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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
__________________
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): SEPTEMBER 18, 1996
TRANS WORLD AIRLINES, INC.
(Exact name of Registrant as Specified in its Charter)
___________________
<TABLE>
<S> <C> <C>
DELAWARE 1-7815 43-1145889
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
ONE CITY CENTRE
515 N. SIXTH STREET
ST. LOUIS, MISSOURI 63101
(314) 589-3000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
______________________
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ITEM 5. OTHER EVENTS
On September 18, 1996, Trans World Airlines, Inc. (the "Company")
announced that the Company expects to report lower pre-tax results for the
third quarter of 1996 than for the comparable period of 1995 (when adjusted for
the effect of 1995 reorganization charges). The Company stated that although
summer traffic and load factors significantly exceeded 1995 levels, July and
August yields were below last year's levels. The Company also noted
significant cost increases in July and August including increased fuel and
maintenance costs.
On September 19, 1996, the Company announced that during the months of
July and August 1996, the Company had issued an aggregate of approximately 3.8
million shares of its Common Stock in exchange for an aggregate $40 million
principal amount of the Company's 12% Senior Secured Reset Notes due 1998 in
privately negotiated exchanges with two note holders.
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EXHIBITS
10.1 Exchange Agreement dated as of June 10, 1996 between Trans World
Airlines, Inc. and Elliott Associates, L.P., as amended
10.2 Exchange Agreement dated as of June 10, 1996 between Trans World
Airlines, Inc. and Westgate International, L.P., as amended
99.1 Press Release regarding third quarter results to date
99.2 Press Release regarding exchange program
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRANS WORLD AIRLINES, INC.
Date: September 20, 1996 By: /s/ Edward Soule
----------------------------
Title: Executive Vice President
and Chief Financial
Officer
<PAGE> 1
EXHIBIT 10.1
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT is made as of this 10th day of June, 1996 by
and between Elliott Associates, L.P., a Delaware limited partnership
("Exchanging Securityholder") and Trans World Airlines, Inc., a Delaware
corporation ("TWA").
W I T N E S S E T H:
WHEREAS, Exchanging Securityholder, is the beneficial owner of certain
12% Senior Secured Reset Notes due November 3, 1998 (together with accrued and
unpaid interest, the "Notes") of TWA; and
WHEREAS, Exchanging Securityholder wishes to arrange for the exchange
of some or all of the Notes for shares of TWA's $.01 par value Common Stock
(the "Shares") and TWA wishes to exchange Shares for some or all of the Notes,
all on the terms and subject to the conditions set forth in this Exchange
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and Exchange
Agreements set forth in this Exchange Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. EXCHANGE TRANSACTIONS. (a) Exchanging Securityholder hereby
agrees that in the event Notes are exchanged for Shares, Exchanging
Securityholder shall exchange, assign, transfer, convey and deliver to TWA, and
TWA shall receive from Exchanging Securityholder, all right, title and interest
in and to the Notes so exchanged; and (b) TWA agrees that in the event that
Notes are exchanged for Shares, TWA shall exchange, assign, transfer, convey
and deliver to Exchanging Securityholder, and Exchanging Securityholder shall
receive from TWA, all right, title and interest in and to the Shares so
exchanged, with all transactions to take place at the applicable Closing (as
defined in Section 9 hereto) on the terms and subject to the conditions set
forth in this Exchange Agreement. The Shares have been approved for listing on
the American Stock Exchange. Based upon Exchanging Securityholder's
representations contained in Section 5, the Shares will be issued to Exchanging
Securityholder free and clear of legend or transfer restrictions.
2. PROCEDURE FOR EFFECTING AN EXCHANGE. (a) To effect an exchange
of Notes for Shares during the term of this Agreement, The Exchanging
Securityholder shall complete and deliver by facsimile transmission to TWA, at
the number therefor for TWA designated in Section 11(f), during or after the
close of a trading day on the American Stock Exchange ("ASE") an Offer to
Exchange ("Offer") in the form of Exhibit A hereto, with all information filled
in, and signed by a duly authorized officer of the Exchanging Securityholder.
Once made, an Offer shall remain open for acceptance by TWA from the time of
receipt thereof by TWA, subject to revocation in writing as hereinafter
provided. Assuming such Offer is acceptable to TWA, TWA shall have such Offer
signed by a duly authorized officer (an "Accepted Offer") and deliver by
facsimile transmission to the Exchanging Securityholder, at the number therefor
for the Exchanging Securityholder designated in Section 11(f), such Accepted
Offer after the time of receipt by TWA of the Offer unless TWA shall
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have received a revocation thereof in writing prior to transmission by TWA of
the Accepted Offer to the Exchanging Securityholder. The Closing of the
exchange contemplated by an Accepted Offer shall take place on the third
trading day ("T+3") on which the ASE is open for business after transmission of
an Accepted Offer by TWA to the Exchanging Securityholder as herein
contemplated.
(b) Prior to transmitting any Offer on any trading day, Exchanging
Securityholder shall give telephonic notice on such day to TWA, at the number
specified in Section 11(f), that Exchanging Securityholder will be making an
Offer. It is the non-binding intention of the parties hereto that (i) the
Exchanging Securityholder will fax the Offer to TWA (accompanied by the most
current Time Sales Quotron Sheet for TWA) while an authorized representative of
the Exchanging Securityholder is in telephone contact with an authorized
representative of TWA and (ii) that TWA will either accept or reject the Offer
(and if the Offer is to be accepted, will fax the Accepted Offer to the
Exchanging Securityholder) while such representatives maintain telephone
contact. Nothing in this paragraph shall be deemed, however, to affect the
validity or enforceability of any Accepted Offer.
3. PRICING OF EXCHANGE. The number of Shares to be exchanged for
Notes hereunder shall be determined by dividing the Notes Price (i.e., the
Notes priced at par, plus accrued interest as computed from Exhibit B hereto
through the date of the transmission of the Offer by the Exchanging
Securityholder) by the Share Price (i.e., 95% of the Agreed Trading Share
Price). The "Agreed Trading Share Price" shall be the price of the Shares on
the ASE on the day the Offer is transmitted by facsimile to TWA by the
Exchanging Securityholder, as such price is reflected on the ASE on the date of
the Offer utilizing an average of the most recent sale prices prior to the
transmission of the offer as agreed between the Exchanging Securityholder and
TWA. The Agreed Trading Share Price and the resulting number of Shares for
which each $1,000 principal amount of Notes (plus accrued but unpaid interest
on the Notes through the close of business on the date of the Offer) will be
exchanged in connection with any Offer will be set forth by the Exchanging
Securityholder in any Offer transmitted to TWA. The number of Shares in any
such exchange will be rounded down to the nearest whole Share and no fractional
shares shall be issued.
4. REPRESENTATIONS OF EXCHANGING SECURITYHOLDER. Exchanging
Securityholder hereby represents and warrants to TWA as follows:
(a) Existence of Exchanging Securityholder. Exchanging
Securityholder is a limited partnership, validly existing and in good
standing under the laws of the State of Delaware. Exchanging
Securityholder has full power and authority to execute and deliver
this Exchange Agreement and to perform its obligations hereunder and
to consummate the transactions contemplated hereby, including, without
limitation, to own, hold, sell and transfer the Notes pursuant to this
Exchange Agreement.
(b) Authority. The execution and delivery by Exchanging
Securityholder of this Exchange Agreement, and the performance by
Exchanging Securityholder of its obligations
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hereunder, have been duly and validly authorized by Exchanging
Securityholder, with no other action on the part of Exchanging
Securityholder or its partners being necessary. This Exchange
Agreement has been duly and validly executed and delivered by
Exchanging Securityholder and constitutes a legal, valid and binding
obligation of Exchanging Securityholder enforceable against Exchanging
Securityholder in accordance with its terms.
(c) Ownership of Notes. Exchanging Securityholder is the
owner of the Notes and all Notes exchanged by the Exchanging
Securityholder will be free and clear of all liens. The delivery of
Notes as contemplated by this Agreement in the manner provided herein
will transfer to TWA good and valid title to the Notes, free and clear
of all liens and encumbrances whatsoever.
(d) No Conflicts. Neither the execution and delivery by
Exchanging Securityholder of this Exchange Agreement, nor the
performance by Exchanging Securityholder of its obligations under this
Exchange Agreement and the consummation of the transactions
contemplated hereby, will conflict with or result in a violation or
breach of any of the terms, conditions or provisions of the
partnership agreement of Exchanging Securityholder.
