall
be contractor-furnished, with the exception of the tractor and driver which will
be furnished by the Government.

(2) The Government will not be responsible for late positioning of
contractor aircraft due to the lack of towing tractors, other equipment, or
personnel. Equipment or personnel may be withdrawn from contractor use for
higher priority AMC mission support, in accordance with the AMC Mission Priority
System. The command post will determine priorities for allocation of manpower
and equipment to service AMC military or contract aircraft.

13. 5352.247-1002 CONTRACTOR'S FAILURE TO PROVIDE SERVICE (JUN 1992)-AMCFARS
(CAT-B Missions Only)

a. In the event that Contractor's aircraft is unable to depart from any
station, or if it can depart from any station but is unable to transport the
full amount of generated traffic within the guaranteed ACL, the Government may
invoke remedies which are set forth in this paragraph which will neither
constitute a termination within the meaning of the clause entitled "Termination
for Convenience of the Government," nor in any way, diminish the government's
rights under the Clause entitled "Default." The rights and remedies of the
government provided for in this paragraph are not exclusive and do not give rise
to government liability for costs incurred and are in addition to any other
government rights and remedies provided for by law or by this contract.

b. Deficit Traffic. This term applies to a situation where the
Contractor's aircraft did depart, but where the full amount of traffic within
the guaranteed station was not transported on the flight involved due to reasons
caused by the contractor. The deficit shall be charged from the station where it
is incurred through to destination unless the government utilizes the space at
an en route station. Contractor shall not be paid for deficit traffic.
Contractor shall be paid at the AMC negotiated uniform price for that portion of
the trip, if any, over which he did transport said traffic less a discount. The
discount shall be equal to a percent of the amount otherwise due. This percent
shall be obtained by dividing the deficit by the guaranteed ACL, but in no event
shall that percent or the discount be greater than 10 percent (10%). Deficit
traffic moved by a newly generated traffic. The contractor will not bill for the
dollar value of the deficit traffic, and the government's guarantee with respect
to that mission is reduced accordingly.

c. Substitute Service. This term, as used herein, applies to the
substitution of an aircraft to replace contractor's aircraft which is unable to
proceed from the departure station or from any en route station short of
destination in accordance with schedules established pursuant to this contract.
If the contractor fails to make an aircraft available for departure within 16
hours subsequent to scheduled departure time for a passenger flight or a mixed
flight from an originating station or an en route station, or within 4 hours of
a scheduled departure time for a

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SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

passenger flight or a mixed flight from an en route station where no holding
facilities for passengers are available, or within 24 hours of a scheduled
departure time for a cargo flight from either the originating station or an en
route station, or for any flight within such lesser time as may be agreed to by
the contractor's designee, the government may: (1) cancel the requirement for
further movement of the defaulted flight; (2) require the contractor to
transport the defaulted passengers or cargo by substitute service within such
additional time as the contracting officer may allow; (3) acquire substitute
service from commercial sources; or (4) reschedule the defaulted flight or
transport the defaulted passengers or cargo, or any portion thereof, itself. The
exercise of any of these options will be in accordance with the following:

(1) In the event that the requirement for future movement of the
defaulted flight is canceled, the number of passengers equal to the guaranteed
ACL for the flight involved, or the number of pounds of cargo equal to the
guaranteed ACL of the flight involved, or the number of miles for the flight
involved, will be subtracted from the government's guarantee. Any canceled
requirement will be deleted from the contract by unilateral modification. If
the failure to depart was from the originating station, contractor will not be
paid any amount for the flight involved. If the failure to depart was from an
en route station, the contractor will be paid at the AMC negotiated uniform rate
for that portion of the trip over which he did transport the passengers or
cargo.

(2) If the contractor is required to transport the passengers or
cargo of the defaulted flight by substitute service within such additional time
as the contracting officer may allow, the contractor shall arrange and pay
directly all costs involved in the transportation by the substitute aircraft.
Contractor will be paid, in this event the full contract price for the flight
involved, irrespective of the amount paid by him for this transportation by
substitute aircraft. The substitute aircraft provided by the contractor must be
of like type, configured in accordance with the applicable specifications, and
must be approved by the contracting officer. In lieu of, or in addition to,
providing the above type substitute service, the contractor may, at his own
expense, purchase the amount of space, by common carriage or otherwise, needed
for the movement of the passengers or cargo of the defaulted flight. The
purchase of such space must be approved by the contracting officer and must be
obtained only from American Flag carriers, except that in the event an American
Flag carrier is unavailable or not reasonably available for point-to-point
substitute service within an overseas area, upon prior authorization of the
contracting officer, the contractor may use a Foreign Flag schedule carrier for
substitute service on an exceptional basis only and provided the requirements of
the clause entitled "Preference for United States Flag Air Carriers," are
complied with. In such event, contractor would be paid the contract price for
the involved transportation. If contractor transports by purchase of common
carriage only a part of the number of passengers or amount of cargo of the
defaulted flight, he will only be paid for those passengers or cargo so
transported, and the passengers or cargo not transported shall be deducted from
the government's guarantee.

(3) The government may purchase substitute service from commercial
sources. This can be by a substitute commercial aircraft or by the purchase
from commercial sources of sufficient space to transport by common carriage or
otherwise, the number of passengers or amount of cargo involved in the defaulted
flight. In either event, the substitute service shall be deducted from the
government's guarantee and the contractor would be charged by the government,
any amount which the government had to pay to commercial sources which is in
excess of the contract price for the transportation of the passengers or cargo
involved for the distance involved. (If this substitute service is obtained for
only a portion of a trip as provided in the contract, the contract price will be
prorated for the distance involved in determining the amount due to the
Government.) Contractor will not be paid any amount for the defaulted flight
except that he will be paid at the AMC negotiated uniform rate for that portion
of the trip, if any, over which he did transport the passengers or cargo on the
flight involved. The contractor shall provide all services normally provided in
connection with flights operating under this contract. In the event the
defaulted flight was to be performed between military bases and the government
procures common carriage substitute service, the defaulting contractor shall be
responsible for the transportation between the military bases and the commercial
terminal.

(4) The government may, in its discretion, elect to either reschedule
the defaulted flight to a later time within the performance period of the
contractor or may move these passengers and/or this cargo, or any portion
thereof. In this event, the number of passengers equal to the guaranteed ACL
for the flight involved, or the number

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SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

of pounds of cargo to the guaranteed ACL of the flight involved, or the number
of miles for the flight involved will be subtracted from the government's
guarantee and the contractor will be charged, by the government, the excess, if
any, of the charge for this movement as computed under the provisions of AFR 76-
28 over the contract price. If this movement is utilized for only a portion of a
trip as provided in the contract, the contract price will be prorated for the
distance involved in determining the amount due the government. Contractor will
not be paid any amount for transportation of the passengers or cargo of the
defaulted flight except that he will be paid at the AMC negotiated uniform rate
for that portion of the trip, if any, over which he did transport said
passengers or cargo in the flight involved.

d. The contracting officer may permit the contractor to provide services
with substitute aircraft having a lower ACL. When such substitution of aircraft
is permitted, the contractor shall be reimbursed at the rate per ton/pax mile
established in the original award times the lesser ACL with a corresponding
reduction in the government's guarantee. In addition or as an alternative to
providing substitute aircraft having a lower ACL, the contracting officer may
permit the contractor to acquire, at his own expense, the amount of space, by
common carriage, needed for movement of the pax or cargo equal to the ACL of the
aircraft originally scheduled for the flight, in which event the contractor will
be paid at the contract rate for the pax and/or cargo within the guaranteed ACL
which are actually transported. The contracting officer may also permit the
contractor to provide services with substitute aircraft having a higher ACL than
the aircraft required for performance of services under the contract. In this
event, the contractor will be reimbursed on the contract price for the flight as
originally awarded.

e. The contracting officer, in making his decisions and selections for
substitute service, will use his discretion in such a manner as to mitigate
contractor's liability for excess costs when reasonably possible. However,
military needs and urgency will be the prime consideration in the exercise of
this discretion.

f. Irrespective of any of the provisions of any subparagraph of this
clause, the government may cancel any mission for movement of submarine crews if
the specified aircraft or an equal substitute aircraft acceptable to the
government is not positioned 2 hours prior to scheduled departure time. This
cancellation, under these circumstances, is at the sole discretion of the
government and will be at not cost to the government.

g. The provisions of Attachment 1, "Performance Work Statement Passenger
Service," relative to contractor's responsibility for care of passengers, and
for providing meals and billets, apply to all situations discussed in this
clause, where in the contractor failed to depart as scheduled. Contractor shall
retain responsibility for passengers until such time as they are moved by the
contractor or the government, or the requirement is canceled by the government.

h. In the event the contractor fails to delivery any part of the GACL (pax
or cargo) to manifested destination due to an accident, contractor will be paid
at AMC negotiated uniform rate only for that amount of pax or cargo delivered to
manifested destination.

G-9
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SOLICITATION NO: F11626-94-D0027

PART I - THE SCHEDULE

SECTION H - SPECIAL CONTRACT REQUIREMENTS

1. GOVERNMENT-FURNISHED SERVICES AND EQUIPMENT

a. The Government will furnish necessary equipment and personnel to
provide the following services for all landings made at military installations
(originating, en route and terminating stations) at no cost to the Contractor
except as otherwise provided in this paragraph:

(1) Transient alert and ramp services to include:

(a) Landing.

(b) Follow-me vehicle.

(d) Parking.

(e) Chocking and grounding of aircraft.

(f) Positioning, connecting, operating, and depositioning of
aircraft ground power unit.

(g) Fire guard for engine starts.

(h) Positioning, connecting, operating, and depositioning of
engine start carts.

(i) Positioning, operating, and depositioning of compressor for
airing of struts and tires. Nitrogen may be used when available to inflate
aircraft tires on a non-reimbursable basis. A qualified technical Contractor
Representative will be present to supervise, provide all required attachment
fittings, and service the items.

(j) Position and deposition of aircraft jacks for tire changes.
Military owned jack will be provided if a suitable jack is available. A
technically qualified Contractor Representative will advise what capacity jack
is required, and whether using military or commercial jack, the Contractor
Representative will jack the aircraft.

(k) Ramp sweeping.

(l) To-plane service of MIL-H-82382 and supply of oxygen
(gaseous or LOX) on a reimbursable basis. Equipment and necessary operators will
be furnished for wing de-icing at no cost; the de-icing fluid will be furnished
on a reimbursable basis.

NOTE: In an emergency, into-plane service of hydraulic fluid, supply of oxygen,
de-icing fluid and servicing of struts/tires will be provided by the Government
on a reimbursable basis. A technically qualified Contractor Representative will
supervise emergency servicing to assure compliance with procedural requirements.

(m) Maintenance stands when required for ground servicing
operations.

(n) To-plane fuel servicing. A Contractor Representative will
connect/disconnect the fuel hose to/from the aircraft Single Point Refueling
(SPR).

(o) Chief Servicing Supervisor (CSS) and fuel vent monitors in
accordance with TO 00-25-172 when a concurrent ground servicing is accomplished.
(NOTE: See subparagraph 1c of this SECTION on concurrent servicing procedures.)

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SOLICITATION NO: F11626-94-D0027

(2) Terminal and traffic services to include:

(a) Passenger processing.

(b) Passenger manifesting and documentation.

(d) Passenger and crew boarding stairs/loading bridge.
(Entrance doors are not to be opened until stairs have been placed up to the
aircraft. Up to the aircraft means positioning the stairs as close to the
entrance as possible without hindering the opening of the doors.)

(e) Customs clearance (Government traffic only).

(f) Medical clearance (passengers only).

(g) Agriculture inspection (if required).

(h) Immigration clearance.

(i) Cargo receiving, processing, documentation, and positioning
for loading.

(j) Loading, tiedown and unloading. (Loading will be in
accordance with the load breakdown provided by the Contractor on AMC Form 55 or
equivalent. The load supervisor will annotate the form to show the actual load.)

(k) Cargo manifesting.

(l) Cargo handling equipment, including 463L pallets and
associated cargo restraining nets.

(m) Potable water (includes equipment and into-plane
servicing).

(n) Baggage carts.

(o) Lavatory servicing, including positioning, hookup,
operation and depositioning of servicing unit. (Anti-freeze solution mix of
approximately 50/50 ethyl/glycol to water will be furnished on a non-
reimbursable basis. Contractor is responsible for additional anti-freeze
solution if Contractor operating specifications require a stronger mix. This
will be done subsequent to lavatory servicing.)

(p) Flightline transportation for crews.

(q) Position, connect, operate, and deposition the ground air
conditioning or heating units. The aircraft interior temperature will be
maintained between 68 degrees Fahrenheit and 74 degrees Fahrenheit. (This
requirement does not apply to DC-10 and B747 aircraft.)

(r) High lift truck for galley servicing at those military
bases where commercial catering service is not available.

H-2
<PAGE>

(3) Fire and crash rescue support.

(4) Aircraft clearance facilities.

(5) Emergency medical services to Contractor air crews and personnel
on a reimbursable basis in accordance with AFRs 55-20 and 168-1.

NOTE: All of the above services will be furnished for all landings at military
installations, including additional landings made due to aborted flights,
irrespective of the cause of the abort. These services will also be provided at
AMC APOEs when Contractor's aircraft are scheduled in a manner to preclude
depositioning to home maintenance base between missions as determined by the
ACO. However, when an aircraft is positioned from a commercial mission from a
commercial airport requiring lavatory servicing, such lavatory servicing will be
on a reimbursable basis.

(6) Special handling equipment (equipment which is not common to
Government and Contractor aircraft and/or cargo handling system), such as tow
bars, may not be available at military installations and must, therefore, be
furnished by the Contractor. Contractor will also furnish personnel to operate
such equipment. Specifically, with regard to wide-body aircraft, if the airlift
services contract calls for services to be performed with wide-body aircraft
through military installations, the Government will furnish the following
special handling equipment:

(a) Pax loading stairs.

(b) Loaders for baggage containers.

(d) Cargo on/off-loading equipment.

(7) For all CAT-B passenger missions (except SAAM and Exercise)
operating through Charleston International, Los Angeles, Philadelphia, and St
Louis, AMC will perform passenger manifesting and check-in to include boarding,
seat assignment, issuance of boarding pass, baggage weighing, tagging and
placing of baggage on conveyor at baggage check-in. Contractor will perform all
other functions. The provisions of Attachment 4 apply to Contractor's
responsibility and liability for interlined baggage.

b. The Contractor may purchase petroleum products at any military base
other than those facilities that are serviced by commercial sources, (unless
specific approval is granted by supplemental agreement) for use in performing
services hereunder. These purchases shall be in accordance with applicable
service directives, AFR 144-9 for Air Force installations, AR 37-60 for Army
installations, NAVCOMPT Manual Vol III, paragraph 032511, and NAVSUP Manual Vol
II, paragraph 25317.3 for Navy installations and subject to the procedures set
forth in paragraph c below. Notwithstanding these service directives, no
accessorial charges or administrative costs will be applied to these purchases.

c. A Supervisory Contractor Representative (SCR) will be in the cockpit
during towing operations. Also, a SCR will be present for supervision and
control of Contractor personnel/equipment during aircraft fuel servicing. TO 00-
25-172 will apply. The following guidance will be followed when concurrently
servicing passenger aircraft with or without passengers aboard and cargo
aircraft at USAF military installations:

(1) The Wing/Base Commander is the final authority for ground
servicing operations and the overall safety associated therewith.

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SOLICITATION NO: F11626-94-D0027

(2) A Concurrent Servicing Supervisor (CSS) will be provided by the
Air Force (AF) when concurrently servicing Contractor aircraft at military
installations. The AF supervisor has full and final authority over all phases of
ground servicing operations. This authority allows the individual to shutdown a
refueling operation if an unsafe condition exists. The supervisor also controls
access to/from the aircraft.

(3) One qualified SCR will be present for supervising and controlling
the Contractor's aircraft as pertains to ground servicing operations and related
safety aspects. The SCR will coordinate each phase of his operation with the CSS
and shall supervise all Contractor and subcontractor personnel. The SCR will
respond to the CSSs direction to discontinue fueling. The SCR shall also advise
the CSS when he/she spots or otherwise becomes aware of a potential hazard. The
fuel servicing will not be resumed until the issue is resolved.

(4) Prior to beginning servicing operations, the SCR will establish a
liaison with the CSS to:

(a) Determine specific servicing requirements such as
grounding/bonding sequence for the specific aircraft.

(b) Discuss any unfamiliar system characteristics or
deficiencies.

(c) Provide guidance on the duties and physical positioning of
the contractor's technical personnel during the concurrent servicing operation.

(d) Jointly approve timing of maintenance, cargo/baggage
loading/unloading, fleet servicing, or other activities (food service, cleaning,
etc.).

(e) Determine if the aircraft (B747 and DC-10) fuel jettison
system was used since departing the previous location. If the system was
operated, concurrent operations will not be accomplished until it is determined
that jettison valves are closed.

(f) Advising the CSS of contractors procedures; if applicable,
for switch loading aviation fuel.

(5) The SCR will insure civilian vehicles involved in a concurrent
servicing comply with standards required by TO 00-20B-5 and AFOSH Standard 127-
39. Additionally, associated servicing equipment not designed or approved for
use within a hazardous location may be moved into or within the fuel servicing
safety zone (FSSZ), if pressurization of the refueling equipment is stopped. Re-
pressurization of the refueling equipment will not resume until the servicing
vehicle's engine is shut down while in the FSSZ or the vehicle leaves the FSSZ.
The SCR will inform the CSS of vehicle status prior to commencing servicing
operations.

(6) Authorized vehicles will not operate closer than 25 feet of
aircraft fuel vents, SPR connections and refueling equipment during fuel
servicing of the aircraft. All other vehicles are restricted to 25 feet from
fuel vents and must remain outside of the 50-foot fuel servicing safety zone.

(7) The aircraft APU will be used to provide power and air-
conditioning on DC-10, L-1011, B767, A-310, and B747 aircraft.

(8) The Contractor is required to furnish three headsets with the
cords for aircraft with passengers and two headsets with cords for aircraft
without passengers on board or cargo aircraft. One cord will be 100 feet long
and the other(s) 50 feet long. The 100 feet long cord will be used by the CSS
and the two 50 feet cords will be used by the two Government fuel vent monitors.
One of the 50-foot cords is not required when servicing a cargo aircraft.

(9) The Contractor refueling panel operator, shall maintain intercom
contact with the CSS.

*(10) When the refueling control panel/fuel system control mechanism
is located on the outside of the aircraft, a qualified Contractor Representative
must be on intercom inside the aircraft when passengers are on board.

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SOLICITATION NO: F11626-94-D0027

*(11) The flight crew shall, prior to beginning the fuel servicing,
brief passengers regarding the fact that fuel servicing will be conducted,
passenger option to deplane, the restrictions on: smoking, operation of
electronic equipment, and personnel movement. Passengers shall not enter or exit
the aircraft during fuel servicing. Also, the flight crew will ensure required
exits are open.

*(12) Qualified flight crew personnel shall be in attendance within
the aircraft to ensure compliance with the above restrictions and to assist in
the evacuation of passengers in an emergency. A crew member will be stationed at
each appropriate exit.

(13) The aircraft INS may remain energized during a fuel servicing
operation.

(14) The aircraft radios and radar systems will not be on during the
fuel servicing operation.

(15) No aircraft electrical systems will be activated during the fuel
servicing operation except those required for servicing.

(16) The SCR will receive and connect/disconnect the fuel nozzle at
the aircraft single point refueling receptacle. The SCR may have another
qualified Contractor Representative perform the task. The Single Point Refueling
(SPR) operator must test the nozzle to ensure it cannot be removed from the
aircraft when the valve handle is in the open and lock position prior to
pressurizing the hose. The fuel nozzle will be disconnected from the aircraft
before disconnecting the refueling equipment ground and bonding wires.

(17) When concurrent servicing operations are in progress, all
Contractor personnel (including flight crews), unless previously cleared, shall
report to and receive the CSS's concurrence prior to entering the servicing
area.

(18) When servicing cargo aircraft, the CSS and his/her assistant (on
inter phone) will also monitor both wing fuel vents.

*(19) A copy of the contractor's aircraft refueling procedures shall
be located on the aircraft and made available to the CSS, as required.

*NOTE: Items preceded by an asterisk "*" apply to passenger aircraft only.

d. Billeting and messing for Contractor's crews, and Government-owned
property required in support of this contract not specifically provided for in
other provisions of this contract, may be provided by the Government at the
discretion of the commanding officer of the military installation involved.
Except as provided in paragraphs a and b above, other services at military
bases, where commercial services are not available, or not available on a timely
basis, may be made available to the Contractor on an emergency basis only, as
determined by the ACO. Aerospace Ground Equipment (AGE) and traffic handling and
servicing equipment, with necessary operators, furnished pursuant to this
paragraph H-1 shall be on a non-reimbursable basis. Billeting and messing for
Contractor's crews shall be on a reimbursable basis. Technical services and
maintenance labor provided, as well as supplies and parts issued, shall be on a
reimbursable basis and in accordance with and subject to the provisions of:

(1) Air Force Installations - AFM 67-1 and AFR 55-20.

(2) Naval Air Stations - Naval Supply Systems Command Manual,
Volume 2.

(3) Army Installations - AR 37-27.

At overseas locations, Contractor's employees (other than native personnel
assigned to duty in their own country) who are involved in the performance of
this contract may be furnished billeting and messing facilities on a
reimbursable basis, as prescribed by local base regulations. In addition,
commissary, base exchange privileges, and other logistic support may be granted
to such employees and dependents in accordance with Joint Service

H-5
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SOLICITATION NO: F11626-94-D0027

Regulation AFR 400-l5/AR 700-32/OPNAVINST 4000.76, Logistic Support of United
States Non Governmental, Nonmilitary Agencies and Individuals in Overseas
Military Commands and such implementing instructions as may be issued by area or
base commander concerned. The ACO will periodically review the scope of support
furnished, pursuant to AFR 400-l5, and advise the Commander concerned as to any
change in status of the Contractor personnel which would affect their
eligibility to receive the support. Minor dependents of a US Citizen, who are
employed by the Contractor overseas in performance of this contract, are
authorized dependent education on a space available, tuition basis in the DOD
dependents schools as provided in DOD Directive 1342.213 dated 8 July 1982.

e. Contractor will be permitted to utilize military telephone and record
communications facilities in those areas where commercial circuits are not
available and it is in the best interest of the Government as determined by the
ACO. Contractor use of military communications facilities must be limited to
transmission/reception of airlift mission support traffic and must not interfere
with military command control traffic.

f. The Government will furnish office, warehouse, and storage space at
military installations for Contractor's representatives and supply support items
and equipment to the extent available. Such office, warehousing and storage
space, including utilities (heat, air conditioning when authorized in AFM 88-l5,
light, power, water, and sewage) concomitant to the use of such space, will be
provided to the Contractor on a non-reimbursable basis. All requests for office,
warehouse, and storage space shall be made to the base commander through the ACO
or his delegated representative. In addition, intrabase communications (on base
telephone service) will be provided on a non-reimbursable basis commensurate
with the availability of circuits. Whenever space is provided it will be on an
as is condition with regard to partitions, walls, lighting, electrical wiring,
plumbing, etc. No modification to buildings will be made unless specifically
authorized by the base commander, other than minor modifications to existing
facilities as approved by the Base Commander. Requests by the Contractor for
construction of facilities on any military installation will be submitted
directly to HQ AMC/XOK. Necessary coordination will be taken by HQ AMC with the
major air command concerned. Contractor will not undertake such construction
until notified by HQ AMC that construction has been approved.

g. Contractor is authorized to purchase ground petroleum products at
overseas Air Force installations for use in company owned ground vehicles
required for performance of this contract. Such authorization is subject to and
in accordance with the provisions of AFR 144-11.

h. In accordance with FAR 52.245-2, a list of the Government-Furnished
Equipment that the Contractor has in its possession, for use in connection with
and under the terms of this contract, will be listed in an attachment at time of
award.

2. PASSENGER AND PUBLIC LIABILITY INSURANCE

a. General. Prior to performance of any services hereunder, the Carrier
shall, at its own expense, procure and maintain during the entire performance
period of this contract, with financially and legally responsible insurance
company or companies, passenger and public liability insurance in accordance
with paragraph b or c, below. Liability insurance purchased pursuant to the
requirements of this paragraph shall cover payment to the Government, pursuant
to the subrogation provision of the Medical Care Recovery Act (42 USC 265l-3)
and within the liability limitations of this contract, of the cost of Government
provided medical care to the extent that said insurance would cover payment to
injured individuals of the cost of medical care in the absence of any Government
obligation to provide medical care. The Carrier shall furnish to the Contracting
Officer a Certificate of Insurance, duly executed by the Insurer, of the
insurance required by this paragraph. The Certificate of Insurance shall
substantially conform to the form set forth in paragraph d, below. If a court of
competent jurisdiction determines that any transportation furnished pursuant to
this contract is subject to the Warsaw Convention, 49 Stat. 3000, and that the
Carrier is entitled to limit its liability under that Convention, then the
minimum limit of insurance required by this clause shall be considered to be a
"higher limit of liability agreed to by special contract" as contemplated by the
last sentence of Article 22(l) of that Convention, and the Contractor agrees
that it shall not with respect to any claim arising out of the death, wounding,
or other bodily injury of a passenger, avail itself of any defense under Article
20(l) of the Convention. Nothing herein shall be deemed to

H-6
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SOLICITATION NO: F11626-94-D0027

affect the rights and liabilities of the Carrier with regard to any claim
brought by, on behalf of, or in respect of any person who has willfully caused
damage which resulted in death, wounding, or other bodily injury of a passenger.
See note below subparagraph c(2) of paragraph entitled, "Passenger and Public
Liability Insurance".

b. Split Limits Liability. The minimum limits of liability insurance
coverage maintained by the Carrier shall be as follows:

(1) Liability for bodily injury to or death of aircraft passengers: A
limit for any one passenger of at least three hundred thousand dollars
($300,000.00), and a limit for each occurrence in any one aircraft of at least
an amount equal to the sum produced by multiplying three hundred thousand
dollars ($300,000.00) by the next highest whole number resulting from taking 75
percent of the total number of passenger seats installed in the aircraft.

(2) Liability for bodily injury to or death of persons (excluding
passengers): A limit of at least three hundred thousand dollars ($300,000.00)
for any one person in any one occurrence, and a limit of at least twenty million
dollars ($20,000,000.00) for each occurrence.

(3) Liability for loss of or damage to property: A limit of at least
twenty million dollars ($20,000,000.00) for each occurrence.

c. Combined Single Limit Liability.

(1) Notwithstanding the provisions of paragraph b above the Carrier
may be insured for a single limit of liability for each occurrence. In that
event, coverage must be equal to or greater than the combined required minimums
set forth in paragraph b, above, for bodily injury, property damage, and/or
passenger liability for the type of use to which such aircraft is put, as the
case may be.

(2) In the case of a single limit of liability, aircraft may be
insured by a combination of primary and excess policies. Such policies must have
combined coverage equal to or greater than the required minimums set forth in
paragraph b, above, for bodily injury to non-passengers, property damage, and/or
passenger liability for the type of use to which the aircraft is put, as the
case may be.

NOTE: In the event the proposed changes to the Warsaw Convention, known as the
Montreal Protocol, are approved or ratified by the United States and become
effective in the United States, the Montreal Protocol will take precedence to
the extent it is inconsistent with the terms of this contract regarding
insurance.

d. Form of Certificate.

"CERTIFICATE OF INSURANCE"

This is to certify that:

(See Attached) (hereinafter called the Insurer)
--------------
Name of Insurer

of (See Attached)
--------------
Address of Insurer

has issued to World Airways, Inc.
-------------------
Name of Insured

Policy, bearing policy number (See Attached), with respect to the legal
liability of the said Insured for aircraft passenger death or bodily injury,
aircraft public death or bodily injury (excluding passengers) and aircraft
property damage liabilities, effective from DEC 1, 1993 through DEC 1, 1994 at
12:01 AM L.S.T. on both dates at the address of the named insured.

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SOLICITATION NO: F11626-94-D0027

The minimum limits of liability insurance coverage maintained by the Insured
under the said policy are as follows*: CSL $750,000,000.00 B.I./P.D. any one
occurrence

(3) Liability for loss of or damage to property: A limit of at least
twenty million dollars ($20,000,000.00) for each occurrence.

(4) The Insurer further certifies that the insurance afforded under
this policy covers payment to the Government, pursuant to the subrogation
provision of the Medical Care Recovery Act (42 USC 265l-3), of the cost of
Government provided medical care to the extent that said insurance would cover
payment to injured individuals of the cost of medical care in the absence of any
Government obligation to provide medical care.

The terms and conditions of the policy apply throughout the world. The following
aircraft are covered by the policy identified above: All aircraft owned and/or
operated by the named insured.

The parties recognize that the policy may exclude certain liabilities with
respect to any DOD operations involving the Civil Reserve Air Fleet (CRAF)
subsequent to the effective date of activation of the CRAF. The excluded
liabilities will be those where a loss may be incurred during the activation of
the CRAF under circumstances such that it cannot be demonstrated that the loss
is either attributable to a war risk and therefore reimbursable under Title XIII
of the Federal Aviation Act of l958, or attributable to cause other than war
risk and therefore required to be covered by the Contractor's commercial
insurance.

The policy contains the attached endorsement.

By Rollins Hudig Hall of VA, Inc. (Company)
----------------------------------------

____________________

*In the case of a combined single limit of liability, the Insurer will be
required to describe the amount or amounts of insurance coverage.

"ENDORSEMENT"
(Attachment to the Certificate of Insurance)

It is agreed, that, with respect only to operations of the named Insured
performed under contract with the Air Mobility Command, Department of the Air
Force (USAF), and with respect only to Aircraft Liability Insurance afforded
under this policy, the following conditions shall also apply:

a. The Insurer agrees that, the insurance afforded under this policy shall
not be subject to any lower limits of liability of the Warsaw Convention, 49
Stat. 3000, for the death or bodily injury of any passenger. If that convention
should otherwise be deemed to be applicable to any passenger death or bodily
injury liability, then to the extent stated in the preceding sentence, this
insurance shall be deemed to be a higher limit of liability agreed to by special
contract as contemplated by the last sentence of Article 22(l) of that
convention.

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SOLICITATION NO: F11626-94-D0027

b. The exclusions of the policy are deleted and the following substituted
therefore:

The insurance afforded under this policy shall not apply to:

(1) Any loss against which the named Insured has other valid and
collectible insurance, except that the limits of liability provided under this
policy shall be excess of the limits provided by such other valid and
collectible insurance but in no event exceeding the limits of liability
expressed elsewhere in this policy.

(2) Any loss arising from the ownership, maintenance or use of any
type of aircraft not declared to the Insurer in accordance with the terms and
conditions of this policy.

(3) Liability assumed by the Insured under any contract or agreement
except as stated in this contract with respect to limitations of the Warsaw
Convention.

(4) Bodily injury, sickness, disease, mental anguish or death of any
employee of the Insured while engaged in the duties of his employment, or any
obligation for which the Insured or any company as his Insurer may be held
liable under any Workman's Compensation or occupational disease law.

(5) Damage to or destruction of property owned, rented, occupied, or
used by, or in the care, custody or control of the Insured, or carried in or on
any aircraft with respect to which the insurance afforded by this policy
applies.

(6) Personal injuries or death or damage to or destruction of
property, caused directly or indirectly, by hostile or warlike actions,
including action in hindering, combating or defending against an actual,
impending or expected attack by any Government or sovereign power, de jure or de
facto, or military, naval or air forces; the discharge, explosion, or use of any
weapon of war employing atomic fission, or atomic fusion, or radioactive
materials; insurrection, rebellion, revolution, civil war or usurped power,
including any action in hindering, combating or defending against such an
occurrence, or confiscation by any Government or public authority.

c. The Insurer hereby waives any right of subrogation it may have against
the United States of America, by reason of any payment under the aforesaid
policy of insurance, with respect to loss caused to transportation services by
acts of the United States of America or any agency thereof, which acts are in
conjunction with the performance by the named Insured of any services under said
contract.

d. In the event the Insurer elects to cancel the insurance afforded under
this policy, the Insurer hereby agrees that such cancellation shall not be
effective unless written notice thereof shall be sent by the Insurer by
registered mail not less than 30 days in advance of such cancellation, direct to
the Air Mobility Command, United States Air Force, 402 Scott Dr., Unit 3A1,
Scott Air Force Base, Illinois, Attention: XOKAI, and in the event the named
Insured requests such cancellation, the Insurer agrees to notify, by registered
mail, the above stated activity immediately upon receipt of such request.

e. Anything in the policy to the contrary notwithstanding, the aircraft
may be operated by pilots authorized by the named Insured.

f. Violations of regulations prescribed by the Federal Aviation
Administration (FAA) shall not prejudice the insurance afforded by this policy.

g. No special waiver issued by the FAA shall affect the insurance afforded
hereunder.

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SOLICITATION NO: F11626-94-D0027

h. Any exclusions, conditions or other provisions of this endorsement,
which have the effect of restricting or nullifying the coverage already granted
by this policy in the absence of this endorsement, shall not apply .

Endorsement to Policy No: (See Attached)
--------------

Effective Date: 12/1/93
-------

Countersigned: Deborah A. Petrin, Assistant Vice President
-------------------------------------------

Company Rollins Hudig Hall
------------------

of Viginia, Inc.
----------------

3. NOTICES.

In performance of this contract, Contractor will furnish or be guided by the
following notices as applicable:

a. All Operations. In the event a flight containing SECRET or
CONFIDENTIAL material is delayed, interrupted or terminated at an unscheduled
point, immediate notice to that effect shall be given to the ACO. Prompt and
strict compliance with instructions received as pertains to the security of the
SECRET or CONFIDENTIAL material shall be maintained. To determine the security
clearance of CRAF personnel, call Company Security Officer. If unsuccessful,
then contact the Defense Investigative Service Clearance Office (DISCO) at
(614)236-2133 or AUTOVON 850-2133 (during duty hours) or (614)236-2058 (after
duty hours).

b. Notice of Accidents. In all cases where the aircraft is involved in an
accident or incident, as defined in Part 830 Investigation Regulation issued by
the National Transportation Safety Board or as defined in the contract clause,
"Safety Precautions for Ammunition and Explosives," the Contractor will be
responsible for ensuring that the information is transmitted by the most
expeditious means available to the Tanker Airlift Control Center (TACC)'s
Emergency Action Cell at Scott AFB, Illinois, telephone (618)256-1706.

c. Aircraft Medical Incidents. Report all aircraft medical incidents in-
flight, or while AMC passengers are under the control of the aircraft captain,
to the first available QAE or CA, at the next en route station for inflight
incidents, or the station where the incident occurs.

d. DOD Casualties. In cases where a death occurs on a Contractor's
aircraft, the following information shall be furnished by telegram to the
addresses below, with an information copy to HQ AMC/XOK: Name, service number
and component of service identified as Army-USA, Air Force-USAF, Navy-USN,
Marine Corps-USMC, Coast Guard USCG.

Army: Chief Casualty Branch Navy and Coast Guard: SEC NAV
DA Washington DC Washington DC

Marines: CMC Air Force: CSAF
Washington DC Washington DC

4. LEASE OF 463-L PALLETS AND NETS

Whenever the Contractor requires the use of 463-L pallets and associated cargo
restraining nets for commercial flights inbound to the continental United States
the Contractor shall make a request to the ACO in writing to enter into a lease
agreement for the use of such equipment.

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SOLICITATION NO: F11626-94-D0027

5. CLEARANCES

a. The Government will make passengers available at airport terminal
cleared for travel to and from the United States and will provide the Contractor
with all passenger and cargo data necessary for the completion of aircraft
clearance including customs, immigration, public health and similar documents.
On arrival at the destination airport, the Government will accept passengers at
airport terminal and assume all responsibility with respect to such passengers,
such as ground transportation, quarantine, etc., provided, however, that the
foregoing shall not relieve the Contractor of responsibility for payment of any
charges, fees, or taxes based upon use of terminal facilities by or for
passengers or cargo, nor shall the Government be obligated to pay or reimburse
the Contractor for payment of any such charges.

b. Contractor will provide the US Immigration Service Form I-94, or such
other forms as may be prescribed to those passengers required, by law, to
complete while aboard aircraft en route to the US or its possessions.

c. Nothing in this contract shall relieve the Contractor of its obligation
and responsibility to furnish appropriate agencies all required manifest,
immigration, and border clearance documents, covering all personnel and cargo
aboard the aircraft upon entry into the United States or a foreign country. In
the event the Contractor is obliged, pursuant to a court or administrative order
of the United States, to pay any fine assessed for violation of any immigration
law or regulation resulting from the transportation of a passenger in reliance
upon clearance by the Government, the Government will reimburse the Contractor
for such fine.

d. The Contractor is responsible for obtaining necessary landing rights or
privileges and visas and passports for crews, route support personnel and
Contractor employees. Contractor will comply with the Aircraft Diplomatic
Landing and Overfly Clearance Procedures for specific countries as set forth in
AMCR 76-8, Chapter 7.

6. SECURITY REQUIREMENTS

a. Where regular and frequent entry into restricted areas at a military
installation is required by Contractor personnel for ground handling of
aircraft, the Contractor personnel must meet the requirements established by AFR
205-1, Chapter 11, and DD Form 254 (Attachment 10). Applications for personnel
security investigations shall be made to the local chief of security police.
(Military installations are airfields that are owned, leased, or controlled by
the US Government.)

b. While on military installations or on military portions of civil
installations, Contractor personnel shall comply with security regulations
promulgated by the military installation/activity commander. Security
regulations are directive in nature and will be adhered to by all contractor
personnel. Senior Lodger station managers, both CONUS and overseas, are
responsible for ensuring that all contractor personnel are aware of station
regulations.

7. RESPONSIBILITY FOR GOVERNMENT CARGO

a. Property (hereinafter referenced in this paragraph as Government cargo)
placed in Contractor's possession for the sole purpose of air transportation
shall not be deemed to be Government Property within the meaning of the
Government Property Clause. Government cargo, within the meaning of this
paragraph, does not include passenger baggage.

b. The Government hereby relieves the Contractor of liability for loss of,
or damage to, any and all Government cargo transported by the Contractor in
performance of this contract, except such loss, destruction and damage resulting
from the willful misconduct or lack of good faith of any of the Contractor's
managerial personnel, as defined in the contract clauses entitled "Government
Property," (Fixed-Price Contract) - Alternate I, and except as follows:

(1) If, other than at the direction of the Government, it should be
necessary to off-load cargo at any en route commercial stations, the Contractor
shall immediately notify the ACO. The ACO will be apprised of

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SOLICITATION NO: F11626-94-D0027

the Contractor's arrangements for movement of the cargo to its originally
consigned destination. The Contractor shall at his expense be responsible for
safeguarding such cargo from loss, theft, or damage by the elements or other
causes until such time as the Contractor is relieved of responsibility by the
ACO. The provisions of SECTION G apply in determining whether the Contractor
should be charged a deficit.

(2) In the event of an accident, the Contractor will be responsible
for providing continuous protection of all cargo aboard the aircraft and for
delivery of the cargo to the point designated by the ACO.

(3) To the extent insurance required by subparagraph b(3) of
paragraph entitled, "Passenger and Public Liability Insurance" of this SECTION
or the appropriate portion of subparagraph c of paragraph entitled, "Passenger
and Public Liability Insurance" of this SECTION (if Combined Single Limit
Liability is used), is not required for payment of third party claims, the
balance of said insurance shall apply to Government cargo loss, damage or
destruction thereto.

c. Any expenses incurred by the Contractor in connection with safeguarding
cargo off-loaded at the direction of the Government at any commercial field will
be reimbursable to the Contractor by the Government by a Supplemental Agreement
to this contract.

8. COLLECTIVE BARGAINING UNITS

a. The contractor agrees to advise the applicable Collective Bargaining
Units of the contract requirements set forth in SECTION C paragraph 2.

b. The Contractor agrees to provide the Contracting Officer, upon request,
a copy of any Collective Bargaining Agreement applicable to employees performing
on this contract.

