<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K/A No. 1
ANNUAL REPORT PURSUANT TO SECTION 13 OR
15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-7815
TRANS WORLD AIRLINES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)
43-1145889
(I.R.S. EMPLOYER IDENTIFICATION NO.)
One City Centre
515 N. 6th Street
St. Louis, Missouri 63101
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(314) 589-3000
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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Securities registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS
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Common Stock, par value $.01 per share
12% Cumulative Preferred Stock,
par value $.01 per share
12% Senior Secured Reset Notes Due 1998 Warrants (expiring August 23, 2002)
NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------------------------------------------
American Stock Exchange
American Stock Exchange
American Stock Exchange
American Stock Exchange
------------------
Securities registered pursuant to Section 12(g) of the Act:
8% Secured Notes due 2001
11% Senior Secured Notes due 1997
(TITLE OF CLASS)
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, and (2) has been subject to such filing
requirements for the past 90 days. Yes No / /
Indicate 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. / /
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes No / /
The aggregate market value of voting stock held by non-affiliates of the
registrant as of March 22, 1996: $692,675,531.00.
As of March 22, 1996, 36,942,695 shares of the Registrant's Common Stock,
par value $0.01 per share, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
Definitive Proxy Statement for the Annual Meeting of Stockholders on May 21,
1996 -- Part III
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<PAGE> 2
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this item regarding the identification of the
Company's directors and executive officers is incorporated by reference to
information contained under the caption "Directors and Executive Officers" of
the Registrant's Proxy Statement for the Annual Meeting of Stockholders to be
held on May 21, 1996.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference to
information contained under the caption "Executive Compensation" of the
Registrant's Proxy Statement for the Annual Meeting of Stockholders to be held
on May 21, 1996.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is incorporated by reference to
information contained under the caption "Security Ownership of Certain
Beneficial Owners and Management" of the Registrant's Proxy Statement for the
Annual Meeting of Stockholders to be held on May 21, 1996.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Inapplicable
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
Financial Statements and Schedules. See Index to Financial Statements and
Schedules, which appears on page F-1 hereof.
Reports on Form 8-K. The following reports on Form 8-K have been filed:
(1) A Form 8-K was filed on December 29, 1995. This filing reports the
Company's adoption of a Stockholder Rights Plan.
(2) A Form 8-K was filed on March 20, 1996. This filing reports the
Company's offering of the 8% Preferred Stock.
(3) A Form 8-K was filed on March 21, 1996. This filing reports the
Company's litigation with Mr. Icahn.
Exhibits. The exhibits listed on the Exhibit Index following the signature
page hereof are filed herewith in response to this Item.
37
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Securites Exchange Act of 1934, the
registrant has duly caused this amended report to be signed on its behalf by
the undersigned thereunto duly authorized.
TRANS WORLD AIRLINES, INC.
Dated: July 2, 1996
By: /s/ Jody A. Ruth
-----------------------
Vice President and Controller
(duly authorized representative
of registrant)
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<TABLE>
<CAPTION>
<S> <C>
10.48 Purchase Agreement, dated February 9, 1996 between The Boeing
Company and TWA relating to Boeing Model 757-231 Aircraft
(Purchase Agreement Number 1910)
</TABLE>
- ---------------
REPORTS ON FORM 8-K
Current Report on Form 8-K filed December 29, 1995.
Current Report on Form 8-K filed March 20, 1995.
Current Report on Form 8-K filed March 21, 1995.
<PAGE> 1
Exhibit 10.48
1910K/TWATrans World Airlines, Inc.
[ THE CONFIDENTIAL PORTION OF THIS DOCUMENT HAS BEEN REDACTED
BY BLACK-OUT AND BRACKET AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ]
PRUCHASE AGREEMENT
between
THE BOEING COMPANY
and
TRANS WORLD AIRLINES, INC.
Relating to Boeing Model 757-231 Aircraft
Purchase Agreement Number 1910
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page SA
Number Number
------ ------
ARTICLES
- --------
<S> <C> <C>
1. Subject Matter of Sale.................................................. 1-1
2. Delivery, Title and Risk
of Loss................................................................. 2-1
3. Price of Aircraft....................................................... 3-1
4. Taxes................................................................... 4-1
5. Payment................................................................. 5-1
6. Excusable Delay......................................................... 6-1
7. Changes to the Detail
Specification........................................................... 7-1
8. Federal Aviation Requirements and
Certificates and Export License......................................... 8-1
9. Representatives, Inspection,
Flights and Test Data................................................... 9-1
10. Assignment, Resale or Lease............................................ 10-1
11. Termination for Certain Events......................................... 11-1
12. Product Assurance; Disclaimer and
Release; Exclusion of Liabilities;
Customer Support; Indemnification
and Insurance.......................................................... 12-1
13. Buyer Furnished Equipment and
Spare Parts............................................................ 13-1
14. Contractual Notices and Requests....................................... 14-1
15. Miscellaneous.......................................................... 15-1
</TABLE>
i
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SA
Number
------
EXHIBITS
- --------
<S> <C>
A Aircraft Configuration......................
B Product Assurance Document..................
C Customer Support Document...................
D Price Adjustments Due to
Economic Fluctuations -
Airframe and Engines........................
E Buyer Furnished Equipment
Provisions Document.........................
F Defined Terms Document......................
</TABLE>
i
<PAGE> 4
LETTER AGREEMENT
INDEX
SUBJECT REFERENCE
1910-1
Seller Purchased Equipment
1910-2
Spares Initial Provisioning
i
<PAGE> 5
TABLE OF CONTENTS
[ THE CONFIDENTIAL PORTION OF THIS DOCUMENT AND ALL DOCUMENTS THAT ARE
OTHERWISE REFERRED TO ON THIS "TABLE OF CONTENTS-RESTRICTED LETTER
AGREEMENTS" HAVE BEEN REDACTED BY BLACK-OUT AND BRACKET AND FILED
SEPARATELY WITH THE SECURITES AND EXCHANGE COMMISSION. ]
SA
Number
------
RESTRICTED LETTER AGREEMENTS
- ----------------------------
Letter Agreement No. 6-1162-RLL-1734
Aircraft Performance Guarantees
Letter Agreement No. 6-1162-RLL-1735
Promotion Support
Letter Agreement No. 6-1162-RLL-1736
Disclosure of Confidential Information
Letter Agreement No. 6-1162-RLL-1737
Advance Payments
Letter Agreement No. 6-1162-RLL-1738
Certain Contractual Matters
Letter Agreement No. 6-1162-RLL-1739
Customer Support Matters
Letter Agreement No. 6-1162-RLL-1740
Escalation Sharing
Letter Agreement No. 6-1162-RLL-1741
Option Aircraft
Letter Agreement No. 6-1162-RLL-1742
Sale by Boeing of Used Simulator
Letter Agreement No. 6-1162-RLL-1743
Reconciliation of [ ] Special Features
Letter Agreement No. 6-1162-RLL-1744
Aircraft Demonstration Flights
Letter Agreement No. 7-1162-RLL-1746
Other Matters
<PAGE> 6
PURCHASE AGREEMENT NO. 1910
Relating to
BOEING MODEL 757-231 AIRCRAFT
This Agreement is entered into as of ____ , 1996 by and between The
Boeing Company, a Delaware corporation, with its principal office in Seattle,
Washington (Boeing), and Trans World Airlines, Inc., a Delaware corporation,
with its principal office in St. Louis, Missouri (Buyer).
Accordingly, Boeing and Buyer agree as follows:
1
<PAGE> 7
ARTICLE 1. Subject Matter of Sale.
1.1 The Aircraft. Boeing will manufacture and deliver to Buyer and
Buyer will purchase and accept delivery from Boeing of ten (10) Boeing Model
757-231 aircraft (the Aircraft) manufactured in accordance with Boeing detail
specification DS-44010-96 dated as of even date herewith, as described in
Exhibit A, as modified from time to time in accordance with this Agreement
(Detail Specification).
1.2 Additional Goods and Services. In connection with the sale of the
Aircraft, Boeing will also provide to Buyer certain other things under this
Agreement, including data, documents, training and services, all as described in
this Agreement.
1.3 Performance Guarantees. Any performance guarantees applicable to
the Aircraft will be expressly included in this Agreement. Where performance
guarantees are included in this Agreement other than within the Detail
Specification, such guarantees will be treated as being incorporated in the
Detail Specification by this reference.
1.4 Defined Terms. For ease of use, certain terms are treated as
defined terms in this Agreement. Such terms are identified with a capital letter
and set forth and/or defined in Exhibit F.
1-1
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ARTICLE 2. Delivery, Title and Risk of Loss.
2.1 Time of Delivery. The Aircraft will be delivered to Buyer by Boeing
assembled and completed, ready for flight and Buyer will accept delivery of the
Aircraft, in accordance with the following schedule:
<TABLE>
<CAPTION>
Month and Year
of Delivery Quantity of Aircraft
----------- --------------------
<S> <C>
February 1997 One (1)
April 1997 One (1)
June 1997 One (1)
August 1997 One (1)
October 1997 One (1)
September 1998 One (1)
November 1998 One (1)
January 1999 One (1)
March 1999 One (1)
May 1999 One (1)
</TABLE>
2.2 Notice of Target Delivery Date. Boeing will give Buyer notice of
the Target Delivery Date of the Aircraft approximately 30 days prior to the
scheduled month of delivery.
2.3 Notice of Delivery Date. Boeing will give Buyer at least 21 days
notice of the delivery date of the Aircraft. If an Aircraft delivery is delayed
beyond such delivery date due to the responsibility of Buyer, Buyer will
reimburse Boeing for all costs incurred by Boeing as a result of such delay,
including amounts for storage, insurance, Taxes, preservation or protection of
the Aircraft and interest on payments due.
2.4 Place of Delivery. The Aircraft will be delivered at a facility
selected by Boeing in the State of Washington, unless mutually agreed otherwise.
2.5 Title and Risk of Loss. Title to and risk of loss of an Aircraft
will pass from Boeing to Buyer upon delivery of such Aircraft, but not prior
thereto.
2.6 Bill of Sale. Upon delivery of an Aircraft Boeing will deliver to
Buyer a bill of sale conveying good title to such Aircraft, free of any
encumbrances.
2-1
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ARTICLE 3. Price of Aircraft.
3.1 Definitions.
3.1.1 Special Features are the features incorporated in
Exhibit A which have been selected by Buyer.
3.1.2 Base Airframe Price is the Aircraft Basic Price
excluding the price of Special Features and Engines.
3.1.3 Engine Price is the price established by the Engine
manufacturer for the Engines installed on the Aircraft including all
accessories, equipment and parts set forth in Exhibit D.
3.1.4 Aircraft Basic Price is comprised of the Base Airframe
Price, the Engine Price and the price of the Special Features.
3.1.5 Economic Price Adjustment is the adjustment to the
Aircraft Basic Price (Base Airframe, Engine and Special Features) as calculated
pursuant to Exhibit D.
3.1.6 Aircraft Price is the total amount Buyer is to pay for
the Aircraft at the time of delivery.
3.2 Aircraft Basic Price.
The Aircraft Basic Price, expressed in July 1995 dollars, is
set forth below:
<TABLE>
<CAPTION>
<S> <C>
Base Airframe Price: $43,168,000
Special Features
From ILFC Detail Spec
per 6-1162-RLL-1743 $1,154,600
From Exhibit A $1,335,900
Engine Price $11,610,000
Aircraft Basic Price $57,268,500
</TABLE>
3-1
<PAGE> 10
3.3 Aircraft Price. The Aircraft Price will be established at the time
of delivery of such Aircraft to Buyer and will be the sum of:
3.3.1 the Aircraft Basic Price, which is Fifty Seven Million
Two Hundred Sixty Eight Thousand Five Hundred Dollars ($57,268,500); plus
3.3.2 the Economic Price Adjustments for the Aircraft Basic
Price, as calculated pursuant to the formulas set forth in Exhibit D (Price
Adjustments Due to Economic Fluctuations - Airframe and Engine); plus
3.3.3 other price adjustments made pursuant to this Agreement
or other written agreements executed by Boeing and Buyer.
3.4 Advance Payment Base Price.
3.4.1 Advance Payment Base Price. For advance payment
purposes, the following estimated delivery prices of the Aircraft have been
established, using currently available forecasts of the escalation factors used
by Boeing as of the date of signing this Agreement. The Advance Payment Base
Price of each Aircraft is set forth below:
<TABLE>
<CAPTION>
Month and Year of Advance Payment Base
Scheduled Delivery Price per Aircraft
------------------ ------------------
<S> <C>
February 1997 $61,233,000
April 1997 $61,282,000
June 1997 $61,340,000
August 1997 $61,566,000
October 1997 $61,885,000
September 1998 $63,652,000
November 1998 $63,789,000
January 1999 $63,999,000
March 1999 $64,293,000
May 1999 $64,623,000
</TABLE>
3-2
<PAGE> 11
ARTICLE 4. Taxes and Customs Duties.
4.1 Taxes. In addition to the purchase price of the Aircraft, Buyer
shall pay to Boeing, upon demand, any sales or use taxes required to be paid by
Boeing as a result of any sale, use (by Buyer after valid tender of delivery),
delivery, storage (after valid tender of delivery), or transfer under this
Agreement of the Aircraft, accessories, equipment, Buyer Furnished Equipment
(Article 9), services, instructions and data furnished or delivered hereunder;
provided, however, that Buyer shall have no liability for any penalties or
interest with respect to any such taxes, or for any tax which may be levied upon
any payment to Boeing by Buyer for the purpose of paying such tax, arising out
of Boeing's fault or negligence. If claim is made against Boeing for such taxes,
Boeing shall promptly notify Buyer. If seasonably requested by Buyer in writing,
Boeing shall, at Buyer's expense, take such action as Buyer may reasonably
direct with respect to such asserted liability and shall not pay such tax except
under protest, if protest is necessary. If payment be made, Boeing shall, at
Buyer's expense, take such action as Buyer may reasonably direct to recover such
payment and shall, if requested, permit Buyer in Boeing's name to file claim or
commence an action to recover such payment. Buyer shall not be liable for any
sales or use taxes pursuant to the provisions of this Article 4 for which it has
not been invoiced within one (1) year from the date of delivery, storage or
transfer of any Aircraft, accessory, equipment, Buyer Furnished Equipment,
service, instruction or datum to which such sales or use taxes apply.
4.2 Customs Duties. In addition to the purchase price of the Aircraft,
Buyer shall pay to Boeing on demand the amount of any United States custom
duties required to be paid by Boeing with respect to the importation of any
items of Buyer Furnished Equipment or any other accessory, equipment or part of
foreign manufacture installed in the Aircraft at Buyer's request. Boeing shall
use its best efforts to assist Buyer in obtaining a refund of such customs
duties upon exportation of the Aircraft from the United States or in securing
temporary free importation of such items under bond, to the extent permitted by
law. Buyer shall reimburse Boeing for any expenses and hold Boeing harmless from
any penalties incurred by or imposed upon Boeing as a result of any action taken
under this Article 4.2.
4-1
<PAGE> 12
ARTICLE 5. Payment.
5.1 Advance Payment Schedule. Advance payment for each Aircraft will be
made to Boeing by Buyer as follows:
<TABLE>
<CAPTION>
Due Date of Payment Amount Due per Aircraft
- ------------------- -----------------------
(Percentage times
Advance Payment Base Price)
<S> <C>
Upon signing the Agreement 1% (less the
Deposit)
24 months prior to the first 4%
day of the scheduled delivery
month of the Aircraft
21 months prior to the first 5%
day of the scheduled delivery
month of the Aircraft
18 months prior to the first 5%
day of the scheduled delivery
month of the Aircraft
12 months prior to the first 5%
day of the scheduled delivery
month of the Aircraft
9 months prior to the first 5%
day of the scheduled delivery
month of the Aircraft
6 months prior to the first 5%
day of the scheduled delivery
month of the Aircraft
--
Total 30%
</TABLE>
5-1
<PAGE> 13
5.2 Payment at Delivery. The Aircraft Price, less Advance Payments
received by Boeing, is due on delivery of such Aircraft to Buyer.
5.3 Form of Payments. All payments due hereunder will be made by Buyer
to Boeing by unconditional deposit in a bank account in the United States
designated by Boeing or in other immediately available funds. All prices and
payments set forth in this Agreement are in United States Dollars.
5.4 Monetary and Government Regulations. Buyer will be responsible for
complying with all monetary control regulations and for obtaining necessary
governmental authorizations related to payments hereunder.
5-2
<PAGE> 14
ARTICLE 6. Excusable Delay.
6.1 General. Boeing will not be liable for or be deemed to be in
default under this Agreement on account of any delay in delivery of any Aircraft
or other performance hereunder arising out of causes such as: acts of God; war,
armed hostilities, riots, fires, floods, earthquakes or serious accidents;
governmental acts or failures to act affecting materials, facilities or
Aircraft; strikes or labor troubles causing cessation, slowdown or interruption
of work; damage to an Aircraft; failure of or delay in transportation; or
inability, after due and timely diligence, to procure materials, systems,
accessories, equipment or parts; or arising out of any other cause to the extent
it is beyond Boeing's control or not occasioned by Boeing's fault or negligence.
A delay resulting from such causes is referred to as an "Excusable Delay".
6.2 Excusable Delay of 12 Months.
6.2.1 Anticipated Delay. If Boeing concludes, based on its
appraisal of the facts and normal scheduling procedures, that due to an
Excusable Delay, delivery of an Aircraft will be delayed more than 12 months
beyond the month in which delivery is scheduled, Boeing will promptly so notify
Buyer in writing and either party may then terminate this Agreement with respect
to such Aircraft by giving written notice to the other within 15 days after
receipt by Buyer of Boeing's notice. Failure of a party to terminate the
purchase of an Aircraft for an Excusable Delay pursuant to this paragraph
results in a waiver of that party's right to terminate the purchase of such
Aircraft for any delay in delivery caused by such Excusable Delay.
6.2.2 Actual Delay. If, due to an Excusable Delay, delivery of
an Aircraft is delayed for more than 12 months beyond the month in which
delivery is scheduled, and such right to terminate has not been waived under
paragraph 6.2.1, either party may terminate this Agreement with respect to such
Aircraft by giving written notice to the other within 15 days after the
expiration of such 12-month period.
6.3 Aircraft Damaged Beyond Repair. If, prior to delivery, an Aircraft
is destroyed or damaged beyond economic repair due to any cause, Boeing will
promptly notify Buyer in writing and either party may then terminate this
Agreement with respect to such Aircraft. If Boeing does not so terminate this
Agreement with respect to such Aircraft, such notice will specify the earliest
date reasonably possible, consistent with Boeing's other contractual commitments
and production capabilities, by which Boeing will deliver a replacement for such
Aircraft. This Agreement will thereupon terminate as to such Aircraft,
6-1
<PAGE> 15
unless Buyer gives Boeing written notice, within 30 days after receipt of
Boeing's notice, that Buyer desires the proposed replacement for such Aircraft.
6.4 Agreement Revision. If an Aircraft is delayed, or destroyed or
damaged beyond economic repair, and this Agreement is not terminated pursuant to
this Article, this Agreement will be appropriately revised.
6.5 Agreement Termination.
6.5.1 Termination under this Article will discharge all
obligations and liabilities of Boeing and Buyer hereunder with respect to
terminated Aircraft and all related undelivered items and services, except that
Boeing will return to Buyer, without interest, all advance payments related to
such Aircraft,
6.5.2 If either party terminates this Agreement as to any
Aircraft pursuant to this Article, Boeing may, upon written notice to Buyer
within 30 days after such termination, purchase from Buyer any Buyer Furnished
Equipment related to such Aircraft, at the invoice prices paid, or contracted to
be paid, by Buyer.
6.6 Exclusive Rights. The termination rights set forth in this Article
are in substitution for any and all other rights of termination or contract
lapse or any other claim arising by operation of law by virtue of delays in
performance covered by this Article.
6-2
<PAGE> 16
ARTICLE 7. Changes to the Detail Specification.
7.1 Development Changes. Boeing may, at its own expense and without
Buyer's consent, incorporate Development Changes in the Detail Specification and
the Aircraft prior to delivery to Buyer. Development Changes are defined as
changes to the basic specification for Model 757-200 aircraft that do not affect
the Aircraft Purchase Price or adversely affect Aircraft delivery, guaranteed
weight, guaranteed performance or compliance with the interchangeability or
replaceability requirements set forth in the Detail Specification. If Boeing
makes changes pursuant to this paragraph, Boeing will promptly notify Buyer of
such changes.
7.2 Change Orders. The Detail Specification and associated provisions
of this Agreement may be amended by Change Order or other written agreement,
which will state the particular changes to be made and any effect on design,
performance, weight, balance, time of delivery, Aircraft Basic Price and Advance
Payment Base Price.
7-1
<PAGE> 17
ARTICLE 8. Federal Aviation Requirements and
Certificates.
8.1 FAA Certificates.
8.1.1 Boeing will obtain from the Federal Aviation
Administration (FAA):
8.1.1.1 a Type Certificate (transport category)
issued pursuant to Part 21 of the Federal Aviation Regulations for the type of
aircraft covered by this Agreement, and
8.1.1.2 a Standard Airworthiness Certificate for each
Aircraft issued pursuant to Part 21 of the Federal Aviation Regulations, which
will be provided to Buyer with delivery of the Aircraft.
8.1.2 Boeing will not be obligated to obtain any other
certificates or approvals for the Aircraft.
8.1.3 If the use of either FAA certificate is discontinued
prior to delivery of an Aircraft, references in this Agreement to such
discontinued certificate will be deemed references to its superseding FAA
certificate. If the FAA does not issue a superseding certificate, Boeing's only
obligation under this paragraph will be to comply with the Detail Specification.
8.2 FAA Manufacturer Changes.
8.2.1 If the FAA, or any other governmental agency having
jurisdiction, requires any change to the Aircraft, data relating to the
Aircraft, or testing of the Aircraft in order to obtain the Standard
Airworthiness Certificate (Manufacturer Change), such Manufacturer Change will
be made prior to delivery of such Aircraft.
8.2.2 If prior to Aircraft delivery a Manufacturer Change is
required to be incorporated in an Aircraft, it will be incorporated at no charge
to Buyer, unless the requirement is promulgated subsequent to the date of this
Agreement, in which case Buyer will pay Boeing's
8-1
<PAGE> 18
charge only for Aircraft scheduled for delivery to Buyer 18 months or more after
the date of this Agreement.
8.3 FAA Operator Changes.
8.3.1 Boeing will deliver each Aircraft with the changes in
equipment incorporated (or, at Boeing's sole discretion, with suitable
provisions for the incorporation of such equipment) that is required by Federal
Aviation Regulations which (i) are generally applicable with respect to
transport category aircraft to be used in United States certified air carriage
and (ii) have to be complied with on or before the date of delivery of such
Aircraft (Operator Changes).
8.3.2 If Operator Changes are incorporated in an Aircraft,
Buyer will pay Boeing's charge applicable to such Aircraft.
8.4 Delays; Changes to this Agreement. If delivery of an Aircraft is
delayed due to the incorporation of a Manufacturer Change or an Operator Change,
the delivery of the Aircraft will be appropriately revised to reflect such
delay. This Agreement will also be revised to reflect appropriate changes in the
Aircraft Price, design, performance, weight and balance due to the incorporation
of a Manufacturer Change or an Operator Change.
8-2
<PAGE> 19
ARTICLE 9. Representatives, Inspection,
Flights and Test Data.
9.1 Office Space at Boeing. From a date 12 months prior to delivery of
the first Aircraft, and until the delivery of the last Aircraft, Boeing will
furnish, without additional charge, suitable office space and equipment in or
conveniently located near its plant in Seattle for the accommodation of up to
five personnel of Buyer.
9.2 Inspection by Buyer. Designated representatives of Buyer may
inspect the manufacturing of the Aircraft at all reasonable times. However, if
access to any part of Boeing's plant is restricted by the United States
Government, Boeing will be allowed a reasonable time to arrange for inspection
elsewhere. All inspections by Buyer's representatives will be performed so as
not to hinder manufacture or performance by Boeing.
9.3 Aircraft Flight. Prior to delivery, each Aircraft will be flown by
Boeing for such periods as may be required to demonstrate to Buyer the function
of the Aircraft and its equipment in accordance with Boeing's production flight
test procedures and as necessary to demonstrate compliance with the Detail
Specification. The aggregate duration of such flights will be not less than
1-1/2 hours or more than 4 hours. Five persons designated by Buyer may
participate in such flights as observers.
9.4 Test Data. Boeing will furnish to Buyer, as soon as practicable,
flight test data obtained on an aircraft of the type purchased hereunder,
certified as correct by Boeing, to evidence compliance with any performance
guarantees set forth in this Agreement. Any Performance Guarantee will be deemed
to be met if reasonable engineering interpretations and calculations based on
such flight test data establish that the Aircraft would, if actually flown,
comply with such guarantee.
9.5 Special Aircraft Test Requirements. Boeing may use the Aircraft for
flight and ground tests prior to delivery to Buyer, without reduction in the
Aircraft Purchase Price, if such tests are deemed necessary by Boeing to:
9.5.1 obtain or maintain the Type Certificate or Standard
Airworthiness Certificate for the Aircraft; or
9.5.2 evaluate aircraft improvement changes that may be
offered for production or retrofit incorporation in any aircraft.
9.6 Indemnity. Boeing will indemnify and hold harmless Buyer and
Buyer's observers from and against all
9-1
<PAGE> 20
claims and liabilities, including costs and expenses (including attorneys' fees)
incident thereto, for injury to or death of any person or persons, including
employees of Boeing but excluding employees, officers or agents of Buyer, or for
loss of or damage to any property, arising out of or in connection with the
operation of the Aircraft during all demonstration and test flights conducted
under the provisions of this Article, whether or not arising in tort or
occasioned in whole or in part by the negligence of Buyer or any of Buyer's
observers, whether active, passive or imputed.
9-2
<PAGE> 21
ARTICLE 10. Assignment, Resale or Lease.
10.1 Assignment. This Agreement will inure to the benefit of and be
binding upon each of the parties hereto and their respective successors and
assigns. Neither the rights nor the duties of either party under this Agreement
may be assigned or delegated, or contracted to be assigned or delegated, in
whole or part, without the prior written consent of the other party, except
that:
10.1.1 Either party may assign its interest to a corporation
that (i) results from any merger or reorganization of such party or (ii)
acquires substantially all the assets of such party;
10.1.2 Boeing may assign its rights to receive money; and
10.1.3 Boeing may assign all or any part of its rights and
obligations under this Agreement to any wholly owned subsidiary of Boeing,
provided that Boeing will remain fully and solely responsible to Buyer for all
obligations and liabilities as the seller of the Aircraft, and Buyer will
continue to deal exclusively with Boeing.
10.2 Transfer by Buyer at Delivery. Buyer may, and at Buyer's request
Boeing will, take any action reasonably required for the purpose of causing an
Aircraft, at time of delivery, to be subjected to an equipment trust,
conditional sale, lien or other arrangement for the financing by Buyer of such
Aircraft. No action taken by either party pursuant to this paragraph, however,
will require Boeing to divest itself of title to or possession of such Aircraft
until delivery and payment therefor pursuant to this Agreement.
10.3 Sale by Buyer After Delivery. If, following delivery of any
Aircraft, Buyer sells such Aircraft (including any sale for financing purposes),
then all of Buyer's rights with respect to such Aircraft under this Agreement
will inure to the benefit of the purchaser of such Aircraft, effective upon
Boeing's receipt of such purchaser's express written agreement, in form
satisfactory to Boeing, to be bound by and to comply with all applicable terms,
conditions and limitations of this Agreement.
10.4 Lease by Buyer After Delivery. If, following delivery of any
Aircraft, Buyer leases such Aircraft, Buyer will not assign to the lessee of
such Aircraft any rights under this Agreement without Boeing's prior written
consent, which consent will not be unreasonably withheld.
10.5 No Increase in Boeing Liability. No action taken by Buyer or
Boeing relating to the assignment, resale or lease of any Aircraft or this
Agreement will subject
10-1
<PAGE> 22
Boeing to any liability beyond that in this Agreement or modify in any way
Boeing's obligations under this Agreement.
10.6 Exculpatory or Indemnity Clause in Post-Delivery Sale or
Lease. If, following delivery of an Aircraft, Buyer sells or leases such
Aircraft and obtains from the transferee an exculpatory or indemnity clause
protecting Buyer, Buyer will include the same protection for Boeing.
10-2
<PAGE> 23
ARTICLE 11. Termination for Certain Events.
11.1 Termination. This Agreement may be terminated at any time with
regard to undelivered Aircraft and items and unperformed services by notice in
writing by either party hereto if the other party:
11.1.1 Ceases doing business as a going concern, suspends all
or substantially all its business operations (other than temporary shutdowns due
to labor disputes or similar causes beyond the control of Buyer), makes an
assignment for the benefit of creditors, is insolvent, or generally does not pay
its debts, or admits in writing its inability to pay its debts; or
11.1.2 Petitions for or acquiesces in the appointment of any
receiver, trustee or similar officer to liquidate or conserve its business or
any substantial part of its assets; commences any legal proceeding such as
insolvency, bankruptcy, reorganization, readjustment of debt, dissolution or
liquidation available for the relief of financially distressed debtors; or
becomes the object of any such proceeding, unless such proceeding is dismissed
or stayed within a reasonable period, not to exceed 60 days.
11.2 Repayment of Advance Payments. If this Agreement is terminated
with regard to any Aircraft by Buyer under this Article, Boeing will promptly
repay to Buyer, without interest, any advance payments received by Boeing from
Buyer with respect to such Aircraft.
11-1
<PAGE> 24
ARTICLE 12. Product Assurance; Disclaimer and Release;
Exclusion of Liabilities; Customer Support;
Indemnification and Insurance.
12.1 Product Assurance. Boeing and Buyer are bound by the provisions of
Exhibit B hereto (Product Assurance Document).
12.2 DISCLAIMER AND RELEASE. THE WARRANTIES, OBLIGATIONS AND
LIABILITIES OF BOEING AND THE REMEDIES OF BUYER SET FORTH IN THE PRODUCT
ASSURANCE DOCUMENT ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND BUYER HEREBY
WAIVES, RELEASES AND RENOUNCES, ALL OTHER WARRANTIES, OBLIGATIONS AND
LIABILITIES OF BOEING AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES OF BUYER AGAINST
BOEING, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY
NONCONFORMANCE OR DEFECT IN ANY AIRCRAFT OR OTHER THING PROVIDED UNDER THIS
AGREEMENT, INCLUDING, BUT NOT LIMITED TO:
(A) ANY IMPLIED WARRANTY OF MERCHANTABILITY
OR FITNESS;
(B) ANY IMPLIED WARRANTY ARISING FROM
COURSE OF PERFORMANCE, COURSE OF
DEALING OR USAGE OF TRADE;
(C) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM
OR REMEDY IN TORT, WHETHER OR NOT
ARISING FROM THE NEGLIGENCE OF BOEING
(WHETHER ACTIVE, PASSIVE OR IMPUTED);
AND
(D) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM
OR REMEDY FOR LOSS OF OR DAMAGE TO ANY
AIRCRAFT.
