Appendix — Hughes Tool Co. v. Trans World Airlines, Inc.

Supreme Court brief1973

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Text

INDEX

Volume AX-I

‘Item

TWA Ex. 2 (Statement of Robert W. Rummel)

TWA Ex. B-3 (Tooleo-Convair Amended Agree-

ment—Model 22, 6/4/56)

TWA Ex. R-5 (TWA-Toolco Purchase Agree-

ment—May 9, 1960)

IWA Ex. R-8(80) (FAA Registration Docu-

ments—B707-331, No. N771TW)

™wA Ex. R-8(81) (FAA Registration Docu-

ments—B707-331, No. N772TW)

NWA Ex. 3 (Affidavit of J. B. Connelly)

WA Ex. 4(b) (C. & C. Report—Comparative

Profit Study)

ITWA Ex. 4 (e) (1) (C. & C. Report Financial

Results from Reconstructed Jet Fleet)

MWA Ex. 4 (e) (4) (Exhibits B-J to C. & C. Re-

port— Financial Results from Reconstructed

Jet Fleet)

Volume AX-II

"WA Ex. 5(a) (Drexel Harriman Ripley, Inc.

Report—Parts I & II)

"TWA Ex. 5(b) (Exhibits to Drexel Harriman

Ripley, Inc. Report)

ITEM

TWA Ex. 7(b)(1) (Price Waterhouse Study—

Volume One)

TWA Ex. 7(b)(2) (Price Waterhouse Study—

Volume Two)

Volume AX-III

TWA Ex. 10 (Letter — Boeing to TWA re 707

Negotiations—12/ 29/54)

TWA Ex. 12 (Toolco-Convair CV. 990 Purchase

Agreement—11/10/60)

TWA Ex. 13 (Holliday Call Sheet—Feb. 20-27,

1961)

TWA Ex. 14 (CV-990 Purchase Agreement—

Amendment of 2/22/61)

TWA Ex. 22 (Rummel Call Sheets) i

TWA Ex. 23 (Letter Agreement—Sale of Six

Boeings to Pan American)

TWA Ex. 39 (Affidavit of Joseph P. Ripley)

TWA Ex. 42 (C. & C. Report—Revision of

Pages 63, 64, 71 & 72)

TWA Ex. 43 (C. & C. Report—Revision of

Page 51)

TWA Ex. 46 (Jet and Turboprop Aircraft of

TWA and Principal Competitors—1958-66)

TWA Ex. 47 (Boeing Aircraft Employed on

Routes Formerly Served by B-720Bs) —.......

PAGE

AX-452

AX-480

AX-643a

AX-644

AX-655

AX-660

AX-665

AX-729

AX-732

AX-735

AX-740

AX-742

AX-743

ITEM

TWA Ex. 50 (Price Waterhouse Report—Sum-

mary of Application of Assumptions)

TWA Ex. 72 (TWA Annual Report—1939)

TWA Ex. 73 (TWA Annual Report— 1940)

TWA Ex. 74 (TWA Annual Report—1941)

TWA Ex. 75 (‘TWA Annual Report—1942)

TWA Ex. 76 (TWA Annual Report—1943)

TWA Ex. 77 (TWA Annual Report—1944) ........

TWA Ex. 78 (TWA Annual Report—1945)

TWA Ex. 79 (TWA Annual Report—1946)

TWA Ex. 80 (TWA Annual Report—1947)

TWA Ex. 81 (TWA Annual Report—1948)

TWA Ex. 82 (TWA Annual Report—1949)

TWA Ex. 83 (TWA Annual Report—1950)

TWA Ex. 84 (TWA Annual Report—1951)

TWA Ex. 86 (TWA Annual Report—1953)

TWA Ex. 87 (TWA Annual Report—1954)

TWA Ex. 88 (TWA Annual Report—1955) . AX-814

TWA Ex. 89 (TWA Annual Report—1956) ......_ AX-819

TWA Ex. 90 (TWA Annual Report—1957) AX-822

IWA Ex. 91 (TWA Annual Report—1958) ......

TWA Ex. 92 (TWA Annual Report—1959)

TWA Ex. 93 (TWA Annual Report—1960)

Ire

TWA Ex. 94 (TWA Annual Pport—1961)

TWA Ex. 96 (TWA Annual Report—1963) ........

TWA Ex. 128 (Pan American Annual Report—

1959)

TWA Ex. 132 (Pan American Annual Report—

1963)

TWA Ex. 155 (AAL, Annual Peport—1958)

TWA Ex. 158 (AAL Annual Peport— 1961)

TWA Ex. 159 (AAL Annual Peport—1962)

TWA Ex. 184 (UAL Annual Report—1959)

TWA Ex. 186 (UAL Annual Report—1961) —

TWA Ex. 187 (UAL Annual Report—i962) ....

TWA Ex. 192 (TWA Prospectus, 5/25/61 & Sup-

plement, 6/20/61)

TWA Ex. 194 (TWA Prospectus—6/17/57) -.......

TWA Ex. 223 (Pan Ameriean Prospectus—

7/3/45—Supplement—7 /24/45)

TWA Ex. 249 (American Airlines Prospectus—

6/11/46—Supplement—6/24/46) -..................

TWA Ex. 257 (TWA-Toolco Lease Agreements

—Boeing Jets)

TWA Ex. 264 (Toolco-Leckheed Purchase

Agreement—L-1449A—12/%3/54) -....................

TWA Ex. 266 (Toolco-Leckheed Purchase

Agreement—L-1049G—9/26€/55)

AX-862

Item

TWA Ex. 267A (Letter, TWA to Tooleo—1957

Common Stock Offering)

TWA Ex. 267B (Letter, TWA to N.Y. Trust

Co.—1957 Common Stock Offering)

TWA Ex. 271 (Letter, Toolco to SEC—1957

Common Stock Offering)

TWA Ex. 275 (TWA Board Minutes—April 26,

1945)

TWA Ex. 276 (TWA Finance Committee Min-

utes—September 12, 1945)

TWA Ex. 277 (Page from Banking Quotation

Record)

TWA Ex. 278 (TWA Board Minutes—November

8, 1946)

TWA Ex. 279 (Special TWA Stockholders Meet-

ing—December 23, 1946-——Judges’ Report)

TWA Ex. 280A (Minutes—Adjourned Special

TWA Stockholders Meeting—December 28,

1946)

TWA Ex. 280B (Adjourned Special TWA Stock-

holders Meeting—December 28, 1946—Judges’

Report)

TWA Ex. 281A (Minutes—Adjourned Special

TWA Stockholders Meeting—December 31,

1946)

TWA Ex. 281B (Adjourned Special TWA Stock-

holders Meeting—December 31, 1946—Judges’

Report)

Irem

TWA Ex. 282 (Minutes & Judges’ Report—Ad-

journed Special TWA Stockholders Meeting

—January 6, 1947)

TWA Ex. 283 (TWA Board Minutes—December

18, 1946) —

TWA Ex. 284 (TWA Board Minutes December

27, 1946)

TWA Ex. 285 (TWA Board Minutes—December

28, 1946)

TWA Ex. 287 (TWA Board Minutes—January

9, 1947)

TWA Ex. 288 (Minutes—Adjourned Special

TWA Stockholders Meeting—January 13,

1947)

TWA Ex. 290 (TWA Board Minutes—June 15,

1948)

TWA Ex. 292 (TWA Proxy Statement—July

15, 1948)

TWA Ex. 293 (TWA Prospectus—2/18/49 &

Amendments—3/8/49)

TWA Ex. 313 (Debt Outstanding & Available to

TWA & Competitors—1961-63)

TWA Ex. 314 (Weighted Average Interest—

TWA & Competitors—1960-63)

TWA Ex. 319 (Least Squares Analysis—S.H.E.

Avg. Stage Length—B-331s)

’ PAGE

AX-945

AX-950

AX-956

AX-962

ITEM

TWA Ex. 320 (Least Squares Analysis—S.H.E.

Avg. Stage Length—CV-880s)

TWA Ex. 321 (Least Squares Analysis—S.H.E.

Avg. Stage Length—B-131s)

TWA Ex. 322 (Least Squares Analysis—S.H.E.

Avg. Stage Length—B-131Bs)

TWA Ex. 328 (S.H.E.—Passengers Added/

Deleted—Reconstructed TWA)

TWA Ex. 331 (TWA Historical Load Factors—

CV-880s—1962-1963)

TWA Ex. 336 (Comparison TWA Int l vs. PAA-

Atl.—1959)

TWA Ex. 345A (Price Waterhouse Comparison

C. & C. and S. H. E. (Revised) )

TWA Ex. 351 (1965 CAB Handbook of Airline

Statistics)

TWA Ex. 355 (Comparative Profit Study—

TWA with AAL & UAL)

TWA Ex. 356 (Comparative Profit Study—

TWA with All Other Domestic Trunks)

TWA Ex. 399 (Comparison, TWA Actual Jet

Load Factors vs. S.H.E. Marginal Passenger

Mile Factors)

TWA Ex. 401 (TWA B-131 Load Factors—

April-July 1959)

TWA Ex. 420 (Price Waterhouse Comparison—

C. & C. (Revised) and S. H. E.)

AX-1066

AX-1067

AX-1068

AX-1069

AX-1071

AX-1072

AX-1073

AX-1107

AX-1108

AX-1110

Trem

TWA Ex. 423 (Late Evening

1961-1963)

TWA Ex. 424 (Cargo v. Passenger Revenue—

TWA Late Evening Flights)

TWA Ex. 426 (Comparison of Selected A/C

Numbers from S.H.E. Appendix a)

TWA Ex. 431 (Profitability of TWA A/C by

Month—Computer Print-out)

TWA Ex. 432 (Profitability of TWA A/C by

TWA Ex. 435 (Regression Analysis—Random

Numbers)

TWA Ex. 436A (Regression Analysis—Random

Numbers)

TWA Ex. 4368 (Regression Analysis—Random

Numbers)

TWA Ex. 4360 (Regression Analysis Random

Numbers)

TWA Ex. 440 (Graph Illustrating Testimony of

Prof. Hare)

TWA Ex. 441 (Regression Experiment—

3/23/68)

Flighte—TWA

TWA Ex. 444 (C. & C. Tabulation—Additional

TWA Domestic Seat-Miles)

PAGE

AX-1129

AX-1133

AX-1134

AX-1135

AX-1145

AX-1146

AX-1154

AX-1157

AX-1160

AX-1163

AX-1164

AX-1177

Volume AX-IV

Irzm

DX4 (Toolco Order—30 P.&W. J i Engines,

2/14/56)

DX5 (Letter—Toolco to PAW, ia Jet Engine

Orders, 2/14/56) 2

DX6G (Tooleo Order 90 Additional P. & W.

JT4A-3 Engines, 2/15/56)

DX7 (Amendment Tooleo Order for 300 P.&W.

Jet Engines, 9/7/56)

DX8 (Letter P. KW. to Rummel re 300 Jet

Engines, 9/7/56)

DX10 (Letter—Rummel to Collings re Boeing

707, 1/12/55)

DX11 (Notes of Convair Negotiations—March

24, 1955)

DX15 (Draft C.&C. Report—TWA Financial

Forecast 1959-61)

DX19 (Page from Aviation Week, Jan. 10,

1955)

DX22 (American Aviation, June 20, 1955, pages

21-23)

DX26 (American Aviation, Sept. 12, 1955, pp.

84-85)

DX27 (American Aviation, Oct. 10, 1955, p. 68)

DX28 (Pages from American Aviation, Oct. 24,

1955)

Werz“

PAGE

AX-1178

AX-1181

AX-1183

AX-1184

AX-1185

AX-1186

AX-1187

AX-1192

AX-1208

AX-1209

AX-1212

AX-1214

AK-1215

Irzm

DX29 (Aviation Week, Oct. 17, 1955, p. 7)

DX31 (American Aviation, Nov. 7, 1955, pp.

23-25, 27-28)

DX40 (TWA Board Minutes—June 21, 1961)

DX43 (Excerpts from Deposition of Robert W.

Rummel)

DX44 (Letter of Damon, Dec. 6, 1955)

DX45 (Letter—Leslie to Dietrich, Dec. 19, 1955)

DX46 (Letter—Dietrich to Ayers, Dec. 21, 1955)

DX47 (Boeing-Tooleco Purchase Agreement

8 B-131s, 1/10/56)

DX48 (Teletype—Boeing to Toolco re B707-

131s, 11/11/56)

DX51 (Boeing Offer of B707-320s to Toolco,

1/6/56)

DX53 (Transcript of Telephone Conversation—

Rummel & Connelly, 12/20/57 )

DX54 (TWA Board Minutes—June 26, 1959)

DX57 (The Huntington Report—1960)

DX62 (TWA Fleet Requirements 1961-70, dated

3/1/61)

DX63 (TWA Financial Forecast 1959-61, dated

5/15/59) ,

——

DX64 (Letter to Thomas, dated 5/6/59)

A-1369

A-1378

AN 1382

AX-1385

AX-1390

AX-1391

AX-1393

AX-1402

AX-1410

AX-1420

IreM

DX65 (TWA Staff Engineering Report re Jets

& Turboprops—4/19/56)

DX66 (Toolco-Boeing Contracts—B707-131s,

3/2/56)

DX67 (Tooleo-Boeing Contracts—B707-331s,

3/19/56)

DX68 (Tooleo-Convair Contracts—CV-880s,

9/10/56)

DX71 (Rummel Memo re TWA Equipment Pro-

gram, 3/15/61)

DX72 (Telegram—Bew to Rummel—2/27/61) -...

DX73 (Letter—Leslie to Holliday—3/20/61) ....

DX74 (Letter—Leslie to Holliday—4/3/61)

DX77 (Letters—Tooleco to TWA re Financing

Additional Jets, 6/9-10/61)

DX78 (Letter—TWA to Holliday re Financing

Proposals, 6/16/61)

DX79 (Pan American-Boeing Purchase Agree-

ment—B707-120s, 10/13/55)

DX81 (Pan American-Boeing Purchase Agree-

ment—B707-321s, 12/19/55)

DX85 (Boeing-AAL Purchase Agreement—

B707-123s, 3/1/56)

DX95 (Allen Letter Announcing Boeing Jet,

Nov. 19, 1954)

DX96 (Boeing Offer to Sell Pan American 25

B-120s, 6/23/55)

Irem

DX97 (Boeing Offer to Sell American 15 B-120s,

6/24/55)

DX98 (Boeing Offer to Sell United 15 B-120s,

6/24/55)

DX101 (Boeing 707 Delivery 8 3

Volume AX-V

DX102 (Boeing Memorandum re 707 Over-Ocean

Configuration, 11/2/55)

DX103 (Boeing Memorandum re TWA Delivery

Positions, 12/23/55)

DX105 (Boeing Memorandum re Negotiations

with TWA, 7/24/56)

DX106 (Letter—Rummel to Cook re Boeing

Deliveries, 1/28/58)

DX107 (Letter—Rummel to Cook re Boeing

Deliveries, 3/17/58)

DX108 (Letter—Price to Allen re Boeing

Deliveries, 3/30/58)

DX109 (Letter—Tooleo to Allen re Boeing

Deliveries, 5/8/58)

DX116 (Rourke Memo to Rummel re CV-880

Deliveries, 1/15/60)

DX120 (TWA Memorandum re CV-880 Deliv-

eries, 10/2/59)

DX122 (Bew Memorandum to Cannady re CV-

880 Deliveries, 12/18/59)

Irem

DX124 (Parmet Memorandum to Rourke re CV-

880 Deliveries, 1/13/60)

DX125 (TWA Memorandum re CV-880 Deliv-

eries, 1/22/60)

DX127 (Rummel Memorandum to Rourke re

Integration of CV-880s, 2/8/60)

DX128 (Letter—Rourke to Digges re Specifica-

tion Modifications, 4/7/60)

DX:130 (Bew Wire to Rourke re Convair Delays,

5/27/60)

DX135 (Letter—Convair to Bew re CV-880 De-

livery, 1/6/61)

DX137 (Telegram—Bew to Rummel re Convair

Delays, 2/16/61)

DX139 (Letter—Convair to Bew re Convair

Delays, 3/16/61)

DX142 (Letter—Convair to Rourke re CV-880

Deliveries, 7/11/61)

DX143 (Letter—Rourke to Convair re CV-880

Deliveries, 8/2/61)

DX146 (Letter—Convair to Toolco re Model 30

Delivery Positions, 5/6/60)

DX148 (Tooleo—General Dynamics Letter

Agreement re 6 Model 30s, 7/14/60)

DX152 (Tooleco—General Dynamics Letter

Agreement re Additional Model 30s, 9/6/60)

Irmi f

DXI56 (Telegram— Beall to Allen, et al. re

PAA Negotiations, 9/28/55).