9. PETROLEUM SUPPORT

a. Upon completion of round trip missions, Contractors are entitled to
purchase sufficient POL at Defense Fuel Supply Center (DFSC) standard prices for
movement of the aircraft to its nearest home base. For example:
McGuire/Dover/Charleston to Kennedy/Philadelphia/Wilmington or Travis/Norton to
San Francisco/Los Angeles/Seattle- Tacoma. If the Contractor is depositioning
their aircraft to a point other than its nearest home base, the amount of fuel
at DFSC standard prices will not be more than that quantity which would be
needed to deposition to the Contractor's nearest home base. For the purpose of
purchasing POL in excess of the amount required to deposition to contractor's
home base, an AMC mission will be considered a civil aircraft not under contract
or charter within the provisions of AFR 144-9. The sale of POL in excess of
depositioning POL will be at the DFSC standard price plus a 5.5 percent
accessorial and administrative charge, except as provided for in paragraph c,
below.

b. Upon completion of one-way trips Contractors are entitled to purchase
sufficient POL at DFSC standard prices for movement of the aircraft to point of
origin of the trip or to the home base nearest to the point of origin, if within
the general area of the point of origin of the live trip. If the Contractor has
commercial business for the ferry trip, the Contractor is entitled to purchase
POL at the DFSC standard price from the destination point of the one-way mission
to the point of origin of the commercial mission as long as this station is less
distant than the original ferry leg.

c. Upon completion of one-way or round trip missions, Contractors will be
allowed to purchase POL at DFSC standard price for ferrying from one coast to
another when positioning to originate another AMC mission. Fuel at DFSC standard
price also will be provided to permit the return of an aircraft to the opposite
coast (or any point short of the opposite coast) if, in fact, the mission
originated on the opposite coast regardless of the location of the contractor's
home base. Contractors may not transit other Air Force bases en route while
ferrying cross country.

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SOLICITATION NO: F11626-94-D0027

10. LEGAL DOCUMENTS

The Contractor shall submit, simultaneously with its transfer to the DOT, one
copy to HQ AMC/XOK and one copy to HQ AMC/JAN of each application, pleading, or
other document submitted to said Agency by the Contractor or by any organization
of which the Contractor is a member, which application, pleading, or other
document pertains, directly or indirectly, to this or any other contract for air
transportation to which AMC is a party or is expected to be a party. Included
among such pleadings are any pertaining to the leasing of any aircraft listed in
Attachment 8.

11. REQUIRED REPORTS

a. FINANCIAL AND MILEAGE REPORT. The Contractor shall file all required
----------------------------
financial information and mileage reports with HQ AMC/LGCA, 402 Scott Dr Unit
2A2, Scott AFB IL 62225-5308,. (Reference DD Form 1423, 001 and 002, Exhibit A)

b. FUEL REPORTS. Carriers providing CAT-B service shall submit monthly
------------
fuel reports to HQ AMC/XOKM. (Reference DD Form 1423, 003, Exhibit A)

c. DD FORM 489 ANNUAL REPORT. (Geneva Convention Identity Card or -Geneva
-------------------------
Convention Card). Each CRAF Contractor will submit an annual report of
accountability of the DD Form 489, with an as-of date of 1 February in
accordance with the instructions identified in paragraph 9-8 and figure 9-3 of
AMCR 55-8, Volume I (Reference DD Form 1423, 004, Exhibit A).

d. CARRIERS' AIRCRAFT REPORTING. (Reference DD Form 1423, 005, Exhibit A)
----------------------------
CRAF contractors are required to report to HQ AMC/XOKMA and Department of
Transportation/OET when a CRAF allocated aircraft is:

(1) Destroyed or suffers major damage.

(2). Sold or leased, to include the identity of the transferee, date
and place of transfer, the terms and conditions of the transfer.

(3). Registered under a different number or removed from US
registration.

(4). Or otherwise unable to satisfy its CRAF commitment, e.g.,
seizure by a foreign Government.

12. INVITED CONTRACTOR OR TECHNICAL REPRESENTATIVE STATUS - REPUBLIC OF KOREA

a. Invited-contractor or technical representative status under the US-ROK
SOFA is subject to the written approval of HQ USFK, ATTN: ACJ, APO 96301-0010.

b. The Contracting Officer will coordinate with HQ USFK, ATTN: ACJ in
accordance with DFARS, subpart 225.802, and USFK Reg 700-19. The AC of S,
Acquisition Management, HQ USFK, will determine the appropriate contractor
status under the SOFA and notify the ACO of the determination.

c. Subject to the above approval, the Contractor, including their
employees and lawful dependents, may be accorded such privileges and exemptions
as specified in the US-ROK SOFA, and implemented per USFK Reg 700-19, subject to
the conditions and limitations imposed by the SOFA and that regulation. These
privileges and exemptions may be furnished during the performance period of the
contract, subject to their availability and provided the invited-contractor or
technical-representative status is not withdrawn by USFK.

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SOLICITATION NO: F11626-94-D0027

d. The Contractor officials and employees performing under this contract
collectively and separately warrant that they are not now performing, nor will
perform during the period of this contract, any contract services or otherwise
engage in business activities in the ROK other than those pertaining to the US
armed forces.

e. During the performance of the work in the ROK required by this
contract, the contractor will be governed by USFK regulations pertaining to the
direct hiring and the personnel administration of Korean National employees.

f. The authorities of the ROK will have the right to exercise jurisdiction
over invited contractors and technical representatives, including officials and
employees, and their dependents, for offenses committed in the ROK and
punishable by the laws of the ROK. In recognition of the role of such persons in
the defense of the ROK, they will be subject to the provisions of paragraphs 5,
7(b), and 9 of the US-ROK SOFA and the related agreed minutes of US-ROK SOFA,
Article XXII. In those cases in which the authorities of the ROK decide not to
exercise jurisdiction, they shall notify the US military authorities as soon as
possible. On such notification, the military authorities will have the right to
exercise such jurisdiction over the persons referred to, as conferred on them by
the law of the United States.

g. Invited contractors and technical representatives agree to cooperate
fully with the USFK sponsoring agency and responsible officer on all matters
pertaining to logistic support. In particular, contractors will provide prompt
and accurate reporting of changes in employee status as required by this
regulation to the assigned sponsoring agency.

h. Invited contractor and technical representative status will be
withdrawn by USFK on--

(1) Completion or termination of the contract.

(2) Proof that the contractor or employees are engaged in business
activities in the ROK other than those pertaining to US armed forces.

(3) Proof that the contractor or employees are engaged in practices
illegal in the ROK or are violating USFK regulations.

i. It is agreed that the withdrawal of the invited-contractor or
technical-representative status or any of the privileges associated therewith by
the US Government, will not constitute grounds for excusable delay by the
contractor in the performance of the contract, nor will it justify or excuse the
contractor defaulting the performance of this contract; and such withdrawal will
not serve as a basis for the filing of any claims against the US Government if
the withdrawal is made for the reasons stated in subparagraph h above. Under no
circumstances will the withdrawal of such status or privileges be considered or
construed as a breach of contract by the US Government. The determination to
withdraw SOFA status and privileges by USFK shall be final and binding on the
parties unless it is patently arbitrary, capricious, and lacking in good faith.

13. OPTION TO EXTEND CONTRACT PERFORMANCE

The Government may require continued performance of services for a maximum of
six (6) months and the AMC Uniform Rate for FY96 will apply. In the event the
Government exercises this option, prices will be determined in accordance with
para 2 of SECTION B. This option may be exercised more than once, but the total
extension of performance hereunder shall not exceed six (6) months. The
Contracting Officer may exercise the option by written notice to the contractor
not later than 15 days prior to expiration of the contract. The Government's
rights under this paragraph are in addition to those under CLIN 4000 of SECTION
B.

14. 5352.204-9001 VISITOR GROUP SECURITY AGREEMENTS (JAN 1990) AFFARS

Prior to beginning operations involving classified information on an
installation identified on the DD Form 254 where the Contractor is not required
to have a facility security clearance, the Contractor shall enter into a
security agreement (or understanding) with the installation commander to ensure
that its' security procedures are properly

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SOLICITATION NO: F11626-94-D0027

integrated with those of the installation. As a minimum, the agreement shall
identify the security actions which will be performed--

a. By the installation for the Contractor, such as providing storage and
classified reproduction facilities, guard services, security forms, security
inspections under DOD 5220.22-M, paragraph 5ag, classified mail services,
security badges, visitor control and investigating security incidents; and

b. Jointly by the Contractor and the installation, such as packaging and
addressing classified transmittals, security checks, international security
controls, and implementing emergency procedures to protect classified material.

15. 5352.223-9004 SAFETY AND ACCIDENT PREVENTION (APR 1984) AFFARS

a. In performing work under this contract on a Government installation, the
Contractor shall--

(1) Conform to the specific safety requirement established by this
contract;

(2) Comply with the safety rules of the Government installation that
concern related activities not directly addressed in this contract;

(3) Take all reasonable steps and precautions to prevent accidents
and preserve the life and health of Contractor and Government personnel
performing or in any way coming in contact with the performance of this
contract; and

(4) Take such additional immediate precautions as the Contracting
Officer may reasonably require for safety and accident prevention purposes.

b. If this contract is performed on an Air Force installation, the Air
Force Occupational Safety and Health (AFOSH) Standards developed in accordance
with AFR 127- 12, in effect on the date of this contract, apply. If contract
performance is on other than an Air Force installation, the Contractor shall
comply with the safety rules of that Government installation, in effect on the
date of this contract.

c. The Contracting Officer may, by written order, direct additional AFOSH
and safety and accident standards as may be required in the performance of this
contract and any adjustments resulting from such direction will be in accordance
with the Changes clause of this contract.

d. Any violation of these safety rules and requirements, unless promptly
corrected as directed by the Contracting Officer, shall be grounds for
termination of this contract in accordance with the "Default" clause of this
contract .

16. 5352.247-1000 AIR SAFETY (NOV 1991) AMCFARS

a. Contractor is obligated to comply with generally accepted standards of
airmanship, training, and maintenance practices and procedures. Contractor must
also satisfy DOD quality and safety requirements as described in 32 CFR Part 861
Section 861.3. In addition, contractor shall comply with all provisions of
applicable statutes, tenders of service, and contract terms, as such may affect
flight safety, as well as with all applicable Federal Aviation Administration
Regulations, Air worthiness Directives, Orders, Rules, and Standards promulgated
under the Federal Aviation Act of 1958, as amended. Compliance with published
standards may not, standing alone, constitute compliance with generally accepted
standards of airmanship, training or maintenance.

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SOLICITATION NO: F11626-94-D0027

b. The cleanliness and orderliness of an aircraft, including the visible
components and surfaces thereof affect the ability to inspect an aircraft,
may be valid indicators of the overall maintenance level of an aircraft, and
- ------
may have a direct effect on the security and confidence of passengers.
- --------
Therefore, Contractor's failure to keep and maintain all such components and
surfaces of the aircraft used in performance of this contract clean, orderly,
and in a good state of repair, may be deemed a failure to comply with generally
------------------------------------------------
accepted standards of maintenance to the extent the failures go beyond mere
- ---------------------------------------------------------------------------
cosmetic or housekeeping deficiencies and relate in some manner to confidence in
- --------------------------------------------------------------------------------
the safety, maintenance or air worthiness of the aircraft.
- ----------------------------------------------------------

c. Should the Government determine that any of the following conditions
exist, it may suspend or place in temporary nonuse status Contractor's further
performance of airlift transportation services for the Department of Defense:

(1) Contractor's failure to meet any of the obligations imposed by
the preceding two paragraphs;

(2) Involvement of one of Contractor's aircraft in a serious or fatal
accident, incident, or operational occurrence (regardless of whether or not such
aircraft is being used in the performance of this contract);

(3) Any other condition which affects the safe operation of
Contractor's flights hereunder.

d. Such suspension shall be accomplished pursuant to the Air Mobility
Command (AMC) and Military Traffic Management Command (MTMC) Commercial Airlift
Safety Review Procedures (32 CFR Part 861), which are hereby incorporated in
this contract by reference, or any procedures that supersede same which may be
adopted by HQ AMC/MTMC from time-to-time. The suspension procedures, including
the temporary nonuse, reinstatement, and appeals processes, set out therein, are
binding, final, and conclusive. In no event shall suspension or temporary nonuse
proceedings, regardless of outcome, give rise to any liability on the part of
the Government.

e. Suspension or temporary nonuse hereunder resulting in unavailability of
Contractor aircraft to perform service under this contract shall be treated as
failure to maintain authorization to engage in air transportation under the
clause of the contract entitled, "REQUIREMENT FOR AUTHORIZATION TO ENGAGE IN AIR
TRANSPORTATION."

17. 5352.247-1001 REQUIREMENT FOR AUTHORIZATION TO ENGAGE IN AIR TRANSPORTATION
(MAR 1988) AMCFARS

a. This contract is conditioned upon the Contractor being an air carrier
and holding a Certificate of Public Convenience and Necessity issued under
Section 401 of the Federal Aviation Act (FAA of 1958, as amended), or is
otherwise authorized by the DOT to engage in air transportation services,
holding an Air Carrier's Operating Certificate issued by the FAA under Part 121
of the Federal Aviation Regulations (14 CFR 121) for airlift operated by the
offeror (or in the case of a joint venture, the entity of the joint venture
operating the aircraft), and participating in the CRAF, if applicable.
Furthermore, the Contractor shall not be in a suspension or temporary nonuse
status in accordance with the special clause in SECTION H entitled "AIR SAFETY."

b. If at any time during the performance period of this contract the
Contractor is not in compliance with the requirements of paragraph a above,
including, but not limited to, instances when the certificate demonstrating
compliance with paragraph a above is, (i) suspended by the pertinent regulatory
body for any period of time even though the effect of the suspension is stayed
pending review by a court of competent jurisdiction, (ii) canceled or revoked in
its entirety by the pertinent regulatory body even though the effect of the
cancellation or revocation is stayed pending review by a court of competent
jurisdiction, or (iii) such certificate or interim operating authority has
expired and has not been renewed, then the Contracting Officer may elect any one
or a combination of the following courses of action:

(1) Suspend the Contractor from further performance of all or any
part of this contract until such time as the suspension/temporary nonuse imposed
by the pertinent regulatory body shall have expired or until such

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SOLICITATION NO: F11626-94-D0027

time as the suspension, temporary nonuse, cancellation, or revocation shall have
been finally set aside, removed, or otherwise terminated. The period of
suspension of this contract will begin at the time that notice thereof is given
by the Contracting Officer to the Contractor's designee named in accordance with
paragraph entitled, "Contractor Point of Contact" in SECTION G of this contract.
All flights which were scheduled to be flown during the time any such suspension
is in effect will be canceled. A unilateral modification reflecting the
cancellation and reducing the Government's obligation accordingly will be issued
by the Contracting Officer at the Termination of the period during which this
contract is suspended or after the expiration of the period of performance of
this contract. Any such cancellation is not for the convenience of the
Government and is not a termination within the meaning of the clause entitled
"Termination for Convenience of the Government (Fixed-Price)." Such cancellation
will be accomplished at no cost to either party, and the substitute service
provisions of this contract will not apply to such canceled flights.

(2) Exercise the Government's rights under the special clause of the
contract entitled, "Contractor's Failure to Provide Service."

(3) Terminate this contract in whole or in part under the procedures
of the clause entitled "Default." If this contract is terminated for default
pursuant to paragraph b, and if it is subsequently determined that termination
for default is not appropriate, this contract shall then be considered to have
been canceled pursuant to subparagraph b(4) below.

(4) Cancel this contract in whole or in part. Any such cancellation
will be accomplished by the issuance of a unilateral modification and will not
be a termination under the provisions of the clause entitled "Termination for
Convenience of the Government (Fixed-Price)" and neither party will be liable to
the other party for costs incurred as a result of such cancellation.

18. SUBMISSION OF COST AND PRICING DATA--MOU

Contractors who are required to submit certified cost and pricing data
pursuant to the MOU shall do so within the time specified by HQ AMC/LGC. Failure
to provide certified cost and pricing data within the defined time may result in
a reduction of such offerors' entitlement for the purpose of awarding business
for the forecast year. Mobilization points may be reduced at a rate of one
percentage point per day late, up to a maximum reduction of 30 percent.
Requirements for submission of certified cost and pricing data are addressed in
the MOU and procedures defined in FAR 52.215-10 entitled "Late Submissions,
Modifications, and Withdrawal of Proposals."

19. REQUIREMENT FOR INDEMNIFICATION APPROVAL

Notwithstanding the inclusion of FAR Clause 52.250-1 and the clause
entitled Definition of Unusually Hazardous Risk in Section I (paras 4 & 5)
indemnification does not take effect until the contracting officer notifies the
contractor by modification that the Commander AMC is implementing
indemnification clauses for a specific mission or missions.

20. CONTRACTOR ACQUIRED INSURANCE

a. The Contractor shall procure and maintain during the entire period of
performance under this contract the following minimum insurance in addition to
the insurance required by paragraph 2, of this section:

TYPE AMOUNT

Automobile
- ----------

Bodily Injury Liability $200,000 per person
$500,000 per occurrence

Property Damage Liability

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SOLICITATION NO: F11626-94-D0027

Comprehensive General Liability
- -------------------------------

Bodily Injury Liability $500,000 per occurrence

Workmen's Compensation and Employers Liability
- ----------------------------------------------

Workman's Comp & Occupational Disease Statutory

Employer's Liability $100,000

b. Contractor shall comply with the requirements of contract clause "Insurance-
Work on a Government Installation" concerning certifications to the Contracting
Officer.

21. CRAF ACTIVATION ACCOUNTING

In order to better identify costs which may be outside the AMC Uniform Rate or
other cost adjustment clauses of this contract, it is recommended that separate
accounting of costs during CRAF activation be maintained where contractors
anticipate extra contractual cost occurrences. The contractor should maintain
separate accounts, by job order or other suitable accounting procedures, of all
incurred direct costs (less allocable credits) allocable to CRAF activation. If
established, such accounts must be maintained for three years after final
payment under this contract.

22. PROVISIONAL PAYMENT OF EQUITABLE ADJUSTMENTS

The contractor may submit requests for equitable adjustment for costs incurred
outside the AMC uniform Rate during CRAF activation in accordance with the terms
and conditions of this contract. The equitable adjustment request may include a
request for provisional payment against the amount requested. The Contracting
Officer will review such requests and may approve a provisional payment against
such requests for reasonable costs incurred outside the Uniform Rate. The
provisional payment amount shall be determined by the Contracting Officer but
under no circumstances will payment be approved for any costs that the
Contracting Officer does not believe are reasonable, allocable to this contract
and incurred as a result of the contract. Any payment made under this clause
shall be deducted from the final equitable adjustment settlement. If the
provisional payments exceed the final equitable adjustment settlement, the
Contractor shall refund the amount of the overpayment to the Government on
demand, plus interest at the current US. Treasury rate, in accordance with FAR
32.614.

23. PROHIBITION OF USE

a. Based on recent aircraft incidents and accidents which occurred at
Guantanamo Bay, Cuba (MUGM), any civil air mission operating under this contract
is prohibited from landing on runway 10 at MUGM from 01 Feb 94 until further
notice. All commercial aircraft landings must be made during daylight hours
only. These restrictions are due solely for safety reasons.

b. Recognizing the different operating parameters and performance
characteristics of civil aircraft, and the variability of local wind conditions,
safe landings on runway 28 may not always be feasible. In the event the aircrew
determines a safe landing on runway 28 is not feasible, carriers will either
return to point of origination, proceed to next destination or divert to filed
alternate airfield, as the situation dictates. When feasible, aircrew shall
communicate through appropriate means to discuss the options with the TACC or
contract administrators. Carriers will be compensated for all miles operated as
a result of this airfield restriction and any approved reroute/diversion.

24. TITILE XIII INSURANCE

Contractor's shall apply for Title XIII insurance from the FAA on all aircraft
committed to CRAF as listed in Attachment 8. Contractor's shall promptly notify
the FAA of any tail number additions and/or removals in its

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SOLICITATION NO: F11626-94-D0027

fleet. This will ensure contractors are covered during a CRAF activation without
delay.

25. CRAF ALTERNATE LANDING PERMIT

a. Having applied for and been issued a CRAF Alternate landing permit, the
contractor is authorized to use the following airfields as a weather alternate
and technical stop: None

b. The following conditions apply to weather alternates: carriers may
include approved weather alternates in their filed flight plans; carriers may
refuel and change crews; and carriers shall enplane or deplane passengers or
cargo without approval by the installation commander.

c. The following conditions apply to technical stops; carriers shall not
include technical stops in their filed flight plans; carriers may only refuel,
change crews, and perform minor maintenance; and carriers shall not enplane or
deplane passengers or cargo without approval by the installation commander.

d. The appropriate service approval authority may revoke landing permits,
in whole or in part, during this contract for military reasons (for example,
military operations, base closure or drawdown) without incurring any obligation
on the part of the Government.

e. The appropriate service approval authority may revoke landing rights
for particular flights during this contract for military reasons (for example,
military operations) without incurring any obligation on the part of the
Government.

f. This clause does not obligate the Government to provide services,
supplies, equipment, or facilities other than landing, taxing, and parking
areas. Fuel and oil purchases, supply and service charges, and landing fees will
be governed, as appropriate, by AFR 55-20, AR 95-2, and SECNAVINST 3770.1C.
Purchases of fuel made necessary by use of a CRAF Alternate weather or technical
stop shall not be considered as part of the fuel adjustment as otherwise
provided under the terms and conditions of this contract.

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SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

PART II - CONTRACT CLAUSES
SECTION I
CONTRACT CLAUSES

1. The following clauses are incorporated by reference:
<TABLE>
<CAPTION>

FAR
NUMBER CLAUSE TITLE DATE
------ ------------ ----
<S> <C> <C>

52.202-1 DEFINITIONS SEP 1991
52.203-1 OFFICIALS NOT TO BENEFIT APR 1984
52.203-3 GRATUITIES APR 1984
52.203-5 COVENANT AGAINST CONTINGENT APR 1984
FEES
52.203-6 RESTRICTIONS ON JUL 1985
SUBCONTRACTOR SALES TO THE
GOVERNMENT
52.203-7 ANTI-KICKBACK PROCEDURES OCT 1988
52.203-10 PRICE OR FEE ADJUSTMENT FOR SEP 1990
ILLEGAL OR IMPROPER
ACTIVITY
52.203-12 LIMITATION ON PAYMENTS TO JAN 1990
INFLUENCE CERTAIN
FEDERAL TRANSACTIONS
52.204-2 SECURITY REQUIREMENTS APR 1984
52.209-6 PROTECTING THE GOVERNMENT'S NOV 1992
INTEREST WHEN
SUBCONTRACTING WITH CONTRACTORS DEBARRED,
SUSPENDED, OR PROPOSED FOR DEBARMENT
52.215-1 EXAMINATION OF RECORDS BY FEB 1993
COMPTROLLER GENERAL
52.215-2 AUDIT--NEGOTIATION FEB 1993
52.215-22 PRICE REDUCTION FOR JAN 1991
DEFECTIVE COST OR PRICING
DATA
52.215-24 SUBCONTRACTOR COST OR DEC 1991
PRICING DATA
52.215-27 TERMINATION OF DEFINED SEP 1989
BENEFIT PENSION PLANS
52.215-33 ORDER OF PRECEDENCE JAN 1986
52.215-39 REVERSION OR ADJUSTMENT OF JUL 1991
PLANS FOR
POST RETIREMENT BENEFITS OTHER THAN PENSIONS (PRB)
52.216-18 ORDERING APR 1984
The blank in para (a), line 5 is completed as
follows:
01 Oct 1994 through 30 Sep 1995
-------------------------------
52.216-19 DELIVERY-ORDER LIMITATIONS APR 1984
The blanks are completed as follows:
Para (a), line 3 $1,250
Para (b)(1) $ 4,000,000
-----------
Para (b)(2) $10,000,000
-----------
Para (b)(3) 5 days
------
Para (d), line 5 5 days
------
52.216-22 INDEFINITE QUANTITY APR 1984
The blank in para
(d), last line is
completed as
follows: 30 SEP 1995
52.219-8 UTILIZATION OF SMALL FEB 1990
BUSINESS CONCERNS AND
SMALL DISADVANTAGED BUSINESS CONCERNS
52.219-9 SMALL BUSINESS AND SMALL
DISADVANTAGED BUSINESS
SUBCONTRACTING PLAN JAN 1991
52.219-13 UTILIZATION OF WOMEN-OWNED AUG 1986
SMALL BUSINESSES
52.220-3 UTILIZATION OF LABOR APR 1984
SURPLUS AREA CONCERNS
52.222-1 NOTICE TO THE GOVERNMENT OF APR 1984
LABOR DISPUTES
</TABLE>

I-1
<PAGE>

SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

<TABLE>
<CAPTION>
FAR
NUMBER CLAUSE TITLE DATE
------ ------------- ----
<C> <S> <C>

52.222-3 CONVICT LABOR APR 1984
52.222-28 EQUAL OPPORTUNITY PREAWARD
CLEARANCE OF APR 1984
SUBCONTRACTS
52.222-29 NOTIFICATION OF VISA DENIAL APR 1984
52.222-35 AFFIRMATIVE ACTION FOR SPECIAL
DISABLED AND VIETNAM ERA VETERANS APR 1984
52.222-36 AFFIRMATIVE ACTION FOR
HANDICAPPED WORKERS APR 1984
52.222-37 EMPLOYMENT REPORTS ON SPECIAL
DISABLED JAN 1988
VETERANS AND VETERANS OF THE VIETNAM ERA
52.223-2 CLEAN AIR AND WATER APR 1984
52.223-6 DRUG-FREE WORKPLACE JUL 1990
52.224-1 PRIVACY ACT NOTIFICATION APR 1984
52.224-2 PRIVACY ACT APR 1984
52.225-11 RESTRICTIONS ON CERTAIN FOREIGN
PURCHASES MAY 1992
52.226-1 UTILIZATION OF INDIAN
ORGANIZATIONS AND INDIAN-OWNED
ECONOMIC ENTERPRISES AUG 1991
52.227-1 AUTHORIZATION AND CONSENT APR 1984
52.227-2 NOTICE AND ASSISTANCE REGARDING
PATENT AND APR 1984
COPYRIGHT INFRINGEMENT
52.227-6 ROYALTY INFORMATION APR 1984
52.228-3 WORKERS' COMPENSATION INSURANCE APR 1984
(DEFENSE BASE ACT)
52.228-4 WORKERS' COMPENSATION AND
WAR-HAZARD APR 1984
INSURANCE OVERSEAS
52.228-5 INSURANCE--WORK ON A GOVERNMENT
INSTALLATION SEP 1989
52.229-3 FEDERAL, STATE, AND LOCAL TAXES JAN 1991
52.229-5 TAXES--CONTRACTS PERFORMED IN
U.S. POSSESSIONS APR 1984
OR PUERTO RICO
52.229-6 TAXES--FOREIGN FIXED-PRICE
CONTRACTS JAN 1991
52.232-4 PAYMENTS UNDER TRANSPORTATION
CONTRACTS AND APR 1984
TRANSPORTATION-RELATED SERVICES CONTRACTS
52.232-8 DISCOUNTS FOR PROMPT PAYMENT APR 1989
52.232-9 LIMITATION ON WITHHOLDING OF
PAYMENTS APR 1984
52.232-11 EXTRAS APR 1984
52.232-17 INTEREST JAN 1991
52.232-18 AVAILABILITY OF FUNDS APR 1984
52.232-23 ASSIGNMENT OF CLAIMS JAN 1986
ALTERNATE I APR 1984
52.233-1 DISPUTES MAR 1994
ALTERNATE I DEC 1991
52.233-3 PROTEST AFTER AWARD AUG 1989
52.237-2 PROTECTION OF GOVERNMENT
BUILDINGS, EQUIPMENT, APR 1984
AND VEGETATION
52.242-13 BANKRUPTCY APR 1991
52.243-1 CHANGES--FIXED-PRICE AUG 1987
ALTERNATE IV APR 1984
52.244-1 SUBCONTRACTS (FIXED-PRICE CONTRACTS) APR 1991
52.244-5 COMPETITION IN SUBCONTRACTING APR 1984
52.245-2 GOVERNMENT PROPERTY
(FIXED-PRICE CONTRACTS) DEC 1989
ALTERNATE I APR 1984
</TABLE>

I-2
<PAGE>

SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027
<TABLE>
<CAPTION>
FAR
NUMBER CLAUSE TITLE DATE
------- ------------ ----
<S> <C> <C>
52.246-25 LIMITATION OF LIABILITY - SERVICES APR 1984
52.247-5 FAMILIARIZATION WITH CONDITIONS APR 1984
52.247-12 SUPERVISION, LABOR, OR MATERIALS APR 1984
52.247-21 CONTRACTOR LIABILITY FOR PERSONAL INJURY
AND/OR
PROPERTY DAMAGE APR 1984
52.247-27 CONTRACT NOT AFFECTED BY ORAL AGREEMENT APR 1984
52.247-63 PREFERENCE FOR U.S.-FLAG AIR CARRIERS APR 1984
52.248-1 VALUE ENGINEERING MAR 1989
52.249-2 TERMINATION FOR CONVENIENCE OF THE APR 1984
GOVERNMENT
(FIXED-PRICE)
52.249-8 DEFAULT (FIXED-PRICE SUPPLY AND SERVICE) APR 1984
ALTERNATE I APR 1984
DEFENSE
FAR SUP
NUMBER CLAUSE TITLE DATE
------ ------------ --------

252.201-7000 CONTRACTING OFFICER'S REPRESENTATIVE DEC 1991
252.203-7000 STATUTORY PROHIBITION ON COMPENSATION DEC 1991
TO FORMER DEPARTMENT OF DEFENSE EMPLOYEES
252.203-7001 SPECIAL PROHIBITION ON EMPLOYMENT APR 1993
252.203-7002 DISPLAY OF DOD HOTLINE POSTER DEC 1991
252.203-7003 PROHIBITION AGAINST RETALIATORY
PERSONNEL ACTIONS APR 1992
252.204-7000 DISCLOSURE OF INFORMATION DEC 1991
252.204-7003 CONTROL OF GOVERNMENT PERSONNEL WORK APR 1992
PRODUCT
252.205-7000 PROVISION OF INFORMATION TO COOPERATIVE DEC 1991
AGREEMENT HOLDERS
252.209-7000 ACQUISITION FROM SUBCONTRACTORS SUBJECT DEC 1991
TO ON-SITE INSPECTION UNDER THE
INTERMEDIATE-RANGE NUCLEAR FORCES (INF) TREATY
252.215-7000 PRICING ADJUSTMENTS DEC 1991
252.215-7002 COST ESTIMATING SYSTEM REQUIREMENTS DEC 1991
252.219-7003 SMALL BUSINESS AND SMALL DISADVANTAGED
BUSINESS SUBCONTRACTING PLAN (DOD
CONTRACTS) APR 1993
252.219-7005 INCENTIVE FOR SUBCONTRACTING WITH SMALL
BUSINESSES,
SMALL DISADVANTAGED BUSINESSES, HISTORICALLY BLACK
COLLEGES AND UNIVERSITIES,
AND MINORITY INSTITUTIONS DEC 1991
The blank in para (a) is 1%.
252.222-7000 RESTRICTIONS ON EMPLOYMENT OF PERSONNEL DEC 1991
The blank in para (a), line 2 is
completed as follows: HAWAII/ALASKA
-------------
252.223-7002 SAFETY PRECAUTIONS FOR AMMUNITION DEC 1991
AND EXPLOSIVES
252.223-7003 CHANGE IN PLACE OF PERFORMANCE-- DEC 1991
AMMUNITIONS AND EXPLOSIVES
252.223-7006 PROHIBITION ON STORAGE AND DISPOSAL OF APR 1993
TOXIC AND
HAZARDOUS MATERIALS
252.225-7026 REPORTING OF OVERSEAS SUBCONTRACTS APR 1993
252.225-7031 SECONDARY ARAB BOYCOTT OF ISRAEL JUN 1992
252.227-7031 DATA REQUIREMENTS OCT 1988
252.231-7000 SUPPLEMENTAL COST PRINCIPLES DEC 1991
</TABLE>

I-3
<PAGE>

SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027
<TABLE>
<S> <C>
252.233-7000 CERTIFICATION OF CLAIMS AND REQUESTS FOR APR 1993
ADJUSTMENT OR RELIEF
252.242-7000 POSTAWARD CONFERENCE DEC 1991
252.243-7001 PRICING OF CONTRACT MODIFICATIONS DEC 1991
252.249-7001 NOTIFICATION OF SUBSTANTIAL IMPACT ON DEC 1991
EMPLOYMENT
</TABLE>

2. 52.203-9 REQUIREMENT FOR CERTIFICATE OF PROCUREMENT INTEGRITY--MODIFICATION
(NOV 1990) FAR

(a) DEFINITIONS The definitions set forth in
-----------
FAR 3.104-4 are hereby incorporated in this clause.

(b) The Contractor agrees that it will execute the certification set
forth in paragraph (c) of this clause when requested by the Contracting Officer
in connection with the execution of any modification of this contract.

(c) Certification As required in paragraph (b) of this clause, the
-------------
officer or employee responsible for the modification proposal shall execute the
following certification:

CERTIFICATE OF PROCUREMENT INTEGRITY--MODIFICATION (NOV 1990)

(1) I, Vance Fort, am the officer or employee responsible for the
----------
preparation of this modification proposal and hereby certify that, to the best
of my knowledge and belief, with the exception of any information described in
this certification, I have no information concerning a violation or possible
violation of subsection 27(a), (b), (d), or (f) of the Office of Federal
Procurement Policy Act, as amended* (41 U.S.C. 423), (hereinafter referred to as
"the Act"), as implemented in the FAR, occurring during the conduct of this
procurement (contract and modification number).

(2) As required by subsection 27(e)(1)(B) of the Act, I further
certify that to the best of my knowledge and belief, each officer, employee,
agent, representative, and consultant of [Name of Offeror] who has participated
personally and substantially in the preparation or submission of this proposal
has certified that he or she is familiar with, and will comply with, the
requirements of subsection 27(a) of the Act, as implemented in the FAR, and will
report immediately to me any information concerning a violation or possible
violation of subsections 27(a), (b), (d), or (f) of the Act, as implemented in
the FAR, pertaining to this procurement.

(3) Violations or possible violations: (Continue on plain bond paper
if necessary and label Certificate of Procurement Integrity--Modification
(Continuation Sheet), ENTER NONE IF NONE EXISTS)

NONE
----

__________________________________________________________________________

__________________________________________________________________________
(Signature of the officer or employee responsible for the modification proposal
and date)

_________________________________________________________________________

Vance Fort, Senior Vice President, Government and Legal Affairs
- ---------------------------------------------------------------
(Typed name of the officer or employee responsible for the modification
proposal)

*Subsections 27(a), (b), and (d) are effective on December 1, 1990. Subsection
27(f) is effective on June 1, 1991.

I-4
<PAGE>

SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

THIS CERTIFICATION CONCERNS A MATTER WITHIN THE JURISDICTION OF AN AGENCY OF THE
UNITED STATES AND THE MAKING OF A FALSE, FICTITIOUS, OR FRAUDULENT CERTIFICATION
MAY RENDER THE MAKER SUBJECT TO PROSECUTION UNDER TITLE 18, UNITED STATES CODE,
SECTION 1001.

(End of Certification)

(d) In making the certification in paragraph (2) of the certificate,
the officer or employee of the competing Contractor responsible for the offer or
bid, may rely upon a one-time certification from each individual required to
submit a certification to the competing Contractor, supplemented by periodic
training. These certifications shall be obtained at the earliest possible date
after an individual required to certify begins employment or association with
the contractor. If a contractor decides to rely on a certification executed
prior to the suspension of section 27 (i.e., prior to December 1, 1989), the
Contractor shall ensure that an individual who has so certified is notified that
section 27 has been reinstated. These certifications shall be maintained by the
Contractor for a period of 6 years from the date a certifying employee's
employment with the company ends or, for an agency, representative, or
consultant, 6 years from the date such individual ceases to act on behalf of the
contractor.

(e) The certification required by paragraph (c) of this clause is a
material representation of fact upon which reliance will be placed in executing
this modification.

3. 252.232-7006 REDUCTION OR SUSPENSION OF CONTRACT PAYMENTS UPON FINDING OF
FRAUD (AUG 1992) DFARS

(a) 10 U.S.C. 2307(e) permits the head of the agency to reduce or
suspend further payments to the Contractor upon a written determination by the
agency head that substantial evidence exists that the Contractor's request for
advance, partial, or progress payments is based on fraud. The provisions of 10
U.S.C. 2307(e) are in addition to any other rights or remedies provided the
Government by law or under contract.

(b) Actions taken by the Government under 10 U.S.C. 2307(e) shall not
constitute an excusable delay under the Default clause of this contract or
otherwise relieve the Contractor of its obligations to perform under this
contract.

4. 52.250-1 INDEMNIFICATION UNDER PUBLIC LAW 85-804 (APR 1984) FAR

(a) "Contractor's principal officials," as used in this clause, means
directors, officers, managers, superintendents, or other representatives
supervising or directing--

(1) All or substantially all of the Contractor's business;

(2) All or substantially all of the Contractor's operations at any
one plant or separate location in which this contract is being performed; or

(3) A separate and complete major industrial operation in connection
with the performance of this contract.

(b) Under Public Law 85-804 (50 U.S.C. 1431-1435) and Executive Order
10789, as amended, and regardless of any other provisions of this contract, the
Government shall, subject to the limitations contained in the other paragraphs
of this clause, indemnify the Contractor against--

(1) Claims (including reasonable expenses of litigation or
settlement) by third persons (including employees of the Contractor) for death;
personal injury; or loss of, damage to, or loss of use of property;

I-5
<PAGE>

SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

(2) Loss of, damage to, or loss of use of Contractor property,
excluding loss of profit; and

(3) Loss of, damage to, or loss of use of Government property,
excluding loss of profit.

(c) This indemnification applies only to the extent that the claim,
loss, or damage (1) arises out of or results from a risk defined in this
contract as unusually hazardous or nuclear and (2) is not compensated for by
insurance or otherwise. Any such claim, loss, or damage, to the extent that it
is within the deductible amounts of the Contractor's insurance, is not covered
under this clause. If insurance coverage or other financial protection in
effect on the date the approving official authorizes use of this clause is
reduced, the Government's liability under this clause shall not increase as a
result.

(d) When the claim, loss, or damage is caused by willful misconduct
or lack of good faith on the part of any of the Contractor's principal
officials, the Contractor shall not be indemnified for--

(1) Government claims against the Contractor (other than those
arising through subrogation); or

(2) Loss or damage affecting the Contractor's property.

(e) With the Contracting Officer's prior written approval, the
Contractor may, in any subcontract under this contract, indemnify the
subcontractor against any risk defined in this contract as unusually hazardous
or nuclear. This indemnification shall provide, between the Contractor and the
subcontractor, the same rights and duties, and the same provisions for notice,
furnishing of evidence or proof, and Government settlement or defense of claims
as this clause provides. The Contracting Officer may also approve
indemnification of subcontractors at any lower tier, under the same terms and
conditions. The Government shall indemnify the Contractor against liability to
subcontractors incurred under subcontract provisions approved by the Contracting
Officer.

(f) The rights and obligations of the parties under this clause shall
survive this contract's termination, expiration, or completion. The Government
shall make no payment under this clause unless the agency head determines that
the amount is just and reasonable. The Government may pay the Contractor or
subcontractors, or may directly pay parties to whom the Contractor or
subcontractors may be liable.

(g) The Contractor shall--

(1) Promptly notify the Contracting Officer of any claim or action
against, or any loss by, the Contractor or any subcontractors that may be
reasonably be expected to involve indemnification under this clause;

(2) Immediately furnish to the Government copies of all pertinent
papers the Contractor receives;

(3) Furnish evidence or proof of any claim, loss, or damage covered
by this clause in the manner and form the Government requires; and

(4) Comply with the Government's directions and execute any
authorizations required in connection with settlement or defense of claims or
actions.

(h) The Government may direct, control, or assist in settling or
defending any claim or action that may involve indemnification under this
clause.

I-6
<PAGE>

SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

5. DEFINITION OF UNUSUALLY HAZARDOUS RISK

1. Definitions:

A. "Civil Reserve Air Fleet (CRAF) Mission" means the provision of
airlift services under this contract (1) ordered pursuant to authority available
because of the activation of CRAF or (2) directed by Commander, Air Mobility
Comand (AMC/CC) or his successor for missions substantially similar to or in
lieu of those ordered pursuant to formal CRAF activation.

B. "Airlift Services" means all services (passenger, cargo, or
medical evacuation) and anything the contractor is required to do in order to
conduct or position the aircraft, personnel, supplies, and equipment for a
flight and return. Airlift Services include Senior Lodger and other ground
related services supporting CRAF missions. Airlift Services do not include any
services involving any persons or things which, at the time of the event, act,
or omission giving rises to a claim, are directly supporting commercial business
operations unrelated to a CRAF mission objective.

C. "War risks" means risks of:

(1) War (including war between the Great Powers), invasion, acts of
foreign enemies, hostilities (whether declared or not), civil war, rebellion,
revolution, insurrection, martial law, military or usurped power, or attempt at
usurpation of power.