12.3 EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES. BOEING WILL HAVE NO
OBLIGATION OR LIABILITY, WHETHER ARISING IN CONTRACT (INCLUDING WARRANTY), TORT
(INCLUDING ACTIVE, PASSIVE OR IMPUTED NEGLIGENCE) OR OTHERWISE, FOR LOSS OF USE,
REVENUE OR PROFIT, OR FOR ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGES WITH
RESPECT TO ANY NONCONFORMANCE OR DEFECT IN ANY AIRCRAFT OR OTHER THING PROVIDED
UNDER THIS AGREEMENT.
12.4 Definitions. For the purposes of this Article, the term "BOEING"
means The Boeing Company, its divisions, subsidiaries and affiliates, the
assignees of each, and their directors, officers, employees and agents.
12.5 Customer Support and Indemnification; Insurance. Boeing and Buyer
are bound by the provisions of Exhibit C hereto (Customer Support Document),
which includes
12-1
<PAGE> 25
indemnification and insurance requirements related to the
use of Customer Support Services.
12-2
<PAGE> 26
ARTICLE 13. Buyer Furnished Equipment and Spare Parts.
13.1 Buyer Furnished Equipment. Boeing and Buyer are bound by the
provisions of Exhibit E (Buyer Furnished Equipment Document), which includes
indemnification requirements related to Buyer Furnished Equipment.
13.2 Purchase of Boeing Spare Parts. Boeing will sell to Buyer and
Buyer will purchase from Boeing materials, spare parts, assemblies, tools and
items of equipment relating to the Aircraft pursuant to Customer Services
General Terms Agreement No. 31-1.
13-1
<PAGE> 27
ARTICLE 14. Contractual Notices and Requests.
All notices and requests relating to this Agreement will be in
English, and may be transmitted by any customary means of written communication
addressed as follows:
Buyer: Trans World Airlines, Inc.
One City Centre, 19th Floor
515 North 6th Street
St. Louis, Missouri 63101
Attention: Michael Robinson
Boeing: Boeing Commercial Airplane Group
P.O. Box 3707
Seattle, Washington 98124-2207
U.S.A.
Attention: Vice President - Contracts
Mail Stop 75-38
or to such other address as specified elsewhere herein or as otherwise directed
in writing by either party. The effective date of any such notice or request
will be the date on which it is received by the addressee.
14-1
<PAGE> 28
ARTICLE 15. Miscellaneous.
15.1 Government Approval. Boeing and Buyer will use their best
reasonable efforts to assist each other in obtaining any United States
Governmental agency consents or approvals necessary or appropriate to effect
certification and sale of the Aircraft under this Agreement.
15.2 Headings. Article and paragraph headings used in this Agreement
are for convenient reference only and are not intended to affect the
interpretation of this Agreement.
15.3 Entire Agreement; Amendments. This Agreement contains the entire
agreement between the parties concerning the subject matter hereof and
supersedes all previous proposals, understandings, commitments or
representations whatsoever, oral or written. This Agreement may be changed only
in writing signed by authorized representatives of Boeing and Buyer, except in
the case of certain changes permitted or required by this Agreement.
15.4 GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY THE LAW OF THE
STATE OF WASHINGTON, U.S.A., EXCLUSIVE OF WASHINGTON'S CONFLICTS OF LAWS RULES.
15.5 Negotiated Agreement. This Agreement, including the provisions of
Article 12 relating to DISCLAIMER AND RELEASE, the Exclusion of Consequential
and Other Damages, and the provisions relating to indemnification and insurance
set forth in this Agreement, has been the subject of discussion and negotiation
and is fully understood by the parties; the Aircraft Purchase Price and other
agreements of the parties set forth in this Agreement were arrived at in
consideration of such provisions.
*************************
TRANS WORLD AIRLINES, INC. THE BOEING COMPANY
By By
------------------------- -------------------------
Its Its
------------------------- -------------------------
15-1
<PAGE> 29
1910K/TWATrans World Airlines, Inc.
AIRCRAFT CONFIGURATION
between
THE BOEING COMPANY
and
TRANS WORLD AIRLINES, INC.
Exhibit A to Purchase Agreement Number 1910
A
<PAGE> 30
AIRCRAFT CONFIGURATION
Dated _____________
relating to
BOEING MODEL 757-231 AIRCRAFT
The Detail Specification is Boeing Detail Specification D6-44010-96
dated as of even date herewith. Such Detail Specification will be comprised of
Boeing Detail Specification D6-44010-77B dated September 12, 1995 as amended to
incorporate the applicable specification language to reflect the effect of the
changes set forth in the Master Changes and Change Requests listed below. Such
Change Requests are set forth in Boeing Document D6-48240. As soon as
practicable, Boeing will furnish to Buyer copies of the Detail Specification,
which copies will reflect the effect of such changes. The Aircraft Basic Price
reflects and includes all effects of such changes of price, except such Aircraft
Basic Price does not include the price effects of Master Change Requests
changing Buyer Furnished Equipment to Seller Purchased Equipment.
A-1
<PAGE> 31
Exhibit A to
Purchase Agreement No. 1910
Page 2
<TABLE>
<CAPTION>
PRICE PER
MASTERCHANGE AIRCRAFT
NO./TITLE (1995 STE $)
--------- ------------
======================================================= ===========
<S> <C>
0310MP5132 $828,300
INCREASE CERTIFIED MAXIMUM TAXI WEIGHT IN
1000 POUND INCREMENTS TO A MAXIMUM OF
256,000 POUNDS FROM 221,000 POUNDS
STATUS: ACCEPT
1110MP5092 NC
EXTERIOR DECORATIVE FINISH - DESOTO H.S. IN
LIEU OF DESOTO 1000
STATUS: ACCEPT
1110MP5093 NC
EXTERIOR DECORATIVE MARKINGS - ILFC LEASE
CUSTOMERS
STATUS: ACCEPT
2123MP5010 NC
SUPPLEMENTAL PASSENGER AIR DISTRIBUTION -
INSTALLATION
STATUS: IN-PROC
2210MP5001 NC
BANK ANGLE HOLD AT AUTOPILOT COMMAND ENGAGE
STATUS: ACCEPT
2210MP5005 NC
FULL TIME FLIGHT DIRECTOR
STATUS: ACCEPT
2210MP5130 NC
MANUAL AUTOPILOT CHANNEL SELECTION UPON
APPROACH MODE ENGAGEMENT
STATUS: ACCEPT
2240MP5003 $3,600
REMOTE MAINTENANCE CONTROL PANEL
INSTALLATION IN FLIGHT COMPARTMENT
STATUS: ACCEPT
2311MP5069 NC
DUAL HF COMMUNICATIONS SYSTEMS INSTALLATION
IN EXISTING COMPLETE PROVISION FOR DUAL HF
COMMUNICATIONS
STATUS: ACCEPT
</TABLE>
A-2
<PAGE> 32
Exhibit A to
Purchase Agreement No. 1910
Page 3
<TABLE>
<CAPTION>
PRICE PER
MASTERCHANGE AIRCRAFT
NO./TITLE (1995 STE $)
--------- ------------
======================================================= ===========
<S> <C>
2312MP5096 $20,900
THIRD VHF COMMUNICATIONS - INSTALLATION -
BFE ROCKWELL INTERNATIONAL CORP (CONTROL
PANEL GABLES P/N G6317)
STATUS: ACCEPT
2322MP5061 $44,100
AIRCRAFT COMMUNICATIONS ADDRESSING AND
REPORTING SYSTEM (ACARS) - INSTALLATION -
PARTIAL PROVISIONS
STATUS: ACCEPT
2322MP5251 $7,400
ACARS SYSTEM - INSTALLATION INTO EXISTING
PROVISIONS - BFE - ALLIED SIGNAL - P/N
965-0728-003
STATUS: ACCEPT
2332MP5333 $3,600
VIDEO ENTERTAINMENT SYSTEM "VIDEO ON" LIGHT
- INSTALLATION - FLIGHT COMPARTMENT
STATUS: IN-PROC
2332MP5335 $126,600
VIDEO ENTERTAINMENT SYSTEM - 8.6" PSU
MOUNTED LCD VIDEO MONITORS - SONY -
PROVISIONS ONLY
STATUS: IN-PROC
2332MP5337 $21,900
VIDEO ENTERTAINMENT SYSTEM - 8.6" PSU
MOUNTED LCD VIDEO MONITORS - BFE SONY -
INSTALLATION INTO EXISTING PROVISIONS AND
CERTIFY
STATUS: IN-PROC
2334MP5036 $8,500
AUDIO ENTERTAINMENT SYSTEM - INSTALLATION
STATUS: OPEN
</TABLE>
A-3
<PAGE> 33
Exhibit A to
Purchase Agreement No. 1910
Page 4
<TABLE>
<CAPTION>
PRICE PER
MASTERCHANGE AIRCRAFT
NO./TITLE (1995 STE $)
--------- ------------
======================================================= ===========
<S> <C>
2520MP5572 -$4,000
INTERIOR ARRANGEMENT - 22 FIRST CLASS AND
158 TOURIST CLASS PASSENGERS - GALLEYS G1A,
G1B, G4B, SPACE PROVISIONS FOR G2A AND
STATUS: ACCEPT
2524MP5165 $20,100
SFE RH UNDER-BIN CLOSET - INSTALLATION -
STATION 407-426
STATUS: ACCEPT
2530MP5442 $18,600
GALLEY G2A - INSTALLATION - UNDERBIN WITH
DRAIN CONNECTIONS ONLY - BFE DRIESSEN TBD
STATUS: ACCEPT
2530MP5446 $10,800
PROVISIONS FOR GALLEY G2A - INSTALLATION -
UNDERBIN WITH ELECTRICAL, AND WATER
CONNECTIONS
STATUS: IN-PROC
2560MP5074 $22,200
EMERGENCY EVACUATION SIGNAL SYSTEM
INSTALLATION
STATUS: IN-PROC
3141MP5002 NC
EICAS STATUS MODE - DISPLAY OF HYDRAULIC
PRESSURE
STATUS: ACCEPT
3141MP5003 NC
EICAS STATUS MODE - DISPLAY OF APU RPM
STATUS: ACCEPT
3141MP5008 $21,200
EICAS MAINTENANCE MODE - DISPLAY OF
ADDITIONAL ENVIRONMENTAL CONTROL
STATUS: ACCEPT
</TABLE>
A-4
<PAGE> 34
Exhibit A to
Purchase Agreement No. 1910
Page 5
<TABLE>
<CAPTION>
PRICE PER
MASTERCHANGE AIRCRAFT
NO./TITLE (1995 STE $)
--------- ------------
======================================================= ===========
<S> <C>
3141MP5061 NC
EICAS MAINTENANCE PAGES AVAILABLE DURING
NON-REVENUE FLIGHT
STATUS: ACCEPT
3321MP5020 $10,500
PASSENGER CABIN LIGHTING - TWO ZONE CONTROL
STATUS: ACCEPT
3351MP5020 -$1,600
FLOOR PROXIMITY EMERGENCY ESCAPE PATH
MARKING SYSTEM - INSTALLATION - SPE LSI IN
LIEU OF SFE BOEING
STATUS: ACCEPT
3419MP5007 NC
WINDSHEAR AMBER PREALERT DISPLAY ON EFIS
EADI
STATUS: ACCEPT
3421MP5010 NC
INERTIAL REFERENCE UNIT (IRU) - ACTIVATION
OF THE 1995 UPDATED AND EXPANDED MAGVAR
TABLES
STATUS: ACCEPT
3422MP5004 NC
RADIO ALTITUDE ON EADI - ROUND DIAL
STATUS: ACCEPT
3422MP5005 NC
ILS DEVIATION WARNING ON EADI
STATUS: ACCEPT
3422MP5008 NC
FILLED INTEGRATED (SINGLE) CUE FLIGHT
DIRECTOR COMMAND
STATUS: ACCEPT
3422MP5034 NC
RANGE ARCS ON EHSI
STATUS: ACCEPT
</TABLE>
A-5
<PAGE> 35
Exhibit A to
Purchase Agreement No. 1910
Page 6
<TABLE>
<CAPTION>
PRICE PER
MASTERCHANGE AIRCRAFT
NO./TITLE (1995 STE $)
--------- ------------
======================================================= ===========
<S> <C>
3422MP5250 NC
EXPANDED AND FULL COMPASS ROSE EHSI FORMATS
STATUS: ACCEPT
3422MP5255 NC
TCAS 3NM RANGE RING ON EHSI
STATUS: ACCEPT
3443MP5078 $14,500
WEATHER RADAR SYSTEM - ARINC 708A SINGLE
WEATHER RADAR SYSTEM WITH PREDICTIVE
WINDSHEAR - PARTIAL PROVISIONS
STATUS: ACCEPT
3443MP5097 NC
WEATHER RADAR SYSTEM - BFE ROCKWELL WITH
PREDICTIVE WINDSHEER CAPABILITY DEACTIVATED
(AND NO ADDITIONAL WIRING) IN LIEU OF
STATUS: ACCEPT
3445MP5146 NC
TCAS II - FULL INSTALLATION - BFE COLLINS
EQUIPMENT - 757-200
STATUS: ACCEPT
3446MP5087 NC
GPWS CALLOUTS - 500' (SMART)
STATUS: ACCEPT
3458MP5029 $36,300
GLOBAL POSITIONING SYSTEM (GPS) -
INSTALLATION - PARTIAL PROVISIONS
STATUS: ACCEPT
3461MP5026 $77,400
FLIGHT MANAGEMENT COMPUTER - INCREASE NAV
DATA BASE TO ONE (1) MILLION WORDS -
PERFORMANCE DATA BASE CAPACITY ADDITION
STATUS: ACCEPT
3461MP5245 $45,000
FMCS CONTROL DISPLAY UNIT REPLACEMENT WITH
HYBRID MULTIFUNCTION CONTROL DISPLAY UNIT
STATUS: ACCEPT
</TABLE>
A-6
<PAGE> 36
Exhibit A to
Purchase Agreement No. 1910
Page 7
<TABLE>
<CAPTION>
PRICE PER
MASTERCHANGE AIRCRAFT
NO./TITLE (1995 STE $)
--------- ------------
======================================================= ===========
<S> <C>
CR'S 42 TOTAL $1,335,900
</TABLE>
A-7
<PAGE> 37
1910K/TWATrans World Airlines, Inc.
PRODUCT ASSURANCE DOCUMENT
between
THE BOEING COMPANY
and
TRANS WORLD AIRLINES, INC.
Exhibit B to Purchase Agreement Number 1910
B
<PAGE> 38
Relating to
BOEING MODEL 757-231 AIRCRAFT
This Product Assurance Document is Exhibit B to and forms a part of
Purchase Agreement No. 1910 between The Boeing Company (Boeing) and Trans World
Airlines, Inc. (Buyer) relating to the purchase of Boeing Model 757-231
aircraft. This Product Assurance Document consists of the following parts:
PART A Boeing Warranty
PART B Warranty Repairs and Modifications by
Buyer
PART C Boeing Service Life Policy
PART D Boeing Indemnity Against Patent
Infringement
PART D-1 Boeing Indemnity Against Copyright
Infringement
PART E Supplier Warranties and Patent
Indemnities
PART F Engine Manufacturer Warranties
PART G Boeing Interface Commitment
PART H General
<PAGE> 39
PART A
BOEING WARRANTY
1. Warranties.
Subject to the exceptions set forth herein, Boeing warrants that, at
the time of delivery, each Aircraft, including all installed systems,
accessories, equipment and parts, will:
1.1 conform to the Detail Specification, as it may be changed pursuant
to this Agreement, except such portions stated to be estimates, approximations,
design objectives, or design criteria, or described as not guaranteed;
1.2 be free from defects in material and workmanship, including process
of manufacture; and
1.3 be free from defects in design, including selection of (i)
materials and (ii) process of manufacture, in view of the state of the art at
the time of design.
For purposes of this Boeing Warranty, nonconformance with the Detail
Specification, defects in material or workmanship and defects in design may
hereinafter be called "defects" or a "defect", and the term "system",
"accessory", "equipment" or "part" may hereinafter be called "item" or "items."
2. Exceptions.
The warranties above will not apply to BFE. The warranty above covering
material and workmanship and the warranty above covering design will not apply
to Engines or to any other item purchased by Boeing but not manufactured to
Boeing's detailed design. However, any defect in the Boeing workmanship
installing such BFE, Engines or other items in an Aircraft will constitute a
defect in workmanship.
3. Survival of Warranties.
Neither the warranty of conformance to the Detail Specification
applicable to Engines and other items purchased by Boeing but not manufactured
to Boeing's detailed design, nor any Performance Guarantees, will
<PAGE> 40
survive delivery of the Aircraft. The remaining warranties set forth herein will
survive delivery of the Aircraft, subject to the limitations and conditions set
forth herein.
4. Warranty Periods and Claims.
4.1 The warranty periods are:
4.1.1 As to a defect in conformance to the Detail
Specification, 36 months after delivery of each Aircraft, and
4.1.2 As to a defect in material, workmanship or design in any
item, 36 months after delivery of each Aircraft in which such item was initially
installed.
4.2 Boeing's Product Assurance Regional Manager at Renton, Washington
must receive the warranty claim in writing at the earliest practicable time
after the defect becomes apparent but in no event later than 90 days after
expiration of the applicable warranty period.
4.3 Such warranty claim must include the data set forth below and, if
requested by Boeing, reasonable evidence that the claimed defect did not result
from any act or omission of Buyer.
4.3.1 Identity of the item or Aircraft involved, including
Boeing part number, serial number if applicable, nomenclature and the quantity
claimed to be defective;
4.3.2 Identity of the Aircraft on which the claimed item was
installed as original equipment;
4.3.3 Date the claimed defect became apparent which will be
the date such defect was discovered by Buyer or the warranty date set forth in a
Boeing service bulletin or service letter, whichever date occurs first; and
4.3.4 Description of the claimed defect and circumstances,
including Boeing service bulletin or Boeing service letter number if claim
involves a service bulletin or letter.
4.4 Upon completion of Boeing's warranty claim investigation, including
examination of any item or Aircraft returned to Boeing, Boeing will provide a
written disposition of its warranty claim findings to Buyer. In the event Boeing
must reject Buyer's warranty claim, Boeing will provide reasonable
substantiation of such rejection in its disposition.
5. Remedies.
<PAGE> 41
Buyer's remedies under this Boeing Warranty are as follows:
5.1 As to a defect in conformance to the Detail Specification, the
correction at Boeing's expense of such defect; provided, however, that Boeing
will not be obligated to correct any defect that has no material adverse effect
on the maintenance, use or operation of the Aircraft. The warranty period for
the corrected item will be the unexpired warranty period for the defective item.
5.2 As to a defect in material or workmanship, (i) the repair at
Boeing's expense of such defect or, (ii) at Boeing's option, the replacement of
such item with a similar item free from defect or the issuance of a credit
memorandum to reimburse Buyer for a spare part previously purchased from Boeing
as the replacement for such defective item. The warranty period for either
correction will be the unexpired warranty period for the defective item.
5.3 As to a defect in design, the correction at Boeing's expense of
such defect. The warranty period for such correction is 18 months from receipt
by Buyer of corrective material or the end of the original design warranty
period for the defective item, whichever is later.
5.4 Boeing will issue a credit memorandum to reimburse Buyer at the
Warranty Labor Rate for the direct labor hours required for removal from the
Aircraft of a defective item and the reinstallation in the Aircraft of the
corrected item.
6. Returned Items.
Unless otherwise provided in this Agreement, the Aircraft or item
claimed to be defective must be returned to Boeing as soon as practicable. Buyer
may also provide specific technical repair or correction instructions with such
return. The absence of such instructions will evidence Buyer's authorization for
Boeing to proceed using Boeing information and data. The following criteria will
apply with respect to return of Aircraft or items to Boeing:
6.1 As to Aircraft:
6.1.1 An Aircraft may be returned only if
6.1.1.1 substantially all the work to be performed by
Boeing is covered by this Boeing Warranty, and
6.1.1.2 Buyer does not have the capability to
perform, nor is it practical for Boeing personnel to perform, the warranty work
away from Boeing's facilities.
<PAGE> 42
6.1.2 All warranty work will be performed at Boeing's
expense, with reasonable efforts to minimize Aircraft out-of-service time. In
addition, Boeing will reimburse Buyer by issuing a credit memorandum for the
cost of fuel, oil and landing fees incurred in ferrying the Aircraft to Boeing's
facilities and in ferrying the Aircraft back to Buyer's facilities. Buyer will
minimize the length of both ferry flights.
6.1.3 Any nonwarranty work performed by Boeing will
be paid for by Buyer at Boeing's then-standard rates.
6.1.4 A separate agreement based on Boeing's
then-standard form will be entered into to cover the return of and work on such
Aircraft.
6.2 As to any system, accessory, equipment or part:
6.2.1 All warranty work will be performed at Boeing's
expense, with reasonable efforts to minimize item out-of-service time for items
returned.
6.2.2 Boeing's turnaround-time objectives for repair
or replacement are: 10 working days for avionic and electronic items and 30
working days for other items when corrected at Boeing's facilities, or 40
working days when corrected at the facilities of a Boeing subcontractor.
Turnaround time starts the date Boeing receives the returned item, together with
Buyer's warranty claim describing the work, and ends the date of shipment by
Boeing of such item. If a turnaround-time objective is not achieved and a
resultant critical parts shortage is experienced by Buyer, and Buyer has
procured spare parts for such item in accordance with the Boeing Recommended
Spare Parts List, Boeing will, upon request from Buyer, either:
6.2.2.1 expedite repair or replacement of
the item or
6.2.2.2 provide a similar item on a
no-charge loan or no-charge lease basis until the repaired or replaced item is
provided to Buyer.
6.2.3 The freight charge for shipment to Boeing of
any item will be paid by Buyer; however, Boeing will reimburse Buyer by issuing
a credit memorandum for such charge for any item determined to be defective
under this Boeing Warranty. The freight charge for the return shipment to Buyer
of any such defective item which has been repaired, replaced or corrected
pursuant to this Boeing Warranty will be paid by Boeing.
6.3 Title to and risk of loss of any Aircraft or
<PAGE> 43
item returned to Boeing will at all times remain with Buyer and/or any other
owner of such Aircraft or item, except that at the time Boeing ships a
replacement item to Buyer, title to and risk of loss (i) for the returned item
will pass to Boeing and (ii) for the replacement item will pass to Buyer. While
Boeing has care, custody and control of an Aircraft or item, Boeing will have
only such liabilities as a bailee for mutual benefit would have, but will not be
liable for loss of use.
7. Nonrepairable Items.
Buyer may scrap any defective nonrepairable item having a then-current
Boeing spare part selling price of $2,000 or less and make a claim for a
replacement item. For a defective nonrepairable item having a then-current
Boeing spare part selling price greater than $2,000, an authorized Boeing
representative must confirm the nonrepairability of any such item. Buyer's claim
for an item with a spare part selling price exceeding $2,000 must include such
confirmation.
8. Reimbursement for Certain Inspection Labor Costs.
8.1 In addition to the remedies set forth in this Boeing Warranty,
Boeing will reimburse Buyer by issuing a credit memorandum at the Warranty Labor
Rate for the direct labor hours expended by Buyer in performing inspections of
the Aircraft to determine whether or not a covered defect exists in any system,
accessory, equipment or part manufactured to Boeing's detailed design, provided
that:
8.1.1 such inspections are recommended by a Boeing service
bulletin or service letter issued by Boeing within 36 months after delivery of
such Aircraft, and
8.1.2 such reimbursement will not apply to any inspections
performed as an alternative to accomplishing corrective action when such
corrective action is available to Buyer at the time such inspections are
performed.
8.2 If a covered defect is determined to exist as a result of the
foregoing inspections, the remedies under this Boeing warranty will apply to
Aircraft in warranty as of the warranty date set forth in the applicable Boeing
service bulletin or service letter or the date the defect was discovered by
Buyer, whichever date occurs first.
9. Wear and Tear.
Normal wear and tear and the need for regular maintenance and overhaul
will not constitute a defect.
10. Disclaimer and Release; Exclusion of Liabilities.
<PAGE> 44
This Part A and the rights and remedies of Buyer and obligations of
Boeing herein are subject to the Disclaimer and Release and Exclusion of
Consequential and Other Damages provisions of Article 12 of this Agreement.
11. Buyer's Indemnification of Boeing.
The provisions of Part E, "Buyer's Indemnification of Boeing and
Insurance" of Exhibit C, will apply to all warranty work performed by Boeing
hereunder in accordance with Buyer's specific technical repair or correction
instructions, to the extent any legal liability of Boeing is based upon the
content of such instructions.
<PAGE> 45
PART B
WARRANTY REPAIRS AND MODIFICATIONS BY BUYER
1. General.
To expedite the return to service of any defective Aircraft or systems,
accessories, equipment and parts (items) that Boeing is obligated to correct
under the Boeing Warranty, repairs and modifications may, at Buyer's option, be
performed by Buyer (work) and charged to Boeing, subject to the following:
2. Scope.
This option applies only to items manufactured to Boeing's detailed
design. The warranty and notice periods and all other conditions and limitations
applicable to the Boeing Warranty apply to this option.
3. Repairs and Modifications.
All work will be performed in accordance with Boeing's written
instructions, using parts and materials as may be furnished by Boeing and/or
Boeing approved parts and materials as may be furnished by Buyer.
4. Claims for Reimbursement.
Buyer's claim for reimbursement must be submitted in writing to
Boeing promptly after completion of the work. Such claim must include the data
set forth in paragraph 4.3 of Part A of this Exhibit B and the following:
4.1 Description of the work performed by Buyer;
4.2 Date work was completed by Buyer;
4.3 Itemized account of the direct labor hours
expended in performing the work; and
4.4 Itemized account of the direct materials
incorporated in the work.
<PAGE> 46
5. Reimbursement.
Upon approval of Buyer's claim for reimbursement, Boeing will
reimburse Buyer by issuing a credit memorandum as follows:
5.1 Direct Labor.
At the Warranty Labor Rate specified herein
for labor hours expended by Buyer's direct labor employees in performing the
work, including removal, disassembly, inspection, bench testing, warrantable
repair or modification, reassembly, final inspection, and reinstallation, but
not to exceed Boeing's reasonable estimate of required labor hours, unless a
greater number of direct labor hours is established by agreement between Boeing
and Buyer, and excluding time for overhaul.
5.2 Direct Materials.
At the invoice cost to Buyer for all direct
materials incorporated in the work, excluding (i) materials used for overhaul,
(ii) materials furnished by Boeing at no charge, (iii) materials which exceed
Boeing's reasonable estimate of required materials, and (iv) allowances for
handling, overhead, taxes, customs duties and the like.
5.3 Warranty Labor Rate.
The Warranty Labor Rate is $41.25 per hour
or 150% of Buyer's average direct hourly labor rate, whichever is greater. For
this purpose, "average direct hourly labor rate" is defined as the average
hourly rate (excluding all fringe benefits, premium-time allowances, social
charges, business taxes and the like) paid by Buyer to Buyer's employees whose
jobs are directly related to the performance of the work. Prior to or
concurrently with submittal of Buyer's first claim for labor reimbursement,
Buyer will notify Boeing of Buyer's then-current average direct hourly labor
rate, and thereafter notify Boeing of any material change in such rate. Boeing
may require data from Buyer to substantiate such rates.
5.4 Limitation.
The total reimbursement with respect to the
direct labor and direct materials incorporated in the work, will not exceed 65%
of Boeing's then-current sales price for the item unless a greater percentage is
established for a particular item by written agreement between Boeing and Buyer.
All claims for reimbursement will be subject to audit by Boeing. Boeing will
promptly notify Buyer of Boeing's disposition of each claim submitted hereunder.
<PAGE> 47
6. Replaced Parts.
If component parts of any assembly are replaced by Buyer, the
replaced parts will be tagged with the assembly part number, the serial number
and the warranty claim number and retained for a period of 60 days following the
date of submittal of Buyer's claim, so as to be made available for Boeing's
inspection. Such parts may be scrapped after such 60-day period.
<PAGE> 48
PART C
BOEING SERVICE LIFE POLICY
1. Definitions.
1.1 "Airframe Component" means any of the primary structural
elements of the wing, fuselage, or vertical or horizontal stabilizer set forth
in Attachment A hereto and installed in an Aircraft at the time of delivery.
1.2 "Landing Gear Component" means any of the primary structural
elements of the landing gear set forth in Attachment A and installed in an
Aircraft at the time of delivery.
1.3 "Spare Component" means any component set forth in Attachment A
that was furnished to Buyer pursuant to this Policy or purchased by Buyer from
Boeing as a spare part.
1.4 "Covered Component" means an Airframe Component, a Landing Gear
Component or a Spare Component.
1.5 "Failure" means any breakage or defect in a Covered Component.
1.6 "Failed Component" means a Covered Component in which a Failure
has occurred.
2. Service Life Policy.
If a Failure occurs in any Covered Component within the following
periods, Boeing will promptly, at a price calculated pursuant to this Policy,
either (i) design and furnish to Buyer materials required to correct the Failed
Component or (ii) furnish to Buyer a replacement Covered Component:
2.1 As to any Airframe Component or Landing Gear Component, within
12 years after delivery of the Aircraft in which such component was initially
installed; or
2.2 As to any Spare Component, within 12 years after delivery of
such Spare Component, or within 12 years after delivery by Boeing of the last
new Model 757 aircraft to Buyer, whichever first expires.
3. Price.
The price that Buyer will pay for the correction or replacement of
a Failed Component will be calculated pursuant to the following formula:
<PAGE> 49
P = CT
-----
144
where:
P = price to Buyer
C = Boeing spare parts sales price at time of
correction or replacement
T = total age in months of the Failed Component from the
date of delivery to Buyer to the date of Failure.
4. Conditions and Limitations.
Boeing's obligations under this Policy are conditioned upon the
following:
4.1 Buyer must notify Boeing of the Failure within three months
after it becomes apparent to Buyer.
4.2 Buyer must provide reasonable evidence that the claimed Failure
is covered by this Policy and if requested by Boeing, that such Failure was not
the result of (i) the breakage of or a defect in a component not covered by this
Policy, (ii) an extrinsic force, (iii) an act or omission of Buyer, or (iv)
operation or maintenance contrary to applicable regulations or Boeing's
instructions.
4.3 If return of a Failed Component is practicable and requested by
Boeing, Buyer will return such Failed Component to Boeing at Boeing's expense
frieght collect.
4.4 Buyer's rights and remedies under this Policy are limited to
the receipt of corrective materials or replacement components at prices
calculated in accordance with this Policy.
<PAGE> 50
5. Disclaimer and Release; Exclusion of Liabilities.
This Part C and the rights and remedies of Buyer and the
obligations of Boeing herein are subject to the Disclaimer and Release and
Exclusion of Consequential and Other Damages provisions of Article 12 of this
Agreement.
<PAGE> 51
Attachment A to
Part C
COVERED AIRFRAME AND LANDING GEAR COMPONENTS
1. Wing.
(a) Upper and lower skins and stiffeners between
the forward and rear wing spars.
(b) Wing spar webs, chords, and stiffeners.
(c) Inspar wing ribs.
(d) Inspar splice plates and fittings.
(e) Main landing gear support structure.
(f) Wing center section lower beams, spanwise beams and
floor beams, but not the seat tracks attached to the
beams.