(e) Disclosure of TWA. Exchanging Securityholder has
received and carefully reviewed TWA's Annual Report on Form 10-K for
the year ended December 31, 1995, TWA's most recent Quarterly Report
on Form 10-Q and TWA's Proxy Statement for the Annual Meeting of
Stockholders held on May 21, 1996. Exchanging Securityholder
acknowledges that all documents, records and books pertaining to the
issuance of the Shares to Exchanging Securityholder and requested by
Exchanging Securityholder have been made available for inspection by
TWA, that Exchanging Securityholder had a reasonable opportunity to
ask questions of and receive answers from TWA concerning the terms and
conditions of the issuance of the Shares, and to obtain additional
information, to the extent possessed or obtainable without
unreasonable effort or expense by the Company, necessary to verify the
accuracy of the information in the above-described documents. All
such questions have been answered to the full satisfaction of
Exchanging Securityholder. No oral representations have been made,
express or implied, to Exchanging Securityholder in connection with
the issuance of the Shares and Exchanging Securityholder has relied
solely upon the representations set forth herein and the information
contained in the documents referred to above. Exchanging
Securityholder represents that it is sophisticated in matters of
financial analysis and is able and willing to evaluate and bear the
risk of investment in equity securities of TWA.
(f) Exemption of Shares from Registration. Exchanging
Securityholder acknowledges that the Shares have not been registered
under the Securities Act of 1933, as amended (including all rules and
regulations thereto, the "Act"), in reliance upon the exemption from
registration thereunder contained in Section 3(a)(9) thereof, and
acknowledges that the Shares have not been registered under the
securities or "blue sky" laws
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of any state, and are being issued to Exchanging Securityholder upon
certain exemptions from registration contained in such securities
laws. Exchanging Securityholder is aware that TWA has relied upon,
among other things, the representations contained herein in
determining that an exemption from registration under the Act and
under applicable state securities laws is available for the issuance
of the shares and that but for such representations, TWA would not
issue the Shares to Exchanging Securityholder as provided herein.
Exchanging Securityholder acknowledges that TWA is and will be under
no obligation to register the Shares under the Securities Act of 1933,
as amended.
(g) Exchanging Securityholder Not an Affiliate. Neither
Exchanging Securityholder nor any of its general or limited partners
is an affiliate of TWA within the meaning of such term under the Act.
(h) ASE Trading Information. All ASE trading information
supplied by the Exchanging Securityholder to TWA upon which the Agreed
Trading Share Price is determined shall be true, accurate and correct
to the best knowledge and belief of Exchanging Securityholder and its
agents and general partners.
5. REPRESENTATIONS OF TWA. TWA hereby represents and warrants to
Exchanging Securityholder as follows:
(a) Corporate Existence of TWA. TWA is a corporation,
validly existing and in good standing under the laws of the State of
Delaware. TWA has full corporate power and authority to execute and
deliver this Exchange Agreement and to perform its obligations
hereunder and to consummate the transactions contemplated hereby,
including, without limitation, to issue the Shares pursuant to this
Exchange Agreement.
(b) Authority. The execution and delivery by TWA of this
Exchange Agreement, and the performance by TWA of its obligations
hereunder, have been duly and validly authorized by the Board of
Directors of TWA, with no other corporate action on the part of TWA or
its stockholders being necessary. This Exchange Agreement has been
duly and validly executed and delivered by TWA and constitutes a
legal, valid and binding obligation of TWA enforceable against TWA in
accordance with its terms.
(c) Ownership of Shares. The delivery of a certificate
or certificates representing the Shares in the manner provided herein
will transfer to Exchanging Securityholder good and valid title to the
Shares, free and clear of all liens and all Shares will be duly and
validly issued and fully paid and nonassessable.
(d) No Conflicts. Neither the execution and delivery by
TWA of this Exchange Agreement, nor the performance by TWA of its
obligations under this Exchange Agreement and the consummation of the
transactions contemplated hereby, will conflict with or result
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in a violation or breach of any of the terms, conditions or provisions
of TWA's Second Amended & Restated Certificate of Incorporation or
Amended and Restated By-laws.
6. CONDITIONS TO OBLIGATIONS OF EXCHANGING SECURITYHOLDER. The
obligations of Exchanging Securityholder hereunder are subject to the
fulfillment, at or before the delivery of the Notes and the Shares at the
Closing, of each of the following conditions (all or any of which may be waived
in whole or in part by Exchanging Securityholder in its sole discretion):
(a) Representations and Warranties. The representations
and warranties made by TWA in this Exchange Agreement shall be true
and correct in all respects material to the validity and
enforceability of this Exchange Agreement on and as of each Closing
Date (as defined below) as though made on and as of such Closing Date.
(b) Performance. TWA shall have performed and complied
with, in all material respects, the Exchange Agreements, covenants and
obligations required by this Exchange Agreement to be so performed or
complied with by TWA at or before the Closing.
(c) Officers' Certificates. TWA shall have delivered to
Exchanging Securityholder a certificate, dated the Closing Date and
executed by the President or any Vice President of and the Corporate
Secretary of TWA, substantially in the form and to the effect of
Exhibit C hereto.
(d) Orders and Laws. There shall not be in effect on the
Closing Date any Order or Law restraining, enjoining, or otherwise
prohibiting or making illegal the consummation of any of the
transactions contemplated by this Exchange Agreement.
(e) Listing of Shares. The Shares shall have been
approved for listing on the American Stock Exchange.
7. CONDITIONS TO OBLIGATIONS OF TWA. The obligations of TWA
hereunder are subject to the fulfillment, at or before the delivery of the
Notes and the Shares at the applicable Closing, of each of the following
conditions (all or any of which may be waived in whole or in part by TWA in its
sole discretion):
(a) Representations and Warranties. The representations
and warranties made by Exchanging Securityholder in this Exchange
Agreement shall be true and correct in all respects material to the
validity and enforceability of this Exchange Agreement on and as of
each Closing Date (as defined below) as though made on and as of such
Closing Date.
(b) Performance. Exchanging Securityholder shall have
performed and complied with, in all material respects, the Exchange
Agreements, covenants and obligations required by this Exchange
Agreement to be so performed or complied with by Exchanging
Securityholder at or before the Closing.
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(c) Officers' Certificates. Exchanging Securityholder
shall have delivered to TWA a certificate, dated the Closing Date and
executed by a duly authorized representative of Exchanging
Securityholder, substantially in the form and to the effect of
Exhibit D hereto.
(d) Orders and Laws. There shall not be in effect on the
Closing Date any Order or Law restraining, enjoining, or otherwise
prohibiting or making illegal the consummation of any of the
transactions contemplated by this Exchange Agreement.
8. NO OTHER REPRESENTATIONS. Notwithstanding anything to the
contrary contained in this Exchange Agreement, it is the explicit intent of
each party hereto that TWA and the Exchanging Securityholder are making no
representation or warranty whatsoever, express or implied, except those
representations and warranties contained in Sections 4 and 5 as applicable and
in any certificate delivered pursuant to Sections 6(c) and 7(c) hereto.
9. CLOSING.
(a) Time and Place. Each closing (a "Closing") of the
transactions contemplated by this Exchange Agreement shall be held at
the offices of American Stock Transfer and Trust Company ("AST"), New
York, New York on T+3 or at such other place(s) or on such other date
as may be mutually agreed upon by Exchanging Securityholder and TWA.
No further Offers may be made hereunder after the earlier of (i)
August 30, 1996 or (ii) the date either party hereto shall give
written notice to the other of the termination of the term of this
Agreement (the "Termination Date"). Alternatively, each closing may
be settled on T+3 by electronic book entry through Depository Trust
Company ("DTC") if Exchanging Securityholder gives written notice
thereof on the next Business Day after the transmission by TWA of an
Accepted Offer. In such event, the Notes shall be delivered by the
Exchanging Securityholder and the Shares by AST on behalf of TWA, in
each case, by book-entry transfer through DTC. No exchange shall be
deemed complete or closing effected until a book-entry confirmation is
received confirming that the Notes, in the case of TWA, and the
Shares, in the case of Exchanging Securityholder, have been
transferred to the account of TWA, in the case of the Notes, and
Exchanging Securityholder, or its designee or nominee, in the case of
the Shares. In the case of a closing by electronic book entry, the
exchange of the Notes for the Shares shall take place on the same
trading day and as simultaneously as practicable. The parties agree
to coordinate with DTC and AST to accomplish that objective. Neither
TWA, the Exchanging Securityholder nor AST, nor any designee or
nominee of any of the foregoing, will have any liability for the
performance by DTC or its participants of their respective obligations
under the rules and procedures governing their operations. The
Termination Date may be extended at any time by agreement in writing
between the parties signed by the Exchanging Securityholder and TWA.