(2) Any hostile detonation of any weapon of war employing atomic or
nuclear fission and/or fusion or other like reaction or radioactive force or
matter.

(3) Strikes, riots, civil commotion's, or labor disturbances related
to occurrences under subparagraph (1) above.

(4) Any act of one or more persons, whether or not agents of a
sovereign power, for political or terrorist purposes and whether the loss or
damage resulting therefrom is accidental or intentional, except for ransom or
extortion demands.

(5) Any malicious act or act of sabotage, vandalism, or other act
intended to cause loss or damage.

(6) Confiscation, nationalization, seizure, restraint, detention,
appropriation, requisition for title or use by or under the order of any
Government (whether civil or military or de facto) or public or local authority.

(7) Hijacking or any unlawful seizure or wrongful exercise of control
of the aircraft or crew (including any attempt at such seizure or control) made
by any person or persons on board the aircraft or otherwise, acting without the
consent of the insured.

(8) The discharge or detonation of a weapon or hazardous material
while on the aircraft as cargo or in the personal baggage of any passenger.

2. For the purpose of the contract clause entitled "Indemnification Under
Public Law 85-804 (APR 1984)," it is agreed that all war risks resulting from
the provision of airlift services for a CRAF mission in accordance with the
contract are unusually hazardous risks, and shall be indemnified to the extent
that such risks are not covered by insurance procured under Title XIII of the
Federal Aviation Act or other insurance, because such insurance has been
canceled, has applicable exclusions, or has been determined by the government to
be prohibitive in cost.

I-7
<PAGE>

SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

The government's liability to indemnify the contractor shall not exceed that
amount for which the contractor commercially insures under its established
policies of insurance.

3. Indemnification is provided for personal injury and death claims resulting
from the transportation of medical evacuation patients whether or not the claim
is related to war risks.

4. Indemnification of risks involving the operation of aircraft, as discussed
above, is limited to claims or losses arising out of events, acts, or omissions
involving the operation of an aircraft for airlift services for a CRAF mission,
from the time that aircraft is withdrawn from the contractor's regular
operations (commercial, DOD, or other activity unrelated to airlift services for
a CRAF mission) until it is returned for regular operations. Indemnification
with regard to other contractor personnel or property utilized or services
rendered in support of CRAF missions is limited to claims or losses arising out
of events, acts, or omissions occurring during the time
the first pre-positioning of personnel, supplies and equipment to support the
first aircraft of the contractor used for airlift services for a CRAF mission is
commenced until the timely removal of such personnel, supplies and equipment
after the last such aircraft is returned for regular operations.

5. Indemnification, is contingent upon the Contractor maintaining, if
available, non premium insurance under Title XIII of the Federal Aviation Act
and normal commercial insurance, as required by this contract or by other
competent authority. Indemnification for losses covered by a contractor self-
insurance program shall only be on such terms as incorporated in this contract
by the contracting officer in advance of such a loss.

6. 252.223-7004 DRUG-FREE WORK FORCE (SEP 1988/DFARS)

(a) Definitions. (1) Employee in a sensitive position, as used in this
clause, means an employee who has been granted access to classified information;
or employees in other positions that the Contractor determines involve national
security, health or safety, or functions other than the foregoing requiring a
high degree of trust and confidence.

(2) Illegal drugs, as used in this clause, means controlled substances
included in Schedules I and II, as defined by section 802(6) of title 21 of the
United States Code, the possession of which is unlawful under chapter 13 of that
Title. The term "illegal drugs" does not mean the use of a controlled substance
pursuant to a valid prescription or other uses authorized by law.

(b) The Contractor agrees to institute and maintain a program for achieving
the objective of a drug-free work force. While this clause defines criteria for
such a program, contractors are encouraged to implement alternative approaches
comparable to the criteria in paragraph (c) that are designed to achieve the
objectives of this clause.

(c) Contractor programs shall include the following, or appropriate
alternatives:
(1) Employee assistance programs emphasizing high level direction,
education. counseling, rehabilitation, and coordination with available community
resources;
(2) Supervisory training to assist in identifying and addressing illegal
drug use by Contractor employees;

(3) Provision for self-referrals as well as supervisory referrals to
treatment with maximum respect for individual confidentiality consistent with
safety and security issues;

(4) Provision for identifying illegal drug users, including testing on a
controlled and carefully monitored basis. Employee drug testing programs shall
be established taking account of the following:

(i) The Contractor shall establish a program that provides for testing
for the use of illegal drugs by employees in sensitive positions. The extent of
and criteria for such testing shall be determined by the Contractor based on
considerations that include the nature of the work being performed under the
contract, the employee's duties, the efficient use of Contractor resources, and
the risks to health, safety, or national security that could result from the
failure of an employee adequately to discharge his or her position.

(ii) In addition, the Contractor may establish a program for employee
drug testing-
(A) When there is a reasonable suspicion that an employee uses
illegal drugs; or
(B) When an employee has been involved in an accident or unsafe
practice;
(C) As part of or as a follow-up to counseling or rehabilitation for
illegal drug use;
(D) As part of a voluntary employee drug testing program.
(iii) The Contractor may establish a program to test applicants for
employment for illegal drug use.

I-8
<PAGE>

SOLICITATION NUMBER: F11626-94-R0001
CONTRACT NUMBER: F11626-94-D0027

(iv) For the purpose of administering this clause, testing for illegal
drugs may be limited to those substances for which testing is prescribed by
section 2.1 of subpart B of the "Mandatory Guidelines for Federal Workplace Drug
Testing Programs" (53 FR 11980 (April 11 1988)), issued by the Department of
Health and Human Services.

(d) Contractors shall adopt appropriate personnel procedures to deal with
employees who are found to be using drugs illegally. Contractors shall not
allow any employee to remain on duty or perform in a sensitive position who is
found to use illegal drugs until such times as the Contractor, in accordance
with procedures established by the Contractor, determines that the employee may
perform in such a position.

(e) The provisions of this clause pertaining to drug testing program shall
not apply to the extent they are inconsistent with state or local law, or with
an existing collective bargaining agreement; provided that with respect to the
latter, the Contractor agrees that those issues that are in conflict will be
subject of negotiation at the next collective bargaining session.

7. 52.252-2 CLAUSES INCORPORATED BY REFERENCE (JUN 1988) FAR

This contract incorporates one or more clauses by reference, with the same
force and effect as if they were given in full text. Upon request, the
Contracting Officer will make their full text available.

I-9
<PAGE>

SOLICITAITON NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACHMENTS
- ------------------------------------------------------------

SECTION J - LIST OF ATTACHMENTS AND EXHIBITS
- --------------------------------------------
<TABLE>
<CAPTION>

ATTACHMENTS
- -----------

NUMBER
NO. NAME OF PAGES
- --------- ---------------------------------------------------- --------
<S> <C> <C>
1 Performance Work Statement Passenger Service, dated
06 January 1994 11

2 Specifications, Terms and Conditions forCategory-B
Passenger Aircraft used in International Operations,
dated 06 January 1994 6

3 Inflight Meal Schedule/Service, dated 06 January 1994 2

4 Procedures for Interlining Baggage for
Passengers, dated 06 January 1994 4

5 Performance Work Statement Cargo Service, Category
B Cargo, dated 06 January 1994 5

6 Performance Work Statement Cargo Service, Category
A Cargo, dated 06 January 1994 3

7 Specifications, Terms and Conditions for Mixed
Passenger and Cargo Aircraft used in International
Operations, dated 06 January 1994 1

8 List of Aircraft, 06 January 1994 1

8A List of Aircraft Supporting use of 3
Another Carrier's MVP's, 17 June 1994

9 Civil Reserve Air Fleet (CRAF) dated 17February 1994 48

10 Publications and Forms, dated 06 January 1994 4

11 DD Form 254, Department of Defense
Contract Security Classification Specification,
dated Dec 90 10

12 Government Furnished Equipment, 17 JUN 94 5

13 Teaming Arrangement Agreement Certfications 5

EXHIBITS
- --------

A DD Forms 1423, Contract Data Requirements List
(CDRL), dated 17 Dec 93 2

B DD Forms 1664, Data Item Description, dated Apr 89 6
</TABLE>

J-1
<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

ATTACHMENT 1

PERFORMANCE WORK STATEMENT

PASSENGER SERVICE

1. Government passengers (Cat-B ) shall be provided service as detailed herein
and such service shall as a minimum be equal to that service afforded coach
class passengers. Passenger service shall be performed in accordance with the
following:

1.1. BOARDING/LOADING.
----------------

1.1.1. The flight attendant or contractor representative shall check the
boarding passes as passengers board the aircraft. In case of a discrepancy, the
Contractor shall immediately advise the Government in order to resolve the
discrepancy.

1.1.1.1. A member of the Contractor's crew shall be responsible for weight and
balance of the aircraft.

1.1.2. The contractor shall furnish for all trips at originating, en route,
turnaround, and terminating points, personnel available three (3) hours in
advance of all scheduled trip departures or actual arrival, whichever is
earlier, to provide the necessary information and coordination with Government
representatives if, at the beginning of the month, scheduled frequency into a
station is three or more transits during a months operation. Each station may
waive the three hour reporting requirement and establish through the contract
administrator acceptable reporting times.

1.1.3. The Contractor shall perform passenger processing, predeparture, and
post arrival passenger service, commensurate with scheduled airline standards to
include passenger assistance and briefing, in accordance with procedures
developed by the ACO or his delegated representative.

1.1.4. Flight manifests, listing the passengers to be moved, shall be furnished
to the Contractor by the Government. The Contractor shall annotate the
passenger manifest indicating the passengers who checked in for the mission.

1.1.5. The Contractor shall verify onboard passenger count to cross check the
manifest listing.

1.1.6. Contractor will endeavor to store a 3-month supply, but in no case less
than a 30 day supply of passenger amenity kits base on forecasted carriage for
each flight they are contracted to operate from a CONUS commercial gateway.
Contractor will notify the AMC Detachment Chief/Alternate of reorder
requirements. Boxes contain approximately 200 kits per 5 cubic foot box.
Contractor will be advised of delivery date within 10 days of placing the
reorder request. Contractor will provide HQ AMC/DOJP a complete shipping address
of their designated agent responsible for storing these kits. DOD-contract
carrier passenger cabin personnel will offer and distribute amenity kits to
passengers shortly after aircraft boarding/departure from CONUS commercial
gateways. At destination, passenger cabin crew will stow undistributed kits for
return to a CONUS gateway.

1.2. LIMITATIONS OF CARRIAGE. Refusal, Cancellations, or Removal. The
-----------------------
Contractor may refuse to carry, cancel the reserved space of, or remove enroute
any passenger when, in the exercise of its reasonable discretion, Contractor
decides:

1.2.1. Such action is necessary for reasons of safety.

1.2.2. Such action is necessary to prevent violation of any applicable laws,
regulations,

ATCH 1
06 January 1994

Page 1 of 11
<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

or orders of any state or country to be flown from, into, or over.

1.2.3. The conduct, status, age, or mental or physical condition of the
passenger is such as to:

1.2.3.1. Require special assistance of the Contractor over and above that
offered to his commercial passengers.

1.2.3.2. Cause discomfort or make himself objectionable to other passengers.

1.2.3.3. Involve any hazard or risk to himself or to other persons or to
property.

1.2.3.4. The passenger fails to observe the instructions of the carrier.

1.2.4. If the question arises of an aircraft being overloaded, the Contractor
shall decide in its reasonable discretion the number of passengers or weight of
articles which shall be carried.

1.3. ACCEPTANCE OF CHILDREN
----------------------

1.3.1 Children at least 8 years, but under 12 years of age, shall be accepted
for carriage unaccompanied provided:

1.3.1.1. They are accompanied to the airport at the time of departure by a
parent, guardian, or responsible adult who shall remain with the child until
enplaned and evidence is presented by such parent, guardian, or responsible
adult that the child will be met at the airport of arrival by another parent,
guardian, or responsible adult upon deplaning.

1.3.1.2. A health certificate is presented from a competent physician
certifying that the child does not suffer from any communicable disease and that
the child's health will not be impaired by air travel.

1.3.1.3. The flight on which space is held is not expected to terminate short
of or by-pass destination due to weather conditions.

1.3.1.4. The child shall not be permitted to stopover en route.

1.3.2. Children under 18 years of age will be required to give satisfactory
assurance to the contractor that they have permission from their parents or
guardians to undertake the trip and in the case of international travel, they
will be in the charge of a responsible adult while in the country of
destination.

1.3.3. The contractor shall not accept any financial, guardianship, or other
responsibilities beyond those applicable to an adult passenger.

1.3.4. The age limit referred to in this rule shall be the age of the child at
the date of commencement of carriage. The contractor may require satisfactory
evidence establishing the child's age.

1.4. Reserved.

1.5. CARE OF PASSENGERS DURING MISSION DELAYS.
----------------------------------------

1.5.1. The Contractor is responsible to provide care for the on-board
passengers and the Government is responsible for the care of passengers to be
boarded at originating, enroute, and turnaround stations during non controllable
delays. However, when requested by the Government, the Contractor shall care
for all passengers manifested at close-out time of the flight at the delay
station, and all space required passengers that check-in at enroute and
turnaround stations. The delay time will be mutually agreed upon between the
Government and the Contractor to allow proper delay evaluation prior to caring
for the passengers. When requested by the Government, the

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CONTRACT NO: F11626-94-D0027

Contractor shall also care for passengers upon arrival to CONUS station(s) when
the arrival time is after a reasonable hour for passengers to make onward travel
connections. Care of passengers to include billeting and transportation to and
from billeting area. Meals and personal expenses, i.e., telephone calls, TV,
etc., shall not be provided. The Contractor shall submit an invoice supported by
receipts by billets and transportation charges to HQ AMC/XOKMA for reimbursement
of these charges. The Government shall effect fair and reasonable payment to the
Contractor upon receipt of a valid invoice.

1.5.2. LATE CONUS ARRIVAL: In the event any contractor flight is delayed at
------------------
any point and (a) the passenger mission arrives the CONUS 4 hours or more after
scheduled arrival time; (b) actual arrival time is later than 2000 hours local;
and (c) late arrival is due to controllable reasons, the Contractor shall be
required to care for passengers who are unable to make onward travel connections
due to the late arrival. The Contractor shall provide the following care:
overnight billeting, hot meals, and transportation to and from the meal and
billeting areas.

1.5.3. OTHER CONTRACTOR CONTROLLABLE DELAYS: In the event a flight is delayed
------------------------------------
and the delay is contractor controllable, the Contractor shall provide hot meals
and transportation to the feeding point if the delay extends over a meal period
for all passengers manifested at the close-out time of the flight at the delay
station, and all space required passengers that check in at enroute stations.
If a controllable delay requires an overnight stay, the Contractor is
responsible for meals, transportation, and billeting at the origin, enroute and
destination stations (if applicable). The Contractor is responsible only for
those passengers manifested at the scheduled manifest close-out time. Overnight
billeting will be considered when the delay is more than 4 hours, or crew rest
is required due to the length of the delay, or a passenger convenience delay is
declared. A passenger convenience delay and/or overnight billeting
determination will be declared only by a Contracting Officer at DET 4/5
Operating Location or HQ AMC/XOK. Slot time requirements at all airfields,
etc., shall be made by the appropriate personnel prior to declaring a passenger
convenience delay or overnight billeting.

1.5.4. DIVERSIONS.
----------

1.5.4.1. If the Contractor overflies an enroute station due to Contractor
controllable reasons, the passengers awaiting transportation at the overflown
station and the passengers who were to be off-loaded at the overflown station
are the responsibility of the Contractor. This includes passenger care and
transportation to manifested destination.

1.5.4.2. If the Contractor overflies an enroute station due to an
uncontrollable diversion, the passengers awaiting pickup at the enroute station
are the responsibility of AMC. However, the Contractor is responsible for care
of the passengers on the aircraft who were to be off-loaded at the overflown
enroute station until they are delivered by the Contractor at Contractor's
expense to the manifested destination; or until such time as the Government
provides suitable air transportation. The Contracting Officer or his
representative will coordinate with the carrier's representative and arrange
transportation for the delayed passengers as soon as possible on the first
military or contract flight, if possible. Whenever suitable transportation is
available but not used, the passengers become the responsibility of AMC. With
the approval of the Contracting Officer or representative, the carrier may
decide to move the overflown passengers by air or suitable ground transportation
to the overflown station or care for the passengers until the Government
provides suitable air or other transportation. For a turnaround station without
any other traffic stops within the same general area, the Contracting Officer or
representative may authorize the Contractor to provide ground transportation
from the diversion point to and from the turnaround point.

1.6. BAGGAGE.
-------

1.6.1. INSPECTION BY CONTRACTOR. The Contractor has the right, but not the
------------------------
obligation, to verify in the presence of the passenger, the contents of his
baggage, and in the case of unaccompanied baggage, to open

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CONTRACT NO: F11626-94-D0027

and examine such baggage whether or not the passenger is present. The existence
or exercise of such right shall not be construed as an agreement, expressed or
implied, by the Contractor to carry such contents as would otherwise be
precluded from the carriage.

1.6.2. DANGEROUS, DAMAGEABLE, OR UNSUITABLE BAGGAGE. Contractor shall not be
--------------------------------------------
required to accept baggage articles which are likely to endanger the aircraft,
persons, or property, which are likely to be damaged by air carriage or which
are unsuitably packed, or the carriage of which is forbidden by any applicable
laws, regulations, or orders of any state to be flown from, into, or over.
Liquids, firearms, explosives, munitions, corrosives, and articles which are
easily ignited can only be carried with prior consent of the carrier and be in
compliance with all DOT and DOD regulations.

1.6.3. FREE BAGGAGE ALLOWANCE. Each passenger shall be allowed free baggage as
----------------------
follows:

1.6.3.1. Two pieces of checked baggage each of which the sum of the greatest
outside length plus the greatest outside height plus the greatest outside width
does not exceed 62 inches, and the weight does not exceed 70 pounds per piece.
NOTE: For weight- restricted flights, the carrier is only obligated to
transport 70 pounds of personal baggage for each passenger per para 2.5.5.

1.6.3.2. One or more additional pieces of baggage of which, measured together
if more than one piece of baggage, the sum of the greatest outside length plus
the greatest outside height plus the greatest outside width does not exceed 45
inches, provided that such additional piece(s) of baggage are carried on-board
the aircraft, retained in the passenger's custody and capable of being stowed
under the passenger's seat, in the overhead rack, or in the garment bag rack.
Due to in-flight safety, the overhead rack will be used for baggage at the
discretion of the flight attendant/passenger service agent.

1.6.3.3. A passenger may check a duffel bag, sea bag, or B-4 bag which exceeds
the limits prescribed above and one piece not exceeding those same limits
defined above. In addition one or more pieces of baggage of which, measured
together do not exceed the hand carried baggage limits as defined above,
provided that such additional piece(s) of baggage are carried on-board the
aircraft, retained in the passenger's custody, and capable of being stowed under
the passengers seat. Excess baggage will be transported at the rates specified
in SECTION B when the passenger's AMC Transportation Authorization (MTA) or
orders specifically provides for the excess. If the MTA does not authorize
excess baggage or if the passenger has more baggage than authorized, the
passenger will be responsible for making arrangements with the Contractor or
other agency to move excess baggage at the passengers expense. Contractor shall
annotate authorized excess baggage on the AMC passenger list and forward to the
AMC Reporting Station.

1.6.3.4. ADJUDICATION OF LOST, DAMAGED, AND PILFERED BAGGAGE. All claims for
---------------------------------------------------
lost, damaged, and pilfered baggage will be settled with AMC passengers within
60 days of the contract carrier receiving the case file from the Baggage Service
Centers. Carriers must acknowledge receipt of case files and notify the baggage
service center of final adjudication with the passenger. Carriers shall also
provide the baggage service center with a list of required items needed from the
passenger to expedite the final adjudication process for lost, damage, and
pilfered baggage.

1.6.4 PETS. Pets (dogs and cats) will be carried on CATEGORY B service. The
----
number of pets and movement of pets in the cabin will be as mutually agreed upon
by the carrier and the contracting officer. The weight of accompanied pets,
when accepted, including the containers carried, will not be included in the
free baggage allowance of the passenger and the passenger will be assessed the
applicable excess baggage weight charge. A maximum of 2 small pets, up to 30.8
pounds (14kg) each, from the same litter or household may be shipped in the same
container. The shipment of small pets in the cabin shall be allowed in
accordance with the carrier's policy and FAA regulations.

1.6.4.1. Pets shall be crated in an IATA-approved container and accompanied by
valid health and rabies

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SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

vaccination certificates, entry permits and other documents required by
countries of entry or transit will be accepted for carriage at the owner's risk
and subject to requirements of the contractor.

1.6.4.2. If the carrier is unable to move prebooked pets because of equipment
malfunction, the carrier shall assume liability for all billeting and
subsistence for care of passenger and pets. AMC will attempt to arrange
alternate transportation within 24 hours of the original scheduled departure.
At no time will carrier liability for care of pets exceed 48 hours.

1.6.5. Seeing Eye Dogs: Dogs trained to lead the blind shall be carried free
of charge in addition to the normal free baggage allowance provided that such a
dog accompanies a passenger with impaired vision dependent upon it, and is
properly harnessed and does not occupy a seat. However, such dog shall not be
carried unless proper permits are obtained for entry into the country or
territory of destination or countries and territories of transit where such
permits prior to reservations being made. If any country or territory on the
route prohibits the entry of dogs, carriage will be refused.

1.6.6. Live animals other than pets (1.6) and "seeing eye" dogs (1.6.2.) shall
be carried when approved by service headquarters and mutually agreed upon by the
carrier (HQ AMC/XONPO is responsible for getting this approval). These animals
shall be carried in accordance with FAA regulations and paragraph 1.6. All
government-sponsored animals, such as working dogs, shall be transported as
cargo.

1.6.7. The government will not pay additional charges for the carriage of live
animals or pets.

1.6.8. BAGGAGE LIABILITY - CATEGORY B-The Contractor shall be responsible and
------------------------------
liable for the loss, damage, or destruction of checked baggage, unchecked
baggage, and items of personal property in the possession of the passenger on
all Category B flights performed under this contract to the extent hereinafter
stated in this paragraph. The liability for checked baggage will exist from the
time the passenger checks his baggage for the flight involved until he recovers
it at his destination. this liability exists irrespective of whether baggage
handling is by Contractor personnel, Government personnel, or self-service.
Contractor's liability for checked baggage is limited to the actual value of the
item or items lost, damaged., or destroyed, not to exceed $9.50 per pound time
the weight of the packed outermost carrying case (such as bag or suitcase)
containing such item or items. Contractor's liability for checked baggage is
limited to a maximum of 140 lbs per passenger when pooled (two pieces not
exceeding 70 lbs total). The Contractor's liability for unchecked baggage and
items of personal property is for the actual value, not to exceed $420.00 per
passenger. Actual value shall be based upon actual replacement cost to the
passenger if the item has been replaced at the time of the claim and upon the
replacement purchase cost at the permanent station of the passenger if the item
has not been replaced at the time of the claim. Contractor's liability for
unchecked baggage and items of personal property in the possession of passengers
exists only for the loss, damage, or destruction occasioned by aircraft accident
or otherwise caused by the Contractor. Any lower limitation of liability to
which the Contractor might otherwise be entitled will not be applicable and the
provisions of this paragraph will prevail over any such lower limitation.
(Claims for lost or damaged baggage will be submitted to the Contractor on AMC
Form 134 (Baggage Irregularity Report.))

1.6.9. LIMITATION OF LIABILITY. The liability of the Contractor for the loss
------------------------
of, or damage to, or delay in the delivery of baggage, shall not exceed $20.99
per kilogram (2.2 pounds) for checked baggage and $400.00 for unchecked baggage
and items of personal property, except in those cases in which excess value
charges have been paid pursuant to paragraphs 3.4.1 through 3.4.5. For carriage
wholly between points in the United States, the Contractor's liability for
checked or unchecked baggage and items of personal property shall be limited to
an amount equal to the value of such property which shall not exceed $750.00
unless a higher value is declared in advance and additional charges paid,
pursuant to paragraphs 3.4.1 through 3.4.5. above.

1.7. CUSTOMS INSPECTION. If required, the passenger must attend inspection of
------------------
their baggage, checked or unchecked, by customs or other Government officials.

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SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

2. CATEGORY B OPERATIONS. In addition to the requirements stated in paragraph
---------------------
1. of this attachment, the following provisions are applicable specifically to
performance of Category B operations. Category B transportation means the
transportation in planeload lots of passengers and/or cargo. All aircraft
utilized must conform to the requirements of Attachment 2 and be licensed,
operated and maintained in accordance with all applicable rules and regulations
of the FAA, DOT, and USDA, giving particular attention to the responsibility of
the air carriers to perform air transportation services with the highest degree
of safety. The aircraft while performing missions under this contract will not
be considered public aircraft. This includes the recording or reporting of
routine and special air reports on meteorological information as specified in
Federal Aviation Regulations (FARs) 91.125 and 121.561 and in ICAO Manual,
"Procedures for Air Navigation Services Rules of the Air and Traffic Services."
Contractor shall also comply with all pertinent US Military regulations and
directives at all military installations.

2.1. SPECIFICATIONS. Specifications for standards of service and flight
--------------
comfort needs are contained in Attachment 2.

2.2. OPERATIONS.
----------

2.2.1. The contractor shall provide the transportation representative (Quality
Assurance Evaluator) with an aircraft capability in both pounds and seats based
upon the critical leg of the mission, 3 hours prior to departure time.

2.2.2. The Government shall have the right to on-load and/or off-load traffic
at all points listed in the item descriptions set forth in the contract. In
addition, the Government shall have the right to on-load and/or off-load traffic
at any operational stops made enroute for the Contractor's convenience plus any
diversion stops made, providing it does not interfere with the Contractor's
scheduled ground operation. When an operational stop will exceed 1 hour in
duration, the passengers shall be permitted to debark from the aircraft. The
Contractor shall assume full responsibility for the passengers during the time
required for the operational stop.

2.2.3. In all cases where landings are made for fuel or maintenance at stations
where AMC command control facilities or units are not established, including
enroute or diversion stops, the Contractor (crew member, local representative,
or responsible dispatch office) shall report advisory arrival and departure
information within 10 minutes of occurrence by telephone or electronic means as
follows:

2.2.3.1. ARINC: For all missions info the HQ AMC TACC/DOCA BLVOCMC for all
missions.

2.2.3.2. CONUS: If ARINC is not available, use telephone notifications. Call
HQ AMC TACC/DOCA (618) 256-1747.

2.2.3.3. Overseas: If operating in the Pacific theater notify HQ AMC TACC/DOCW
(618) 256-1749. Aircraft transiting the European theater will notify HQ AMC
TACC/DOCE (618) 256-1748.

2.2.3.4. Arrival and departure information for paragraphs 2.2.3.1. and 2.2.3.2.
above will include the following:

ARRIVAL DEPARTURE

Mission Number Mission Number
FAA Aircraft Registration Number FAA Aircraft Registration Number
(Tail Number) (Tail Number)
Station Station
Time of Arrival Actual Departure Time (ADT)

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SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027
*Estimated Time of Departure (ETD) Next Station
Next Station Estimated Time of Arrival (ETA)

* If mission is delayed beyond ETD, report delay cause and estimated
time aircraft will be in commission (ETIC) and revised ETD.

2.2.4. When transiting a station at which a Command Post/Operations Officer,
Airlift Control Element (ALCE), AMC Liaison Office (AMCLO), or other AMC airlift
representative is located, the Contractor shall provide that local AMC agency
an estimated block time at least 2 hours prior to arrival. On a follow-on
mission, the contractor shall provide the following to the AMC Operations
Center/Command Post at the last off-load station prior to the ferry leg:

2.2.4.1. FAA aircraft registration number (Tail number).

2.2.4.2. ETD from last off-load station.

2.2.4.3. ETA at first on-load station after ferry leg.

2.2.4.4. Applicable mission number.

2.2.5. Thirty minutes prior to arrival, Contractor shall notify all
originating, transiting, and terminating Operations Center/Command Post (1) by
VHF radio where equipment is available; and/or (2) within 20 to 30 minutes prior
to arrival by telephone at stations where Contractor air-to-ground radio
capability exists the following information:

2.2.5.1. Mission number.

2.2.5.2. FAA aircraft registration number (Tail number).

2.2.5.3. Verify or revised ETA.

2.2.5.4. Maintenance status.

2.2.5.5. Fuel required (as applicable).

2.2.5.6. Any other operational information that will reduce ground time or
enhance ground handling activities.

2.2.6. AMC AF Operations Centers are concerned with mission monitoring status.
All problems associated with mission accomplishment will be directed to the ACO
or appropriate Contract Administrator for resolution.

2.2.7. When positioning within CONUS for the initial on-load of a Special
Assignment Airlift Mission (SAAM) or exercise mission, the Contractor shall
provide the AMC mission identifier, aircraft tail number and ETA to the
cognizant division within the HQ AMC TACC Operations Center. The above also
applies to missions positioning overseas. This information shall be reported
as soon as the aircraft departs the last station prior to positioning at the on-
load station originating the SAAM or exercise mission. If a mission will be
delayed beyond the scheduled or contractual positioning time, report the cause
for delay and the estimated revised ETA.

2.2.8. When an aircraft is operating from a commercial airport to a military
air base, the carrier (dispatcher, captain, etc.) shall relay the departure time
and estimated time of arrival to destination through the tie-in at the FAA
Flight Service Station (FSS) for relay to the destination military airport.
This reporting applies to live, ferry, and positioning flights.

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SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

2.2.9. In order to provide adequate notification to the destination station,
the Contractor shall notify the AMC terminal (as specified by the ACO for each
normally used commercial gateway) as soon as possible after the actual departure
of the mission and provide (a) flight number, (b) FAA aircraft registration
number (Tail number), (c) destination of aircraft, (d) actual departure time,
(e) estimated time of arrival, and (f) those Government sponsored individuals
who departed on the flight.

2.2.10. CHANNEL EXTENSION. (Reimbursable)

a. Twelve hours in advance of flight departure time, AMC will furnish
the contractor at the origin boarding station with a passenger list identifying
the travelers booked for that flight. The passengers will present the
contractor an appropriate travel authorization (travel order). The contractor
will annotate the passenger list indicting whether the passenger appeared or no
showed. The contractor shall attach a copy of the traveler's orders to, and sign
the passenger list. Manifests for flights originating at the contract channel
extension should be presented to the senior flight attendant for drop off with
the gateway personnel at the next stop.

b. The contractor shall arrange for all flight processing the include
verification of travel documents, tagging checked baggage, baggage handling, and
other contracted passenger care requirements for flights originating or
terminating at a channel extension. Originating missions will be opened for
check-in not later than 4 hours prior to departure. Excess baggage and pets
shall be processed. Assistance may be obtained from the military
representative present. Selection and processing of space available travelers
will be accomplished by the military representative present at the origin
contract channel extension site.

c. Arriving flights shall receive the same baggage service as
exercised at Philadelphia, Charleston, St. Louis and Los Angeles. In addition,
ground support personnel shall be available to assist passengers with lost,
damaged, or pilfered baggage claims.

2.3. PASSENGER MANIFESTING. For all Category B passenger missions (except SAAM
---------------------
and exercise) operating through Charleston, Los Angeles, Philadelphia, and St
Louis International airports, AMC will perform passenger manifesting and check
in to include border clearance inspections, boarding, seat assignment, issuance
of boarding pass, baggage weighing, tagging, and placing of baggage on conveyor
at baggage check in. Contractor shall perform all other functions.

2.4 MAXIMUM STANDARD PAYLOAD.
-------------------------

2.4.1 The 'Maximum Standard Payload' as used by AMC in its Uniform Negotiated
- ------------------------------------------------------------------------------
Rates and Rules, is the same as the Guaranteed Allowable Cabin Load (GACL or
- ----------------------------------------------------------------------------
ACL). The GACL is the number of seats and/or weight of cargo for which the
- ---------------------------------------------------------------------------
Contractor guarantees to make capacity available to the Government. The
- ------------------------------------------------------------------------
Government agrees to use this amount as the price basis regardless of whether
- -----------------------------------------------------------------------------
the Government utilizes the full guaranteed capacity on any given flight.
- -------------------------------------------------------------------------

2.4.2. AMC may utilize up to the maximum standard ACL of passengers and their
allowable baggage. In order to maximize the benefits of the standard ACL, the
carrier shall not be allowed to block off any area of the aircraft for nonuse
or load route support crew or equipment (as authorized by the ACO in Section C,
para 13), over the maximum standard ACL. (Route support authorization shall be
determined in accordance with Section C, para 13.)

2.5. ON-LOADING.
----------

2.5.1. The Government will load according to the Contractor provided, planned
load breakdown and is responsible for the accuracy of the actual on-load weights
provided to the Contractor and entered on the local

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SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

station load summary, or Contractor's form, by loading supervisor. The
Contractor (aircraft commander or other designated crew member) is responsible
for visually checking the cargo load, its security and tie-down so that FAA
requirements are met.

2.5.2. PASSENGER MISSION ON-LOADING AT A MILITARY INSTALLATION. The
-------------------------------------------------------
Contractor's representative shall provide the Government with the aircraft
capability in both pounds and seats based upon the critical leg of the mission,
3 hours prior to departure time. The Contractor may use the station's local
load summary form or Contractor's form. As a minimum, the following shall be
shown:

2.5.2.1. Trip number/date.

2.5.2.2. Type aircraft.

2.5.2.3. ACL in passenger seats/pounds this leg.

2.5.2.4. ACL in passenger seats/pounds critical leg.

2.5.2.5. Cube allowable in the belly compartments.

2.5.2.6. Belly compartment weight by compartment.

2.5.3. The Contractor's representative shall sign the local station load
planning form to indicate receipt of actual load breakdown.

2.5.4. Contractor shall furnish seat selection charts conforming to the
configuration and seat numbering system of its aircraft, to the QAE at
originating and turnaround stations for each Category B mission. Seat selection
charts must clearly identify the location of all emergency exits. Where
required seat spacing results in less rows of seats than are indicated in the
aircraft's overhead numbering system, the excess row numbers/seats should be
blanked out, with tape or otherwise, to minimize confusion. The flight
attendant or contractor representative shall check boarding passes as
passengers board the aircraft. In case of a discrepancy, the Contractor shall
immediately advise the Government in order to resolve the discrepancy.

2.5.5. The Government shall be entitled to have transported, on each all-
passenger flight and each mixed flight, 70 pounds of personal baggage (and/or
mail, courier material, cargo) for each passenger carried. If for reasons
caused by the Contractor, the Contractor can not transport all of such baggage,
the Government may withhold passengers (and their baggage) whose baggage can not
be carried and charge the Contractor a deficit for those passengers pursuant to
SECTION G. The Government may require the Contractor to transport courier
material, mail, additional baggage in any amount not in excess of 245 pounds
multiplied by the difference between the number of passengers furnished by the
Government and the passenger ACL. Mail and cargo required to be transported
will be of such weight and configuration as to fit readily in otherwise unused
space within the cargo or baggage compartment of the aircraft, or both, without
the interference with baggage stowage; and mail, baggage, or cargo will not be
stowed in the cabin or passenger compartment.

2.5.6. The following standardized weights are used by DOD units for planning of
movements.

2.5.6.1. NORMAL PASSENGER LOADS. This is a mixed load of military members and
----------------------
their dependents. This load is very similar to that experienced by civil
carriers on scheduled flights. The DOD uses weights in accordance with FAA AC
120-27A; i.e., adults -- 175 pounds; children 2 to 12 - 80 pounds; plus 70
pounds checked baggage. TOTAL: Adults - 245 pounds.

2.5.6.2. NONCOMBAT EQUIPPED MILITARY PERSONNEL. A full load of military
-------------------------------------
personnel, without spouses and children, and without combat equipment. The DOD
uses 175 pounds plus 20 pounds of hand

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SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

carried baggage, plus 70 pounds of checked baggage. TOTAL: 265 pounds.

2.5.6.3. COMBAT EQUIPPED MILITARY PERSONNEL. This represents the standard
----------------------------------
combat soldier as would be seen in large exercise movements such as REFORGER,
TEAM SPIRIT, BRIGHT STAR, etc.

2.5.6.3.1 Combat-equipped troops with carry-on baggage and 70 pounds of checked
baggage: 280 pounds.

2.5.6.3.2 Combat-equipped troops with web gear and weapon, carry on baggage and
70 pounds of checked baggage: 302 pounds.

2.5.6.3.3 Combat-equipped troops with web gear, weapon, carry-on baggage, ruck
sack and 70 pounds of checked baggage: 380 pounds.

2.5.6.3.4 Actual scaled weights of individuals with uniform, boots, helmet,
weapon, web gear, and hand-carried baggage will be used in lieu of standard body
weights. If scales are not available, interrogated weights of individuals can
be used. Use the following additive item weights to determine the total weight
of the individual:

- Boots: 5 pounds
- Helmet: 5 pounds
- Uniform: 5 pounds
- Web Gear: 12 pounds
- Weapon: 10 pounds
- Hand-carried Baggage: 20 pounds

2.5.6.4. Contractors may request interrogated weights of passengers and baggage
8 hours prior to positioning for the flight. DOD users moving on
SAAMs/Exercises will weight all LD-3 containers and 463-L pallets and loose
loaded baggage prior to loading in aircraft baggage pits and will furnish those
weights to carrier personnel.

2.5.7. Carriers shall insure that their ground handlers meet the following
baggage off- load times:

a. DV/EL baggage will be available for pick-up not later than 10
minutes after aircraft block time. This baggage is clearly marked with DV/EL
tags and is the last baggage loaded.

b. The first piece of containerized baggage should be on the arrival
carousel not later than 15 minutes after block time, with the last piece
arriving at:

NUMBER OF PASSENGERS ON AIRCRAFT TIME

1 - 165 20 minutes after block-in
166 - 375 45 minutes after block-in
376 - 499 1 hour after block-in

c. The first piece of floor loaded baggage should be on the arrival
carousel not later than 15 minutes after block time, with the last piece
arriving at:

NUMBER OF PASSENGERS ON AIRCRAFT TIME

1 - 165 30 minutes after block-in
166 - 375 1 hour after block-in
376 - 499 1 hour 30 minutes after block-
in

ATCH 1
06 January 1994

Page 10 of 11
<PAGE>

d. The above standards will apply based solely on the block-in time,
regardless of early or late.

e. Failure to meet these standards will be considered unsatisfactory
performance.

2.5.8. INFLIGHT MEAL SCHEDULE AND COMPLIANCE. Contractor shall provide
-------------------------------------
inflight meals equal to those provided to economy class passengers on scheduled
commercial passenger flights. Menus will be approved by the ACO and shall be
served in accordance with the schedule set forth in Attachment 3.

3.3. POOLED BAGGAGE. All passengers traveling as a group (listed on the same
--------------
MTA or under the same orders) to a common destination on the same flight shall
be permitted a total free baggage allowance equal to the combination of their
individual free baggage allowances. Baggage in excess of the combined free
baggage allowance of the total number of passengers in that group, who moved on
the same flight, will be subject to charges for excess baggage. Passengers with
baggage in excess of the amount authorized on their MTA or orders will pay the
Contractor for the excess at rates specified.

3.4. EXCESS VALUE CHARGES.
--------------------

3.4.1 A value for baggage in excess of $20.00 per kilogram (2.2 lbs) may be
declared by the passenger. When such declaration is made, a charge for value in
excess of $20.00 per kilogram (2.2 lbs) will be assessed by each Contractor
participating in the carriage, at the rate of $.50 for each $100.00 of excess
value of fraction thereof up to a maximum total valuation of $5000.00.

3.4.2. Excess value charges are payable by the passenger and will not be paid
by the U.S. Government.

3.4.3. Valuation Limit of Baggage. No baggage of any one passenger having a
declared value in excess of $5000 will be accepted for carriage unless special
arrangements therefore have been made in advance between the passenger and
Contractor(s) concerned.

3.4.4. Collection of Excess Value Charges. Excess value charges will be
payable at the point of origin for the entire journey to final destination;
provided, that if at a stopover enroute, a passenger declares a higher excess
value than that originally declared, additional excess value charges for the
increased value from the stopover at which the higher excess value was declared
to final destination will be payable.

3.4.5 Payment of Baggage Charges. Contractor will not be obligated to carry
baggage until the passenger has paid all applicable charges or has complied with
credit arrangements established by Contractor. However, when a traveler's MTA
or orders authorized excess baggage, the carrier must issue an excess baggage
charge on the auditors coupon of the commercial ticket or issue an excess
baggage ticket. In either case AMC will reimburse the carrier for authorized
excess baggage upon receipt of the carrier's claim. The submitted claim must be
accompanied by a copy of the MTA showing excess baggage authorization and
documentation showing total passengers and total bags moved. The carrier
representative shall annotate on the MTA, auditor's coupon or baggage ticket
the number of bags the traveler actually checked in. The traveler in turn will
validate the number of bags checked in by signing the document.