(g) Wing-to-body structural attachments.
(h) Engine strut support fittings attached
directly to wing primary structure.
(i) Support structure in the wing for spoilers and spoiler
actuators; for aileron hinges and reaction links; and
for leading edge devices and trailing edge flaps.
(j) Trailing edge flap tracks and carriages.
(k) Aileron, leading edge device and trailing edge flap
internal, fixed attachment and actuator support
structure.
2. Body.
(a) External surface skins and doublers,
longitudinal stiffeners, longerons and
circumferential rings and frames between the
forward pressure bulkhead and the vertical
stabilizer rear spar bulkhead, and
structural support and enclosure for the APU
but excluding all system components and
related installation and connecting devices,
insulation, lining, and decorative panels
and related installation and connecting
devices.
(b) Window and windshield structure but
excluding the windows and windshields.
(c) Fixed attachment structure of the passenger
<PAGE> 52
Attachment A to
Part C
doors, cargo doors and emergency exits, excluding door
mechanisms and movable hinge components. Sills and
frames around the body openings for the passenger
doors, cargo doors and emergency exits, excluding scuff
plates and pressure seals.
(d) Nose wheel well structure, including the wheel well
walls, pressure deck, forward and aft bulkheads, and
the gear support structure.
(e) Main gear wheel well structure including pressure deck,
bulkheads and landing gear beam support structure.
(f) Floor beams and support posts in the control
cab and passenger cabin area, but excluding
seat tracks.
(g) Forward and aft pressure bulkheads.
(h) Keel structure between the wing front spar bulkhead and
the main gear wheel well aft bulkhead, including
splices.
(i) Wing front and rear spar support bulkheads,
and vertical and horizontal stabilizer front
and rear spar support bulkheads including
terminal fittings but excluding all system
components and related installation and
connecting devices, insulation, lining,
decorative panels, and related installation
and connecting devices.
(j) Support structure in the body for the
stabilizer pivot and stabilizer screw.
3. Vertical Stabilizer.
(a) External skins between front and rear spars.
(b) Front, rear and auxiliary spar chords, webs, and
stiffeners, and attachment fittings between vertical
stabilizer and body.
(c) Inspar ribs.
(d) Support structure in the vertical stabilizer
for rudder hinges, reaction links and
actuator.
(e) Rudder internal, fixed attachment and
actuator support structure.
<PAGE> 53
Attachment A to
Part C
(f) Rudder hinges and supporting ribs, excluding
bearings.
4. Horizontal Stabilizer.
(a) External skins between front and rear spars.
(b) Front, rear and auxiliary spar chords, webs,
and stiffeners.
(c) Inspar ribs.
(d) Stabilizer center splice fittings, pivot and
screw support structure.
(e) Support structure in the horizontal
stabilizer for the elevator hinges, reaction
links and actuators.
(f) Elevator internal, fixed attachment and
actuator support structure.
5. Engine Strut.
(a) Strut external surface skin and doublers and
stiffeners.
(b) Internal strut chords, frames and bulkheads.
(c) Strut to wing fittings and diagonal brace.
(d) Engine mount support fittings attached
directly to strut structure and including the
engine mounted support fittings.
6. Main Landing Gear.
(a) Outer cylinder.
(b) Inner cylinder.
(c) Upper and lower side struts, including
spindles and universals.
(d) Drag strut.
(e) Side strut reaction link.
(f) Side strut support link.
(g) Downlock links including spindles and
universals.
(h) Orifice plate.
<PAGE> 54
Attachment A to
Part C
(i) Trunnion link.
(j) Truck beam.
(k) Axles.
(l) Torsion links.
(m) Stabilizer link.
7. Nose Landing Gear.
(a) Outer cylinder.
(b) Inner cylinder.
(c) Upper and lower drag strut, including lock
links.
(d) Axles.
(e) Torsion links.
(f) Steering plates and steering collar.
(g) Orifice plate.
NOTE: The Service Life Policy does not cover any
bearings, bolts, bushings, clamps, brackets,
actuating mechanisms or latching mechanisms used in
or on the Covered Components.
<PAGE> 55
PART D
BOEING INDEMNITY AGAINST PATENT INFRINGEMENT
1. Indemnity.
Subject to the provisions of this Part D, Boeing will indemnify and
hold harmless Buyer from and against all claims, suits, actions, liabilities,
damages and costs arising out of actual or alleged infringement, by any Aircraft
or any system, accessory, equipment or part (item) installed thereon at the time
of Aircraft delivery, of any patent issued under the laws of any country in
which Buyer lawfully operates the Aircraft (Country).
2. Exceptions.
2.1 This indemnity will not apply unless, from the time of design
of the allegedly infringing Aircraft or item until the resolution of the
infringement claim, the Country and flag country of the Aircraft: (i) are fully
bound by the Chicago Convention on International Civil Aviation of December 7,
1944, and are fully entitled to all benefits of Article 27 thereof, or (ii) have
been parties to the International Convention for the Protection of Industrial
Property (Paris Convention), or (iii) are the United States.
2.2 This indemnity will not apply to Buyer Furnished Equipment,
Engines, any system, accessory, equipment or part that was not manufactured to
Boeing's detailed design, or to any system, accessory, equipment or part
manufactured to Boeing's detailed design without Boeing's authorization.
3. Conditions and Limitations.
Buyer's remedy and Boeing's obligations hereunder are subject to
the following:
3.1 Buyer must give Boeing written notice within 10 days after
Buyer receives notice of a suit or action against Buyer alleging infringement or
within 20 days after Buyer receives a written claim of infringement.
<PAGE> 56
3.2 Following receipt of such notice Boeing may conduct
negotiations with any party claiming infringement and may intervene in any suit
or action. Whether or not Boeing intervenes, Boeing will be entitled at any
stage of the proceedings to assume or control the defense.
3.3 Buyer will (i) promptly furnish to Boeing all data, records and
assistance within Buyer's control which are material to any such claim, suit or
action and (ii) (except as to amounts mandated by a judgment) obtain Boeing's
prior approval to pay or assume any liabilities, damages, royalties or costs.
3.4 Boeing's obligations and Buyer's remedies herein exclude
Buyer's incidental or consequential damages and liabilities, costs, loss of
revenue or loss of profit resulting from loss of use, but include, at Boeing's
option, replacing the infringing item with an equivalent non infringing unit or
otherwise curing any infringement on account of which use of the Aircraft by
Buyer is prevented.
3.5 Boeing's obligations and Buyer's remedies herein are exclusive
and in substitution for, and Buyer hereby waives, releases and renounces, all
other indemnities, obligations and liabilities of Boeing and any assignee of
Boeing, and all other rights, remedies and claims, including claims for damages,
direct, incidental or consequential, of Buyer against Boeing or any assignee of
Boeing, express or implied, arising by law or otherwise, with respect to any
actual or alleged patent infringement or the like by any Aircraft or any item
installed therein.
<PAGE> 57
PART D-1
BOEING INDEMNITY AGAINST COPYRIGHT INFRINGEMENT
1. Indemnity.
Subject to the following, Boeing will indemnify Buyer with respect
to claims, suits, damages and costs arising out of copyright infringement by any
computer software included with the Aircraft when the Aircraft is first
delivered by Boeing (Aircraft Software).
2. Exceptions, Limitations and Conditions.
2.1 Boeing will have no obligation to indemnify Buyer relative to
Buyer Furnished Equipment, engines, software not manufactured to Boeing's
detailed design, or software manufactured to Boeing's detailed design without
Boeing's written authorization.
2.2 Boeing's obligation to indemnify Buyer is limited to
infringements (a) in countries where Buyer lawfully operates the Aircraft
(Countries), (b) where, from the time of creation of the allegedly infringing
software until the resolution of the infringement claim, the Countries and flag
country of the Aircraft are members of The Berne Union and recognize computer
software as a "work" under The Berne Convention, and (c) in the United States.
2.3 Boeing will have no obligation or liability for loss of use,
revenue or profit, or for any other incidental or consequential damages.
2.4 Boeing may, at its option, replace any infringing or allegedly
infringing Aircraft Software (or item containing Aircraft Software) with a
noninfringing equivalent.
2.5 Buyer must inform Boeing in writing (a) within 10 days after
Buyer receives notice of a suit or other formal action against Buyer alleging
copyright infringement involving Aircraft Software and (b) within 30 days after
Buyer receives any written allegation or claim in the nature of copyright
infringement involving Aircraft Software.
2.6 Boeing may negotiate with any party claiming infringement and
may intervene or assume control of the defense at any stage in any infringement
suit or action.
2.7 Buyer will promptly furnish to Boeing all data, records and
assistance within Buyer's possession or control which may be material to any
copyright infringement claim, suit or action relating to Aircraft Software.
<PAGE> 58
2.8 Other than as required by a final judgment entered by a court
of competent jurisdiction, Buyer will not make any payment or commitment to pay,
assume any obligation, or make any material concession relative to any copyright
infringement for which Boeing may otherwise be obligated.
2.9 The obligations of Boeing and remedies of Buyer set forth in
this Part are exclusive and in substitution for, and Buyer hereby waives,
releases and renounces, all other indemnities, obligations, and liabilities of
Boeing and all other rights, claims and remedies of Buyer against Boeing,
express or implied, arising by law or otherwise, with respect to any actual or
alleged copyright infringement or the like by any Aircraft or any item included
in any Aircraft.
<PAGE> 59
PART E
SUPPLIER WARRANTIES AND PATENT INDEMNITIES
1. Supplier Warranties and Supplier Patent
Indemnities.
Boeing will use diligent efforts to obtain adequate warranties and
indemnities against patent infringement enforceable by Buyer from manufacturers
(Suppliers) of systems, accessories, equipment or parts installed on the
Aircraft at the time of delivery that were selected and purchased by Boeing, but
not manufactured to Boeing's detailed design. Boeing will furnish copies of such
warranties and patent indemnities to Buyer prior to delivery of the first
Aircraft.
2. Boeing Assistance in Administration of Supplier
Warranties.
Buyer will be responsible for submitting warranty claims directly
to Suppliers; however, if Buyer experiences problems enforcing any Supplier
warranty obtained by Boeing for Buyer, Boeing will conduct an investigation of
such problems and assist Buyer in the resolution of such claims.
3. Boeing Support in Event of Supplier Default.
3.1 If any Supplier defaults in the performance of a material
obligation under a design, material or workmanship warranty obtained by Boeing
for Buyer, and Buyer provides evidence to Boeing that such default has occurred,
then the equivalent warranty and related provisions set forth in this Product
Assurance Document will apply to the claimed defect.
3.2 At Boeing's request, Buyer will assign to Boeing, and Boeing
will be subrogated to, Buyer's rights against the manufacturer providing such
Supplier warranty.
<PAGE> 60
PART F
ENGINE MANUFACTURER'S WARRANTY
AND PRODUCT SUPPORT PLAN
Boeing has obtained from United Technologies Corporation ("United") the right to
extend to Buyer the provisions of Section 4.4.2, "Warranty for New Engines and
New Parts for Engines" of United's "Product Support Plan for Customers
Purchasing PW2000 Powered Boeing 757 Type Aircraft"; subject, however, to
Buyer's acceptance of the conditions set forth in said Section 4.4.2.
Accordingly, Boeing hereby extends to Buyer, and Buyer hereby accepts, the
provisions of such "Warranty for New Engines and New Parts for Engines"
applicable to such PW2000 engine(s) ("Engine(s)," including all "Parts"
thereof), and such "Warranty for New Engines and New Parts for Engines" shall
apply to Engines installed in the Aircraft at the time of delivery; provided
that Buyer may, by notice given to Boeing and United prior to the delivery of
the Aircraft, elect to substitute for such "Warranty for New Engines and New
Parts for Engines" any corresponding warranty included either in a General Terms
Agreement currently effective between Buyer and United or in a contract for the
sale by United to Buyer of such Engines. In consideration for such extension,
Buyer hereby releases and discharges Boeing and United from any and all claims,
obligations and liabilities whatsoever arising out of the purchase or use of
said installed Engines except as expressly assumed by United in such "Warranty
for New Engines and New Parts for Engines."
<PAGE> 61
UNITED TECHNOLOGIES CORPORATION
WARRANTY FOR NEW ENGINES AND NEW PARTS FOR ENGINES
1. Defective Goods.
United Technologies Corporation, Pratt & Whitney Group, Commercial
Products Division (Seller) warrants to Customer (Buyer) that at the time of
delivery the goods sold hereunder will be free from defects in material and
manufacture and will conform substantially to Seller's applicable specification.
Seller's liability and Buyer's remedy under this warranty are limited to the
repair or replacement, at Seller's election, of goods or parts thereof returned
to Seller which are shown to Seller's reasonable satisfaction to have been
defective; provided that written notice of the defect will have been given by
Buyer to Seller within ninety (90) days after the first operation or use of the
goods (or if the goods are installed in new aircraft, within ninety (90) days
after acceptance of such aircraft by its first operator) but in no event later
than one (1) year after the date of delivery of such goods by Seller.
Transportation charges for the return of defective goods to Seller and their
reshipment to Buyer and the risk of loss thereof will be borne by Seller only if
returned in accordance with written shipping instructions from Seller.
2. Title.
Seller warrants to Buyer that it will convey good title to the
goods sold hereunder. Seller's liability and Buyer's remedy under this warranty
are limited to the removal of any title defect or, at the election of Seller, to
the replacement of the goods or parts thereof which are defective in title;
provided, however, that the rights and remedies of the parties with respect to
patent infringement shall be limited to the provisions of paragraph 3 below.
3. Patent Infringement.
Seller will conduct, at its own expense, the entire defense of any
claim, suit or action alleging that, without further combination, the use or
resale by Buyer or any subsequent purchaser or user of the goods delivered
hereunder directly infringes any United States patent, but only on the
conditions that (a) Seller receives prompt written notice of such claim, suit or
action and full opportunity and authority to assume the sole defense thereof,
including settlement and appeals, and all information available to Buyer and
defendant for such defense; (b) said goods are made according to a specification
or design furnished by Seller or, if a process patent is involved, the process
performed by the goods is recommended in writing by Seller; and (c) the claim,
suit or action is brought against Buyer or one expressly indemnified
<PAGE> 62
by Buyer. Provided all of the foregoing conditions have been met, Seller will,
at its own expense, either settle said claim, suit or action or will pay all
damages and costs awarded by the court therein and, if the use or resale of such
goods is finally enjoined, Seller will, at Seller's option, (i) procure for
defendant the right to use or resell the goods, (ii) replace them with
equivalent noninfringing goods, (iii) modify them so they become noninfringing
but equivalent, or (iv) remove them and refund the purchase price (less a
reasonable allowance for use, damage and obsolescence).
If a claim, suit or action is based on a design or specification furnished by
Buyer or on the performance of a process not recommended in writing by Seller,
or on the use or sale of the goods delivered hereunder, in combination with
other goods not delivered to Buyer by Seller, Buyer will indemnify and save
Seller harmless therefrom.
4. Engine and Parts Service Policy.
Seller warrants to Buyer that it will extend to Buyer, with respect
to Engines sold to Buyer (whether installed as new equipment in aircraft by the
manufacturer and delivered to Buyer or delivered directly by Seller to Buyer),
allowances and adjustments in accordance with the applicable Engine and Parts
Service Policy offered by said Seller on the date of Seller's receipt of the
order therefor. Seller's liability and Buyer's remedy under this warranty
(Warranty) are limited to the allowances and adjustments and are subject to the
general conditions stipulated in such Engine and Parts Service Policy; provided,
however, that no change in or retraction of such Policy shall apply to Engines
delivered or to be delivered by Seller under orders received by Seller prior to
Seller's announcement of any such change or retraction.
5. Exclusive Warranties Remedies.
THE FOREGOING WARRANTIES ARE EXCLUSIVE AND ARE GIVEN AND ACCEPTED
IN LIEU OF (I) ANY AND ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, AND (II) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY
IN CONTRACT OR TORT, WHETHER OR NOT ARISING FROM SELLER'S NEGLIGENCE, ACTUAL OR
IMPUTED. THE REMEDIES OF BUYER SHALL BE LIMITED TO THOSE PROVIDED HEREIN TO THE
EXCLUSION OF ANY AND ALL OTHER REMEDIES INCLUDING, WITHOUT LIMITATION,
INCIDENTAL OR CONSEQUENTIAL DAMAGES. NO AGREEMENT VARYING OR EXTENDING THE
FOREGOING WARRANTIES, REMEDIES OR THIS LIMITATION WILL BE BINDING UPON SELLER
UNLESS IN WRITING, SIGNED BY A DULY AUTHORIZED OFFICER OF SELLER.
6. Warranty Pass On.
<PAGE> 63
Seller will, upon the written request of the Buyer, extend Warranty
coverage to Engines (or modules and/or parts thereof) sold by Buyer to another
operator to the extent only, however, that such coverage exists at the time of
such sale and subject to the provisions of the Warranty.
<PAGE> 64
PART G
BOEING INTERFACE COMMITMENT
1. Interface Problems.
If Buyer experiences technical problems in the operation of an
Aircraft or its systems, the cause of which is not readily identifiable by Buyer
but which Buyer believes to be attributable to the design characteristics of the
Aircraft or its systems (Interface Problem), Boeing will, without additional
charge to Buyer, promptly conduct an investigation and analysis to determine the
cause or causes of the Interface Problem and to recommend such corrective action
as may be feasible. Buyer will furnish to Boeing all data and information in
Buyer's possession relevant to the Interface Problem, and will cooperate with
Boeing in the conduct of investigations and tests. Boeing will promptly advise
Buyer at the conclusion of its investigation of Boeing's opinion as to the
causes of the Interface Problem and Boeing's recommendation as to corrective
action.
2. Boeing Responsibility.
If Boeing determines that the Interface Problem is primarily
attributable to the design of any item manufactured to Boeing's detailed design,
Boeing will correct the design of such item to the extent of any then-existing
obligations of Boeing under the provisions of the applicable Boeing Warranty or
Boeing Service Life Policy.
3. Manufacturer Responsibility.
If Boeing determines that the Interface Problem is primarily
attributable to the design of an item not manufactured to Boeing's detailed
design, Boeing will assist Buyer in processing a warranty claim against the
manufacturer of such item.
4. Joint Responsibility.
If Boeing determines that the Interface Problem is partially
attributable to the design of an item manufactured to Boeing's detailed design
and partially to the design of an item not manufactured to Boeing's detailed
design, Boeing will seek a solution to the Interface Problem through the
cooperative efforts of Boeing and the manufacturer of the other item and will
promptly advise Buyer of resulting corrective actions and recommendations.
5. General.
<PAGE> 65
Buyer will, if requested by Boeing, assign to Boeing any of Buyer's
rights against any manufacturer as Boeing may require to fulfill its obligations
hereunder.
6. Disclaimer and Release; Exclusion of Liabilities.
This Part G and the rights and remedies of Buyer and the
obligations of Boeing herein are subject to the Disclaimer And Release and
Exclusion of Consequential and Other Damages provisions of Article 12 of this
Agreement.
<PAGE> 66
PART H
GENERAL
1. Duplicate Product Assurance Remedies.
Boeing will not provide or be requested to provide multiple
remedies for any claim made pursuant to the provisions of this Product Assurance
Document.
2. Notices.
References to "Boeing" in connection with notices or communications
throughout this Product Assurance Document mean Boeing's Product Assurance
Regional Manager at Renton, Washington.
<PAGE> 67
CUSTOMER SUPPORT DOCUMENT
between
THE BOEING COMPANY
and
TRANS WORLD AIRLINES, INC.
Exhibit C to Purchase Agreement Number 1910
C
<PAGE> 68
CUSTOMER SUPPORT DOCUMENT NO. 1910
Dated _________________
Relating to
BOEING MODEL 757-231 AIRCRAFT
_________________
This Customer Support Document is Exhibit C to and forms a part of
Purchase Agreement No. 1910 between The Boeing Company (Boeing) and Trans World
Airlines, Inc. (Buyer) relating to the purchase of Boeing Model 757-231
aircraft. This Customer Support Document consists of the following parts:
PART A Boeing Maintenance Training Program
PART B Boeing Customer Support Services
PART C Boeing Flight Training Program
PART D Technical Data and Documents
PART E Buyer's Indemnification of Boeing and Insurance
PART F Alleviation or Cessation of Performance
C-I
<PAGE> 69
PART A
BOEING MAINTENANCE TRAINING PROGRAM
1. General.
This Part describes the maintenance training to be provided by
Boeing (Maintenance Training) at Boeing's training facility at or near Seattle.
The Maintenance Training will be provided at no additional charge to Buyer,
except as otherwise provided herein.
All instruction, examinations and materials shall be prepared and
presented in the English language and in the units of measure used by Boeing.
Buyer will be responsible for the living expenses of Buyer's
personnel during Maintenance Training. For Maintenance Training provided at or
near Seattle, Boeing will transport Buyer's personnel between their local
lodging and the training facility.
2. Maintenance Training Program.
In conjunction with earlier sales to Buyer of the same model type
aircraft as the Aircraft, Boeing has provided to Buyer comprehensive maintenance
training and/or materials for such aircraft. If requested by Buyer at least 12
months prior to delivery of the first Aircraft, Boeing agrees to provide 1
Maintenance Training course consisting of classroom training to acquaint up to
15 of Buyer's personnel with any operational, structural or systems differences
between the first Aircraft scheduled for delivery pursuant to this Agreement and
the last aircraft of the same model type for which maintenance training and/or
materials were delivered by Boeing to Buyer that are significant to the
maintenance of the Aircraft. Such course will be scheduled by mutual agreement
of Boeing's and Buyer's maintenance training organizations.
C
P.A. No. 1910 A-1
K/TWA
<PAGE> 70
3. Training Materials.
Boeing will provide Buyer with a narrative description defining the
expected time to teach the various differences between the first Aircraft
scheduled for delivery pursuant to this agreement and the last aircraft of the
same model type for which maintenance training and/or materials were delivered
by Boeing to Buyer.
If Buyer chooses to have Boeing provide a differences Maintenance Training
course, Boeing will provide at the beginning of the course, 1 copy of a training
manual for the differences training course to each student attending such
course. Boeing will also provide to the Buyer 1 set of visual aid projection
transparencies and 1 set of black and white reproducible masters of the training
manual graphics and text utilized in the Maintenance Training class. No revision
service will be provided for such training manuals and materials.
If Buyer chooses not to have Boeing provide a differences Maintenance Training
course, Boeing will provide to Buyer at Buyer's direction, 1 set of visual aid
projection transparencies and 1 set of black and white reproducible masters of
the training manual graphics and text that would have been utilized in a
differences Maintenance Training class. Delivery of requested materials will
satisfy difference training entitlements as defined herein. No revision service
will be provided for such training manuals and materials.
4. Training at a Facility Other Than Boeing's.
If seasonably requested, Boeing will conduct the classroom training
described above at a mutually acceptable alternate training site, subject to the
following conditions:
4.1 Buyer will be responsible for providing acceptable classroom
space and training equipment required to present the Boeing courseware.
4.2 Buyer will pay Boeing's then-current per diem charge for each
Boeing instructor for each day, or fraction thereof, such instructor is away
from Seattle, including travel time.
P.A. No. 1910 C
K/TWA A-2
<PAGE> 71
4.3 Buyer will reimburse Boeing for round-trip transportation for
Boeing's instructors and training materials between Seattle and such alternate
training site.
4.4 Buyer will pay, or reimburse Boeing for, all taxes, fees,
duties, licenses, permits and similar expenses incurred by Boeing and its
employees as a result of Boeing's providing the training at such alternate site.
4.5 Those portions of training that require the use of Boeing's
training devices, if any, will be conducted at Boeing-designated facilities.
P.A. No. 1910 C
K/TWA A-3
<PAGE> 72
PART B
BOEING CUSTOMER SUPPORT SERVICES
1. General.
This Part describes the support services to be provided by Boeing
at no additional charge to Buyer, unless otherwise specified herein. Except with
respect to Field Services, the services described in this Part will be provided
by Boeing during a period commencing with delivery of the first Aircraft and
continuing so long as one Aircraft is regularly operated by Buyer in commercial
air transport service.
2. Field Service Engineering.
Boeing will furnish field service representation to advise Buyer on
maintenance and operation of the Aircraft (Field Services) as follows:
2.1 Field Services will be available to Buyer at or near Buyer's
main maintenance or engineering facility for a period beginning prior to
delivery of the first Aircraft and terminating 12 months after delivery of the
last Aircraft (Field Service Period. If such Field Service Periods overlap, the
Field Services will be provided concurrently.
2.2 Buyer will furnish at no charge to Boeing suitable office space
and equipment that will include desks, chairs, file cabinets and an electrical
power source in, or convenient to, Buyer's facility where each/any Boeing
representative is providing Field Services. As required, Buyer will assist each
representative providing Field Services with visas, work permits, customs, mail
handling, identification passes, and local airport authorities.
2.3 In addition to the Field Services referred to above, the
services of any Boeing field service representative will also be available to
Buyer anywhere Buyer may land the Aircraft.
2.4 Boeing may, from time to time, provide additional support
services in the form of Boeing personnel visiting Buyer's facilities to work
with Buyer's personnel in an advisory capacity.
3. Additional Engineering Support Services.
Boeing will, if requested by Buyer in writing, provide technical
advisory assistance with respect to the Aircraft and accessories, equipment and
parts manufactured to Boeing's detailed design and installed in the Aircraft at
the time of delivery. Such technical advisory assistance, which will be provided
from Seattle, will include:
3.1 analysis of and comment on any Aircraft service or operational
problem experienced by Buyer in order to determine the nature of the problem and
its cause and to suggest possible solutions;
3.2 analysis of and comment on Buyer's engineering releases
relating to structural repairs of the Aircraft not covered by Boeing's
Structural Repair Manual; and
3.3 analysis of and comment on Buyer's engineering proposals for
changes in, or replacement of, parts, accessories or equipment manufactured to
Boeing's detailed design (excluding computer software embedded or included
therein); provided that Boeing will not analyze or comment on any such change or
replacement which constitutes a
P.A. No. 1910 C
K/TWA B-1
<PAGE> 73
major structural change, nor on any engineering release related thereto, unless
Buyer's request for such analysis and comment is accompanied by complete
detailed drawings, substantiating data (including data, if any, required by
applicable government agencies), all stress or other appropriate analysis, and a
specific statement from Buyer of the kind of review and response desired by
Buyer.
4. Special Services.
4.1 Facilities, Ground Equipment and Maintenance Planning
Assistance.
Boeing will, at Buyer's request, send qualified Boeing
engineering representatives to Buyer's main base to evaluate Buyer's technical
facilities, tools and equipment for servicing and maintaining the Aircraft, to
recommend changes where necessary and to assist in the formulation of Buyer's
overall maintenance plan.
4.2 Additional Services.
Boeing may, at Buyer's request, provide additional
special services with respect to the Aircraft after delivery, which may include
such items as Master Changes (Kits and/or Data), training and maintenance and
repair of the Aircraft. Providing such additional services will be subject to
(i) mutually acceptable price, schedule and scope of work and (ii) Boeing's
then-current standard contract therefor including disclaimer and release,
exclusion of consequential and other damages and indemnification and insurance
requirements.
4.3 Post-Delivery Aircraft Services.
If Boeing performs unanticipated work on an Aircraft
after delivery of such Aircraft, but prior to its initial departure flight, or
upon its return to Boeing's facilities prior to completion of such flight, the
following provisions will apply:
4.3.1 Title to and risk of loss of any such Aircraft
will at all times remain with Buyer.
4.3.2 The provisions of the Boeing Warranty set forth
in Exhibit B of this Agreement will apply to such work.
4.3.3 Buyer will reimburse Boeing for such work to the
extent not covered by the Boeing Warranty applicable to the Aircraft.
4.3.4 The Disclaimer and Release and Exclusion of
Consequential and Other Damages provisions set forth in Article 12 of this
Agreement and the indemnification and insurance provisions set forth in this
Exhibit C will apply to such Boeing work.
4.3.5 In performing such work, Boeing may rely upon the
commitment authority of Buyer's personnel requesting such work.
5. Additional Informational Services.
Boeing may, from time to time, provide Buyer with additional
services in the form of information about the Aircraft or other aircraft of the
same type, including information concerning design, manufacture, operation,
maintenance, modification, repair and in-service experience.
P.A. No. 1910 C
K/TWA B-2
<PAGE> 74
PART C
BOEING FLIGHT TRAINING PROGRAM
1. General.
This Part describes the flight training to be provided by Boeing
(Flight Training) at or near Seattle, or at some other location to be determined
pursuant to this Part. The Flight Training will be provided at no additional
charge to Buyer, except as otherwise provided herein.
All instruction, examinations and materials will be prepared and presented in
the English language and in the units of measure used by Boeing.
Buyer will be responsible for the living expenses of Buyer's personnel during
the Flight Training Program. For Flight Training provided at or near Seattle,
Boeing will transport Buyer's personnel between their local lodging and the
training facility.
2. Flight Training Program.
In conjunction with earlier sales to Buyer of aircraft of the same
model type as the Aircraft, Boeing has provided to Buyer comprehensive flight
training for such aircraft. If requested by Buyer at least 12 months prior to
delivery of the first Aircraft, Boeing agrees to provide, if required, 1
classroom training class to acquaint up to 15 of Buyer's personnel with any
operational, systems and performance differences significant to the operation of
the Aircraft, between the first Aircraft scheduled for delivery pursuant to this
Agreement and the last aircraft of the same model type as the aircraft
previously delivered by Boeing to Buyer. Such course will be scheduled by mutual
agreement of Boeing's and Buyer's flight training organizations.
3. Training Materials.
Any training materials, if required, that are used in Flight
Training shall be provided to Buyer at the conclusion of such class. No revision
service shall be provided for such training materials.
P.A. No. 1910 C
K/TWA C-1
<PAGE> 75
4. Training at a Facility Other Than Boeing's.
If seasonably requested, Boeing will conduct the Flight Training at
a mutually acceptable alternate training site, subject to the following
conditions:
4.1 Buyer will be responsible for providing classroom space
acceptable to Boeing, a flight simulator and training equipment required to
present the Boeing courseware.
4.2 Buyer will pay Boeing's then-current per diem charge for each
Boeing instructor for each day, or fraction thereof, such instructor is away
from Seattle, including travel time.
4.3 Buyer will reimburse Boeing for round-trip transportation for
Boeing's flight training instructors and materials between Seattle and such
alternate site.
4.4 Buyer will pay, or reimburse Boeing for, all taxes, fees,
duties, licenses, permits and similar expenses incurred by Boeing and its
employees as a result of Boeing's providing the training at such alternate site.
4.5 Those portions of the training that require the use of Boeing's
training devices, if any, will be conducted at Boeing-designated facilities.
P.A. No. 1910 C
K/TWA C-2
<PAGE> 76
PART D
TECHNICAL DATA AND DOCUMENTS
1. General.
Boeing will furnish to Buyer the data and documents set forth
herein at no additional charge to Buyer, unless otherwise specified herein. Such
data and documents will, where applicable, be prepared essentially in accordance
with the provisions of Revision 29 to Air Transport Association of America
Specification No. 100, dated June 1, 1956, entitled "Specification for
Manufacturers' Technical Data," with the following specific exceptions: The
Illustrated Parts Catalog, will be prepared essentially in accordance with the
provisions of Revision 28. The Overhaul and Component Maintenance Manuals will
be written to the ATA Revision level established for the airplane model the
component was originally used on. Such data and documents are only intended to
provide Buyer with pertinent information on components, equipment and
installations designed by Boeing for aircraft of the same model type as the
Aircraft. Such data and documents will be in English and in the units of measure
used by Boeing, except as otherwise specified herein or as may be required to
reflect Aircraft instrumentation.