(b) Delivery by Exchanging Securityholder. At or prior
to each Closing, Exchanging Securityholder will deliver to TWA (i) a
certificate or certificates registered in Exchanging Securityholder's
name and representing the Notes so exchanged (unless Closing
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takes place by electronic book entry through DTC), and (ii) the
officers' certificates to be delivered pursuant to Section 7(c) hereto.
(c) Delivery by TWA. At or prior to each Closing, TWA
will deliver to Exchanging Securityholder (i) a certificate or
certificates registered in Exchanging Securityholder's name and
representing the Shares so exchanged (unless Closing takes place by
electronic book entry through DTC), and (ii) the officers'
certificates to be delivered pursuant to Section 6(c) hereto.
10. INDEMNIFICATION.
(a) Indemnification by Exchanging Securityholder.
Exchanging Securityholder agrees to indemnify and hold harmless TWA,
its officers, directors and stockholders and any other person who may
be deemed to control TWA from any loss, liability, claim, damage or
expense arising out of the inaccuracy of any of Exchanging
Securityholder's above representations, warranties or statements or
the breach of the agreements contained herein; provided, however, in
no event shall TWA be entitled to recover any incidental, indirect,
special or consequential damages from Exchanging Securityholder.
(b) Indemnification by TWA. TWA agrees to indemnify and
hold harmless Exchanging Securityholder, its officers, directors and
stockholders and any other person who may be deemed to control
Exchanging Securityholder from any loss, liability, claim, damage or
expense arising out of the inaccuracy of any of TWA's above
representations, warranties or statements or the breach of the
agreements contained herein; provided, however, in no event shall
Exchanging Securityholder be entitled to recover any incidental,
indirect, special or consequential damages from TWA.
11. MISCELLANEOUS.
(a) Limitation on Other Exchanges. TWA shall not enter
into any contract or agreement to exchange Shares for 12% Senior
Secured Reset Notes with any other person on any Extended Business Day
on which it shall have entered into an agreement to exchange Notes for
Shares by transmitting an Accepted Offer to the Exchanging
Securityholder. "Extended Business Day" means from 3:30 p.m. on any
trading day prior to the trading day on the ASE on which the Accepted
Offer is transmitted until 9:29 a.m. on the next succeeding trading
day on the ASE following the trading day on which the Accepted Offer
was transmitted by TWA. This Section 11(a) is not intended to prevent
TWA from entering into or performing such an agreement with Westgate
International, L.P. or any affiliate thereof).
(b) Entire Agreement. Except as otherwise expressly
provided herein, this Exchange Agreement contains the entire agreement
between the parties with respect to the transactions contemplated
hereunder and may be amended only by a writing executed by the parties
hereto. This Exchange Agreement supersedes all prior arrangements or
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understandings with respect thereto, written or oral. The terms and
conditions of this Exchange Agreement shall inure to the benefit of
and be binding upon the parties and their respective successors and is
intended for the benefit of Exchanging Securityholder and TWA.
(c) Consent to Jurisdiction Etc. Exchanging
Securityholder agrees that any legal action or proceeding against
Exchanging Securityholder relating to or arising out of or under this
Exchange Agreement may be brought in any court of competent
jurisdiction in the State of New York or of the United States of
America for the Southern District of New York, and Exchanging
Securityholder accepts with regard to any such action or proceeding
for itself and in respect to its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Exchanging
Securityholder further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified
U.S. mail, postage prepaid, to the Exchanging Securityholder at its
addresses provided in Section 11(f) hereof, such service to become
effective upon receipt or five (5) days after such mailing, whichever
shall first occur. Nothing herein contained shall affect the right of
TWA to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against Exchanging
Securityholder in the State of Delaware or against Exchanging
Securityholder in any other jurisdiction in which Exchanging
Securityholder may be subject to suit. To the fullest extent
permitted by applicable law, Exchanging Securityholder hereby waives,
and agrees not to assert, by way of motion, defense, counterclaim or
otherwise, in any such suit, action or proceeding any claim that (i)
Exchanging Securityholder is not personally subject to the
jurisdiction of any of the above-named courts by reason of any
immunity or otherwise (ii) its properties are exempt or immune from
setoff, execution or attachment, either prior to judgment or in aid of
execution or (iii) any suit, action or proceeding so brought is in an
inconvenient forum or that the venue of the suit, action or proceeding
is improper or that the subject matter hereof may not be enforced in
or by such courts. Exchanging Securityholder further agrees that,
after final judgment by any such court, it will, to the fullest extent
permitted by applicable law, waive the benefit of any defense that
would hinder or delay the levy, execution or collection of any amount
to which TWA is entitled hereunder or pursuant to a final judgment of
any court having jurisdiction.
(d) Survival of Representations and Warranties. The
representations and warranties of Exchanging Securityholder set forth
herein shall survive the issuance of the Shares pursuant to this
Exchange Agreement.
(e) Expenses. Each party will pay its own costs and
expenses incurred in connection with the negotiation, execution and
closing of this Exchange Agreement and the transactions contemplated
hereby and thereby.
(f) Governing Law. This Exchange Agreement shall be
governed by and construed in accordance with the laws of the State of
New York.
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(g) Notices. All notices, requests and other
communications hereunder must be in writing and will be deemed to have
been duly given only if delivered personally or by facsimile
transmission or mailed (first class postage prepaid) to the parties at
the following addresses or facsimile numbers:
If to Exchanging Securityholder, to:
Elliott Associates, L.P.
712 5th Avenue, 36th Floor
New York, New York 10019
Attn: Mr. Vince Intrieri
Telephone No.: 212/974-2151
Facsimile No.: 212/974-2092
Authorized Representative:
Paul E. Singer or Vince Intrieri
If to TWA, to:
Trans World Airlines, Inc.
One City Centre
515 N. Sixth Street
St. Louis, Missouri 63101
Attn: Michael J. Palumbo
Telephone No. for telephonic
notice: 314/589-3175
Facsimile No.: 314/589-3267
Authorized Representative:
Robert A. Peiser or Michael J. Palumbo
(h) Counterparts. This Exchange Agreement may be
executed in any number of counterparts, each of which will be deemed
an original, but all of which together will constitute one and the
same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this
Exchange Agreement to be fully executed as of the 10th day of June,
1996.
ELLIOTT ASSOCIATES, L.P.
By: /s/ Paul E. Singer
------------------------------
Paul E. Singer
General Partner
TRANS WORLD AIRLINES, INC.
By: /s/ Richard P. Magurno
------------------------------
Name: Richard P. Magurno
Title: Senior Vice President
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EXHIBIT A
OFFER OF EXCHANGE
Trans World Airlines, Inc. [TO BE TRANSMITTED BY FACSIMILE]
One City Centre
515 N. Sixth Street Dated: ____________________, 1996
St. Louis, MO 63101
Attn: Michael J. Palumbo
Vice President and Treasurer
Dear Sirs:
We refer to the Exchange Agreement dated the 10th day of June, 1996
(the "Exchange Agreement") between Elliott Associates, L.P. ("Exchanging
Securityholder") and Trans World Airlines, Inc. ("TWA"). All capitalized terms
used herein which are not separately defined are used as defined in the
Exchange Agreement.
The Exchanging Securityholder hereby offers to exchange Notes in the
following principal amount and accrued interest:
<TABLE>
<S> <C>
Principal Amount of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Accrued Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
---------------
Notes Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
===============
</TABLE>
for __________ Shares. Such number of Shares has been computed in accordance
with Section 3 of the Exchange Agreement based upon a Share Price of $_____ and
an Agreed Trading Share Price of a Share on the date of this Offer of
$________. Please evidence your acceptance of our Offer by signing and
returning this Offer by facsimile transmission in accordance with the terms of
the Exchange Agreement.
ELLIOTT ASSOCIATES, L.P.
By:________________________________
Authorized Officer
ACCEPTANCE
TWA hereby accepts the within offer and agrees to exchange ___________
Shares for the total Notes Price referred to above.