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<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

ATTACHMENT 2

SPECIFICATIONS, TERMS, AND CONDITIONS
FOR CATEGORY-B PASSENGER AIRCRAFT
USED IN INTERNATIONAL OPERATIONS

1. FLIGHT COMFORT NEEDS The aircraft and passenger service will be
--------------------
commensurate with those used in regularly scheduled commercial international
operations. The minimum requirements are:

1.1. SEAT SPECIFICATIONS Passenger seats will be of such design as to afford
-------------------
optimum comfort during flight and shall be commensurate with the seat
specifications used in commercial international standards.

1.2. Reserved.

1.3. AISLES The aisles must allow unobstructed passage to toilets, doorways,
------
and other passenger-accessible positions. On wide-bodied aircraft the aisles
shall be at least 16 inches wide, (15 inches wide on B707/DC-8 aircraft)
measured parallel to the floor at all levels up to and including the arm rests.
The aisle may be displace laterally not more than two inches at either end of
the passenger compartment. (This provision is included to permit adjustments
necessitated by the taper of the aircraft fuselage, and will not be interpreted
to allow staggered aisles.) Seating configuration shall not exceed ten abreast
for wide-bodied aircraft.

1.4. LAVATORIES A minimum of two complete, serviceable lavatories shall be
----------
provided. An additional complete lavatory shall be provided for each 40
passengers or fraction thereof in excess of 80 passengers. The commode shall be
placed to allow adequate leg room and the fixtures shall be so arranged to
accommodate an adult and child with the door closed. The facility shall be
equipped with a door with an inside lock which can be opened with a key from the
outside, a mirror, a wash bowl, and an electric razor outlet. The lavatory
shall be supplied with adequate toilet tissue, sanitary napkins, towels, soap,
and sufficient supply of potable wash water. The wash water tanks must be
serviced with potable water; and the wash water dispensed must be potable.

Lavatories shall not be used to store company material or refuse from meal
service except that refuse from meal service may be stored in not more than two
lavatories after the passengers have been instructed to fasten seat belts in
preparation for descent prior to landing.

1.5. CABIN ENVIRONMENTAL CONTROL Cabin air temperature and ventilation shall
---------------------------
be maintained to insure a passenger comfort index, as indicated below, at all
times. Aircraft shall not be positioned for a flight unless the cabin
environmental control systems are fully operational and are capable of
maintaining a uniform inflight cabin temperature between 68 and 74 degrees
Fahrenheit without excessive drafts. The ventilating system shall supply
outside air at the rate of at least 10 cubic feet per minute per passenger. The
temperatures indicated herein will apply whenever passengers are aboard,
inflight or on the ground. When the aircraft transits a commercial airport, it
shall be the Contractor's responsibility for positioning, operation and
depositioning of Contractor furnished ground air conditioning or heating units.

1.6. FLOOR COVERING Floor covering in the passenger compartment shall be of
--------------
the fibrous or vinyl rug type commensurate with the floor covering used in
regularly scheduled commercial service. Floor covering in the aircraft
entrance, aisle and buffet area may be of the type normally found in commercial
service, i.e., fibrous, vinyl, rubber mat. Convertible aircraft must have the
same minimum floor covering when passengers are being carried. Seat tracks must
have inserts or be covered with appropriate material.

1.7. BLANKETS AND PILLOWS One blanket, commensurate with commercial scheduled
--------------------
or charter service shall be provided for at least 50 percent of the seats and at
least one pillow for 90 percent of the seats in the aircraft. These must be
maintained in a sanitary condition. The pillows furnished shall have clean and
sanitary (cloth or paper) covers.

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06 January 1994
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<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

1.8. OVERHEAD STORAGE Aircraft shall be equipped with headliners and overhead
----------------
storage facilities, equivalent to those furnished on passenger-configured
aircraft used in regular commercial scheduled service.

1.9. APPROPRIATE LIGHTING Cabin lighting shall be provided to properly serve
--------------------
the needs of the passengers.

1.10. FLIGHT ATTENDANT KIT In addition to requirements contained in FAR
--------------------
121.309, Appendix 4, the aircraft shall be equipped with a passenger service kit
(Flight Attendant Kit) which shall include, as a minimum, the following medical
items: (Wide bodied aircraft must contain twice the quantities listed.)

<TABLE>
<CAPTION>
ITEM AMOUNT
<S> <C>
Acetaminophen (No Aspirin) 50 tablets
Ammonia Inhalant 1 package (10 ampoules)
Motion sickness tablets; prohibit
bonamine and marezine as a safeguard 50 tablets
Ointment, Topical Bacitracin 2 ounce (two 1 ounce or
four 1/2 ounce tubes)
Alka Seltzer or Bromo Seltzer 50 tablets
Cotton, absorbent, compressed 1 each 1 ounce package
Band-aids, 3/4" x 3" 1 package (18 each)
Betadine swabs 1 package (10 ampoules)
</TABLE>

1.11. AIRCRAFT APPEARANCE Prior to flight loading, cabin and lavatory space
-------------------
shall be appropriately serviced, removing any dirt and debris from prior flights
to assure an initially clean condition upon departure. Aircraft exterior shall
be cleaned, if necessary, to assure a presentable appearance.

1.12. HEADREST COVERS Clean and sanitary disposable headrest covers (cloth or
---------------
paper) shall be supplied for each seat designed to accommodate one (i.e.
velcro/other fastening device) prior to loading at the station of origin. If
the seat has permanent headrest covers, they will compliment the seat fabric in
decor and be replaced/cleaned whenever they become unsanitary. If the seat back
is not equipped for a headrest cover, the fabric/seat covering material will be
sanitary and free from stains.

1.13. BASSINETS Bassinets shall be provided for infants under one year of age,
---------
in addition to a seat. Bassinets shall be capable of being installed securely
in the seat without restricting the recline of adjacent passenger seats. A
supply of six (6) disposable diapers shall also be available.

1.14. AIR SICKNESS CONTAINERS Each seat shall be provided with clean
-----------------------
airsickness containers which are to be replaced as used.

1.15. POTABLE WATER All water and ice shall be potable and handled under
-------------
sanitary conditions.

1.16. INFLIGHT SERVICE Inflight service shall include collection of recurrent
----------------
debris and maintenance of cabin and lavatory facilities in clean condition.
Contractors shall insure the appropriate instruction of flight personnel as to
disposition of waste so as to prevent misuse of lavatory facilities. Trash and
garbage receptacles shall be kept sanitary and clean at all times. On those
aircraft not designed with chute disposals, trash and garbage receptacle shall
be lined with removable plastic bags.

1.17. CREW COMPARTMENT Fixed bulkheads shall be provided, separating the crew
----------------
compartment from the passenger compartment.

1.18. NOISE The acoustical noise levels in the aircraft shall not exceed the
-----
requirements of Specification MIL-A-8806 (ASG) including the normal cruise power
criteria given in Table IV.

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06 January 1994

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SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

1.19. READING MATERIAL Current reading material, to include a reasonable
----------------
supply of current popular magazines equal in number to 30 percent of the
passenger ACL, shall be provided on aircraft carrying passengers. The magazines
shall consist of a selection of twelve popular titles (six issued monthly and
six issued weekly) and these shall be placed in magazine racks located in the
fore and aft passenger compartment of the aircraft. A current magazine is one
which is dated during last sixty days. Carriers will not be penalized for
carrying additional material older than 60 days.

1.20. LAVATORIES Access to lavatories shall not be blocked to the passengers
----------
during the flight unless the latrine becomes inoperative.

1.21. SMOKING POLICY Smoking is NOT allowed on any AMC commercial contract
--------------
aircraft.

1.22. INFLIGHT AMENITIES Contractor shall provide inflight amenities kits on
------------------
each flight consisting of adult playing cards and writing portfolios equal in
number to five percent of the ACL and fun kits for children consisting of games,
puzzles, coloring/drawing materials and pilot/cabin attendants wings etc. equal
in number to ten percent of the ACL.

1.23. INFLIGHT MOVIES AND STEREO Inflight movies and stereo shall be provided
--------------------------
on all wide body aircraft used regularly in AMC operations at no charge to the
passenger. Headset costs must be submitted to HQ AMC/LGCA with rate cost
packages. This same service shall also be provided on narrow body aircraft that
are so equipped.

1.24. TOWELLETTE SERVICE On flights over 6 hours, the Contractor shall provide
------------------
towellette service prior to each hot meal and one hour before landing. Meal
service criteria reflected in Attachment 3, will be used to establish times for
providing towellette service. Towellette service will not be required on flight
segments serving only snacks or beverages. As a minimum, towellette should be
approximately 7 3/4 X 9 3/8 inches, disposable, white, scented, of rayon fabric
and moistened with hot/cold water dependent upon season. Cloth towel suitable
but not required.

2. FLIGHT ATTENDANTS The number of flight attendants shall be as established
-----------------
by the FAA for passenger aircraft. Such attendants shall be stationed in the
passenger compartment in seats approved by FAA during takeoffs and landings. It
is required that such personnel be adequately trained in first aid, use of
emergency equipment and food sanitation. They shall be qualified in accordance
with US Public Health requirements pertaining to food handlers. All attendants
shall be thoroughly familiar with the use of the public address system,
required briefings and flight advisory information that is furnished passengers.
The attendants shall speak the English language in a fluent and coherent manner.

3. SANITATION Requirements of the International Air Transport Association
----------
'Food Hygiene in Air Transport: Recommended Code of Practice' and the World
Health Organization 'Guide to Hygiene and Sanitation in Aviation' shall apply.

4. FOOD SERVICE
------------

4.1. The Contractor shall furnish hot inflight meals, cold plates and snacks in
accordance with the schedule set forth in Attachment 3. Meal service provided
shall be no less than the standards of service provided to the economy class
passenger by the contractor on scheduled commercial or charter flights. Menu
content shall be subject to approval by the ACO. Menus shall be rotated using
the schedule used on commercial scheduled or charter flights but at least every
quarter. When requested by the AMC representative, the contractor shall make
available representative samples of meals. (Eating utensils for breakfast,
lunch and dinner must be stainless; plastic is not acceptable). Utensils for
snack service may be plastic, approximately five inches in length. Slip-on
trays shall be provided for seats without seat backtrays. The use of pillows in
lieu of trays will not be permitted.

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06 JANUARY 1994

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SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

4.2. Contractor may purchase inflight meals from military installations when a
suitable commercial source is not available. Purchase of such meals shall be
for cash or contractor check only. No credit is authorized. The price for each
meal will be the actual food costs of the basic meal and supplements as computed
monthly at base level plus applicable surcharge.

4.3. Equipment shall be available for refrigerating and warming baby foods and
formula; also, an emergency supply of baby foods, not less than two units of
meat, two vegetables, plus two desserts or fruits shall be available.

5. BRIEFING PROCEDURES Contractor shall ensure passengers are properly
-------------------
instructed by the appropriate crew member prior to take-off and briefed in
flight relative to the following: (Do not include statement that these are AMC
requirements.)

5.1. How life preservers are to be donned, stressing that they will be donned
only on the order of a member of the flight crew. (Applicable only to overwater
flight.)

5.2. The location and use of emergency oxygen equipment stressing that parents
don their own masks first and then assist their children and further that after
each passenger has donned their mask to check whether the next person has donned
theirs properly.

5.3. The physical location of emergency exits.

5.4. The physical location of life rafts. (Applicable only to overwater
flights.)

5.5. In addition, in briefing and passenger handling procedures, all aircraft
commanders shall comply with instructions received from the Contracting Officer.

5.6. In flight, a member of the crew shall brief the passengers on points of
geographical interest enroute; the altitude at which the aircraft is flying; a
statement addressing the availability of reading material, a general statement
regarding the weather (i.e., rainy, cold, good, etc.), the ground temperature
and the estimated time of arrival at the terminating station. The remark for
military destination stations will include the military designation plus the
geographical location (e.g., McGuire AFB, Wrightstown, New Jersey).

5.7. In the pre-landing announcement upon arrival at the US Port of Entry,
include a statement that USDA prohibits importation of fresh fruits and meat
sandwiches and therefore such items cannot be carried off the aircraft and that
the US Customs Service advises that in all cases where undeclared agricultural
products are found in baggage they will be seized. Further, when the aggregate
domestic value of such item(s) amounts to $3.00 or more, a penalty equal to the
domestic value shall be assessed against the passenger.

5.8. The flight crew, prior to beginning of fuel servicing, shall brief
passengers regarding the fact that fuel servicing will be conducted, and the
restrictions on smoking, operation of electronic equipment, and personnel
movement. Passengers shall not enter or exit the aircraft, and their movement
shall be limited to that necessary for personal comfort, for example, use of the
latrines. Also, the flight crew shall insure required exits are open.

6. CREW UNIFORM AND PERSONAL APPEARANCE REQUIREMENTS All crew members shall
-------------------------------------------------
wear clean, neat appearing uniforms of a standard design and color as specified
by the Contractor. The flight attendants' uniforms shall be of such a fit as to
assure the flight attendants' unrestricted movements in rendering assistance to
passengers during emergencies in the air, on the ground or in the water.

7. INTERIOR DECOR OF THE AIRCRAFT
------------------------------

7.1. The interior decor shall be consistent with and of a style and color
combination to be commensurate with the interior of passenger aircraft used in
regularly scheduled US commercial international operations.

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06 January 1994

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SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

7.2. Windows in the passenger compartment shall be equipped with a curtain or
other acceptable device which will allow the passenger to regulate the light
coming from outside of the aircraft.

7.3. Life rafts shall be enclosed and the enclosure consistent with the color
decor of the interior of the aircraft.

7.4. The rail system with all components thereto and cargo tiedown equipment
shall be removed from the cabin on convertible aircraft when passengers are
being carried.

7.5. Any protrusions, handles, brackets or other mechanisms that may be a
safety hazard shall be removed or sufficiently padded and covered to provide
adequate safeguard from passenger injury. The covering shall be consistent with
the color decor of the interior of the aircraft.

8. SAFETY BARRIERS All passenger and/or cargo doors used for the on-
---------------
loading/off-loading of passengers and/or cargo aboard contract aircraft shall be
equipped with a safety barrier (strap, net, or bar) at chest or waist level.
The safety barrier shall be in place when the cabin/cargo door is open except
when actually on-loading/off-loading pax/cargo or when loading stairs are
positioned.

9. LD-3 BAGGAGE CONTAINERS Contractor shall furnish one complete set of
-----------------------
baggage containers for each wide body aircraft used in AMC Channel passenger
operations. Serial numbers shall be furnished to AMC/XOKM. Contractor shall
allow these containers to remain in the AMC operation. Carrier shall arrange to
lease to AMC necessary additional LD-3 containers to sustain containerized
baggage operation on wide body aircraft. AMC/XONP will maintain tracking system
to control the flow and location of containers as follows:

9.1. AT COMMERCIAL/MILITARY STATIONS Contractor shall send a departure message
-------------------------------
or letter to DET 1, 375 Trans., PO Box 10305, St. Louis, Missouri 63145-0305
listing by nine digit number all containers on board. Also, after the last
departure of the Zulu day, send a nine digit serial number container inventory
message or letter to DET 1, 375 Trans., PO Box 10305, St. Louis, Missouri 63145-
0305.

10. BAGGAGE COMPARTMENT BARRIER NET Barrier type nets shall be installed and
-------------------------------
used in the baggage compartment of all passenger and convertible aircraft.

11. DEODORIZATION Contractor shall deodorize the aircraft passenger
-------------
compartment before each mission at the originating and turnaround stations.

12. CARRIAGE OF WEAPONS The carriage of weapons in the passenger compartment
-------------------
aboard commercial aircraft is authorized in accordance with FAR 108-11. The
following provisions to this authorization will apply only to
SAAM/Exercise/contingency operations that specify the carriage of weapons aboard
commercial aircraft in the OPLAN or mission directive:

12.1. The total cabin load of the aircraft is under the exclusive use by US
military forces.

12.2. All firearms shall be unloaded, clip magazines removed and safety on.

12.3. All individuals with hand carried weapons shall stow the weapons flat on
the floor under the seat in front of them. Other gear will be stowed either
under the seats or in overhead compartments. Crew served weapons and any excess
gear shall be required to be put into the lower deck baggage compartments.

12.4. Hazardous materials shall not be carried in the passenger compartment.

13. PASSENGER MANIFEST The passenger manifest will list names of each
------------------
passenger on board, except in case of families only, the senior family member
name will be listed, with the total number of family members

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06 January 1994

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<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

listed in the adjacent column. For compliance with FAR Section 121.693(e), the
originating AMC terminal will maintain the full names of all passengers for a
minimum of three months.

14. AIRCRAFT IDENTIFICATION Aircraft shall have the name of the operating
-----------------------
contractor on both sides of the fuselage commensurate with industry practice.
Any name other than the operating contractor must be approved by the contracting
officer, prior to departure.

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06 January 1994

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<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

ATTACHMENT 3

INFLIGHT MEAL SCHEDULE/SERVICE

1. Inflight meal schedule/service for Category B missions is as follows:

1.1. LOCAL TIME AT ORIGINATING STATION OF MISSION:
---------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
When a mission is scheduled
to depart originating station
between the hours of: 0201-0800 0801-1400 1401-2200 2201-0200

Breakfast Noon Meal Evening Meal Snack
Meals shall be served in
the following sequence
between the hours of: 0230-0930 1000-1500 1600-2300 2330-0300
</TABLE>

1.2. Required meal service shall be based on the above serving times and
scheduled duration (in hours and minutes) of non-stop mission segments specified
below:

1.2.1. LONG RANGE MISSIONS: Those missions where the entire mission is over 6
-------------------
hours in duration, according to the AMC published schedule.

1.2.1.1. Segment less than 2 + 00 - no meal or snack required unless specified
by the ACO. EXCEPTION: A heavy snack shall be served between St Louis and
Philadelphia (both ways) and between Osan and Yokota (one way only). Also, when
a mission consists of two or more consecutive segments, each less than two hours
in duration, a heavy snack shall be served on one segment.

1.2.1.2. Segment 2 + 00 to 4 + 00 - One snack.

1.2.1.3. Segment 4 + 01 to 6 + 00 - One meal.

1.2.1.4. Segment 6 + 01 to 9 + 00 - One meal plus one snack.

1.2.1.5. Segment over 9 + 01 - Two meals (No EXCEPTION).

1.2.2. SHORT RANGE MISSIONS: Those missions where the entire mission is 6
--------------------
hours or less in duration, according to the AMC published schedule.

1.2.2.1. Segment less than 1 + 30 - No meal or snack required.

1.2.2.2. Segment 1 + 31 to 3 + 00 - One snack.

1.2.2.3. Segment 3 + 01 to 6 + 00 - One meal. EXCEPTION: A snack may be
served if a meal was served on the immediate preceding segment or if the mission
is scheduled to depart between 2200-0200 local.

1.3. No more than 6 hours shall elapse between servings.

1.4. In the event of mission delays occurring at originating, enroute, or
turnaround stations not in excess of 4 hours, the originally scheduled meal
service shall be utilized upon departure, except the passengers may be ground
fed with the appropriate meal.

ATCH 3
06 January 1994

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<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

1.5. Eating utensils for breakfast, lunch, and dinner meals shall be stainless.

EXCEPTION: Eating utensils for snack service may be plastic, approximately 5
inches. On SAAM or exercise missions, heavy duty plastic utensils at least 6
inches in overall length may be used.

1.6. Passengers shall be offered a choice of two entrees for the
breakfast/lunch and dinner meals. Where the noon and evening meal are served on
the same flight, a different entree shall be offered for each meal.

1.7. Beverages; that is, coffee, tea, milk, and carbonated drinks shall be
available to passengers throughout each leg of each mission. Contractor shall
have a minimum of 6 ounces of carbonated soft drinks per passenger on board
when departing the normal catering station. Non carbonated beverages also may
be served, but shall be in addition to the minimum required quantity of
carbonated beverages. Full alcoholic beverage service, beer, wine, and mixed
drinks will be made available to passengers on all contract flights subject to
carriers' normal rules as to age, sobriety and schedule unless otherwise
directed by the Contracting Officer. Charges may be made to passengers
commensurate with commercial operation.

1.8. Special holiday menus shall be served on Thanksgiving and Christmas.

2. When an unusual flight schedule reasonably precludes meeting above
requirements, appropriate deviations may be approved by the contract
administrator.

3. USDA/USCS Preclearance Program (SAAMs/exercise missions only). Red meats
and fresh fruits can not be served in snacks on precleared flights to CONUS.
Foods prohibited by USDA can not be taken on board to be consumed enroute.
Garbage will be controlled as foreign material. Routings must allow disposal at
approved airports or bases.

ATCH 3
06 January 1994

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<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

ATTACHMENT 4

PROCEDURES FOR INTERLINING BAGGAGE FOR PASSENGERS

1. Procedures for Interlining Baggage for Passengers to/from Domestic Scheduled
Flights of Participating Carriers from/to Air Mobility Command (AMC) Category B
Charters.

2. The AMC Transportation Authorization (MTA) will also allow for through
checking of baggage for passengers with confirmed reservations connecting
to/from an Air Traffic Conference of America (ATC) Member Carrier for military
personnel utilizing AMC Category B charter service into/out of the Charleston,
Los Angeles, St Louis, and Philadelphia International Airports and at the same
terminal complex.

3. BAGGAGE ACCEPTANCE.
-------------------

3.1. FREE ALLOWANCE. The AMC standard piece allowance will apply for baggage
---------------
accepted for travel when the passenger's travel is in either direction, i.e., US
points to overseas international points or from overseas international points to
US points. Standard AMC free piece allowance is two pieces of checked baggage.
(Reference Atch 1, para1.6.3.1.)

3.2. EXCESS BAGGAGE. Passengers with baggage in excess of the free allowance
---------------
as stated in paragraph 3.1. will not be authorized baggage interlining.

3.3. FRAGILE ITEMS/DANGEROUS GOODS. Fragile items and dangerous goods
------------------------------
acceptance will be in accordance with individual carriers established rules and
appropriate federal regulations.

3.4. EXCESS VALUATION. Excess valuation declarations will be accepted on-line,
-----------------
i.e., high value baggage is not acceptable on an interline basis. Excess
valuation will be in accordance with individual carrier established rules.

4. BAGGAGE CHECKING. Military personnel traveling to/from overseas
-----------------
international points through Charleston, Los Angeles, St Louis, and Philadelphia
commercial gateways will have baggage interlined as follows:

4.1. To overseas international points via the commercial gateways from points
within the US.

4.1.1. The passenger must have a confirmed reservation from the originating
city to the commercial gateway and will present a ticket or Government
Transportation Request (GTR) to the originating airline for transportation to
the commercial gateway.

4.1.2. An MTA will be presented also, indicating the AMC two-letter airline
code (MC) along with a two digit flight number (30) and final destination. The
flight number will be indicated MC plus a two digit number, i.e., MC30, MC50,
etc. Category B charter passenger missions operate through the commercial
gateways of Los Angeles, St Louis, Philadelphia, and Charleston.

4.1.3. Standard international minimum connecting times will be applicable for
connecting baggage at commercial gateways. (The time indicated on the MTA will
be a minimum of 1 1/2 hours prior to departure time.)

4.1.4. The originating Carrier shall deliver the interline baggage to the
designated AMC transfer point at the commercial gateways. The AMC transfer
point will be in accord with the normal interline baggage transfer areas
(immediate vicinity) in the same terminal complex. AMCs contract carrier ground
handler shall transfer the baggage to the designated contract flight, in
accordance with normal interline baggage transfer procedures.

ATCH 4
06 January 1994

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<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

4.2. From overseas international points via the commercial gateways to points
within the US.

4.2.1. The passenger must have confirmed reservations from the commercial
gateway to final destination within the US. The confirmed reservations must be
indicated by the passenger holding a confirmed ticket.

4.2.2. US CUSTOMS CLEARANCE. All baggage will have cleared US Customs before
---------------------
interlining with participating Carriers.

4.2.3. AMC will adopt the standard interline and expedite baggage tags as
outlined in ATC Resolutions. AMC personnel will be trained in the preparation
of the standard interline baggage tags. They will check baggage through to the
passenger's final domestic destination. Standard interline minimum connection
times from domestic to international and international to domestic will apply.

4.2.4. AMC personnel will not check baggage for interline transferring if the
originating contract flight is expected to be delayed departing in excess of 1
hour.

4.2.5. AMCs contract carrier ground handler at the commercial gateway shall
transfer the baggage in accordance with normal interline baggage transfer
procedures, to the connecting Carrier.

5. BAGGAGE - LOST CLAIMS.
----------------------

5.1. TRACING.
--------

5.1.1. US POINTS.
----------

5.1.1.1. Delivering Carrier shall initiate a lost baggage search using standard
interline baggage tracing procedures.

5.1.1.2. Delivering Carrier shall advise AMC who will initiate a search using
standard AMC baggage tracing procedures.

5.1.2. OVERSEAS INTERNATIONAL POINTS.
------------------------------

5.1.2.1. AMC will initiate a lost baggage search using standard AMC tracing
procedures.

5.1.2.2. AMC will alert its contract carrier ground handler at the commercial
gateway who will search locally.

5.1.2.3. AMCs contract carrier ground handler shall contact the delivering
carrier at the commercial gateway, who will initiate a lost baggage search using
standard interline tracing procedures.

5.2. FORWARDING.
-----------

5.2.1. FROM US POINTS. Baggage will be forwarded via expedite tag to the
---------------
overseas international point.

5.2.2. FROM POINTS OUTSIDE US. AMC will forward bag(s) via standard expedite
-----------------------
tag to the AMC contract carrier ground handler at the commercial gateway. AMC
(AMCs contract carrier ground handler) will forward the bag(s) to the
appropriate airline/station.

5.3. DELIVERY. All delivery charges incurred as a result of lost/delayed
---------
baggage will be paid by the Carrier to whom the claim is filed. Charges will be
billed to AMC and subsequently paid by the AMC contract carrier. The AMC
contractor will be able to recover such net charges and claims through the AMC
uniform negotiated rate. "Net charges and claims" are defined as those charges
and claims which exceed the amount, if any,

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06 January 1994

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<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

recovered by the contractor from its insurer or self-insurance fund or pool.
Provided, however, that the contractor's recovery from the Government will be
limited to those net charges and claims which exceed, as calculated over a
fiscal year, those actual costs for net charges and claims that the contractor
experienced during performance of AMC Category B flights during a representative
period, prior to implementation of this interlining agreement. (The Carrier
shall include the following passenger data with the bill that is sent to AMC:
AMC flight passenger traveled on, passenger name, date of travel, origination
point, amount claimed, amount paid.)

5.4. DAMAGE CLAIMS. Any and all damage claims will be filed with the final
--------------
delivering domestic carrier and baggage repaired and/or replaced in accordance
with established procedures. Costs for repairs/replacement will be billed to
AMC and subsequently paid by the AMC contract carrier. The AMC contractor will
be able to recover such net charges and claims through the AMC uniform
negotiated rate. "Net charges and claims" are defined as those charges and
claims which exceed the amount, if any, recovered by the contractor from its
insurer or self-insurance fund or pool. Provided, however, that the
contractor's recovery from the Government will be limited to those net charges
and claims which exceed, as calculated over a fiscal year, those actual costs
for net charges and claims that the contractor experienced during performance of
AMC Category B flights during a representative period, prior to implementation
of this interlining agreement. (The carrier shall include the following
passenger data with the bill that is sent to AMC: AMC flight passenger traveled
on, passenger name, date of travel, origination point, amount claimed, amount
paid.)

5.5. PILFERAGE CLAIMS. Any and all pilferage claims will be filed with the
-----------------
final delivering domestic carrier and settled following established procedures.
Costs incurred settling pilferage claims will be billed to AMC and subsequently
paid by the AMC contract carrier. The AMC contractor will be able to recover
such net charges and claim through the AMC uniform negotiated rate. "Net
charges and claims" are defined as those charges and claims which exceed the
amount, if any, recovered by the contractor from its insurer or self-insurance
fund or pool. Provided, however, that the contractor's recovery from the
Government will be limited to those net charges and claims which exceed, as
calculated over a fiscal year, those actual costs for net charges and claims
that the contractor experienced during performance of AMC Category B flights
during a representative period, prior to implementation of this interlining
agreement. (The carrier shall include the following passenger data with the
bill that is sent to AMC: AMC flight passenger traveled on, passenger name,
date of travel, origination point, amount claimed, amount paid.)

5.6. SETTLEMENT.
-----------

5.6.1. All carriers shall follow normal established procedures for settlement
of baggage claims up to carrier's international limitation of liability. Once
settled, the dollar amount of settlement will be billed to AMC and subsequently
paid by the AMC contract carrier. The AMC contractor will be able to recover
such net charges and claims through the AMC uniform negotiated rate. "Net
charges and claims" are defined as those charges and claims which exceed the
amount, if any, recovered by the contractor from its insurer or self-insurance
fund or pool. Provided, however, that the contractor's recovery from the
Government shall be limited to those net charges and claims which exceed, as
calculated over a fiscal year, those actual costs for net charges and claims
that the contractor experienced during performance of AMC Category B flights
during a representative period, prior to implementation of this interlining
agreement. (The carrier shall include the following passenger data with the
bill that is sent to AMC: AMC flight passenger traveled on, passenger name,
date of travel, origination point, amount claimed, amount paid.)

5.6.2. AMC will provide the carrier a copy of AMC Form 134, Baggage
Irregularity Report, and AMC Form 136, Baggage Irregularity Report File. The
carrier shall provide required documents to the passenger to complete claim.
The Baggage Service Center (BSC) at Lambert International Airport will be
provided a notification giving passenger name, date of travel, origination
point, amount claimed and amount paid.

5.6.3. The carrier shall provides the BSC a copy of their specific settlement
requirements, e.g., notarized statement of loss, itemization of claim (4 pr
slacks at $22.50) etc.

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06 January 1994

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<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

5.7. BAGGAGE LIABILITY. Individual carrier liability will be limited to the
------------------
amounts specified in appropriate tariffs for international liability and in
accordance with the Warsaw Convention. Any claims over and above these dollar
amounts will be filed by the passenger with appropriate military branch - Army -
Air Force, etc.

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06 January 1994

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<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027
ATTACHMENT 5

PERFORMANCE WORK STATEMENT CARGO SERVICE
CATEGORY B CARGO

The following provisions apply to movement of Category B Cargo. Category B
transportation means the transportation in planeload lots of cargo.

1. LOADING
-------

1.1. The Contractor shall be responsible for the safe loading and off-loading
of the aircraft in accordance with applicable Federal Aviation Regulations
(FARs) and individual aircraft specifications. A member of the Contractor's
crew shall be responsible for weight and balance of the cargo loading, shall
make a visual check of cargo load, and if required, indicate approval of loading
by signing the station compartment breakdown. The Government shall be
responsible for the accuracy of the weights entered on the form by the loading
supervisor. Four hours prior to scheduled departure time from originating
station of cargo or mixed missions being loaded by Government personnel, the
Contractor's representative or a crew member shall provide the AMC traffic
representative with an appropriate form showing the planned load breakdown. For
wide-body aircraft the planned load breakdown shall be furnished six hours prior
to scheduled departure time from originating station. Contractor should request
estimated amount of fuel on-load one and one-half hours prior to scheduled
departure time. The Government will provide the actual load information to the
Contractor at least one hour prior to scheduled departure time for computation
for actual fuel on-load. The Government loading supervisor will annotate the
form to show the actual load aboard the aircraft by compartment and total
weight. A Contractor's crew shall be responsible for weight and balance of the
aircraft.

1.2 Prior to positioning the aircraft for flight, all unauthorized restrictions
to cube shall be removed from the cargo compartment and the compartment shall be
appropriately cleaned and serviced by removing all dirt and debris to ensure an
initially clean condition before the cargo is loaded. All cargo doors utilized
for loading/unloading cargo aboard contract aircraft will be equipped with a
safety barrier (net or bar) at chest level. It will be installed when the cabin
door remains open before or after loading has been completed. B727 aircraft
must be equipped with threshold assembly (cargo door lock guards) when on/off-
loading cargo.

1.3. MECHANIZED LOADING SYSTEM.
--------------------------

1.3.1. Aircraft shall be equipped with 463-L equipment or a rail system
compatible with and configured for the 463-L pallets. The load will include the
weight of the cargo and the pallet combined. Pallet restraint criteria must
meet FAA requirements and shall, at a minimum, be able to restrain against the
inertia forces listed in FAR 25.561.

1.3.2. Palletized cargo shall be secured to the Government pallets with
Government furnished pallet nets. If additional tie down equipment is necessary
to secure the load to the pallet, the Government will furnish it; if additional
tie down equipment is necessary to secure the loaded pallet to the aircraft, the
Contractor shall furnish it. In addition, sufficient quantities of tie down
equipment shall be provided by the Contractor for separate tie down of heavy
items such as engines or other types of non palletized cargo which must be
secured separately.

1.4. PROVISIONS FOR HAND LOADING
---------------------------

1.4.1 When aircraft are required to be positioned for hand loading the aircraft
shall be loaded in accordance with FAA requirements. Aircraft may be solid
loaded provided they comply with FAR 25.857(e). Under solid loading a fire aisle
is not required. The load will be secured with adequate barrier and cage nets.
In addition, the Contractor shall provide sufficient quantities of tie down
equipment for separate tie down of heavy items such as engines or other types of
cargo which must be secured separately.

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06 January 1994
Page 1 of of 5
<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027
1.4.2. The aircraft shall be equipped with floors of sufficient strength and
smoothness to permit the use of material handling equipment without damage to
the aircraft. The floor shall be designed to withstand a minimum uniform
distributed cargo load of 200 pounds per square foot. The aircraft shall be
conspicuously placard to indicate the floor loading strength throughout the
cabin. Shoring as required, will be provided by the Government.

1.5. At civil airports, Contractor shall provide for loading and unloading of
cargo (and mail, if applicable), in accordance with all applicable FARs and the
following:

1.5.1. If at the beginning of a month, scheduled frequency into a station is
three or more transits during that month:

1.5.1.1. The Contractor shall furnish personnel to provide necessary
information and coordination with Government representatives at all originating,
enroute, turnaround, and terminating points.

1.5.1.2. These Contractor personnel must be available at least three hours in
advance of all scheduled trip departures or actual arrivals, whichever is
earlier.

1.5.1.3. A station may waive the three hour reporting requirement and establish
acceptable reporting times through coordination with the cognizant contract
administrator.

1.5.2. At the originating station of a cargo or mixed mission, Contractor
personnel must be available four hours prior to scheduled departure time (six
hours for wide-body aircraft).

1.5.3. For months in which there are less than three transits scheduled at any
station (originating, enroute, turnaround, and terminating) as originally
published in the monthly AMC Cargo Schedule, the Contractor's crew members can
serve as the Contractor's representatives to provide necessary information and
coordination with Government personnel.

1.5.4. Three hours prior to departure time, Contractor personnel shall provide
the Government QAE with aircraft capability in pounds, based on the critical leg
of the mission.

1.5.5. The Government representative will furnish the Contractor personnel with
flight manifests listing the cargo to be moved.

1.6. CARGO DELAYED ENROUTE
---------------------

1.6.1. Cargo delayed enroute in excess of 24 hours will be expedited by routing
on other available contract or military flights. Delays will be handled in
accordance with procedures set forth in AMC FARS 5352.247-1002, Section G,
paragraph 11. If it is necessary to off-load cargo at any civilian airport
other than at the direction of the Contracting Officer, the Contractor is
responsible for such off-loading safeguarding, and moving the cargo to such
location as directed by the Contracting Officer.

1.6.2. The Contractor must take care of any cargo off-loaded at a civil airport
at the direction of the Contracting Officer. Any costs incurred by the
Contractor in safeguarding such cargo off-loaded will be reimbursable to the
Contractor.

1.7. The Government shall have the right to on-load and/or off-load traffic at
all points listed in the item descriptions set forth in SECTION B, at any
operational stops made enroute for the Contractor's convenience, or at any
diversion stops to the extent that it does not interfere with the Contractor's
scheduled ground operation. Scheduled ground operation is the work and time
required by the Contractor to ready his aircraft for departure regardless of the
time listed in the Operations Bulletin and/or Schedule.

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06 January 1994

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<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

1.8. In all cases where landings are made at stations were AMC Command Control
facilities or units are not established, Contractor (crew member, local
representatives, or responsible dispatch office) shall report advisory arrival
and departure information within ten minutes of occurrence by telephone as
follows:

1.8.1. CONUS Call HQ AMC TACC/DOCA, (618)256-1747.
-----

1.8.2. OVERSEAS Call HQ AMC TACC/DOCA, (618)256-1747.
--------

1.8.3. Arrival and departure information for paragraphs 1.8.1. and 1.8.2. above
will include the following:

ARRIVAL DEPARTURE

Mission Number Mission Number
FAA Aircraft Registration Number FAA Aircraft Registration Number
(Tail Number) (Tail Number)
Station Station
Time of Arrival Actual Departure Time (ADT)
*Estimated Time of Departure (ETD) Next Station
Next Station Estimated Time of Arrival (ETA)

* If mission is delayed beyond ETD, report cause of delay and estimated time
aircraft will be in commission (ETIC) along with the revised ETD.

2. SPECIAL CARGO
-------------

2.1. Contractor shall provide Signature Service from origin to destination of
the shipment for Registered Mail, AMC Pouches, High Value, and life or death
urgency shipments. The purpose of Signature Service is to provide continuous
responsibility for custody of the material during transit. Contractor station
representative or crew member, who must be a US national, shall be responsible
for signing for such shipments at station of origin and obtaining the signature
of an authorized Government representative at destination. The AF Form 127, DD
Form 1907, DD Form 191, or the manifest accompanying the shipment may be used to
sign for shipments. At enroute military stations the Government will provide a
guard or otherwise secure shipments during the ground time of the aircraft
provided the Contractor's crew request same of the Operations Center/Command
Post at least one hour prior to landing. At enroute commercial stations, the
Contractor is required to provide its own security. When a crew change is made
enroute, the Contractor's station representative shall be responsible for
briefing the incoming crew of the Signature Service shipments on board the
aircraft.

2.2. In the event a flight containing SECRET or CONFIDENTIAL material is
delayed, interrupted or terminated at an unscheduled point, immediate notice to
that effect shall be given to the ACO. Prompt and strict compliance with
instructions received pertaining to the security of the SECRET or CONFIDENTIAL
material will be maintained. If unsuccessful, then contact the Defense
Investigative Service Clearance Office (DISCO) at (614)238-2133 or AUTOVON
850-2133 (during duty hours) or (614)238-2058 (after duty hours).

2.3. The Contractor shall transport hazardous material in accordance with Air
Force Regulation (AFR) 71-4 as provided by the Department of Transportation
(DOT) Exemption 7573, DOT, FAA, and ICAO/IATA regulations for all cargo and
mixed configured flights. All hazardous materials shall be properly prepared and
cleared for air movement prior to loading the aircraft. Whenever hazardous
materials are on board the aircraft, the aircraft captain shall advise tower or
ground control prior to taxing and landing. Identification will include aircraft
identification number, NET explosive weight (NEW), or quantity of other
hazardous materials, hazard

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06 January 1994

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<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027
class/division proper shipping name, UN number, and ETA/ETD. Prior to departure
the Government will furnish aircraft captain a written briefing to include the
following:

2.3.1. Proper shipping name, UN number, and hazard class/division.

2.3.2. Quantity in terms of weight or volume.

2.3.3. Location of the hazardous item in the aircraft.

2.3.4. NEW for UN hazard class/division 1.1., 1.2., or 1.3.

2.3.5. Passenger authorization.

2.3.6. Cabin smoking restrictions.

2.3.7. Special handling instructions.

Aircraft captain shall enter in the remarks section of the flight plan (DD Form
175, FAA Form 398, or ICAO Form 1801) the proper shipping name, classification,
and NET explosive weight. In addition, the aircraft captain shall insure that
smoking and ignition of matches or lighters in the cargo compartment is
prohibited. Packages showing evidence of leaking, moisture, staining, or
otherwise suspected of being damaged will be rejected. When transporting items
whose vapors are toxic, flammable, explosive or which have a low boiling
temperature, the aircraft captain must insure that the aircraft is properly
ventilated.