DX168 (Boeing Memorandum re Conversations

with Howard R. Hughes, 9/23/55)

DX169 (Boeing Memorandum re Conversation

with Howard R. Hughes, 10/31/55)

DX170 (Telegram—Boeing to Tooleo re B707-

331s, 7/21/59)

DX218 (C.&C. Letter to Leslie re TWA Finan-

cial Forecast, March 13, 1959)

DX219 (TWA Financial Forecast 1958-1962,

dated 12/1/58)

DX237 (Aviation Week & Space Technology,

11/13/61, pages 42-43)

DX239 (Airlift, May 1962, p. 46)

DX254 (TWA Board Meeting, Aug. 16, 1961—

Report of System General Manager

DX255 (Statement of CAB Chairman Boyd,

Jan. 29, 1960)

DX257 (Aviation Week, 1/30/61, pp. 36-37)

DX258 (Report to Directors of TWA—Oct. 13,

1961)

DX259 (CAB Order of Investigation Dec. 28,

1961)

DX260 (Letter—Tillinghast to CAB, Jan. 29,

1962)

PAGE

AX-1657

.AX-1658

AX-1660

AX-1661

AX-1664

AX-1666

AX-1671

AX-1673

AX-1674

AX-1677

— AX-1681

AX-1683

AX-1694

AX-1703

IremM PAGE

DX262 (Revised Pages 70-73 of TWA Ex.

4(c)(1)) AX-1708

DX270 (Report of Loeb, Rhoades & Co.) ............. AX-1712

DX271A (S.H.E. Report (Revised)—Volume

0 One) AX-1789

DX271B (S.H.E. Report (Revised)—Volume

Two) AX-1859

DX284 (TWA’Prospectus—Nov. 20, 1952) ........ AX-1961

DX286 (TWA Board Minutes—Jan. 13, 1955) — AX-1967

DX287 (TWA Board Minutes—Dec. 13, 1955) — AX-1970

DX289 (TWA Board Minutes—April 26, 1956) — AX-1974

DX290 (Tooleo-TWA Conditional Sale Con-

tract—L-1049Gs, 6/6/56) AX-1979

Volume AX-VI

DX292 (Tooleo-TWA Conditional Sale Con-

tract—L-1649As, 4/19/57) AX-1995

DX321 id. (CAB Orders & Documents) AX-2012

DX322 id. (CAB Orders & Documents) AX-2191

DX323 id. (CAB Orders & Documents) AX-2347

Volume AX-VII

DX334 (Correlation Coefficients—Substituted

S.H.E. Table G-VII) AX-2427

DX339 (B-120s Available to AAL, Actual vs. .

Reconstructed 1959) A-2428

xvi

Traut .

D341 (Domestic Carriers—Jets Assigned to

Service, 1959.63)

DX342 (TWA’s Share of Jets Assigned to Do-

mestic Service, 1959-63) ,

DX348 (Revised Summary—Categories of Dif-

ferences—Wemple vs. Simat)

DX358B id. (CAB Form 41 Reports—Northeast

Airlines, 1957-1966)

DX358C id. (CAB Form 41 Reports—PAA,

1957-1966) .

D359 A (Supplemental S. H. E. Report Volume

DX364 id. (Excerpts from Deposition of Emmett

O. Cocke)

DX367 (Combined Non-Stop Scheduled Fre-

quencies Per Week—Anug. 1958-63)

DX368 (Combined Non-Stop Scheduled Fre-

quencies Per Week—Aug. 1958-63)

DX371 (Summary—Categories of Differences—

Wemple vs. Simat (Supplemental))

DX379 (Domestic Jet Seat Miles—Wemple vs.

Historical)

PAGE

AX-2429

AX-2430

AX-2431

AX-2452

AX-2454

AX-2458

AX-2843

AX-2851

AX-2853

AX-2856

AX-2867

AX-1995

DX292

(Toolco-TWA Conditional Sale Contract-

L-1649As, 4/19/57)

. | “CONDITIONAL SALE CONTRACT

dated as of April 19, 1957,

between

HUGHES: TOOL COMPANY

23g Seller

N and

TRANS WORLD AIRLINES, INC.

; 2 Buyer

AX-1996 , ass

‘ agin. page 1

(Toolco-TWA Conditional Sale

L-1649As, 4/19/57)

- CONDITIONAL SALE CONTRACT

contract of Conditional Sale made as of the 19th

day. of April, 1957, between HUGHES TOOL CONPANY, a N

Delaware corporation (hereinafter sometimes called the

Seller“), with its principal place of business et

Houston, Texas, and TRAXS WORLD AIRLINES, INC., 2

Delaware corporation (hereinafter sometimes called the

buyer“), with its principal place of business at Kansas

Brisa: Missouri, : |

_ THE INTEREST OF THE SELLER IN THE AIRCRAFT AND

EQUIPMENT COVERED HERESY IS _THAT OF A CON-

a DITIONAL SELLER AND THE INTE T OF ‘THE BUYER

THEREIN IS THAT OF A CONDITIONAL BUYER.

* c

WHEREAS, “Hughes has contracted to purchase from

Lockheed Aircraft Corporation (hereinafter caljea

Lockheed“) the twenty-five (25) Model L-1649A "Lockheed

Airplanes identified as follows:

C.A.A. Reslstration No. Mfg. Serial No.

2 — 1002

—5.— . 1003

2 ~ 1004

1005

N7305C ° _ 1006

N7300C , : 1007

ol Ey 6 1008

N73 1009

N7305¢ . 1010

N7310C 1012

N7311C * 1013

N7312¢ . 1014

.N73i3C ; 1015

N7314C 1016

N7315¢ 1017

N31 1018

° N7327C 1019

é N732EC 1023.

N 73180 1622

N732Co 1023

DX292, e 2 AX-1997

(Toolco-TWA Condttieunt Baie Contract-

L-1649As, 4/19/57)

Herathlonr RO. Mfg, Serta No.

3210 102

1322 1025 ~

30 1029

* 1030

5C 1035

together with the airplane engines (cach of which is of

750 or more rated take-off horsepower and will be later

identified by manufacturer's serial number in @ supp gi

ment to this Conéitionel Sale Contract) installed in each

thereof on the date of delivery of such airplanes to Hughes

and together with the propeller assenidives and 211 other

equipment and accessories attached to such e and

engines: on che date of delivery of such lanes to Hughes me

(hereinafter ¢alled."the Airplencs"); 1 .

WEBREAS, Hugnes has also contracted to purchase

from various vendors extra airplane engines lego of which

is of 750 1 more rated take-off horscpower and “will be

later identified by manufacturer's serial number in a sup-

plenent to this Conditional Sale Contract) end propeller

assemblies and airframe spare parts, spare parts for air-

plane engines and for propeller assenblies, and other acces-

sories, flight equipment and parts, for use on or in con-

nection with the operation or maintenance of the Airplanes

at, in or near repair or overhaul bases, airports, airficlds,

landing strips, hangars, werchouses, storehouses and build-

ings owned, operated, leased or usec by Buyer ef any one or

more of the locations shown on Exhibit 1 ennexed heréto

(all of which engines, prope? ler essen! es, parts, acces-

sories and cquipment are hereinafter ~oferred to as “Spares");

and

WHEREAS, ti

buy the Airplancs ind Sg ros pursuant to the conditional

sale apranzetentn set forth herein.

2 ie

—

DX292, page 3

. (Toolco-TWA Conditional

Sale Contrac

L-1649A8, 4/19/57) nae

NOW, VHEHEYORE, in conside ‘atlon of the niytuz)

covenants herein contecned, the parties hereto agree as

follows: :

co 1 agrees to sel! to Buyer and Buye>

agrees to purchase the Airplanes and Spares upon the terns

and conditions hereinafter set forvh. :

ae 5 (a) Simultancously upon conveyance of title

to each Airplane to Seller, such ee shall forthwith

de delivered to Buyer and ‘Buyer shall accept such delivery

at Lockhecd ur Terminal, Burbank, California, or at such

other place to which the Airplane has been delivered to

Seller. „

(s ) Seller shall deliver the Spares, or caus

them to be delivered, to Buyer at Kansas City, Missouri, or

such other pace as may be designated by Buyer, such

deliveries to be made upon delivery of the first Airplane

to Buyer, or as soon thereafter as practicable, ‘and with

respect to Spares not then delivered to Seller, upon

delivery of such Spares to Seiler, or as soon. thereafter

as practicable.

3. (a) The purchase price of each irplane for

pur poses of this Contract shall be the aggregate of

(1) The amounts Seller shell have paid

Loeſcheed for such Airplene at the time of its |

del:very to Buyer hereunder; N

(2) All additional direct costs which |

have been peid or incurred dy Selle> at the time oF

the delivery of such Airplene to Buyer and are at-

triburedie to such Aisplanc, including, but not

limited to, costs of “customer furnished equipment".

DX292, page 4

L-1649As, 4/19/57)

To the extent thet any such costs ase not specifically

attributable to a particular Airplane they shall be

allocated equally among the * at the time not

Gelivered to Buyer;

(3) An amount equal to interest at the

rate of three per cent (3%) per annum on the average

amount of the outstanding advance payments made by

.* Seller applicable to such Airplanes; less, however,

an amount equal to the sum of all interest payments

received by Seller from ö for advance payments

made by Seller to Lockheed in connection with the

. agreement betwost them covering the Airplanes.

Said sum: of interest 8 received by Seller from

Lockheed shall be eredited only against that part of

the purchase price provided for by this subperagraph

3), apa shall in no event reduce that part of the

"purchase price represented by subparagraphs (1) and

(2) of this paragraph. The average anount of the out -

standing advance payments applicable to 3 Airplane

shall be computed by considering the payments made or

costs incurred as set forth in subparagraphs (1) end

(2) of this paragraph 3(a) as outstanding from the

respective dates such payments were zade or such costs

ere incurred by Seller and until the delivery of

such Airplane to Buyer under this Contract.

(b) ne purchase price of Sp or purposes

ol this Contract shell be the aggregate of

(1) the total payments made therefor by

— 4. * 2 = seat wo * N -% 45

Seller to the ver dors OF Such Spares zt the time of the

delivery of the first Airplane to Buyer hereunder;

(Toolco-TWwA Conditional Sale Contract-

AX-2000

DX292,

8 (2) ‘all add: tional direct costs which

ö have Sion pad or incurrcé by Seller at the time of

the delivery of the fivst Airplane to Buyer aud are

attributable to such Spares or to the purchase thereof;

(3) an amount equal to interest at the

rate of three per cent (3%) per annum on the average

amount of the outstanding advance payments made by

‘Seller applicable to such Spares. The average amount

of the outstanding advance payments applicable to 5

Spares shall be computed by considering the peyments

made or costs incurred as set . in subparagraphs

(1) and (2) of this paragraph 3(b) as outstanding from

the respective dates such payments were made or such

costs were incurred by Seller and until the delivery

of the first Airplane to Buyer under this contract;

: (4) any dart lone! amount which, at the

. tine or the delivery of the first Airplane to Buyer :

eee Seller is committed to pay to duppliers any

Spares. :

the purchase price of Spares shell each de paid dy Buyer to

Seller in sixty (60) equal consecutive monthly installnents,

together with interest on the unpaid balance et the rate of

4 per cent (kg) per annum. Tne first of such peynents

relating to cach Airplane shall be ede 2d the time of

delivery of such Airplane, and the first oF such payments

* 0 .

relating to Spares shall be mede et the vime of delivery of

ive

the first Airplene. As to each Airplane, and as to Spares,

* the sccond nd suceceding syn da hall ze nge sonth

8 on the first dzy of the months sucecccding

which the first ginnt is_rogut rsd to de

AX-2001

DX292, page 6

(Toolco-TWA Conditional Sale Contract-

L-1649As, 4/19/57)

vole of each such purchase price shali have been pela. .

11 payments shall be made to the Seller at the Hughes Tool

company, Eouston, Texas.

' (a) In tne event thet the purchase price o

the Airplanes differs from the azount computed at the tine

of the delivery tnercof to Buyse> hereunéer or in the event

that the aggregate net amount which Seller is required to

pay for the Spares in a final accounting with the suppliers

thereof differs hock the amount used én computing the pur-

chase price thereof purs f vant to subparagraph 3(b), separate

and independent 3 will be made by pay. ant from

one party to the other of such difference. Similarly,

elle will’ reimburse Buyer for eny interest paid by tives -

1 espect to any portion of the purchase price of the ö

Spares which js unpaid at the time of delivery of the first

Arplane hereunder, to the extent and for the period that |

Seller nas not earned such interest dy having nade payments

to the suppliers. ‘ ö

4, Title to the Airplanes and Spares shall not

pass to Buyer by delivery, but shall remain in Seller until

such time as the purchese price shall have been paid in run

and Buyer shall have paid to Seller 211 other sums then aue

and payable to Seller hereunder, whereupon ebsolute title

to the Airplanes and Spares shall pass to Buyer.

5. Upon dne happen sing of eny one or more of tne

following events, l

a (a) default in making eny peynent, in the

8 a ~% *

manner herein specific, of any monthly installment of the

anne price of dne Airplancs or Spares enc such default

Fae Ss

shall continue unremed: cd for five (5) days after written

notice thorcof shall have Seen Eeliveved by Seller to Buyer;

AX-2002

DX292, page 7

(Toolco-TWA Conditional Sale Con

‘L-1649As, 4/19/57)

(v) @éefault sha be wide by the Buyer in the

observence or performance dy the Buyer of any other covenant

or agreement contained herein, and such default shall con--

tinue unremedcicd for thirty (30) days after written notice

thereof shall have deen delivered by Seller to Buyer; or

(e) the Buyer shall become insolvent, or shall

file a voluntary petition in benkruptcy, or shall file a

voluntary petition or answer seeking or consenting to reor-

ganization pursuant to or purporting to be pursuant to the

Acts of Congress relating to bankruptcy or any other statute,

state or Federal, for the relief of debpors, or shall de

adjudicated a bankrupt, or shall make an assignment for the

‘benefit of creditors, or shall consent to the appointment

of a receiver or trustee of or for it or a substantial par

of its property; or |

(a) an order shall be entered pursuant to or

purport int to de pursuant to the Acts of Congress relating

to bankruptcy or any other statute, state or Federal, for

the relief of debtors approving a petition seeking a reorgan-

ization of, or if an order shall be entered appointing a

receiver or trustee of, or for any sudstantial part of the

property of, or if a warrant of attachment shall be issued

ageinst any substantial pert of the property of, the Buyer,

and any such order is not dismissed or s dayed within sixty

(60) days from its entry or such attachment is not dismissed

or bonded within thirty (30) days from its levy; or

. (e) the Bonds at the time issued and out-

standing under that certain Indenture, dated as of December

. 5 ö

1, 1954, between Buye> end Irving Trust Company, es Trustvtec,

as said Indenture may have heretofore doen or may, hereafter

7 .

"Ss

be amended, shall be declared and besos

;

“4

AX-2008

DX292, page 8

(Toolco-TWA Conditional Sale Contract-

L-1649As, 4/19/57)

prior to the date of maturity of such Bonds as set forth

there ein, upon the occurrence of any of the “events of Ge-

fault" described in saic Incenture, as amended (and the

Buyer hereby agrees to novity the Seller of any Geclaration

of default forthwith upon the receipt thereol); or

(r) the Notes at the time issued en

90.

standing under that certain Crattel Mortgage, Gated es of

Decenber 20, 1954, between Buyer and Irving Trust Company,

as Trushee, 28 | said Chattel Nort tgage mey have heretofore

been or may hereafter be amended, shall be declared and

become due and payable, prior to the date of maturity of

such Notes as set forth therein, upon | the occurrence of any

of the “events, of default" described in said Chattel .