2. Treatment of Data and Documents.
2.1 The data and documents provided by Boeing under this Agreement
("Documents") are licensed to Buyer. They contain confidential, proprietary
and/or trade secret information belonging to Boeing; and Buyer will treat them
in confidence and use and disclose them only for Buyer's own internal purposes
as specifically authorized herein. If Buyer makes copies of any Documents, the
copies will also
P.A. No. 1910 C
K/TWA D-1
<PAGE> 77
belong to Boeing and be treated as Documents under this Agreement. Buyer will
preserve all restrictive legends and proprietary notices on all Documents and
copies.
2.2 All Documents will only be used: (a) for the purpose of
maintenance, repair, or modification of an Aircraft or spare part as permitted
in the Spare Parts GTA or Customer Services GTA between Buyer and Boeing, and
then only in connection with an Aircraft or spare part for which the Document in
question is tabulated or identified by Boeing serial number, and (b) for the
purpose of Buyer's own development and manufacture of training devices for use
by Buyer, in connection with the Aircraft.
2.3 Any Document may be provided to Buyer's contractors for
maintenance, repair, or modification of the Aircraft; and Airplane Flight
Manuals, Operations Manuals, Aircraft Maintenance Manuals, Wiring Diagram
Manuals, System Schematics Manuals, Component Maintenance/Overhaul Manuals and
assembly and installation drawings may be provided to Buyer's contractors for
development and manufacture of training devices for use by Buyer, but in both
cases, only if Buyer's contractor is, at the time of transfer of Documents,
bound by a Boeing Customer Services GTA, or other appropriate proprietary
information protection agreement with Boeing, applicable to the Documents.
3. Document Formats and Quantities.
The Attachment is provided to record the quantities and formats of
Documents provided to Buyer which are applicable to aircraft previously
delivered by Boeing of the same model type as the Aircraft. Revisions to such
Documents will be provided as necessary to reflect the configuration, at time of
delivery, of the Aircraft to which this Part applies. Space is provided in the
Attachment for Buyer and Boeing to indicate changes, mutually agreed upon
concurrently with signing this Agreement, in the quantities and formats of such
Documents to be hereinafter provided.
In the event Boeing determines that revisions would not be appropriate for any
of the Documents described in the Attachment, Boeing reserves the right to
furnish to Buyer, in lieu of such revisions, a separate publication of such
Document for the Aircraft in the same format and quantity as
P.A. No. 1910 C
K/TWA D-2
<PAGE> 78
indicated in the Attachment. Revision service for such publication shall be the
same as for the Document it replaces.
4. Revision Service.
Further revisions to any such Documents will be provided with
respect to such Aircraft in accordance with the provisions applicable to such
Documents, as set forth in the purchase agreement or purchase agreement
supplement under which Boeing originally agreed to provide such Documents, as
such provisions may have been amended by the parties.
5. Supplier Technical Data.
Boeing will continue to maintain the supplier data program referred
to in the purchase agreement or purchase agreement supplement under which data
and documents for Buyer's aircraft of the same model type as the Aircraft were
originally provided to Buyer. As indicated in such prior purchase agreement or
supplement, the provisions of such supplier data program are not applicable to
items of Buyer Furnished Equipment.
6. Additional Data and Documents.
If Boeing provides data or documents other than Documents which are
not covered by a Boeing Customer Services GTA or other proprietary information
protection agreement between Boeing and Buyer, all such data and documents will
be considered things delivered under this Agreement and treated as Documents.
7. Buyer's Shipping Address.
Boeing will ship the Documents furnished hereunder to Buyer's
shipping address for data and documents previously provided to Boeing. Buyer
shall promptly notify Boeing of any change to such address.
P.A. No. 1910 C
K/TWA D-3
<PAGE> 79
Attachment to
Part D
Page 1
WORKSHEET
<TABLE>
<CAPTION>
ORIGINAL REVISED
ITEM NAME QUANTITY QUANTITY FORMAT
- ---- ---- -------- -------- ------
A. FLIGHT OPERATIONS:
<S> <C> <C> <C>
1. Airplane Flight Manual -------- -------- Printed 1 Side
NOTE: An additional copy is
placed aboard each
airplane at delivery
as required by FAR's.
2. Operations Manual and Quick Printed 2 Sides
-------- --------
Reference Handbook
3. Weight and Balance Control -------- -------- Reproduced
and Loading Manual
4. Dispatch Deviation -------- -------- Printed 2 Sides
Procedures Guide
5. Flight Crew Training Manual Printed 2 Sides
-------- --------
6. Performance Engineer's Manual -------- -------- Printed 2 Sides
8. Fault Reporting Manual -------- -------- Printed 2 Sides/
9. Jet Transport Performance -------- -------- Printed 2 Sides
Methods
(total quantity - all models)
10. FMC Supplemental Data -------- -------- Printed 2 Sides
11. Operational Performance
Software (OPS)
a. Inflight and Report Programs Digital Magnetic
-------- --------
Tape
Diskette, IBM
Compatible:
3.5 Inch (720KB or
-------- --------
-------- -------- 1.44MB)
-------- -------- 5.25Inch (360KB or
1.2MB)
-------- -------- Diskette, Macintosh
-------- -------- 3.5 Inch (800KB or
1.4MB)
b. Airplane Performance -------- -------- Digital Magnetic
Monitoring (APM/HISTRY) Tape
Diskette, IBM
Compatible:
-------- -------- 3.5 Inch (720KB or
1.44MB)
-------- -------- 5.25Inch (360KB or
1.2MB)
-------- -------- Diskette, Macintosh
3.5 Inch (800KB or
1.4MB)
</TABLE>
P.A. No. 1910 C
K/TWA D-A-1
<PAGE> 80
Attachment to
Part D
Page 2
WORKSHEET
---------
<TABLE>
<CAPTION>
ORIGINAL REVISED
ITEM NAME QUANTITY QUANTITY FORMAT
- ---- ---- -------- -------- ------
<S> <C> <C> <C>
B. MAINTENANCE
1. Aircraft Maintenance Manual -------- -------- Printed 2 Sides
-------- -------- Printed 1 Side
-------- -------- Microfilm, 16mm Duplicate
Duplicate
-------- -------- Microfilm, 16mm Master
Master
-------- -------- Digital Format
2. Wiring Diagram Manual 1 1 Full-Size Mylar
-------- -------- Reproducible of any
Wiring Diagram or
Chart on specific
request therefor
1 1 Sets of 35mm
-------- --------
Aperture Cards of all Wiring Diagrams and Charts
Copies of Entire -------- -------- Standard Printed
Manual
Copies of all -------- -------- Standard Printed
sections except EDP portion
</TABLE>
P.A. No. 1910 C
K/TWA D-A-2
<PAGE> 81
Attachment to
Part D
Page 3
WORKSHEET
---------
<TABLE>
<CAPTION>
ORIGINAL REVISED
ITEM NAME QUANTITY QUANTITY FORMAT
- ---- ---- -------- -------- ------
<S> <C> <C> <C>
-------- --------
EDP portion in
Microfilm, 16mm, Duplicate
-------- --------
EDP portion in
Microfilm, 16mm, Master
-------- --------
Entire Manual,
Microfilm, 16mm, Duplicate
-------- --------
Entire Manual,
Microfilm, 16mm, Master
-------- --------
Digital Format
-------- --------
3. System Schematics Manual Printed 2 Sides
-------- --------
Full-Size Mylar
Reproducibles of any page, upon specific request therefor
-------- --------
35mm Aperture Cards
-------- --------
Schematics,
Microfilm, 16mm, Duplicate
-------- --------
Microfilm, 16mm,
Master
-------- --------
Digital Format
</TABLE>
P.A. No. 1910 C
K/TWA D-A-3
<PAGE> 82
Attachment to
Part D
Page 4
WORKSHEET
---------
<TABLE>
<CAPTION>
ORIGINAL REVISED
ITEM NAME QUANTITY QUANTITY FORMAT
- ---- ---- -------- -------- ------
<S> <C> <C> <C>
5. BITE Manual -------- -------- Printed 2 Sides
(if seperate)
-------- -------- Microfilm, 16mm,
Duplicate
-------- -------- Microfilm, 16mm,
Master
6. Ramp Maintenance Manual -------- -------- Printed 2 Sides
-------- -------- Microfilm (16mm)
-------- -------- Microfilm (Silver Halide)
-------- -------- Digital Format
(747-400/757/767/777)
7. Fault Isolation Manual Printed 2 Sides or
-------- --------
(if separate)
-------- -------- Microfilm, 16mm,
Duplicate
-------- -------- Microfilm, 16mm,
Master
-------- -------- Digital Format
(737-700/747/757/767/777)
</TABLE>
P.A. No. 1910 C
K/TWA D-A-4
<PAGE> 83
Attachment to
Part D
Page 5
WORKSHEET
---------
<TABLE>
<CAPTION>
ORIGINAL REVISED
ITEM NAME QUANTITY QUANTITY FORMAT
- ---- ---- -------- -------- ------
<S> <C> <C> <C>
8. Structural Repair Manual -------- -------- Printed 2 Sides
-------- -------- Printed 1 Side
-------- -------- Microfilm, 16mm,
Duplicate
-------- -------- Microfilm, 16mm,
Master
-------- -------- Magnetic Tape
Text (Print File Format)
Illustrations (CGM Format)
9. Component Maintenance/ -------- -------- Printed 2 Sides
Overhaul Manuals
-------- -------- Microfilm, 16mm,
Duplicate
-------- -------- Microfilm, 16mm,
Master
-------- -------- Magnetic Tape
Text (Print File Format)
Illustrations (CGM Format)
10. Chapter 20 Standard Printed 2 Sides
-------- --------
Overhaul Practices Manual
(total quantity - all models) Printed 1 Side
-------- --------
-------- -------- Microfilm, 16mm,
Duplicate
-------- -------- Microfilm, 16mm,
Master
</TABLE>
P.A. No. 1910 C
K/TWA D-A-5
<PAGE> 84
Attachment to
Part D
Page 6
WORKSHEET
---------
<TABLE>
<CAPTION>
ORIGINAL REVISED
ITEM NAME QUANTITY QUANTITY FORMAT
- ---- ---- -------- -------- ------
<S> <C> <C> <C>
11. Chapter 20 Standard Wiring Printed 2 Sides
Practices Manual
(total quantity - all models) -------- -------- Microfilm, 16mm, Duplicate
-------- -------- Microfilm, 16mm, Master
Master -------- --------
-------- -------- Digital Format
12. Nondestructive Test Printed 2 Sides
-------- --------
Manual
-------- -------- Printed 1 Side
Duplicate -------- -------- Microfilm, 16mm, Duplicate
Master -------- -------- Microfilm, 16mm, Master
-------- -------- Magnetic Tape
Text (Print File Format)
Illustrations (CGM Format)
13. Service Bulletins -------- -------- Printed 2 Sides
14. Service Bulletins Index -------- -------- Printed 2 Sides
15. Major Assembly and 1 1 Set Aperture
-------- --------
Installation Drawings -------- -------- Cards
(one set only at no charge)
16. Corrosion Prevention Manual -------- -------- Printed 2 Sides
-------- -------- Printed 1 Side
Duplicate -------- -------- Microfilm, 16mm, Duplicate
Master -------- -------- Microfilm, 16mm, Master
-------- -------- Magnetic Tape
Text (Print File Format)
Illustrations (CGM Format)
</TABLE>
P.A. No. 1910 C
K/TWA D-A-6
<PAGE> 85
Attachment to
Part D
Page 7
WORKSHEET
---------
<TABLE>
<CAPTION>
ORIGINAL REVISED
ITEM NAME QUANTITY QUANTITY FORMAT
- ---- ---- -------- -------- ------
<S> <C> <C> <C>
17. Power Plant Buildup Manual Printed 2 Sides
-------- --------
-------- -------- Microfilm (16mm)
-------- -------- Microfilm (Silver Halide)/
18. In-Service Activity Report -------- -------- Printed
19. All Operators Letters -------- -------- Printed
20. Service Letters -------- -------- Printed
21. Structural Item Interim -------- -------- Printed
Advisories
22. Maintenance Tips -------- -------- Printed
23. Combined Index -------- -------- Printed
-------- -------- Digital Format
24. Production Management Data Base -------- -------- Digital Format
(PMDB)
C. MAINTENANCE PLANNING
1. Maintenance Planning -------- -------- Printed
Data Documents
2. Maintenance Task Cards -------- -------- Printed 1 Side
3. Maintenance Inspection -------- -------- Printed
Intervals Report
(total quantity - all models)
D. SPARES
1. Illustrated Parts Catalog Printed 2 Sides
-------- --------
(select one format only)
-------- -------- Printed 1 Side
-------- -------- Microfilm (16mm)
-------- -------- Microfilm (Silver Halide)
2. Standards Books
a. Index -------- -------- Printed 2 Sides
-------- -------- Microfilm
b. Parts Standards -------- -------- Printed 2 Sides
-------- -------- Microfilm
</TABLE>
P.A. No. 1910 C
K/TWA D-A-7
<PAGE> 86
Attachment to
Part D
Page 8
WORKSHEET
---------
<TABLE>
<CAPTION>
ORIGINAL REVISED
ITEM NAME QUANTITY QUANTITY FORMAT
- ---- ---- -------- -------- ------
<S> <C> <C> <C>
c. Parts Specifications -------- -------- Printed 2 Sides
-------- -------- Microfilm
d. Standards for Repair -------- -------- Printed 2 Sides
-------- -------- Microfilm
e. Obsolete Standards -------- -------- Printed 2 Sides
-------- -------- Microfilm
f. Commercial Markers -------- -------- Printed 2 Sides
-------- -------- Microfilm
g. Commercial Markers 757 Printed 2 Sides
-------- --------
-------- -------- Microfilm
h. Passenger Cabin Symbology -------- -------- Printed 2 Sides
(Commercial Placards)
-------- -------- Microfilm
i. Process Standards -------- -------- Printed 2 Sides
-------- -------- Microfilm
j. Material Standards -------- -------- Printed 2 Sides
-------- -------- Microfilm
k. Drafting Standards Practices -------- -------- Printed 2 Sides
-------- -------- Microfilm
l. Specification Support Printed 2 Sides
-------- --------
Standards
-------- -------- Microfilm
</TABLE>
P.A. No. 1910 C
K/TWA D-A-8
<PAGE> 87
Attachment to
Part D
Page 9
WORKSHEET
---------
<TABLE>
<CAPTION>
ORIGINAL REVISED
ITEM NAME QUANTITY QUANTITY FORMAT
- ---- ---- -------- -------- ------
<S> <C> <C> <C>
E. FACILITIES AND EQUIPMENT PLANNING
1. Facilities and Equipment Printed 2 Sides
Planning Document
-------- --------
2. Special Tool and Ground Sets Aperture
-------- --------
Handling Equipment Drawings Cards
Sets Reproducible
-------- --------
Sets Black & White
-------- --------
Copies
3. Special Tool and Ground Printed 2 Sides
-------- --------
Handling Equipment Drawings
Index
4. Supplementary Tooling Printed 2 Sides
-------- --------
Documentation
(total quantity - all models)
5. System Test Equipment Printed 1 Side
-------- --------
Document
6. Illustrated Tool and Printed 2 Sides
-------- --------
Equipment List/Manual
/ Printed 1 Side
-------- --------
Microfilm, 16mm,
-------- --------
Duplicate
Microfilm, 16mm,
-------- --------
Master
Magnetic Tape
-------- --------
Text (Print File Format)
Illustrations (CGM Format)
(737-700, 777)
7. Airplane Recovery Document Printed 2 Sides
-------- --------
8. Airplane Characteristics for Printed
-------- --------
Airport Planning
9. Crash, Fire and Rescue Printed
-------- --------
Document
10. Engine Handling Document Printed 2 Sides
-------- --------
</TABLE>
P.A. No. 1910 C
K/TWA D-A-9
<PAGE> 88
Attachment to
Part D
Page 10
WORKSHEET
---------
<TABLE>
<CAPTION>
ORIGINAL REVISED
ITEM NAME QUANTITY QUANTITY FORMAT
- ---- ---- -------- -------- ------
<S> <C> <C> <C>
F. EROPS
Configuration, Maintenance Printed 2 Sides
and Procedures for Extended -------- --------
Range Operations Document/
G. COMPUTER SOFTWARE DOCUMENTATION FOR AIRBORNE COMPONENTS
Computer Software Index Printed 2 Sides
-------- --------
H. Supplier Technical Data
Product Support Supplier Printed
-------- --------
Directory (total quantity -
all models)
</TABLE>
P.A. No. 1910 C
K/TWA D-A-10
<PAGE> 89
PART E
BUYER'S INDEMNIFICATION OF BOEING AND INSURANCE
1. Buyer's Indemnification Of Boeing.
Buyer hereby indemnifies and holds harmless Boeing from and against
all claims and liabilities, including costs and expenses (including attorneys'
fees) incident thereto or incident to successfully establishing the right to
indemnification, for injury to or death of any person or persons, including
employees of Buyer but not employees of Boeing, or for loss of or damage to any
property, including Aircraft, arising out of or in any way related to the
performance by Boeing of training, services or other obligations pursuant to
this Exhibit C, whether or not arising in tort or occasioned in whole or in part
by the negligence of Boeing, whether active, passive or imputed.
1.1 With regard to training, services and other obligations, the
foregoing indemnification will not apply to the legal liability to persons or
parties other than Buyer or Buyer's assignees arising out of an accident caused
solely by a product defect in an Aircraft.
2. Buyer's Insurance.
Evidence of insurance will be required 10 days prior to the
scheduled delivery of the first Aircraft. Accordingly, Buyer will provide
certificates of insurance specifically referencing the Agreement and paragraph 1
of this Part E. In addition to showing policy number, limits of liability, and
effective dates of coverage, such certificates will contain but not be limited
to the following provisions:
P.A. No. 1910 C
T/TWA E-1
<PAGE> 90
2.1 Hull All Risk; Hull War & Allied Perils Insurance.
Insurers and/or reinsurers will hold harmless and waive
all rights of subrogation against Boeing for any damages or claims arising out
of these Exhibit C services.
2.2 Aircraft Liability Insurance.
(a) To name Boeing as an additional insured in
connection with the performance by Boeing of training, services, or other
obligations provided under this Exhibit C.
(b) To provide that the insurance arranged herein will
be primary and without right of contribution with respect to any other insurance
which may be available for the protection of Boeing.
(c) To provide that all provisions of the insurance,
except the limits of liability, will operate to give each insured or additional
insured the same protection as if there were a separate policy issued covering
each insured or additional insured.
(d) To provide that no act, omission, breach of any
warranty or condition, or misrepresentation on the part of the Insured or any
other person or party (other than by Boeing) will void, exclude, minimize, or
adversely change this coverage as it applies to Boeing.
2.3 For Coverages Specified in 2.1 and 2.2.
(a) Acknowledgment that the insurers and/or reinsurers
are aware of and have seen a copy of the Agreement and accept and insure the
risks and indemnity herein to the extent of the coverage and endorsements as
described in this certificate.
(b) To give 30 day written notice of cancellation,
termination or adverse material alteration of the policies (7 day written notice
in the eventof non payment of premium of War Risk or such lesser period as may
be in effect with prior notice).
(c) That Boeing will not be responsible for payment,
set off, or assessment of any kind of any premiums in connection with the
policies, endorsements or coverages described herein.
(d) For the purpose of this Part E, "Boeing" is defined
as The Boeing Company, its divisions, subsidiaries, affiliates, the assignees of
each and their respective directors, officers, employees and agents.
If more than one Aircraft is to be delivered under the Purchase Agreement, the
insurance certificates must reference all Aircraft when delivered or separate
certificates must be supplied for each Aircraft. The certificates of insurance
will be kept current and valid.
P.A. No. 1910 C
T/TWA E-2
<PAGE> 91
PART F
Alleviation or Cessation of Performance
Boeing will not be required to provide any services, training, data or goods at
a facility while:
1. a labor stoppage or dispute in progress involving Buyer exists;
2. wars or warlike operations, riots or insurrections in the
country where such facility is located exist;
3. conditions at such facility which, in the opinion of Boeing, are
detrimental to the general health, welfare or safety of its personnel and/or
their families exist;
4. the United States Government refuses permission to any Boeing
personnel or their families to enter the country where such facility is located,
or recommends that any Boeing personnel or their families leave such country; or
5. the United States Government refuses Boeing permission to
deliver goods or services to the country where such facility is located.
Boeing further reserves the right, upon the occurrence of any of such events,
subsequent to the location of Boeing personnel at Buyer's facility, to
immediately and without prior notice relocate its personnel and their families
to a place of Boeing's choosing. Any delay resulting therefrom will be deemed a
delay by mutual agreement.
P.A. No. 1910 C
K/TWA F-1
<PAGE> 92
1910K/TWATrans World Airlines, Inc.
AIRFRAME AND ENGINE PRICE ADJUSTMENT
between
THE BOEING COMPANY
and
TRANS WORLD AIRLINES, INC.
Exhibit D to Purchase Agreement Number 1910
P.A. No. 1910 D
K/TWA
<PAGE> 93
Exhibit D
Page 1
PRICE ADJUSTMENT DUE TO
ECONOMIC FLUCTUATIONS
AIRFRAME PRICE ADJUSTMENT
(JULY 1995 Base Price)
1. Formula.
The Airframe Price Adjustment will be determined at the time of
Aircraft delivery in accordance with the following formula:
Pa = (P)(L + M - 1)
Where:
Pa = Airframe Price Adjustment.
L = .65 x ECI
-----
130.1
M = .35 x ICI
-----
123.6
P = Aircraft Basic Price (as set forth in Article 3.2 of
this Agreement) less the base price of Engines (as defined
in this Exhibit D) in the amount of $11,320,000.
ECI = A value using the "Employment Cost Index for
workers in aerospace manufacturing" (aircraft
manufacturing, standard industrial
classification code 3721, compensation, base
month and year June 1989 = 100), as released
by the Bureau of Labor Statistics, U.S.
Department of Labor on a quarterly basis for
the months of March, June, September and
December, calculated as follows: A three-month
arithmetic average value (expressed as a
decimal and rounded to the nearest tenth) will
be determined using the months set forth in
the table below for the applicable Aircraft,
with the released Employment Cost Index value
described above for the month of March also
being used for the months of January and
February; the value for June also used for
April and May; the value for September also
used for July and August; and the value for
December also used for October and November.
ICI = The three-month arithmetic average of the
released monthly values for the Industrial
P.A. No. 1910 D-1
K/TWA
<PAGE> 94
Exhibit D
Page 2
Commodities Index as set forth in the
"Producer Prices and Price Index" (Base Year
1982 = 100) as released by the Bureau of Labor
Statistics, U.S. Department of Labor values
(expressed as a decimal and rounded to the
nearest tenth) for the months set forth in the
table below for the applicable Aircraft.
In determining the value of L, the ratio of ECI divided by 130.1
will be expressed as a decimal rounded to the nearest ten-thousandth and then
multiplied by .65 with the resulting value also expressed as a decimal and
rounded to the nearest ten-thousandth.
In determining the value of M, the ratio of ICI divided by 123.6
will be expressed as a decimal rounded to the nearest ten-thousandth and then
multiplied by .35 with the resulting value also expressed as a decimal and
rounded to the nearest ten-thousandth.
<TABLE>
<CAPTION>
Months to be Utilized
Month of Scheduled in Determining the
Aircraft Delivery Value of ECI and ICI
- ----------------- --------------------
<S> <C>
January June B, July B, Aug. B
February July B, Aug. B, Sept. B
March Aug. B, Sept. B, Oct. B
April Sept. B, Oct. B, Nov. B
May Oct. B, Nov. B, Dec. B
June Nov. B, Dec. B, Jan. D
July Dec. B, Jan. D, Feb. D
August Jan. D, Feb. D, Mar. D
September Feb. D, Mar. D, Apr. D
October Mar. D, Apr. D, May D
November Apr. D, May D, June D
December May D, June D, July D
</TABLE>
The following definitions of B and D will apply:
B = The calendar year before the year in which
the scheduled month of delivery as set forth
in Article 2.1 occurs.
D = The calendar year during which the scheduled month of
delivery as set forth in Article 2.1 occurs.
2. If at the time of delivery of an Aircraft Boeing is unable to determine the
Airframe Price Adjustment because the applicable values to be used to determine
the ECI and ICI have not been released by the Bureau of Labor Statistics, then:
P.A. No. 1910 D-2
K/TWA
<PAGE> 95
Exhibit D
Page 3
2.1 The Airframe Price Adjustment, to be used at the time of
delivery of each of the Aircraft, will be determined by utilizing the escalation
provisions set forth above. The values released by the Bureau of Labor
Statistics and available to Boeing 30 days prior to scheduled Aircraft delivery
will be used to determine the ECI and ICI values for the applicable months
(including those noted as preliminary by the Bureau of Labor Statistics) to
calculate the Airframe Price Adjustment. If no values have been released for an
applicable month, the provisions set forth in Paragraph 2.2 below will apply. If
prior to delivery of an Aircraft the U.S. Department of Labor changes the base
year for determination of the ECI or ICI values as defined above, such rebased
values will be incorporated in the Airframe Price Adjustment calculation. The
payment by Buyer to Boeing of the amount of the Purchase Price for such
Aircraft, as determined at the time of Aircraft delivery, will be deemed to be
the payment for such Aircraft required at the delivery thereof.
2.2 If prior to delivery of an Aircraft the U.S. Department of
Labor substantially revises the methodology used for the determination of the
values to be used to determine the ECI and ICI values (in contrast to benchmark
adjustments or other corrections of previously released values), or for any
reason has not released values needed to determine the applicable Aircraft
Airframe Price Adjustment, the parties will, prior to delivery of any such
Aircraft, select a substitute for such values from data published by the Bureau
of Labor Statistics or other similar data reported by non-governmental United
States organizations, such substitute to lead in application to the same
adjustment result, insofar as possible, as would have been achieved by
continuing the use of the original values as they may have fluctuated during the
applicable time period. Appropriate revision of the formula will be made as
required to reflect any substitute values. However, if within 24 months from
delivery of the Aircraft the Bureau of Labor Statistics should resume releasing
values for the months needed to determine the Airframe Price Adjustment, such
values will be used to determine any increase or decrease in the Airframe Price
Adjustment for the Aircraft from that determined at the time of delivery of such
Aircraft.
2.3 In the event escalation provisions are made non-enforceable or
otherwise rendered null and void by any agency of the United States Government,
the parties agree, to the extent they may lawfully do so, to equitably adjust
the Purchase Price of any affected Aircraft to reflect an allowance for
increases or decreases in labor compensation and material costs occurring since
February, 1995, which is consistent with the applicable provisions of paragraph
1 of
P.A. No. 1910 D-3
K/TWA
<PAGE> 96
Exhibit D
Page 4
this Exhibit D.
3. For the calculations herein, the values released by the Bureau of Labor
Statistics and available to Boeing 30 days prior to scheduled Aircraft delivery
will be used to determine the ECI and ICI values for the applicable months
(including those noted as preliminary by the Bureau of Labor Statistics) to
calculate the Airframe Price Adjustment.
Note: Any rounding of a number, as required under this Exhibit D with
respect to escalation of the airframe price, will be accomplished
as follows: if the first digit of the portion to be dropped from
the number to be rounded is five or greater, the preceding digit
will be raised to the next higher number.
P.A. No. 1910 D-4
K/TWA
<PAGE> 97
Exhibit D
Page 5
ENGINE PRICE ADJUSTMENT - PRATT & WHITNEY
(1995 BASE PRICE)
(a) The Aircraft Basic Price of each Aircraft set forth in Article 3.2 of this
Agreement includes an aggregate price for P&W 2037 engines and all accessories,
equipment and parts therefor provided by the engine manufacturer (collectively
in this Exhibit D called "Engines") of Eleven Million Three Hundred Twenty
Thousand Dollars ($11,320,000). The adjustment in Engine price applicable to
each Aircraft ("Engine Price Adjustment" herein) will be determined at the time
of Aircraft delivery in accordance with the following formula:
Pa = (P + F) (AA + BB + CC) - P/
(b) The following definitions will apply herein:
Pa = Engine Price Adjustment
P = Aggregate Engine Base Price as set forth in paragraph
(a) above.
AA = .60 x L
------
$17.80
BB = .30 x M
------
130.6
CC = .10 x E
------
76.6
In determining the value of AA, BB and CC, the ratio of L divided by $17.80, M
divided by 130.6 and E divided by 76.6 will be expressed as a decimal and
rounded to the nearest ten-thousandth but the decimal value resulting from
multiplying such ratios by the respective constants (.60, .30 and .10) will not
be rounded. The value of the sum of AA + BB + CC will also be rounded to the
nearest ten-thousandth.
L = Labor Index, which is the "Hourly Earnings of
Aircraft Engines and Engine Parts Production Workers,
SIC 3724" published by the Bureau of Labor Statistics,
U.S. Department of Labor, for the seventh month
preceding the month of scheduled Aircraft delivery.
$17.80 = Published Labor Index (SIC 3724) for
December, 1994.
P.A. No. 1910 D-5
K/TWA
<PAGE> 98
Exhibit D
Page 6
M = Material Index, which is the "Producer Price Index -
Code 10, Metals and Metal Products," (Base Year 1982 =
100) published by the Bureau of Labor Statistics, U.S.
Department of Labor, for the seventh month preceding
the month of scheduled Aircraft delivery.
130.6 = Published Material Index (Code 10) for
December, 1994.
E = Fuel Index, which is the "Producer Price Index - Code
5, Fuels and Related Products and Power" (Base Year
1982 = 100) published for the Bureau of Labor
Statistics, U.S. Department of Labor, for the seventh
month preceding the month of scheduled Aircraft
delivery.
76.6 = Published Fuel Index (Code 5) for
December, 1994.
F = 0.005 (N)(P). Where N = the calendar year of
scheduled Engine delivery, minus 1995. For purposes of
this calculation, Engine delivery is assumed to be 3
months prior to the month of scheduled Aircraft
delivery.
The Engine Price Adjustment will not be made if it would result in a decrease in
the aggregate Engine base price.
(c) The value of the Labor, Material and Fuel Index used in determining the
Engine Price Adjustment will be those published by the Bureau of Labor
Statistics, U.S. Department of Labor as of a date 30 days prior to the scheduled
Aircraft delivery to Buyer. Such Index values will be considered final and no
revision to the Engine Price Adjustment will be made after Aircraft delivery for
any subsequent changes in published Index values.
(d) If the Bureau of Labor Statistics, U. S. Department of Labor, (i)
substantially revises the methodology (in contrast to benchmark adjustments or
other corrections of previously published data) or (ii) discontinues publication
of any of the data referred to above, Pratt & Whitney Aircraft (P&WA) agrees to
meet with Boeing and jointly select a substitute for the revised or discontinued
data, such substitute data to lead in application to the same adjustment result,
insofar as possible, as would have been achieved by continuing the use of the
original data as it may have fluctuated had it not been revised or discontinued.