2.4. Carrier shall ensure each aircraft transporting explosives and other
hazardous materials has on board a current copy of the ICAO, "Emergency Response
Guidance for Aircraft Incidents Involving Dangerous Goods" handbook or
DOT-P-5800 (Series), "Emergency Response Guidebook." The guidebook can be
obtained by contacting the following company:

INTERG
A Division of American Labelmark Co.
5724 N. Pulaski Rd.
Chicago IL 60646
Phone: (312) 478-0900

3. AIRCRAFT TIE DOWN PROVISIONS

3.1. Tie down restraints shall be as specified in the aircraft operating manual
and shall be in compliance with FAA requirements for the type of aircraft.

3.2. All cargo shall be adequately secured to prevent damage of cargo during
the flight.

3.3. High density or nonstackable cargo units shall be tied down individually.

4. AIRCRAFT LIGHTING Lighting system must be an integral part of the aircraft
equipment and provide adequate interior lighting for loading and unloading
operations.

4.1. The lighting system will consist of a minimum of 200 watts total, with
bulbs spaced so as to provide adequate lighting in the main cargo compartment.
All bulbs will be protected by wire bulb guards, except in those aircraft having
recessed lights which provide the equivalent protection of wire bulb guards.

4.2. A minimum of one 25 watt bulb will be provided in each subcompartment.

Page 4 of 5
<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027
4.3. One or more bulbs will be located at or near each cargo loading door to
provide light for loading and unloading operations through the cargo door.

5. EXCESS ACL The Government may utilize excess ACL including excess ACL on
----------
substitute service as follows, subject to excess ACL not being utilized by the
Contractor:

5.1. On all cargo flights, the Government shall be entitled to transport
additional cargo over the guaranteed ACL to the entire capacity (including
baggage compartment) of the aircraft at no additional cost to the Government.

5.2. The amount of space utilized over the guaranteed ACL constituting "excess
ACL" will be determined by the limits of the gross take-off weight of the
aircraft and by the aircraft captain's judgment with respect to other
operational limitations. In this regard, it is understood that the Government
shall not be entitled to transport "excess ACL" if the Contractor would be
required, on any specific flight, to make an otherwise unrequired operational
stop as a result of the carriage of "excess ACL".

6. SEATS FOR GOVERNMENT SPONSORED PERSONNEL ON CARGO AIRCRAFT
----------------------------------------------------------

6.1. The Contractor shall provide two seats, if physically possible, at no extra
cost, for the Government sponsored personnel, in the heated portion of the
aircraft. Subject to the availability of space and configuration of the
aircraft, one additional seat will be provided. Government sponsored personnel
are those individuals under military orders stating that they are escorts,
couriers, and/or guards for cargo or human remains. In addition, such seats may
be used by CAs and QAEs in performance of their duties. The Government shall
advise the Contractor 24 hours prior to scheduled departure of the mission of
the number or seats required. The seats may be side front or rear facing. They
may be jump, observer, or passenger seats. They must comply with the safety and
structural specifications outlined in FAR 25.785. Such seats must be readily
accessible to the crew compartment.

6.2. The seats above shall be provided on ferry legs of cargo flights, on a
space available basis, for use by CAs and QAEs in performance of their duties.

6.3. MEALS FOR GOVERNMENT SPONSORED PERSONNEL ON CARGO AIRCRAFT Government
----------------------------------------------------------
sponsored personnel on cargo aircraft shall be served a meal or snack equivalent
to that served the flight crew members in accordance with the schedule set for
in Attachment 3.

6.4. BRIEFING PROCEDURES Each Contractor shall assure the Government sponsored
-------------------
personnel aboard cargo aircraft are properly briefed in accordance with
Attachment 2.

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06 January 1994

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<PAGE>

SOLICITATION NO: F11626-94R-R0001
CONTRACT NO: F11626-94R-D0027

ATTACHMENT 6

PERFORMANCE WORK STATEMENT CARGO SERVICE
CATEGORY A CARGO

The following applies to Category A (CAT-A) cargo:

1. GENERAL. CAT-A cargo is individually waybilled cargo transported on
-------
scheduled commercial flights between the Continental United States (CONUS) and
overseas stations or between overseas stations.

2. ACCEPTABILITY OF GOODS FOR CARRIAGE
-----------------------------------

2.1. PACKAGING AND MARKING OF CARGO Cargo will be packed by the Government so
------------------------------
as to ensure safe carriage with ordinary care in handling and so as not to
injure or damage any persons, goods or property. Each package shall be legibly
and durably marked with the name and full street address of the shipper and
consignee.

2.2. CARGO ACCEPTABILITY Contractor agrees to transport, subject to the
-------------------
availability of suitable equipment and space, general merchandise, goods, wares,
and products of all kinds, unless otherwise excluded by Contractor's
regulations, and provided:

2.2.1. The transportation, or the exportation or importation thereof, is not
prohibited by the laws or regulations of any country to be flown from, to ,
into, or over;

2.2.2. They are packed in a manner suitable for carriage by aircraft;

2.2.3. They are accompanied by the requisite shipping documents;

2.2.4. They are not likely to endanger aircraft, persons or property, or cause
annoyance to passengers.

2.2.5. Shipments of material identified by the Department of Transportation
(DOT) as regulated must be packaged marked and labeled in accordance with
applicable FAA, IATA, and DOT regulations.

3. Each CAT-A cargo shipment will be accompanied by cargo manifests and cargo
detail records. Contractor shall annotate two copies of the cargo manifest with
the following certificate and return them to the AMC Air Terminal Operations
Section at station of origin within 24 hours after the flight departs.

"I certify the above manifested cargo was loaded aboard _______________ (name

of CAT-A Carrier), flight number _________________________________ (indicate

number) by (AMC transportation or Contractor) loading personnel on ____________

__________ (date)."

______________________________________
Signature of Contractor Representative

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06 January 1994

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<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

4. GOODS ACCEPTABLE ONLY UNDER PRESCRIBED CONDITIONS
-------------------------------------------------

4.1. The Contractor has the right to refuse to transport animals, baby chicks,
turkeys and ducklings, bees and insects, birds, frogs, tropical fish, fish or
seafood, on any aircraft on which passengers are being carried.

4.2. Contractor shall accept dogs and cats for transportation only if prior
special arrangements have been made and if the dog or cat is confined in a
suitable container. A dog or cat confined in a container supplied by
the shipper will be accepted for transportation by the Contractor only if the
container is inspected and approved by the Contractor prior to flight departure
time.

4.3 CORPSES Contractor has the right to refuse to transport corpses or
-------
disinterred remains on any aircraft carrying passengers.

4.4 FIREARMS Sporting firearms, including pistols, shotguns, rifles, and
--------------------------
trapline guns, may be carried.

4.5 PERISHABLES (Shipment contents which are liable to deteriorate or perish
-----------
due to changes in climate, temperature, altitude, or other ordinary exposure, or
because of length of time in transit). Such shipments will be accepted without
responsibility on the part of the Contractor for loss or damage due to the
foregoing. Shipper is responsible for insuring that the following precautions
are carefully followed:

4.5.1 Advance reservation (or ample notification).

4.5.2 Adequate packing.

4.5.3 Prominent and clear marking or labeling of packages(s): "PERISHABLE".

NOTE 1: Suitable labels may be secured from any cargo traffic office of the
Contractor.

NOTE 2: Seafood and fish will be accepted upon advance arrangements only, and
when packed in odor-proof and leak-proof containers.

4.6 UNUSUAL SHIPMENTS Contractor does not have to accept packages or pieces of
-----------------
extreme length or of unusual shape or of excessive weight for transportation
unless arrangements for handling same have been made previously.

4.7 CONTRACTOR'S RIGHT OF INSPECTION Contractor has the right to examine the
--------------------------------
contents of all consignment, but shall be under no obligation to do so.

5. The transit time between origin (Military APOE) and destination (Military
Aerial Port of Debarkation (APOD)) for purposes of performance evaluation will
be no more than the following:

BETWEEN HOURS
------- -----

<S> <C>
East Cost and UK/Europe 24
East Cost and Tokyo 72
East Cost and Pacific beyond Tokyo 96
West Cost and Honolulu 24
West Cost and Tokyo 36
West Cost and Seoul/Taipei/Kadena 48

</TABLE>

As soon as the Contractor knows that the flight on which the cargo is scheduled
to move will be or is delayed or canceled, the Contractor shall notify the
applicable AMC/AF Port Management Center (PMC) by telephone (21

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06 January 1994

Page 2 of 3
<PAGE>

SOLICITATION NO: F11626-94P-R0001
CONTRACT NO: F11626-94P-D0027

AF, (609)724-3781 or 22 AF, (707)438-3714) of the reason for the delay or
cancellation and when the cargo will be moved.

6. MOVEMENT OF COURIERS When required by the Government, Contractor shall
--------------------
provide a seat for a courier accompanying the CAT-A cargo. The rate for such
courier will be at the applicable round-trip CAT-B passenger rate between the
commercial stations as set forth in SECTION B or at no cost to the Government
in those instances where the Contractor does not provide scheduled commercial
passenger service.

7. A member of the Contractor's crew shall be responsible for weight and
balance of the cargo loading and shall make a visual check of cargo load and, if
required, indicate approval of loading by signing the station compartment
breakdown. The Government shall be responsible for the accuracy of the weights
entered on the form by the loading supervisor. Contractor should request
estimated amount of fuel on-load one and one-half hours prior to scheduled
departure time.

8. Whenever practical, a minimum of two hours notification will be provided
contract carriers when Government sponsored personnel are scheduled to move on
cargo trips. When an armed courier is abroad a contract aircraft, a responsible
crew member shall ensure that ammunition and magazine are removed from the
courier's weapon immediately after takeoff, or will request the weapon be
surrendered to the aircraft commander until the aircraft lands at the next
destination. Custody of the weapon/ammunition will be retained by the courier
until takeoff and regained immediately after landing, so adequate protection
can be given material while the aircraft is on the ground.

9. SCHEDULED SERVICE CARGO (CAT A)
-------------------------------

9.1. Service shall be for 4 business days delivery of one-way door-to-door
transportation of medical supplies (MEDEX) and Air Line of Communication (ALOC)
cargo on scheduled service commercial flights from Defense Logistics Agency
depots to identified locations in Section B.

9.2. The Government will palletize the cargo using military 463L pallets and
nets.

9.3. Carrier shall provide intransit data on all shipments to the government
within 30 minutes upon conveyance departure. This data may consist of multiple
transportation control numbers (TCN) since future initiatives require visibility
of all TCNs on the pallet. Interface shall be provided via automated source to
the AMC Gateway computer system. The format shall be IAW MILLSTAMP documentation
as stated DOD 45000.32R. AMC will feed data to the appropriate computer system
such as HOST, ALIF, or GtN.

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06 January 1994

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<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

ATTACHMENT 7

SPECIFICATIONS, TERMS, AND CONDITIONS
FOR MIXED PASSENGER AND CARGO AIRCRAFT
USED IN INTERNATIONAL OPERATIONS

1. TYPE OF AIRCRAFT Aircraft used for mixed passenger and cargo operations
----------------
shall be pressurized, weather avoidance radar equipped, and capable of carrying
mixed traffic. They shall also have either a nose, side forward, or side aft
loading cargo door. All the provisions of Attachment 5 will apply to the cargo
operation. All the provisions of Attachment 1, 2 and 3 will apply to the
passenger operation.

2. Contractor shall furnish barrier type nets for belly compartment of aircraft
when in mixed configuration.

ATCH 7
06 January 1994
Page 1 of 1
<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

ATTACHMENT 8
------------

LIST OF AIRCRAFT
----------------

The following aircraft are volunteered by the Contractor to the stage(s)
indicated below. The Contractor shall identify aircraft by type, FAA aircraft
registration (tail) number, and whether owned of leased. (Enter O for owned and
L for leased in column 4.)

1 2 3 4 5 6 7
EIA - LONG RANGE
TYPE A/C PAX/FRT REG# OWN/LEASE STG I STG II STG III
DC8-62F FRT N817EV O 0 1 1
DC8-73F FRT N815EV O 0 0 1
DC8-73F FRT N816EV O 0 0 1
B747-200F FRT N470EV O 1 1 1
B747-200C FRT N471EV O 1 1 1
B747-200CF FRT N482EV O 1 1 1
B747-200F FRT N485EV O 0 0 1
B747-100F FRT N472EV O 0 1 1
B747-100F FRT N473EV O 0 1 1
B747-100F FRT N474EV O 0 1 1
B747-100F FRT N477EV O 0 0 1
B747-100F FRT N478EV O 0 0 1
B747-100F FRT N479EV O 0 1 1
B747-100F FRT N480EV O 0 0 1
B747-100F FRT N481EV O 0 1 1

Atch 8
17 June 1994

Page 1 of 5

<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

ATTACHMENT 8
------------

LIST OF AIRCRAFT
----------------

The following aircraft are volunteered by the Contractor to the stage(s)
indicated below. The Contractor shall identify aircraft by type, FAA aircraft
registration (tail) number, and whether owned or leased. (Enter O for owned and
L for leased in column 4.)

1 2 3 4 5 6 7
EWW - LONG RANGE
TYPE A/C PAX/FRT REG# OWN/LEASE STG I STG II STG III
DC8-73F FRT N791FT L 1 1 1
DC8-73F FRT N792FT L 1 1 1
DC8-73F FRT N795FT L 1 1 1
DC8-73F FRT N796FT L 1 1 1
DC8-73F FRT N870TV L 1 1 1
DC8-73F FRT N961R L 0 1 1
DC8-73F FRT N2674U L 0 1 1
DC8-73F FRT N105WP L 0 1 1
DC8-71F FRT N8177U L 0 1 1
DC8-71F FRT N8079U L 0 1 1
DC8-71F FRT N8084U L O 0 1
DC8-71F FRT N8086U L 0 0 1
DC8-71F FRT N8087U L 0 1 1
DC8-71F FRT N501SR L 0 0 1
DC8-71F FRT N801GP L 0 0 1
DC8-63F FRT N865F L 0 1 1
DC8-63F FRT N906R L 0 1 1
DC8-63F FRT N921R L 0 1 1
DC8-63F FRT N952R L 0 1 1
DC8-63F FRT N957R L 0 0 1
DC8-63F FRT N959R L 0 0 1
DC8-63CF FRT N796AL L 0 0 1
DC8-63CF FRT N797AL L 0 0 1
DC8-63CF FRT N929R L 0 0 1
DC8-63CF FRT N950R L 0 0 1
DC8-63CF FRT N951R L 0 0 1
DC8-63CF FRT N964R L 0 0 1
DC8-62F FRT N996CF L 0 0 1
DC8-62F FRT N997CF L 0 1 1

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17 June 1994

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<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

ATTACHMENT 8
------------

LIST OF AIRCRAFT
----------------

1 2 3 4 5 6 7
WOA - LONG RANGE
TYPE A/C PAX/FRT REG# OWN/LEASE STG I STG II STG III
MD-11F FRT N274WA L 1 1 1
MD-11CF FRT N275WA L 0 0 1
MD-11CF FRT N276WA L 0 0 1
DC10-30CF FRT N107WA L 0 0 1
DC10-30CF FRT N1856U L 1 1 1
DC10-30CF FRT N1857U L 0 1 1
DC10-30CF FRT N1858U L 0 1 1
DC10-30CF FRT N1859U L 0 1 1
MD-11 PAX N271WA L 1 1 1
MD-11 PAX N272WA L 1 1 1
MD-11 PAX N273WA L 1 1 1

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17 June 1994

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<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

ATTACHMENT 8
------------

LIST OF AIRCRAFT
----------------

The following aircraft are volunteered by the Contractor to the stage(s)
indicated below. The Contractor shall identify aircraft by type, FAA aircraft
registration (tail) number, and whether owned or leased. (Enter O for owned and
L for leased in column 4.)

1 2 3 4 5 6 7
RIA - LONG RANGE
TYPE A/C PAX/FRT REG# OWN/LEASE STG I STG II STG III
DC8-62 PAX N1805 O 1 1 1
DC8-62 PAX N772CA O 1 1 1
DC8-63 PAX N4935C L 1 1 1
L1011-1 PAX N303EA L 1 1 1
L1011-1 PAX N304EA L 1 1 1
L1011-1 PAX N313EA L 1 1 1
L1011-1 PAX N319EA L 1 1 1

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17 June 1994

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<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

ATTACHMENT 8
------------

LIST OF AIRCRAFT
----------------

1 2 3 4 5 6 7
SCX - LONG RANGE
TYPE A/C PAX/FRT REG# OWN/LEASE STG I STG II STG III
DC10-10 PAX N573SC L 1 1 1

SCX-SHORT RANGE
TYPE A/C PAX/FRT REG# OWN/LEASE STG I STG II STG III
B727-200 PAX N275AF L 0 0 1
B727-200 PAX N286SC L 0 0 1
B727-200 PAX N287SC L 0 0 1
B727-200V PAX N284SC L 0 1 1
B727-200V PAX N285SC L 0 0 1
B727-200V PAX N288SC L 0 0 1

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17 June 1994

Page 5 of 5

<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

ATTACHMENT 8A
---------------

LIST OF AIRCRAFT SUPPORTING
-----------------------------
USE OF ANOTHER CARRIER'S MVPs
-------------------------------

The following aircraft are identified as having been committed to the CRAF
Program.

TYPE A/C SERIAL # NUMBER OF MVPs
- ---------- --------- --------------

CONTINENTAL AIRLINES
LONG RANGE

B747-100 N17010 7.170004
B747-100 N17011 7.170004
B747-200 N78019 15.84094
B747-200 N33021 15.84094
B747-200 N17025 7.920468
DC10-10 N68041 2.353055
DC10-10 N68042 2.353055
DC10-10 N68043 2.353055
DC10-10 N68044 2.353055
DC10-10 N68046 2.353055
DC10-10 N68047 2.353055
DC10-30 N12061 5.936574
DC10-30 N12064 5.936574
DC10-30 N13066 5.936574
DC10-30 N13067 5.936574
DC10-30 N14062 5.936574
DC10-30 N14063 5.936574
DC10-30 N19072 5.936574
DC10-30 N19073 5.936574
DC10-30 N68060 5.936574
DC10-30 N68065 5.936574

SHORT RANGE
B727-200 N8885Z 12.67
B727-200 N8886Z 12.67
B727-200 N66734 12.67
B727-200 N69735 12.67
B727-200 N69736 12.67
B727-200 N93738 12.67
B727-200 N69741 12.67
B727-200 N79745 12.67
B727-200 N79746 12.67
B727-200 N79748 12.67
B727-200 N79749 12.67
B727-200 N79750 12.67
B727-200 N73751 12.67
B727-200 N76752 12.67
B727-200 N79754 12.67
B727-200 N511PE 12.67
B727-200 N77780 12.67
B727-200 N27783 12.67
B727-200 N16784 12.67

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17 Jun 1994
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<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

B727-200 N33785 12.67
B727-200 N519PE 12.67
B727-200 N10791 12.67
B727-200 N523PE 12.67
B727-200 N45793 12.67

AMERICAN AIRLINES
LONG RANGE

DC10-10 N126AA 2.547201
DC10-10 N127AA 2.547201
DC10-10 N128AA 2.547201
DC10-10 N129AA 2.547201
DC10-10 N130AA 2.547201
DC10-10 N131AA 2.547201
DC10-10 N132AA 2.547201
DC10-10 N133AA 2.547201
DC10-10 N134AA 2.547201
DC10-10 N135AA 2.547201
DC10-10 N166AA 2.547201
DC10-30 N137AA 9.541697
DC10-30 N143AA 9.541697
DC10-30 N144AA 4.770849
DC10-30 N163AA 4.770849
B767-200ER N312AA 3.525911
B767-200ER N313AA 3.525911
B767-200ER N315AA 3.525911
B767-200ER N316AA 3.525911
B767-200ER N317AA 3.525911
B767-200ER N319AA 3.525911
B767-200ER N320AA 3.525911
B767-200ER N321AA 3.525911
B767-200ER N322AA 3.525911
B767-200ER N323AA 3.525911
B767-200ER N324AA 3.525911
B767-200ER N325AA 3.525911
B767-200ER N327AA 3.525911
B767-200ER N328AA 3.525911
B767-200ER N329AA 3.525911
B767-200ER N330AA 3.525911
B767-200ER N332AA 3.525911
B767-200ER N334AA 3.525911
B767-200ER N335AA 3.525911
B767-200ER N336AA 3.525911
B767-200ER N338AA 3.525911
B767-300ER N368AA 4.433740
B767-300ER N370AA 4.433740
B767-300ER N372AA 4.433740

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<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

USAIR
AEROMEDICAL

B767-200ER N645US 7.7565
B767-200ER N646US 7.7565
B767-200ER N653US 7.7565

*Identify the carrier who transferred the MVPs. If more than one carrier have
authorized use of MVPs, identify each separately.

Page 3 of 3
<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-DOO27

ATTACHMENT 9

CIVIL RESERVE AIR FLEET (CRAF)

CHAPTER 1
---------

The CRAF program is a national plan (based on The Defense Production Act of 1950
and Executive Order 12656) to utilize airlift resources of US air carriers to
support Department of Defense airlift requirements in a national security
contingency. The CRAF is composed of US registered aircraft owned or controlled
by the US "air carriers" specifically allocated (by FAA registration number) for
this purpose by the Department of Transportation. As used in this contract,
CRAF aircraft are those allocated aircraft, which a carrier has contractually
committed to the Department of Defense, under stated CRAF conditions of this
contract. This contractual commitment of the aircraft includes the supporting
resources required to provide the contract airlift services. Reference is also
made to Memorandum of Understanding By and Between the Secretary of Defense and
the Secretary of Transportation with Respect to the Civil Reserve Air Fleet
Program, dated January 1988 and Air Mobility Command Regulation (AMCR) 55-8.
The Contractor's obligation to perform services hereunder during any period when
the CRAF is activated, as described in the Contract, is expressly conditioned on
there being in existence a valid determination made pursuant to the provisions
of Public Law 85-804 and Executive Order 10789, as amended, that the national
defense shall be facilitated by obligating the Government to indemnify the
Contractor under the terms and conditions stated in the Contract. Upon
activation of CRAF, the aircraft listed in Attachment 8 of this contract which
are requested by the Government, must be positioned where directed by the
Government, with maximum fuel aboard, consistent with aircraft performance
limitations and mission requirements, as quickly as possible, but in no event
more than 24 or 48 hours (as appropriate) after the Contractor receives the
request from the Government for the aircraft required. The Government, in
ordering services under the provisions of this contract shall, to the extent
practicable and to the extent that military requirements permit, order services
from all AMC airlift service Contractors on an equitable pro rata basis, giving
consideration to each Contractor's aircraft commitment to the stage of
requirements which has been activated, and if applicable, giving consideration
to the amount of capacity which each Contractor has already scheduled for fixed
and expansion service under this contract.

ATCH 9
17 June 1994
Page 1 of 48
<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-DOO27

CHAPTER 2
---------

CRAF GENERAL

SECTION A--POLICIES

2.1. BASIC POLICIES. Basic Policies for the CRAF program are directed toward
--------------
identification, organization, and development of a source of civil airlift
capability readily available to augment the Department of Defense (DOD). The
CRAF may be activated in increments of three stages. The Government retains the
option of activating any portion of each stage or segment, as required. During
CRAF activation, AMC has mission control and the carrier retains operational
control. Any reference to the CRAF cell or XOC implies the office of the
Assistant for Civil Air.

2.2. COMPOSITION OF THE FLEET. The CRAF is composed of US-registered civil
------------------------
transport aircraft that are suitable and operationally capable of performing DOD
airlift. The number and type of aircraft are identified to satisfy
international (long and short-range), aeromedical evacuation, and national
airlift requirements. Principle considerations in determining aircraft
suitability are range, payload, block speed, and configuration.

2.3. USE OF THE FLEET. Use of the CRAF resources shall be based on military
----------------
operational plans and the terms and conditions of this Contract.

2.4. AIRLIFT CONTRACTS. AMC peacetime airlift services contracts are offered
-----------------
to carriers that are CRAF participants or are eligible and agree to become CRAF
participants and have aircraft suitable for allocation to CRAF.

2.5. AIRCRAFT OPERATIONS. CRAF aircraft supporting DOD airlift requirements
-------------------
during a CRAF activation shall be operated in accordance with appropriate
Federal Aviation Regulations (FARs) and such waivers as are applicable.

2.6. AIRCRAFT MAINTENANCE. Maintenance of CRAF airlift is the responsibility
--------------------
of the operating carrier and shall be performed in accordance with appropriate
FARs and such waivers, when applicable.

2.7. LOGISTICS SUPPORT. CRAF logistics support shall be coordinated with the
-----------------
AMC Crisis Response Cell (CRC) and shall be monitored by HQ AMC/XOK.

2.7.1. USE OF EXISTING CARRIER ASSETS. To the maximum extent possible,
-------------------------------
logistics support of CRAF aircraft shall be provided by the participating
carrier and obtained from existing carrier assets. Shortages in such support
may be supplemented by carrier contract and/or arrangements with other sources.
If CRAF carriers cannot support themselves, requests for assistance are to be
forwarded to the HQ AMC CRC.

2.7.2. USE OF GOVERNMENT-FURNISHED MATERIAL HANDLING EQUIPMENT (MHE).
--------------------------------------------------------------
Government-furnished MHE shall be used at military onload/offload airfields
whenever possible. Upon HQ AMC CRC approval, augmenting commercial resources
may be acquired under the Changes clause of the Airlift Services Contract in
situations where government-furnished MHE is unavailable or inadequate.

2.7.3. PETROLEUM, OIL, AND LUBRICANTS (POL). Upon the activation of any stage
------------------------------------
of CRAF, CRAF carriers may purchase POL products at military airfields and/or
civil airports.

2.7.4. REIMBURSABLE OR EQUITABLE EXCHANGE. Logistics support, other than that
----------------------------------
listed in this Contract, shall be furnished at military bases, if available, on
a reimbursable or equitable exchange basis.

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17 June 1994
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SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-DOO27

2.7.5. GOVERNMENT-FURNISHED CARGO EQUIPMENT. Cargo tie-down equipment shall be
------------------------------------
furnished by AMC.

2.8. PERSONNEL. All personnel required in the performance of CRAF operations
----------
at civil bases shall be furnished by the CRAF carriers. (EXCEPTION: Passenger
Service Agents shall be furnished by AMC.) During CRAF operations, CRAF
carriers shall procure, position, supervise, and train their own employees.

2.8.1. CRAF LOADING SUPERVISORS. During CRAF activation, the HQ AMC CRC may
-------------------------
require participating carriers to provide supervisory personnel who are highly
qualified and certified in the loading operations of civil aircraft. These
personnel shall report where directed by HQ AMC CRC.

2.8.2. US NATIONAL VERSUS INDIGENOUS PERSONNEL. All cockpit crewmember and
----------------------------------------
Senior Lodger positions shall be manned by US citizens during CRAF activation.
Indigenous personnel may be used to fulfill other personnel requirements.

2.9. USE OF CIVIL AIRFIELDS. CRAF aircraft shall use enroute civil airports
-----------------------
wherever possible to reduce saturation at military airfields.

2.10. LEASED AIRCRAFT. The HQ AMC Airlift Services contract officer will
----------------
determine acceptability of contractor offered aircraft which are indicated as
being wet or dry leased.

2.11. AIRCRAFT ALLOCATION.
--------------------

2.11.1. POLICY. HQ AMC/XOC determines aircraft suitability prior to submitting
------
allocation requests to Department of Transportation (DOT), Office of Emergency
Transportation (OET). The Director, OET, allocates US-registered civil aircraft
to the CRAF program by FAA registration number. Issues regarding the DOT
allocation of CRAF aircraft or DOD requirement for CRAF aircraft should be
presented to the Director, Federal Emergency Management Agency (FEMA) for review
and resolution.

2.11.2. ALLOCATION DETERMINATION. International (long and short-range), and
-------------------------
aeromedical evacuation CRAF aircraft are allocated by OET to satisfy the DOD
wartime airlift requirements, as identified by the CINCs and major commands.

SECTION B--CONCEPTS

2.12. DEFINITIONS
-----------

2.12.1. CRAF ACTIVATION. The formal act of notifying CRAF carriers that a CRAF
----------------
stage, segment, and/or section or portions thereof are operational.

2.12.2. CRAF DEACTIVATION. The formal act of notifying CRAF carriers that a
------------------
CRAF stage, segment, and/or section or portions thereof are no longer
operational.

2.12.3. AIRCRAFT CALL UP. After a stage, segment, and/or section of CRAF is
-----------------
activated, the formal act of notifying a CRAF carrier that certain aircraft are
required to meet DOD airlift requirements in response to a CRAF activation.
Aircraft called up shall be given specific direction on where to relocate and
scheduled departure times, etc. Aircraft are called up by registration number.

2.12.4. CRAF SEGMENT. There are three CRAF segments. The CRAF segments are
-------------
the International, Aeromedical Evacuation, and National.

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SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-DOO27

2.12.5. CRAF SECTION. A CRAF section is a subelement of the segment. For
-------------
example, within the International segment is the Long-Range and Short-Range
Sections. The CRAF sections may have subelements of passenger and/or cargo
elements.

2.12.6. NOTIFICATION. Notification is considered acceptable if received by
-------------
either party by telephone, followed in writing by facsimile or by ARINC.

2.13. CRAF ACTIVATION/DEACTIVATION. The CRAF may be activated or deactivated
-----------------------------
either incrementally or in total, by stage, segment, and/or section. Cargo,
passenger, and aeromedical evacuation aircraft may be activated or deactivated
separately.

2.14. AIRCRAFT CALLUP/RELEASE. Within each activated stage, segment, and
------------------------
section, AMC may select and call up specific CRAF aircraft needed to fulfill the
DOD airlift requirement. AMC may elect to call up only a portion of the
available aircraft, and is not obligated to call up aircraft from every carrier.
Aircraft selection generally shall be prorated based on mobilization value (MV)
of aircraft within the stage, segment, and section activated . Those carriers
not called up shall be notified in writing and shall receive a minimum of 5 days
notice of any subsequent call up, unless a higher stage of CRAF is mandated by
DOD contingency requirements. If DOD contingency requirements mandate a higher
stage activation (i.e. Stage II or III), the 5 days minimum notification
requirement is nullified and the appropriate response time to the newly
activated stage shall apply.

2.15. AIRCRAFT SUBSTITUTION. Carriers may request to substitute aircraft of
----------------------
equal capability to replace aircraft called up. HQ AMC/XOC is the approval
authority for aircraft substitutions.

2.16. VOLUNTEER CARRIERS. Carriers may volunteer to perform missions prior to
-------------------
and during CRAF activation. Volunteers supporting contingency requirements
prior to CRAF activation, time permitting, shall be given the option to be
considered activated when the CRAF, and the segment in which their aircraft
would normally qualify is activated, but only to the level of aircraft required.
These aircraft shall be considered called up first and released last. After
volunteers have committed to activation and call up, additional aircraft, if
required, shall be determined and prorated based on MV of aircraft within the
segment activated.

2.17. RESPONSE TIME. Response time for carriers, after mission assignment, is
--------------
24 hours for Stages I and II and 48 hours for aircraft called up for Stage III.
Response time for carriers, after mission assignment, for aeromedical
evacuation aircraft is 48 hours for Stages II and III. In those cases where the
entire stage is not called, written notification of release from the 24 and 48
hour response requirements shall be given within 72 hours of the activation of
the CRAF stage, segment and section. AMC shall provide a minimum of 5 calendar
days notice for subsequent call up of those aircraft released. If DOD
contingency requirements mandate a higher stage activation (i.e. Stage II or
III) the 5 day minimum notification requirement is nullified, and the 24 hour
response to Stage II and 48 hour response to Stage III will apply.

2.18. MINIMUM UTILIZATION OF INTERNATIONAL (LONG-RANGE SECTION) SEGMENT.
------------------------------------------------------------------
Carriers with international (long-range) aircraft called up for CRAF service
shall be guaranteed an average utilization by carrier and aircraft type of 8
hours per day per aircraft called up for the duration of the call up or for a
minimum of 30 days, whichever is longer. Only aircraft called up are guaranteed
minimum utilization. AMC shall give at least 15 days notice of release of an
aircraft call up or stage, segment and/or section deactivation. Negotiation of
compensation for underutilization shall be in accordance with the procedures
outlined in this contract and shall include all commercial business obtained by
the carrier using called up aircraft. Carriers are obligated to utilize their
best efforts to obtain commercial business to minimize Government costs during
any period of guaranteed utilization including but not limited to the 15 day
period following notice of release. Carriers may waive these minimum
utilization provisions by notifying HQ AMC/XOK in writing.

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SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-DOO27

2.19. MISSION ASSIGNMENT Specific mission assignments shall be based on
------------------
airlift requirements and aircraft availability.

2.20. THE THREE STAGES OF THE CRAF ARE:
---------------------------------

2.20.1 STAGE I - COMMITTED EXPANSION. This is airlift capability, from the
------------------------------
international (long-range section) segment, committed to Commander, Air Mobility
Command. It can be used to perform airlift services when the AMC airlift force
can not meet both deployment and other traffic requirements simultaneously.
CINCTRANS, on approval by the Secretary of Defense (SECDEF), has the authority
to activate Stage I of CRAF.

2.20.2. STAGE II - DEFENSE AIRLIFT EMERGENCY. This is airlift capability
------------------------------------
identified for an airlift emergency not warranting national mobilization. All
three segments become available, if needed in this stage. CINCTRANS, on
approval by the SECDEF, has the authority to activate Stage II of CRAF.

2.20.3. STAGE III - NATIONAL EMERGENCY. CRAF Activation. This is the total
------------------------------
CRAF airlift capability made available when required for DOD operations during
major military emergencies involving US forces.

2.20.3.1. The Secretary of Defense shall issue the order to CINCTRANS to
activate Stage III of the CRAF:

2.20.3.1.1. In time of war or during a defense-oriented national emergency
declared by the President, or in time of national emergency declared by
Congress.

2.20.3.1.2. In a national security situation short of a declared defense-
oriented national emergency.

2.20.3.2. Activation of CRAF Stage III presumes that the Secretary of
Transportation has been authorized to exercise presidential priorities and
allocation authority.

2.20.3.3. The notice that the total CRAF has been activated shall be
communicated by the AMC CRC and/or the Civil Air Cell to all CRAF carriers.
Upon activation of any stage of CRAF, the total capability of all aircraft in
that stage may be used.

2.21. PRESERVATION OF THE FLEET.
-------------------------

2.21.1. In the event of a war or a national disaster, it is paramount that our
Nation's airlift resources survive for they shall be used to help reconstruct
our Nation's economy and reconstitute its military forces.

2.21.2. Since various stages of CRAF may be activated prior to the United
States' entry into an all-out war, all CRAF carriers shall, when directed, take
immediate survival measures to minimize destruction and damage to CRAF aircraft.
Corporate management, equipment, and facilities shall be used as long as they
are tenable.

2.22. PLANNING CONSIDERATIONS.
-----------------------

2.22.1. Planning for use of CRAF shall be predicated upon the following:

2.22.1.1. Availability, upon 24-hour notice, of those aircraft identified as
Stage I and Stage II resources, to perform airlift services as required by the
Government.

2.22.1.2. Availability, upon 48 hour notice, of those aircraft identified as
Stage III resources, to perform airlift services as required by the Government.

2.22.1.3. Effective command and control through commercial and military
communication capabilities.

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SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-DOO27

2.22.1.4. Use of carrier resources to the maximum extent possible.

2.22.2. Carriers are allowed three percent of available ACL, by weight, for
necessary self-support.

2.23. AIRLIFT REQUIREMENTS. International (Long-range) airlift requirements
--------------------
are based on Joint Chiefs-of-Staff (JCS) approved contingency plans. Civil
eligible cargo and personnel requirements are extracted from these plans. They
range from channel missions that maintain manageable port levels, to augmenting
the active force in deployment, redeployment, and resupply. This becomes the
basis for DOD sizing of the fleet.

2.24. Not Used.

SECTION C--ORGANIZATION

2.25. HQ AMC CRC DIRECTOR (AMC CRC-D). Under an activated CRAF, the management
-------------------------------
of CRAF resources is the responsibility of the AMC CRC-D.

2.26. CRAF CELL. The function within the HQ AMC CRC that is directly
---------
responsible for the management of the CRAF.

2.27. TECHNICAL ADVISORY GROUPS (TAGs). TAGs are persons provided by carriers
--------------------------------
to furnish technical advice and information designed to provide maximum
coordination, efficiency, and effectiveness in the use of the CRAF. Adequate
CRAF planning cannot be accomplished without employing the technical capability
of industry representatives. TAG representation shall be selected from all
carriers participating in the CRAF program. The overriding prerequisite for
selection must be the specific technical assistance needed for the development
and maintenance of adequate CRAF plans.

2.28 SENIOR LODGER. The Senior Lodger is the name given to the CRAF carrier
--------------
who shall be the AMC representative designated to manage CRAF operations at a
specified airport(s) during CRAF activation. (See Chapter 4).

2.29. COMMAND AND CONTROL. When the CRAF is activated, management of the
-------------------
International and aeromedical evacuation CRAF missions shall be the
responsibility of AMC, exercised through the AMC CRC CRAF Cell.

SECTION D--CRAF CONTRACTS

2.30. CONTRACT OPERATIONS. The AMC Airlift Services Contract is the AMC
-------------------
commercial airlift procurement document and incorporates all the contractual
provisions necessary to operate CRAF. It establishes a legal obligation to
perform, and is the basis for payment for all services rendered, whether for
personnel, ground support, or airlift.

2.31. TECHNICAL ASSISTANCE: This portion of the contract provides for
---------------------
reimbursement of expenses to the carrier for services rendered. For example:
providing Technical Advisory Group representatives to participate in meetings
and exercises; preparing or assisting with manuals, documents, listings,
reports, specifications, plans, etc. Services to be rendered are specified in
Change Orders issued by the AF Contracting Officer (HQ AMC/XOK).

SECTION E--RESERVED

SECTION F--AIRCRAFT EQUIPMENT REQUIREMENTS

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CONTRACT NO: F11626-94-DOO27

2.32. AIRCRAFT PASSENGER/CARGO EQUIPMENT.
----------------------------------

2.32.1. PASSENGER AIRCRAFT. All passenger aircraft shall be configured in
------------------
accordance with Federal Aviation Regulations.

2.32.2 LOWER LOBE BAGGAGE CONTAINERS. Current contingency plans do not require
------------------------------
the use of baggage containers; however, should the need arise, carriers shall be
required to furnish appropriate containers.

2.32.3 COMMERCIAL PALLETS. In some cases, military necessity may require hand
-------------------
loading of passenger baggage on B-747s. Should the need arise, carriers shall
be required to furnish commercial pallets to be used as a subfloor for the lower
lobes.

2.32.4. CARGO AIRCRAFT. Cargo aircraft must be configured in accordance with
--------------
Federal Aviation Regulations and be equipped with a cargo handling system
compatible with military 463L pallets (except Alaskan section of National
Segment). Pallets and tie-down equipment shall be provided by AMC.

2.33. EMERGENCY AND SAFETY EQUIPMENT. Emergency and safety equipment required
------------------------------ --------
by FAR 121.353 satisfy CRAF extended overwater requirements.

2.34. NAVIGATION ROUTE KIT.
--------------------

2.34.1. Navigation route kits are provided by the Government. During CRAF
activation, the carriers are required to have aboard each international CRAF
aircraft a navigation route kit which shall provide world wide area coverage.
The carriers are required to retain and maintain in serviceable condition the
publications and charts required in the kit. Those carriers receiving flight
information publications and charts from the Government are authorized to use
them during peacetime commercial and military contract operations; however, the
kits must be maintained in a ready status to support any stage of CRAF
activation.

2.34.2. STORAGE AND MAINTENANCE. Government-furnished navigation route kits
-----------------------
are stored and maintained by the carrier at no expense to the Government. Upon
activation of any stage of the CRAF, the kit shall be placed aboard and remain
with the aircraft during CRAF operations.

2.34.3. REPLACEMENT CHARTS AND FLIPS. When participating in DOD contract
----------------------------
airlift, the aircraft captain may obtain replacement charts, FLIPs, etc., from
any USAF Base Operations.

CHAPTER 3
---------

CRAF MISSION SCHEDULING AND ACTIVATION

SECTION A--MISSION SCHEDULING

3.1. GENERAL. CRAF international and aeromedical evacuation mission scheduling
-------
is the responsibility of the HQ AMC CRC. The scheduling of CRAF missions is
similar to the current procedures used by AMC and the CRAF carriers in
scheduling peacetime DOD airlift missions. The primary objective is to schedule
CRAF missions effectively. To this end, the HQ AMC CRC will exercise mission
management to include such activities as capability reporting, mission
scheduling, flight monitoring, and logistics monitoring. Mission scheduling
shall be accomplished at HQ AMC through direct coordination with appropriate
CRAF carrier's operations center. This chapter contains guidance pertaining to
the procedures employed to manage the additional workload created by CRAF
activation.
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3.2. MANPOWER AND PERSONNEL. When requested by the HQ AMC CRC Director, CRAF
----------------------
carriers shall establish a 24-hour/day operations center manned by qualified
personnel and located at the carriers' designated operations center. Subsequent
to the activation of Stage II and prior to Stage III activation the CRAF
carriers shall, upon the request of the HQ AMC CRC Director, provide
predesignated carrier liaison and communications supervisor personnel to HQ AMC,
Scott AFB IL. To assure appropriate liaison representation and to facilitate
assimilation of tasks, carriers should provide personnel with a high degree of
knowledge and experience in the carriers' overall operations and management.