Mortgage, as amended (and the Buyer hereby agrees to notify

the Seller of any Geel ration of default forthwith upon the

precio eee

then Seller may at once (or at any later time) „ to

take possession of the Airplanes and Spares in any manner

8 provided by law, or Seller may’ at its option, and Seller is

hereby empowered to, with r without legal process, and

with or Without demand, enter upon the premises were the

Airplanes or Spares may be anc tak @ possess: on thereof? an

remove the same. Seller may resell the Airplanes ens Spares,

so retaken, at public or private sale, with or without having

pares av the place oF sale, and upon such

such Airplanes and S;

terms and in: such manner es Seller aay a&ctevmine. Notice of

the intention of Scller to so sell the Alzplanes

13 de given by Seller to Suyer at least ten (20) ésys

* . 2 >

prior to the time of such sale. Seller uty bid end purchise

it any such public sale. From the prosesccs Of fn such sale

l 0 - * 7

vy * ‘a

. . DX292, page 9

(Toolco-TWA Conditional Sale

Sarre 2719/57)

Seller shail deduct &ll expenses for retaking „ vepebring, ;

storing 8 and sclling the Airplanes and Spares, inelucing any

reasonable atrosneys fees incurred, The balence of such

procecds shall be applice to the payment of all sums owins

to Seller unéer this agreement and any surplus of such

procecds remaining shall be paid to Suyer or to Whoever may

be lawfully entitled to receive the sane. Buyer shall be

under no cbligation to Séller for any deficiency resulting

from any such sale or to make any payments on account of

the purchase price of any Airplane or Spares falling due

after Seller has taken possession of such een or .

pursuant to this provision.

* 6. From and after delivery of the Airplanes and

Spares to Buyer and until absolute title thereto is vested

2 N

in Buyer or its nominee, or Seller repossesses the Airplanes,

. — b (a) Buyer shall procure and 8 at its

property

expense public liability, passenger liability and

damage insurance in such amounts and with such companies

as shall be satisfactory to Seller, covering Seller's

liability as holder of legal title to the Airplanes and

Speres. The policies evidencing such insurance shall con-

tain such provisions as shall be satisfactory to Seller and

shall name Seller as assured.

(b>) Buyer shall at its expense maintain all

risk aircraft hull insurance in respect os the Airplanes in

- in such amotnts and with such conpenkes as shall be satis-

factory to Seller. If any such Airplane shall be lost,

metres Gamagec to such an extent thet rep: therco!

is impractical, such Insurance shell ba paid to vane Seiler

to the extent of the unpsid balance of the purchase price of

| AX-2005

DX292, page 10

(Toolco-TWA Conditional Sale Contract-

L-1649As, 4/19/57)

auoh . Lrplaue togethers with au acesued and wopata doteress

thereon, Plus all other amounts then due to Seller hereunder,

pon such payment to the Seller of insurance to

of the unpaid dbalcnce of the purchase price of any Airdlanc,

absolute title to the Airplane so Canageca or to any parts

of en Airplane so destroyed shall vest in Suyer and Seller

shall deliver to Suyer such proper documents of title with

respect thereto és Buyer may reasonadly require. Buyer shall

be under no obligat on to make eny payments on account of the

purchase price of such Airplane felling due after such loss,

destruction or damage. Any’ insurance proceeds in excess of ö

the amount payable to the Seller, ana any insurance proceeds

payable as a result of demage not rendering repair impractical,

"shall be payable to Buyer or its Gesignee.

. 7. Buyer may at any time pay to Seller the unpaid

balance of the purchase price of the Airplanes and Spares or

any part thereof, without premium or penalty.

8. /Upon the payment to Seller of the balance of

the purchase price of the Airplanes and Spares together with

all other amounts owing to Seller hereuncer, Seller shall

Geliver to Buyer at such place in the United States as Buyer

may Gesignate: ö

(a) a bi of sale duly vesting in Buyer the

title to the Airplenes and Spares free and clear of 221

liens, claims, charges end encuzbrances attaching subse quent

to the delivery of the Airplanes and Spares to Seller and

nod arising out of the possession, usc or cpcration of the

Airplanes and Spares by Buyer, end

Buyer 1. 27 TS. 5 9 =D

DX292, page 11

(Toolco-TWA Conditional Sale C

L-1649As, 4/19/57)

9. In tho event any sales tax or use tax is

hereafter imposed upon or paid dy Seller by reason of the

sate or use of the Airplanes and Spares or the purchase

thereof by Seller, then in sss: tion to the sales price ppo-

vided for in paragraph 3, Buyer shall pay to Seller dne

amount thereof, upon demend. _

10. Buyer shali furaish Seller forthwith and from

time to time thereafter at reesonable intervals, all such

information concerning Buyer's finaricial condition, includ-

ing balance sheets and forecasts of ceraings, as is cus-

tomarily furnished to a commercial bank holding or consider-

ing the accepteénce of unsecured notes of a borrower. ö

1 11. The Buyer agreés that it will pey and dis-

charge all taxes, assessments, governmental charges and all

charges for keep, repairs, storage} maintenance or acces-

_sories, which if unpaid might become à lien, charge or

encumbrance upon or against any of the Airplanes or Spares;

and upon the failure of the Buyer so to do the Seller may

make any such Payment; provided, however, that nothing here-

in contained shall require the Buyer to pay such tax,

assessment or charge so long es the Buyer shall in good

faith contest the valiéity thereof and shell furnish the

Seller such bond or indemnity as the Seller shell require,

unless, in the judgment of dhe Seller, forte ture is likely >

to result from any such -ailure to pe. Any sum or sus |

80 petd dy the Seller, tozether with interest thereon at

the highest lewful contrect rate, shzll be and become &

rt of the sum whieh the Suyer 2s required to pay unde>

tris Contract, end hel? Lac: & TEE, without Cemand, be

duc end be repaieé by the Suyer to the Soller.

. AX-2007

| DX292, page 12

; (Toolco-TWA Conditional Sale Contract-

L-1649As, 4/19/57)

Tne Buyer will, upon written request tron the

Soller, .

(a) retmburse the Seller for all filing or

scoraing fees incurred in connection with filing or recorda-

ree vo

ing or refiling or re-recoréing this Contract and all suppie-

ments end additions hereto, if any;

(v) execute end deliver to the Seller 211

such further docwrents and instruments and do such further

acts as may be necessary to perfect the rights of the Seller

herein contempiated ; and N

(o) furnish to the Seller at reasonable inter-

vals reports and certificates setting forth all the informa-

tion necessary to inform the Seller as to the continued

existence, location and condition of the Airplanes and Spares.

. Tne Seller shall also have the right to inspect the Airplanes

and Spares at all times when the same are not in use and when

such inspection can be had without undue inconvenience or

expense to the Buyer. |

| 12. Buyer agrees to maintain the Airplanes and

Spares in good repair end working condition at its own

expense, except any airplane lost, destroyed or so danaged

that insurance with respect thereto is payable to the Seller’

formance of such covenant, the Buyer may make repairs and

replacements to the Airplanes and Spares and may substitute

for engines, propellers and any other equipment installed

in or attached -to the airplanes om Spares, engines, pro-

pellers or other cguipment.of substantiaily t

* 2 2 ey ames 2 2 8

engines, propehlers, or equipments, anc no replacement

thereof, snsll divest Seiler G2 its sucerior title thereto

LE L

ook

AX-2008

paragraph 12 hereof, the Buyer will not (volunterz iy or

DX292, page 13

(Toolco-TWA Conditional Sale Contract-

L-1649As, 4/19/57)

or render any such remove: or replaces equipac:

to tne licen o> claim of any person otner than Seller,

USS and NIL such cguipaent 18 replaced by equipucnt

of suvstentially the sane kind end value, the title to

which, upon such equipsent being installed in or attached

to the hirplanes or Spares, may veli@ly vest in Seller

free one clear of the lien or clein of any other pers son,

subject to the provis2ane of paragraph 14 hereof. In the

case of any such permitted sudstiturion, title to the substi-

tuted equipment shali ire diately vest in Seller and become

subject to the provisions of this Conditional Sale Contract

and remain so i = so subject unless and until sudsti-

tuted for in the manner hereinabove permitted; and title to

the equipment substituted for shall vest in Buyer.

13. Until tit? ze to the Airplanes and Spares shall

have passed to the Buyer hereunder, the Buyer shall have no

right, power or authority to sell, transfer, assign, mort

gage or encumber or in any other manner whatsoever dispose

of the Airplanes and Spares or any part thereof (except as

provided in paragraph 12 hereof) or any interest therein,

and the Buyer hereby g rees that, except as perm: red oy

involuntarily) sell, transfer, moregese, encumber or in any

other manner whatsoever cispose of the Airplanes end Spares

or eny pars thereof or any interes therein. ye: agrees,

except às provided neren, thet the Airplanes end Spares will

be useé exclu sively for its commercial ai> Sranspore oper

tions and related ectivisies and that it will not permit

* * 2 o° 2 8 .

uycr day por: the use of the Airplanes sn. Spares by

4. * 2 1 4-7 2 %,. Re om," esate — - a 4. — *

other airlines with unt, Buy enters Tnvo in sn

DX292, page 14

(Toolco-TWA Conditional Sale Contract-

L-1649As, 4/19/57)

acreements provided ties any such use by other airlines snali

for the purposes of this agrecincnt be cons Sdcred to be use

by tne Buyer.

14. To the extent, if any, thet there is a con-

flict between any of the provisions of this agreegont an

ny of the provisions of the Indenture of Mortgage cated

as of December 1, 1954 between the Buyer and Irving Trust

Company, as Trustee, or of the Crattel Morte age dated as

or Decexber. 20, 1954 between the Zuye and Irving Trust:

Company, as Trustee, “the provisions of said indenture and

. geid Chattel Mortgage shall prevail and the provisions of | ;

this agreement shall “pe deemed amended to the extent neces-

‘sary to avoid such conflict. Seller recognizes the liens

created by (a) Granting Clause VI. of ‘said Indenture and

(v) Granting Clause 111 of said chatte! Mortgage es prior

liens. on the gtecratt engines and on the propellers,

appliances ‘and spare parts relating to tne Airplanes or

Spares when and so long as they shall be instaile a in,

attacned to or incorporated. in any of the aircraft or alr-

eraft engines at any tine sudjeot to dhe lien of said N

Indenture or of said chatte! Mortsege, es the case may be. 7

Seller agrees that so long 2s 211 the 3ondés

Issued under said Indenture ed the time outstanding shall

be herd by the original purchaser thereof, (e) Seller wiil

not repossess the Airplanes or Spares, in the event of a

Pay? N — he — 1 24 208 7. en 2 —

de faut by Buyer uncer this agreement, witnout: affording

1 .

such origine purcheser reasonadle notice of

and a reasonable opportunity to remecy the same and (b)

: 5 Pret S aan eh a9 Neis Sm. WE opine 2 5470 9

2 such. or- = nal puenz- zer shall have the right, et its option,

Bon, N

* 5 5 2 8 4 8 4. N ~ . 22 8

to purchase a any time all the interest of Seller herourder

a a = 7 Gia ten stad eed ene 5 272 5

by paying te Seller the chen remaining ban nee of the pur-

7 2 - a 3 7 * 4 2 +a

Chase price heveunter Dt; ecerucd zn a .

„

XXL 2010

DX292, page 1

(Toolco-TWA ene an made Contract.

L-1649As, 4/19/57)

Seller also ares that zn the event of à aefauit

by Buye> besen F the withts end remedies o? Seller shall

be limited to repossession of the Airplanes and Spares.

15. Before gelivery of cach Airplane to Suyer

hereunéer, Buyer will cause to be fastened thereon in a

location reasonably adjacent to, end not less prominent

than that of, ‘the airwo sthiness certificate for such Air-

plane, a name piate no are than four inches by seven

inches. (k“ x 7") bearing the following “legend:

“ “Hughes Tool Company holds legal title

to this Airplane es Conditional Seller."

Buyer shall maintain such name plate in such location or in

one or at least equal prominence and visibility at all tines.

Buyer. may affix to the Airplanes, Buye r's name, insignia or

other legends customerily displayed by Buyer on its airplenes.

: 15. Buyer shail indemnify and hold harmless Seller,

its cannes heat its ciployees ‘from any and all liabi2, ity for

losses, expenses, damages, demands and claims in connec%ion

with or arising out of 29 death of, or injury’ or alleged

injury or damage to, Persons or property sustained, or

alleged to have been sustained, in connection with or aris-

ing or alleged to have arisen out of Buyer's possession, use

or operation of the Urplen es or speres and Buyer agrees to

handle any claim and defend eny suit or action brought

‘against Seller, its epents or its employees, or any of then,

dase on any. ‘such death, ‘injury or demese, or elleged injury

or déxase, and to pay @ll damages, costs and expenses,

including attorneys' fees, in connection therewith or result-

. + 3 ie Aas 1 * ve

Buyer's itadtitty to Seller unae> this Parzgra pn

16 is o ond tꝛonod upon Seller's promptly giving notice to

DX292, page 16 AX-2011

(Toolco-TWA Conditional Sale Contract-

L-1649As, 4/19/57)

—

ü 24 * * — 72 ie 247 7 „ yt ores . 1

fusbibulion of Such zul“ or aceuscd OP o recci ot

puye? of

of such clasin or demand. Buyer shall have the Odtidn at

any 11 88

an AN

4. ee Oe ee oe ee ayes +2 4 „ „. mente 7

ro Condues negotiations With the parey o- pareics

* 822325 8 * — 1 — — 9

such claim or Gemand, and may intervene in eny

— ~ — 4.4 * Ay iw. — 7 * om 2 + Pe ha 2

zueh suit or s ton. „neter or not Buyer intervenes in

any such SUL OF acston, 1% shall be entivied vo assun

conduct or control the Gefense thereor, and Seller shall

not settle o> discharge any such claim, cen and, suit, action

or judgment without prior notice to and, the consent of

Buyer.

IN WITNESS WHSREOY, the parties hereto, have exe-

cuted and delivered this anreement as of the day ‘and year

first above written. - . - 9

* ra aw ts

HUGHES TOOL COMPANY 7

fo”

Attest: | Vice President

2 A 7 cote

~ Assistant Secrevary

TRANS WORLD AZRLINSS, YC.

N 5 hs

By Ow . bet ‘

z 7. — 2 — as "Ed on OA Ms

Senior Vice Presicenty - rinence

cy a ee " Dx321 1d. Item ]

12 * 8 (CAB OFders & Dog

YVULAL

8 9 oe CIVIL AERONAUTIC 8708

aye, : 0 a 0 ie

5 ——— 3 a . 8 * 8 : Po 8 1 4 ge)

. 77 5755 Pia ee GARE OH ‘ . BOARD N Koy 14 i] x AM 1 *

* ‘3 * N - 1 ety a 8 . . f° 81 . 1. 1

ve 8 0 * 3 . ae 2 4 VII. AEN 3 0 Eau

7 „bezüg- — bs dunn

22 = 0 4 4 a | K e a

* 2 22 fie * 0

122 7 4

3 15 ae Application „ 3 :

. 25 ° ° 12 : : 7 Par f

é ately _* 1 . 2 . 5 x.

Janet: . . 2 -of- . | 2 . / | * 220

ä „ See

AY HUGHES TOOL COMPANY, —. eds hg

see a Delaware Corporation, 1 phe

re 12 arene sll

Tor approval by the Civil Aeronautics board,“

3 117 such approval is deemed necessary, of an ee

control of Transcontinental & Western gt „

an dir carrier, under Section 406 off

eT el . „

“4 Ince

14 : ade, Civil N l Act . **. 5 5 55

7 5 wa? 2 3 : . N

' 7 Ar 2252 AEN 2 Ar. 7 * 3 ‘ 7 5 9 ; 7 ° 1 19

7 2 3.3777 9 hey, A rees * 42 tee, 8 107 5 * ; 2 15

774 1 . 5 /)

71 1 . * ir Fes 4, i “2 * „ of 8 ,

1 — . ome a * * 5 ** 4. ° —

3 4 oF, i Oe ig 2 af a?

1 5 1 . 21.6 §*. - 5 > .. „ „ 7 7 8

7 . . Ori 10 2 ee 4

ah Wi 3. et — 5

at 4 2 ee é

oe. 5 1 igi Me *

1 * * 5

-®@. . *

. 5

. 4

‘4

. „

7 2

seth 5 EO. 0 ae set

| ee A ee

WAKE, TITLE AND ADDRESS or PERSONS TO WHOM cowmnopi0n8

FROM THE BOARD ARE TO BE GENTS

pg Seed. : a

a 2 : anh PA 7. * 0

ct 6

cnhadbourne, ee Parke t b wass,

* 23 Broadway, Bie say

: new Tork 21 U. . bees 37 r n

A — . e . 5 vs ,

Uses. N . 7 Y OS

* aa" ed — *

1 i

+. i037 Se McCarthy, Fed -; 4 f e.