TRANS WORLD AIRLINES, INC.
By:___________________________
Authorized Officer
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AMENDMENT NO. 1
TO THE EXCHANGE AGREEMENT
THIS AMENDMENT NO. 1 TO THE EXCHANGE AGREEMENT is made as of this 22nd
day of August, 1996 by and between Elliott Associates, L.P., a Delaware limited
partnership ("Exchanging Securityholder") and Trans World Airlines, Inc., a
Delaware corporation ("TWA").
WITNESSETH:
WHEREAS, Exchanging Securityholder and TWA entered into an Exchange
Agreement as of June 10, 1996 ("Exchange Agreement") whereby Exchanging
Securityholder and TWA agreed to exchange 12% Senior Secured Reset Notes due
November 3, 1998 (the "Notes") for shares of TWA's $.01 par value Common Stock
("Shares"), all as more fully set forth in the Exchange Agreement; and
WHEREAS, Exchanging Securityholder and TWA wish to extend the date by
which the parties may exchange the Notes and the Shares pursuant to the Exchange
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. The second sentence of paragraph 9 of the Exchange Agreement is
hereby deleted and the following sentence is hereby substituted therefor.
"No further offers may be made hereunder after the earlier of (i)
October 30, 1996 or (ii) the date either party hereto shall give
written notice to the other of the termination of the term of this
Agreement (the "Termination Date")."
2. Exhibit B to the Exchange Agreement is hereby amended to include
Exhibit B-1, attached hereto and made a part hereof.
3. Except as amended herein, the Exchange Agreement remains in full
force and effect.
4. This Amendment No. 1 to the Exchange Agreement may be executed in
any number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to the Exchange Agreement to be executed as of the 28th day of August, 1996.
Elliott Associates, L.P.
By: /s/ Paul E. Singer
---------------------------
Paul E. Singer
General Partner
Trans World Airlines, Inc.
By: /s/ Richard P. Magurno
---------------------------
Richard P. Magurno
Senior Vice President
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EXCHANGE AGREEMENT EXHIBIT B - 1
TRANSWORLD AIRLINES, INC.
DAILY CALCULATION OF PAR + ACCRUED INTEREST
12% SR. SECURED RESET NOTES
MONDAY SEPT. 2 1,010.67
TUESDAY 3 1,011.00
WEDNESDAY 4 1,011.33
THURSDAY 5 1,011.67
FRIDAY 6 1,012.00
MONDAY 9 1,013.00
TUESDAY 10 1,013.33
WEDNESDAY 11 1,013.67
THURSDAY 12 1,014.00
FRIDAY 13 1,014.33
MONDAY 16 1,015.33
TUESDAY 17 1,015.67
WEDNESDAY 18 1,016.00
THURSDAY 19 1,016.33
FRIDAY 20 1,016.67
MONDAY 23 1,017.67
TUESDAY 24 1,018.00
WEDNESDAY 25 1,018.33
THURSDAY 26 1,018.67
FRIDAY 27 1,019.00
MONDAY 30 1,020.00
TUESDAY OCTOBER 1 1,020.33
WEDNESDAY 2 1,020.67
THURSDAY 3 1,021.00
FRIDAY 4 1,021.33
MONDAY 7 1,022.33
TUESDAY 8 1,022.67
WEDNESDAY 9 1,023.00
THURSDAY 10 1,023.33
FRIDAY 11 1,023.67
MONDAY 14 1,024.67
TUESDAY 15 1,025.00
WEDNESDAY 16 1,025.33
THURSDAY 17 1,025.67
FRIDAY 18 1,026.00
MONDAY 21 1,027.00
TUESDAY 22 1,027.33
WEDNESDAY 23 1,027.67
THURSDAY 24 1,028.00
FRIDAY 25 1,028.33
MONDAY 28 1,029.33
TUESDAY 29 1,029.67
WEDNESDAY 30 1,030.00
<PAGE> 15
TWA [LETTERHEAD]
September 9, 1996
Elliott Associates, L.P.
712 5th Avenue, 36th Floor
New York, New York 10019
Attention: Mr. Vince Intrieri
Gentlemen:
Reference is made hereby to the Exchange Agreement dated as of June 10,
1996 between Elliott Associates, L.P., a Delaware limited partnership
("Elliott"), and Trans World Airlines, Inc., a Delaware corporation ("TWA"), as
amended (the "Exchange Agreement"), which provides for Elliott to exchange 12%
Senior Secured Reset Notes due November 3, 1998 of TWA held by it (together with
accrued and unpaid interest, the "Notes") for shares of TWA's Common Stock, $.01
par value per share ("Shares") in exchange transactions exempt from the
registration requirements of the Securities Act of 1933, as amended (the "Act"),
in reliance upon Section 3(a)(9) of the Act.
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, Elliott hereby agrees that any and all resales of
Shares received by Elliott in exchange transactions pursuant to the Exchange
Agreement will be made either (i) in compliance with the requirements of
sections (e) and (f) of Rule 144 of the Act, as such rule may be amended from
time to time, or (ii) pursuant to another exemption available under the Act,
with respect to the availability of which exemption to be confirmed by an
opinion of Kleinberg, Kaplan, Wolff & Cohen, P.C., or such other counsel
acceptable to TWA, reasonably satisfactory in form and substance to TWA,
furnished to TWA prior to any such resale. If such resale is made pursuant to
Section 4(2) of the Act or any similar "private placement" exemption, the
transferee shall assume, in form and substance satisfactory to TWA, the
obligations of Elliott with respect to any subsequent resale by such transferee.
If the foregoing is agreeable and acceptable to you, please indicate your
agreement with TWA as hereinabove set forth.
Very truly yours,
TRANS WORLD AIRLINES, INC.
By: /s/ Richard P. Magurno
-------------------------------------
Name: Richard P. Magurno
Title: SR. V.P.
AGREED AND ACCEPTED
this 10th day of September, 1996.
ELLIOTT ASSOCIATES, L.P.
By: /s/ Paul Singer
-------------------------------
Its: GENERAL PARTNER
------------------------------
<PAGE> 1
EXHIBIT 10.2
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT is made as of this 10th day of June, 1996 by
and between Westgate International, L.P., a Cayman Islands limited partnership
("Exchanging Securityholder") and Trans World Airlines, Inc., a Delaware
corporation ("TWA").
W I T N E S S E T H:
WHEREAS, Exchanging Securityholder, is the beneficial owner of certain
12% Senior Secured Reset Notes due November 3, 1998 (together with accrued and
unpaid interest, the "Notes") of TWA; and
WHEREAS, Exchanging Securityholder wishes to arrange for the exchange
of some or all of the Notes for shares of TWA's $.01 par value Common Stock
(the "Shares") and TWA wishes to exchange Shares for some or all of the Notes,
all on the terms and subject to the conditions set forth in this Exchange
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and Exchange
Agreements set forth in this Exchange Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. EXCHANGE TRANSACTIONS. (a) Exchanging Securityholder hereby
agrees that in the event Notes are exchanged for Shares, Exchanging
Securityholder shall exchange, assign, transfer, convey and deliver to TWA, and
TWA shall receive from Exchanging Securityholder, all right, title and interest
in and to the Notes so exchanged; and (b) TWA agrees that in the event that
Notes are exchanged for Shares, TWA shall exchange, assign, transfer, convey
and deliver to Exchanging Securityholder, and Exchanging Securityholder shall
receive from TWA, all right, title and interest in and to the Shares so
exchanged, with all transactions to take place at the applicable Closing (as
defined in Section 9 hereto) on the terms and subject to the conditions set
forth in this Exchange Agreement. The Shares have been approved for listing on
the American Stock Exchange. Based upon Exchanging Securityholder's
representations contained in Section 5, the Shares will be issued to Exchanging
Securityholder free and clear of legend or transfer restrictions.
2. PROCEDURE FOR EFFECTING AN EXCHANGE. (a) To effect an exchange
of Notes for Shares during the term of this Agreement, The Exchanging
Securityholder shall complete and deliver by facsimile transmission to TWA, at
the number therefor for TWA designated in Section 11(f), during or after the
close of a trading day on the American Stock Exchange ("ASE") an Offer to
Exchange ("Offer") in the form of Exhibit A hereto, with all information filled
in, and signed by a duly authorized officer of the Exchanging Securityholder.