3.3. COMMUNICATIONS. Existing commercial communications and company-owned
--------------
facilities shall expand as required to maintain operational control of CRAF
resources. When CRAF is activated, Aeronautical Radio, Inc. (ARINC) facilities
shall continue to be a means of recorded communications between AMC and CRAF
carriers. However, secure telephone, secure facsimile, and unsecure telephone
shall be the primary means used to schedule missions and communicate essential
operational information.

3.4. CRAF CARRIER RESPONSIBILITIES:
-----------------------------

3.4.1. Respond to requests for airlift missions.

3.4.2. Schedule crews to support assigned mission, and deploy stage crews.

3.4.3. Develop mission itinerary in line with airlift requests and required
pickup/delivery times.

3.4.4. Flight follow CRAF aircraft.

3.4.5. Forward aircraft arrival/departure/advisory messages and mission status
to the Tanker/Airlift Control Center.

3.4.6. If applicable, ensure CRAF aircrew personnel are issued and instructed
to review their Ground Chemical Warfare Defense Ensemble (GCWDE) handouts.
Carriers will stress the importance of securing the appropriate GCWDE at the
enroute stage location identified by HQ AMC CRC.

SECTION B--CRAF ACTIVATION

3.5. NOTIFICATION. CRAF activation messages are transmitted over civil
------------
circuits to each CRAF carrier. These messages, prepared in advance, are
released as directed by the HQ AMC CRC Director and described as follows:

3.5.1. HQ AMC CRC ACTIVATION. If required, A HQ AMC/CRC message addressed to
---------------------
all CRAF carriers shall advise the long- and short-range international and
aeromedical evacuation segment operators that the HQ AMC CRC has been activated,
and where CRAF communications should be directed.

3.5.2. STAGE I ACTIVATION. This message shall be addressed to all CRAF
------------------
carriers with information copy to AMCALT, AMC Numbered Air Forces (NAFs) and is
to be released by the HQ AMC CRC-D upon receipt of proper authority from
USCINCTRANS.

3.5.3. STAGE II ACTIVATION. This message shall be addressed to all CRAF
-------------------
carriers, with information copy to AMCALT, AMC NAFs, AFMC, NAVMTO, 11AF and
616AMSS. It shall be released by the HQ AMC CRC-D upon receipt of proper
authority from USCINCTRANS.

3.5.4. STAGE III ACTIVATION WARNING. This message shall be addressed to all
----------------------------
CRAF carriers with information copy to AMCALT, AMC NAFs, AFMC, NAVMTO, DOT/OET
DPB-30, AND 616AMSS, and is to be released by the HQ AMC CRC-D upon receipt of
proper authority from USCINCTRANS. This message serves as an advisory for
carrier company planning.

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SOLICITATION NO: F11626-94-R0001
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3.5.5. STAGE III ACTIVATION. This message shall be addressed to all CRAF
---------------------
carriers with information copy to AMCALT, AMC NAFs, AFMC, NAVMTO, 11AF, DOT/OET
DPB-30, and 616AMSS and is to be released by the HQ AMC CRC-D upon receipt of
proper authority from USCINCTRANS. The message shall include the approximate
percentage of aircraft and type of airlift (cargo or passenger) which may be
required..

3.5.6. PRESIDENTIAL AUTHORITY (10 USC 9742)--Control of Transportation Systems
--------------------------------------
in Time of War. This message is addressed to all CRAF carriers, with
information to all military and governmental agencies associated with CRAF
operations. It advises all concerned that the President has invoked his
authority under Title 10, USC, and provides the effective date (GMT). It also
advises the CRAF carriers that mission assignment and AMC Command and Control
will function from the HQ AMC CRC to the aircrews, through the Senior Lodger
Station manager, when corporate management and facilities are no longer intact.
The message shall be released by the HQ AMC CRC Director upon receipt of proper
authority from USCINCTRANS, and after coordination with the CRC Staff.

3.5.7. SENIOR LODGER STATION ACTIVATION. This three part message is addressed
--------------------------------
to the NAFs and applicable carriers. Part I contains the date and time (GMT)
stations identified in Part III are activated. If applicable, it also notifies
the CRAF Aircrew Protection Program Manager of GCWDE requirements to be shipped.
Part II is for carriers who have Senior Lodger responsibilities at stations
identified in Part III. Part III identifies the carrier responsible, and Senior
Lodger station being activated, depending upon the requirement.

3.5.8. SENIOR LODGER STATION WORKLOAD. This message is addressed to the
------------------------------
applicable Senior Lodger Station, with information copy to AMCALT and AMC NAFs.
It shall be sent on a continuing basis and shall advise the station manager of
the number of aircraft, by type as can be determined. Station workload
information shall be sent to all activated Senior Lodger locations as necessary.

SECTION C--HQ AMC CRC CHECKLIST FOR ACTIVATING AN USING THE CRAF
- ----------------------------------------------------------------

3.6. AIRCRAFT MANAGEMENT. To minimize cost to the Government and disruption of
-------------------
the carriers' civil schedules and services, only those aircraft actually needed
by AMC shall be called-up, and only as they are needed. Also, those no longer
needed shall be released to the carrier for commercial operations as soon as
practical.

SECTION D--CRAF CARRIER ACTIVATION ACTIONS
- ------------------------------------------

3.7. CRAF CARRIER ACTIVATION CHECKLIST. During CRAF activation, carriers shall
---------------------------------
receive the messages specified in this chapter. The conditions and a suggested
checklist of actions to be taken by the carrier follow:

3.7.1. HQ AMC CRC ACTIVATION MESSAGE. Upon receipt of this message, carriers
------------------------------
shall ensure that:

3.7.1.1. Personnel are assigned to its operations control center so as to
provide 24- hour coverage.

3.7.1.2. Personnel who have been requested by the HQ AMC CRC shall report to HQ
AMC at Scott AFB or AMCALT at Travis Air Force Base, CA.

3.7.2. STAGE I AND II ACTIVATION MESSAGE. Upon receipt of these messages,
-----------------------------------
carriers shall ensure that:

3.7.2.1. Review the operational and maintenance status of all company aircraft
allocated to support Stage I and II of CRAF.

3.7.2.2. Prepare to recall and mobilize aircraft and aircrews designated to
participate in CRAF Stages I and II.

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3.7.2.3. Review personnel support requirements.

3.7.2.4. If the carrier has Senior Lodger responsibilities, review actions
required to assume these duties and responsibilities.

3.7.2.5. Review the availability of aircraft spares and support equipment.

3.7.2.6. Ensure navigation route kits are current and available for use.

3.7.2.7. Assure all personnel scheduled to travel overseas have a current
passport or an application for a passport. Follow preparatory requirements to
issue Geneva Convention Cards IAW Chapter 9.

3.7.2.7.1 Issuance of the Geneva Convention Cards during Stage I and II
activations is at the carrier's option.

3.8. STAGE III ACTIVATION WARNING MESSAGE. When this message is received
------------------------------------
carriers should:

3.8.1. Ensure actions listed above (3.7.2) are accomplished based upon
commitment of carrier personnel and resources to Stage III.

3.9. STAGE III ACTIVATION MESSAGE. Upon receipt of this message, CRAF carriers
----------------------------
shall if directed:

3.9.1. Issue Geneva Convention ID cards, as appropriate, to carrier personnel
going overseas.

3.9.2. If assigned Senior Lodger responsibilities, take immediate action to
assure that those assigned duties and responsibilities can be fulfilled.

3.9.3. Standby for aircraft call-up and a AMC airlift mission assignment.

3.10. AIRLIFT MISSION ASSIGNMENT. All airlift services performed by CRAF
--------------------------
carriers shall be substantiated by delivery orders executed by the Contracting
Officer. Upon receipt of a AMC airlift mission assignment, the carrier shall:

3.10.1. Make available aircraft and aircrews required to perform the mission.
(Maximum time allowable for positioning aircraft and aircrews is 48 hours for
Stage III.) Cargo aircraft shall require a loading supervisor as part of the
crew.

3.10.2. Ensure navigation route kits are current and aboard allocated aircraft.

3.10.3. Service mission aircraft so as to position at on-load base with
sufficient fuel to make an east or west coast senior lodger station. This
allows for maximum ACL use.

3.11. SENIOR LODGER STATION ACTIVATION MESSAGE. Upon receipt of this message,
----------------------------------------
the following actions shall be taken:

3.11.1. Senior Lodger carriers take immediate action to assure that Senior
Lodger duties and responsibilities are fulfilled. Advise the HQ AMC CRC of
operational or support limitations at each station activated.

3.11.2. Carriers having personnel committed to stations being activated shall
make them available for immediate deployment.

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SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-DOO27

CHAPTER 4
---------

SENIOR LODGER

SECTION A--GENERAL

4.1. CONCEPT. During a CRAF activation, carriers shall utilize existing
-------
contracts and arrangements for aircraft servicing and support to the greatest
extent possible. The aircrew shall contact the Senior Lodger only when such
services are not available through normal commercial means, or when special
requirements exist (such as classified materials issue/storage, the hands-on
training and issue of GCWDE) which exceed normal commercial arrangements.

4.2. DEFINITION.
----------

4.2.1. SENIOR LODGER. Senior Lodger is a term applied to the CRAF carrier that
-------------
contractually commits itself to support civil aircraft and crews flying in
support of the AMC operations at any stage of CRAF activation as they transit a
specific civil airports.

4.2.2. SENIOR LODGER STATION. AMC/XOC selects airdromes as Senior Lodger
---------------------
stations based on the facilities available and the needs of CRAF and AMC.

4.2.3. AUGMENTING CARRIER PERSONNEL. Personnel provided by other CRAF
-----------------------------
carriers, who shall, when requested, augment a Senior Lodger station, and
perform duties as required by the Senior Lodger.

4.2.4. AUGMENTING DOD PERSONNEL. DOD personnel provided as augmentees to
-------------------------
support a Senior Lodger station. The support provided by these personnel may
include but not be limited to GCWDE, intelligence, weather, and mission
briefings.

4.2.5. CIVIL AIRLIFT SUPPORT ELEMENT (CASE). A team of two to four personnel,
-------------------------------------
possessing cargo and passenger expertise, and volunteered by civil air carrier
resources, that shall augment a AMC TALCE at an onload or offload site. The
CASE shall act as a liaison between the DOD and the civil carriers and shall
provide the necessary liaison support for civil aircraft and aircrews as they
transit specific airfields.

4.3. SENIOR LODGER CONTRACT PROVISIONS. All Senior Lodger services provided in
---------------------------------
connection with the CRAF shall be through provisions of a contract modification
issued by HQ AMC. The Airlift Services Contract makes provisions for the HQ AMC
Contracting Officer, as the HQ AMC CRC Director directs, to activate Senior
Lodger stations as required during CRAF activation. The Contracting Officer
shall issue a contract modification for stations activated.

4.4. SENIOR LODGER STATIONS. The following Senior Lodger stations, with the
-----------------------
responsible air carrier indicated, shall be activated as required.

4.4.1. CONUS
-----

4.4.1.1 Bangor International, ME -- Federal Express

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4.4.1.2 Boston/General Edward L. Logan International, MA -- TWA

4.4.1.3 Houston Intercontinental, TX -- Continental

4.4.1.4 JFK International, NY -- TWA

4.4.1.5 Miami International, FL -- Southern Air Transport

4.4.1.6 San Francisco International, CA --

4.4.1.7 Seattle-Tacoma International, WA -- Northwest

4.4.2 OVERSEAS
--------

4.4.2.1 Agana NAS, Guam -- Northwest

4.4.2.2 Anchorage International, Alaska -- Federal Express

4.4.2.3 Brussels National, Belgium -- Delta

4.4.2.4 Cairo International, Egypt -- TWA

4.4.2.5 Frankfurt Main, Germany -- Delta

4.4.2.6 Honolulu International, Hawaii --

4.4.2.7 Lisboa/Lisbon, Portugal -- TWA

4.4.2.8 London/Gatwick, England -- Continental

4.4.2.9 Naha, Okinawa, Japan -- Northwest

4.4.2.10 New Tokyo International, Japan -- Northwest

4.4.2.11 Prestwick, Scotland -- Northwest

4.4.2.12 Roma/Fiumicino, Italy -- TWA

4.5. LIMITING FACTORS Upon station activation, the Senior Lodger shall advise
----------------
the AMC CRC CRAF Cell of any limiting factors that may affect the assigned CRAF
mission.

4.6. SENIOR LODGER SERVICES. Senior Lodgers shall act as the primary agent for
----------------------
any services required, whether specifically providing them or acquiring them
through alternative sources. Should appropriate support be unavailable, the
Senior Lodger should contact AMC CRC CRAF Cell, either through the CRAF carrier
operations, directly, or by any other expeditious means.

4.6.1. CIVIL AIRCRAFT SUPPORT. Senior Lodger services consist of ground
----------------------
support for all civil aircraft and crews participating in US military airlift
operations. Services which the Senior Lodger performs will vary from station to
station depending upon the workload involved.

4.6.2. DOD AIRCRAFT SUPPORT. AMC may occasionally request the Senior Lodger to
--------------------
provide or obtain service for DOD aircraft. Should a priority determination be
required, the Senior Lodger manager shall

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communicate with the HQ AMC CRAF Cell
through the CRAF carrier operations.

4.7. ACCOUNTING AND FINANCE.
----------------------

4.7.1. A Change Order to the Contract shall specify period of obligation and
the limits of payments for services.

4.7.2. BILLING PROCEDURE FOR PERSONNEL. A CRAF carrier, other than the Senior
-------------------------------
Lodger carrier, providing augmenting personnel to a Senior Lodger station, shall
bill the Senior Lodger for the costs incurred.

4.7.3. CHARGES TO THE GOVERNMENT. In the event of Senior Lodger activation, HQ
-------------------------
AMC will forecast the traffic for each Senior Lodger Station for planning
purposes. Normally, the Senior Lodger operation at a given station should be
self-sustaining, provided the traffic forecasted is generated. In the event
such traffic is not generated, the Senior Lodger shall charge the excess cost to
the US Government in accordance with the Change Order limitation.

4.7.4. SERVICES. Normally, civil carriers shall pay the Senior Lodger for
--------
services required and rendered. However, AMC may require the Senior Lodger to
provide or arrange the services listed below, for CRAF aircraft, at no cost to
the using CRAF carrier. In such cases Senior Lodger services are chargeable to
the US Government.

4.7.4.1. Transient alert and ramp services.

4.7.4.2. Passenger and cargo handling services.

4.7.4.3. Fire and crash rescue support.

4.7.4.4. Aircraft clearance facilities.

4.7.4.5. Emergency medical services.

4.7.4.6. Aeromedical hub or spoke support.

4.7.4.7. Physical survey of selected Senior Lodger airports.

4.7.4.8. Physical security provisions.

4.7.4.9. Digital and voice communications capability.

SECTION B--FLIGHT OPERATIONS

4.9. AUTHENTICATORS.
--------------

4.9.1. Procedures. Authenticators may be used during CRAF operations.
Normally, the aircraft Captain or First Officer shall be issued the appropriate
authentication material at a carrier's hub in sufficient quantity to support the
mission to the destination base and return to the CONUS, including possible
delays en route. Carrier personnel issuing authentication material shall
instruct the aircrews in the proper use of the authenticators. Aircraft
Captains and First Officers with proper SECRET security clearances shall be
authorized access to the classified authentication material affecting their
mission. If updated authentication material is required at a Senior Lodger
station, the Senior Lodger shall assist the flight crew in obtaining the current
material, and shall insure they are instructed in its proper use. To verify a
crewmember's access to classified material, the following must be checked:

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SOLICITATION NO: F11626-94-R0001
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4.9.1.1 Crewmembers' airline identification card with picture.

4.9.1.2 The DD Form 489, Geneva Convention's Identity Card for Civilians who
Accompany the Armed Forces.

4.9.2. STORAGE and SECURITY. Senior Lodgers must be prepared to provide
--------------------
security for classified cryptographic material up to and including SECRET. To
handle US SECRET cryptographic materials, the handler must have a SECRET
security clearance and, unlike non-cryptographic material, must be a US citizen.

4.9.2.1. Stateside storage facilities require a facility clearance for
classified storage. An alternative to storage is "constant vigilance," where
the cryptographic material is kept at all times in the field of view of a US
citizen with a SECRET clearance. Carriers can identify employees at US Senior
Lodger sites to fulfill this function.

4.9.2.2. Storage of classified material at overseas Senior Lodger stations is
not authorized. Therefore, when an aircraft has been delayed, the Senior Lodger
shall assign a minimum of three employees who are US citizens and have SECRET
clearances for constant vigilance of cryptographic material. Should there be
less than three SECRET- carrier employees at the Senior Lodger site, or should
those at the overseas site be required for other tasks not permitting constant
vigilance, the Senior Lodger carrier should identify a minimum of three
employees who can be spared during a CRAF activation (such as reservations
clerks, etc.) and who are US citizens to receive a US SECRET clearance and
deploy to the overseas site. If the Senior Lodger carrier is unable to supply
the needed personnel, the Senior Lodger shall contact the HQ AMC CRC for
assistance.

4.9.2.3. If delays are incurred at locations other than military installations
or Senior Lodger stations, the aircraft Captain shall insure the security of the
authentication materials

4.9.3. Disposition of Authenticator:

4.9.3.1. The transfer of authentication material between aircrews at staging
points shall be accomplished by the use of the Standard Form (SF) 153 or Comsec
Material Report comparable receipt form.

4.9.3.2. When no longer needed, authentication materials must be promptly
returned to any AMC Command Post or USAF Base Operations. Retain the SF 153 or
other receipt for 2 years.

4.9.3.3. In an emergency, burn or finely shred the authenticators, widely
scatter the remains, and complete the destruction portion of the SF 153.
Provide a copy of this form to the issuing US Government agency/facility, and
retain one copy for 2 years.

SECTION C--TRAFFIC SERVICES RESPONSIBILITIES

4.10. AIRFIELDS.
---------

4.10.1. CIVIL AIRFIELDS. AMC may require Senior Lodger to provide the traffic
---------------
services for CRAF aircraft as specified in paragraphs 4.11 through 4.18.

4.10.2. MILITARY AIRFIELDS. AMC will provide or arrange for traffic services
------------------
for CRAF aircraft at military airfields. Normally, these services will consist
of on/off-load operations, including documentation. AMC may provide other
traffic functions when necessary to expedite the CRAF mission.

4.11. PASSENGER SERVICE If circumstances require passenger handling, the
-----------------
following services may be required.

4.11.1. Onload Passengers:

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4.11.1.1. Ascertain proper boarding authority has been provided prior to
onloading passengers.

4.11.1.2. Ascertain documentation papers are in order and ensure proper
ticketing (Warsaw Convention) at commercial airport facilities normally operated
by the contractor or its agents, valid passports, visas, and health records are
possessed by those passengers departing for overseas. The contractor is not
responsible to ticket a passenger when the passengers are moved outside the
commerical terminal structure and using mobility passenger movement procedures.
The services are responsible to brief their passengers on Warsaw Convention
liability limits, through the use of handouts and signs containing the Warsaw
Convention language, and briefings to passengers using direct quotations of the
convention language. Additional insurance packets are handed out to the
passengers at that time.

4.11.1.3. Provide special handling for all courier and diplomatic passengers.

4.11.1.4. Provide passenger conveyance from terminal to aircraft, as required.

4.11.2. Offload Passengers:

4.11.2.1. Ascertain that passengers possess required passports, visas, and
health records prior to government processing.

4.11.2.2. Arrange for customs, public health, immigration, and ground
transportation.

4.11.2.3. Provide or arrange for adequate baggage handling.

4.11.2.4. Assure passengers process through customs, public health,
immigration, etc.

4.11.2.5. Provide special handling for courier and diplomatic passengers.

4.12. CARGO SERVICE Senior Lodger stations will normally not be cargo onload
-------------
or offload sites. If
circumstances require cargo handling, the following services may be required.

4.12.1. Outbound Cargo:

4.12.1.1. Ensure onload capability exists.

4.12.1.2. Receipt of cargo or mail from shipper.

4.12.1.3. Prepare necessary waybills, forms, etc.

4.12.1.4. Provide special handling and facilities for high value and hazardous
cargo.

4.12.2. Inbound Cargo:

4.12.2.1. Ensure offload capability exists.

4.12.2.2. Arrange for notifying consignee of shipment arrival or availability.

4.12.2.3. Arrange for government processing (customs, agriculture) or
shipments.

4.12.2.4. Provide necessary facilities for tracing lost or mishandled
shipments.

4.12.3. Records: Provide adequate facilities for maintenance of current
records and handling all invoicing.

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4.13. ADDITIONAL GROUND SERVICE SUPPORT. The following factors must be
---------------------------------
considered:

4.13.1. Ramp parking assignments for aircraft.

4.13.2. Weight and balance planning and coordination.

4.13.3. Issuance of fuel load instructions to those responsible for aircraft
fueling.

4.13.4. Preparing and transmitting flight movement report which includes
passenger and cargo breakdowns, delays, crewmembers on board, aircraft
registration number, and fuel load.

4.13.5. Dissemination of accurate flight information.

4.13.6. Alerting and/or advising crew of dangerous cargo or high-value
shipments on board and its location.

4.13.7. Alerting flight crews as to flight readiness or availability.

4.13.8. Preparation or procurement of required food and beverages for
passengers, patients and flight crew.

4.13.8.1. Delivery of the food and beverages to the aircraft.

4.13.8.2. Galley servicing and supply.

4.14. CABIN SERVICE
-------------

4.14.1. Services and Supplies. Lavatory servicing and supply, including
operation of the necessary vehicles.

4.14.2. Cleaning. All cabin and cockpit areas.

4.14.3. Water. Water service necessary for aircraft operation and passenger
convenience.

4.15. TRAFFIC SUPPORT AND FORMS If a CRAF aircraft requires additional
-------------------------
supplies and AMC traffic forms while on a CRAF airlift mission, the Senior
Lodger shall provide company supplies and AMC (or equivalent substitute) forms.

4.16. AMC PERSONNEL. AMC shall provide traffic personnel to effect liaison on
-------------
traffic matters between AMC and the Senior Lodger at those stations where there
is a traffic function.

SECTION D--COMMUNICATIONS RESPONSIBILITIES

4.17. COMMUNICATIONS POLICY.
---------------------

4.17.1. SERVICES. Senior Lodgers shall use existing civil communications
--------
circuits. Military circuits, where available, are for backup service only.

4.17.2. RECORD COMMUNICATIONS.
---------------------

4.17.2.1. Senior Lodgers shall have the means to communicate with the HQ AMC
CRC, the carrier's home station, appropriate air traffic control center,
meteorological services, and adjacent stations served by CRAF. Facilities may
consist of, but are not necessarily limited to, the following:

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4.17.2.1.1. International Civil Aviation Organization (ICAO)/Aeronautical Fixed
Telecommunications Network (AFTN).

4.17.2.1.2. Airline multiple user circuits, Aeronautical Radio, Inc. (ARINC),
International Aeradio, Ltd., and Societe Internationale de Telecommunicata
Aeronautiques (SITA).

4.17.2.2. The carrier shall coordinate with AMC for connection to the nearest
military communications center to provide for alternate message routing.

4.18. COMMUNICATIONS STATUS REPORT. Each Senior Lodger shall advise the HQ AMC
----------------------------
CRC and the air carrier's headquarters of available communications (ARINC, STU
III, Secure Fax machines, telephone, etc.), immediately upon the activation of
the Senior Lodger station. Carriers shall review Senior Lodger phone numbers,
ARINC addresses, etc., annually for currency.

SECTION E--SAFETY RESPONSIBILITIES

4.19. HAZARD REPORTING. The Senior Lodger or carrier representatives shall
----------------
report any condition involving cargo which, in their opinion, constitutes a
hazard to operations to the carrier and airport safety personnel. This report
should contain the following information:

4.19.1. Location.

4.19.2. Date and time (GMT).

4.19.3. Nomenclature of cargo (proper shipping name of hazardous cargo).

4.19.4. Shipper's organization/unit and name of cargo representative.

4.19.5. Destination of cargo.

4.19.6. Transportation control number (TCN) or Bumper/Increment number.

4.19.7. Facts and circumstances.

SECTION F--CRAF GROUND CHEMICAL WARFARE DEFENSE ENSEMBLE (GCWDE) MANAGEMENT

4.20 Concept of Operations. If GCWDE is directed by HQ AMC, CRAF aircrew
-----------------------
members will receive, at a Senior Lodger location, hands-on training and GCWDE
for their flight into/out of the AOR where chemical protection may be necessary.
All government furnished GCWDE kits will be returned to the next available
senior lodger location after exiting the AOR. This will be reentered into issue
stocks for other transiting CRAF aircrews.

4.20.1 The activated Senior Lodger station manager will coordinate with AMC
Tanker Airlift Control Element (TALCE) personnel and arrange for suitable
facilities necessary for their on-site CRAF GCWDE program. AMC designated
disaster preparedness personnel will provide the necessary administrative and
inspection requirements. HQ AMC/XOC will coordinate with the designated Senior
Lodger carriers on this program.

CHAPTER 5
---------

FLIGHT OPERATIONS

SECTION A--CONCEPT

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SOLICITATION NO: F11626-94-R0001
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5.1. GENERAL. CRAF flight operations shall be conducted in accordance with all
-------
applicable Federal Aviation Regulations (FARs) and all other applicable
governing directives.

5.2. OPERATIONS. There are many identified CRAF missions which support DOD
----------
airlift requirements during airlift or national emergencies. Primarily, these
are overseas deployment and resupply missions. The airlift capability in
support of these missions is based on a daily aircraft utilization rate of 10
hours.

5.2.1 INTERNATIONAL. The Long-range section satisfies requirements that exceed
--------------
the capability of AMC's organic long-range aircraft. The Short-range section
satisfies medium-range offshore airlift requirements such as the Pacific inter-
island complex, Western Pacific, and from the CONUS to such places as Alaska,
Greenland, Panama, and Puerto Rico. AMC applies a 10-hour a day utilization
rate to these two segments for contingency planning. To arrive at a productive
aircraft utilization rate, the following known factors apply:

5.2.1.1 Aircraft ferry, position, and deposition time computed at .6 hours a
day.

5.2.1.2 DOD contingency plans identify wartime deployment airlift requirements;
therefore, productive utilization is one-half of the remaining 9.4 hours a day.
This equates to 4.7 hour a day.

5.2.2 AEROMEDICAL. Boeing B767 aircraft shall be configured to carry litter
------------
and ambulatory patients and provide all necessary electrical and oxygen systems
necessary for patient support. B767 aircraft are to be utilized in a strategic
role to augment existing military cargo aircraft such as the C-141. The
utilization rate for planning is 10 hours per aircraft per day.

5.3. CRAF OPERATIONS AUTHORITY. CRAF operations shall be conducted in
-------------------------
accordance with procedures outlined in AMCR 55-8; AMCR 76-8; AMCR 76-1, Volume
I; and terms of the current AMC Airlift Services Contract. Any situation or
subject not covered herein shall be resolved by the HQ AMC CRC-D or the
contracting officer.

5.4. FEDERAL AVIATION REGULATIONS (FARs). The basic policy is that CRAF shall
-----------------------------------
operate under FARs with waivers as necessary.

5.5. ALLOCATION OF THE FLEET. Aircraft are allocated to the CRAF by the
-----------------------
Department of Transportation (DOT)/Officer of Emergency Transportation (OET),
under the authority of Defense Production Act of 1950, as amended (50 USC App.
2061, et seg.). This allocation is based upon such factors as Department of
Defense (DOD)-approved airlift requirements and suitability of civil aircraft.

5.6. PASSENGER AIRCRAFT. These aircraft, allocated against international (long
------------------
and short-range) airlift, shall arrive at on-load site prepared to receive
passengers/troops.

5.7. CARGO AIRCRAFT. Cargo aircraft allocated against international (long and
--------------
short-range) airlift requirements shall arrive at on-load site prepared to
receive cargo loaded on military 463L pallets.

5.8. CONVERTIBLE AIRCRAFT. Convertible aircraft shall be configured by the
--------------------
carriers for cargo missions unless otherwise specified by the AMC CRC CRAF Cell.

SECTION B--COMMUNICATIONS

5.9. IN-FLIGHT COMMAND COMMUNICATION PROCEDURES.
------------------------------------------

5.9.1. MISSION POSITION REPORTING. All CRAF aircraft shall keep appropriate
--------------------------
AMC Command and

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Control agencies (Tanker Airlift Control Center (TACC), or Tanker Airlift
Control Elements (TALCE)), informed of mission progress. This shall be done via
direct radio contact when possible or through relays via company operations
centers, or any suitable ground radio station.

5.9.2. ARRIVAL/DEPARTURE MESSAGES. CRAF aircraft on active AMC missions or
--------------------------
positioning to an active AMC mission shall pass AMC mission number, aircraft
number, actual time of arrival/departure and estimated time of departure/arrival
within 15 minutes of arriving or departing a station without a AMC command and
control agency.

5.9.3. ENROUTE COMMUNICATIONS WITH THEATER ALCC. On all missions into an area
-----------------------------------------
of operations that has a designated ALCC, CRAF aircraft must contact the ALCC
prior to passing geographical boundaries of the operational area. The following
information shall be passed.

5.9.3.1. Mission number and FAA aircraft registration (Tail) number.

5.9.3.2. Estimated Time of Arrival (ETA) for destination or alternate, and
delay if anticipated.

5.9.3.3. Any significant maintenance problems.

5.9.3.4. Thirty minutes prior to landing, pass the information requested in

5.9.3. above to the destination TALCE.

5.9.4. ESTABLISHING COMMUNICATIONS WITH DESTINATION STATION. On all flights,
----------------------------------------------------
when an aircraft is approximately two hours from destination, the aircraft
Captain shall establish contact with or have information relayed to the
destination station. The following data shall be passed:

5.9.4.1. Mission number and FAA aircraft registration (Tail) number.

5.9.4.2. ETA destination or alternate and delay time if anticipated.

5.9.4.3. Any significant maintenance problems.

5.9.5. THE AMC TALCE COMMANDER, SENIOR AMC REPRESENTATIVE, OR SENIOR LODGER
--------------------------------------------------------------------
Shall ensure that the CRAF aircrew receives (see AMCR 55-25):

5.9.5.1. The latest available communications information concerning the
proposed route of flight.

5.9.5.2. Enough authentication material (tables) to cover the subsequent 72
hours.

5.9.5.3. The latest intelligence information associated with the route of
flight and destination.

5.9.5.4. If directed by HQ AMC CRC, the associated hands-on training and issue
of GCWDE accomplished by AMC disaster preparedness personnel.

5.10. MESSAGES. The following air traffic control (ATC) and operational
--------
messages are necessary for proper control and flight following of the CRAF by
the HQ AMC CRC over standard communication channels.

5.10.1. ATC MESSAGES. These shall be filed in accordance with established
------------
procedures.

5.10.2. OPERATIONAL MESSAGES. There are three kinds: departure, arrival, and
--------------------
advisory. Addressees should be the next intended landing site operation center,
the appropriate carrier, and the TACC.

5.10.3. When standard communications are not possible, the crew should
communicate the following information to

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their company headquarters (or the most accessible military flight facility) by
the most rapid and efficient method at their disposal:

5.10.3.1. Greenwich (Z) Time of Arrival.

5.10.3.2. Estimated (Z) Time of Departure.

5.10.3.3. Proposed destination and estimated arrival times (Z).

5.10.3.4. Maintenance Problems.

5.10.3.5. Other information as necessary.

SECTION C--AIRCREW, SCHEDULING, AND MISSION MANAGEMENT.

5.11. GENERAL. During CRAF activation, mission scheduling shall be accomplished
-------
by the AMC CRC CRAF Cell. Carriers shall schedule aircrews and aircraft.

5.12. DEVIATION FROM MISSION SCHEDULE. Except for emergency or safety reasons,
-------------------------------
deviations from mission schedules must be authorized by the AMC CRC.

5.13. CREW SCHEDULING AND STAGING RESPONSIBILITY. Aircrew scheduling and
------------------------------------------
staging shall be the responsibility of the CRAF carrier. Under emergency
conditions, the responsibility for crew scheduling may be delegated by the
carrier to the Senior Lodger station manager.

5.14. CREW COMPLEMENT.
---------------

5.14.1. Aircrew composition is the decision of the CRAF carrier and in
accordance with carrier operating manuals and Part 121 of the FAR.

5.14.2. The composition of the aeromedical crew shall be determined by the
Chief Nurse of the aeromedical crew organization, based upon patient load and
acuity. A minimum B767 aeromedical crew is 4 flight nurses and 6 aeromedical
technicians.

5.14.3. Assignment of carrier or FAA personnel as check or instructor personnel
is authorized. These additional crewmembers shall be limited, whenever
possible, to flights which shall not have a reduced ACL as a result of the
additional crewmember(s) being aboard. However, should the additional
crewmember require a cabin seat that reduces the ACL, the ACO must grant
approval.

5.14.4. Prior to boarding the aircraft, written authority for FAA and carrier
personnel, signed by properly designated personnel of the carrier concerned,
must be presented to the appropriate operations officer, dispatch center, Senior
Lodger station manager, or AMC representative.

5.15. CREW NOTIFICATION.
-----------------

5.15.1. CONUS. Crew notification shall be accomplished by the CRAF carrier.
-----
Should CRAF be in a dispersed posture, notification shall be accomplished by the
CONUS Senior Lodger station manager.

5.15.2. OVERSEAS. Crew notification shall be accomplished by the Senior Lodger
--------
station manager at civil airports and by Base Operations or AMC Command and
Control agency at military airfields.

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SOLICITATION NO: F11626-94-R0001
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5.16. AIRCRAFT GROUND TIME. For planning purposes the following ground times
--------------------
shall be used:
<TABLE>
<CAPTION>

CONCURRENT OFF-LOAD TURN
TYPE LOADING ENROUTE AT AROUND 1/
CARGO SERVICING 1/ STATIONS DESTINATION 5/ STATION 2/
- ------------------------ ------------ -------- -------------- ----------
<S> <C> <C> <C> <C>

Palletized Bulk 3/
1-7 pallets 3 + 00 1 + 30 0 + 45 3 + 00
8-13 pallets 3 + 00 1 + 30 1 + 15 3 + 00
14-18 pallets 3 + 30 1 + 30 1 + 15 3 + 30
19 or more 5 + 00 4/ 1 + 30 3 + 00 5 + 00 4/

Oversize/Rolling Stock
1-25 ST ACL 4 + 00 1 + 30 2 + 00 4 + 00
26 ST or more 5 + 00 4/ 1 + 30 3 + 00 5 + 00 4/

CONCURRENT OFF-LOAD TURN
TYPE LOADING ENROUTE AT AROUND 1/
CARGO SERVICING 1/ STATIONS DESTINATION 5/ STATION 2/
- ------------------------ ------------ -------- -------------- ----------

Passengers
105-250 PAX 2 + 00 1 + 30 2 + 00 2 + 30
251 or more 3 + 00 1 + 30 3 + 00 3 + 30

Aeromed Evac Patients
All 5 + 00 3 + 00 3 + 00 6 + 00
</TABLE>

1/ Add one hour at station where concurrent loading and servicing are not
authorized.

2/ Stations where off-load, servicing, and/or on-loading shall occur.

3/ Assumes palletized bulk cargo load and that aircraft is properly configured
to accommodate 463L pallets.

4/ Add one hour if subfloor must be installed or removed.

5/ No aircraft servicing is planned.

SECTION D--AIRCREW RESTRICTIONS

5.17. FLIGHT TIME LIMITATIONS. The flight time limitation for CRAF crewmembers
is specified in the FAR and the carriers' aircraft operating manual, unless
otherwise waived by FAA. Carriers with union agreements, which have flight time
limitations less than those identified in Chapter 10, must consider this in
planning aircrew requirements. Where possible, carriers should have agreements
with crew members that permit flight operations during CRAF activation up to the
maximum limits specified by FAR and safe operating practices.

SECTION E--AIR CARRIER DISPATCH PROCEDURES

5.24. AIRCRAFT CAPTAIN'S AUTHORITY. Aircraft captains may:

5.24.1. DELAY OR DISCONTINUE FLIGHT. Delay of discontinue their flight when,
in their opinion, operating conditions are unsafe for starting or continuing a
flight.

5.24.2. CHANGE FLIGHT PLAN. Initiate a change in their flight plan when, in
their opinion, this change is

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necessary for reasons of safety.

5.24.3. RELEASE FLIGHT Release their own flight when operating in support of
CRAF.

5.25. ALTERNATE AIRPORTS.

5.25.1. SELECTION. In flight planning alternate airports for CRAF missions,
CRAF carriers shall consider the following:

5.25.1.1. For foreign off-load destinations, a Senior Lodger station, a US
military airfield, or airfield with US military facilities should be given first
priority. (AMC command and control agencies shall provide preferred
alternatives for each mission based on forces and supplies requirements and
desired off-load locations.)

5.25.1.2. Availability and proximity of billeting and messing facilities for
passenger missions.

5.25.1.3. Diplomatic clearance, overflight agreements, and security
considerations for missions carrying dangerous or special handling cargo.

5.25.2. COORDINATION. The nearest or most available AMC operations
center/command post should be contacted before proceeding to an alternate.

5.25.3. AEROMED EVAC MISSION In addition to the above considerations, casualty
transport Systems or equivalent MHE must be available. A satisfactory patient
holding facility may also be required.

SECTION F--SPECIAL OPERATING PROCEDURE

5.26. HANDLING OF COMPLETED MISSION PAPERS. Disposition of Flight Forms. All
flight papers that have been used or collected during flight shall be disposed
of in accordance with carrier directives.

5.27. EARLY DEPARTURE. The HQ AMC CRC may authorize early departure from any
station. Early departures must be approved by the aircraft captain.

5.28. EMERGENCY AND SURVIVAL EQUIPMENT. CRAF carriers are responsible for
providing overwater, emergency, and survival equipment in compliance with
Federal Aviation Regulations.

5.29. PRIORITY OF AIRCRAFT. During CRAF activation, military and civil
transport aircraft flying in support of the contingency shall receive the same
priority.

SECTION G--DISPERSAL AND REGROUP PLANNING

5.30. CRAF REGROUP OPERATIONS. CRAF aircraft and resources shall be considered
dispersed in place and regrouped in accordance with the provisions of this
attachment and the HQ AMC CRC.

5.30.1. In planning for employment of civil airlift augmentation during a
national emergency, consideration must be given to the preservation of airlift
resources.

5.30.2. Aircraft inflight over the CONUS shall be dispersed to safe haven
bases, as directed by air traffic control authorities. When conditions permit,
control of these dispersed aircraft shall be retained by company management who
shall direct reassembly at predetermined regroup operating bases, or dispatch to
specified on-load bases. Airlift mission assignments shall be routed through
corporate management. Airlift mission assignments shall be from the HQ AMC CRC.

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5.30.3. Allocated aircraft that are offshore when safe passage procedures
(contained in SECRET NORAD Regulations 55-67 and 55-68) have been implemented
shall divert into the nearest base listed below so as to obtain specific
procedural information required for penetration and operation in the NORAD area.
Base operations at one of the following locations shall provide the NORAD
information prior to departing for entry into the NORAD defense area.

5.30.3.1. ATLANTIC AREA. Rhein-Main AB, Germany; Incirlik AB, Turkey; and
Lajes Field, Azores.

5.30.3.2. PACIFIC AREA. Andersen AFB, Guam; Yokota AB, Japan; Kadena AB,
Okinawa; Hickam AFB, Hawaii; Elmendorf AFB/Cold Bay AFS (714 ACWS), Alaska. (If
aircraft is on the ground at Anchorage International, contact Elemendorf AFB.
If aircraft is airborne within the Alaska area, divert to Cold Bay AFS.)

5.30.4. After obtaining a copy of the NORAD Safe Passage procedures, aircraft
identified in paragraph 5.30.3. above, shall be directed to:

5.30.4.1. A CONUS regroup base, or

5.30.4.2. A CONUS on-load base.

CHAPTER 6
---------

TRAFFIC (TERMINAL SERVICES)

6.1. GENERAL. This chapter covers the broad aspects of traffic/terminal
-------
services as they apply to the International (Long-Range) CRAF. Traffic/terminal
services include the receiving, processing, documenting, on/off-loading of
passengers and cargo, cabin servicing, preparing and submitting necessary
reports, maintaining records, and accomplishing other applicable tasks.