Appropriate revision of the Engine Price Adjustment provisions set forth above
will be made to accomplish this
P.A. No. 1910 D-6
K/TWA
<PAGE> 99
Exhibit D
Page 7
result for affected Engines.
In the event the Engine Price Adjustment escalation provisions of this Agreement
are made non-enforceable or otherwise rendered null and void by any agency of
the United States Government, P&WA agrees to meet with Boeing and jointly agree,
to the extent that they may lawfully do so, to adjust equitably the Purchase
Price of any affected Engine(s) to reflect an allowance for increases in labor,
material and fuel costs that occurred from December, 1994 to the seventh month
preceding the month of scheduled delivery of the applicable Aircraft.
NOTES: Any rounding of a number, as required under this Exhibit D with
respect to escalation of the Engine price, will be accomplished as
follows: if the first digit of the portion to be dropped from the
number to be rounded is five or greater, the preceding digit will
be raised to the next higher number.
P.A. No. 1910 D-7
K/TWA
<PAGE> 100
1910K/TWATrans World Airlines, Inc.
BUYER FURNISHED EQUIPMENT PROVISIONS DOCUMENT
between
THE BOEING COMPANY
and
TRANS WORLD AIRLINES, INC.
Exhibit E to Purchase Agreement Number 1910
P.A. No. 1910 E
K/TWA
<PAGE> 101
BUYER FURNISHED EQUIPMENT PROVISIONS DOCUMENT
Dated ________________
Relating to
BOEING MODEL 757 AIRCRAFT
________________
This Buyer Furnished Equipment Provisions Document is Exhibit E to
and forms a part of Purchase Agreement No. 1910, between The Boeing Company
(Boeing) and Trans World Airlines, Inc. (Buyer) relating to the purchase of
Boeing Model 757-231 aircraft.
P.A. No. 1910 E
K/TWA (I)
<PAGE> 102
BUYER FURNISHED EQUIPMENT PROVISIONS DOCUMENT
1. General.
Certain equipment to be installed in the Aircraft is furnished to
Boeing by Buyer at Buyer's expense. This equipment is designated "Buyer
Furnished Equipment" (BFE) and is listed in the Detail Specification. On or
before May 24, 1996, Boeing will provide to Buyer a BFE Requirements
On-Dock/Inventory Document (BFE Document) or an electronically transmitted BFE
Report which may be periodically revised, setting forth the items, quantities,
on-dock dates and shipping instructions relating to the in sequence installation
of BFE. For planning purposes, a preliminary BFE on-dock schedule is set forth
in the attachment to this Exhibit.
2. Supplier Selection.
Buyer will:
2.1 Select and notify Boeing of the suppliers of
the following BFE items by the following dates:
Galley System Galley System
Already Selected
Seats (passenger) Seat System
Already Selected
Video Video System
Already Selected
2.2 Meet with Boeing and such selected BFE
suppliers promptly after such selection to:
2.2.1 complete BFE configuration design
requirements for such BFE; and
2.2.2 confirm technical data submittal
dates for BFE certification.
P.A. No. 1910 E-1
K/TWA
<PAGE> 103
3. Buyer's Obligations.
Buyer will:
3.1 comply with and cause the supplier to comply
with the provisions of the BFE Document or BFE Report;
3.1.1 deliver technical data (in English)
to Boeing as required to support installation and FAA certification in
accordance with the schedule provided by Boeing or as mutually agreed upon
during the BFE meeting referred to above;
3.1.2 deliver BFE including production
and/or flight training spares to Boeing in accordance with
the quantities and schedule provided therein; and
3.1.3 deliver appropriate quality assurance
documentation to Boeing as required with each BFE part
(D6-56586, "BFE Product Acceptance Requirements");
3.2 authorize Boeing to discuss all details of
the BFE directly with the BFE suppliers;
3.3 authorize Boeing to conduct or delegate to
the supplier quality source inspection and supplier
hardware acceptance of BFE at the supplier location;
3.3.1 require supplier's contractual
compliance to Boeing defined source inspection and supplier delegation programs,
including availability of adequate facilities for Boeing resident personnel; and
3.3.2 assure that Boeing identified
supplier's quality systems be approved to Boeing document
D1-9000;
3.4 provide necessary field service
representation at Boeing's facilities to support Boeing on
all issues related to the installation and certification
of BFE;
3.5 deal directly with all BFE suppliers to obtain overhaul
data, provisioning data, related product support documentation and any warranty
provisions applicable to the BFE;
3.6 work closely with Boeing and the BFE
suppliers to resolve any difficulties, including defective
equipment, that arise;
3.7 be responsible for modifying, adjusting
and/or calibrating BFE as required for FAA approval and
for all related expenses;
P.A. No. 1910 E-2
K/TWA
<PAGE> 104
3.8 warrant that the BFE will meet the requirements of the Detail
Specification; and
3.9 be responsible for providing equipment which is FAA certifiable
at time of Aircraft delivery, or for obtaining waivers from the applicable
regulatory agency for non-FAA certifiable equipment.
4. Boeing's Obligations.
Other than as set forth below, Boeing will provide for the
installation of and install the BFE and obtain certification of the Aircraft
with the BFE installed.
5. Nonperformance by Buyer.
If Buyer's nonperformance of obligations in this Exhibit or in the
BFE Document causes a delay in the delivery of the Aircraft or causes Boeing to
perform out-of-sequence or additional work, Buyer will reimburse Boeing for all
resulting expenses and be deemed to have agreed to any such delay in Aircraft
delivery. In addition Boeing will have the right to:
5.1 work closely with Buyer to mitigate the damages to Buyer
resulting from the nonperformance by Buyer;
5.2 provide and install specified equipment or suitable alternate
equipment and increase the price of the Aircraft accordingly; and/or
5.3 deliver the Aircraft to Buyer without the BFE installed.
6. Return of Equipment.
BFE not installed in the Aircraft will be returned to Buyer in
accordance with Buyer's instructions and at
Buyer's expense. Such equipment returned to Buyer will be returned in a mutually
agreeable time period.
P.A. No. 1910 E-3
K/TWA
<PAGE> 105
7. Title and Risk of Loss.
Title to and risk of loss of BFE will at all times remain with
Buyer or other owner. Boeing will have only such liability for BFE as a bailee
for mutual benefit would have, but will not be liable for loss of use.
8. Indemnification of Boeing.
Buyer hereby indemnifies and holds harmless Boeing from and against
all claims and liabilities, including costs and expenses (including attorneys'
fees) incident thereto or incident to successfully establishing the right to
indemnification, for injury to or death of any person or persons, including
employees of Buyer but not employees of Boeing, or for loss of or damage to any
property, including any Aircraft, arising out of or in any way connected with
any nonconformance or defect in any BFE and whether or not arising in tort or
occasioned in whole or in part by the active, passive or imputed negligence of
Boeing. This indemnity will not apply with respect to any nonconformance or
defect caused solely by Boeing's installation of the BFE.
9. Patent Indemnity.
Buyer hereby indemnifies and holds harmless Boeing from and against
all claims, suits, actions, liabilities, damages and costs arising out of any
actual or alleged infringement of any patent or other intellectual property
rights by BFE or arising out of the installation, sale or use of BFE by Boeing.
10. Definitions.
For the purposes of the above indemnities, the term "Boeing"
includes The Boeing Company, its divisions, subsidiaries and affiliates, the
assignees of each, and their directors, officers, employees and agents.
P.A. No. 1910 E-4
K/TWA
<PAGE> 106
Attachment A to
Exhibit E
BOEING MODEL 757-200 AIRCRAFT
Item Preliminary On-Dock Dates
February 1997
Aircraft
Seats - December 5, 1996
Galleys - November 19, 1996
Electronics - November 12, 1996
Furnishings - November 6, 1996
P.A. No. 1910 E
K/TWA A-1
<PAGE> 107
1910K/TWATrans World Airlines, Inc.
DEFINED TERMS DOCUMENT
between
THE BOEING COMPANY
and
TRANS WORLD AIRLINES, INC.
Exhibit F to Purchase Agreement Number 1910
P.A. No. 1910 F
K/TWA
<PAGE> 108
DEFINED TERMS DOCUMENT
Dated _________________
Relating to
BOEING MODEL 757-200 AIRCRAFT
_________________
This Document is Exhibit F to and forms a part of Purchase
Agreement No. 1910 (Agreement) between The Boeing Company (Boeing) and Trans
World Airlines, Inc. (Buyer) relating to the purchase of Boeing Model 757-231
aircraft.
The following is a list of those terms and their definitions as
used and not otherwise defined in this Agreement. Such terms are identified in
the Agreement by the use of an initial capital letter.
P.A. No. 1910 F
K/TWA
(I)
<PAGE> 109
DEFINED TERMS DOCUMENT
EXHIBIT F TO AGREEMENT NO. 1910
<TABLE>
<CAPTION>
TERM DEFINITION FIRST REFERENCE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Advance Payment Boeing's estimate of the Article 3
Base Price Aircraft Price is set
forth in Article 3.
Agreement Purchase Agreement Opening paragraph
No. 1910, including all of the Agreement
Exhibits, the Detail Specification,
attachments, letter agreements and other
written modifications and amendments
thereto.
Aircraft (includes The aircraft described in Article 1,
"the", "all", Article 1, Para. 1.1. Para. 1.1
"first", "last"
"such", /the "Block
A Aircraft"/ /the
"Block B Aircraft"/
etc.)
Aircraft Basic The amount set forth in Article 3, Para.
Price Article 3, Para. 3.1.4. 3.1.4
Aircraft Price The total amount Buyer is Article 3, Para.
to pay for an Aircraft 3.1.6
which is described in
Article 3, Para. 3.1.6.
Aircraft Software The computer software Exhibit B,
included with the Part D-1, Para 1
Aircraft when the Aircraft is delivered
by Boeing, described in Exhibit B, Part
D-1, Para. 1.
Airframe Component A component described in Exhibit B Part C
Exhibit B, Part C, Para. 1.1 Para. 1.1
Article An Article of the Article 6, Para.
Agreement. 6.4
Base Airframe Price The airframe price Article 3,
described in Article 3,
Para. 3.1.2. Para. 3.1.2/
Boeing The Seller of the Opening paragraph
Aircraft identified in of the Agreement
the opening paragraph of
the Agreement.
Boeing Warranty Part A of Exhibit B to Exhibit B, Part A,
the Agreement. Para. 1
Buyer The purchaser of the Opening paragraph
Aircraft identified in of the Agreement
the opening paragraph of
the Agreement.
</TABLE>
P.A. No. 1910 F-1
K/TWA
<PAGE> 110
DEFINED TERMS DOCUMENT
EXHIBIT F TO AGREEMENT NO. 1910
<TABLE>
<CAPTION>
TERM DEFINITION FIRST REFERENCE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Buyer Furnished Equipment provided by Article 4.1
Equipment or BFE Buyer pursuant to Exhibit
E for installation by Boeing on the
Aircraft.
Buyer Furnished Document provided by Article 13, Para.
Equipment Document Boeing to Buyer defining 13.1
requirements for BFE.
Exhibit E, Para. 1.
Certificate of The certificate issued by Article 8, Para.
Airworthiness the FAA pursuant to Part 8.1.1.2
21 of the Federal Aviation Regulations
for the type of Aircraft purchased under
this Agreement as described in Article 8.
Change Order A change to the Detail Article 7, Para.
Specification, as 7.2/
described in Article 7,
Para. 7.2.
Covered Component An Airframe Component as Exhibit B Part C
described in Exhibit B, Para. 1.4
Part C, Para. 1.4.
Customer Support Exhibit C to the Article 12, Para.
Document Agreement. 12.5
Customer Support The Boeing services, Article 12, Para.
Services training and other 12.5
obligations described in
Exhibit C to the
Agreement.
Deposit The money paid by Buyer Article 5, Para.
to Boeing as part of the 5.1
acceptance of the
Aircraft proposal.
Detail The Boeing document that Article 1, Para.
Specification describes the 1.1
specifications of the Aircraft modified
from time to time to include
developmental and Buyer requested
changes.
Development Changes to the basic Article 7, Para.
Change(s) specification that do not 7.1
affect price, delivery,
guaranteed weight,
performance or
interchangeability as
described in Article 7,
Para. 7.1.
</TABLE>
P.A. No. 1910 F-2
K/TWA
<PAGE> 111
DEFINED TERMS DOCUMENT
EXHIBIT F TO AGREEMENT NO. 1910
<TABLE>
<CAPTION>
TERM DEFINITION FIRST REFERENCE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Disclaimer and The disclaimer and Article 12,
Release Release set forth in Para. 12.2
Article 12, Para. 12.2.
Documents The data and documents Exhibit C, Part D
provided by Boeing under Para. 2
the Agreement.
Economic Price Article 3, Para. 3.1.5./ Article 3,
Adjustment
Para. /3.1.5/
/3.1.4/
Engine(s) The engines installed on Article 3,
the Aircraft as described Para. 3.1.2
in the Detail
Specification.
Engine Price The price of the Engines Article 3, Para.
installed on the Aircraft 3.1.3
set forth in Exhibit D,
including all
accessories, equipment
and parts therefor
provided by the Engine
manufacturer.
Engine Price The adjustment to the Article 3 Para.
Adjustment Engine Price as required 3.1.2
by Article 3,
Para. 3.1.2, and as
calculated pursuant to
Exhibit D.
Excusable Delay A delay resulting from Article 6, Para.
any of the causes 6.1
described in Article 6,
Para. 6.1.
FAA The Federal Aviation Article 8, Para.
Administration of the 8.1.1
Department of
Transportation of the
United States, including
the Administrator of the
Federal Aviation
Administration, the
National Transportation
Safety Board and any
other authority or agency
of the Federal Government
of the United States
having like jurisdiction.
Failed Component A component as described Exhibit B Part C
in Exhibit B, Part C, Para. 1.6
Para. 1.6.
</TABLE>
P.A. No. 1910 F-3
K/TWA
<PAGE> 112
DEFINED TERMS DOCUMENT
EXHIBIT F TO AGREEMENT NO. 1910
<TABLE>
<CAPTION>
TERM DEFINITION FIRST REFERENCE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Failure Any breakage or defect as Exhibit B Part C
described in Exhibit B, Para. 1.5
Part C, Para. 5.
Federal Aviation The United States Federal Article 8, Para.
Regulations Aviation Regulations and, 8.1.1.1
if they are redesignated
or discontinued, any
comparable regulations or
parts thereof issued by
the FAA.
Field Service(s) Boeing-provided services Exhibit C, Part B,
as described in Exhibit Para. 2
C, Part B, Para. 2.
Field Service The length of time Boeing Exhibit C, Part B,
Period provides Field Service to Para. 2.1
Buyer as described in Exhibit C, Part B,
Para. 2.1.
Flight Training A planning conference as Exhibit C, Part C,
Planning Conference described in Exhibit C, Para. 2
Part C, Para. 2.
Flight Training The program of flight Exhibit C, Part C,
Program training described in Para. 3
Exhibit C, Part C, Para. 3.
Interface Problem A technical problem Exhibit B, Part G,
attributed to the design Para. 1
characteristics of the
Aircraft or its systems, as described in
Exhibit B, Part G, Para. 1.
Landing Gear A component as described Exhibit B Part C
Component in Exhibit B, Part C, Para. 1.2
Para. 1.2.
Maintenance A planning conference as Exhibit C, Part A,
Training Planning described in Exhibit C, Para. 2
Conference Part A, Para. 2.
Maintenance The program of training Exhibit C, Part A,
Training Program described in Exhibit C, Para. 3
Part A, Para. 3.
Major Damage Damage described in Exhibit C Part C
Exhibit C, Part C, Para. 11.3 Para. 11.3
Manufacturer A change to the Aircraft Article 8, Para.
Change(s) or performance required 8.2.1
of Boeing as described in
Article 8, Para. 8.2.1.
</TABLE>
P.A. No. 1910 F-4
K/TWA
<PAGE> 113
DEFINED TERMS DOCUMENT
EXHIBIT F TO AGREEMENT TO 1910
<TABLE>
<CAPTION>
TERM DEFINITION FIRST REFERENCE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operator Change(s) A change to the Aircraft Article 8, Para.
described in Article 8, 8.3.1
Para. 8.3.1.
Performance The written guarantees Article 1, Para.
Guarantees regarding the operational 1.3
performance of the
Aircraft set forth in the Agreement or
the Detail Specification.
Policy (Boeing Exhibit B, Part C, Para. 2. Exhibit B, Part C,
Service Life Policy) Article 3, Para. 3.1.7. Para. 2
Price First Article 3,
Published
Para. 3.1.7
Product Assurance Exhibit B of the Article 12, Para.
Document Agreement. 12.1
Revenue Service Flight Training conducted Exhibit C, Part C,
Training on the Aircraft during Para. 8
revenue service with cargo and/or
passengers on board, as described in
Exhibit C, Part C, Para. 8.
Software A listing of components Exhibit C, Part D,
Documentation and equipment referred to Para. 3.3.6
in Exhibit C, Part D,
Para. 3.3.6.
Spare Component A component as described Exhibit B Part C
in Exhibit B, Part C, Para. 1.3
Para. 1.3.
Special Features Article 3, Para. 3.1.1. Article 3,
Para. 3.1.1
Standard A certificate issued by Article 8, Para.
Airworthiness the FAA, pursuant to Part 8.1.1.2
Certificate 21 of the Federal Aviation Regulations
as described in Article 8, Para.
8.1.1.2.
Target Delivery A non binding estimated Article 2,
Date delivery date provided Para. 2.2
for Buyer's planning
purposes, described in
Article 2.
Taxes The term "Taxes" defined Article 2, Para.
in Article 4, Para. 4.1. 2.3
</TABLE>
P.A. No. 1910 F-5
K/TWA
<PAGE> 114
DEFINED TERMS DOCUMENT
EXHIBIT F TO AGREEMENT NO. 1910
<TABLE>
<CAPTION>
TERM DEFINITION FIRST REFERENCE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Type Certificate A certificate issued by Article 8,
the FAA pursuant to Part Para. 8.1.1.1
21 of the Federal
Aviation Regulations
described in Article 8,
Para. 8.1.1.1.
Warranty Labor Rate The hourly labor rate Exhibit B, Part B,
defined in Exhibit B, Para. 5.3
Part B, Para. 5.3.
</TABLE>
P.A. No. 1910 F-6
K/TWA
<PAGE> 115
1910-1
Trans World Airlines, Inc.
One City Centre
515 N. Sixth Street
19th Floor
St. Louis, Missouri 63101
Subject: Letter Agreement No. 1910-1 to
Purchase Agreement No. 1910-
Seller Purchased Equipment
This Letter Agreement amends Purchase Agreement No. 1910 dated of even date
herewith (the Agreement) between The Boeing Company (Boeing) and Trans World
Airlines, Inc. (Buyer) relating to Model 757-231 aircraft (the Aircraft).
For purposes of this Letter Agreement the following definitions apply:
Seller Purchased Equipment (SPE) is Buyer Furnished Equipment (BFE) that Boeing
purchases for Buyer.
Developmental Buyer Furnished Equipment (DBFE) is all BFE not previously
certified for installation on the same model aircraft.
Developmental Seller Purchased Equipment (DSPE) is DBFE which is converted to
SPE. This Letter Agreement does not include developmental avionics.
Developmental avionics are avionics that have not been previously certified for
installation on the same model aircraft.
All other terms used herein and in the Agreement, and not defined above, will
have the same meaning as in the Agreement.
Buyer may request that Boeing purchase as SPE the BFE which has been changed to
SPE by Change Request. In such event, Boeing and Buyer agree as follows:
<PAGE> 116
1910-1
Page 2
1. Price.
Aircraft Price. The Aircraft Price will be adjusted to reflect (i)
the actual costs charged Boeing by the SPE suppliers, (ii) a handling fee of 10%
of such costs and (iii) transportation charges. If all DBFE, except for
developmental avionics, is converted to SPE, Boeing will waive the handling fee
for all SPE.
2. Responsibilities.
2.1 Buyer is responsible for:
(i) selecting a FAA certifiable part;
and
(ii) providing to Boeing the SPE part
specification/Buyer requirements.
2.2. Boeing is responsible for:
(i) placing and managing the purchase
order with the supplier;
(ii) coordinating with the suppliers
on technical issues;
(iii) ensuring that the delivered SPE
complies with the part specification;
(iv) obtaining certification of the
Aircraft with the SPE installed; and
(v) obtaining for Buyer the
supplier's standard warranty for the SPE. SPE is deemed to be BFE for purposes
of Exhibit B, the Product Assurance Document, of the Agreement.
3. Changes.
After this Letter Agreement is signed, changes to SPE may only be
made by and between Boeing and the suppliers. Buyer's contacts with SPE
suppliers relating to design (including selection of materials
<PAGE> 117
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Page 3
and colors), weights, prices or schedules are for informational purposes only.
If Buyer wants changes made to any of the above, requests must be made directly
to Boeing for negotiating with the supplier.
4. Proprietary Rights.
Boeing's obligation to purchase SPE will not impose upon Boeing any
obligation to compensate Buyer or any supplier for any proprietary rights Buyer
may have in the design of the SPE.
5. Remedies.
If Buyer does not comply with the obligations above, Boeing may:
(i) delay delivery of the Aircraft;
(ii) deliver the Aircraft without installing
the SPE;
(iii) substitute a comparable part and
invoice Buyer for the cost;
(iv) increase the Aircraft Price by the
amount of Boeing's additional costs attributable to such noncompliance.
6. Buyer's Indemnification of Boeing.
Buyer will indemnify and hold harmless Boeing from and against all
claims and liabilities, including costs and expenses (including attorneys' fees)
incident thereto or incident to successfully establishing the right to
indemnification, for injury to or death of any person or persons, including
employees of Buyer but not employees of Boeing, or for loss of or damage to any
property, including Aircraft, arising out of or in any way connected with any
non conformance or defect in any SPE and whether or not arising in tort or
occasioned in whole or in part by the negligence of Boeing, whether active,
passive or imputed. This indemnity will not
<PAGE> 118
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Page 4
apply with respect to any non conformance or defect caused solely by Boeing's
installation of the SPE.
Very truly yours,
THE BOEING COMPANY
By
---------------------
Its Attorney-In-Fact
---------------------
ACCEPTED AND AGREED TO as of this
Date: , 1996
---------------
TRANS WORLD AIRLINES, INC.
By
---------------------
Its
---------------------
<PAGE> 119
1910-2
Trans World Airlines, Inc.
One City Centre
515 N. Sixth Street
19th Floor
St. Louis, Missouri 63101
Subject: Letter Agreement No. 1910-2 to
Purchase Agreement No. 1910-
Spares Initial Provisioning
This Letter Agreement amends Purchase Agreement No. 1910 dated of even date
herewith (the Agreement) between The Boeing Company (Boeing) and Trans World
Airlines, Inc. (Buyer) relating to Model 757-231 aircraft.
Reference is also made to Purchase Agreement No. 1771, dated December 15, 1992,
between The Boeing Company (Boeing) and International Lease Finance Corporation
(Lessor) under which Lessor purchased Boeing Model 757-200 aircraft, including
aircraft leased to Buyer. Reference is also made to that certain Aircraft Lease
Agreement between Buyer and Lessor, under which Lessor agreed to lease the
aircraft to Buyer.
The aircraft purchased direct from Boeing by Buyer and the aircraft leased by
Buyer from Lessor are collectively referred to as the Aircraft (the Aircraft).
All terms used herein and in the Purchase Agreement, and not defined herein,
will have the same meaning as in the Agreement.
1. Applicability.
This letter will apply to initial provisioning for the 757-200
Aircraft covered by the Agreement and under lease by Buyer from Lessor.
2. Initial Provisioning Meeting.
Boeing will conduct an initial provisioning meeting (Initial
Provisioning Meeting) with Buyer to establish mutually agreeable procedures to
accomplish Buyer's initial provisioning of spare parts for the Aircraft. The
parties will agree, during the Initial
<PAGE> 120
1910-2
Page 2
Provisioning Meeting on the operational data to be provided by Buyer for
Boeing's use in preparing its quantity recommendations for initial provisioning
of spare parts for the Aircraft, exclusive of special tools, ground support
equipment, engines and engine parts (Provisioning Items). Such operational data
to be provided by Buyer will be the data described in Section E of Boeing Manual
D6-49090, entitled "Initial Provisioning Implementation Manual, Boeing Model
757, 767, 777, 747-400 and 737-300, -400 and - 500" (Boeing Initial Provisioning
Implementation Manual) which will be furnished to Buyer prior to the Initial
Provisioning Meeting. The parties will also agree on the provisioning
documentation to be provided by Boeing. Such data will be essentially in
accordance with the provisions of Chapter 1 of ATA International Specification
2000, Revision 1, dated April 20, 1989, as described in Boeing Initial
Provisioning Implementation Manual D6-49090 (such data will be hereinafter
referred to collectively as the "Provisioning Data"). Boeing will provide
instruction in the use of the initial provisioning documentation. This
instruction will be provided in conjunction with the Initial Provisioning
Meeting. In addition, the parties will discuss spares ordering procedures and
other matters related to the provisioning for the Aircraft. The time and
location for such Initial Provisioning Meeting will be mutually agreed upon
between the parties; however, Boeing and Buyer will use their best efforts to
convene such meeting within 30 days after execution of the Agreement.
3. Initial Provisioning Documentation.
3.1 Provisioning Data. Boeing will furnish Provisioning Data to
Buyer on or about March 1, 1996. The Provisioning Data will be as complete as
possible and will cover Provisioning Items selected by Boeing for review by
Buyer for initial provisioning for the Aircraft. The Provisioning Data will set
forth the prices for Provisioning Items which are Boeing Spare
Parts and such prices will be firm and remain in effect until the date or dates
set forth in Paragraph 4.1, Boeing Spare Parts, by which orders must be placed
with Boeing. Boeing will, from time to time, until a date approximately 90 days
following delivery of the last Aircraft or until the delivery configuration of
each of the Aircraft is reflected in the Provisioning Data, whichever is later,
furnish to Buyer revisions to the Provisioning Data.
3.2 Provisioning IPC. Boeing will, on or about April 28, 1996,
furnish to Buyer a Boeing Illustrated Parts Catalog (IPC), hereinafter referred
to as the "Provisioning IPC." The Provisioning IPC
<PAGE> 121
1910-2
Page 3
will be as complete as possible and will cover Provisioning Items selected by
Boeing for review by Buyer for initial provisioning for the Aircraft. Boeing
will, from time to time, until a date approximately 90 days following delivery
of the last Aircraft, or until the delivery configuration of each of the
Aircraft is reflected in the Provisioning IPC, whichever is later, furnish to
Buyer revisions to the Provisioning IPC.
3.3 Buyer Furnished Equipment (BFE)
Provisioning Data.
3.3.1 Boeing's Responsibility. Boeing
will include BFE end items in the Provisioning Data and Provisioning IPC for BFE
installed on Buyer's Aircraft provided such equipment has been installed on
other Aircraft by Boeing and Boeing has data on the BFE.
3.3.2 Buyer's Responsibility. Buyer
will be responsible for ensuring BFE data is provided to Boeing by the BFE
supplier in a format acceptable to Boeing for BFE not covered by 3.3.1 above. If
the data is not provided to Boeing in a timely manner and in a format acceptable
to Boeing, such BFE equipment will not be included in Boeing's Provisioning Data
or IPC.
3.4 Other Data. Boeing will submit to
Buyer listings of Raw Materials, Standard Parts and Bulk Materials to be used by
Buyer in the maintenance and repair of the Aircraft.
4. Purchase from Boeing of Spare Parts as Initial
Provisioning for the Aircraft.
4.1 Boeing Spare Parts. Buyer will place orders, as required, for
Provisioning Items by May 15, 1996; provided, however, that in those instances
where Boeing submits any revision to the Provisioning Data, Buyer will place
orders for Boeing Spare Parts covered by such revision within 60 days following
the date of such submittal. At Buyer's request, Boeing will process "controlled
shipments" by shipping full or partial quantities of an order on a schedule
specified by Buyer, provided the final shipment is made no later than 24 months
after receipt of the order.
4.2 Vendor Provisioning Items. Buyer may place orders with Boeing
for Provisioning Items which are manufactured by vendors or to their detailed
design and are covered by the Provisioning Data as initial provisioning for the
Aircraft. The price to Buyer for any such vendor Provisioning Item will be 112%
of the vendor's quoted price to Boeing therefor. If Buyer elects to purchase
such vendor Provisioning Items from
<PAGE> 122
1910-2
Page 4
Boeing, Buyer will place its orders therefor in accordance with the provisions
of Paragraph 4.1, Boeing Spare Parts.
4.3 Ground Support Equipment and Special Tools. Buyer may place
orders with Boeing for ground support equipment (GSE) and special tools
manufactured by vendors which Buyer determines it will initially require for
maintenance, overhaul and servicing of the Aircraft and/or engines. The price to
Buyer for such GSE or special tools will be one hundred twelve percent (112%) of
the vendor's quoted price to Boeing therefor. If Buyer elects to purchase such
GSE and special tools from Boeing, Buyer will place its orders therefor by the
date set forth in Paragraph 4.1, Boeing Spare Parts or such later date as the
parties may mutually agree.
4.4 Spare Engines and Engine Spare Parts. Buyer may place orders
with Boeing for spare engines and/or engine spare parts which Buyer determines
it will initially require for support of the Aircraft or for maintenance and
overhaul of the engines. The price to Buyer for such spare engines or such
engine spare parts, will be 105% of the engine manufacturer's quoted price to
Boeing for the engine, and 112% of the engine manufacturer's quoted price to
Boeing for the engine spare parts. If Buyer elects to purchase such spare
engines or engine spare parts through Boeing, Buyer will place its orders on a
date to be mutually agreed upon during the Initial Provisioning Meeting.
4.5 QEC Kits. Boeing will, on or about March 15, 1996, furnish to
Buyer a listing of all components which could be included in the Quick Engine
Change (QEC) kits which may be purchased by Buyer from Boeing. Buyer agrees to
review such listing and indicate by marking on one copy of such listing those
components that Buyer desires included in its QEC kits. Buyer will return such
marked copy to Boeing within 30 days after Buyer's receipt of such listing.
Within 30 days after Boeing's receipt of such marked copy, Boeing will republish
such listing to reflect only those components selected by Buyer and will provide
copies of such republished listing to Buyer. Boeing will from time to time
furnish revisions to such republished listing until a date approximately 90 days
after delivery of the last QEC kit ordered by Buyer for the Aircraft. Boeing
will furnish to Buyer as soon as practicable a statement setting forth a firm
price for the QEC kit configuration selected by Buyer. Buyer agrees to place
orders with Boeing for QEC kits by a minimum of sixty days prior to the date the
QEC kits are required on dock by Buyer.
4.6 Payment for Provisioning Items. The
<PAGE> 123
1910-2
Page 5
payment provisions of the General Terms Agreement between Boeing and Buyer will
be applicable to Provisioning Items ordered by Buyer from Boeing for the
Aircraft.