Once made, an Offer shall remain open for acceptance by TWA from the time of
receipt thereof by TWA, subject to revocation in writing as hereinafter
provided. Assuming such Offer is acceptable to TWA, TWA shall have such Offer
signed by a duly authorized officer (an "Accepted Offer") and deliver by
facsimile transmission to the Exchanging Securityholder, at the number therefor
for the Exchanging Securityholder designated in Section 11(f), such Accepted
Offer after the time of receipt by TWA of the Offer unless TWA shall
<PAGE> 2
have received a revocation thereof in writing prior to transmission by TWA of
the Accepted Offer to the Exchanging Securityholder. The Closing of the
exchange contemplated by an Accepted Offer shall take place on the third
trading day ("T+3") on which the ASE is open for business after transmission of
an Accepted Offer by TWA to the Exchanging Securityholder as herein
contemplated.
(b) Prior to transmitting any Offer on any trading day, Exchanging
Securityholder shall give telephonic notice on such day to TWA, at the number
specified in Section 11(f), that Exchanging Securityholder will be making an
Offer. It is the non-binding intention of the parties hereto that (i) the
Exchanging Securityholder will fax the Offer to TWA (accompanied by the most
current Time Sales Quotron Sheet for TWA) while an authorized representative of
the Exchanging Securityholder is in telephone contact with an authorized
representative of TWA and (ii) that TWA will either accept or reject the Offer
(and if the Offer is to be accepted, will fax the Accepted Offer to the
Exchanging Securityholder) while such representatives maintain telephone
contact. Nothing in this paragraph shall be deemed, however, to affect the
validity or enforceability of any Accepted Offer.
3. PRICING OF EXCHANGE. The number of Shares to be exchanged for
Notes hereunder shall be determined by dividing the Notes Price (i.e., the
Notes priced at par, plus accrued interest as computed from Exhibit B hereto
through the date of the transmission of the Offer by the Exchanging
Securityholder) by the Share Price (i.e., 95% of the Agreed Trading Share
Price). The "Agreed Trading Share Price" shall be the price of the Shares on
the ASE on the day the Offer is transmitted by facsimile to TWA by the
Exchanging Securityholder, as such price is reflected on the ASE on the date of
the Offer utilizing an average of the most recent sale prices prior to the
transmission of the offer as agreed between the Exchanging Securityholder and
TWA. The Agreed Trading Share Price and the resulting number of Shares for
which each $1,000 principal amount of Notes (plus accrued but unpaid interest
on the Notes through the close of business on the date of the Offer) will be
exchanged in connection with any Offer will be set forth by the Exchanging
Securityholder in any Offer transmitted to TWA. The number of Shares in any
such exchange will be rounded down to the nearest whole Share and no fractional
shares shall be issued.
4. REPRESENTATIONS OF EXCHANGING SECURITYHOLDER. Exchanging
Securityholder hereby represents and warrants to TWA as follows:
(a) Existence of Exchanging Securityholder. Exchanging
Securityholder is a limited partnership, validly existing and in good
standing under the laws of the Cayman Islands. Exchanging
Securityholder has full power and authority to execute and deliver
this Exchange Agreement and to perform its obligations hereunder and
to consummate the transactions contemplated hereby, including, without
limitation, to own, hold, sell and transfer the Notes pursuant to this
Exchange Agreement.
(b) Authority. The execution and delivery by Exchanging
Securityholder of this Exchange Agreement, and the performance by
Exchanging Securityholder of its obligations
2
<PAGE> 3
hereunder, have been duly and validly authorized by Exchanging
Securityholder, with no other action on the part of Exchanging
Securityholder or its partners being necessary. Martley
International, Inc. is the duly authorized attorney-in-fact of
Exchanging Securityholder and is duly authorized to execute this
Exchange Agreement on behalf of Exchanging Securityholder and to
execute and deliver Offers during the term of this Exchange Agreement,
all of which will be binding on Exchanging Securityholder. This
Exchange Agreement has been duly and validly executed and delivered by
Exchanging Securityholder and constitutes a legal, valid and binding
obligation of Exchanging Securityholder enforceable against Exchanging
Securityholder in accordance with its terms.
(c) Ownership of Notes. Exchanging Securityholder is the
owner of the Notes and all Notes exchanged by the Exchanging
Securityholder will be free and clear of all liens. The delivery of
Notes as contemplated by this Agreement in the manner provided herein
will transfer to TWA good and valid title to the Notes, free and clear
of all liens and encumbrances whatsoever.
(d) No Conflicts. Neither the execution and delivery by
Exchanging Securityholder of this Exchange Agreement, nor the
performance by Exchanging Securityholder of its obligations under this
Exchange Agreement and the consummation of the transactions
contemplated hereby, will conflict with or result in a violation or
breach of any of the terms, conditions or provisions of the
partnership agreement of Exchanging Securityholder.
(e) Disclosure of TWA. Exchanging Securityholder has
received and carefully reviewed TWA's Annual Report on Form 10-K for
the year ended December 31, 1995, TWA's most recent Quarterly Report
on Form 10-Q and TWA's Proxy Statement for the Annual Meeting of
Stockholders held on May 21, 1996. Exchanging Securityholder
acknowledges that all documents, records and books pertaining to the
issuance of the Shares to Exchanging Securityholder and requested by
Exchanging Securityholder have been made available for inspection by
TWA, that Exchanging Securityholder had a reasonable opportunity to
ask questions of and receive answers from TWA concerning the terms and
conditions of the issuance of the Shares, and to obtain additional
information, to the extent possessed or obtainable without
unreasonable effort or expense by the Company, necessary to verify the
accuracy of the information in the above-described documents. All
such questions have been answered to the full satisfaction of
Exchanging Securityholder. No oral representations have been made,
express or implied, to Exchanging Securityholder in connection with
the issuance of the Shares and Exchanging Securityholder has relied
solely upon the representations set forth herein and the information
contained in the documents referred to above. Exchanging
Securityholder represents that it is sophisticated in matters of
financial analysis and is able and willing to evaluate and bear the
risk of investment in equity securities of TWA.
3
<PAGE> 4
(f) Exemption of Shares from Registration. Exchanging
Securityholder acknowledges that the Shares have ot been registered
under the Securities Act of 1933, as amended (including all rules and
regulations thereto, the "Act"), in reliance upon the exemption from
registration thereunder contained in Section 3(a)(9) thereof, and
acknowledges that the Shares have not been registered under the
securities or "blue sky" laws of any state, and are being issued to
Exchanging Securityholder upon certain exemptions from registration
contained in such securities laws. Exchanging Securityholder is aware
that TWA has relied upon, among other things, the representations
contained herein in determining that an exemption from registration
under the Act and under applicable state securities laws is available
for the issuance of the shares and that but for such representations,
TWA would not issue the Shares to Exchanging Securityholder as provided
herein. Exchanging Securityholder acknowledges that TWA is and will be
under no obligation to register the Shares under the Securities Act of
1933, as amended.
(g) Exchanging Securityholder Not an Affiliate. Neither
Exchanging Securityholder nor any of its general or limited partners
is an affiliate of TWA within the meaning of such term under the Act.
(h) ASE Trading Information. All ASE trading information
supplied by the Exchanging Securityholder to TWA upon which the Agreed
Trading Share Price is determined shall be true, accurate and correct
to the best knowledge and belief of Exchanging Securityholder and its
agents and general partners, including without limitation, Martley
International, Inc.
5. REPRESENTATIONS OF TWA. TWA hereby represents and warrants to
Exchanging Securityholder as follows:
(a) Corporate Existence of TWA. TWA is a corporation,
validly existing and in good standing under the laws of the State of
Delaware. TWA has full corporate power and authority to execute and
deliver this Exchange Agreement and to perform its obligations
hereunder and to consummate the transactions contemplated hereby,
including, without limitation, to issue the Shares pursuant to this
Exchange Agreement.
(b) Authority. The execution and delivery by TWA of this
Exchange Agreement, and the performance by TWA of its obligations
hereunder, have been duly and validly authorized by the Board of
Directors of TWA, with no other corporate action on the part of TWA or
its stockholders being necessary. This Exchange Agreement has been
duly and validly executed and delivered by TWA and constitutes a
legal, valid and binding obligation of TWA enforceable against TWA in
accordance with its terms.
(c) Ownership of Shares. The delivery of a certificate
or certificates representing the Shares in the manner provided
herein will transfer to Exchanging Securityholder good and
4
<PAGE> 5
valid title to the Shares, free and clear of all liens and all Shares
will be duly and validly issued and fully paid and nonassessable.