DX321 id., Item la, page

N . (CAB orders & Documents)

b AERONAUTICS bonn r

shld alata keener to 5 5

3 _— . 14. 7 Me, eos

7 4 72 ° . 7 . 4 5 .

AS oe of 7 * ergs af: „ 2

** HUGHES TOOL COMPANY 7 + b are

‘a Delaware sorporation, for approval gt at. 54245

Ay the Civil Acronautics Board, if - 4 att: *

“such approval is decmed necessary, „% „„ „ es

ok control of Transcontinental & .° ie

‘Western Air, Ince, an air carrier, 2 : 3.

vonder Section 408 of the Civil “e se " ©, 4 *

yhoronovtics Act of 1938. . 1 5 5 lee to:

e "8 oe

15 ö vo

70 Tul HONORABLE, THE CIVIL AERONAUTICS BOARD? gt ,

1 Me : * J

5 Tho ‘Applicant, Hughes Tool Company, & Delaware :

a 9 .

corporation, respectivily snvumits to 20 Boars th? eat towiner

5 1. ‘The name and address of ‘the Applicant is Hughes

, Tool Company, Gulf Building, Houston, Texas. All the stock

0 Hughes Tool Compony is owed by ur. Howard. Re Hughes, who —

0 18 resident of Houston, ‘Texas, ond a citizen of the United — :

Aistates. . e e e e ee 7 * ; 2

1 a 2. ‘Hughes Tool Company, as of July 31, 1943, owned”:

i 440,00 shares of the capital stock of Transcontinental & xe

Western Air, Ince, being equal to 45-6 percent of a total or is

965,063 ‘shares outstanding on that date. Transcontinental &

Ves tern Air, Inc., @#lso a Delaware corporation, is on air .

arrier under the Civil Aeronautics Act of 1938 as amended,

holding certificates of convenicnco: and necessity for the

428

transportation of persouSy proporty ond mail for routes 25 2

(CAB Orders & B

4 a} 3. Hughes Tool Company is principally engaged iq the

‘ manufacture of oil field equipment, and is also engaged in .

: development and manufacture of aircraft throvgh a department °

“operated under tho name-of "Hughes Aircraft Company", with its,

: principal place of business at Florence Avenue and Teale, .

Culver City, California, This department is engaged ontinely

2 * 4 —

* * °

ee ein tho devolopmont and manufacture of " aireraft for tho Govern |

ment or for war purposes, ; |

dc: Applicant hereby secks the approval by the ct

: Aoronavties Board, if such approval is deemed necessary, of

tho control by the Applicant of Transcontinental & Wester 5

» Air, Ine,

is *

one a7

WHEREFORE. tho Appl! cant prays that the Board

. acting pursuant to Section 408 of the Civil Aeronautics Act 1

of 1938, as amended, enter an order granting the approval .

„

j sought herein, if such approval is deemed necessary, and,

„1 not necessary, enter an order to that effects and that

175 fhe Board grant ‘the —— such othor and Kun roller

jaa tt'miy doom propers n n „ HEL

7. 15 0 2: > 7 * 5» „% 850 5 *

eee oe 50 * 2. — 2

. Dated peer e 1545.

‘neapeutturiy submitted,

HUGHES TOOL COMPANY

A- A

DX 321 id., Item lc, page 1

(CAB Orders & Documents)

, WI1TED Sr. rs OF Ic.

CIVIL . NM. ANilcs ba.

4 ANKCTa, b. c.

TOCYET #0. 1182 7

appliccticn for cpprovel of acquisition of control under sectica

408 of the Civil .cruniutics «ct of 1978, as ann&d.

HUCIZS TOIL co. A COITROL OF 1

— }

RPT & r. A. LA, R. L DIR

i |

Serveds JUL 12 19%

. 8 a ,

: Grorsc N: Sratcr for Hughes Tool Corpany

Sadie . wriuthnct for the Department of Justi

Lovis ~. Goodhind, Public Counscl.

Exceptions, If any rust de (led «ith the Sweretory, Civil AN neues

Boird, «aesreton, b. c., and wrved den all cher portes within 10

Gays of tha sate cf service thom abovee Trivfs rar bo 11.4 ond

corved cn 711 other parties within 15 ys aster the ect. fd fue

filing ecxc:plicnse

pa ee 2 ae

DX321 id., Iten 1

(CAB Orders & Docy

wrred Srates OF GIERICA

CIVIL &FROIVTICS ROARD

Lam, D. C. e

ICQET HO, 1182

HUGHES TOOL C&PaxY CONTROL OF TWA

Appreval recocrended of the acpisition of esntrol dy gutes Tool

Commy of Tetnsernttnortald as? Tact. „, De., Wer gets

408 of tho ch Acronautics act of 1933, as amnded, subject

te certain conditions.

George 15 Szater for Guches Tool

Sadie B. ériuthnot for the bepartront of Justice

a+ Geockind, Public Counsel.

REPORT OF r. A. LAW, N., ELDER

Hughes Tool Corpory, an industrial corporation, by application duly

filed, secks approval dy the Boord "if such approval 1s dcerrd nc cessary®

and western air, Ince, hercimafter called Tia, an air carrier

within the traning of sectica 1(2) of the Act. After notice hearing

was held and triefs have teen filed. The icparteent of Justice vas

authorized to intcrvens, g

Under secticn 408(a)(S) u is unlawful, unless approved by the Board,

for any air carricr or rsa cortrelling an air carricr, any other -

common carricr or any person engaged in : y ether phase of a-ronutics,

to acquire ctrol of acy air carrier in any rarner whatsoever.

the langrage of section (d) the Doard ie required te craat suck

* 8pproval sudject te such r-aronsble terns and conditions as are required

in the cireurcstances unless it is found Cat the acquisition will not

de consistent with the pudiic interest. wh

Tuches Tool is a tlavare Corporation, all the Nock of wi-h is”

Sed ty Go.ird Re Mes. its princ$pvl tur taess, locat-d at Foust

Texe, 18 aad hrs deen the s-uvfacture of rock bits, tool Jothts, and high

pressure s for the ofl eln Grilling tnetry. = Thy conxay is 4 ö

fandly enterprise, feunc-! Ly the father of the present cuner, the was 3

engaged Jn the cil industry. In its om Sicld nerhee Tool his tees and 7 Nr

- * P

>. —2— — —

DX 321 id, It em le

(CAB Orders & Document

is highly successful. as of Mover r 30, 1943, its capital and :arncd —

surplus areregated marly £21,5C0,00. Its current assets ayyreypatod

Fore thin $22,000,(0 against current Lisdilitics of approxiratay

10,770,000.

Ro- ard R. Noghes is a well known aviator and acronautical carne

sho wtil recent ycars tas interested in aerenmiutics principally, if

not hell, as ahctty. as an aviator he has bern the “inner of var-

fous trophics and is the holcer of various speed records. 8 én

acromutical engineer he has eesign:d or collaterctcd in the design

mr nteerattan af st=craft fre sed tests ond pore lately for air

transporte

Hughes Tool first becare interested in TA at the solicitation of

the president of Tua, a personal frimd of Ha-ard R. Huchese In

Yarch 1939, the first purchase of stock, aroumting to 600 shares, ws S 4 :

mde. Dy the cmd of Unt year, lues Took tis the omer of 152, — 0

stares of cen en stock cf Tide This-arcmt had crm to ore Cage

400,000 shares, or 42.1 percent of the then outst-nding total at tho

end of 1740. at the end of 1942 Hughes Tool omed 440,050 eres r

45.6 peret of a total of £55,173 stares ovtstanting. All of tis , €

stock cxcept 119,154 sharcs purchaced on :arch 2, 19/0, dircctly fron

the Tia treasury, vas acquircd through open mirket or brokeraye trans-

actions. ihe total imest:rnt of Hughes Tori in the stock of 7. is

approxiratcly $5,535,C00. 1

For the purpose of this rrocceding applicant has stipulated that the

stock noe d , constitctes control of the carrier, tut for- practical

Purpescs such control has cxist«d since the end of 1940 at Acast, and

the Rughes influence, had it been cxereiscd, ht have becn’ effectively

felt 1n°1939 then the omership as stated reached 157,700 chares. Asice

fron the stipulation of covrsel, ry little discussion is requircd te

d&ioonstrate that control cxists and has cxist«d since 1940. Such @

proportion of the outstanding stock as that thn god, thea 1 bebe :

and consistcntly votcd, represents such a corinating inMlucnce in to

affairs af a carporaticn dat control, cithcer affirrative er negative,

nene. uch smiler interests dave den found so to doo %

8 No individual holes or has held office in both nurhes Tool ond Ts

except for the cxyploynant in an advisory capacity by Muches Tool of the

President of Tua, Lr. Jack Frye.

905 * :

: 4 Prior to 1939 the only activity of hebes or of Iuchcs Tool ase ‘

ae eat. vith any ase of the aircraft industry vas cxperizcentil and .

ieee Set lop ntal work dien ihe privately cin d ead operated equicn nt of

Ba tr. hu, es or the corpamye Yo cor: uredal cctivities of any chiracke

existed. The first ets ity of er. huches in any phase of cc r ,

— Oe mee

-3-

DX321 14., Item ;

(CAB Orders 4 pas

aeronaut ies follored the acquisition ef an interest in NWA. In the

late spring and early sux-r of 1939, lessrs. Eughes and Frye collabe-

rated in the design ef a 4 zotorcè a

in comercial air transportation.

Thy de an negpt

aircraft ranufacturing concerns regirding constrvct

an acrecmnt between Huphcs Tool ond Lockheed aircraft Corporction on

June 30, 1939, before cent roi of Ti ty Hughes Tool sas obtained for

the construction and delivery of five a irolanes to be knom ss

"ExX-Calitur-i", The nase latcr «as chang.d te Con

be referred to hercinx{tcr as such.

Inis contract Peseracicd the testi accu jms Sd

tion type aircraft to othurs tian Rugh:s Tool or Tike It vas later

rodified to authorize thcir ge to the Cowmrents of tho United

States cnd Great Pritain, to Pon arcricon Arrays, Ine., and to Kon

Lc, and the nurber to do purchasod

Luchtvaart “natschappij, kno.m as

dy Kuches Tool vas inereascd to a

directors of Tia cuthcrized the air carricr te ac

total of 40. In

ec:

irnlane duvcloped for uro by Tia

fattons iu cv

jon, reculting in

stcllation and will +

rf 2 5 002 *

1941 the tuard of

pt assure of

the Hughcs-Lockheed Sprcerent, and in 1942 nuches Tool, with tis approval

of Lockhecd assignd to Tia all of its richt

under the arrcerent, Tin is to purchase 13 2

the latter being purciaseable under an option throurh Tih.

craft

ee end interest therein,

and Hughes Tool 25

5 optica

te purchase the 25 is subject to cancellation upon apuropriate notice.

at the prescnt tire all of the Ceastellation type a

e4liverzble for military use subject to an option to reacquire a total

of 40 by repurchise {rez the Govemmrent. Restrict

runufacturer which sould prewnt the sale of Censte

for Gozestic air tren: ert we exec

contracts. hen mde, the Constellation 2ercenent

and at the request of Fa, and to cvidence 75

given the option to te substitutcd fer Eugh:s Tool as the’dircet centract-

ing party. The otvicus, 1 not the expressed, pur

gents was to give Tuk the benefit

of hnuches Tool in a transaction involving subdstauti2

of the ercdit and

ircraft built are

ions accinst the

llation type aircraft

ft by T continucs uricr existing

s wre for the wmfit,

terest, it was

pose of these arrento-

fincncial stancing

1 financial rcsnoa-

sibility. As to the 25 airplanes subject to the option of Hughes Tool,

tho record indicates that these, if the option is excreiscd, will te

held for resale oni for czpcrin-ntal uso.

Should applicant not cxcreies

its cption, it is still jarty te contracts rectri in distribut) ;

the aircrait even by resale, co as to prevent thess use domestic sf

service execpt by NA.

In addition to its intervct in the purchare ani

type aircraft, lvches fool 14 19 tern prodection

of aircraft parts fœ ve In aircralt built

by the United Statcs rilitory fer

directly cr throvph svbsidiary cr

Abend cad dvr its poo!

& phase: of strengt ies ca a c- ers tosis =

Mile of Constclictica

as 3 cubcontractor

2s xcapons fer or transport

ets. Since that tecinning, ei ter

“fTilisted coxycnies, opplicent hia

veticr ictivitics in furthereanca of thre

war efforts Were ts na cvidence, have, ef an Sntuntion to continua

the scnufosture cf alrerate er aivereft parts or lo otherwise ngo in

der the were) mere 3

Cvidhisce to 1½ lente de thet Pushes toi my ccati nue dc vclop:>ntal. 2

ant crpertrental tock zu oviction.

) AX-2019

— DX321 id., Item lc, page

, (CAB Orders & W

24 —

Jurisdiction of the Bocrd in the proceeding is qucsticned by the °

applicaticn xen it ‘asks approvsl "if auch erprov2l is decred necessary".

Under the section of the act invelvcd, there are three cleacnts of ~

jurisdicticns (1) there rust be an acquisition ef contre]; (2) the =

party sought to be ccntrollcd must de an air carricr; snd (3) the

acquirer rust be encaged in a phase of 2cronautics. 28 to the first

tuo there is no ccutt. There has bein on acqu siti n ef contrel, and

Tia is an sir carricr. as to none ws eny svricus ebjcetion to the -

‘Board's jurisdicticn intcrpos:d curing the course of the free cding sub- ,

sequent to the filing ef thc applicaucn. s the case hes proceeccd,

it has become quite clear wat ncither the appliccnt nor Tiin go N

assurptica cf jurisdicticn by the Board and the raking of stetutcry .

finding rcquircd by the act. The pertinent qucstion is eme

Huphes Tool is engaged in a phase of acroncutics as ccntcoplit«d ty

svetien 402 cf the act. ParticulsrJy cicniticont in tus recura ae

the fact that Hughcs Tool is at prismt obligctcd to purchase & a>

stent 121 fect of aircraft, at Icast a pert of which rey de hdd for

resale fer cormercial airline retien. It thus oy wicr its con

tracts, if it has not slriecy, become a acaler in such cquiprent ond

thus engaged in a psec of acronsutics, vhich randcrs unlavful the N

acquisition of central of the air carrier witheut the consent cf tba .

0 Board. mile sore dasis for rœæscneblo doutt in the rind cf ths p

air trensper d oqui print supports jurisdiction of the Bocrd hercin as

urgcd by, Public Counsel. The ccnswaatic of its plan is not cssenticl

to this conclusions 77 * ies . :

Micant rey have existed at the tire control of T. 2s cbtsincd, tho .

fact that applicnt is suthoriscd to becom: a cecl:r in second hend G

Under the present ani conti lated oporat jens of Hoches Tool no

adverse effect upon the public interest can do forescale, Zlin

4s net not encagcd in ard has no plsns eontcrplating prove ti ca· ot

aircraft, aircraft ports, or facilit es for use in corrxpeisl air

trensportaticn. So far as the possibility of T.ia acquiring fron

the oppliccnt aircraft which the acpliccnt is obliyatcd to pyrc:ase

. wnter cxisting agrcenents is ecnecrncd, the price is firsly tsi - 7

Used so cs not to cxeccd costs, and in view of lat right de referrcd

to as ‘the patcrnclistic atütuce ef Muches Tcol up to un er cant, tho N

Incl inccd that Tua - icht be fore & te fur case mre Ura me eure -

cperaticns of Tun require is rescte, but such a mssibility exists.