5. Delivery.
Boeing will, insofar as reasonably possible, deliver to Buyer the
Spare Parts ordered by Buyer in accordance with the provisions of this letter on
dates reasonably calculated to conform to Buyer's anticipated needs in view of
the scheduled deliveries of the Aircraft. Buyer and Boeing will agree upon the
date to begin delivery of the Provisioning Spare Parts ordered in accordance
with this letter. Where appropriate, Boeing will arrange for shipment of such
Spare Parts, which are manufactured by vendors, directly to Buyer from the
applicable vendor's facility. The routing and method of shipment for initial
deliveries and all subsequent deliveries of such Spare Parts will be as mutually
agreed between Boeing and Buyer.
6. Substitution for Obsolete Spare Parts.
6.1 Obligation to Substitute. In the event that, prior to delivery
of the first Aircraft pursuant to the Agreement, any Spare Part purchased by
Buyer from Boeing in accordance with this letter is rendered obsolete or
unusable due to the redesign of the Aircraft or of any accessory, equipment or
part therefor, (other than a redesign at Buyer's request), Boeing will deliver
to Buyer new and usable Spare Parts in substitution for such obsolete or
unusable Spare Parts and Buyer will return the obsolete or unusable Spare Parts
to Boeing. Boeing will credit Buyer's account with Boeing with the price paid by
Buyer for any such obsolete or unusable Spare Part and will invoice Buyer for
the purchase price of any such substitute Spare Part delivered to Buyer.
6.2 Delivery of Obsolete Spare Parts and Substitutes Therefor.
Obsolete or unusable Spare Parts returned by Buyer pursuant to this Item will be
delivered to Boeing at its Seattle Distribution Center, or such other
destination as Boeing may reasonably designate. Spare Parts substituted for such
returned obsolete or unusable Spare Parts will be delivered to Buyer at Boeing's
Seattle Distribution Center, or such other Boeing shipping point as Boeing may
reasonably designate. Boeing will pay the freight charges for the shipment from
Buyer to Boeing of any such obsolete or unusable Spare Part and for the shipment
from Boeing to Buyer of any such substitute Spare Part.
7. Repurchase of Provisioning Items.
<PAGE> 124
1910-2
Page 6
7.1 Obligation to Repurchase. During a period commencing 1 year
after delivery of the first Aircraft under the Agreement, and ending 5 years
after such delivery, Boeing will, upon receipt of Buyer's written request and
subject to the exceptions in Paragraph 7.2, Exceptions, repurchase unused and
undamaged Provisioning Items which (i) were recommended by Boeing in the
Provisioning Data as initial provisioning for the Aircraft, (ii) were purchased
by Buyer from Boeing, and (iii) are surplus to Buyer's needs.
7.2 Exceptions. Boeing will not be obligated under Paragraph 7.1,
Obligation to Repurchase, to repurchase any of the following: (i) quantities of
Provisioning Items in excess of those quantities recommended by Boeing in the
Provisioning Data for the Aircraft, (ii) QEC Kits, Bulk Material Kits, Raw
Material Kits, Service Bulletin Kits, Standards Kits and components thereof
(except those components listed separately in the Provisioning Data), (iii)
Provisioning Items for which an Order was received by Boeing more than 5 months
after delivery of the last Aircraft, (iv) Provisioning Items which have become
obsolete or have been replaced by other Provisioning Items as a result of (a)
Buyer's modification of the Aircraft or (b) design improvements by Boeing or the
vendor (other than Provisioning Items which have become obsolete because of a
defect in design if such defect has not been remedied by an offer by Boeing or
the vendor to provide no charge retrofit kits or replacement parts which correct
such defect), and (v) Provisioning Items which become excess as a result of a
change in Buyer's operating parameters, provided to Boeing pursuant to the
Initial Provisioning meeting in Paragraph 2, which were the basis of Boeing's
initial provisioning recommendations for the Aircraft.
7.3 Notification and Format. Buyer will notify Boeing, in writing,
when Buyer desires to return Provisioning Items which Buyer's review indicates
are eligible for repurchase by Boeing under the provisions of this Repurchase of
Provisioning Items paragraph. Buyer's notification will include a detailed
summary, in part number sequence, of the Provisioning Items Buyer desires to
return. Such summary will be in the form of listings, tapes, diskettes or
other media as may be mutually agreed between Boeing and Buyer, and will
include part number, nomenclature, purchase order number, purchase order date
and quantity to be returned. Within 5 business days after receipt of Buyer's
notification, Boeing will advise Buyer, in writing, when Boeing's review of
such summary will be completed.
<PAGE> 125
1910-2
Page 7
7.4 Review and Acceptance by Boeing. Upon completion of Boeing's
review of any detailed summary submitted by Buyer pursuant to Paragraph 7.3,
Boeing will issue to Buyer a Material Return Authorization (MRA) for those
Provisioning Items Boeing agrees are eligible for repurchase in accordance with
this Repurchase of Provisioning Items paragraph. Boeing will advise Buyer of the
reason that any spare part included in Buyer's detailed summary is not eligible
for return. Boeing's MRA will state the date by which Provisioning Items listed
in the MRA must be redelivered to Boeing and Buyer will arrange for shipment of
such Provisioning Items accordingly.
7.5 Price and Payment. The price of each Provisioning Item
repurchased by Boeing pursuant to this Repurchase of Provisioning Items
paragraph will be an amount equal to 100% of the original invoice price thereof.
In the case of Provisioning Items manufactured by a vendor which were purchased
pursuant to Paragraph 4, Purchase from Boeing of Spare Parts as Initial
Provisioning for the Aircraft, hereof the repurchase price will not include
Boeing's 12% handling charge. Boeing will pay the repurchase price by issuing a
credit memorandum in favor of Buyer which may be applied against amounts due
Boeing for the purchase of aircraft, Spare Parts, services or data.
7.6 Delivery of Provisioning Items. Provisioning Items repurchased
by Boeing pursuant to this Repurchase of Provisioning Items paragraph will be
delivered to Boeing F.O.B. at its Seattle Distribution Center, or such other
destination as Boeing may reasonably designate. Buyer will pay the freight
charges for the shipment from Buyer to Boeing of any such Provisioning Items.
8. Obsolete Spare Parts and Surplus Provisioning
Items - Title and Risk of Loss.
Title to and risk of loss of any obsolete or unusable Spare Parts
returned to Boeing pursuant to Paragraph 6, Substitution for Obsolete Spare
Parts, will pass to Boeing upon delivery thereof to Boeing. Title to and risk of
loss of any Spare Part substituted for an obsolete or unusable Spare Part
pursuant to Paragraph 6, Substitution for Obsolete Spare Parts, will pass to
Buyer upon delivery thereof to Buyer. Title to and risk of loss of any
Provisioning Item repurchased by Boeing pursuant to Paragraph 7, Repurchase of
Provisioning Items, will pass to Boeing upon delivery thereof to Boeing. With
respect to the obsolete or unusable Spare Parts which may be returned to Boeing
and the Spare Parts substituted therefore, pursuant to Paragraph 6, and the
Provisioning Items
<PAGE> 126
1910-2
Page 8
which may be repurchased by Boeing, pursuant to Paragraph 7, the party
which has risk of loss of any such Spare Part or Provisioning Item
will have the responsibility of providing any insurance coverage for it desired
by such party.
9. Supplier Support.
Boeing has entered, or anticipates entering, into product support
agreements with suppliers (Boeing Suppliers) of major system components
manufactured by such Suppliers to be installed on the Aircraft (Supplier
Components). Such product support agreements commit, or are expected to commit,
the Boeing Suppliers to provide to Boeing's Buyers and/or the Buyer's designees
support services with respect to the Supplier Components which can be reasonably
expected to be required during the course of normal operation. This support
includes but is not limited to shelf-stock of certain spare parts, emergency
spare parts, timely delivery of spare parts, and technical data related to the
Supplier Components. Copies of such product support agreements will be provided
to Buyer on or about March 1, 1996, in Boeing Document D6-56115, Volumes 1 and
2. In the event Buyer has used due diligence in attempting to resolve any
difficulty arising in normal business transactions between Buyer and a Boeing
Supplier with respect to product support for a Supplier Component manufactured
by such Supplier and if such difficulty remains unresolved, Boeing will, if
requested by Buyer, assist Buyer in resolving such difficulty. Assistance will
be provided by the Spares Supplier Support and Data Management Organization
within the Boeing Buyer Services Division.
In the event of termination of the Agreement
with respect to any Aircraft
(i) pursuant to Article 6.2 of the
Agreement, or
(ii) pursuant to Article 6.3 of the
Agreement
such termination will, if Buyer so requests by written notice received by Boeing
within 15 days after such termination, also discharge and terminate all
obligations and liabilities of the parties as to any
<PAGE> 127
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Spare Parts which Buyer had ordered pursuant to the Provisions of this letter as
initial provisioning for such Aircraft and which are undelivered on the date
Boeing receives such written notice.
Very truly yours,
THE BOEING COMPANY
By
-----------------------------------
Its Attorney-In-Fact
-----------------------------------
ACCEPTED AND AGREED TO this
Date: , 1996
------------------
TRANS WORLD AIRLINES, INC.
By
-----------------------------------
Its
-----------------------------------
<PAGE> 128
6-1162-RLL-1734
Trans World Airlines, Inc.
One City Centre
515 N. Sixth Street
19th Floor
St. Louis, Missouri 63101
Subject: Letter Agreement No. 6-1162-RLL-1734 to
Purchase Agreement No. 1910 -
Aircraft Performance Guarantees
This Letter Agreement amends Purchase Agreement No. 1910 (the Agreement) between
The Boeing Company (Boeing) and Trans World Airlines, Inc. (Buyer) relating to
the Model 757-231 aircraft (the Aircraft).
All terms used herein and in the Agreement, and not defined herein will have the
same meaning as in the Agreement.
1. AIRCRAFT PERFORMANCE GUARANTEES. The only performance guarantees applicable
to the Aircraft are those set forth in Attachment hereto. Such guarantees are
exclusive and will expire upon delivery of the Aircraft to Buyer.
2. CONFIDENTIAL TREATMENT. Buyer understands that certain commercial and
financial information contained in this Letter Agreement including any
attachments hereto is considered by Boeing as confidential. Buyer agrees that it
will treat this Letter Agreement and the information contained herein as
confidential and will not, without the prior written consent of Boeing, disclose
this Letter Agreement or any information
<PAGE> 129
6-1162-RLL-1734
page 2
contained herein to any other person or entity except as provided in Letter
Agreement 6-1162-RLL-1736.
Very truly yours,
THE BOEING COMPANY
By
-----------------------
Its Attorney-In-Fact
----------------------
ACCEPTED AND AGREED TO this
Date: , 1996
-------------------
Trans World Airlines, Inc.
By
-----------------------
Its
----------------------
Attachment
<PAGE> 130
Attachment to Letter Agreement
No. 6-1162-RLL-1734
Page 1
MODEL 757-231 PERFORMANCE GUARANTEES
<TABLE>
<CAPTION>
SECTION CONTENTS
------- --------
<S> <C>
1 AIRCRAFT MODEL APPLICABILITY
2 FLIGHT PERFORMANCE
3 MANUFACTURER'S EMPTY WEIGHT
4 AIRCRAFT CONFIGURATION
5 GUARANTEE CONDITIONS
6 GUARANTEE COMPLIANCE
7 EXCLUSIVE GUARANTEES
</TABLE>
<PAGE> 131
Attachment to Letter Agreement
No. 6-1162-RLL-1734
Page 2
1 AIRCRAFT MODEL APPLICABILITY
The guarantees contained in this Attachment (the "Performance
Guarantees") are applicable to the 757-231 Aircraft with a maximum
takeoff weight of 235,000 pounds and equipped with Boeing furnished
PW2037 engines.
2 FLIGHT PERFORMANCE
2.1 TAKEOFF
The FAA approved takeoff field length at a gross weight at the start
of the ground roll of 235,000 pounds, at a temperature of 87 degrees
F, at a sea level altitude and using maximum takeoff thrust, shall not
be more than the following guarantee value:
GUARANTEE: 7,250 Feet
2.2 LANDING
The FAA approved landing field length at a gross weight of 198,000
pounds and at a sea level altitude, shall not be more than the
following guarantee value:
GUARANTEE: 4,820 Feet
2.3 CRUISE FUEL MILEAGE
The cruise fuel mileage at a gross weight of 200,000 pounds on a
standard day, at an altitude of 35,000 feet, at 0.80 Mach number and
using not more than maximum cruise thrust, shall not be less than the
following guarantee value:
NOMINAL: 0.0650 Nautical Miles/Pound
TOLERANCE: -0.0013 Nautical Miles/Pound
GUARANTEE: 0.0637 Nautical Miles/Pound
<PAGE> 132
Attachment to Letter Agreement
No. 6-1162-RLL-1734
Page 3
3 MANUFACTURER'S EMPTY WEIGHT
The Manufacturer's Empty Weight (MEW) is guaranteed not to exceed the
value in Section 3-60-00 of Detail Specification D6-44010-96 plus one
percent.
4 AIRCRAFT CONFIGURATION
4.1 The guarantees contained in this Attachment are based on the Aircraft
configuration as defined in the original release of Detail
Specification D6-44010-96 (hereinafter referred to as the Detail
Specification). Appropriate adjustment shall be made for changes in
such Detail Specification approved by the Buyer and Boeing or
otherwise allowed by the Purchase Agreement which cause changes to the
flight performance, and/or weight and balance of the Aircraft. Such
adjustment shall be accounted for by Boeing in its evidence of
compliance with the guarantees.
4.2 The Manufacturer's Empty Weight guarantee of Section 3 will be
adjusted by Boeing for the following in its evidence of compliance
with the guarantees:
(1) Changes to the Detail Specification including Change Requests,
Master Changes, Change Orders or any other changes mutually agreed
upon between the Buyer and Boeing or otherwise allowed by the Purchase
Agreement.
(2) The difference between the component weight allowances given in
Appendix IV of the Detail Specification and the actual weights.
5 GUARANTEE CONDITIONS
5.1 All guaranteed performance data are based on the ICAO International
Standard Atmosphere (ISA) and specified variations therefrom;
altitudes are pressure altitudes.
5.2 The FAA Regulations (FAR) referred to in this Attachment are, unless
otherwise specified, the 757-200 Certification Basis regulations
specified
<PAGE> 133
Attachment to Letter Agreement
No. 6-1162-RLL-1734
Page 4
in the Type Certificate Data Sheet A2NM, Revision 3, dated December
30, 1986.
5.3 In the event a change is made to any law, governmental regulation or
requirement, or in the interpretation of any such law, governmental
regulation or requirement that affects the certification basis for the
Aircraft as described in Paragraph 5.2, and as a result thereof, a
change is made to the configuration and/or the performance of the
Aircraft in order to obtain certification, the guarantees set forth in
this Attachment shall be appropriately modified to reflect any such
change.
5.4 The takeoff and landing guarantees are based on hard surface, level
and dry runways with no wind or obstacle, no clearway or stopway, 225
mph tires, and with anti-skid operative unless otherwise specified.
The takeoff performance is based on no engine bleed for air
conditioning or thermal anti-icing and the Auxiliary Power Unit
(APU) turned off unless otherwise specified. The improved climb
performance procedure will be used for takeoff as required. The
landing performance is based on the use of automatic spoilers.
5.5 The cruise fuel mileage guarantee includes allowances for normal power
extraction and engine bleed for normal operation of the air
conditioning system. Normal electrical power extraction shall be
defined as not less than a 110 kilowatts total electrical load. Normal
operation of the air conditioning system shall be defined as pack
switches in the "Auto" position, the temperature control switches
in the "Auto" position that results in a nominal cabin temperature of
75 degrees F, and all air conditioning systems operating normally.
This operation allows a maximum cabin pressure differential of 8.6
pounds per square inch at higher altitudes, with a nominal Aircraft
cabin ventilation rate of 3,680 cubic feet per minute including
passenger cabin recirculation (nominal recirculation is 55 percent).
The APU is turned off unless otherwise specified.
<PAGE> 134
Attachment to Letter Agreement
No. 6-1162-RLL-1734
Page 5
5.6 The cruise fuel mileage guarantee is based on an Aircraft center of
gravity location of 26 percent of the mean aerodynamic chord, and on a
fuel Lower Heating Value (LHV) of 18,580 BTU per pound.
6 GUARANTEE COMPLIANCE
6.1 compliance with the guarantees of Sections 2 and 3 shall be based
on the conditions specified in those sections, the Aircraft
configuration of Section 4 and the guarantee conditions of Section 5.
6.2 Compliance with the takeoff and landing guarantees shall be based on
the FAA approved Airplane Flight Manual for the Model 757-200.
6.3 Compliance with the cruise fuel mileage guarantee shall be established
by calculations based on flight test data obtained from an aircraft in
a configuration similar to that defined by the Detail Specification.
6.4 The data derived from tests shall be adjusted as required by
conventional methods of correction, interpolation or extrapolation in
accordance with established engineering practices to show compliance
with these guarantees.
6.5 Compliance with the Manufacturer's Empty Weight guarantee shall be
based on information in the "Weight and Balance Control and Loading
Manual - Aircraft Report."
6.6 Compliance shall be based on the performance of the airframe and
engines in combination, and shall not be contingent on the engine
meeting its manufacturer's performance specification.
7 EXCLUSIVE GUARANTEES
The only performance guarantees applicable to the Aircraft are those
set forth in this Attachment.
<PAGE> 135
6-1162-RLL-1735
Page 1
Trans World Airlines, Inc.
One City Centre
515 N. Sixth Street
19th Floor
St. Louis, Missouri 63101
Subject: Letter Agreement No. 6-1162-RLL-1735 to
Purchase Agreement No. 1910 -
Promotion Support
This Letter Agreement amends Purchase Agreement No. 1910 dated as of even date
herewith (the Agreement) between The Boeing Company (Boeing) and Trans World
Airlines, Inc. (Buyer) relating to Model 757-231
aircraft (the Aircraft).
All terms used herein and in the Agreement, and not defined herein, will have
the same meaning as in the Agreement.
1. PLANNING MEETING.
Boeing will assist Buyer in the introduction of the Aircraft by
providing to Buyer certain promotion support. Promptly after execution of the
Agreement and before any funds are disbursed, a Boeing Airline Promotion
representative will meet with Buyer's designated representatives to discuss the
extent, selection, scheduling, and disbursement process for the promotion
support to be provided.
2. SUPPORT LEVEL.
Boeing will make available to Buyer [
] for Buyer's marketing communications
programs. Programs include marketing research; tourism development; corporate
identity; direct marketing; video tape, film or still photography requirements;
planning, design and production of collateral materials; management of promotion
programs; and advertising campaigns.
<PAGE> 136
6-1162-RLL-1735
Page 2
Boeing's obligation to provide the support will commence at the time the
purchase of the Aircraft becomes firm (not subject to cancellation by either
party) and will terminate 2 years from the date the first Aircraft is delivered
to Buyer. There will be no cash payments or other support in lieu thereof.
3. ADDITIONAL SUPPORT.
Additional promotional support may be provided by Boeing subject to
the parties reaching mutual agreement as to the type of services, timing and
price.
4. CONFIDENTIAL TREATMENT. Buyer understands that certain commercial
and financial information contained in this Letter Agreement including any
attachments hereto is considered by Boeing as confidential. Buyer agrees that it
will treat this Letter Agreement and the information contained herein as
confidential and will not, without the prior written consent of Boeing, disclose
this Letter Agreement or any information contained herein to any other person or
entity except as provided in Letter Agreement 6-1162-RLL-1736.
Very truly yours,
THE BOEING COMPANY
By
----------------------------
Its Attorney-In-Fact
---------------------------
ACCEPTED AND AGREED TO this
Date: , 1996
-------------------
TRANS WORLD AIRLINES, INC.
By
----------------------------
Its
---------------------------
<PAGE> 137
6-1162-RLL-1736
Trans World Airlines, Inc.
One City Centre
515 N. Sixth Street
19th Floor
St. Louis, Missouri 63101
Subject: Letter Agreement No. 1736 to
Purchase Agreement No. 1910 -
Disclosure of Confidential Information
This Letter Agreement amends Purchase Agreement No. 1910 dated as of even date
herewith (the Agreement) between The Boeing Company (Boeing) and Trans World
Airlines Inc. (Buyer) relating to Model 757-231 aircraft (the Aircraft).
All terms used herein and in the Agreement, and not defined herein, will have
the same meaning as in the Agreement.
1. Buyer understands that certain commercial and financial information contained
in the documents listed below (Confidential Documents) is considered by Boeing
as confidential.
2. Buyer agrees that it will treat the Confidential Documents and the
information contained therein as confidential and will not, without the prior
written consent of Boeing, disclose such Confidential Documents or any
information contained therein to any other person or entity except as may be
required by (i) applicable law or governmental regulations, or (ii) for
financing the Aircraft in accordance with the provisions of Article 10 of the
Agreement.
3. In connection with any such disclosure or filing of the Confidential
Documents, or the information contained therein pursuant to any such applicable
law or governmental regulation, Buyer will request and use its best reasonable
efforts to obtain confidential treatment of such Confidential Documents
<PAGE> 138
6-1162-RLL-1736
Page 2
and the information contained therein. Boeing agrees to cooperate with Buyer in
making and supporting its request for confidential treatment.
Schedule of Confidential Documents
----------------------------------
1. Letter Agreement No. 6-1162-RLL-1734
2. Letter Agreement No. 6-1162-RLL-1735
3. Letter Agreement No. 6-1162-RLL-1737
4. Letter Agreement No. 6-1162-RLL-1738
5. Letter Agreement No. 6-1162-RLL-1739
6. Letter Agreement No. 6-1162-RLL-1740
7. Letter Agreement No. 6-1162-RLL-1741
8. Letter Agreement No. 6-1162-RLL-1742
9. Letter Agreement No. 6-1162-RLL-1743
10. Letter Agreement No. 6-1162-RLL-1746
Very truly yours,
THE BOEING COMPANY
By
-------------------------------
Its Attorney-In-Fact
------------------------------
ACCEPTED AND AGREED TO this
Date: , 1996
-------------------
TRANS WORLD AIRLINES, INC.
By
-------------------------------
Its
------------------------------
<PAGE> 139
6-1162-RLL-1737
Trans World Airlines, Inc.
One City Centre
515 N. Sixth Street
19th Floor
St. Louis, Missouri 63101
Subject: Letter Agreement No. 6-1162-RLL-1737 to
Purchase Agreement No. 1910 -
Advance Payments
Gentlemen:
Reference is made to Purchase Agreement No. 1910 dated
as of even date herewith (the Purchase Agreement)
between The Boeing Company (Boeing) and Trans World
Airlines, Inc. (Buyer) relating to Model 757-231
aircraft (the Aircraft).
All terms used and not defined herein, shall have the same meaning as in the
Agreement.
Notwithstanding the Advance Payment Schedule set forth in Article 5.1 of the
Purchase Agreement, Boeing and Buyer hereby agree to an alternate schedule for
such advance payments as follows:
1. ADVANCE PAYMENT SCHEDULE.
1.1 Buyer may pay to Boeing advance payments for each Aircraft on the
dates indicated in the schedule set forth in Attachment A hereto. For those
payments expressed as a percentage the amount of the payment shall be equal to
the product of (i) the percentages indicated in said schedule and (ii) the
Advance Payment Base Price of such Aircraft adjusted as of the date the advance
payment is due Boeing due to Change Order; provided that Buyer compensates
Boeing in accordance with subparagraph 1.2 of this Letter Agreement.
<PAGE> 140
6-1162-RLL-1737
Page 2
1.2 In the event Buyer elects to follow the advance payment schedule set forth
in Attachment A, Buyer agrees to pay to Boeing interest on the difference
between the amounts and payment dates determined in accordance with Article 5.1
and those set forth in subparagraph 1.1 of this Letter Agreement.[
]. Such interest will be payable on the first
day of each calendar quarter during the term of the deferral and on the day of
delivery of the Aircraft. The interest rate for calculation of such interest is
the rate of [ ] the Citibank base rate in
effect from time to time during the period such interest is incurred.
2. [
]
3. APPLICABILITY TO OPTION AIRCRAFT.
The provisions of this Letter Agreement shall be applicable in their
entirety to the purchase by Buyer of any Option Aircraft, Rollover Option
Aircraft offered by Boeing to Buyer by Letter Agreement 6-1162-RLL-1741.
4. CONDITIONS PRECEDENT.
Letter Agreement No. 6-1162-RLL-1737 will become effective upon its
execution and the execution of the Consent of Assignment Agreement No.
6-1162-RLL-1745.
<PAGE> 141
6-1162-RLL-1737
Page 3
5. CONFIDENTIAL TREATMENT. Buyer understands that certain
commercial and financial information contained in this Letter Agreement
including any attachments hereto is considered by Boeing as confidential. Buyer
agrees that it will treat this Letter Agreement and the information contained
herein as confidential and will not, without the prior written consent of
Boeing, disclose this Letter Agreement or any information contained herein to
any other person or entity except as provided in Letter Agreement
6-1162-RLL-1736.
Very truly yours,
THE BOEING COMPANY
By
--------------------------
Its Attorney-In-Fact
-------------------------
ACCEPTED AND AGREED TO this
------
day of , 1996
-------------------
TRANS WORLD AIRLINES, INC.
By
--------------------------
Its
-------------------------
Attachment
<PAGE> 142
Attachment A to
6-1162-RLL-1737
<TABLE>
<CAPTION>
Amount Due per
Aircraft
(Percentage of
Due Date of Payment Advance Payment Base
- ------------------- --------------------
Price)
- ------
<S> <C>
Upon execution of the [ ]
the Agreement
18 months prior to the first [ ]
day of the scheduled delivery
month of the aircraft
12 months prior to the first [ ]
day of the scheduled delivery
month of the aircraft
9 months prior to the first [ ]
day of the scheduled delivery
month of the aircraft
6 months prior to the first [ ]
day of the scheduled delivery
month of the aircraft
Total [ ]
</TABLE>
<PAGE> 143
6-1162-RLL-1738
Trans World Airlines, Inc.
One City Centre
515 N. Sixth Street
19th Floor
St. Louis, Missouri 63101
Subject: Letter Agreement No. 6-1162-RLL-1738 to
Purchase Agreement No. 1910 -
Certain Contractual Matters
Gentlemen:
This Letter Agreement amends Purchase Agreement No. 1910 dated as of even date
herewith (the Agreement) between The Boeing Company (Boeing) and Trans World
Airlines, Inc. (Buyer) relating to Model 757-231 (the Aircraft) and to Letter
Agreement 6-1162-RLL-1741, dated even date herewith, entitled "Option Aircraft,"
relating to the sale by Boeing and purchase by Buyer of ten (10) additional
Model 757-231 aircraft (the Option Aircraft) and ten (10) Rolling Option
Aircraft.
All terms used herein and in the Agreement, and not defined herein, will have
the same meaning as in the Agreement.
1. CREDIT MEMORANDUM - AIRFRAME.
1.1 In consideration of Buyer's purchase of the Aircraft, Boeing will issue
to Buyer at the time of delivery of each Aircraft, a credit memorandum which may
be used by Buyer for the purchase of Boeing goods and services or applied to the
final delivery payment for the Aircraft for which the credit was issued. The
amount of the credit memorandum applicable to each Aircraft will be [
]
2. CREDIT MEMORANDUM - AIRFRAME -
OPTION AIRCRAFT AND ROLLOVER OPTION
AIRCRAFT.
<PAGE> 144
6-1162-RLL-1738
Page 2
2.1 COMMITMENT ENHANCEMENT - QUANTITY PURCHASE OF AIRCRAFT. For all Aircraft
placed on firm order by Buyer on or prior to December 31, 2001 and deliver to
Buyer on or before June 30, 2003, Boeing will enhance its credit memorandum
offer in accordance with paragraph 1 above as follows:
For the fifteenth and subsequent Aircraft placed
on firm order, the credit memorandum percentage
will be increased to [ ]
For the twentieth and subsequent Aircraft placed
on firm order, the credit memorandum percentage
will be increased to [ ]
For the twenty-fifth and subsequent Aircraft placed on firm order,
the credit memorandum percentage will be increased to [
]
For the thirtieth Aircraft placed on firm order,
the credit memorandum percentage will be
increased to [ ]
2.2 The difference in the increased credit memorandum percentage over the
original or increased credit memorandum identified in paragraphs 1.1 and 2.1
above will be [ ] and payable [ ] upon the
execution of the definitive agreement and payment by Buyer of the eighteen month
payment as specified in Letter Agreement No. 6-1162-RLL-1737 for the Aircraft
identified in paragraphs 1.1 and 2.1 above. Such payment [ ]
will be made to Buyer in immediately available funds from Boeing.
2.3 Undelivered Aircraft will, at the time of delivery, receive the
appropriate credit memorandum amount calculated on the higher percentage as
described in paragraph 2.1 above for such undelivered Aircraft subject to
execution of the definitive agreement and payment by Buyer of the eighteen month
payment as specified in Letter Agreement No. 6-1162-RLL-1737 for the Aircraft
identified in paragraphs 1.1 and 2.1 above. Boeing and Buyer agree that the
agreement as contained herein will apply only to Aircraft delivering on or
before June 30, 2003.
3. RETROACTIVE READJUSTMENT.
<PAGE> 145
6-1162-RLL-1738
Page 3
If Buyer fails to take delivery of, or the contract is terminated for the
cumulative number of Aircraft which triggered that enhanced credit memorandum as
described in Paragraph 2.1 above, the enhanced credit memorandum previously
provided to Buyer as a result of the firm order of such Aircraft in excess of
that amount which would have been provided pursuant to 2.1, 2.2, and 2.3 will be
immediately returned to Boeing.
4. RIGHTS TO OTHER BOEING MODEL AIRCRAFT.
In the event Buyer elects to purchase other Boeing model aircraft, Buyer
will be eligible for the commitment enhancement as described in paragraph 2
above if Buyer places on firm order other Boeing aircraft of equal dollar value
by December 31, 2001 for delivery on or before June 30, 2003. The equal dollar
value will be determined by (i) computing the price of other Boeing model
aircraft in 1995 year dollars with the price of the Aircraft in 1995 year
dollars and (ii) converting the Aircraft with other Boeing model Aircraft in a
dollar for dollar basis based upon (i) above.
The commitment enhancement will be applied retroactively for the Aircraft
already delivered or for Aircraft to be delivered under the conditions as
outlined in paragraph 2 above.
5. DELIVERY FLEXIBILITY.
5.1 Buyer can request to accelerate the delivery positions of the
Aircraft. Boeing's offer of such acceleration for the Aircraft is contingent on
Boeing's
<PAGE> 146
6-1162-RLL-1738
Page 4
then current production capabilities and other commitments permitting such
requested acceleration.
5.2 Upon Buyer and Boeing identifying the Option Aircraft delivery positions
as described in Letter Agreement No. 6-1162-RLL-1741, Buyer can request to
accelerate the delivery positions of the Option Aircraft. Boeing's offer of such
acceleration for the Option Aircraft is contingent on Boeing's then current
production capabilities and other commitments permitting such requested
acceleration.
6. CONFIDENTIAL TREATMENT.
Buyer understands that certain commercial and financial information
contained in this Letter Agreement are considered by Boeing as confidential.
Buyer agrees that it will treat this Letter Agreement and the information
contained herein as confidential and will not, without the prior written consent
of Boeing, disclose this Letter Agreement or any information contained herein to
any other person or entity, except as provided in Letter Agreement
6-1162-RLL-1736.