(d) No Conflicts. Neither the execution and delivery by
TWA of this Exchange Agreement, nor the performance by TWA of its
obligations under this Exchange Agreement and the consummation of the
transactions contemplated hereby, will conflict with or result in a
violation or breach of any of the terms, conditions or provisions of
TWA's Second Amended & Restated Certificate of Incorporation or
Amended and Restated By-laws.
6. CONDITIONS TO OBLIGATIONS OF EXCHANGING SECURITYHOLDER. The
obligations of Exchanging Securityholder hereunder are subject to the
fulfillment, at or before the delivery of the Notes and the Shares at the
Closing, of each of the following conditions (all or any of which may be waived
in whole or in part by Exchanging Securityholder in its sole discretion):
(a) Representations and Warranties. The representations
and warranties made by TWA in this Exchange Agreement shall be true
and correct in all respects material to the validity and
enforceability of this Exchange Agreement on and as of each Closing
Date (as defined below) as though made on and as of such Closing Date.
(b) Performance. TWA shall have performed and complied
with, in all material respects, the Exchange Agreements, covenants and
obligations required by this Exchange Agreement to be so performed or
complied with by TWA at or before the Closing.
(c) Officers' Certificates. TWA shall have delivered to
Exchanging Securityholder a certificate, dated the Closing Date and
executed by the President or any Vice President of and the Corporate
Secretary of TWA, substantially in the form and to the effect of
Exhibit C hereto.
(d) Orders and Laws. There shall not be in effect on the
Closing Date any Order or Law restraining, enjoining, or otherwise
prohibiting or making illegal the consummation of any of the
transactions contemplated by this Exchange Agreement.
(e) Listing of Shares. The Shares shall have been
approved for listing on the American Stock Exchange.
7. CONDITIONS TO OBLIGATIONS OF TWA. The obligations of TWA
hereunder are subject to the fulfillment, at or before the delivery of the
Notes and the Shares at the applicable Closing, of each of the following
conditions (all or any of which may be waived in whole or in part by TWA in its
sole discretion):
(a) Representations and Warranties. The representations
and warranties made by Exchanging Securityholder in this Exchange
Agreement shall be true and correct in all
5
<PAGE> 6
respects material to the validity and enforceability of this Exchange
Agreement on and as of each Closing Date (as defined below) as though
made on and as of such Closing Date.
(b) Performance. Exchanging Securityholder shall have
performed and complied with, in all material respects, the Exchange
Agreements, covenants and obligations required by this Exchange
Agreement to be so performed or complied with by Exchanging
Securityholder at or before the Closing.
(c) Officers' Certificates. Exchanging Securityholder
shall have delivered to TWA a certificate, dated the Closing Date and
executed by a duly authorized representative of Exchanging
Securityholder, substantially in the form and to the effect of
Exhibit D hereto.
(d) Orders and Laws. There shall not be in effect on the
Closing Date any Order or Law restraining, enjoining, or otherwise
prohibiting or making illegal the consummation of any of the
transactions contemplated by this Exchange Agreement.
8. NO OTHER REPRESENTATIONS. Notwithstanding anything to the
contrary contained in this Exchange Agreement, it is the explicit intent of
each party hereto that TWA and the Exchanging Securityholder are making no
representation or warranty whatsoever, express or implied, except those
representations and warranties contained in Sections 4 and 5 as applicable and
in any certificate delivered pursuant to Sections 6(c) and 7(c) hereto.
9. CLOSING.
(a) Time and Place. Each closing (a "Closing") of the
transactions contemplated by this Exchange Agreement shall be held at
the offices of American Stock Transfer and Trust Company ("AST"), New
York, New York on T+3 or at such other place(s) or on such other date
as may be mutually agreed upon by Exchanging Securityholder and TWA.
No further Offers may be made hereunder after the earlier of (i)
August 30, 1996 or (ii) the date either party hereto shall give
written notice to the other of the termination of the term of this
Agreement (the "Termination Date"). Alternatively, each closing may
be settled on T+3 by electronic book entry through Depository Trust
Company ("DTC") if Exchanging Securityholder gives written notice
thereof on the next Business Day after the transmission by TWA of an
Accepted Offer. In such event, the Notes shall be delivered by the
Exchanging Securityholder and the Shares by AST on behalf of TWA, in
each case, by book-entry transfer through DTC. No exchange shall be
deemed complete or closing effected until a book-entry confirmation is
received confirming that the Notes, in the case of TWA, and the
Shares, in the case of Exchanging Securityholder, have been
transferred to the account of TWA, in the case of the Notes, and
Exchanging Securityholder, or its designee or nominee, in the case of
the Shares. In the case of a closing by electronic book entry, the
exchange of the Notes for the Shares shall take place on the same
trading day and as simultaneously as practicable. The parties agree
to coordinate with DTC and AST to accomplish that objective. Neither
TWA, the Exchanging Securityholder nor AST, nor any designee or
nominee of any of the
6
<PAGE> 7
foregoing, will have any liability for the performance by DTC or its
participants of their respective obligations under the rules and
procedures governing their operations. The Termination Date may be
extended at any time by agreement in writing between the parties
signed by the Exchanging Securityholder and TWA.
(b) Delivery by Exchanging Securityholder. At or prior
to each Closing, Exchanging Securityholder will deliver to TWA (i) a
certificate or certificates registered in Exchanging Securityholder's
name and representing the Notes so exchanged (unless Closing takes
place by electronic book entry through DTC), and (ii) the officers'
certificates to be delivered pursuant to Section 7(c) hereto.
(c) Delivery by TWA. At or prior to each Closing, TWA
will deliver to Exchanging Securityholder (i) a certificate or
certificates registered in Exchanging Securityholder's name and
representing the Shares so exchanged (unless Closing takes place by
electronic book entry through DTC), and (ii) the officers'
certificates to be delivered pursuant to Section 6(c) hereto.
10. INDEMNIFICATION.
(a) Indemnification by Exchanging Securityholder.
Exchanging Securityholder agrees to indemnify and hold harmless TWA,
its officers, directors and stockholders and any other person who may
be deemed to control TWA from any loss, liability, claim, damage or
expense arising out of the inaccuracy of any of Exchanging
Securityholder's above representations, warranties or statements or
the breach of the agreements contained herein; provided, however, in
no event shall TWA be entitled to recover any incidental, indirect,
special or consequential damages from Exchanging Securityholder.
(b) Indemnification by TWA. TWA agrees to indemnify and
hold harmless Exchanging Securityholder, its officers, directors and
stockholders and any other person who may be deemed to control
Exchanging Securityholder from any loss, liability, claim, damage or
expense arising out of the inaccuracy of any of TWA's above
representations, warranties or statements or the breach of the
agreements contained herein; provided, however, in no event shall
Exchanging Securityholder be entitled to recover any incidental,
indirect, special or consequential damages from TWA.
11. MISCELLANEOUS.
(a) Limitation on Other Exchanges. TWA shall not enter
into any contract or agreement to exchange Shares for 12% Senior
Secured Reset Notes with any other person on any Extended Business Day
on which it shall have entered into an agreement to exchange Notes for
Shares by transmitting an Accepted Offer to the Exchanging
Securityholder. "Extended Business Day" means from 3:30 p.m. on any
trading day prior to the trading day on the ASE on which the Accepted
Offer is transmitted until 9:29 a.m. on the next succeeding
7
<PAGE> 8
trading day on the ASE following the trading day on which the Accepted
Offer was transmitted by TWA. This Section 11(a) is not intended to
prevent TWA from entering into or performing such an agreement with
Elliott Associates, L.P. or any affiliate thereof).
(b) Entire Agreement. Except as otherwise expressly
provided herein, this Exchange Agreement contains the entire agreement
between the parties with respect to the transactions contemplated
hereunder and may be amended only by a writing executed by the parties
hereto. This Exchange Agreement supersedes all prior arrangements or
understandings with respect thereto, written or oral. The terms and
conditions of this Exchange Agreement shall inure to the benefit of
and be binding upon the parties and their respective successors and is
intended for the benefit of Exchanging Securityholder and TWA.