Tmt no frescntly existing barg or uncthic.l purpofe is apfaruid is

—not crnclusive 322 to the future. rer, the possibility of wrerg *

doing is no tasis for the intcrruptica cf a rcIlaUcn: hip ut bea

not eroven hireful, tut n th. ecntrery has den ond my eontinss

to preve halpful t the alr carrier. NMertb-ring digt tac irtcr= 4

cst cf arplicant in th: cir etrricr hea its incerpticn in aa effort *

to de helpful in th: ca: u-ticn cf plins conecived ond initist<«d

“My the ar carrier ite lt, it ia net inecnsistint sith the ful

intersct tet the rvinticnship conti, but cause of the possibil-

2515 ing rr Ot is pr rer wat the Board de chrervanec of

the cbligiticss Lic Cen at Ly th. act dacure zin tny t: teten

ster con: te th: ap: 4 -t to trike advanttyze Qf the r.. n-

_ * 3 _ * £411

* 2 4 4

„ine that the applicit tock 1: zzdHte execptian to ths proposal of

DX321 1d. fte

(CAB Orders 1

. -$-

eranting its approval subject to such reasonable conditions os rill {]

enable it in the future to cecquately protect the public intcrest. ;

The Dvpartnent of Justice urges Unt the restraint which has deen

placed upon the sale of Constcllutioan cy of afrcrart for use in

dort stäe air servicc, together with other facts in the case, do

especially considercd by the Board in detcrreiMing the nature ond

scope of any order mich rey be entci’cds It urges further thet °

the Toard's approval, if crentcd be bottomd_uson the fact that

Eughes Tool is not nc cngared in the mnufecture of aircraft o e

dircreft parts for ecrrereuu use, n ess (hil 22 Tw

reserve jurisdiction jn the procecding for the purpore of rceconsidcr

ation in the event that this condition change in the future. applicant

in response asserts that the restraint referreè to sicquld ccist vhether

or not Hughes Tool has control and, contmding that the Constcll-tica

type of aircraft is primrily an cng'necring ecvcloprent of oni for

Tua, belicves the r..ctraint is usual, cppropricte and rcasomible. as

an altcrnative it sougecsts thet if any condition is cttach:d te the

Bozrd's approval, applicant be rcquir-d to return for further wnsid-

cration only if Rugies Tool ent.rs comxrcial production of aircraft

cr aircraft parts and T. a4 undertakes to purchaso then.

n brief Public Counsel recomcnds unt the Board approve We

acquisition of control herein upon el=boratc conditicnse He vould ,

provide that t he cpproval tcrninate in the evant that iwer Tunes

Tool or Novard R. livghes engage dircctly or indirectly in the pro- :

éuction or disposition of circraft or aircreft parts for use in inter-

state, overseas or forcign air transportation, cxecpting fron this

condition, however, the 25 Lockheed Constcllaticn airplenes as to

which nuches Tool not holds the right of rcpurchase fron the United

Statcs through T. a. Ee would also provide that no cozpcnsaticn shall

be paid to Buches dy 1. fer any participetion by hin as acroncutical

encincer in the devcloprent or cerig of aircre{t or aircraft parts;

and that Bughcs shall not attcrpt dircctly or indircctly to influcnce

the cir carrier in its decision to purchase aircraft or aircraft parts

in the devcloprent ar design of vhich Bughes my have perticipst«d te

a substanticl degree. The apparat intmt of the condition is te

rcstra in Hugacs or Hushes Tcol Cirectly, or dy indirection throcgh any

associate or as fiat: fron engcafing in any ranncr in the mmufscture, .

procuction, or-disposition of any ites of property which gocs or right

co into the creaticn of aircrait susceptible of use for correrciel air

transport. cn pain ef forfciture of the Boord's sporoval subjecting —

applicant te the pensltics ef tha ict, the condition as preposed

ecnerivobly cnvid stifle research ani devtlorunt work oven of the :

elnracter. cf thit Und Hu. des Tool hos herctofere performed. Coasidcr-§

the D. ten r of Ju: Lies as being too rectrictive, it is rcasonable

° DX321 id., Item lc, pag

(CAB Orders & Document

+ oe

— 6

It zculd hardly de consistcnt sath the public intcrest for TUA to

be proventcéd fron taking reascazbly lirdtsd ccvant;,¢ of tho benefits

which rächt result frog th: r. arch ond dcvilopacnt rx ef the

controlling incustry, if tht corporation should at sore futc>r tins

unccertake to renufecture articlcs useful in eovcreial air tronsporta=

tion. pplicnt suzgcsts thit any condition attached b. the Soard to

mnufacturc of circreft er aircraft parts suitcble for co: brei use

and mat if Tun cheuld desire to acquire such aireraft o aircrstt

parts, then T.in ond HughesTcol should be requircé to return ts che

Buss fuse L N. Narr S8 =A pontinvation of th: releticns beten

Tl. and Hughcs Toole It insists unt such 2 ccndition vould perme |

applictat to know c u “here it stands «nd yet previce 211 the ro- —

tcction of the pedlic interest ecnterplat:d by section 403 in the cose

of rclationships betwca@m the ronufacturer end an cir carrier. 3

Ir. Fughes is m echedrgcd cxpert in so: parts of av: on. *

Unrc2sonzble rctricti hs rächt, and prob bly voulc, ricult in cepriv— |

ing the air carrier of th: venefit ef his cdvice. It 4s porsabie mat

the c xper irental end devdopnant work of the cfplicant in its vont : £

er in behalf of sr. Bughes higself, Af centinucé, my r cult in the ;

ccvileprent, ond possibly snufncture at cn or vore parts of = at

of rajor denefit not only to the appliccnt bat to the-entirs cir tran-

port industry. Such a porsibility should net v. pr. nt by pice |

ing in jeopardy the l-=r¢e inves trent tree in the Air.cerricre / jhe :

object of cny ccncition to the ccntinucd ecntrel of Til ty the air

carricr insertid at this tire in tho cuthcrity cgrontud by the poard

should be to protcet ihe public intcrest frog infringennt by oy

attcept cither to give Tin unfair ecrjctitive advntcce cr to cu

Scct it to varcesenzble dards throuzj the ir.flunce of the controlling

industry. This can de accozpli med by 2 rincon2ble lirit upon con-

mrcicl trensacticns betw:cn the cequircr am Uw eeghir.d M ary

be dad without further consic-ration in this preescding by thé Board.

. ; a

It is (corded tat the Board find thet cen. rol cf Trenseonti-

rental d stern air, Ine. , by Hughes Tol ccepeny is nct inconslsten

sith the public intcrist % long 2 cure trensacticas Nn the

or detecen Ta and cy affilicte cr subsidizry of iugbes Tool is Urte.

to aircraft parts or aceccscrics, the cerplcte item price cf vhich

dees not exceed $25 cach, vith the further linitaticn thit the tctal

annual expenditure ther f:r by di er zartz chill not exe: wi A0,

It shewla te provid.d further that the Qeard shell r. t 1a jurisdiction

in this preeeecing to Uke arpropriate act ica, upon briich of this

cendithean r ufa petitics fcr waiver thor.cf in ony rar untcr,

and that the res! rictica cio 11 at af f. c d. cristing ecatractul cn \

of cpplicani to rescue Convtcllation etroenft throus: Tine &

, DX321 id., 1tes

5 * 2 cee ee

: , before the

CIVIL AERONAUTICS BOARD

rt D. C.

—— — = = — Cees hae em we oF

In the vatter of the Application r 2

HUGHES TOOL COMPANY Bs

for approval under Section 408 of the : Docket Ho. 1162

Civil Aeronautics Act of 1938, as „ 4 .

es of the . of centred. 822

° 25525 ae

. 127 ° . te, . 2 °

TRANSCONTINENTAL & WESTERN AIR, IRC. - : K

222295 „„ 4äĩͤ% „% „%% „% % „„ 8 a .*

LOTION FOR SPYROCAL or A o

Transcontinental & Western Air, Inc., a Delaware corpo-

ration (herein referred to as "TwA"), respectfully noves the Board

to enter an order herein approving tne 78 sale dy Hughes

Tool Company to IKA of two Lockheed Constellatttn airplanes bearing

Menvfacturer's Serial Bos. 049-1969 and 049-1970, which Hughes Tool

Company now owns, and that the Board nodify its order approving the 7

acquisition ty Hughes Tool Company of control of THA, Order Serial

Ro. 3210, issued October 17, 1944, as anended ly Order Serial Bo.

4437, issveG Januery 26, 1946 end Order Seriol Ao. E 922, issued

October 29, 1947, so as to permit the sale of such aircraft. |

mn SUPPORT OF SUCH KOTION, TKA shows to the Boards

1. By agreement dated as of October 1, 1948, a copy or 7.

‘hich ts attached hereto as *Exnibit 1", Hughes fool Coupany has |

agreed to sell and ThA has egresd to purchase, subject to the ap-

proval herein requested cnd to the other conditions set forth in

such agreenent, the txo Constellation airplanes atove referred to

at the cost of said airplanes to Rughes Tool Company, which cost

is rot to excced an axtretgute price of 11,090,000, all as more

porttewlarty set forth tn such agreenont.

. 2 22292

ye Oe, | DX321 id., Item 3a, page

“5 . (CAB Orders & Documents)

5 a 2. Rughes Tool Cosjiny nequired airplane Sericl No. 049-

1969 from the United Stetes Governzcnt through uu pursuant to

rights reserved by TAA una Hughes Zool Comzary in connection with

the ssle by THA of such cirplene to the iy Air Force curing the

War. Hughes Tool Conpsny purchased airplane Serial No. 049-1970 ~~ ©

from Lockhced Aircraft Corporation. Airplane No. 649-1970 has been

and Ho. 049-1469 is in the process of being converted by Lockheed

Aircraft Corporation from military to commercial versions jncluding

sonplate overhaul and modification to acet current CAA requircments

‘a the air transport category. „ „ „ eo : . .

In support of the foregoing, the afficavit of Frank M. 7 : — ;

YcDonnell is attached hereto as "Exhibit 27 end by this reference . 2 wees

mode a part hereof. * aay _ =, ,

3.- said sirplarnes are to Le 8 D THA on a — ; . —

dass pen ing actica of tne Ecard oa tals motion, in accordance |

with the Board's letter of Oc tober 6, 1948, a n of chich is

“attached hereto as "Exhibit 22. ;

4. As will wre particulorly t ppear froa the affidavit of :

Barren Lee Pierson attached ncreto as "Exnibit 4" end ty this ref-

erence mode a part hereof, seid airplanes ere required by TVA for

use in its domestic opcrations; the ranufacture of airplanes cf

this model has bein discontinued; T&A hes recently purchased twelve ,

Lockheed Model 749 Constellation cirplanes for a price of epprox-

. imately £910,000 per airplanc; end the price to de paid ty T&A to

Hughes Tool Company for 2214 wirplones is substantially telow the

price paid ty TWA for airplanes of the seme wodel purchased by it

7 from Lockheed Aircreft Corporation in Say of 1947. = *

: WHEREFORE, 17A respectfully moves the Board to enter an

order herein approving the sale ty fluxhes Tool Coupany to TKA of

two Lockheed Constellation eirplancs as hereinbefore set forth,

oe egg 8 DX321 id,

2 3 | (CAB öder 1 5

and for such other and further relief as y be appropriate.

. ä * “Respectfuily zubalt tea,

— ‘TRANSCONTINENTAL < SESTERN AIR, Ic.

| af —

Cusirman wf tue board =“,

— .

Chadbourne, Wellacc, anual & miteside, * „„ ete Bete Oe

25 Broadxay, Sain db emmy «Pk on °

New York 4, 1. 1. e e ee

1 8

— 3

: / °

. A-2025

DX 321 id., Item 3a, page 4

(CAB Orders & Documents)

— —ñ—37— —ä——— —ä2— ee

STATE OF NEW YOKR Yo a _* +e 7

COUNTY OF NEW YORK | * 2 *

WARFEN LEB PIERSON, being duly srorn, deposes and

says that he is Chairman of the Board of TnANSCONTINENTAL

& WESTERM AIR, INC.; that he has read and is faniliar with the

contents of the foregoing rotion and the exhibits attached

„ thereto; that he intends and desires that in granting or dery ing

the relief requested, the Board shall place fvll and complete |

reliance upon the accuracy of each and every statement thercin |

contained; that he is faniliar with the facts therein set _ 5 . 5

forth; that to tne best of his information and belief every

statement c ne, In the roten §s trpe and no such statement

: y :

is misleading...

. "Subscribed and sworn to Parr ; Bee ‚ „ ae oe

’ before ne this gt day . . hae *

of Oe tober, 1943. 29 4 “tg? OF ESS rn

N ln

Wotary bI ftir.

OORSTHEA A O-BRIEN

nav OSE ty the Sate of New Toe .

rene ty een i .

* esc. st. 171. et. a 1089 0 . .

6 C tm eis Fe 17200 N ö

ee. Gauss

7 N (en Order

ba Exhibit 1.

SLLES ACHEE ERE : z

TIS AGRESUENT, nade and executed in auplicate as of ‘the

first day of October, 1948, by and between RUGUES TOOL COMPANY,

a Delaware corporation (hereinafter sonetines called "Seller*), —

with its principal place of business at nous ton, Texas, and ThANS-

CONTINENTAL & WESTERN AIR, Inc., a Delaware corporation (hereinafter =

sone tines called er“) „ with its ov pant of business at .

_Xansas City, issourts NUE: eth C

IIIA | ee

nns Seller desires to sell and Buyer desires to pur-

chase two Lockheed Model 49 Constellation type airplanes which |

Seller now owns or has contracted to yorchases oe boty Sy 4

ROW THEREFORE, in ‘consigeration of the mutual covenants ©

teva vases oes Sul weasiody LS Pa- 22a herete agree as toes:

5 1. Seller shall sell und deliver to Buyer and Buycr shall -

purchase and accept delivery of tro Lockheed hodel 49 airplanes bear-

ing Lockheed Serial Ros. 049-1969 and 049-1970. At the tine of

delivery said airplanes snall physically conform to the airplane

description contained in the Lockheed heport Ro. B-5470-7 dated

Way 21, 1948, as modified by Contracts Nos. LD-45 and LD-46 dated :

February 3, 1948, between Seller and Lockheed Aircraft Corporation;

copies of said Report and Contracts have been exanined ty and are

In the possession of Buyer. It is understood that Seller nekes no

warranties whatsoever regarding said airplanes but that Buyer ae-

cepts In lieu thereof the obligations of Lockhecd Aircraft Corpors-

tion as set forth in said Contracts, which obligations Lockhecd

Aircraft Corporation has agreed shall run in favor of Buyer as evi-

denced by instrument attached hereto, markea "Exhibit A*®, ond hereby

sade a part hereof, ond Seller hereby assigns to fuyer Seller's ;

rights under Said contracts after aircraft delivery thereunder.

ome

pn 321 id., Item 34 page

eee

> .

. a E q

— Se ee „ —

—_——— — . : 5

7 a

—

AX-2027

—

* 1d. , Item 3a, page

0 wer örders & Documents

2 4

2. Each of said airplenes snall be delivered to Euyer

by Seller and Buyer snall accept delivery thereof at Los Angeles

Kunicipal Airport, or such other place as may be mutually agreed

upon, as soon as is practicable after tne airplanes have been con-

pleted ly Lockheed Alreraft Corporation and approval to this sale

“{s granted by the Civil Acronautics Board. E

3. The sales price of cach sirplene shell be the cost.

8 to uu hes 1001 Compsny and for tne surposes of this agreenent.

shall be established at FIVE HUNDRED FORTY TiiOUSAND DOLLARS .

($540,000.00), subject to the following provision: at such time as

the total cost of both airplanes is finally determined, based on the

books and records of the Hughes Aircraft Conpany Division of Bughes

Tool Company, any variation from said established price shall be

promptly paid ty the buyer or refunded ly the Seller, as the case

ray be. rrovided that in no event shall said sales price exceed an

| average of FIVE HUNDRED FORTY-FIVE 7iH0USAiD DOLLARS (%545,000.00)

per airplane. Payncnt tnercof shall be mde by Buyer to Seller .

in consecutive monthly installoents in the oxount of NINE THOUSAND ~ eh i ——

DOLLARS ($9,000.00) or more. Ine first of such paynents relating |

— — —

to each airplane shall de mde at the tise of the del very of such

— — —

airplane, and one of the recaining payments shall be nade each

calendar month thercaf ter, in accordance with the promissory note

hereinafter provided for, until the snole of the sales. price shall

have been paid. Buyer's obligation to make the payments, after Sie

first paygent, relating to cech of said airplanes, shall be evidenced

by a negotiable installaent promissory note dated, at Los Angeles,

California, as of the date of the delivery of such — payable

to Scller or order ty Buy er and bearing interest on the principal

4 thereof at the rate of Tro Per Cent (24) per annum, payable monthly.

gs Such note shall provide for the payscnt of the principal in

consecutive monthly payments of NINE THOUSAND DOLLARS (49,000.00)

wid more, comzencing one onto ter the delivery of such elrplane.