6.2. TRAFFIC FUNCTIONS RESPONSIBILITIES. During CRAF activation,
----------------------------------
responsibility for traffic functions shall be:

6.2.1. SENIOR LODGER. The Senior Lodger station manager shall be responsible
-------------
for enroute traffic functions for CRAF aircraft. When required, military
personnel shall provide liaison between the military and the Senior Lodger
station manager.

6.2.2. MILITARY INSTALLATIONS. When CRAF has been activated, CRAF aircraft
----------------------
shall use traffic terminals as directed. When military stations are used by
CRAF aircraft, services and equipment, as set forth in this Contract, shall be
provided by the Government.

6.2.3. AMC NUMBERED AIR FORCE (AMC NAF)-CONUS. The responsible AMC NAF shall
--------------------------------------
provide all aerial port of embarkation (APOE) functions required for CRAF
operation.

6.3. CRAF ROUTE SUPPORT.
------------------

6.3.1. MOVEMENT ON CRAF AIRCRAFT. CRAF carriers shall move support traffic
-------------------------
aboard their own or other civil carriers aircraft in accordance with Section C
of the contract except that, during CRAF activation, three percent of the
aircraft's ACL, by weight, shall be considered available for route
support/resupply.

6.3.2. MOVEMENT ON MILITARY AIRCRAFT. CRAF carriers that are unable to move
-----------------------------
support traffic aboard CRAF/non-CRAF civil aircraft shall request assistance
from AMC CRC.

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6.3.3. PRIORITIES. CRAF route support traffic shall be assigned the same
----------
movement priority as AMC route support traffic.

6.4. TRAFFIC DOCUMENTATION AND PROCEDURES.
------------------------------------

6.4.1. ROUTING OF TRAFFIC DOCUMENTS. All traffic moved on CRAF aircraft shall
----------------------------
be documented and processed in the same manner as traffic moved on AMC aircraft.
Manifests, and supporting documents, prepared at non-AMC CONUS on-load bases
shall be forwarded by AMC personnel to the appropriate AMC Numbered Air Force.

6.5. MATERIAL HANDLING EQUIPMENT (MHE).
---------------------------------

6.5.1. The HQ AMC CRC Director shall be responsible for assuring availability
of adequate MHE, cargo and passenger, to support planned workload at all on-load
and off-load locations. See Note in paragraph 7.2.1.7.

6.5.2. CRAF carriers shall be tasked to provide wide-body MHE from their
resources, when available, unless compatible military equipment is
prepositioned.

6.5.2.1. Positioning of carrier MHE will normally be their responsibility.

6.5.2.2. AMC shall position MHE that exceeds the carrier capability to
position.

6.5.2.3. Payment to carriers for use of MHE and equipment operators shall be
settled under the authority of the Changes clause of the Airlift Services
contracts.

6.6. CARGO TIE-DOWN POLICY. AMC is responsible for providing the tie-down
---------------------
equipment for palletized and non-palletized cargo. For non-palletized cargo,
AMC is also responsible for providing pallets required for sub-flooring. The
carrier is responsible for securing pallets to the aircraft.

6.7. PASSENGER FEEDING.
-----------------

6.7.1. CRITERIA. All passengers shall be provided with inflight meals or
--------
snacks.

6.7.2. RESPONSIBILITY. Obtaining, preparing, and serving inflight meals are
--------------
the carrier's responsibilities. The contractor is required to provide ground
feeding when appropriate.

6.7.3. PURCHASE OF INFLIGHT MEALS FROM MILITARY. The contractor may purchase
----------------------------------------
inflight meals from military installations when a suitable commercial source is
not available.

6.7.4. GROUND FEEDING. Ground feeding at military installations shall be in
--------------
accordance with this contract.

6.8. PATIENT MEALS. Patients receiving regular diets shall be served by the
-------------
Flight Attendants. When special meals are required and are available,
aeromedical evacuation crewmembers shall coordinate with flight attendants on
meal preparation and delivery.

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SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-DOO27

CHAPTER 7
---------

LOGISTICS

SECTION A--RESPONSIBILITIES

7.1. AMC. AMC shall be responsible for programming, budgeting, funding,
---
contracting, and monitoring logistics support in the following areas:

7.1.1. INITIAL MOVEMENT AND RESUPPLY. Upon Stage III CRAF activation, HQ AMC
-----------------------------
CRC will ensure that sufficient support airlift is made available, if requested,
to CRAF carriers for the initial movement and subsequent resupply of their route
support materials and personnel.

7.1.1.1. Transportation of resupply support shall be via route support airlift,
or via government surface transportation, as dictated by the urgency of the
requirement.

7.1.1.2. Should route support be required, request shall be forwarded to HQ AMC
CRC.

7.1.2. LOGISTIC SUPPORT PLANNING. HQ AMC CRC will monitor and coordinate CRAF
-------------------------
logistic support effectiveness under the airline self-support concept.

7.1.3. POL FACILITIES AND RESUPPLY CAPABILITY. AMC shall ensure that adequate
--------------------------------------
POL facilities and resupply capability are available at all planned contingency
bases (both commercial and military). If fuel cannot be made available,
suitable alternate airfields shall be recommended. Standard fuels will normally
be available. Unusual POL requirements shall be managed by either the Senior
Lodger or the using carrier.

7.1.4. TO-PLANE POL SERVICES. Headquarters AMC CRC shall ensure that to-plane
---------------------
servicing of POL is provided at military bases. To-plane servicing of POL at
commercial bases shall be the responsibility of the carrier or Senior Lodger
station manager.

7.2. MILITARY BASES. Commanders of military bases identified in USAF WAR and
--------------
Mobilization Plan, through which CRAF aircraft may transit, shall be responsible
for the following:

7.2.1. GROUND SERVICES. Provide services to include the furnishing of
---------------
necessary equipment and personnel for all CRAF aircraft arrivals:

7.2.1.1. Ramp services. To include: landing, towing, parking, ramp sweeping,
snow removal service, APUs, fire guard, turbine engine starting units, loading
ramps, crew and passenger stairs/ramps, baggage carts, lavatory, and potable
water service units.

7.2.1.2. To-plane fueling.

NOTE: A technically qualified carrier representative must be present to perform
the into-plane portion of the fueling operations.

7.2.1.3. Cargo handling.

7.2.1.4. Ground-to-plane air conditioning, where available and required.

7.2.1.5. Engine water (demineralized) and alcohol.

7.2.1.6. Aircraft deicing.

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7.2.1.7. Ground heater.

NOTE: Peculiar Ground Equipment (equipment not common to normal base
requirements in support of military aircraft or not compatible with CRAF
aircraft) may not be available; therefore, must be provided by the carrier.

7.2.2. SERVICES FOR CRAF AIR CREWS. Where commercial services are not
---------------------------
available at or near military bases, arrangement for the billeting and messing
facilities for CRAF air crews shall be accomplished by the US Government, as
required. Services or property furnished on military bases, pursuant to this
paragraph, shall be on a reimbursable basis in accordance with provisions of:

7.2.2.1. Air Force Bases--AFM 67-1, Volume I, part 1.

7.2.2.2. Naval Air Stations--Naval Supply Systems Command Manuel, Volume II.

7.2.2.3. Army Air Fields--AR 210-95 (POL only).

7.2.3. HOUSEKEEPING SUPPORT AND SERVICES. Providing the CRAF operation with
---------------------------------
normal housekeeping support and services.

7.2.4. REIMBURSABLE OR EQUATABLE CREDIT EXCHANGE. Logistic support provided by
-----------------------------------------
the Government to CRAF carriers shall be on a reimbursable or equitable credit
exchange basis, as contractually agreed.

7.2.5. PURCHASE OF PETROLEUM PRODUCTS. The Contract may purchase at any
------------------------------
military base other than Rhein-Main AB, Germany (unless specific approval is
granted by supplemental agreement), for the use in performing services
hereunder.

7.3. CRAF CARRIER.
------------

7.3.1. SUPPLY LEVELS. Maintain adequate supply levels to assure expeditious
-------------
unit replacement for unserviceable parts.

7.3.2. TRANSPORTATION PRIORITIES. Assign transportation priorities to
-------------------------
shipments consigned to the Senior Lodger station manager.

7.3.3. SUPPLY PRIORITIES. Honor the supply priority on Senior Lodger station
-----------------
manager requests for resupply.

7.3.4. SHIPPING RESUPPLY ITEMS. Ship routine resupply rotatable items within
-----------------------
48 hours, if possible.

7.3.5. REPORTING SUPPLY DIFFICULTIES. Advise Senior Lodger station managers
-----------------------------
when difficulty in filling requests is anticipated within the time limit or the
priority indicated.

7.3.6. STATUS OF SUPPLY ACTIONS. Keep the Senior Lodger station managers
------------------------
advised as to the status of their requests for supply action.

7.3.7. MAINTENANCE SERVICE. Provide or make arrangements for requirements to
-------------------
support CRAF maintenance services within the CONUS.

7.3.8. SPECIAL CLOTHING. Ensure that company personnel are adequately clothed
----------------
and equipped for assigned locations and particular job specialty.

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SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-DOO27

SECTION B--SUPPLY AND SERVICES

7.4. AIRCRAFT SPARES. Each CRAF carrier shall determine spares required for
---------------
each station or individual aircraft to accomplish their assigned mission based
upon station workload and route structure. Allocation of spares to, and
placement of spares on, individual aircraft for selected stations shall be in
consonance with the carrier's best estimate of the support capability required.
Carriers will consider all available sources of supply in planning for
anticipated spares support.

7.5. GROUND EQUIPMENT AND AIRCRAFT SERVICE.
-------------------------------------

7.5.1. MILITARY BASES. At military installations, common ground support
--------------
equipment shall be provided CRAF carriers, as required.

7.5.2. COMMERCIAL BASES. At commercial bases, Senior Lodger station managers
----------------
will provide required support to the maximum extent possible, exhausting all
civil sources. Deficiencies in support requirements shall be reported to the HQ
AMC CRC.

7.6. POL (PETROLEUM - OIL - LUBRICANTS).
----------------------------------

7.6.1. MILITARY BASES. POL products of military specifications shall be
--------------
provided carriers, as required, on a reimbursable basis (see paragraph 7.2.).
Military fuels JP-4 and JP-5 are acceptable substitutes for commercial fuels.
CRAF carriers and Senior Lodger station managers will provide their own peculiar
requirements of commercial type oils, lubricants, and fluids.

7.6.2. COMMERCIAL BASES. Senior Lodger station managers will help arrange for
----------------
all CRAF POL, using all available civil sources to obtain full support.
Deficiencies shall be reported to the HQ AMC CRC.

SECTION C--MAINTENANCE

7.7. MAINTENANCE POLICY. Normally, maintenance shall be accomplished at the
------------------
operator's facilities or other agencies contracted by the carrier. Aircraft
maintenance at en route and turnaround bases shall be performed in accordance
with policies and procedures of respective carriers and this contract.

7.8. EMERGENCY MAINTENANCE. At military bases, military commanders are
---------------------
authorized to furnish aircraft maintenance, within the limits of existing
capability, on a reimbursable basis. Carrier shall provide a qualified
supervisor (flight deck crew member, if available) when maintenance is performed
by the military.

7.9. MAINTENANCE OF GROUND SUPPORT EQUIPMENT.
---------------------------------------

7.9.1. MILITARY BASES. Peculiar equipment required by the carriers shall be
--------------
the responsibility of the using carrier.

7.9.2. COMMERCIAL AIRPORTS. Equipment provided from airline industry resources
-------------------
shall be maintained by the Senior Lodger Station Manager.

7.10. AIRCRAFT INSPECTIONS AND ENGINE CHANGES. Individual CRAF carriers shall
---------------------------------------
control their scheduled aircraft maintenance inspections and time limited
components through their scheduling sections in accordance with company policy.

7.11. MINIMUM EQUIPMENT REQUIREMENTS. Instructions contained in each CRAF
------------------------------
carrier's aircraft

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SOLICITATION NO: F11626-94-R0001
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operating manual shall be used when releasing aircraft with
inoperative items.

7.12. MANDATORY AIRCRAFT MODIFICATION AND INSPECTION. Each CRAF carrier shall
----------------------------------------------
ensure its aircraft are in compliance with applicable FAA standards and
directives. In those instances where the FAA and the carrier's mandatory
inspection or modification work is to be performed, the Senior Lodger Station
Manger shall perform such work or inspection in accordance with instruction
from the carrier.

7.13. AIRBORNE COMMUNICATIONS AND NAVIGATION EQUIPMENT MAINTENANCE.
------------------------------------------------------------
Maintenance of aircraft communications and navigational equipment shall be
predicated on unit replacement and accomplishment of limited repairs within the
capability of each Senior Lodger Station Manger. Equipment that cannot be
repaired shall be returned to the carrier from whose aircraft the unit was
removed.

CHAPTER 8
---------

COMMUNICATIONS

SECTION A--CONCEPT

8.1. GENERAL. This chapter establishes communication policies and procedures
-------
to be used during the employment of the CRAF.

8.2. ACTIVATION OF CRAF. Activation of the CRAF will require continuous
------------------
communication capability between the HQ AMC CRC and the carriers. The means of
communication shall be those facilities normally used during the average
business day. They include: telephone, Aeronautical Radio, Inc. (ARINC),
Automatic Digital Network (AUTODIN), secure telephone and secure fax machine.

8.3. FEDERAL AVIATION REGULATIONS (FARs). FARs are applicable in all civil
-----------------------------------
aviation operations.

SECTION B--OPERATING PROCEDURES

8.4. GENERAL.
-------

8.4.1. USE OF COMMUNICATIONS EQUIPMENT. CRAF aircraft shall be equipped with
-------------------------------
radios that are capable of communicating with all appropriate control agencies.
CRAF air crews shall use International Civil Aviation Organization (ICAO)
procedures unless otherwise instructed.

8.4.2. PRIMARY AND SECONDARY GROUND/AIR CONTACT. ICAO and other civil
----------------------------------------
ground/air stations presently used by CRAF carriers shall be the primary
aircraft contact. USAF Global Command and Control System (GCCS) stations shall
be for secondary contact when civil facilities are not available.

8.5. COMMUNICATION NETWORKS.
----------------------

8.5.1. REQUIRED SERVICES. Reliable continuous communications service is
-----------------
necessary to support CRAF mission control. Additional point-to-point circuits
essential to CRAF carrier operations shall be provided by the carrier to include
those required at Senior Lodger locations.

8.5.2. AIR-TO-GROUND.
-------------

8.5.2.1. The primary facility for HF en route voice contact shall be those
civil facilities which are presently used; e.g., ICAO, ARINC, or company
commercial air/ground facilities.

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8.5.2.2. Existing USAF GCCS facilities shall be used as an alternate when civil
facilities are not available. Frequencies for USAF GCCS stations are listed in
the current DOD Flight Information Publication (FLIP).

8.5.2.3. Carrier aircraft shall be capable of communicating with US Air Force
Communications Control Stations as outlined in the current FLIP en route
supplement, National, and International section.

8.5.2.4. Strict radio discipline is mandatory.

8.5.2.5. Voice call signs for individual CRAF aircraft shall be as directed by
the HQ AMC CRC.

8.5.3. POINT-TO-POINT.
--------------

8.5.3.1. Presently used civil communications shall be used for communication
between the HQ AMC CRC, CRAF carrier operating bases, and Senior Lodger
locations.

8.5.3.2. Military communications shall be used as an alternative when civil
communications are not available.

8.5.3.3. When at military facilities, AMC Command and Control communications
shall be used. If they are not available, the Defense Communications System
Teletype Net or other available system shall be used, as appropriate.

8.5.3.4. CRAF aircraft movement messages shall be transmitted in the clear.

8.5.3.5. Messages regarding classified missions shall be classified and
transmitted over Stu III/secure facsimile equipment.

8.5.3.6. When a carrier has a special message handling requirement, it becomes
that carrier's responsibility to contact the Senior Lodger Station Manager and
make arrangements for such handling.

8.5.3.7. Carriers and Senior Lodger stations using TELEX (Telex Communications,
Inc.) and ARINC facilities will follow appropriate message addresses and format.
Message exchange between carriers, Senior Lodger Station Manager, and the HQ AMC
CRC shall be routed in accordance with the International Air Transport
Association (IATA) Airline seven-letter addresses and the ICAO/AFTN eight-letter
addresses. These addresses are the central contact point at each location. It
then becomes the responsibility of each contact point to establish procedures to
ensure international routing of all CRAF messages. These messages shall be in
the format applicable to the circuit over which the message is to be sent (e.g.,
ICAO/AFTN, commercial, IATA/Airline, military).

8.5.3.8. When necessary to relay messages between circuits when using different
procedures, it shall be accomplished through automated interchange between ARINC
and FAA operated AFTN relay station (KMKM) at Kansas City MO.

SECTION C - CRAF COMMUNICATIONS
- -------------------------------

8.6. GENERAL. Voice and teletype circuits are required from the HQ AMC CRC to
-------
the CRAF carriers' operations control center locations and the Senior Lodger
stations. An ARINC teletype system shall be installed upon the direction of the
HQ AMC CRC/CRAF representative. The location for the CRAF ARINC shall be
specified at that time by the CRAF representative. Operators shall be
identified for the ARINC on a 24-hour-a-day standby basis.

8.7 SECURE COMMUNICATIONS.
----------------------

8.7.1. All CRAF carrier operations centers and Senior Lodger sites shall be
equipped with a Government furnished STU III/secure facsimile machine to receive
or transmit material up to the SECRET level.

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SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-DOO27

8.7.2. All CRAF carrier operations center, Senior Lodger sites, and CRAF pilots
will have KL43D DATA Encryption Devices issued to them which will allow them to
authenticate and pass encoded messages to AMC command and control agencies over
very high frequency (VHF) and HF frequencies, phone patch, or telephone.

CHAPTER 9
---------

MANPOWER AND PERSONNEL

SECTION A--CONCEPT

9.1. GENERAL.
-------

9.1.1. TRANSITION FROM CIVIL TO MILITARY SUPPORT OPERATIONS. The CRAF program
----------------------------------------------------
structure is designed to permit supporting personnel to transition from
commercial operations to military support operations in the most expeditious and
efficient manner.

9.1.2. PROCUREMENT AND SUPERVISION. Procurement and supervision of all
---------------------------
personnel required by the CRAF carriers to conduct military support operations
shall remain the responsibility of each carrier.

SECTION B--POLICIES

9.2. BENEFITS AND COMPENSATIONS. Persons assigned to CRAF will remain on the
--------------------------
payroll of their original employer and will receive personnel benefits accorded
by that employer. Rates of compensation shall be determined by the employing
carrier.

9.3. OFFICER STATUS AUTHORIZED FOR CRAF PERSONNEL. CRAF personnel in the
--------------------------------------------
following categories shall be afforded the courtesies of officer grade.

9.3.1. All aircrew personnel.

9.3.2. All supervisory personnel.

9.3.3. All professional and technical personnel including:

9.3.3.1. Dispatchers.

9.3.3.2. Meteorologists.

9.3.3.3. Doctors.

9.3.3.4. Nurses.

9.4. COOPERATION BETWEEN CRAF PERSONNEL AND MILITARY BASE COMMANDERS. CRAF
---------------------------------------------------------------
personnel shall be expected to cooperate with military base commanders on all
policy matters pertaining to safety, security, overall administration, and
personal conduct.

SECTION C--REQUIREMENTS AND ALLOCATIONS

9.5. PERSONNEL REQUIREMENTS AND MANPOWER ALLOCATION. Personnel resources to
----------------------------------------------
support CRAF operations (except AMC liaison personnel) shall be furnished by
parties in accordance with the following:

9.5.1. SENIOR LODGER PERSONNEL REQUIREMENTS. Senior Lodger carriers shall
------------------------------------
designate, by name,

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SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-DOO27

qualified company personnel, including courier officer, if required, to provide
24-hour service in operations, maintenance, supply communications, and traffic
services. Other Senior Lodger personnel requirements at each CONUS and overseas
station will depend upon the type and magnitude of the CRAF missions planned to
be operated through the station. Headquarters AMC will provide the Senior Lodger
carrier(s) concerned the best possible definition of the potential station
workload. Senior Lodger carriers will determine the additional personnel, by
skill, required for the Senior Lodger station concerned. The HQ AMC CRC shall be
advised of personnel requirements that cannot be satisfied.

SECTION D--PERSONNEL PROCEDURES UPON STAGE III CRAF ACTIVATION

9.6. SENIOR LODGER SUPPORT. Upon receipt of notification, each CRAF carrier
---------------------
who has an overseas Senior Lodger personnel commitment and/or an overseas crew
staging requirement shall accomplish the following:

9.6.1. OVERSEAS ASSIGNED. Alert personnel in the CONUS who have been selected
-----------------
for overseas duty. Reporting instructions for transportation overseas shall be
forwarded from the HQ AMC CRC. Prior to departing designated embarkation
points, personnel will have in their possession:

9.6.1.1. Travel Authorization Document. In order to identify properly those
individuals reporting to a CONUS pickup point for further movement to an
overseas station, a Travel Authorization Document shall be provided by each CRAF
carrier to its personnel. Each individual shall be furnished two copies: one
for their own use and one to turn in at the CONUS reporting point.

9.6.1.2. Passport. Issue instructions for obtaining passports.

9.6.1.3. Geneva Convention Identity Card (DD Form 489).

9.6.1.4. International Certificate of Vaccination (Public Health Service Form
731).

9.6.2. CONUS ASSIGNED. Alert personnel in the CONUS who have been designated
--------------
to support CONUS Senior Lodger stations and issue appropriate reporting
instructions for their CRAF duty assignment.

9.6.3. ALREADY OVERSEAS. Alert personnel overseas who have been designated as
----------------
CRAF support personnel, and issue them appropriate instructions regarding their
reporting to and overseas Senior Lodger Station Manager.

NOTE: Prior to CRAF activation, it shall be necessary for CRAF carriers
contributing personnel to coordinate with the appropriate overseas Senior
Lodger.

9.7. PASSPORTS.
---------

9.7.1. PROCEDURES. CRAF personnel will report to the State Department
----------
representative at the nearest and most convenient State Department passport
location and provide a completed passport application, two duplicate passport
photographs (2 1/2" X 2 1/2"), and satisfactory birth evidence as outlined in
the passport regulations. In lieu of such birth evidence, a signed statement
from the employing airlines, based upon company records, may suffice. The
statement from the airline should contain the following information:

9.7.1.1. Name.

9.7.1.2. Date of Birth.

9.7.1.3. Place of Birth.

9.7.1.4. Citizenship.
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SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-DOO27

9.7.1.5. Length of time employed by the airline.

9.7.1.6. Name and address of relatives and/or references shown in company
record.

9.7.2. STATE DEPARTMENT RESPONSIBILITY. The State Department will provide the
-------------------------------
applicant a receipt evidencing application, showing date and office of
acceptance. Every effort shall be made by the State Department representative
to issue a passport prior to the overseas departure of the individual.

9.7.3. EMERGENCY CONDITIONS. In an emergency condition where hostilities or
--------------------
enemy action preclude sufficient time to issue a passport, the individual CRAF
member shall be required to show proof of US citizenship (birth certificate, or
statement from airline) upon departing from and arriving in the United States.

9.8. GENEVA CONVENTION IDENTITY CARD (DD FORM 489). Hereafter referred to as
---------------------------------------------
the Geneva Convention Card. Civilian noncombatant personnel authorized to
accompany military forces of the US in regions of war shall be issued a Geneva
Convention Card. Authority is AFR 30-20.

9.8.1. PERSONNEL AUTHORIZED THE CARD. Carrier personnel, both US and foreign
-----------------------------
nationals, authorized by the carrier to enter regions of war in performance of
AMC Airlift Services contracts shall be issued this card. The bearer's Social
Security Account Number (SSAN) shall be entered on the front side of the DD Form
489 under "SERVICE". The card will not make any reference to nationality. The
Geneva Convention Card shall be issued to the following company personnel;

9.8.1.1. Aircrew members designed to perform peacetime DOD as well as wartime
CRAF airlift missions.

9.8.1.2. Ground support personnel assigned to overseas CRAF Senior Lodger
stations, to include indigenous personnel (non-US citizen) already overseas.

9.8.1.3. Selected supervisory personnel responsible for overall supervision of
the company's participation in peacetime contract and CRAF operations.

9.8.2. ISSUING FOR WARTIME USE. The DD Form 489 should be completed by company
-----------------------
personnel after notification of CRAF Stage I, II or III activation. Issuance of
this card prior to Stage III is the carrier's option; however, it must be issued
----
within 48 hours after Stage III CRAF activation.

9.8.3. CONTROL. Control of Geneva Convention Cards and their issue to air
-------
carriers is a responsibility of Headquarters AMC. The following procedures
apply:

9.8.3.1. Each CRAF carrier shall determine the total number of carrier
personnel (those physically located in the CONUS as well as those already
overseas) needed by support the overseas CRAF operations, and notify HQ AMC/XOC
of their requirements. (HQ AMC/XOC, 402 Scott Drive, Unit 3A1, Scott AFB IL
62225-5302, (618)256-6751.)

9.8.3.2. HQ AMC/XOC will forward the forms by certified mail to the carriers.
To simplify accountability, the form shall be issued by HQ AMC/XOC.

9.8.4. RESPONSIBLE COMPANY AGENT. Each CRAF carrier shall designate its
-------------------------
company security officer as the company agent responsible for accountability,
control, and issue of the DD Form 489.

9.8.5. CONTROL AND ACCOUNTABILITY. Each CRAF carrier shall establish control
--------------------------
and accountability procedures for inventorying, storing, issuing, reporting,
controlling, and accounting for the DD Forms 489, to include:

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SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-DOO27

9.8.5.1. Performing a physical inventory, by serial number, upon receipt from
HQ AMC/XOC and advise immediately of any discrepancies. When the inventory has
been satisfied, enter each serial number on the log (AF Form 335) (see paragraph
9.8.5.3., below).

9.8.5.2. Providing a storage facility to ensure the security of blank forms and
maintain control to prevent the issuance of this form to unauthorized persons.

9.8.5.3. Maintaining an issuance record/log to identify the disposition of each
DD Form 489, by recording the serial numbers on AF Form 335, Issuance Record-
Accountability Identification Card. This log will serve to identify damaged,
lost, destroyed, and issued DD Form 489. (Annual Report, see paragraph
9.8.5.4., below). A supply of the AF Form 335 shall be furnished by HQ AMC/XOC.

9.8.5.4. An annual report as of 1 February, shall be submitted to HQ AMC/XOC
during that month, reflecting the number of blank cards in possession at the
time of the report, the number issued that are still valid, and the number of
forms received from Headquarters AMC. It is not necessary to report each time a
card is lost or destroyed. Retain this data for the annual report.

9.8.5.5. Investigation responsibilities for lost cards.

9.8.5.6. Notification responsibility for lost cards is provided for through the
submission of an annual report of DD Form 489.

NOTE: The blank DD Forms 489 should be stored in a secure container.

9.8.6. CARRIER ACTION WHEN CARD IS LOST. The following actions must be
--------------------------------
accomplished by the company security officer upon receiving notice that a Geneva
Convention Card has been lost:

9.8.6.1. Obtain a written statement, if possible, signed by the employee,
describing the circumstances connected with loss of the card.

9.8.6.2. Issue the employee a new DD Form 489 after determining that the
employee's requirement still exists.

9.8.7. DISPOSITION OF OUTDATED CARDS.
-----------------------------

9.8.7.1. DD Form 489 that have been surrendered to the company agent for any
reason shall be destroyed as classified material. The same is also true for a
card that is no longer usable because of a typing error, smudged fingerprint,
outdated form, etc. Erasures and strikeovers are not permitted.

9.8.8. ISSUING AUTHORITY. When the DD Forms 489 are ready for issue, the
-----------------
company security officer is authorized to sign as the issuing agency.

9.8.9. PHOTOGRAPHIC SERVICE. Commercial (or company) facilities shall be used
--------------------
to laminate the DD Form 489 prior to issue. If company lamination facilities
are not available, and the carrier chooses not to use commercial facilities, the
Security Police Office at designated military bases may be used for this
service. In order to obtain lamination service from the military, the completed
DD Form 489 may be dispatched (by certified mail or hand-carried) by the company
security officer (or an authored representative) to the "CRAF Security Police"
at the nearest designated military base.

9.8.9.1. AMC bases designated to provide necessary services are:

9.8.9.1.1. McGuire AFB NJ 08641

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SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-DOO27

9.8.9.1.2. Dover AFB DE 19901

9.8.9.1.3. Charleston AFB SC 29404

9.8.9.1.4. Scott AFB IL 62225

9.8.9.1.5. Altus AFB OK 73521

9.8.9.1.6. McChord AFB WA 98438

9.8.9.1.7. Travis AFB CA 94535

9.8.9.1.8. Griffis AFB NY 13441

9.8.9.1.9. Little Rock AFB AR 72076

9.8.9.1.10. Pope AFB NC 28308

9.8.9.1.11. Rhein-Main AFB NY 09057

9.8.9.2. CRAF carriers located in Alaska shall be provided processing and
laminating service by the 21st Combat Support Group, Elmendorf AFB, Alaska
98743.

9.8.9.3. CRAF carriers, which have aircrews and support personnel located
outside the Continental United States (CONUS), shall issue the DD Form 489
prior to departing the CONUS. However, CRAF carriers with indigenous personnel
(non-US citizens) who have been designated to support CRAF and are already
overseas should contact the nearest military installation for laminating
service. This service may be performed, during peacetime, by any military
facility; however, one of the AMC bases should be used, if possible.

9.9. CARRIERS' INSTRUCTIONS TO EMPLOYEE AT TIME OF ISSUE. After the DD Form
---------------------------------------------------
489 has been signed by the company security officer (issuing officer), and
laminated, the card shall be issued to the individual concerned, specifically
advising the bearer of the following at time of issue:

9.9.1. Read the DD Form 489 (PA), Privacy Act Statement-Geneva Conventions
Identity Card for Civilians Who Accompany the Armed Forces, as required by the
Privacy Act of 1974. A copy of this statement shall be issued at the time
individual is handed the laminated Geneva Convention Card (July 1974 edition).

NOTE: A resupply of the DD Form 489 (PA), Privacy Act Statement. may be
obtained by contracting HQ AMC/XOC, or local reproduction is authorized.

9.9.2. Read the NOTICE STATEMENT on the reverse side of the DD Form 489.

9.9.4. Notify the company security officer immediately if the card is lost or
stolen.

9.9.5. Surrender the card to the company security officer when:

9.9.5.1. No longer employed by the company.

9.9.5.2. The carrier no longer has a AMC Airlift Services or CRAF Stage III
contract.

9.9.5.3. The individual is no longer designated by carrier for duty during
peacetime and wartime DOD contract

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airlift operations.

9.9.5.4. When any of the information on the present card has changed.

9.9.5.5. The card has expired (four years from date of issue for those cards
issued when an expiration date was required).

9.9.6. The card is for use only when captured and held as a prisoner of war.

9.9.7. The military civilian grade relationship is based upon the individual's
standing in the company and the responsibility of the duties to be performed.
The equivalent grade is shown on the card to ensure that the bearer, if
captured, will receive appropriate treatment.

9.9.8. In no instance will the equivalent grade grant any privilege or wearing
of military insignia not otherwise authorized.

9.9.9. Keep the card on the person of the bearer. In the event the individual
becomes a prisoner of war, name, equivalent grade, social security account
number, and date of birth shall be provided the capturing authority. The
convention articles require this identity card be shown by the prisoner upon
demand, but in no case is to be taken away from the prisoner. The convention
further provides for prisoners of war to be treated with regard to their age.

9.9.10. AMC BASE RESPONSIBILITIES. Should the CRAF carrier choose not to
-------------------------
laminate the DD Form 489, then the commanders of AMC bases shall be responsible
for laminating and trimming each completed form, and return the forms to the
carrier security officer by certified mail.

9.9.11. ALASKA AIR COMMAND SUPPORT. The 21st Combat Support Group, Elmendorf
--------------------------
AFB, Alaska 98743, has agreed to provide the same support as identified in
paragraph 9.9.10. above, for the CRAF carriers located in Alaska (Anchorage
International Airport).

9.10. MEDICAL. Emergency medical treatment shall be provided on military
-------
installation for CRAF carrier personnel assigned to support the CRAF program;
i.e., ground support, aircrew, etc. Medical services performed by the military
shall be fully reimbursed at the appropriate rate as prescribed in AFR 168-6.

CHAPTER 10
----------

WAIVERS AND EXEMPTIONS

PART I-FEDERAL AVIATION REGULATION (FAR) WAIVERS

SECTION A--GENERAL

10.1. GENERAL. Chapter 10 identifies FAR waivers that MAY be enacted under any
-------
CRAF activation. The provisions of PART 121 of the FAR, with the following
authorizations and limitations shall apply to all CRAF operations. Waivers in
this attachment apply when carriers operate off their certificated routes.
These waivers are not applicable until FAA has issued approval direction to
flight standards district offices.

SECTION B--CERTIFICATION RULES FOR DOMESTIC AND FLAG AIR CARRIERS

10.2. FAR 121.25. CONTENTS OF CERTIFICATE AND OPERATIONS SPECIFICATIONS.
------------------------------------------------------------------
Overhaul and inspection time limitations may be increased up to a maximum of 25
percent above the time limitations shown on the

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specifications. Such time limitation increase may be used only under general war
conditions and only if the circumstances of time provide an alternative to
continue operation.

SECTION C--CERTIFICATION RULES FOR SUPPLEMENTAL AIR CARRIERS AND COMMERCIAL
OPERATORS

10.3. FAR 121.45. CONTENTS OF CERTIFICATE AND OPERATIONS SPECIFICATIONS.
------------------------------------------------------------------
Overhaul and inspection time limitations may be increased up to a maximum of 25
percent above the time limitations shown on the specifications. Such time
limitation increase may be used only under general war conditions and only if
the circumstances of time provide no alternative to continue operation.

SECTION D--APPROVAL OF ROUTES: DOMESTIC AND FLAG AIR CARRIERS

10.4. FAR 121.93. AREA AND ROUTE REQUIREMENTS: General. The operator may
----------------------------------------
conduct operations over routes and into areas without listing such routes or
areas in its approved operations specifications or be required to show that it
is competent to operate over such routes or into such areas.

10.5. FAR 121.101. WEATHER REPORTING FACILITIES. If weather information
------------------------------------------
required by this section is not available, the operator may use, in lieu
thereof, any appropriate weather data prepared by the military.

SECTION E--APPROVAL OF AREAS AND ROUTES FOR SUPPLEMENTAL AIR CARRIERS AND
COMMERCIAL OPERATORS

10.6. FAR 121.113. AREA AND ROUTE REQUIREMENTS: General. The operator may
-----------------------------------------
conduct operations over routes and into areas without listing such routes or
areas in its approved operations specifications or be required to show that it
is competent to operate over such routes or into such areas.

10.7. FAR 121.119. WEATHER REPORTING FACILITIES. If weather information
------------------------------------------
required by this section is not available, the operator may use, in lieu
thereof, any appropriate weather data prepared by the military.

10.8. FAR 121.125. FLIGHT FOLLOWING SYSTEM. The operator may conduct flights
-------------------------------------
which are not monitored in accordance with the requirements of this section.

10.9. FAR 121.127. FLIGHT FOLLOWING SYSTEM: Requirements. The operator need
-------------------------------------
not meet the "show" requirements specified in this section.

SECTION F--AIRCRAFT REQUIREMENTS

10.10. FAR 121.153. AIRCRAFT REQUIREMENTS: General. The operator may operate
-----------------------------------
any airworthy aircraft upon prior written approval of an authorized
representative of the administrator, provided the aircraft meets the
requirements of FAR Section 121.57.

10.11. FAR 121.161. AIRPLANE LIMITATIONS: Type of Route. The operator may
----------------------------------
operate any CRAF-capable twin-engine airplane in an extended overwater operation
over a route that contains a point farther than one hour, but not farther than
two hours forty minutes, flight time (in stall air at normal cruising speed with
one engine inoperative) from an adequate airport.

10.12. FAR 121.163. AIRCRAFT PROVING TESTS. The operator need not conduct
------------------------------------
proving tests required by this section unless an authorized representative of
the administrator specifically requires it by notifying the operator in writing.

SECTION G--AIRPLANE PERFORMANCE OPERATING LIMITATIONS

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10.13. FAR 121.198. TRANSPORT CATEGORY CARGO SERVICE AIRPLANES: Increased
--------------------------------------------------------
Zero Fuel and Landing Weights. The applicable structural provisions of the FARs
notwithstanding, transport type aircraft may be operated in cargo-only service
in accordance with the following conditions:

10.13.1. The zero fuel weight (maximum weight of aircraft with no disposable
fuel and oil) may be increased up to five percent beyond the maximum approved in
full compliance with the FARs, and the structural landing weight may be
increased to a weight not to exceed the amount, in points, of the increase in
zero fuel weight.

10.13.2. Inspection procedures shall be established in addition to those
normally performed to safeguard against possible structural damage from the
higher operating stress levels.

10.13.3. The flight manual of each aircraft operated with increased weights as
provided herein shall be appropriately revised so as to include the necessary
operating limitations and operating information.

10.13.4. An aircraft which has been operated at increased weights as prescribed
herein shall not be used for the carriage of passengers, except under the
following conditions:

10.13.4.1. Special inspections established by the manufacturer and approved by
the Administrator of the Federal Aviation Administration shall have been
accomplished.

10.13.4.2. The effects of the operation at increased weights on structural
fatigue shall have been evaluated by the aircraft manufacturer and taken into
account in any fatigue limitations established for the airplane.

SECTION H--INSTRUMENT AND EQUIPMENT REQUIREMENTS

10.14. FAR 121.303. AIRPLANE INSTRUMENTS AND EQUIPMENT. Components and parts
------------------------------------------------
approved by the military shall be considered as approved parts for the purpose
of meeting the requirements of this section and 121.605, provided they are
compatible with the aircraft components and systems and test equipment used for
conducting ground checks.

10.15. FAR 121.345 through 121.351. RADIO EQUIPMENT--AIRCRAFT. Any comparable
-------------------------------------------------------
military radio communications system may be substituted for FAA-approved
equipment and its use continued until replaced by equipment approved by FAA.

SECTION I--MAINTENANCE, PREVENTATIVE MAINTENANCE, AND ALTERNATIONS

10.16. FAR 121.363 through 121.375. MAINTENANCE AND INSPECTION REQUIREMENTS.
---------------------------------------------------------------------
Compatible engines, components, propellers, parts, and accessories approved by
the military may be substituted for FAA-approved equipment and may be installed
by personnel who normally conduct such maintenance functions for the military.
The certificate holder may use qualified persons, other than those listed in
their operating manual, to perform inspections, provided the other requirements
of FAR 121.369 are met.

SECTION J--FLIGHT TIME LIMITATIONS: FLAG AIR CARRIERS

10.17. FAR 121.481 through 121.493. FLIGHT TIME LIMITATIONS--ALL AIRMEN:
-----------------------------------------------------------------
Airplanes. The following flight time limitations are authorized for
international operations:

10.17.1. Aircraft having two pilots and an additional flight crewmember:

10.17.1.1. A flight crewmember shall not be scheduled to be aloft, as a member
of the flight crew, more an 13 hours during any 24 consecutive hours. A flight
crewmember who has been aloft, as a member of flight crew, more than 13

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hours during any 24 consecutive hours, shall be given a rest period of not less
than 12 hours. For Pacific and Southwest Asia operations a flight crewmember may
be scheduled to be aloft, as a member of the flight crew, up to 16 hours.

10.17.1.2. A flight crewmember shall not be scheduled to be aloft, as a member
of the flight crew, more than 120 hours during any calendar month.

10.17.1.3. A flight crewmember shall not be scheduled to be aloft, as a member
of the flight crew, more than 1200 hours during any calendar year.

10.17.2. Aircraft having three or more pilots and an additional flight
crewmember:

10.17.2.1. Flight hours shall be scheduled in such a manner as to provide for
adequate rest periods on the ground while the flight crew personnel are away
from their base.

10.17.2.2. A flight crewmember shall not be scheduled to be aloft, as a member
of the flight crew, more than 340 hours during any calendar quarter.

10.17.2.3. A flight crewmember shall not be scheduled to be aloft, as a member
of the flight crew, more than 1200 hours during any calendar year.