(c) Consent to Jurisdiction Etc. Exchanging
Securityholder agrees that any legal action or proceeding against
Exchanging Securityholder relating to or arising out of or under this
Exchange Agreement may be brought in any court of competent
jurisdiction in the State of New York or of the United States of
America for the Southern District of New York, and Exchanging
Securityholder accepts with regard to any such action or proceeding
for itself and in respect to its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Exchanging
Securityholder further irrevocably consents to the service of process
out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified
U.S. mail, postage prepaid, to the Exchanging Securityholder at its
addresses provided in Section 11(f) hereof, such service to become
effective upon receipt or five (5) days after such mailing, whichever
shall first occur. Nothing herein contained shall affect the right of
TWA to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against Exchanging
Securityholder in the Cayman Islands or against Exchanging
Securityholder in any other jurisdiction in which Exchanging
Securityholder may be subject to suit. To the fullest extent
permitted by applicable law, Exchanging Securityholder hereby waives,
and agrees not to assert, by way of motion, defense, counterclaim or
otherwise, in any such suit, action or proceeding any claim that (i)
Exchanging Securityholder is not personally subject to the
jurisdiction of any of the above-named courts by reason of any
immunity or otherwise (ii) its properties are exempt or immune from
setoff, execution or attachment, either prior to judgment or in aid of
execution or (iii) any suit, action or proceeding so brought is in an
inconvenient forum or that the venue of the suit, action or proceeding
is improper or that the subject matter hereof may not be enforced in
or by such courts. Exchanging Securityholder further agrees that,
after final judgment by any such court, it will, to the fullest extent
permitted by applicable law, waive the benefit of any defense that
would hinder or delay the levy, execution or collection of any amount
to which TWA is entitled hereunder or pursuant to a final judgment of
any court having jurisdiction. The Exchanging Securityholder hereby
irrevocably designates Stonington Management Corporation, having an
office on the date hereof at 712 Fifth Avenue, 36th Floor, New York,
New York 10019, as the designee, appointee and agent of the
Exchanging Securityholder to receive service of process in such
jurisdiction in any legal action or proceeding with respect to this
Exchange Agreement and such service shall be deemed complete five (5)
days after delivery thereof to said agent, if written notice of such
8
<PAGE> 9
service shall be given to Exchanging Securityholder either by such
agent or by TWA, by mailing the same by registered or certified mail
to Exchanging Securityholder at the address set forth in Section 11(f)
or otherwise as notice is permitted to be given under such paragraph.
(d) Survival of Representations and Warranties. The
representations and warranties of Exchanging Securityholder set forth
herein shall survive the issuance of the Shares pursuant to this
Exchange Agreement.
(e) Expenses. Each party will pay its own costs and
expenses incurred in connection with the negotiation, execution and
closing of this Exchange Agreement and the transactions contemplated
hereby and thereby.
(f) Governing Law. This Exchange Agreement shall be
governed by and construed in accordance with the laws of the State of
New York.
(g) Notices. All notices, requests and other
communications hereunder must be in writing and will be deemed to have
been duly given only if delivered personally or by facsimile
transmission or mailed (first class postage prepaid) to the parties at
the following addresses or facsimile numbers:
If to Exchanging Securityholder, to:
Stonington Management Corporation
712 5th Avenue, 36th Floor
New York, New York 10019
Attn: Mr. Vince Intrieri
Telephone No.: 212/974-2151
Facsimile No.: 212/974-2092
Authorized Representative:
Paul E. Singer or Vince Intrieri
If to TWA, to:
Trans World Airlines, Inc.
One City Centre
515 N. Sixth Street
St. Louis, Missouri 63101
Attn: Michael J. Palumbo
Telephone No. for telephonic
notice: 314/589-3175
Facsimile No.: 314/589-3267
Authorized Representative:
Robert A. Peiser or Michael J. Palumbo
9
<PAGE> 10
(h) Counterparts. This Exchange Agreement may be
executed in any number of counterparts, each of which will be deemed
an original, but all of which together will constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Exchange
Agreement to be fully executed as of the 10th day of June, 1996.
WESTGATE INTERNATIONAL, L.P.
By: Martley International, Inc.
ATTORNEY-IN-FACT
By: /s/ Paul E. Singer
----------------------------
Paul E. Singer
President
TRANS WORLD AIRLINES, INC.
By: /s/ Robert A. Peiser
------------------------------------
Name: Robert A. Peiser
Title: Executive Vice President and
Chief Financial Officer
10
<PAGE> 11
EXHIBIT A
OFFER OF EXCHANGE
Trans World Airlines, Inc. [TO BE TRANSMITTED BY FACSIMILE]
One City Centre
515 N. Sixth Street Dated: ____________________, 1996
St. Louis, MO 63101
Attn: Michael J. Palumbo
Vice President and Treasurer
Dear Sirs:
We refer to the Exchange Agreement dated the 10th day of June, 1996
(the "Exchange Agreement") between Westgate International, L.P. ("Exchanging
Securityholder") and Trans World Airlines, Inc. ("TWA"). All capitalized terms
used herein which are not separately defined are used as defined in the
Exchange Agreement.
The Exchanging Securityholder hereby offers to exchange Notes in the
following principal amount and accrued interest:
<TABLE>
<S> <C>
Principal Amount of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Accrued Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
---------------
Notes Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
===============
</TABLE>
for __________ Shares. Such number of Shares has been computed in accordance
with Section 3 of the Exchange Agreement based upon a Share Price of $_____ and
an Agreed Trading Share Price of a Share on the date of this Offer of
$________. Please evidence your acceptance of our Offer by signing and
returning this Offer by facsimile transmission in accordance with the terms of
the Exchange Agreement.
WESTGATE INTERNATIONAL, L.P.
By: Martley International, Inc.
ATTORNEY-IN-FACT
By:___________________________
Authorized Officer
ACCEPTANCE
TWA hereby accepts the within offer and agrees to exchange ___________
Shares for the total Notes Price referred to above.
TRANS WORLD AIRLINES, INC.
By: __________________________
Authorized Officer
<PAGE> 12
EXHIBIT B
PRINCIPAL AND INTEREST ON
12% SR. SECURED RESET NOTES
12
<PAGE> 13
AMENDMENT NO. 1
TO THE EXCHANGE AGREEMENT
THIS AMENDMENT NO. 1 TO THE EXCHANGE AGREEMENT is made as of this 22nd
day of August, 1996 by and between Westgate International, L.P., a Cayman
Islands limited partnership ("Exchanging Securityholder") and Trans World
Airlines, Inc., a Delaware corporation ("TWA").
W I T N E S S E T H:
WHEREAS, Exchanging Securityholder and TWA entered into an Exchange
Agreement as of June 10, 1996 ("Exchange Agreement") whereby Exchanging
Securityholder and TWA agreed to exchange 12% Senior Secured Reset Notes due
November 3, 1998 (the "Notes") for shares of TWA's $.01 par value Common Stock
("Shares"), all as more fully set forth in the Exchange Agreement; and
WHEREAS, Exchanging Securityholder and TWA wish to extend the date by
which the parties may exchange the Notes and the Shares pursuant to the Exchange
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. The second sentence of paragraph 9 of the Exchange Agreement is
hereby deleted and the following sentence is hereby substituted therefor:
"No further offers may be made hereunder after the earlier of (i)
October 30, 1996 or (ii) the date either party hereto shall give
written notice to the other of the termination of the term of this
Agreement (the "Termination Date")."
2. Exhibit B to the Exchange Agreement is hereby amended to include
Exhibit B-1, attached hereto and made a part hereof.
3. Except as amended herein, the Exchange Agreement remains in full
force and effect.
4. This Amendment No. 1 to the Exchange Agreement may be executed in
any number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
<PAGE> 14
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to the Exchange Agreement to be executed as of the 28th day of August, 1996.
Westgate International, L.P.
By: Martley International, Inc.
Attorney-in-Fact
By: /s/ Paul E. Singer
-------------------------------------
Paul E. Singer
President
Trans World Airlines, Inc.
By: /s/ Richard P. Magurno
-------------------------------------
Richard P. Magurno
Senior Vice President
2
<PAGE> 15
EXCHANGE AGREEMENT EXHIBIT B-1
TRANSWORLD AIRLINES, INC.