DX321 id., Item 3q.

oe W & Docu age

mentz)

Such promissory note shall de executed ont delivered ty Buyer

to Seller at the tine of the delivery of such uirplane, and shall be

in the foru of "Exhibit B®, attached hercto, and ty this reference

made a part hercor. The pronissory note relating to each airplane

Shall be secured dy a Chattel bortgaze, covering such airplane, .

which shall be a first lien on such airplane and snall be sub- . to

stantially in the fora of the Chattcl Mortgace entered into by and

between Buyer and Lockheed Aircraft Corporation as of May 12, 1947,

and the Supplemental Chattel kortgage dated tay 15, 1947, both re-

‘lating to airplanes sold to Buyer under the terms of a certain — 45 45

Sales Agreement, designated as Contract No. LO-33, dated Barch 27, 5 e ee

1947, detwecn Buyer and Lockhéed Aircraft Corporation. Opon the oe aes 1

happening of any one or wore of the following events, namely” ~ oe

(a) moe breach on the part of the Buyer of any co ot r. : °

nant or agreenent oi tre un e eg te Le sbererret, ST

done or performed ty the Buycr; .

(vb) The occurrence of -any’ event of defavlt as provided |

in the Chattel Mortgages fy 2 e, e SE

(e) Failure to make paynent when ‘eat and a within 0 so

five (5) days after demand in writing is made for payacnt, :

of the principal or of ony interest of any promissory note

hereinbefore referred toz FF

then the unpaid principal and accrued interest of both of such 8

sory notes shall become imnmcdiatcly due and payable without demand -

and without notice, and Buyer agrees forthwith to pay the same; or

(4) If Buyer shall divest itself, or be divested,

in, whatsoever manner, of title to either such airplane; oF

(e) It either such airplane is * destroyed oer

damaged beyond repairz i

" then the unpaid principal, and accrued interest arenes, of the

promissory note relating to such airplane shall become inacdiately

duc and payable withovt demand or notice and Buyer agrees forthwith

X321 id. Item 3a, page

1 345 Or ders & Documents

to pay the sase. Each successive holder of ene such promissory

pote shall have the benefit of, and aay enforce the rights contained

in, the foregoing provisions relating to the acceleration of paturity

of such propissory note. The provisions hereof and any contained

in the applicable Chattel Mortgage relating to the acceleration of

the raturity of such note shall be deemed to be curulstive and not e

exclusive and the existence of such provisions in either instrv- ~ _ a —

nent shall not preclude the exercise of any right. set forth in the ö i ö

x other. All poyrents made pursvant to this sgreenent shall be nade 5 as —

in lawfvl roney of the United States of Acerica or by check draxn

upon, and duly certified W, a merber “bank of the United States

Federal Reserve Systea and payable in such money, and, unless other-

wise provided, at Seller's office in dovs ton, Texas. 5 a

4. Buyer shall furnish Seller forthwith, and from tive

tw tine thereafter at reagsonadle intervals and in any event uo _

request at such time or tixes as Seller shall be engaged in offering

to sell or discount either or doth of sete yroulssory notes to a dank

or other prospective purchaser, all such information concerning 8

Puyer's financial condition, including balance sheets and forecasts . ö .

of earnings, as is custosarily furnished to a commercial bank holding _

or considering the acceptance of unsccured notes ofa borrower or

prospective dborroser therefrom Seller shall hold such information

in confidence except to the extent it reasonably deens it necessary .

to divulge the same to such bank or prospective purchaser in connec-

tion with the sale or discount of such note or notes.. he a

3. In the event any sabes tax or use tax is hereafter 4 °

inposed upon or paid by Seller dy reason of the sale or use of the .

si Birplenes or in connection with the sodification thereof by Lock-

heed Nest Corporation unéer said Contracts LD-25 and 10-46,

. then in addition to the sales price provided for in section 3,

Buyer shall pay to Seller the acount thereof, upon derand.

, 4 ! 4 6. This ‘agreeneont thall not de effective for any purpose

DX321 id., rti

(CAB Orders §

unless and until the buyer has secured all consents and approvals

to the extent required under or dy retson of any prior, comaitnent

in örder to avoid Buyer's ezceution of this Instresent | as consti-

tuting a defeult thereunder. 8

7. This agrecgent is entered into subject to the ap-

proval of the sale herein provided for ly the Civil Aeronautics |

Board and in the cvent such approval is not granted within e

(60) days from the date hereof, this agreenent shall be deemed

— 6

0 8

to be ineffective for any purpose. 3 „ ok eee ayy ee

8. Upon the securing of 111 dae ‘consents and approvals .

hereinbefore referred to, this agrecaent shall become binding and aS 25

* 2

a Yay *

effective as of the day and year first above written. eon Sg 7

m utrnzss wor the deren hereto have wine 5 *

and delivered tnis Agreczent «cs of the czy end er 15 5

written. gat aaa ° * 5 : ° a * ae ae ee eis “4 * ee - mat _

„ HOGHES 100. cura t

a — OL, n

8. ecutive Vice President

TRAMSCONTINERTAL & WESTERN AIR, INC.

By ___Warren Lee FIE...

Ghairwan of the Board . utes

* ; 9 : tj . 8 2 ;

we i ! .

* 8 5 a: N — + ; * t

* R 5 * 1 o ° 2 Ae 2 — 23 * 5 0

— n :

4 >

DX321 id., Item 3b, page

N N (eng Orders & Documents)

—

ue . * | .

8 a Orders

. S zr Surber n

nnn e. erer ee. er *

524 „ 4 UNITED STATES CF Ai ane 5 44

cenie Mur is FWW „

‘ : , . Nn, b. 6. .

; 5 : „ 2 „* 22 2 — 2 —

My. ft . sdoptod dy the 011 e b .

a ... tk. its office in beshington, es 25 ö , i

K ae on the 27th day Mice ay - * 5 . .

„r eq, ee j . 22

„ — 5 = *

r 2 7 Se ‘ ‘i

In the ratter ef tho epplicaticn ef 1 ez

0 o- a —

ü- TOOL cee DE t ,

. * 8 .

for apprevel under scetion 408 of the 8 Docket, N. Uf .

Civil „eromut fes act of 1948, ts. 4. ae 3 „ on ©

amended, of the enen of cantroh see le ee

of > r „ — de : * *

* * °° @s° 8

N. Sc D A ATR ur. vey “an Rhee a ct”

777 ** : . are 2 2

g IHA OER 1rd xecoxsras” .

1 es bey, ‘ing docn fis. w Wies Tool Cospeny for en ca order

medifying Order Serie b. 3210’ Assusd October! 27, 19:4 in this docket,

#8 asendcd by Oder Serial no. 4437 ene. January 26, 1946, as

modified by Cider Sorisl 15. E922 issued ceteder 29, 1947, 50/4 to

por=it the se ef tro Lockheed Constellction irplancs boaring

semfacturer's Serie Ths. 049-1969 znd 49-1970 by hushzs Tool

8 Conpcny te Trense-ntincnt=] end stern air, Ine. (s) pursuant . ;

to tho ters end ce nditicns of the 82128 cyrecoent d=ted October 1, 1948,

es azcnécd by. acrocgent af bocerber 1, 1918, dot cen said parties; and .

Th: Deamt, ecting pursuant to th: pners vested in it by the

ciel srorsacutics wet of 1934, as ad, prrticulerly 204(2), 468

Item 3b, paged”

ers & Documents)

DX321 ide

(CAB Ord

* e

. g ö . ¢ 8 — 5

“+o * ee 7," = sail a 7 * 5 ‘ : * — ee

and 1005(d) thereof, and finding that the.further modification of 146

order in Docket No. 1182, as encnéed and nodificd, hereinafter provided a]

ö 5 * oe oe

for is just and reasonable and is in the Padlic interests | - ts 5 \ 2

“Pes 1 22 42 K.. . ;

> 8 — * = 8 2 4 4 at -

Tf IS ORDERED mu: POSE Cae ec Depa Pee 2 . 3

ex . .

1 eb eqn = 27 . —

Order Serial no. 216 ‘sued October 17, 19bh, as Seed ty Order’ a N

Soria No, Lh37 issued Jomary 26, 28, as nodificd by Order Serial .

2 —

E-922 issued October 29, 1947, de: and it hereby is. modified by adding -

therete tho follusings ne idee ame Se ere ae

. “That the terrs of this order shall net! restricg _

tho right of Iiughes Tool Cc-pany to scll to rad or e „ 52

right of TiA to rurchase rea Bughcs Tool Cocpany twe a

Lockheed Censtellation 3 bearing =arufecturer?s. .-.- — -

Serial Kes. Cy9-1559 ard Ce-, pursuant te-the terns 4

and conditicns of the sales acrce=cnt dated ceteber 1 a

19h8, as agendod by an apreenent erated Deceabor 1 8

between said parties, provided that the sale shal ds „ —

reported do the Board in the rotner proviced- in · paragraph :

. 2 of the order, and previded further that nothing in the .. - * . ,

Bocmi!s action herein shall te coastrucd as -a determination : :

"+ that the equip-ent here involved is required by TWA in the. ste oat. \

interest of cc=erce, the postal servico, or-the natiena l! “4

écfense or that the cost thereof to NA is eppropriate for eee Ce —

investeent aner rate-naking purposes te 2

* * * *

By the Civil Acronsatics Boards... : - ET

22 * _ Jef He Co A=. ...

g 2. 2 * „˙ͤ Oh e. nie *°8:

oe cecretary -:.

2 — * **

(stat) E oe. 0 ;

7 — e 4 0 2 ae 2812 * 2 — 3 9 e

* x es °e. 4 85 e 2 W —

x 7 - * «=: = *

“f 85 8 2 : id sie d ot « See

2 e tres tes. a eee *¢ at ~ 8 —mU— ~' 7 5

— 1 2

2 2 — 22

: Ne eo wo et * oot Je 2. s 33 2 * >

— * ° :

e — t „ .

7 7 oo * a — e se 2 2 5

ree e _ * os ee

‘ .

aes

—äũ d 4 —E—— —— —k 2 — — SS —

: AX-2033

DX321 id., Item 4a, page

. (CAB Orders & Documents)

Berore tae 7.

CLVin achUNaAUT(ICs bon

weer mec eee e cr ce cc cee nn’

‘te tue Matter of tue Applicatioa of 2 5

BUGIES 100＋ COE ö

for approval unser Section .O of tne : vocket ilo. 1182

Clvil aeronautics act of 1936, 43 ; ;

_ . @ensea, of tae ecquisition of control 2

rA SCDuUTIuEN Id. & WESTENA ALK, LAC. eas 2: a

. “ e 8 2 . - .

ꝙ—— sce eee — wee swe ok 7. . .

Alon FOR AVPROVAL OF PURCHASE OF

ISE IIA Alkire Lanes

dranscontlaental & vestern Air, Inc., a Delarare °

corjoration (aerela referred to as iia"), respectfully 7

des cue ivesu ov ler »der naretn a povoving the |

contezplatea sele by Hugues 1001 Comping to Iva of siz

Lockated Constellation Eouel 049 alrylanes besring ann

facturer's Serlal Nos. 2074, 2073, 2074, 2075, 2070 ond

2084, wulcn Huraes Tool Company now ons or has eoatreeted

to sirenase ang taat tae Boars moalsry its order approving

tae ccquisition by Hugacs Tool Corpary of control of TRA,

orcer Serial ko. 3<10, Lssuea October 17, 1944, as amended .

by Oraer Serial No. 4437, issued January 26, 1946, Order

Serial ho. E 92z, issued October 29, 1947, and Order Serial

No. E-2404, issued Januar 27, 1949, 20 as to permit the °

sale of suca aircraft.

8 [hk sUvPORT OF sc floh, faa snows to the Eoards

1. by agrecsent dated as of February 2, 1950, a

* copy of taica Is sttacued nerelo as'cxaibit 1°, dune

1 Company nas agrecu to sell, on a coniition*) sale basis,

1 sos

Dx321 1d., Item te

(CAB Orders & be

ond IMA aas agreed to purcanse, subject to tae approval

hercla reyuestca — to tie otner conaitions set for tu in

such agrecnent, tae six Constellation airplanes above re-

ferrea to st tne coat of sald sirplanes to dugnes Tool Co-

pany less, in tue case or one airylane to de used teapor-

arlly dy Hughes Tool Compeny, depreciation ut the rate f

1/a% per conth, all as wore particularly set ror in in such.

agreenent.

2. these airplanes. are being acquirea. ty Ungaes

Tool Company, four frow Air France and tro fros n. 5

Aircraft Corporation, to assist Ina in Increasing its

flcet of aircraft. fü nau teen endeavoring to porcaase

additional Constellation alrplanes woen tae avallobility

of tnese ais aircraft was discoverea by Sughes Tool coas-

pany wulle it vas investigating tae possibility of obtain- >

ing tae use of onc Constellation airplane for teaporary ö

vse for test purposes. Hugaes Tool Compsay innealately

advised Twa teat toese six eres . ere avsilable. ö

3. Tue contracts for tue purcnase of these air- ;

planes «ere entered into directly ty ilugaes fool Conpany {

to assist TwA in ucquiring sucn airplanes. It is impos- -

sible for Iva to acquire aircraft witnovt obtaining prior

consents or waivers under various financial sgreenents it

has enterec into in the past. Tae Indenture of Ceceaber

1. 1945, as amended, between Tia and Tae Commercial National 1

Banat ana Trust Conyuny of new Tork, as Trustee, covering ö

the Debentures held by fae Equitable Life Assurance Society .

of tae United States, proalbits, unuer present conditions,

tue acquisition by N. of any new aircraft sitaout the con-

sent of tne holders of tne Debentures. The Chattel xort-

gage of August 4, 193 Cron A to Uellon natlonal Bank and

— — ee AX-2035

DX321 id., Item 4a, page 3

. (CAB Orders & Documents)

et Company, as Trustce, pronitits borrowings, nor tyaging

of wiscraft, or acquisition of aircraft by -comaitional sales

agrecauat except after tairty s written notice by THA

to, ons neyrtiations sita, me Lending Banxs under such

wurtguce. Becuuse Lt novld de necessary for Tih to o-

lain scditLonel rlauncing to acquire these six airplanes, . .. _ :

Tha could not nave entered into urrangeaents for tnelr —

pi Cudoe wLtuout cou, ing aita or obtaining consents or

uweivers vader dota of tnese Sgrceacat . By contracting to

* tacse slrplanes lasediatelz Hugues Tool Company |

5 :

insurea tant taney would be available to Tka upon the con- Zs

' pletion of “tine necessary clearances vader these agree-. °° . Ste |

nents. . 5 _ —

he ‘tn udiitlon, ty selling tucse. 1 „ ö — 5

to TRA on a “conditional sale tasis on tae teras. wotiines * N ö - : e :

in Exnibit 1, Hugnes Tool Coupany 1s providing ThA ita

rInunc 1a n Leics 221 thee sents otneres se a : 3

te avullable. Under tac bank Creait hgreement. which Ta

nes wrrangea for tne financing of tne 20 Cons tel lation N

el TA eircrart waica Lt is contracted to purchase 9 1 oe

from Lockheed Aircraft Corporation, “WA 111 pay interest 5 5

wt. tne rate of 3% per unnuz and wlli pay over 35% of dae

puren se price of tne Constellation 7491 airplanes fros

EY its own funus. Interest payable to Hugnes Tool Compariy .

: is 2-1/2 per annuu una tae initial paynent required is

only 105 of the purcaase price. ~ ö i

5. Five or tne six airplencs are to be used ty at. 9

Nu on à no- charge basis after acquisition tnereoſ dy

Hugues Tool Loupany, pending action of tae Board on tals

motion. Tae sixta airplune, to be selected by TWA, is to 18 °

Le uclivered to Tea ty au, nes “fool Coupany on or before °

DX321 id., Item la

(CAB Orders & Doct

August 31, 1950 after tne coupletion of certaln. test

fligats by Avughes Tool Cowpany.