10.17.2.4. A flight crewmember, upon returning to home base from any flight or
series of flights and after an absence from home base of more than one day,
shall receive a rest period of not less than twice the total number of hours
aloft, as a member of the flight crew, since the last rest period at home base,
provided that the required rest period need not exceed seven days.

SECTION K--FLIGHT TIME LIMITATIONS: SUPPLEMENTAL AIR CARRIERS AND COMMERCIAL
OPERATORS

10.18. FAR 121.503 through 121.525. FLIGHT TIME LIMITATIONS--ALL AIRMEN:
-----------------------------------------------------------------
Airplanes. The following flight time limitations are authorized for
international operations:

10.18.1. Aircraft having two pilots and an additional flight crewmember:

10.18.1.1. A flight crewmember shall not be scheduled to be aloft, as a member
of the flight crew, more than 13 hours during any 24 consecutive hours. A
flight crewmember who has been aloft, as a member of flight crew, more than 13
hours during any 24 consecutive hours, shall be given a rest period of not less
than 12 hours. For Pacific and Southwest Asia operations a flight crewmember
may be scheduled to be aloft, as a member of the flight crew, up to 16 hours.

10.18.1.2. A flight crewmember shall not be scheduled to be aloft, as a member
of the flight crew, more than 120 hours during any calendar month.

10.18.1.3. A flight crewmember shall not be scheduled to be aloft, as a member
of the flight crew, more than 1200 hours during any calendar year.

10.18.2. Aircraft having three or more pilots and an additional flight
crewmember:

10.18.2.1. Flight hours shall be scheduled in such a manner as to provide for
adequate rest periods on the ground while the flight crew personnel are away
from their base.

10.18.2.2. A flight crewmember shall not be scheduled to be aloft, as a member
of the flight crew, more than 340

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hours during any calendar quarter.

10.18.2.3. A flight crewmember shall not be scheduled to be aloft, as a member
of the flight crew, more than 1200 hours during any calendar year.

10.18.2.4. A flight crewmember, upon returning to home base from any flight or
series of flights and after an absence from home base of more than one day,
shall receive a rest period of not less than twice the total number of hours
aloft, as a member of the flight crew, since the last rest period at home base,
provided that the required rest period need not exceed seven days.

SECTION L--FLIGHT OPERATIONS

10.19. FAR 121.557. EMERGENCIES: DOMESTIC AND FLAG AIR CARRIERS. The
----------------------------------------------------------
requirement for filing emergency reports shall not apply.

10.20. FAR 121.559. EMERGENCIES: SUPPLEMENTAL AIR CARRIERS AND COMMERCIAL
--------------------------------------------------------------------
OPERATORS. The requirement for filing emergency reports shall not apply.
- ---------

10.21. FAR 121.567. INSTRUMENTAL APPROACH PROCEDURES AND IFR LANDING MINIMUMS.
------------------------------------------------------------------------
When conducting an IFR takeoff or landing, or an instrument approach at a
military airport, the operator may use the instrument approach procedures and
weather minimum prescribed by the military on its approach charts (plates) for
use at such an airport.

10.22. FAR 121.583. CARRIAGE OF PERSONS ABOARD ALL-CARGO AIRCRAFT. Persons
-----------------------------------------------------------
other than crewmembers may be carried aboard any all-cargo aircraft provided
such persons meet the requirements of section 121.583.

SECTION M--DISPATCHING AND FLIGHT RELEASE RULES

10.23. FAR 121.617 through 121.623. ALTERNATE AIRPORT REQUIREMENTS FOR
----------------------------------------------------------------
DEPARTURE AND DESTINATION: All Certificate Holders. The alternate airport
- -------------------------
requirements specified by the military in accordance with appropriate military
directives may be used for compliance.

10.24. FAR 121.625 and 121.631. ALTERNATE AIRPORT WEATHER MINIMUM AND FLIGHT
----------------------------------------------------------------------
PLANS FILING/AMENDING PROCEDURES. The alternate weather minimums and flight
- --------------------------------
planning procedures specified by the military in accordance with appropriate
military directives may be used for compliance.

10.25. FAR 121.651. TAKEOFF AND LANDING WEATHER MINIMUMS. IFR: All
--------------------------------------------------
Certificate Holders.

10.25.1. The takeoff and landing weather minimums specified by the military on
its approach charts (plates) may be used for compliance with the weather
minimums of 121.651(a) and (b).

10.25.2. In addition to the provisions of 121.651(c), an instrument approach
procedure may be executed when the weather report indicates that the ceiling or
visibility is less than approved minimum for landing, if the airport is serviced
by ILS and GCA in operative condition and both are used by the pilot and,
thereafter, a landing may be made, if weather conditions are equal to or better
than the prescribed minimums are found to exist by the pilot-in-command upon
reaching the authorized landing minimum altitude.

PART II--DEPARTMENT OF TRANSPORTATION (DOT) EXEMPTIONS

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10.26. TRANSPORTATION OF EXPLOSIVES AND OTHER DANGEROUS ARTICLES. The
---------------------------------------------------------
Department of Defense (DOD) has been exempted from provisions of Title 49 Code
of Federal Regulations (49 CFR), Subpart B of Part 107, Parts 172 and 175, to
the extent necessary to permit the transportation of hazardous materials via DOD
contract airlift, under DOT Exemption 7573 and DOT Exemption 9232. Hazardous
materials authorized by these exemptions are limited to materials authorized to
be transported by motor vehicle in conformance with 49 CFR parts 107 and 171-
179. All hazardous material must be packed according to the requirements of 49
CFR and Air Force Regulation 71-4 (Preparation of Hazardous Material of Military
Air Shipment).

10.26.1. DOT EXEMPTION 7573. This exemption applies to cargo aircraft only of
------------------
the QUICKTRANS fleet and those contract airlift services and civil air operators
under contract to AMC to include Stages I and II.

10.26.1.1. Transport of materials authorized by this exemption is restricted to
US military bases and specific identified civil airports.

10.26.1.2. Hazardous materials and explosives must be deemed essential to
national defense prior to shipment.

10.26.1.3. Transportation of hazardous materials is authorized in aircraft of
United States registry only.

10.26.1.4. No persons other than required flight crewmembers and mission
essential personnel may be carried on the aircraft.

10.26.1.5. Prior to using this exemption, approval must be obtained from either
the Deputy Chief of Staff, Operations and Transportation, AMC; the Director of
Transportation, Air Force Logistics Command; the Naval Material Transportation
Office; or their authorized representatives.

10.26.1.6. Shipping papers (including the certifications required by 49 CFR
147.204) are required for all hazardous material carried under this exemption.

10.26.2. DOT EXEMPTION 9232. This exemption applies to cargo and passenger-
------------------
carrying aircraft for emergency movements during a declared National Emergency
and during contingencies (expedited movement of US Forces as approved by the
Secretary of Defense and directed by the Commander in Chief, US Transportation
Command).

10.26.2.1. Aircraft used must be those civil aircraft of the Civil Reserve Air
Fleet that are necessary to augment military operations and operated under the
contract and mission control of Commander, Air Mobility Command.

10.26.2.2. DOD must have advance permission from the owner or operator of each
manned airport where the material is to be on-loaded or off-loaded or where the
aircraft is to land while the material is on board.

10.26.2.3. Additional fuel may be carried in five gallon packaging meeting or
equivalent to DOT specification. See DOT Exemption 9232.

10.26.2.4. No person other than a required flight crewmwmber, of FAA inspector,
the shipper or consignee of the material or a representative of the shipper or
consignee so designated in writing, or a person necessary for handling the
material may be carried on the aircraft.

10.26.2.5. Shipping papers are required for all hazardous material carried
under this exemption.

10.26.2.6. This exemption authorized transportation of hazardous materials in
aircraft of US registry or in aircraft of foreign registry operating within the
jurisdiction of the US.

10.26.3. Common requirements that apply to DOT Exemption 7573 and DOT Exemption
9232.

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10 26.3.1. Loading and storage of hazardous materials aboard the aircraft must
be in accordance with AFR 71-4. Loading and unloading operations shall be
monitored by a qualified DOD representative or a technician qualified in
accordance with 14 CFR 121.433a or AFR 71-4.

10.26.3.2, During loading or unloading no persons may smoke or operate any
device capable of causing an open flame within 50 feet of the aircraft.

10.26.3.3. Unless emergency conditions prescribe otherwise, loading and
unloading of the aircraft shall be conducted at a safe distance from heavily
populated areas and any place of human abode. However, if an airport has a
designated area for loading and unloading, explosives shall be loaded and
unloaded in this area.

10.26.3.4. No fueling operations of the aircraft may be conducted during the
loading and unloading of explosives.

10.26.3.5. Fuel tanks of vehicles may not be filled to more than 75 percent of
their capacity.

10.26.3.6. Operation of the aircraft during take-off, en route, and landing
must be conducted at a safe distance from heavily populated areas.

10.26.3.6.1. Before movement of the aircraft, the pilot shall notify the
control tower of the class(es) of explosives on board and request this
information be relayed to the appropriate officials.

10.26.3.6.2. The pilot, prior to entering an airport traffic area, shall notify
the control tower of the class(es) of explosives on board and request this
information be relayed to the appropriate officials.

10.26.3.6.3. When under radar control during the approach and landing phase,
the pilot shall request appropriate vectors so as to avoid heavily populated
areas.

10.26.3.7. A copy of this exemption must be carried aboard each aircraft
operating under these exemptions.

10.26.3.8. Any incident involving loss of contents of the packages must be
reported to the Office of Hazardous Materials Regulation as soon as practicable.

10.26.3.9. Prior to take-off, all crewmembers shall be instructed in proper
procedures to be followed during an emergency involving hazardous materials.

10.26.3.10. When destination is changed after departure because of weather or
other unforeseen circumstances, permission from the owner or operator of the
alternate airport shall be obtained as soon as practicable.

10.26.3.11 These exemptions do not grant authority to use foreign controlled
airspace or airports outside the US.

CHAPTER 11
----------

SECURITY

SECTION A--GENERAL

11.1. SECURITY REQUIREMENTS FOR CRAF. This chapter is consolidation of
------------------------------
security requirements applicable to CRAF.

11.2. DIRECTIVES
----------

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11.2.1. Air Force Regulations in the 205-series (Security) and the DOD
Industrial Security Regulations (specifically DOD 5200.1-R/AFR 205-1 and DOD
5220.22-R/AFR 205-4).

11.2.2. The DOD Industrial Security Manual for Safeguarding Classified
Information (DOD 5220.22M), January 1991, or superseded by subsequent
publications, establishes requirements for safeguarding of classified
information by DOD contractors, subcontractors, vendors, or suppliers. Federal
Statutes and Executive Orders set forth in the DOD Industrial Security Manual
are also applicable.

SECTION B--CRAF SECURITY

11.3. REQUIREMENTS.
------------

11.3.1. FACILITY SECURITY CLEARANCE. A facility clearance of SECRET and
---------------------------
classified safeguarding capability is required in accordance with DOD 5220.22M
where there is a need for the storage or development of classified documents
supporting the CRAF program.

11.3.2. NON-AIRCREW SECURITY CLEARANCES. All participants in CRAF planning are
-------------------------------
required to possess a security clearance of SECRET, in accordance with the
Industrial Security Program. Former Defense Air Transportation Administration
(DATA) clearances must be converted to SECRET clearances under the Industrial
Security Program. Personnel eligible for such clearances are limited to US
personnel (defined as citizens of, national of, and immigrant aliens to, the
United States). Personnel designated by the carrier to perform duties specified
as follows must possess a SECRET security clearance.

11.3.2.1. Carrier personnel involved with overall CRAF planning.

11.3.2.2. Carrier personnel assigned for liaison and communications supervisory
duty at either HQ AMC or its alternate.

11.3.2.3. Carrier personnel who will attend Technical Advisory Group (TAG)
meetings.

11.3.2.4. Carrier personnel designated as Senior Lodger Courier Officers.

11.3.2.5. All flight operations dispatchers involved in CRAF missions.

11.3.2.6. Carrier personnel at Senior Lodger locations designated to handle or
safeguard classified materials.

11.3.3. AIRCREW SECURITY CLEARANCES. Carriers are not required to maintain
---------------------------
active security clearances for CRAF flight deck crewmembers during peacetime.
SECRET clearances shall be granted by USCINCTRANS in conjunction with activation
of the CRAF. Carriers must ensure that crewmembers designated to support CRAF
operations are US citizens and eligible for a SECRET clearance.

11.4. PROCEDURES.
----------

11.4.1. FACILITY SECURITY CLEARANCE. CRAF carriers must inform HQ AMC/XOC of
---------------------------
the correct address of any company agency requiring a secure facility. HQ
AMC/XOC will provide HQ AMC/XOK with a listing of these agencies.

11.4.1.1. If a contract is to be negotiated with an air carrier not having a
current contract, HQ AMC/XOC will furnish the Information Security Division,
Security Police (HQ AMC/SPI) with the name and address of the company so that
they can determine the actions required to provide a facility security
clearance. When required, HQ AMC/SPI

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will request the cognizant security office to initiate necessary action to issue
a facility clearance.

11.4.1.2. Action shall be taken by HQ AMC/SPI, the cognizant security officer,
and carriers concerned to ensure completion of clearance action with minimum
delay.

11.4.2. PERSONNEL SECURITY CLEARANCE. Upon being designated as a CRAF
----------------------------
participant, security clearance applications for all required personnel shall be
completed in accordance with DOD Industrial Security Manual and instructions
received from the cognizant Defense Industrial Security Officer, Defense
Investigative Service (DIS). All required clearance actions shall be forwarded
to the cognizant Defense Industrial Security Officer.

11.5. SAFEGUARDING CLASSIFIED INFORMATION. Administrative procedures shall be
-----------------------------------
developed in accordance with directives referenced in paragraph 11.2. to ensure
a maximum degree of safeguarding for classified information. This shall be
accomplished in accordance with the carrier's approved Standard Practice
Procedure for Handling of Classified Documents.

SECTION C--RESPONSIBILITIES

11.6. CRAF RESPONSIBILITIES.
---------------------

11.6.1. INDIVIDUAL CRAF PERSONNEL AND COMPANY SECURITY OFFICER. Responsibility
------------------------------------------------------
for security of classified information and material rests with each individual
authorized access. To ensure that all carrier personnel handling classified
material are familiar with requirements for safeguarding of this material, the
company security officer must periodically review company procedures. The CRAF
carrier must establish appropriate safeguards to assure that the individuals who
are not cleared do not gain access to classified information.

11.6.2. MILITARY BASE COMMANDER. CRAF aircraft at military installations will
-----------------------
receive the same degree of physical security as provided military aircraft in
like status. Ingress and egress procedures to and through control points and
restricted or controlled areas shall be established to permit CRAF crews access
to their aircraft.

11.6.3. SENIOR LODGER STATION MANAGER AND CRAF CARRIER. Upon CRAF activation,
----------------------------------------------
the Senior Lodger Station Manager and/or CRAF carrier will employ any necessary
procedure to deny unauthorized persons access to facilities, equipment, and
aircraft in support of the overall CRAF mission.

11.7. AUTHORITY FOR ACCESS TO CLASSIFIED DOCUMENTS.
--------------------------------------------

11.7.1. AUTHORITY TO HANDLE AUTHENTICATOR EXTRACTS. CRAF aircrew members shall
------------------------------------------
require certain authentication systems in order to perform CRAF missions. When
needed, these documents shall be made available to specified aircrew members at
military bases and Senior Lodger stations, providing the individual possesses a
SECRET clearance.

11.7.2. AUTHORITY FOR ACCESS TO SAFE PASSAGE PROCEDURES. NORAD Regulations 55-
-----------------------------------------------
67 and 55-68 (S), provide the safe passage procedures for CRAF aircraft
departing from and returning to the Continental United States (CONUS). Upon
activation of CRAF and when required by NORAD Safe Passage Procedures providing
each individual possess a SECRET clearance.

11.8. CLASSIFIED CORRESPONDENCE. Any time classified material is forwarded to
-------------------------
CRAF carriers, the originator will notify, in writing, the cognizant security
officer in the carrier's area. This notification will contain the subject and
date of the material, number of copies, and mailing address. The written
notification will ensure a current inventory of classified material being stored
by the carrier.

11.9. RESERVED.

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11.10. PERSONNEL SECURITY CLEARANCE AUTHORIZATION.
------------------------------------------

11.10.1. GENERAL. Authority for carriers to certify the personnel security
-------
clearance status of company employees is contained in the Industrial Security
Manual, DOD 5220.22M. This reference makes provisions for the carrier
(contractor) who has a valid facility security clearance of SECRET to verify the
security clearance status of its employees.

11.10.2. SECURITY CLEARANCE IDENTIFICATION. A valid passport, company ID card,
---------------------------------
or Geneva Convention Card, any of which as a picture of the bearer, will provide
sufficient identification for releasing SECRET material to CRAF personnel.

11.10.3. SECURITY CLEARANCE VERIFICATION OF AIRCREWS. The CRAF carrier shall
-------------------------------------------
validate security access information on the flight release form. Carriers may
use company formats, but will ensure that security access statements are clear
and unambiguous. An example of a proper statement is "SECRET security access
current and valid for Ira A Eaker, James J. Doolittle, and Amelia N. Earhart."

11.10.4. SECURITY CLEARANCE CONFIRMATION. If validity of the clearance status
-------------------------------
or the identity of the bearer is questioned during peacetime or wartime DOD
contract airlift operations, confirmation may be obtained by contacting the
appropriate CRAF carrier's company security officer. Should this situation
arise when Stage III CRAF is activated and the carrier security officer cannot
be contacted, the questioner may contact the Defense Investigative Service
Clearance Office (DISCO), (614)236-2133 or AUTOVON 695- 2265, during duty hours
or (614)236-2058 after duty hours.

11.10.5. COMPANY SECURITY OFFICER'S RESPONSIBILITY. The company security
-----------------------------------------
officer shall maintain a current list of cleared personnel. This list shall be
verified during on- site surveys by DOD air carrier survey office.

11.10.6. MILITARY BASE COMMANDERS. All CRAF carrier personnel, after proper
------------------------
clearance verification or confirmation and after proper identification by means
of a valid passport, company ID card, or Geneva Convention Card, and receive
classified material as necessary to support the DOD airlift mission.
Additionally, each individual who is listed with the Company Security Officer
and DISCO has been the subject of at least a National Agency Check which may be
used as the basis for issuance of a restricted area badge.

11.11. AUTHENTICATION MATERIALS. Authentication materials and IFF/SIF
-------------------------
operating instructions shall be made available to CRAF aircrews at military Base
Operations and Route Briefing sections, and Senior Lodger stations. Initial
issue of these documents shall be as required to cover elapsed time from
departure station to destination and return, or to the first enroute station
having the capability to provides additional distribution.

11.12. CLASSIFIED/UNCLASSIFIED OPERATIONS BRIEFING. An operations briefing,
--------------------------------------------
including communications and security, shall be the responsibility of AMC.

11.13. HANDLING OF CLASSIFIED MATERIAL. In addition to the briefing outlined
--------------------------------
above, the briefing officer will insure that the aircraft captain, or the first
officer, is aware of the following:

11.13.1. RECEIPT FOR CLASSIFIED MATERIAL. The contents of the briefing
--------------------------------
envelope contain information affecting the national defense of the United States
and is issued for use while flying. Part of this information is classified and
extreme care should be exercised to preclude its being compromised. Upon
terminating the flight, all material shall be given to the military base
operations officer or destroyed in accordance with paragraph 11.13.2. below.
All classified material shall be accounted for by means of the AF Form 310,
Document Receipt and

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Destruction Certificate, or a comparable receipt. Prior to accepting material,
the aircraft captain should insure that sufficient legible copies of the receipt
form are available to allow one copy for the recipient at the destination and
one copy for the aircraft captain's personal file.

11.13.2. DESTRUCTION OF CLASSIFIED MATERIAL. In the event of a emergency where
-----------------------------------
it appears that the classified material cannot be protected, it shall be burned
or destroyed by other means to render recognition impossible. In this event,
complete the destruction certificate on the SF 153 or AF Form 310. Provide a
copy of this form to the issuing office and retain one copy to be held for the
required 2 years.

CHAPTER 12

(RESERVED)

CHAPTER 13

AEROMEDICAL EVACUATION

13.1 DEFINITIONS.
-----------

13.1.1. Aeromedical Evacuation (AE): The movement of patients under medical
supervision to and between medical treatment facilities by air transportation.

13.1.2. Aeromedical Evacuation Control Center (AECC): The control facility
established by an airlift division, AMC, another major air command or USAF. It
operates in conjunction with the command and control centers and coordinates
medical requirements with airlift capabilities. It also assigns medical
missions to the appropriate AE element in the system and monitors patient
movements.

13.1.3. Aeromedical Evacuation Control Element (AECE): This element of the AE
system will exercise operational control over all strategic AE activities and
personnel within its area of responsibility in conjunction with the regional
AECC.

13.1.4. Aeromedical Evacuation Crew Member(s)(AECMs): Qualified flight nurses
and AE technicians.

13.1.5. Medical Crew Director (MCD): A qualified flight nurse responsible for
the overall supervision of patient care and management of AECMs assigned to AE
missions.

13.1.6. LOX: Liquid Oxygen

13.2. PERFORMANCE REQUIRED
--------------------

13.2.1. The contractor shall position the aircraft to a designated location as
specified by the government (DOD) when any stage of the CRAF Aeromedical
Evacuation segment is activated. The aircraft must be in place, ready to be
configured within 24 hours after stage activation. Aircraft shall be baselined
IAW Specification Drawings and the number 89CD0161 and 7590ICD00001. Costs for
baselining shall be submitted to the PCO, negotiated and incorporated by
modification. All unpacking and installation of the CRAF Aeromedical Evacuation
Shipset (AESS) on the aircraft shall be done by a separate contractor. When
CRAF Aeromedical Evacuation aircraft are no longer required, the contractor
shall return the aircraft to the designated location for removal and repacking
of the CRAF AESS. Response times requirements are outlined in Attachment 9,
Chapter 2, para 2.17.

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13.2.2. The government (DOD) will pay for the positioning and depositioning
legs to the specified reconfiguration location.

13.2.3. Contractor shall apply for FAA deviations to Part 121 of the Federal
Aviation Regulations (FAR's). Deviations shall be provided when finalized.

13.2.4. Contractor shall develop an FAA approved training program if required
to facilitate operation of CRAF AE under PART 121 of the FAR's with deviations
referenced above.

13.2.5. The contractor shall provide the following:

13.2.5.1. Five portable, high flow, emergency oxygen sources for AECM use with
each aircraft. p6 3

13.2.5.2. One life vest/emergency egress card/air sickness bag for each AECM
and patient listed on manifest per aircraft. These life vests shall be removed
from the seats and placed in the overhead storage compartments when the aircraft
is "base lined" by the contractor airline.

13.2.6. The maximum number of litter patients is 111 with up to 40 ambulatory
patients on the B767-300 series or zero (0) ambulatory patients on the B767-200
series.

13.2.7. Meal service shall be IAW Atch 3. Additionally, the contractor shall
provide the following:

13.2.7.1. Cold chilled water in lieu of alcoholic beverages.

13.2.7.2. Cold juice/sodas. These shall be primarily orange, apple, and grape
juices. Mixed soda flavors shall be provided.

13.2.7.3. Coffee, tea and bouillon.

13.2.8. If special patient meals are necessary they shall be provided from the
originating hospital.

13.2.9. There shall be no smoking (including flight and medical crew) on any AE
aircraft configured for patient carriage. The "No Smoking" sign shall remain
lighted at all times.

13.2.10. There shall be no hazardous cargo on AE flights.

13.2.11. The contractor shall take necessary actions to add medical equipment
certified for inflight use to its operations specifications certificate.
Medical equipment shall be certified for inflight use. Equipment not approved
for inflight use on B767s will undergo an operational checkout IAW the aircraft
supplemental flight manual procedures provided by the government in the CRAF
AESS packaging.

13.2.12. The scheduled ground time in CONUS shall be four (4) hours. An
additional one (1) hour shall be added if liquid oxygen (LOX) servicing is
required.

13.3..EXECUTION OF FLIGHT
-------------------

13.3.1. CRAF AE B-767s shall be used to return AECMs and medical equipment,
from CONUS AE hubs to overseas AE hubs.

13.3.2. Refueling should normally be accomplished prior to enplaning patients;
however, if this is not possible an emergency crash/rescue vehicle shall be
required to stand by the aircraft during concurrent servicing IAW T.O.00-25-172.
Contractor pilot shall request through the command post at military airfields;
crash/rescue support prior to

ATCH 9
17 June 1994
Page 46 of 48
<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-DOO27

taxi, take off, landing, or aircraft servicing of fuel or LOX with patients on
board.

13.3.3. The contractor pilot and inflight manager are responsible for mission
management and shall contact the MCD #1 for a briefing on medical requirements.
This shall be accomplished thirty (30) minutes prior to takeoff. The following
information shall be provided:

13.3.3.1. Weather enroute.

13.3.3.2. Enroute flying time.

13.3.3.3. Any additional information that may be pertinent.

13.3.3.4. Patient status that may affect aircraft operation shall be provided
to the aircraft captain by the MCD.

13.3.3.5. MCD will provide a list suitable medical emergency alternate
airfields.

13.3.4. The number of AECMs is four (4) flight nurses and six (6) medical
technicians. This number may be augmented by an additional one (1) or two (2)
personnel.

13.3.5. Air Force/military medical personnel are responsible for the following:

13.3.5.1. MCD #1 is the military mission manager. Prior to the MCD arriving at
the aircraft the AECE has overall AE mission management responsibilities.

13.3.5.2. The AECC/AECE will provide information on any altitude or flight
restrictions due to medical reasons to the AMC CAT CRAF Cell who will relay this
information to the contractor operations center when received (minimum 12 hours
prior to flight departure). AECC/AECE or the MCD will also brief this
information to the contractor pilot in command.

13.3.5.3. The MCD will have the final decision on medical emergencies affecting
manifested patients. Should a medical diversion become necessary, the
contractor pilot will make every effort to comply with the request of the MCD.

13.3.5.4. Enplaning and deplaning all patients.

13.3.5.5. Medical care and treatment of all patients.

13.3.5.6. AECMs will secure all medical equipment IAW current Air Force
procedures.

13.3.5.7. AECMs will collect and properly dispose of all medical wastes.
Medical waste shall be collected and stored separately from common waste.

13.3.6. Should the medical condition of any patient require attention during
takeoff, enroute cruise or landing, and if the seat belt sign is on, AECMs shall
be secured with straps to the litter and remain standing during these phases of
flight.

13.3.7. AECMs will assist flight attendants and flight crew during aircraft
emergencies, including the deplaning of patients during an emergency. AECM
qualification is based on AFR 60-1, AFP 164-2, AMCR 55-1/51-164, Vol 1/60-1/164-
3, Operational Manual Supplement, and abbreviated checklist.

13.3.8. Should an enroute aircraft diversion be necessary for reasons other
than a medical emergency, the aircraft

ATCH 9
17 June 1994
Page 47 of 48
<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-DOO27

commander will coordinate with the MCD, when possible, before deciding the point
of landing. The welfare of the patients is a prime consideration in all such
decisions; however, safety is the final determinant. The command and control
center shall be advised and guidance requested for all aircraft or medical
emergencies which require diversions.

13.3.9. In matters of flight safety, decisions of the contractor operations
personnel are final. In matters of all patient care, decisions of MCD are
final.

13.3.10. The contractor flight attendant personnel shall accomplish the
following duties:

13.3.10.1. Direct the AECMs and patients during all ground or inflight
emergencies.

13.3.10.2. All briefings, including the addition of remarks that "during a
cabin decompression the TOP litter patient will pass the emergency oxygen mask
to the lower litter patients".

13.3.10.3. Meal and beverage service shall be IAW attachment 3. The medical
crew will designate which patients can or cannot receive meals or beverages.

13.4. AIRCRAFT IDENTIFICATION The aircraft shall use the call sign of "Air
-----------------------
Evac" for all scheduled flights.

13.5. ADDITIONAL INFORMATION Configuration Control. The contractor shall
----------------------
provide information on aircraft configuration changes which affects the ability
to install the CRAF AESS on designated aircraft to HQ AMC/SGAL.

13.6. MISSION SCHEDULING HQ AMC CRC CRAF Cell is responsible for scheduling
------------------
all CRAF AESS missions. The CRAF Cell will receive requirements from the HQ AMC
CRC.

ATCH 9
17 June 1994
Page 48 of 48
<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

ATTACHMENT 10

PUBLICATIONS/FORMS

Copies of the publication referenced in this contract and listed below may be
obtained from the following sources:

AMC Publications, HQ AMC/IMPPD
BLDG 700
Scott AFB IL 62225

AIR FORCE Publications National Technical Information Service (NTIS)
Defense Publication Service
US Department of Commerce
5285 Port Royal Road
Springfield VA 22161-0001

ARMY Publications Commander
USA Publications Distribution Center
2800 Eastern Blvd
Baltimore MD 21220

NAVY Publications Commanding Officer
Naval Publications and Forms Center
ATTN: Code 101
5804 Tabor Avenue
Philadelphia PA 19120-5099

Short Title Title Date

T.O.: 00-20B-5 USAF Motor Vehicle and Vehicular Equipment AP88
Inspection
CH 5 OC90

T.O.: 00-25-172 Ground Servicing of Aircraft and Static
Grounding/Bonding CH 9 DE92

AFR 30-20 Issuing and Controlling Identification JN90
(ID) Cards

AFR 55-20 Use of United States Air Force AP87
Installations
By Other Than United States Department of
Defense Aircraft
Ch 1 AP89

AFR 60-1 Flight Management FB90

AFR 66-33 Foreign Object Damage (FOD) Prevention SE85
Program

AFM 67-1 Vol 1 Basic Air Force Supply Procedures SE86
Pt 1 Amendment 1 MR87
Amendment 4 MA87

ATCH 10
06 January 1994
Page 1 of 4
<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

Amendment 5 AU87
Amendment 6 NO87
Amendment 9 AU88
Amendment 10 OC88
Amendment 11 MR89
Amendment 12 AP89
Amendment 13 AU89
Amendment 15 AP90

AFR 71-4 Preparing Hazardous Materials for Military Air JA88
Shipments

AFR 76-28 Non-US Government Rate Tariffs JL75

AFM 88-15 Air Force Design Manual - Criteria and (Basic JA75
Standards for Air Force Construction
with Changes 1-6)

AFR 127-12 Air Force Occupational Safety, Fire Prevention MA90
and Health Program

AFR 144-9 Aviation Fuel and Oil Issues to Contract, MA83
Charter, and Civil Aircraft

AFR 144-11 Cash Sales of Ground Petroleum Products in MR84
Overseas Areas

AFR 164-2 Aeromedical Evacuation Nursing JN90

AFR 168-6 Persons Authorized Health Care, Health Benefits, MR88
Charges and Billing Procedures

AFR 205-1 Information Security Program (Supplements AP87
DoD 5200.1-R) Chapter 11
CH1 JL89
CH2 OC89

AFR 400-15 Logistic Support of United States JN78
Non-governmental, Non-military Agencies and
Individuals in Oversea Military Commands

AFOSH STD 127-39 Fuel Servicing Operations 7FEB80

AR37-60 Pricing For Material and Services 1APR85

AR700-32 Logistic Support of United States Non-governmental, JAN78
Non-military Agencies and Individuals in Oversea
Military Commands

ATCH 10
06 January 1994
Page 2 of 4
<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

OPNAVINST 4000.76 Logistic Support of U.S. Non-governmental, 1JUN78
Non-military Agencies and Individuals in Overseas
Military Commands

DODM 5220-22 Industrial Security Manual for Safeguarding MR89
Classified Information (Para 37d)

AMCR 51-164 Aeromedical Evacuation Crew Member (AECM) Training AP86
VOL 1

AMCR 55-1 Aircrew Training Program (General) DE82

AMCR 55-8 Civil Reserve Air Fleet (CRAF) AG92

AMCR 60-1 Aircrew Standardization/Evaluation Program JN92

AMCR 76-1 Transportation JN92
VOL I

AMCR 76-8 Contract Airlift Management--Civil Air Carrier JN92

AMCR 164-3 Worldwide Aeromedical Evacuation Procesdures JL86

FORMS

DD175 Military Flight Plan MA86

DD489 Geneva Conventions Identity Card for Civilians JL74
Who Accompany the Armed Forces

DD1155 Order for Supplies or Services MA90

DD1482 Airlift Mobility Command (AMC) Transportation SE81
Authorization

DD1907 Signature and Tally Record AP90

DD2400 Civil Aircraft Certificate of Insurance AP87

DD2401 Civil Aircraft Landing Permit AP87

DD2402 Civil Aircraft Hold Harmless Agreement AP87

AF 127 Traffic Transfer Receipt JL72

AF310 Document Receipt and Destruction Certificate NO81

AF335 Issuance Record--Accountability Identification Card AP89

AMC8 Civil Aircraft Certificate JN92

ATCH 10
06 January 1994
Page 3 of 4
<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

AMC9 Certificate of Airlift Services Performed FB88
and Accepted

AMC117 AMC Passenger List NO86

AMC157 Civil Reserve Air Fleet (CRAF) Senior Lodger MR90
Site Survey

AMC166B Contract Discrepancy or Violation Notice-- SE89
Civil Airlift

SF1113 Public Voucher for Transportation Charges MR77

ATCH 10
06 January 1994
Page 4 of 4
<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

ATTACHMENT 12
-------------

GOVERNMENT FURNISHED EQUIPMENT
------------------------------

WORLD AIRWAYS

1. STU III Telephones:

RCA S/N 3000026692
$2300
STU III Seed Key - 343635

2. Secure Facsimile Machine

Cryptek Transcrypt 10 Serial #1642
$7500

3. KL43D Data Encryption Devices
$225

S/N 25817 25900 25596 25823 25923
25629 25811 25931 25645 25814
25628 25644 25626

4. Totals: 1 STU IIIs
1 Secure Facsimili
13 KL-43s

Atch 12
17 June 1994
1
<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

GOVERNMENT FURNISHED EQUIPMENT
------------------------------

EVERGREEN

1. STU III Telephones:

RCA S/N 3000026700
$2300
STU III Seed Key 535533

2. Secure Facsimile Machine

Cryptek Transcrypt 10 Serial #1639
$7500

3. KL43D Data Encryption Devices
$225

S/N 25608 25702 25609 25699
25610 25708 25611 25690
25612 25707 25613 25706

4. Totals: 1 STU IIIs
1 Secure Facsimili
12 KL43s

Atch 12
17 June 1994
<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

GOVERNMENT FURNISHED EQUIPMENT
------------------------------

EMERY WORLDWIDE

1. STU III Telephones:

RCA S/N 30000426706
$2300

2. Secure Facsimile Machine

Cryptek Transcrypt 10 Serial #1690
$7500

3. KL43D Data Encryption Devices
$225

S/N 25827 26024 26012 25600
25829 26029 26027 25607
25815 25998 26021 25601
25837 26019 26013 25602
25816 26007 26023 25603
25832 26010 25620

4. Totals: 1 STU IIIs
1 Secure Facsimili
23 KL43s

Atch 12
17 June 1994
3
<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

GOVERNMENT FURNISHED EQUIPMENT
------------------------------

SUN COUNTRY

1. STU III Telephones:

Motorola S/N 2000086665
$2300

2. Secure Facsimile Machine

Cryptek Transcrypt 10 Serial #1893
$7500

3. KL43D Data Encryption Devices
$225

S/N 25746 25765
25750 25766
25747

4. Totals: 1 STU IIIs
1 Secure Facsimili
5 KL43s

<PAGE>

SOLICITATION NO: F11626-94-R0001
CONTRACT NO: F11626-94-D0027

GOVERNMENT FURNISHED EQUIPMENT
------------------------------

RICH INTERNATIONAL AIRWAYS, INC.

1. STU III Telephones:
One (1) RCA STU-III, S/N 3000026686
$2300

2. Secure Facsimile Machine:

Cryptek Secure Fax Machine, Serial #1905
$7500

<PAGE>

CONTRACT NO: F11626-94-D0027

AFFARS 5304.102

The parties hereto expressly understand and agree as follows:

a. Vance Fort, Senior Vice President, Administration and Legal, World Airways,
---------------------------------------------------------------------------
Inc.
----
(name, title and company)

principal representative of the joint venture. As such, all communications
regarding the administration of the contract and the performance of the work
thereunder may be directed to him or her. In the absence of Vance Fort,
-----------
Senior Vice President, Administration and Legal, World Airways, Inc.
--------------------------------------------------------------------
(same name, title and company as above)

Jerry A. Carlon, Manager Government Sales, World Airways, Inc.
--------------------------------------------------------------------
(enter name, title and company of alternate)

is the alternate principal representative of the joint venture.

b. Direction, approvals, required notices, and all other communications from
the Government to the joint venture, including transmittal of payments by
the Government, shall be directed to Vance Fort, Senior Vice President,
----------------------------------
Administration and Legal, World Airways, Inc.
---------------------------------------------
(enter name, title and company of principal)

principal representative of the joint venture.

EMERY WORLDWIDE AIRLINES, INC. SUN COUNTRY AIRLINES

BY: BY:
----------------------- -------------------------
Name: Name:
Title: Title:

EVERGREEN INTERNATIONAL AIRLINES, INC. WORLD AIRWAYS, INC.

BY: BY:
----------------------- -------------------------
Name: Name:
Title: Title:

RICH INTERNATIONAL AIRWAYS, INC.

BY: /s/
----------------------
Name: MARK HUTCHINSON
Title: VICE PRESIDENT SALES & MARKETING

ATCH 13
<PAGE>

CONTRACT NO: F11626-94-D0027

AFFARS 5304.102

The parties hereto expressly understand and agree as follows:

a. Vance Fort, Senior Vice President, Administration and Legal, World Airways,
---------------------------------------------------------------------------
Inc. (name, title and company)
----

principal representative of the joint venture. As such, all communications
regarding the administration of the contract and the performance of the work
thereunder may be directed to him or her. In the absence of Vance Fort,
-----------
Senior Vice President, Administration and Legal, World Airways, Inc. (same
--------------------------------------------------------------------
name, title and company as above)

Jerry A. Carlon, Manager Government Sales, World Airways, Inc.
--------------------------------------------------------------
(enter name, title, and company of alternate)

is the alternate principal representative of the joint venture.

b. Direction, approvals, required notices, and all other communications from the
Government to the joint venture, including transmittal of payments by the
Government, shall be directed to Vance Fort, Senior Vice President,
----------------------------------
Administration and Legal, World Airways, Inc. (enter name, title and company
---------------------------------------------
of principal)

principal representative of the joint venture.

EMERY WORLDWIDE AIRLINES, INC. SUN COUNTRY AIRLINES

BY: BY:/s/ Jean Smith
------------------------ ------------------------
Name: Name: Jean Smith
Title: Title: VP, Sales

EVERGREEN INTERNATIONAL AIRLINES, INC. WORLD AIRWAYS, INC.

BY: BY:
------------------------ ------------------------
Name: Name:
Title: Title:

RICH INTERNATIONAL AIRWAYS, INC.

BY:________________________
Name:
Title:

ATCH 13
4-5
<PAGE>

CONTRACT NO: F11626-94-D0027

AFFARS 5304.102

The parties hereto expressly understand and agree as follows:

a. Vance Fort, Senior Vice President, Administration and Legal, World Airways,
--------------------------------------------------------------------------
Inc. (name, title and company)
----

principal representative of the joint venture. As such, all communications
regarding the administration of the contract and the performance of the work
thereunder may be directed to him or her. In the absence of Vance Fort,
-----------
Senior Vice President, Administration and Legal, World Airways, Inc. (enter
--------------------------------------------------------------------
name, title and company as above)

Jerry A. Carion, Manager Government Sales, World Airways, Inc.
--------------------------------------------------------------------------
(enter name, title, and company of alternate)

is the alternate principal representative of the joint venture.

b. Direction, approvals, required notices, and all other communications from
the Government to the joint venture, including transmittal of payments by
the Government, shall be directed to Vance Fort, Senior Vice President,
----------------------------------
Administration and Legal, World Airways, Inc. (enter name, title and company
---------------------------------------------
of principal)

principal representative of the joint venture.

EMERY WORLDWIDE AIRLINES, INC. SUN COUNTRY AIRLINES

BY: BY:
------------------------- -------------------------
Name: Name:
Title: Title:

EVERGREEN INTERNATIONAL AIRLINES, INC. WORLD AIRWAYS, INC.

BY: BY:/s/ Vance Fort
------------------------- -------------------------
Name: Name: Vance Fort
Title: Title: Senior Vice President
Government and Legal Affairs

RICH INTERNATIONAL AIRWAYS, INC.

BY:
--------------------------
Name:
Title:

ATCH 13
5-5