Very truly yours,
THE BOEING COMPANY
By ________________________________
Its _______________________________
ACCEPTED AND AGREED TO as of this
date: ______________, 1996
TRANS WORLD AIRLINES, INC.
By _______________________________
Its ______________________________
<PAGE> 147
6-1162-RLL-1739
Trans World Airlines, Inc.
One City Centre
515 N. Sixth Street
19th Floor
St. Louis, Missouri 63101
Subject: Letter Agreement No. 6-1162-RLL-1739 to
Purchase Agreement No. 1745 -
Customer Support Matters
Gentlemen:
This Letter Agreement amends Purchase Agreement No. 1910 dated as of even date
herewith (the Agreement) between The Boeing Company (Boeing) and Trans World
Airlines, Inc. (Buyer) relating to Model 757-231
aircraft (the Aircraft).
All terms used herein and in the Agreement, and not defined herein, will have
the same meaning as in the Agreement.
1. 757-200 Door Trainers.
----------------------
In consideration of Buyer's purchase of the Aircraft, Boeing will
reimburse Buyer's door trainer manufacturer in an amount [
]. Boeing's offer to Buyer is accepted by Buyer with
the express understanding that Buyer waives its right to the training
entitlement assigned to Buyer from International Lease Finance Corporation's
Purchase Agreement No 1771, Exhibit C-1, Part C, paragraphs 3.1 and 7 for flight
crew training for two classes up to 4 cockpit crews in each class and for ferry
assistance. Buyer will provide Boeing with the invoices for such door trainers
and Boeing will reimburse the door trainer manufacturer directly.
2. Data for 757-200 Door Trainers.
-------------------------------
In further consideration of Buyer's purchase of the Aircraft, Boeing will
issue an offsetting credit memorandum [ ] for aperture
cards required for Buyer's selected 757-200 Door Trainer manufacturer.
<PAGE> 148
6-1162-RLL-1739
Page 2
3. Standard Computerized Airplane Performance Data.
------------------------------------------------
Boeing will provide [ ] standard computerized airplane
performance (SCAP) data for Buyer's 747-200 aircraft with -7J engines.
4. Confidential Treatment.
-----------------------
Buyer understands that certain commercial and financial information
contained in this Letter Agreement hereto are considered by Boeing as
confidential. Buyer agrees that it will treat this Letter Agreement and the
information contained herein as confidential and will not, without the prior
written consent of Boeing, disclose this Letter Agreement or any information
contained herein to any other person or entity, except as provided in Letter
Agreement 6-1162-RLL-1736.
If the foregoing correctly sets forth your understanding of our agreement with
respect to the matters treated above, please indicate your acceptance and
approval below.
Very truly yours,
THE BOEING COMPANY
By _____________________________
Its ____________________________
ACCEPTED AND AGREED TO as of this
date: ____________, 1996
TRANS WORLD AIRLINES, INC.
By ____________________________
Its ___________________________
<PAGE> 149
6-1162-RLL-1740
Trans World Airlines, Inc.
One City Centre
515 N. Sixth Street
19th Floor
St. Louis, Missouri 63101
Subject: Letter Agreement No. 6-1162-RLL-1740 to
Purchase Agreement No. 1910 -
Escalation Sharing
This Letter Agreement amends Purchase Agreement
No. 1910 dated as of even date herewith (the Agreement)
between The Boeing Company (Boeing) and Trans World
Airlines, Inc. (Buyer) relating to Model 757-231
aircraft.
All terms used herein and in the Agreement, and not defined herein, will have
the same meaning as in the Agreement.
1. COMMITMENT.
Boeing agrees to share one-half of the escalation up to a maximum of 3
percent per year in each of the years 1997 and 1998, as more fully described in
paragraph 2 below, for any of Buyer's aircraft which are scheduled to deliver
after December 31, 1996. For the purpose of this Letter Agreement such aircraft
are referred to as "Eligible Aircraft."
All escalation calculations under this Letter Agreement will be made in
accordance with Exhibit D to the Agreement entitled "Price Adjustment Due to
Economic Fluctuations - Airframe Price Adjustment" (hereinafter referred to as
"Exhibit D"), using actual escalation indices published for the applicable
period.
<PAGE> 150
6-1162-RLL-1740
Page 2
2. ESCALATION CREDIT MEMO.
2.1 CALCULATION - ELIGIBLE AIRCRAFT
DELIVERING IN 1997.
At the time of delivery of each Eligible Aircraft delivering in
1997, Boeing will issue to Buyer a credit memorandum (the 1997 Credit
Memorandum) which shall be applied to the Purchase Price of such Aircraft. The
1997 Credit Memorandum shall be calculated as follows:
One-half of the difference between the airframe and special features
escalation calculated for a December 1996 aircraft delivery position, and
the escalation calculated for the month of delivery of the 1997 Eligible
Aircraft;
provided however,
The maximum amount of the 1997 Credit Memorandum shall not exceed 3
percent pursuant to the following calculation:
At the time of the delivery of the 1997 Eligible Aircraft, the
Base Airframe Price and Special Features prices will be escalated
to a December 1996 delivery month. The December 1996 escalated
price will be referred to in the following formula as the
"December 1996 Index Amount". The 1997 Credit Memorandum for the
1997 Eligible Aircraft will not exceed an amount equal to:
the December 1996 Index Amount times 0.03
2.2 CALCULATION - ELIGIBLE AIRCRAFT
DELIVERING IN 1998.
At the time of delivery of each Eligible Aircraft delivering in
1998, Boeing will issue to Buyer a credit memorandum (the 1998 Credit
Memorandum) which shall be applied to the Purchase Price of such Aircraft. The
1998 Credit Memorandum shall be calculated as follows:
(i) One-half of the difference between the airframe and special features
escalation calculated for a December 1997 aircraft delivery position, and
the escalation calculated for the month of delivery of the 1998 Eligible
Aircraft; provided however,
The maximum amount of the 1998 Credit Memorandum
<PAGE> 151
6-1162-RLL-1740
Page 3
shall not exceed 3 percent pursuant to the following calculation:
At the time of the delivery of the 1998 Eligible Aircraft, the
Base Airframe Price and Special Features prices will be escalated
to a December 1997 delivery month. The December 1997 escalated
price will be referred to in the following formula as the
"December 1997 Index Amount." The 1998 Credit Memorandum for the
1998 Eligible Aircraft will not exceed an amount equal to:
the December 1997 Index Amount times 0.03;
and,
(ii) The amount calculated above in paragraph 2.1 for the 1997 Credit
Memorandum calculated through December, 1997.
2.3 ELIGIBLE AIRCRAFT DELIVERING AFTER 1998.
For Eligible Aircraft delivering after the calendar year 1998,
the amount of the Credit Memorandum will be the amount calculated pursuant to
paragraph 2.2 above through December 1998. This credit memorandum amount will be
escalated from December 1998 to the month of delivery.
3. ADVANCE PAYMENT BASE PRICE.
It is agreed that the Advance Payment Base Prices for the Eligible
Aircraft set forth in Article 3.4 of the Agreement includes an estimate for the
escalation sharing Credit Memorandum pursuant to this Letter Agreement.
<PAGE> 152
6-1162-RLL-1740
Page 4
4. ESCALATING CREDITS (STE).
It is agreed that the credit memoranda specified in Letter Agreement No.
6-1162-RLL-1738 which escalate in accordance with Exhibit D, is expressed as a
percentage of the escalated Purchase Price of the Aircraft, will be calculated
using the same factors used to develop the adjusted airframe escalation pursuant
to this Letter Agreement.
5. CONFIDENTIAL TREATMENT. Buyer understands that certain commercial and
financial information contained in this Letter Agreement including any
attachments hereto is considered by Boeing as confidential. Buyer agrees that it
will treat this Letter Agreement and the information contained herein as
confidential and will not, without the prior written consent of Boeing, disclose
this Letter Agreement or any information contained herein to any other person or
entity except as provided in Letter Agreement 6-1162-RLL-1736.
Very truly yours,
THE BOEING COMPANY
By
----------------------------
Its Attorney-In-Fact
----------------------------
ACCEPTED AND AGREED TO this
Date: , 1996
--------------------
TRANS WORLD AIRLINES, INC.
By
----------------------------
Its
----------------------------
<PAGE> 153
6-1162-RLL-1741
Trans World Airlines, Inc.
One City Centre
515 N. Sixth Street
19th Floor
St. Louis, Missouri 63101
Subject: Letter Agreement No. 6-1162-RLL-1741 to
Purchase Agreement No. 1910 -
Option Aircraft
This Letter Agreement amends Purchase Agreement No. 1910 dated as of even date
herewith (the Agreement) between The Boeing Company (Boeing) and Trans World
Airlines, Inc. (Buyer) relating to Model 757-231 aircraft.
All terms not defined herein will have the same meaning as in the Agreement.
Conditioned upon Buyer's purchase of all of the Aircraft, Boeing agrees to
manufacture and sell to Buyer additional Model 757-231 aircraft as described in
paragraph 1 of Attachment A hereto (Option Aircraft), subject to the following.
1. OPTION AIRCRAFT FLEXIBILITY.
----------------------------
Boeing and Buyer understand and agree that Buyer does not have any
specific Option Aircraft in the Agreement. If Buyer wants Option Aircraft, then
on or before April 3, 1997, Buyer will advise Boeing that Buyer requests up to
ten (10) option positions in specific delivery months and years. If, after
Boeing reviews and agrees on the availability of the requested delivery
positions or Boeing offers different delivery positions that are acceptable to
Buyer, and any of those delivery positions are within 18 months from April 3,
1997, then Boeing and Buyer will enter into a definitive agreement for those
aircraft. If Buyer requests delivery positions that are more than 18 months from
April 3, 1997 or Boeing offers different delivery positions that are more than
18 months from April 3, 1997 and those positions are acceptable to Buyer, then
Boeing and Buyer will add those aircraft to Letter Agreement No. 6-1162-RLL-1741
and those Option Aircraft will become a part of the Agreement including all the
terms and conditions of Letter Agreement No. 6- 1162-RLL-1741 including but not
limited to the option deposit in the amount of $350,000.
<PAGE> 154
6-1162-RLL-1741
Page 2
2. ROLLING OPTION AIRCRAFT
-----------------------
In addition to the 10 Option Aircraft, Buyer has requested ten (10)
rolling option aircraft (Rolling Option Aircraft). When Buyer exercises one or
more Option Aircraft, Boeing will offer the same quantity of Rolling Option
Aircraft to Buyer. Boeing and Buyer agree that Boeing will offer the 10 Rolling
Option Aircraft to Buyer on a one for one basis coincident with Buyer exercising
the Option Aircraft. Such Rolling Option Aircraft delivery positions will be
made to Buyer subject to availability and other schedule consideration. Upon
agreement between Boeing and Buyer on the option delivery positions, then Boeing
and Buyer will add those aircraft to Letter Agreement No. 6-1162-RLL-1741 and
those Rolling Option Aircraft will become Option Aircraft and will become a part
of the Agreement including all the terms and conditions of Letter Agreement No.
6-1162-RLL-1741 including but not limited to the option deposit in the amount of
$350,000. Boeing and Buyer agree that the last Option Aircraft has to be
exercised by Buyer on or before December 31, 2001 and that the business offer as
contained in Letter Agreement No. 6-1162-RLL-1738 will apply only to Aircraft
delivering on of before June 30, 2003.
3. DELIVERY.
---------
The Option Aircraft will be delivered during or before the months
set forth in the following schedule:
Month and Year Number of
of Delivery Option Aircraft
----------- ---------------
4. PRICE.
------
The estimated delivery prices (Advance Payment Base Price) of the
Option Aircraft indicated below do include an amount for special features in
addition to those specifically described in Attachment A but do not include any
amount for items of Buyer Furnished Equipment (BFE). An estimate for typical
special features in $ per aircraft (expressed in 1995 dollars) and for BFE is $
per aircraft
<PAGE> 155
6-1162-RLL-1741
Page 3
Month and Year Advance Payment Base Price
of Delivery Per Option Aircraft
----------- -------------------
5. PAYMENT.
--------
5.1 Buyer will pay a deposit to Boeing of $350,000 for each Option
Aircraft (Deposit), on the date Boeing and Buyer sign the Agreement for the
Aircraft. If Buyer exercises an option, the Deposit will be credited against the
first advance payment due for such Option Aircraft.
If Buyer does not exercise an option, Boeing will retain the Deposit for that
Option Aircraft.
5.2 Following option exercise, advance payments in the amount of
30% of the Advance Payment Base Price will be payable for the Option Aircraft
pursuant to Attachment A. The remainder of the Option Aircraft purchase price
will be paid at the time of delivery of the Option Aircraft.
6. OPTION EXERCISE.
----------------
6.1 To exercise an option, Buyer will give written notice to Boeing
on or before eighteen months prior to the first day of the delivery month of
each Option Aircraft
6.2 If Boeing must make production decisions which are dependent on
Buyer exercising an option earlier than the Option Exercise Date, Boeing may
accelerate the Option Exercise Date subject to Buyer's agreement. If Boeing and
Buyer fail to agree to revised Option Exercise Dates, either party may terminate
such option and Boeing will refund to Buyer, without interest, any Deposit and
advance payments received by Boeing with respect to such Option Aircraft.
7. CONTRACT TERMS.
---------------
Boeing and Buyer will use their best efforts to enter into a
definitive agreement for the purchase of an Option Aircraft, within thirty (30)
days after Buyer exercises such option.
Such definitive agreement will include the terms and conditions
contained herein and terms and conditions as may be mutually agreed upon. In the
event the parties have not entered into such agreement within such time, either
party may terminate the purchase of such Option Aircraft by giving written
notice to the other within ten (10) days of such
<PAGE> 156
6-1162-RLL-1741
Page 4
period.
8. CONFIDENTIAL TREATMENT.
-----------------------
Buyer understands that certain commercial and financial information
contained in this Letter Agreement including any attachments hereto is
considered by Boeing as confidential. Buyer agrees that it will treat this
Letter Agreement and the information contained herein as confidential and will
not, without the prior written consent of Boeing, disclose this Letter Agreement
or any information contained herein to any other person or entity except as
provided in Letter Agreement 6-1162-RLL-1736.
Very truly yours,
THE BOEING COMPANY
By
------------------------------
Its ATTORNEY-IN-FACT
------------------------------
ACCEPTED AND AGREED TO this
Date: , 1996
--------------------
TRANS WORLD AIRLINES, INC.
By
------------------------------
Its
------------------------------
Attachments
<PAGE> 157
Attachment A to
6-1162-RLL-1741
Page 1
MODEL 757-231 AIRCRAFT
- ----------------------
1. AIRCRAFT DESCRIPTION AND CHANGES.
---------------------------------
1.1 AIRCRAFT DESCRIPTION - PW AIRCRAFT.
The Aircraft is described by Boeing Detail
Specification D6-44010-96, dated as of even date herewith, which includes
installation of Pratt and Whitney PW2037 engines and a Maximum Taxi Weight of
221,000 pounds, as revised to include the following special features:
(a) 0310MP5152
Increase the Maximum Taxi
Weight to 236,000 pounds in
lieu of 221,000 pounds
1.2 CHANGES. The Boeing Detail Specification will
be further revised to include:
(1) Changes applicable to the basic
Model 757-200 aircraft which are developed by Boeing between the date of the
Detail Specification and the signing of the definitive agreement.
(2) Changes mutually agreed upon.
(3) Changes required to obtain a Standard
Airworthiness Certificate.
(4) To provide sufficient Aircraft
manufacturing and procurement lead time, it is necessary for Boeing and Buyer to
reach final agreement on the Aircraft configuration, including BFE/SPE vendor
selection, by February 9, 1996. If such items are not resolved by the indicated
dates, Boeing reserves the right to amend this letter agreement:
(a) to adjust the scheduled
delivery of the Aircraft to a later time period and,
(b) to make such other changes as
are appropriate and consistent with the revised Aircraft deliveries.
<PAGE> 158
Attachment A to
6-1162-RLL-1741
Page 2
2. PRICE DESCRIPTION.
------------------
2.1 PRICE ELEMENTS PER AIRCRAFT.
<TABLE>
<CAPTION>
1 2 3 4 5 6 7
- - - - - - -
AIRFRAME & A/C BASIC ESTIMATED ESCALATION CONTRACTED ESTIMATED ADV. PMT.
AIRCRAFT ESTIMATED SPECIAL PRICE ON DELIVERY ESCALATION BASE PRICE
DELIVERY FEATURES PRICE ENGINE PRICE ELEMENTS ELEMENT ELEMENT PRICES CREDIT ELEMENTS
MO. & YR. (JULY 1995 $) (JULY 1995 $) 1 + 2 1 2 3 + 4 MEMO* 5 - 6
- --------- --------------- ------------- ------ ------------------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
<FN>
* NOTE: REFLECTS ESTIMATED ESCALATION ADJUSTMENT FOR THE YEARS 1997 AND 1998 FOR
AIRCRAFT DELIVERING AFTER DECEMBER 1996.
</TABLE>
Continued Next Page...
<PAGE> 159
Attachment A to
6-1162-RLL-1741
Page 3
2. PRICE DESCRIPTION. (Continued)
------------------------------
2.2 ESCALATION ADJUSTMENTS. The Aircraft Price
will include escalation amounts for the airframe, special features and engines
determined pursuant to the provisions of Attachments B and C.
2.3 PRICE ADJUSTMENTS.
2.3.1 The Aircraft Basic Price and Advance
Payment Base Price of each Aircraft will be adjusted at the time of signing the
definitive agreement and thereafter as appropriate to reflect changes made in
the elements of such prices.
2.3.2 Engine price and escalation provisions
will be adjusted if they are changed by the engine manufacturer prior to signing
a definitive agreement for the Aircraft.
3. ADVANCE PAYMENT BASE PRICE ADJUSTMENTS.
---------------------------------------
The Advance Payment Base Prices of each Aircraft have been
established using currently available forecasts of the escalation factors used
by Boeing and applicable to the scheduled month and year of Aircraft delivery.
Such Advance Payment Base Prices will be reestablished at the time of signing of
the definitive agreement, using the then-current forecasted escalation factors
used by Boeing.
<PAGE> 160
Attachment B to
6-1162-RLL-1741
Page 1
PRICE ADJUSTMENT DUE TO
-----------------------
ECONOMIC FLUCTUATIONS
---------------------
AIRFRAME PRICE ADJUSTMENT
-------------------------
(1995 BASE PRICE)
-----------------
(a) The adjustment in airframe price of each Aircraft ("Airframe Price
Adjustment" herein) shall be determined at the time of Aircraft delivery in
accordance with the following formula:
Pa = (P)(L + M - 1)
(b) The following definitions shall apply herein:
Pa = Airframe Price Adjustment.
L = .65 x ECI
-----
130.1
M = .35 x ICI
-----
123.6
P = Aircraft basic price as determined at the time of the
particular Aircraft delivery less the base price of
Engines set forth below:
PW Aircraft $11,320,000
ECI = A value using the "Employment Cost Index for
workers in aerospace manufacturing" (Aircraft
manufacturing, standard industrial
classification code 3721, compensation, base
month and year June 1989 = 100), as released
by the Bureau of Labor Statistics, U.S.
Department of Labor on a quarterly basis for
the months of March, June, September and
December, calculated as follows: A three-month
arithmetic average value (expressed as a
decimal and rounded to the nearest tenth)
shall be determined using the months set forth
in the table below for the applicable
Aircraft, with the released Employment Cost
Index value described above for the month of
March also being used for the months of
January and February; the value for June also
used for April and May; the value for
September also used for July and August; and
the value for December also used for October
and November.
<PAGE> 161
Attachment B to
6-1162-RLL-1741
Page 2
ICI = The three-month arithmetic average of the released monthly
values for the Industrial Commodities Index as set forth in
the Producer Prices and Price Index" (Base Year 1982 = 100)
as released by the Bureau of Labor Statistics, U.S.
Department of Labor values (expressed as a decimal and
rounded to the nearest tenth) for the months set forth in
the table below for the applicable Aircraft.
In determining the value of L, the ratio of ECI divided by 130.1
shall be expressed as a decimal rounded to the nearest ten-thousandth and then
multiplied by .65 with the resulting value also expressed as a decimal and
rounded to the nearest ten-thousandth.
In determining the value of M, the ratio of ICI divided by 123.6
shall be expressed as a decimal rounded to the nearest ten-thousandth and then
multiplied by .35 with the resulting value also expressed as a decimal and
rounded to the nearest ten-thousandth.
<TABLE>
<CAPTION>
Months to be Utilized
Month of Scheduled in Determining the
Aircraft Delivery Value of ECI and ICI
- ----------------- --------------------
<S> <C>
January June B, July B, Aug. B
February July B, Aug. B, Sept. B
March Aug. B, Sept. B, Oct. B
April Sept. B, Oct. B, Nov. B
May Oct. B, Nov. B, Dec. B
June Nov. B, Dec. B, Jan. D
July Dec. B, Jan. D, Feb. D
August Jan. D, Feb. D, Mar. D
September Feb. D, Mar. D, Apr. D
October Mar. D, Apr. D, May D
November Apr. D, May D, June D
December May D, June D, July D
</TABLE>
The following definitions of B and D will apply:
B = The calendar year BEFORE the year in which the
scheduled month of delivery as set forth in Article 2.1
occurs.
D = The calendar year DURING which the scheduled month of
delivery as set forth in Article 2.1 occurs.
(c) In addition, it is understood that at the time of delivery of each of the
Aircraft to Buyer, Boeing may be unable to determine the precise Airframe Price
Adjustment for such Aircraft because the applicable values to be used
<PAGE> 162
Attachment B to
6-1162-RLL-1741
Page 3
to determine the ECI and ICI may not be released by the Bureau of Labor
Statistics. Accordingly, the parties agree as follows:
(i) The Airframe Price Adjustment, to be used at the time of
delivery of each of the Aircraft will be determined by utilizing the escalation
provisions set forth above. The values released by the Bureau of Labor
Statistics and available to Boeing 30 days prior to scheduled month of Aircraft
delivery shall be used to determine the ECI and ICI values for the applicable
months (including those noted as preliminary by the Bureau of Labor Statistics)
to calculate the Airframe Price Adjustment. If no values have been released for
an applicable month, the provisions set forth in Paragraph (c) (ii) below shall
apply. If prior to delivery of an Aircraft the U.S. Department of Labor changes
the base year for determination of the ECI or ICI values as defined above, such
rebased values will be incorporated in the Airframe Price Adjustment
calculation. The payment by Buyer to Boeing of the amount of the Purchase Price
for such Aircraft, as determined at the time of Aircraft delivery, shall be
deemed to be the payment for such Aircraft required at the delivery thereof.
(ii) If prior to delivery of an Aircraft the U.S. Department of
Labor substantially revises the methodology used for the determination of the
values to be used to determine the ECI and ICI values (in contrast to benchmark
adjustments or other corrections of previously released values), or for any
reason has not released values needed to determine the applicable Aircraft
Airframe Price Adjustment, the parties shall, prior to delivery of any such
Aircraft, select a substitute for such values from data published by the Bureau
of Labor Statistics or other similar data reported by non-governmental United
States organizations, such substitute to lead in application to the same
adjustment result, insofar as possible, as would have been achieved by
continuing the use of the original values as they may have fluctuated during the
applicable time period. Appropriate revision of the formula shall be made as
required to reflect any substitute values. However, if within 24 months from
delivery of the Aircraft the Bureau of Labor Statistics should resume releasing
values for the months needed to determine the Airframe Price Adjustment, such
values shall be used to determine any increase or decrease in the Airframe Price
Adjustment for the Aircraft from that determined at the time of delivery of such
Aircraft.
(iii) In the event escalation provisions are made
<PAGE> 163
Attachment B to
6-1162-RLL-1741
Page 4
non-enforceable or otherwise rendered null and void by any agency of the United
States Government, the parties agree, to the extent they may lawfully do so, to
equitably adjust the Purchase Price of any affected Aircraft to reflect an
allowance for increases or decreases in labor compensation and material costs
occurring since February, 1995, which is consistent with the applicable
provisions of paragraphs (a) and (b) of this Attachment B.
(d) For the calculations herein, the values released by the Bureau of Labor
Statistics and available to Boeing 30 days prior to scheduled month of Aircraft
delivery shall be used to determine the ECI and ICI values for the applicable
months (including those noted as preliminary by the Bureau of Labor Statistics)
to calculate the Airframe Price Adjustment.
NOTE: Any rounding of a number, as required under this Attachment B with
- ---- respect to escalation of the airframe price, shall be accomplished
as follows: if the first digit of the portion to be dropped from
the number to be rounded is five or greater, the preceding digit
shall be raised to the next higher number.
<PAGE> 164
Attachment C to
6-1162-RLL-1741
Page 1
ENGINE PRICE ADJUSTMENT - PRATT & WHITNEY
-----------------------------------------
(1995 BASE PRICE)
-----------------
(a) The basic price of each Aircraft set forth in paragraph 2.1 of Attachment A
includes an aggregate price for Engines of Eleven Million Three Hundred Twenty
Thousand Dollars ($11,320,000). The adjustment in Engine price applicable to
each Aircraft ("Engine Price Adjustment" herein) shall be determined at the time
of Aircraft delivery in accordance with the following formula:
Pa = (P + F) (AA + BB + CC) - P
(b) The following definitions shall apply herein:
Pa = Engine Price Adjustment
P = Aggregate Engine Base Price as set forth in paragraph (a)
above.
AA = .60 x L
--------
$17.80
BB = .30 x M
--------
130.6
CC = .10 x E
--------
76.6
In determining the value of AA, BB and CC, the ratio of L divided
by $17.80, M divided by 130.6 and E divided by 76.6 shall be
expressed as a decimal and rounded to the nearest ten-thousandth
but the decimal value resulting from multiplying such ratios by the
respective constants (.60, .30 and .10) shall not be rounded. The
value of the sum of AA + BB + CC shall also be rounded to the
nearest ten-thousandth.
L = Labor Index, which is the "Hourly Earnings of
Aircraft Engines and Engine Parts Production Workers,
SIC 3724" published by the Bureau of Labor Statistics,
U.S. Department of Labor, for the seventh month
preceding the month of scheduled Aircraft delivery.
$17.80 = Published Labor Index (SIC 3724) for
December, 1994.
M = Material Index, which is the "Producer Price
<PAGE> 165
Attachment C to
6-1162-RLL-1741
Page 2
Index - Code 10, Metals and Metal Products," (Base Year
1982 = 100) published by the Bureau of Labor
Statistics, U.S. Department of Labor, for the seventh
month preceding the month of scheduled Aircraft
delivery.
130.6 = Published Material Index (Code 10) for
December, 1994.
E = Fuel Index, which is the "Producer Price Index Code
5, Fuels and Related Products and Power" (Base Year
1982 = 100) published by the Bureau of Labor
Statistics, U.S. Department of Labor, for the seventh
month preceding the month of scheduled Aircraft
delivery.
76.6 = Published Fuel Index (Code 5) for
December, 1994.
F = 0.005 (N)(P). Where N = the calendar year of
scheduled Engine delivery, minus 1995. For purposes of
this calculation, Engine delivery is assumed to be
three (3) months prior to the month of scheduled
Aircraft delivery.
The Engine Price Adjustment shall not be made if it would result in a decrease
in the aggregate Engine base price.
(c) The value of the Labor, Material and Fuel Index used in determining the
Engine Price Adjustment shall be those published by the Bureau of Labor
Statistics, U.S. Department of Labor as of a date thirty (30) days prior to the
scheduled Aircraft delivery to Buyer. Such Index values shall be considered
final and no revision to the Engine Price Adjustment shall be made after
Aircraft delivery for any subsequent changes in published Index values.
(d) If the Bureau of Labor Statistics, U. S. Department of Labor, (i)
substantially revises the methodology (in contrast to benchmark adjustments or
other corrections of previously published data) or (ii) discontinues publication
of any of the data referred to above, Pratt & Whitney Aircraft (P&W) agrees to
meet with Boeing and jointly select a substitute for the revised or discontinued
data, such substitute data to lead in application to the same adjustment result,
insofar as possible, as would have been achieved by continuing the use of the
original data as it may have fluctuated had it not been revised or discontinued.
Appropriate revision of the Engine Price Adjustment provisions set forth above
shall be made to accomplish this result for affected Engines.
<PAGE> 166
Attachment C to
6-1162-RLL-1741
Page 3
In the event the Engine Price Adjustment escalation provisions of this Agreement
are made non-enforceable or otherwise rendered null and void by any agency of
the United States Government, P&W agrees to meet with Boeing and jointly agree,
to the extent that they may lawfully do so, to adjust equitably the Purchase
Price of any affected Engine(s) to reflect an allowance for increases in labor,
material and fuel costs that occurred from December, 1994 to the seventh month
preceding the month of scheduled delivery of the applicable Aircraft.
(e) The Engine escalation provisions set forth above shall be appropriately
amended to reflect changes in such provisions (including any increase in Engine
base price) established by P&W as of the date of entering into a definitive
agreement to purchase the Aircraft and applicable to Engines for delivery to
Boeing during the same approximate time period as the Aircraft.
NOTE: Any rounding of a number, as required under this Attachment C with
- ---- respect to escalation of the Engine price, shall be accomplished as
follows: if the first digit of the portion to be dropped from the
number to be rounded is five or greater, the preceding digit shall
be raised to the next higher number.
<PAGE> 167
6-1162-RLL-1742
Trans World Airlines, Inc.
One City Centre
515 N. Sixth Street
19th Floor
St. Louis, Missouri 63101
Subject: Letter Agreement No. 6-1162-RLL-1742 to
Purchase Agreement No. 1910 -
Sale by Boeing of Used Simulator
This Letter Agreement amends Purchase Agreement No. 1910 dated as of even date
herewith (the Agreement) between The Boeing Company (Boeing) and Trans World
Airlines, Inc. (Buyer) relating to Model 757-231 aircraft.
All terms used herein and in the Agreement, and not defined herein, will have
the same meaning as in the Agreement.
1. Sale by Boeing of Used Simulator.
---------------------------------
[ ],
Boeing will sell and deliver to Buyer a used 1982 model
767 Rediffusion simulator together with certain spare
parts and documentation as described in Exhibit A attached
hereto (collectively, the "Simulator"), in accordance with
the applicable terms and conditions of the Agreement and
this Letter Agreement.
2. Delivery, Title, Risk of Loss.
------------------------------
2.1 The Simulator will be delivered to Buyer during the six month
period prior to the delivery of the first Aircraft. For planning purposes the
parties agree to target the month of October, 1996 as the date the Simulator
will be delivered. Delivery will be F.O.B. Buyer's premises at a location
specified by Buyer within the continental United States of America. Buyer will
notify Boeing of the delivery location no later than seven months prior to
simulator delivery.
2.2 Upon delivery of the Simulator to Buyer, Boeing will deliver to
Buyer a bill of sale conveying good title to the Simulator, free of any
encumbrances, and risk of loss of the Simulator will pass from Boeing to Buyer.
<PAGE> 168
6-1162-RLL-1742
Page 2
3. Inspection.
-----------
Buyer will examine the Simulator at Boeing's facilities prior to
delivery to become familiar with the operational capabilities of the Simulator.