6. Ine six airplanes are required.ty TWA for

use in its dowestic and international operations. Tae gan-

urac ture of Wodel 049 Airplanes has been discontinucd und

tacrefore no suca airplanes are available fron. the no-

tecturtr. Tas is te pay Hugues Tool Conpery only s.

price ich Bughes Tool Cozpang has paid Air Prance or

Lockheed Aircraft Corporation, as the case my be, for ; a

such aircraft, plus suca incidental expenses as Bugaes

Tool Coapany aay incur in connection sith purchasing these

aircraft for TsA's account. bith respect to tue one air-

craft taat is to be used by Hugnes Tool Company for a

" temporary period, the sales price to be pala ty TWA is

to de reduced ty depreciation on the basis of a seven.

ver life. Tae purchase price of the 20 Loczheed Model

749A Constellation airplanes which Tit has recently con-

tracted to purchase 1s approximately $930,000 per air-

plane. abs ; a . eee

9. Had aal tles et tasse six atxplanes.to 5

present fleet will peralt increased Constellation service

and increase revenue mileage and wlll thus icprove Tal“

service to tae public. It will also enable TA to increase

its gross revenues, improve its can position in n

fate future ana Layrove ita's earning position. Because

tne six uirplanes being acquired are of the sane nodel as |

Tuh's present domestic Constellation fleet, such increased

service anu zevenue can be achieved sita relatively little

increase in overhead ‘expenses, maintenance equisnent or 7

Spare parts inventories. ; 1

WiEREPOBE, Tus respectfully coves tae Board to

eee

: 5 DX321 id., Item 4a, pa

(CAB Orders & Documen

enter un or zer nerein c,proving tae sale ty Hugaes Tool

Co-w,eny to Inn of six Loccnceca Constellation airplanes as

f ;

nereirpecfore set forta, ane for auca otner and furtuer re-

lief as way be aprropr late.

- A e

ThadlsCuNT(ibulan « EI. An, Inc.

, . -

chadbourne, \ullace, Parae 4 nul tes lde,

22 Eroaaway, — _

Hew Yors a, R. * ; ° — : . 3 „ „

DX321 id., Item #a™

(CAB Orders & Document,

Salk SF un. CORK , _ —

53.2 a N

ColniY O¢ a 104

qere. Axel R > being culz svorn, deposes

na 829 tart ne 112 % AA

ur McisCCHEAL E58 Alb, ne.; taat he bas a

ond is trailer ita tne contents of the foregoing aotion

anz tce exalbit attached tnereto; that he intends and .

cesires taut in granting or cenying the relief requested, ,

tne Boaru 9211 place full and corplete reliance upon tae

accuracy or esca ani every statesent tacrein contained; =

“tnat ne is fasillar wita tne facts. taereln set forth; |

that to tae best of ais information zu delle. ever N

statereat contained in tue . * true ani no such

stutecent is misleading. — 1 1 oe

Zubser lbed oni ssoip.te 5

before ze tal » ae 7 N 3 —

3 se * ‘eo 55 —— oe

DX321 id., Item 4a page

(CAB Orders & Docimenta

2 —

e ee 1

5 ul n, Ke sua cxecutea in 8 as s

uf tue anu cay of Pcbrusly, 4520, ty in between HUGHES

10% Warn, u bel Kare corporation tuner elner ter sone tines

elle Wselier"), titu its princlgal place of business at 32 22

nous ten, texzs, cud TheANSCOUTINeNTAL « EH AIR, Inc., °

; 2 be jixsre corporation (uci einai ter sometimes celled - . . —

en-), tu its principal place of Lusiness at Kansas 7...

. City, A0 I. . es 2 . 2 —_ eo *

LLETRESSETa: - *

1. Seller tgrecs to scli.to buyer una buyer 5

vel ses to purcuase tue 91x hoc ce Aoadel 049 Constella-

lion aa> plunes describes Lelox (nesslaattes soaetiues .

terested to us tue “Airpianes"), uyoa tas teras uno. n . 52227

tions ner elacfter set for tas

—

n Qe) Four & 231 uy Locaueeu ended len * - er

. sirplines, kinufacturcr® > dez Lal Ho. <072, Zo. ö

ö 2073, Ho. 070 44 no. 2075, incluulng related - —

coavei lou «its, coapaete an- in tne conaitiea ;

veliveres to Zeller —— do tie ugreevent = +”

betneea Coupegale Betiouale Alr Fiance una ö

seller te- Jun? il, 1959, « goyy of wnich

8 Ls atlecaeu nereto Eis wy tals reference made &

| | 2 uex cot, suca alryianes being socetiues re-

fesres to ws tae ait France Airplencs.ani such

agreescut deln, veterres to as tae alr rraace

A,reescente — 2 f

“- *

i r) ir wouel 549 Loca.tea Constellation

“= eirpiunes, dunufectures"s Ser 121 Bo. 2070 ane

no. 298, Incivsing relalce.csaversion «its,

2. és 2027 °

0.17 '1

8 pene 7 DX321 id., Item

F an (CAB Orders & deem

couylete sna in tus conaitisa celivered do

seller pursuant to tne agreencnt betpeen Lock-

nee Alrcrart Corporation and Seller cite’ Jan-

uniy 15, 1950, us snemoea, a copy of wnich -

egicewent, as auensea, Ls attached. nereto ani de

‘tals reference zaae & „rt hereof, .such. airplanes

‘ a de In, Zone tles ‘referrea to as the K. Airplanes 5

aun suca agrceacnt, as so anenieu, . deing referres ‘4

3 to us tne Locanced Agreement. t. 8

If Seller a0 not acecpt del lverz fica Locanees Aircraft

Corporetion of tae airplune dear laz sMinufucturer’s Serial rie Eee

No. 4034, tnis ap,recsent saall be decued. to be cancellea ore oe, 2 8 75

wita resyect to sucu airplane vnd aciiner party snall have. . |

uny xsuituer sbligatioa or liabillty to tae otacr nereunuer oi 7 “ene sins

. S

* 4 5

or Otnerwise vita resyect to suca Airplanes 3

2 ———

It is uncerstosu taut Seller aales no warranties

wnatsoever regaraing tac airglanes but vill convey to

Buyer ali seller“ rigat ana Interest sita respect to all

asnufsceturers' dal zaatles ana gvsrantces.acquired ty --

Zeller pursuant to tue alr Fraace Agreesent.

; . 2. Men of . seed ‘te Scktweres to *

Buyer ty seller ana buyer suall accept celivery tnereof

t Severe Alrgort, Newura, Hes Jersey, or sucn otaer air-

port as say be zien uon. One of tue Airplenes, to be eas |

sesignites ty ositten notice from buyer to seller (aerein |

souetines referres to as tue "Lesignatea Alrplane*) © i

z Il be veliveres ty sealer to buyer on or before

SUgust 1, 195) er five (5) uaz" prior sritten notice =

froa seller to BLS aubject to tae prior fulfilisent

of tae conultlons apecirica in paragrapa 9 hereof. the | 3 2

AX.2041

DX321 id., Item 4a, page

(CAB Orders & Documents

Alrylenes, Otuer tau tuc vesignated -mirplane, saall *

de el lvered Seller to buyer as soon as practicable

atter eacn suca Airplane suall be delivered to seller by

Couparie Natiooule Alr France or Lockaeca Aircrsft Cor-

poration, 28 tue case asy be, ana after all conditions .

specifies in paragrapa 9 aereot snall aave deen cui

filled.

— * * ° —

~ 3- Tae purcaase rice of each alrplane, other

2 unn tae 8 Airplane, shall be the price tnere-

for «nica Seller snall na ve paid Coapagate Nationale 1 5 5

alr France, pursuant to the Air France Agreesent, or

Lockheed Aircraft Corporatlon, pursuart to the Lockheed 4

Agrcesent, as tue case cay be, plus such, ulrect out-of-

yocaet costs and expenses, ir any, incurred by. Seller. in

eccepting velively, storing and erfecting aeliverz to N : . °

buyer (lnclusing insurance or ferry cuarges connec tea witha ö 5

one of Cie foregoing) aml any costs incurred by Seller in

ellas wven afr ine zursuaut to paragrapu. & c2rcof.

Tae purcaase price “of tne Designate’ Airplane. saall de

tac price taerefor valca seller suall ouve paid Coupagnie = ö .

Hatioazle air france, pursuant to’ tne air France Agreegent, * 1 — .

or Locineed aircraft Corporation, pursuant to tac Lockheed K

eee nt, as tue case ray be, plus such direct out-of-

Voce t coats aai expenses, if any, incurred by Seller inf

acceptiug selivery ani errecting dellvery te tiger (in- . 8

cluding Insurance or ferry cnarges connected sith eltaer ö

of tne foregoing) ana any costs incurred by Seller in

ü, suca Alrylzne pursuant o palagrapa 8 hereof,

less deyrcclation at tne rate of one cignty-fourta of tne

2 sales price poli by seller per nonta fron the date of ; 8

acquisition by seller to tue date of aclivery dy seller , —

do buyer ucreunser. Payucat for each Airplane snall be

—

DX321 id., If

(CAB Orders t

. 2 —

8 . — 8 . a ar

nude in tae following wanaers ; ;

(e) $100,000, plus any wo. Lfication.costs pal

‘ty Seller pursusnt do parzgra,a 8 nereof, in cash,

upon tne selivery of each airplane te buy er aereunder;

(bd) tut balance of tue pureaase ‘price

Shall de pulu by buyer to Seller in sixty ae

qual consecutive moataly Lastzllnents, . together:

Tita interest on tue unpsia balance at the rate of

two ana one-.wif percent (2-1/<s) per annua. The

first of suca peywonts relating to each Airplane —

anal de muse oa tae first uay of tne nonth follow-

ing tae Jellvery of sala Airline ent one of the ee. a 5

* remaining pzrueuts 20811 de waue on the first day 7 —

Bc of ces month thereafter vatil tae whole purchase „

—* 2 5 = price snail have deen lu. wee. 2 . 1 * y

4. Title to ue n shall ndt pass to

‘Puyer dy aclivery, but sas ressin in. Seller until such

time as tue purcoase price shell have been paid In full ~

ana Buyer saall nave pald to seller all other sums then 85 i

aue und puysble to Seller nereunuer, wnereupon absolute eaten —

title to tue alrplenes siall pass to Buyer. Tae respec- | * 8 3

tive rignts of Buyer und seller to tie Airplanes shall :

be more specifically set forta in one or sore condi- . 5

tlonal cules ayreesents covering suca eirplages in fore )

Satisfactory to buyer ans eller. Eaci sucu agreenent

Snail incluce provisions tnat upon tae nappening of any

one or more of tae rolling eveats, namely:

(a) tuc Ureaca on tae part of tae buyer or 4

acy cuvensnt oF agrevscat contulaca aerein or in

suca conditional sales agi eewent to be observed, ©

Sone or performed by the Buyer; } 9

A-

DX321 id., Item 4a, page 11

(CAB Orders & Documents)

55 do) tae occuricuce of auy event of ccfault- : . .

aS p,reviuea lu suca conultional sales syreenent; | N

(e Tallure to Ae bsyrent nen que, and 2

Aula five ( says after dend in writing is ö 2

e for paysent, of any ponthly installzent of N

tae fur czuse price of tae airplanes. pursuant co

n. — exit ket ole 55 ; ö „

taen Seller say st once (or at any later tine) proceed © ie i _ : =

so texe possession of tne Airplanes in any sanner pro- 7 . | ö

„ed ty law, or seller cay at its option, and seller is _ ——

vel ebf ccposerea to, 1uU or “witaout Legel process, and : or

Ata or sitaout ceasna, enter upon tae prealses. tnere tae | ö

aylenes de and take possession tnereof anu remove .

du sane. Selher way resell tae Airplanes, so retaken, a :

gt public or private sule, sita or without having de 3

alryplines at tae place of sale, and upon suca .teras and

28 S80) “RANGE ws Seller day detersine. Notice of the 1

intent loa of Seiler to 50 sell tae Airplanes shall de

given by Seller to Fuer at least tea (wo) Guys prior to

tue tive of suen sale. Zeller way dia and purchase at any

suca public sule. Froa tne proceeds ot any suca Sale,

Seller saall cGesuct all expenses for retaxing, repairing,”

storing una selling tae airplanes, incluuing any nb

able uttoraorye’ Pees incurred. Tne balance of such pro-

ceeus suall be applied to tue - of all suas owing

to seller unser tals agrecsent ana any surplus of suca _

procetcs resuining zaall be pais to Buyer or to sacever ma ee N N

aay be lerrull entitlea to receive tne sace. buyer

sasll te under no odlizatioa to Zeller ror any: deficiency

Tesulting froa ony duch sale or to aske any payazents on

- eecount of tae „ui cause price of * alrplene falling *

8 3991 .

9 — cai

* n Ve *

L — —

55 *

: 5 5 DX321 1 ., Item ha, page 15

: : ee (CAB Orders & Documents)”

—

after Seller ais taten possession of land Airplane yur- -

Suvant to tals provision. Saas

Frou anu after delivery of tue Airplanes. to x oe, ‘

Buyer and until absolute title werete is vested in

buyer or its nosinee, or Seller repossesses. the Alr-

planes, Buyer saull procure ana maintain at its expense er Tipe

public Liability, passenger liability and property . = .-

dsasge Insurance in such amounts nau sven coapanies 8

us saall be satisfactory to Seller, cidentne Seller's -

liability as holder of legal title to tne Airplanes.

Tae policies eviuencing suca insurance Snall contain a

such provisions as suall be sutisfactory to Seller — . *

shell nane Seller as assured. et 8 ae

i Buyer salle at its expense 1 al. 114

aircrart bull insurance in respect of tue Airplanes in ie

favor ot Evyer sna Seller, as tuelr interests may ap- -—

Par, in én *coint-at least sufficient to cover tae -

taen unpaid portion of tae purchase price of tae Air-

planes. If any sucn Airplane shall be lost, destroyed re

or aanages*to such an extent tant repair taereof is

impractical, sucu insurance Shall be pald to the Seller

to tae extent of tue unpala balance ot the purcaase 88885

price of suca airplane togetner with any accrued and

unpaia interest tuereon, plus all other amounts toon due

to seller ger eunder. Buyer shall be under no obligation :

to mace any payrents on account of tae purcaase price 5

of suenu Atrylanes falling ave after such loss, ann.

tion or dsasge. % lasurance »roceeds In excess. of

such Smount, ana any iusurance proceeds payable as 4. |

result of dumge not rendering repair inpractical, shall

be payable to buyer or its designee. ie :

Buyer my at any tioe pay to Seller. tae ci. . 5

* i . e

Dx 321 1d. Item 4a, page

(CAB Orders & Documents )

5 © - a

telvace of tne purcuzse price of tae Airplanes, or any

part tac reot, tituout prculus or penalty. - . f

Upon tue payacnt to seller of tae balance of

the purcause price of tac Alrplanes togetaer wita all

other swsouata lng to seller acreunader, Seller suall

deliver to Buyer at suca place in tue United stetes.as

Buyer a2 deslgaate (1) a DLLL of sale avly vesting in

buyer tae title to toe alrplancs acquirea by Seller

vaser tic alt F ance agreenent or tae Loccneea hgreenent,

ee es tne Chae a be, free ana clear of all liens, claims,

citar ges ana encuabi auces attacaing subsequent to. the

welivery of suca . to Seller and not arising -

out of tne possession, use or operation of tne airplanes

by Buyer, and (2) suca otaer savregriate docuzents of

"title vita n tac re to as ~ er * r oe .

require. 3 Sale kee we . * = Me 2 „

Rid. ee . < * Buyer sual furaisa seller fortasita and et

froa tiue to tice thereafter at reasonable intervals - *

ell sucu tnformetion concerning Buyer's financial c. 8.

ation, incluslug dolence sucets aoa forecasts of earn- | 3 f

| ings, o>» Ls custocsarlly furnisaed. to a commercial tank 7 ai = — ö

aoluing or ann, ing tae acceptance of 6— notes gs as i 8 8 = — *

of a torscter or prospective borroner 3

d. In tne event any sales tax or use tax is ae ae

ee laposea upon or bald by seller dy reason of. : * 5 ö J : °

tne le or use of tae airplanes or the purchase thereof oe 8

ty Seller (otaer tnan tne use by seller of the Designated . f

alrplane prior to dellverz tucreof to Buyer pursuant to

peregraya « acicor), tuen 10 8 to tne sales price

proviceu for in puragrapa 5, Buyer s. 11 pay seller the

#pount tacreosf, don utuend. buyer agrees to indeanify

DX321 id., 7

(CAB Orders ¢

anu ola auraless Seller frou any liabilities, costs or „ i .

expenses te whicn seller way becose subject because of

paragragh 4 of the Air Frange agtecaent or decause of

paragrayls 3(>) of tue Locanews agreeneat.