DAILY CALCULATION OF PAR + ACCRUED INTEREST
12% SR. SECURED RESET NOTES
<TABLE>
<S> <C> <C> <C>
MONDAY SEPT. 2 1,010.67
TUESDAY 3 1,011.00
WEDNESDAY 4 1,011.33
THURSDAY 5 1,011.67
FRIDAY 6 1,012.00
MONDAY 9 1,013.00
TUESDAY 10 1,013.33
WEDNESDAY 11 1,013.67
THURSDAY 12 1,014.00
FRIDAY 13 1,014.33
MONDAY 16 1,015.33
TUESDAY 17 1,015.67
WEDNESDAY 18 1,016.00
THURSDAY 19 1,016.33
FRIDAY 20 1,016.67
MONDAY 23 1,017.67
TUESDAY 24 1,018.00
WEDNESDAY 25 1,018.33
THURSDAY 26 1,018.67
FRIDAY 27 1,019.00
MONDAY 30 1,020.00
TUESDAY OCTOBER 1 1,020.33
WEDNESDAY 2 1,020.67
THURSDAY 3 1,021.00
FRIDAY 4 1,021.33
MONDAY 7 1,022.33
TUESDAY 8 1,022.67
WEDNESDAY 9 1,023.00
THURSDAY 10 1,023.33
FRIDAY 11 1,023.67
MONDAY 14 1,024.67
TUESDAY 15 1,025.00
WEDNESDAY 16 1,025.33
THURSDAY 17 1,025.67
FRIDAY 18 1,026.00
MONDAY 21 1,027.00
TUESDAY 22 1,027.33
WEDNESDAY 23 1,027.67
THURSDAY 24 1,028.00
FRIDAY 25 1,028.33
MONDAY 28 1,029.33
TUESDAY 29 1,029.67
WEDNESDAY 30 1,030.00
</TABLE>
<PAGE> 16
TWA [LETTERHEAD]
September 9, 1996
Westgate International, L.P.
c/o Stonington Management Corporation
712 5th Avenue, 36th Floor
New York, New York 10019
Attn: Mr. Vince Intrieri
Gentlemen:
Reference is made hereby to the Exchange Agreement dated as of June 10,
1996 between Westgate International, L.P., a Cayman Islands limited partnership
("Westgate"), and Trans World Airlines, Inc., a Delaware corporation ("TWA"), as
amended (the "Exchange Agreement"), which provides for Westgate to exchange 12%
Senior Secured Reset Notes due November 3, 1998 of TWA held by it (together with
accrued and unpaid interest, the "Notes") for shares of TWA's Common Stock, $.01
par value per share ("Shares") in exchange transactions exempt from the
registration requirements of the Securities Act of 1933, as amended (the "Act"),
in reliance upon Section 3(a)(9) of the Act.
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, Westgate hereby agrees that any and all resales of
Shares received by Westgate in exchange transactions pursuant to the Exchange
Agreement will be made either (i) in compliance with the requirements of
sections (e) and (f) of Rule 144 of the Act, as such rule may be amended from
time to time, or (ii) pursuant to another exemption available under the Act,
with respect to the availability of which exemption to be confirmed by an
opinion of Kleinberg, Kaplan, Wolff & Cohen, P.C., or such other counsel
acceptable to TWA, reasonably satisfactory in form and substance to TWA,
furnished to TWA prior to any such resale. If such resale is made pursuant to
Section 4(2) of the Act or any similar "private placement" exemption, the
transferee shall assume, in form and substance satisfactory to TWA, the
obligations of Westgate with respect to any subsequent resale by such
transferee.
If the foregoing is agreeable and acceptable to you, please indicate your
agreement with TWA as hereinabove set forth.
Very truly yours,
TRANS WORLD AIRLINES, INC.
By: /s/ Richard P. Magurno
-------------------------------------
Name: Richard P. Magurno
Title: SR. V.P.
AGREED AND ACCEPTED
this 10th day of September, 1996.
WESTGATE INTERNATIONAL, L.P.
By: Martley International, Inc.
ATTORNEY-IN-FACT
By: /s/ Paul E. Singer
-------------------------------
Paul E. Singer
<PAGE> 1
EXHIBIT 99.1
News from
[LOGO] TWA
FOR IMMEDIATE RELEASE MEDIA CONTACT: John McDonald
(314) 589-3214
ANALYSTS-INVESTOR CONTACT: Dave Garino
(314) 982-0551
TRANS WORLD AIRLINES COMMENTS ON THIRD QUARTER
ST. LOUIS, September 18, 1996 -- Trans World Airlines [AMEX: TWA] TWA
today stated the company expects to report lower pre-tax results for the third
quarter of 1996 than for the comparable period of 1995 (when adjusted for the
effect of 1995 reorganization charges). The company stated that although
summer traffic, load factors and overall revenues exceeded 1995 levels, July
and August yields were below last year's levels. The company also noted
significant cost increases in July and August relative to the prior year.
Several factors dampened third quarter to date performance, the company
said.
* July and August yields were below those experienced in 1995, attributable in
part, the company believes, to a short-term loss of premium fare international
bookings following the loss of Flight 800 on July 17. The company also
attributed reduced yields to a combination of other factors including pricing
issues and capacity growth concentrated in lower-yield markets.
* A slight temporary fall-off in advance bookings immediately following the
Flight 800 tragedy resulted in September passenger loads that are below
original expectations. This is consistent with the experiences of other
airlines that have suffered similar tragedies, and the company has not observed
a negative impact on advance bookings in October and thereafter.
* TWA experienced an unusually high level of domestic flight cancellations in
July and August partly as a result of an extremely aggressive growth plan for
summer flying. These excessive cancellations produced unanticipated expenses
and the loss of some revenue. TWA has responded by reducing the September
schedule by approximately 16 flights per day, producing a more manageable level
of flying while still maintaining a September schedule with available seat mile
(ASM) growth of approximately 10 percent over the prior September. Since
implementing the revised schedule, TWA has operated at an on-time arrival rate
of 79.1 percent (versus 69.3 percent in July and August).
* Fuel price increases are having a negative impact. Although this is generally
epxerienced industry-wide, its effect is more pronounced in the case of TWA's
less fuel-efficient fleet. The company stated that it is continuing efforts to
modernize the fleet. TWA this week announced the exercise of an option for ten
new McDonnell Douglas MD83 aircraft. In total, the company now has 34 new MD80
series and Boeing B757-200 aircaft on order (and took delivery of the first new
B757-200 in July). By the
<PAGE> 2
end of 1997, a total of 24 more fuel efficient new and used aircraft are to be
added to the fleet, primarily as replacements for older, less efficient
aircraft types.
* The company noted that it is making significant expenditures in an enhanced
maintenance program designed, among other things, to improve schedule
reliability. The costs associated with this program will be partially
alleviated over time through fleet renewal. The company stated that its
efforts in this area are consistent with its previously-announced objective of
growing the airline through greater aircraft utilization while simulatenously
renewing its fleet.
"Operationally and emotionally this has been an extremely difficult summer
for the people of TWA, and unfortunately it now appears that we will see these
difficulties reflected in third quarter financial results," said Jeffrey H.
Erickson, president and chief executive officer. "While we are disappointed by
this, we continue to have faith in the future of TWA. Prior to this quarter,
we recorded six consecutive quarters of improved results; our fleet renewal
program is underway; and we continue to grow as we have said we must. We are
taking the steps necessary to keep TWA's recovery on track."
TWA previously reported July and August traffic growth of 11.7 percent
over the year-earlier period. Capacity as measured by ASMs increased 9.6
percent for the same period, for a load factor increase of 1.4 points over 1995
levels.
The estimates and projections in various forward-looking statements and
information contained herein are based on management's beliefs as well as
assumptions made by, and information currently available to, management.
Whether such forward-looking statements and information ultimately prove to be
accurate depends on various uncertainties and future developments that cannot
be predicted.
3
<PAGE> 1
EXHIBIT 99.2
NEWS FROM
[LOGO] TWA
FOR IMMEDIATE RELEASE MEDIA CONTACT: John McDonald
(314) 589-3214
INVESTOR/ANALYST CONTACT: Dave Garino
(314) 982-0551
TWA ANNOUNCES EXCHANGES
ST. LOUIS, September 19, 1996 -- Trans World Airlines, Inc. [AMEX:TWA]
today reported that during the months of July and August 1996, the
company issued an aggregate of approximately 3.8 million shares of its
Common Stock in exchange for an aggregate of $40 million principal amount
of its 12 percent Senior Secured Reset Notes due 1998 in privately
negotiated exchange with two note holders. The company stated that as a
result of the exchanges the aggregate outstanding principal amount of the
12 percent Notes will have been reduced from approximately $170 million
to $130 million.
# # #
[LOGO] SMITHSONIAN