4. Installation.
-------------
Boeing will install the Simulator at Buyer's premises.
5. Buyer's Responsibilities.
-------------------------
5.1 Buyer will provide a suitable facility to install the
Simulator. This includes a raised floor computer room and a high bay large
enough to install the Simulator. Any changes to the facility required by State
or local building codes is Buyer's responsibility.
5.2 Buyer will be responsible for obtaining FAA
certification of the Simulator.
6. NO WARRANTY; DISCLAIMER AND RELEASE; EXCLUSION OF
-------------------------------------------------
LIABILITIES.
------------
6.1 THE SIMULATOR IS BEING SOLD TO BUYER "AS IS," AND "WITH ALL
FAULTS", AND BOEING MAKES NO WARRANTIES, REPRESENTATIONS OR PERFORMANCE
GUARANTEES, EITHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, WITH RESPECT TO THE
SIMULATOR, THE INSTALLATION THEREOF, OR THE SIMULATOR'S OPERATIONAL
CAPABILITIES. BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES,
OBLIGATIONS AND LIABILITIES OF BOEING AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES
OF BUYER AGAINST BOEING, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH
RESPECT TO THE SIMULATOR OR OTHER THINGS PROVIDED UNDER THIS LETTER AGREEMENT,
INCLUDING BUT NOT LIMITED TO: (I) ANY IMPLIED WARRANTY OF MERCHANT ABILITY OR
FITNESS FOR A PARTICULAR PURPOSE; (II) ANY IMPLIED WARRANTY ARISING FROM COURSE
OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE; (III) ANY OBLIGATION,
LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, WHETHER OR NOT ARISING FROM THE
NEGLIGENCE OF BOEING (WHETHER ACTIVE, PASSIVE OR IMPUTED); AND (IV) ANY
OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF OR DAMAGE TO ANY
AIRCRAFT.
6.2 BOEING WILL HAVE NO OBLIGATION OR LIABILITY, WHETHER ARISING IN
CONTRACT (INCLUDING WARRANTY), TORT (INCLUDING ACTIVE, PASSIVE OR IMPUTED
NEGLIGENCE) OR OTHERWISE, FOR LOSS OF USE, REVENUE OR PROFIT, OR FOR ANY OTHER
INCIDENTAL OR CONSEQUENTIAL DAMAGES WITH RESPECT TO ANY NON CONFORMANCE OR
DEFECT IN THE SIMULATOR DELIVERED
<PAGE> 169
6-1162-RLL-1742
Page 3
UNDER THIS AGREEMENT.
7. Condition of Sale.
------------------
In the event the Simulator is lost, destroyed or damaged beyond
repair prior to acceptance of the Simulator by Buyer, all rights and obligations
of Boeing and Buyer with respect to the Simulator will thereupon terminate and
be without further force and effect, provided, however, that Boeing shall
maintain, at Boeing's expense, insurance covering the Simulator for physical
loss or damage of the Simulator until the Simulator is delivered to Buyer. In
the event of loss of or damage to the Simulator, the proceeds of such insurance
shall be paid to Boeing. Boeing shall have the exclusive right to adjust and
settle any such loss or damage with the insurers and any such settlement shall
be binding upon all interested parties. In the event of such loss or damage,
insurers shall be entitled, at their option, to claim the remains of the insured
property as salvage. Any deductibles, exclusions, or loss or damage exceeding
available and collectible limits of such physical damage insurance shall be
assumed by, for the account of, and at the sole risk of Buyer.
In the event of a total loss, Boeing shall distribute the insurance proceeds, in
an amount not to exceed the adjusted cash value to Buyer.
EXCEPT AS PROVIDED ABOVE, BUYER HEREBY AGREES TO RELEASE AND RELIEVE BOEING, AND
WAIVE ITS ENTIRE CLAIM OF RECOVERY FOR LOSS OF OR DAMAGE TO THE SIMULATOR OR FOR
LOSS OF USE THEREOF OR FOR ANY OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGES
SUFFERED BY BUYER.
<PAGE> 170
6-1162-RLL-1742
Page 4
8. CONFIDENTIAL TREATMENT. Buyer understands that certain commercial and
financial information contained in this Letter Agreement including any
attachments hereto is considered by Boeing as confidential. Buyer agrees that it
will treat this Letter Agreement and the information contained herein as
confidential and will not, without the prior written consent of Boeing, disclose
this Letter Agreement or any information contained herein to any other person or
entity except as provided in Letter Agreement 6- 1162-RLL-1736.
Very truly yours,
THE BOEING COMPANY
By
-------------------------------
Its Attorney-in-Fact
-------------------------------
ACCEPTED AND AGREED TO as of this
date: , 1996
---------------------
TRANS WORLD AIRLINES, INC.
By
-------------------------------
Its
-------------------------------
<PAGE> 171
6-1162-RLL-1742
Exhibit A
Page 1 of 2
<TABLE>
<CAPTION>
EXHIBIT A
767-200 FULL FLIGHT SIMULATOR
<S> <C>
MANUFACTURER: Rediffusion Simulation, Ltd.
Crawley, England
DATE-IN-SERVICE: May 29, 1982
APPROVAL: Phase II, AC120-40A & AC-121,
Appendix H - December 7, 1983
FAA ID Number: 31
CONFIGURATION:
Engines: Pratt & Whitney JT9D-7R4D
Engine Monitoring: EICAS-302
Tail Number: C-GPWA
Effectivity: VB201
Airline: Pacific Western Airlines
Autopilot: Honeywell FCC -202
Navigation: FMC -451 with World Wide Data Base,
Collins EFIS -421, TCAS
Options: Selectable EFIS, FMCS, GPWC, FCC,
EICAS program pins
FMC Product Improvement Package
MOTION: Six degree of freedom, hydrostatic
CONTROL LOADING: Analog, force feedback, hydrostatic,
independent hydraulic system
COMPUTER:
Manufacturer: Gould C.S.D.
Model: Series 32/7780,32/67 with EPOCH-90
CPU/IPU replacements
Configuration: Dual CPU/IPU with 2 MB Reflective
Memory
Peripherals: 2 SECURE-A-STORE 300 MB disk
drives, 1
tape drive, 1 Printronix P600 line
printer, 2 terminals
VISUAL:
Manufacturer: Singer Link-Miles
Model: Image 4/AWARDS
Configuration: 3-channel, continuous mirror,
day/dusk/night, color, infinity display,
horizontal texture
Field-of-view: 150 degrees Horizontal, 40 degrees
Vertical, Viewing for all cockpit
occupants
Airports: BFI, MWH, SEA, LHR, JFK, MSP, PDX,
Lhasa, YKM, LAX, SFO and Generic
</TABLE>
<PAGE> 172
6-1162-RLL-1742
Exhibit A
Page 2 of 2
EXHIBIT A (CONT'D)
767-200 FFS SPARES LIST
<TABLE>
<CAPTION>
==================================================================================================================================
NAME PART # QUANTIT
Y
==================================================================================================================================
<S> <C> <C>
Mode Control Panel S241T00-202* 2
- ----------------------------------------------------------------------------------------------------------------------------------
EFIS Control Panel S242T404-304* 1
- ----------------------------------------------------------------------------------------------------------------------------------
Dual ADF Control Panel 285T0557-2* 1
- ----------------------------------------------------------------------------------------------------------------------------------
P/W EICAS Computer S242N701-302* 1
- ----------------------------------------------------------------------------------------------------------------------------------
RDMI S242T403-107* 1
- ----------------------------------------------------------------------------------------------------------------------------------
Brake Pressure Indicator S231T231-9* 1
- ----------------------------------------------------------------------------------------------------------------------------------
Duct Pressure Indicator S231T241-1* 1
- ----------------------------------------------------------------------------------------------------------------------------------
Stab Trim Indicator S253T405-8* 1
- ----------------------------------------------------------------------------------------------------------------------------------
Standby Altimeter S50400067 1
- ----------------------------------------------------------------------------------------------------------------------------------
Simulated Horizon Indicator (Standby ADI) N44ADM 1
- ----------------------------------------------------------------------------------------------------------------------------------
Airspeed/Mach Indicator 4039891-901 1
- ----------------------------------------------------------------------------------------------------------------------------------
Vertical Speed Indicator 4039893-901 1
- ----------------------------------------------------------------------------------------------------------------------------------
Audio Selector Panel 5032-1-2 1
- ----------------------------------------------------------------------------------------------------------------------------------
GPDC Circuit Board for EICAS A91/489/13 1
- ----------------------------------------------------------------------------------------------------------------------------------
Analog Output-Low Circuit Board A841/486/1 1
- ----------------------------------------------------------------------------------------------------------------------------------
Analog Output-High Circuit Board A841/486/2 1
- ----------------------------------------------------------------------------------------------------------------------------------
Dual SYDRI Circuit Board A851/486/1 1
- ----------------------------------------------------------------------------------------------------------------------------------
Addressable Relay Circuit Board A852/486/1 1
- ----------------------------------------------------------------------------------------------------------------------------------
Discrete In-High Circuit Board A870/486/1 1
- ----------------------------------------------------------------------------------------------------------------------------------
Bus Interface Circuit Board A872/486/1 1
- ----------------------------------------------------------------------------------------------------------------------------------
Discrete Out-Low Circuit Board A917/486/1 1
- ----------------------------------------------------------------------------------------------------------------------------------
Discrete Out-High Circuit Board A917/486/2 1
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
VISUAL SPARES
- ----------------------------------------------------------------------------------------------------------------------------------
Coil Match Board 260 1
- ----------------------------------------------------------------------------------------------------------------------------------
Power Supply (35kv EHT) RR30-5P/M113B 1
- ----------------------------------------------------------------------------------------------------------------------------------
Power Supply (10kv Focus) UC10P/M132 1
- ----------------------------------------------------------------------------------------------------------------------------------
Anode Leads VM-542223-07 1
- ----------------------------------------------------------------------------------------------------------------------------------
CRT (Red) SD-187R 2
- ----------------------------------------------------------------------------------------------------------------------------------
CRT (Green) SD-187G 2
- ----------------------------------------------------------------------------------------------------------------------------------
CRT (Blue) SD-187B 2
- ----------------------------------------------------------------------------------------------------------------------------------
Intel Computer 310 1
- ----------------------------------------------------------------------------------------------------------------------------------
IG Extender Card N/A 1
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
32/77 COMPUTER SPARES
- ----------------------------------------------------------------------------------------------------------------------------------
High Speed Device Interface Board (9131) 160-103364-001 1
- ----------------------------------------------------------------------------------------------------------------------------------
High Speed Device Interface Board (9130) 160-103554-001 1
- ----------------------------------------------------------------------------------------------------------------------------------
Dual Ported Integrated Memory (2MB DPIMM) 160-103845-001 2
- ----------------------------------------------------------------------------------------------------------------------------------
Asyncronous Data Set Board 160-103025-001 1
- ----------------------------------------------------------------------------------------------------------------------------------
Write Sense Controller 160-103769-002 1
- ----------------------------------------------------------------------------------------------------------------------------------
Read Sense Contoller 160-103770-002 1
==================================================================================================================================
</TABLE>
<PAGE> 173
6-1162-RLL-1742
Exhibit A
Page 3
EXHIBIT A (CONT'D)
767-200 FFS DOCUMENTS LIST
================================================================================
SIMULATOR
- --------------------------------------------------------------------------------
Documentation Guide
- --------------------------------------------------------------------------------
Operating Manuals
- --------------------------------------------------------------------------------
Maintenance Manuals
- --------------------------------------------------------------------------------
Computer Manuals
- --------------------------------------------------------------------------------
Software Manuals
- --------------------------------------------------------------------------------
Electrical Drawings
- --------------------------------------------------------------------------------
Simulator System Schematics
- --------------------------------------------------------------------------------
Tabulated Wiring Manual
- --------------------------------------------------------------------------------
Cable Diagrams
- --------------------------------------------------------------------------------
Inout/Output Listing
- --------------------------------------------------------------------------------
Parts Calalog
- --------------------------------------------------------------------------------
General Assembly Drawings
- --------------------------------------------------------------------------------
Instrument Data Documents
- --------------------------------------------------------------------------------
Acceptance Test Guide
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
VISUAL
- --------------------------------------------------------------------------------
Operation & Maintenance
- --------------------------------------------------------------------------------
Installation Documents
- --------------------------------------------------------------------------------
System Schematics
- --------------------------------------------------------------------------------
System Description
- --------------------------------------------------------------------------------
<PAGE> 174
6-1162-RLL-1743
Trans World Airlines, Inc.
One City Centre
515 N. Sixth Street
19th Floor
St. Louis, Missouri 63101
Subject: Letter Agreement No. 6-1162-RLL-1743 to
Purchase Agreement No. 1910 -
Reconciliation of [ ] Special Features
This Letter Agreement amends Purchase Agreement No. 1910 dated as of even date
herewith (the Agreement) between The Boeing Company (Boeing) and Trans World
Airlines, Inc. (Buyer) relating to Model 757-231 aircraft.
All terms used and not defined herein, shall have the same meaning as in the
Agreement.
1. [ ] Detail Specification
----------------------------
The Aircraft will be manufactured using Boeing Detail Specification
D6-44010-96 dated as of even date herewith. Such Detail Specification will be
comprised of Boeing Detail Specification D6-44010-77B dated September 12, 1995,
as the basis for Aircraft configuration (the [ ] Detail Spec). The [ ] Detail
Spec describes the configuration of Buyer's aircraft, Production Tab Block [ ],
which Buyer [
]. In addition, the [ ] Detail Spec has been revised to incorporate
certain development changes and other improvements to Boeing's basic model
757-200 configuration since delivery of [ ].
2. [ ] Special Features
------------------------
Attachment A hereto includes Change Requests (CR's) and Production
Master Changes (MP's) incorporated in the [ ] Detail Spec (the [ ] Changes),
which are changes to Boeing's current Basic Detail Specification for model
757-200 aircraft. The prices are expressed in July 1995 dollars, subject to
escalation. The changes unique to the [ ] configuration (not program priced
changes) reflect [ ] follow-on pricing for the CR's and MP's to be incorporated
in additional aircraft manufactured for Buyer. The prices for the changes
reflect only
<PAGE> 175
6-1162-RLL-1743
Page 2
recurring effort to incorporate the changes; non-recurring engineering is not
included in these follow-on prices.
3. Aircraft Special Features
-------------------------
The Aircraft Basic Price of the Aircraft,
described in Article 3.2.1, includes the price of the [
] Changes, as well as additional master changes described in Exhibit A to the
Agreement, which will be changes to the [ ] Detail Spec.
4. Exhibit A Non-Recurring Engineering
-----------------------------------
The configuration changes listed in Exhibit A are changes to the [
] Detail Spec to be incorporated in ten (10) Aircraft. The changes will also be
incorporated in ten (10) additional aircraft [
]. Non-recurring engineering associated with each of these
Exhibit A changes has been divided evenly over twenty aircraft; the ten (10)
Aircraft and ten (10) [ ] Aircraft.
5. Confidential Treatment.
-----------------------
Buyer understands that certain commercial and financial information
contained in this Letter Agreement are considered by Boeing as confidential.
Buyer agrees that it will treat this Letter Agreement and the information
contained herein as confidential and will not, without Boeing's prior written
consent, disclose this Letter Agreement or any information contained herein to
any other person or entity, except as provided in Letter Agreement
6-1162-RLL-1736, DISCLOSURE OF CONFIDENTIAL INFORMATION.
<PAGE> 176
6-1162-RLL-1743
Page 3
If this Letter Agreement accurately reflects your understanding of the matters
treated herein, please so indicate by dating and signing the document as
provided below.
Very truly yours,
THE BOEING COMPANY
By
--------------------------
Its Attorney-In-Fact
--------------------------
ACCEPTED AND AGREED TO this
Date: , 1996
----------------
TRANS WORLD AIRLINES, INC.
By
--------------------------
Its
--------------------------
Attachment
<PAGE> 177
Attachment A to
6-1162-RLL-1743
Page 1
<TABLE>
PRICE PER
<CAPTION>
CHANGE REQUEST AIRCRAFT
NO. TITLE (1995 STE $)
- -------------- ------------
<S> <C>
0130SO5001 [ ]
FOUR DOOR CONFIGURATION
STATUS: ACCEPT
0220CH5019 [ ]
STAINLESS STEEL IDENTIFICATION PLATE
STATUS: ACCEPT
0225SO5001 [ ]
EXTENDED RANGE OPERATIONS (EROPS)
STATUS: ACCEPT
0253CH5008 [ ]
CHANGE SELECTED BUYER FURNISHED EQUIPMENT
(BFE) TO SELLER PURCHASED EQUIPMENT (SPE)
STATUS: ACCEPT
1110MP5077 [ ]
EXTERIOR DECORATIVE FINISH - CROWN METRO
SERIES F20 TOPCOAT IN LIEU OF EXISTING
TOPCOAT
STATUS: ACCEPT
2210MP5005 [ ]
FULL TIME FLIGHT DIRECTOR
STATUS: ACCEPT
2311CH5018 [ ]
COMPLETE PROVISIONS FOR TWO HF
COMMUNICATIONS SYSTEMS (COLLINS - BFE - ONE
TRANSCEIVER CONTROL PANEL AND ANTENNA
COUPLER FOR FUNCTIONAL TEST)
STATUS: ACCEPT
2311MP5069 [ ]
DUAL HF COMMUNICATIONS SYSTEMS INSTALLATION
IN EXISTING COMPLETE PROVISION FOR DUAL HF
COMMUNICATIONS
STATUS: ACCEPT
2312CH5020 [ ]
VHF COMMUNICATIONS SYSTEM TRANSCEIVER -
COLLINS IN LIEU OF BENDIX
STATUS: ACCEPT
</TABLE>
<PAGE> 178
Attachment A to
6-1162-RLL-1743
Page 2
<TABLE>
<CAPTION>
PRICE PER
CHANGE REQUEST AIRCRAFT
NO. TITLE (1995 STE $)
- -------------- ------------
<S> <C>
2334CH5030 [ ]
AUDIO ENTERTAINMENT SYSTEM - PARTIAL
PROVISIONS - TRANSCOM MODEL 800
STATUS: ACCEPT
2334MP5056 [ ]
PARTIAL PROVISIONS FOR AUDIO ENTERTAINMENT
- ATTENDANT'S PANEL REVISION
STATUS: ACCEPT
2370CH5005 [ ]
VOICE RECORDER - SUNDSTRAND IN LIEU OF
FAIRCHILD
STATUS: ACCEPT
2500CH5007 [ ]
INTERIOR ARRANGEMENT REVISION - 228 TOURIST
CLASS PASSENGERS WITH GALLEYS 1A AND 4B,
AND LAVATORIES A, C, D, AND F
STATUS: ACCEPT
2500CH5066 [ ]
INTERIOR ARRANGEMENT REVISION - 225 T/C
PASSENGERS WITH GALLEYS G1A, G1B, & G4B IN
LIEU OF 228 T/C PASS WITH GALLEYS G1A & G4B
STATUS: ACCEPT
2511SO5003 [ ]
SECOND OBSERVER'S STATION - COMPATIBLE WITH
EXPANDED RIGHT SIDE PANEL WITH BOOKCASE
STATUS: ACCEPT
2513SO5001 [ ]
EXPANDED RIGHT SIDE PANEL AND BOOKCASE -
FLIGHT COMPARTMENT
STATUS: ACCEPT
2520MP5531 [ ]
LITERATURE POCKETS ON LAVATORY F -
RELOCATION - AND SEAT RELOCATION FOR PTC
SEATS
STATUS: ACCEPT
</TABLE>
<PAGE> 179
Attachment A to
6-1162-RLL-1743
Page 3
<TABLE>
PRICE PER
<CAPTION>
CHANGE REQUEST AIRCRAFT
NO. TITLE (1995 STE $)
- -------------- ------------
<S> <C>
2523CH5005 [ ]
OWNER'S NAMEPLATES - FLIGHT COMPARTMENT AND
PRATT AND WHITNEY ENGINES
STATUS: ACCEPT
2540MP5092 [ ]
Installation of Lavatories C and D
with bifold doors
2562CH5054 [ ]
INSTALLATION OF SLIDE/RAFTS AT DOOR 1, LEFT
AND RIGHT, AND DOOR 4, LEFT AND RIGHT
STATUS: ACCEPT
2562MP5152 [ ]
INSTALLATION OF DOOR 4 HGW SLIDE-RAFTS IN
LIEU OF LGW SLIDE-RAFTS
STATUS: ACCEPT
3131CH5035 [ ]
FLIGHT DATA RECORDER - (BFE) SUNDSTRAND
980-4100-DXUN IN LIEU OF BFE SUNDSTRAND
980-4100-DXUS OR 980-4100-BXUS
STATUS: ACCEPT
3131CH5043 [ ]
FLIGHT DATA ACQUISITION UNIT (FDAU) - (SPE)
SUNDSTRAND FDAU IN LIEU OF (SFE)
HAMILTON-STANDARD
STATUS: ACCEPT
3131CH5046 [ ]
FLIGHT DATA RECORDER SYSTEM - ADDITIONAL
PARAMETERS TO MEET FAR PART 121.343
AMENDMENT NO. 121-197, PW ENGINES
STATUS: ACCEPT
3131MP5052 [ ]
FLIGHT DATA RECORDER SYSTEM - FAA REQUIRED
PARAMETERS, FAA RECOMMENDED PARAMETERS AND
SELECTED OTHER PARAMETERS
STATUS: ACCEPT
3131MP5127 [ ]
TELEDYNE DFDAU, P/N 2233000-1, CONFORMING
TO FAR 121.343 AMENDMENT 121.197 IN LIEU OF
SUNDSTRAND P/N TBD
STATUS: ACCEPT
</TABLE>
<PAGE> 180
Attachment A to
6-1162-RLL-1743
Page 4
<TABLE>
PRICE PER
<CAPTION>
CHANGE REQUEST AIRCRAFT
NO. TITLE (1995 STE $)
- -------------- ------------
<S> <C>
3240SO5001 [ ]
B. F. GOODRICH STEEL BRAKES
STATUS: ACCEPT
3245CH5004 [ ]
225 MPH 24 PLY RATING TIRES
STATUS: ACCEPT
3431CH5004 [ ]
INSTRUMENT LANDING SYSTEM (ILS) RECEIVER -
COLLINS IN LIEU OF BENDIX
STATUS: ACCEPT
3432CH5001 [ ]
VOR/MARKER BEACON RECEIVER - COLLINS IN
LIEU OF BENDIX
STATUS: ACCEPT
3433CH5011 [ ]
RADIO ALTIMETER (RA) TRANSCEIVER - COLLINS
IN LIEU OF BENDIX
STATUS: ACCEPT
3443CH5023 [ ]
WEATHER RADAR - BFE COLLINS IN LIEU OF BFE
BENDIX
STATUS: ACCEPT
3445CH5002 [ ]
TRAFFIC ALERT AND COLLISION AVOIDANCE
SYSTEM (TCAS) - PARTIAL PROVISIONS
STATUS: ACCEPT
3453CH5007 [ ]
AIR TRAFFIC CONTROL (ATC) TRANSPONDER -
COLLINS TPR720 - MODE "S"
STATUS: ACCEPT
3455CH5001 [ ]
DISTANCE MEASURING EQUIPMENT (DME) -
INTERROGATORS - COLLINS P/N 622-4540-001 IN
LIEU OF BENDIX
STATUS: ACCEPT
3457CH5014 [ ]
AUTOMATIC DIRECTION FINDER (ADF) - TWO
SYSTEMS - BFE COLLINS
STATUS: ACCEPT
</TABLE>
<PAGE> 181
Attachment A to
6-1162-RLL-1743
Page 5
<TABLE>
PRICE PER
<CAPTION>
CHANGE REQUEST AIRCRAFT
NO. TITLE (1995 STE $)
- -------------- ------------
<S> <C>
3510CH5003 [ ]
CREW OXYGEN CYLINDER - 114 CU. FT. IN LIEU
OF 76 CU. FT.
STATUS: ACCEPT
3520SO5001 [ ]
PASSENGER OXYGEN MASK - INCREASED QUANTITY
STATUS: ACCEPT
4930SO5001 [ ]
APU FUEL MANIFOLD DRAIN TANK
STATUS: ACCEPT
5200CG5001 [ ]
ADDITIONAL SCUFF PLATE FOR ENTRY AND
SERVICE DOORS
STATUS: ACCEPT
7100CH5015 [ ]
PRATT AND WHITNEY AIRCRAFT PW2040 ENGINES
IN LIEU OF PW2037 ENGINES
STATUS: ACCEPT
7100SO5001 [ ]
PRATT AND WHITNEY AIRCRAFT PW2037 ENGINES
STATUS: ACCEPT
CR'S 40 TOTAL [ ]
</TABLE>
<PAGE> 182
6-1162-RLL-1744
Trans World Airlines, Inc.
One City Centre
515 N. Sixth Street
19th Floor
St. Louis, Missouri 63101
Subject: Letter Agreement No. 6-1162-RLL-1744 to
Purchase Agreement No. 1910 -Waiver of
Aircraft Demonstration Flights
This Letter Agreement amends Purchase Agreement No. 1910 (the Agreement) between
The Boeing Company (Boeing) and Trans World Airlines, Inc. (Buyer) relating to
the Model 757-231 aircraft (the Aircraft).
All terms used herein and in the Agreement, and not defined herein will have the
same meaning as in the Agreement.
1. Fuel Entitlement at Delivery.
-----------------------------
At the time of delivery of the Aircraft, Boeing will provide to
Buyer, at no charge 1600 gallons of jet fuel.
2. Waiver of Demonstration Flight.
-------------------------------
Notwithstanding the provisions of the Agreement requiring the
Aircraft to be test flown prior to delivery for the purpose of demonstrating to
Buyer the functioning of such Aircraft and its equipment, upon notice to Boeing
90 days prior to the scheduled date of the Aircraft delivery, or as agreed
between the parties, Buyer may waive such flight. With respect to each waived
demonstration flight, the following provisions will apply:
3. Additional Fuel.
----------------
Promptly after delivery of the Aircraft, Boeing will load on the
Aircraft 8,000 gallons of jet fuel.
<PAGE> 183
6-1162-RLL-1744
Page 2
4. Reimbursement for Correction of Flight
--------------------------------------
Discrepancies.
--------------
4.1 Ferry Flight.
-------------
Except for Aircraft to be used promptly
after delivery for Boeing flight crew training provided to Buyer at or near
Seattle, Washington, Boeing will reimburse Buyer for Buyer's direct labor costs
(as defined below) and the cost of any material (Correction Costs) required to
correct any flight discrepancy detected by Buyer while the Aircraft is being
ferried from Seattle, Washington, to Buyer's main base, to the extent such
Correction Costs and labor costs are not covered under a warranty provided by
Boeing or by any of its suppliers. Within 90 days after the date of such ferry
flight Buyer will submit to Boeing's Director, Product Assurance Contracts, at
Renton, Washington, a written itemized statement describing any such flight
discrepancy and indicating the Correction Costs incurred by Buyer for the
correction of such flight discrepancy.
4.2 Definitions.
------------
For purposes of reimbursement under this
paragraph; (i) Buyer's direct labor costs will be determined using the Warranty
Labor Rate in effect between the parties as of the date such labor is expended,
and (ii) flight discrepancies mean any failure or malfunction of such Aircraft,
or the accessories, equipment, systems and parts installed therein which results
from a defect in such Aircraft, accessories, equipment, systems and parts or a
nonconformance to the Detail Specification for such Aircraft which was present
at the time of delivery of the Aircraft to Buyer and which, if detected during a
Boeing predelivery demonstration flight, would have been reported in the pilot's
flight discrepancy report and would have been corrected by Boeing prior to the
delivery of such Aircraft to Buyer.
<PAGE> 184
6-1162-RLL-1744
Page 3
5. Return of Aircraft.
-------------------
If any flight discrepancy as defined above is detected by Buyer
during the ferry flight of any Aircraft, which requires the return of such
Aircraft to Boeing's facilities at Seattle, Washington, for correction by
Boeing, title to and risk of loss of such Aircraft will at all times remain with
Buyer and Boeing will have such responsibility for such Aircraft while it is on
the ground at Boeing's Seattle, Washington, facilities as is chargeable by law
to a bailee for mutual benefit, but Boeing will not be chargeable for loss of
use.
Very truly yours,
THE BOEING COMPANY
By
------------------------------
Its Attorney-In-Fact
------------------------------
ACCEPTED AND AGREED TO this
Date: , 1996
-------------------
TRANS WORLD AIRLINES, INC.
By
------------------------------
Its
------------------------------
<PAGE> 185
6-1162-RLL-1746
Trans World Airlines, Inc.
One City Centre
515 N. Sixth Street
19th Floor
St. Louis, Missouri 63101
Subject: Letter Agreement No. 6-1162-RLL-1746 to
Purchase Agreement No. 1910 -
Other Matters
This Letter Agreement amends Purchase Agreement No. 1910 dated as of even date
herewith (the Agreement) between The Boeing Company (Boeing) and Trans World
Airlines, Inc. (Buyer) relating to Model 757-231 aircraft.
All terms used herein and in the Agreement, and not defined herein, will have
the same meaning as in the Agreement.
1. Delivery Delay.
---------------
Notwithstanding the language set forth in Article 2.3 "Notice of
Delivery Date," if Buyer requests a delivery delay for any Aircraft within the
contract delivery month, Buyer shall not be charged for any costs incurred by
Boeing for the first three (3)
days of such delay.
2. Exhibit B, Part A - Boeing Warranty and
---------------------------------------
Part C - Boeing Service Life Policy.
------------------------------------
For clarification purposes, "the clock" for both the Boeing
Warranty as described in Exhibit B, Part A and for the Boeing Service Life
Policy as described in Exhibit B, Part C starts at delivery of the Aircraft and
as such there is an overlap in the Boeing Warranty and the Service Life Policy
for the first thirty six (36) months after delivery of the Aircraft.
During the thirty six (36) month warranty period, the terms and
conditions of the Boeing Warranty take precedence over the terms and conditions
of the Boeing Service life Policy.
3. Exhibit B, Part A Paragraph 5.1. and 5.2
----------------------------------------
In the event of a defect in conformance to the Detail Specification
or a defect in material or workmanship for a spare part and that defect occurs
in the thirty fifth month of the thirty six month warranty
<PAGE> 186
6-1162-RLL-1746 Page 2
period, then Boeing will extend the Boeing Warranty thirty (30) days from the
date of notification from Buyer to Boeing in the thirty fifth month for the
defect in conformance to the Detail Specification or a defect in material or
workmanship for the spare part.
4. Confidential Treatment. Buyer understands that certain commercial and
financial information contained in this Letter Agreement including any
attachments hereto is considered by Boeing as confidential. Buyer agrees that it
will treat this Letter Agreement and the information contained herein as
confidential and will not, without the prior written consent of Boeing, disclose
this Letter Agreement or any information contained herein to any other person or
entity except as provided in Letter Agreement 6-1162-RLL-1736.
Very truly yours,
THE BOEING COMPANY
By
------------------------------
Its Attorney in Fact
------------------------------
ACCEPTED AND AGREED TO as of this
date: , 1996
--------------------
TRANS WORLD AIRLINES, INC.
By
------------------------------
Its
------------------------------