7. . written request of seller and *

tne written consent of buyer, eltner before or after :

the del lvery to seller of any of the Airplanes, purso- |

ant to tne Air France Agreezent or the Locanced agree po Seite

a ment, Buyer 3-11 take puysicul custoay taercof pending 0

fulfillsent of tae conaitions spécifled ln perayrapn 9

hereof and during. such interim perioa Buyer my store,-

use or modify such Airplanes consistent wita tae terms .

of sucn request ana consent, Carrying suen —— oe

coverage as may een sas be — in such request

* we

. „

—— ——ůꝛů 2 —

° * 2 eT 1 mw *%

—

5 83. upon tae written b of pei ans toe 15

Atte ==? Scller, cits fore or after the

5 Gelivery to Seller of ayy of the Airplanes, pursuant ‘

; to tae Alx France Agrecwent or tae Locaheed Agreenent,

and penaing or subsequent to the fulfillwent of tae -

conditions specified ia paragraph 9 nereof, codifica- i

tion of sny of tae airplanes may be undertaken by eiter

Buy er or Seller or tarovgn a contractor to tne extent .

—

3 „ * ? .

0 5

— —— . 2 2. — — —

. .

und in tae ranger specifiea is suca request end consent

to tne end taat upon completion tuereof suca ener ö

my be most appropriate for the use of her.

— ed

7 N : %

. . *

wig 9 Tals agreevent is N to tae ae

tuen of en end all of tae folio: ing conditions oa. CA ance

or before April 1, 1950 or sucn extension of soch cate *

as my be agreed upon in writing: a N

322

DX321 id., Item 4a, page 15

(CAB Orders & Documents)

(a) ony up tovel, conseut or mse sane or

tae C. a- B. anica ue be rcyulren puraucat to ta

8 Civil acrvauutles act of 1934, es v engedz |

Id) e sypyroveis, consents, clearances or

" palvers Tulcn say te rewuirea unaer tae existing

an ernte ot buyer «itn Tne Equltzble Live Assur-

ance suciety of tuc Unites states sm alta vn lous

lenulag bance. . ot pie ei RM ge Se

Tals agiecsent 8% 11 ut be erfestive Cor eny purpose un-

less ani until buyer za Secu cu il dcn approvals, consents,

: clearances or teivers. Buyer suall furnisn evidence, Satis-. _

factory to seller, of alt tpprowis, consents, clearances . .

or talvers requires uoccr subsivision (b) of uus fer-

graph 9 wituin tal: () says froa tue date of the

éprroval or tue Civil Acronuutics bold pursuant to sub-

uivision te) ar thts usedeveay , : s ö

10. b. du tac securing of tac approvals, con- |

sents, clearances ens walvers teyulice ty puragtepa 9 hereof, —

tals Agrecsent -I eee vinulm, ans effective as of tae .

aay ana year riret above written. =

Ia IIA „dor, tue „ tles aereto asve :

eaxecutcu aun désaivescy tals agiecucat as of tae asy and

J ear Yiret dave u ltten.

: ; HUGHES 1001 Cura

‘<2 by. 2 . . é e . = —

5 Aulus a ee oo

ThsNSCONTININIAL & RESTERG. AIR, INC. |

By | “eo 5 ‘ —

del a

Ice weculscut 4 ireasurer :

8 Serial Sunder Z~10

_ -_

WITS STATS CF Hen

: CIVIL cauac s N . a

“ASULISTOK, 5. e. 5 1

Wopted ty the Civil loro utiles Board 7 2

at its office in tysirgton, D. Co rn

. en the 12th daz fot *. R

—äͤůä 22 — —ꝛ— —ůꝛ ——ů — ——ů —— e= = @& = =

In the rakter of the application of

HUGHES TOCL c mn ers ;

or ap- eren ten Les of tha

Civil scremutics- t of i955, os camæa,

of the eccuisition of cot. rol t

1 226% é

Tars KH A. & 2 An. ne.

—— — — — wea — eee * oe MP,

~ 92 oe i ~ i.

C IDULFUUG COCR zr NαjEͤU⁰, 7 .

Alon heving been filed by N Tool Corny for an order

podifying Order Serial 20. 3210 Ar October 17, 144 in this

docket, 23 accnded by cubsuqucet oniers, so as to perrit the sale a

of six Locztced Censtcliatica airplanes bearing sanufacturer's Serial

Tos. O. 9-207, ChI-2773, C.-, Oh9-2075, OL9-2070 and -A by

Eughes Tool Cozpany to Trenscortinoatel & ‘bstcra Ur, Ire. ()

pursuant. to the tems me ceneit ies of the siles agrocecnt dated

February 2, 19503 ard : a

is eee, ² ˙ a pasevusidialttye = * 7

Civil S:ronaitics Jct of 1935, as red, particularly sections (e .

„ *

and 1X5 (4) theroof, end £irdirg thet the further notifiestion of its *

reer in Docket Fo, 1102, as a and rod fred, hurclrafwr provided |

for As gust en ebe cmt 1 in the public interests :

DX321 id., Item 4b, page 2

(CAB Orders & Documents)

If IS ORD nun „ 9 72

| Order Serial To, 3210 f asi ce 17, 12hb, os . | 0 —

scgu:nt ordcrs, be ond it uercby is” furtb-r. cmcnded by adding threte

thy follocing: _ „

ead

0 .

+ : s

oe .

' :

ND —

5 .

0 .

. 0

„

7 0 e

nn 8

* 8 0

: et W .

% 3 :

om ie

, J

. „% 4 ‘

* b ,

——— . ———

6. That tic teres of this order shal! not restrict the

right of Hughes Tool Cempeny te 301 to Titi or the right of

T to purchase fron lsh-s Tool Conp-ny six Loched Const lla

tion —— bearing nuf actur cri Scricl Mos, &9-2072, . 9

203, O.9-207h, (49-2075, 49-2070 cad O. -u, Arent te the

ten= oni co: ui Ucns cf the szles cgrccau1& 0 stud Sebrarz *

1950, de. ieen c ports, rov asd e . oA it

reportid to the re In the nr provided in pꝛragrem 2 of

this orc.r, m provided furthir Wet nothing in the Ward!

ecticn rain mel be construed as a deterairet Lon that tie

qui pct. her involycd is rcouircd by T 4. in tho irécrest of

e. res, the post scrview, or the rclicn:l defense or thet is Eee

the cost thriof te Ti 28 sat co for Av h * a ö 3

rete-ccking purpesca,® : ae ne

Dy the Civil ccromutics Dordt 5 | 1 2

i „„ i Ns

8 r. c. ang ae . :

ms ‘ . Scereterrxr „ 3

(sex) „ . ;

55 px321 4. fte

: ess Orders 1

85 „„ 1 5

sas : BEFOAE THE eee de

: ee C1VIt RzRovauTiIcs Bcanp =!

—

* - „«%ͤ„ „% 2 K 2 2 8 «%% ese ͤKj K 23 1

In the Matter of the Application of 3

HUOHES TOOL COMPAKY 2

for approval under Section 408 of st nee Tene

the Civil Aercnautics Act of 1933, Docket Ko. 1182

as ercended, of the acquisition of 3 „ 5

control al 2 5 1 ean ae 1

* 3 1 : ° oe ee 5 oe

8 TRAKS WORLD AIRLINES, INC. VVV ö

‘ ° 2 ear

2 ee ae 4

MOTION PCR APPROVAL OF TRAKSACTIONS *~ _

: . °

- 8 . ‘ . 8 — 4 8

5 6 ee

- *

— 2 eee Tes we TT;

: I e.. A. :.. « Deleware corpores

tion (herein referred to as “TWA"), respectfully moves that

the Board enter an order herein approving (1) the proposed sale

* by TWA to Hughes 7001 Company (herein referred to os “Hughes"),

of one Martin Model 40% Airplane pursuant to an agreement

dated December 4, 1950 between TWA and Hughes, a copy of which

is attached hereto as Exhibit A, (2) the proposed finencing d

TWA through Hughes of the final instalment of the purchase -

price of four Lockheed Constellation Model 74SA Airplanes by

means of a conditional seles contract between TWA end Hughes

e pursuont to an egreenent eated March 2, 1951 between TWA end

a Hughes, a copy of which is attached hereto az Exhibit B, and

en agreer.cnt dated Farch 2, 1951 between TWA, Hughes ard

Lockheed Aircraft Corporation (herein referred to as "Uockheed"),

a copy of which is attsched hereto a8 Exhibit c. (3) the pro-

posed sale by TWA to Hughes of one Lockheed Constellation __

Yodel 7594 Airplone pursuent to the agreement dated Merch 2,

pe * 1651 between TWA and Huyhes, attoches herete as Exhibit It te P

DX321 id., Item 5a a 2

(CAB Orders & — 4 —

Exhibit B, and (4) the sgreerents between TWA, livghes and The

ae Equitable Life Assurance Society of the United States (herein

| called "Zquitable"), copies of which are attached hereto as

Exhibits D and E; and that the Board rodify its order approv-

ing the acquisition dy Hughes of control of Twa, Order Seriel

3 Ko. 321C, issued October 17, 1988. as amended, so as to

permit the perfornance of such transactions and agreements.

In support of such cotion, TWA shows to the Board:

A. Sale of Hartin Airplane :

1. Sy contract dated February 22, 1950, TVA *

contracted to purchase fron The Glenn L. Kart in Company 30 ee

Kartin Mcdel 40% Airplanes, This contract, referred to as N 7 +

Contract No. 1116, was arended by Contract Change order No. |

§ to provide for the purchase by TWA of an additional 11 ö

kart in Model 40% Airplanes. One of such airplanes was q

ordered dy ‘TWA at the recvest of and for the account of 2 N

Hughes. TWA has agreed to sell this airplane to Hughes, sub-

zeet to epprovas oi tne Foard, vy apicewent dee er Se

1950, a copy of which is attached hereto as Exhibit A.

2. Under such agreerent Hughes will psy to TWA

211 costs incurred by Tul in connection with the purchase of

this airplane from The Glenn L. Kartin Company and the sale

thereof to Hughes.

3. This airplane was included in Contract No.

1116 fcr the convenience of all the parties to the transaction

and so as not to conplicate the srrargements under which The

Glenn L. hart in Company obtained credit to finance the mange

facture of the Modei Sumner and under which TWA and

Eastern Air Lines at the sare tiz: “obtained security for their

„„ payments made to The Glenn L. Martin Company.

. The purchase by Hughes of a Ear tin Model 408

Aircraft is of zotential tenefit to TWA in that under Contract

pursuant to Contract CD-. Buzghes has agreed to pay to Lock. |

I to Exhibit B. Shee . 5 au

20. 3116 che purchste grice of each @irplere purchascd by TWA

is reduced by $12,500 if The Glenn L. Martin corpany nanu- 8 |

fectures rore than 100 of such airplenes in continuous preduc- .

tion,

B. FPinanctine of Feur Leckheed Constellation —

OSI '-Ga Alrplanes

3. By contract cated March 2, 1951 between TWA

and Hughes, a ccpy of which 28 sttach23 hereto as Exhibit B,.

Hughes n2s agreed in effect to finance the final instalment

of the purchase price of four Leckxkeed Constellation Model

739 Airplanes which TWA has agree’ to purchase from Lockheed

heed the second and final irstalsent of the purchase price

of such airplanes ard to sell such airplanes to TWA on @

conditional sale basis, subJect to the epproval herein re-

quested and to the cther conditions set forth in such agree- meee .

rent. Lockheed dss agreed to this transaction dy an agree- 8 N

rent dated March 2, 1951 wee THE. Hughes and Lockheed, a Le

copy cf wich is attached hereto as Exhibit e.

6. Hughes is taking title to these four sir-

planes ena selling thes to TWA on s conditional sale besis

solely for the purpose of enabling TKR to finance the acquisi-

tien of such airplanes. The terms and conditions of sale sre )

substantially the same as those contained in the agreement | 228

Gated as of February 2, 1550 between Hughes and TWA relating 5

to the sale from Hughes to TWA of six Constellation Model 89

Airplanes on a con3itional sale basis, which was approved de °

Board Crder No. E-%3160. ‘The details of the arrangesents de-

tween the parties are more specificatly set forth in the con-

ditional sale contract, a copy of which is attached as Exhibit

7. TWA 3s to pay Hughes for these airplanes only

the amounts which Hughes has pale to Lockheed, with interest —

(CAB Orders & Documents)

tte 10 bslanze #2 proviges zn the conditional sale se

treet. Hughes 1s provitirg Tu with financing for the acquisi-

_ ton of these four sirplares on better terms than would other-

4 de available to TWA. ene S 3 a ‘

— — ~ -

“ve These four airplanes are required by TWA for 15

2 use in 173 Comestic and int ernational operations. The addi- - }

tion of these planes to TdA's present fleet will permit in- .

‘ereased Consteiiaticn service ‘and increased revenue 3

e. Sale of * Leckheed Constellation ast

Yicdel TTT Airplone „

9. By contract dated Kay 31, 1949, referred to :

os Contract No. LD-6C, TWA contracted to purchase from .- - :

Leeheed 20 Lockheed Constellation . 1 749A Airplanes. Upon ey

* the exercise pf éptions granted to TA to purchase additional

airplones, contract No. LD-60 was amended dy Contract change

Créer Ko. 9 to provide for the purchase by TWA of an addi-

tien oan ecki ei. ::: 279 Airplane. One

- of such airplanes was ordered by TWA at the request of and

for the account of Hughes. TWA has agreed to sell th. air-

plane to Hughes, subject to the approval of the Board, by

eereenent Gated March 2, 1951, a copy of which is attached :

hereto as Exhibit B. The details of this transaction ere set

forth in the letter azgreecent dated March 2, 2 8 attached —

thereto as Exhibit 11. Rie 5 Boe: =. 8 5

1c. Under such letter sgreement Hughes will: pay

to SWA 211 ecsts incurreé by Tu in connection with the —. : 3 i

_ chase cf this sirplare from Lockheed and the sale thereof to x

*. @ughes. : te bow

ude : * 25 aN a n

ao 11. This airplane was incsiuded in Contract No.

2 1-60 for tie convenience of 3811 the psrties to the transac- .

: - The curches2 ty Avetes cf 2 Leckheed Constellation keel

| A Airplane is cf substantisl’ tensfit to TWA in that under

a tract o. Lyfe the purchase price of cach airplane purchaeed Z

: DX321 1d., Item 36

5 (eas Orders & Doe

dy TSA is reduced as che nunder of plenes purchased thereunder

is increased rt es the exercise by TWA of —- riot. 55

D. Agreements for 881 of . rr Bt ae ee

Stock of 1k. „

12. By contract dated april 5, 1950 between hughes,

TWA and Equitable, Tua agreed that on or before December 31,

1951, 1t voul4 sell sufficient shares of its unissued capital

stock so that the net proceeds to it fron such sale, after de-

8 ore ting underwriting cor=issions and other expenses of auen

issuance payable by it, should be at least $5,000,000 snd a |.

Hughes agreed that it would cause TWA to perform such agree-: : =

went end that if such shares were not otherwise sold it would

itself buy sufficient shares of the capital stock of TWA to

provide such net proceeés or would lend to TWA $5,000,000 ee

evidenced by @ subordinated note, all as more fully provided 2 ae

in such agreement (herein referred to as the "1950 * a ie 2 15

a a copy of which is attached hereto as Exhibit d. : 8

13. ty cab zes sake January 16, 2931 deter N

Hughes, TWA and Equitable, TWA agreed that on or — fe ss ae , ee .

December 31, 1952 it would sell sufficient shares of 144

unissved capital stock (in addition to stock to de solé pur-

susnt to the 1950 Agrcerent)- so that the net proceeds to 40

from such ssle, after deducting underwriting commissions on!

e 0 * .

2 —

dnn 0 ‘

other expenses of such issuance payable by it, should be at

. least $5,000,000 and Hughes agreed that it would cause TWA 3

to perforn such agreement end that ir such shares were not 15 a + 7

otherwise 61% it would itself buy sufficient shores of the — “se . uf. 5 a

capital stock of TsA to provide such net proceeds or wo,,i

lend to TWA $5,000,000, evidenced by s subordinated note,

211 as more fully provided in such agreenent (herein referred

to as the "1951 Agreeent*), @ copy of which 10 attached 8 b

hereto as Exhibit E. a ee a ae ey

18. Both agreements 5 that the 8 :

of Hughes unger tuch azreenents are subject to the spproval of

‘ 5

® — 3

1 ~

* .

DX321 id » Item 5a, pa

; e

5 | | _- (CAB Orders ¢ Paes ce ali

125 the Civil Aeronaut ies Beard. ee ; | :

| 8 15. The execution of doth the 19250 Agreerent and e

| the 1951 Agreexent were essential parts of the transactions

pursuant to which TA arr2nge3 to purchase and finance new

fleets of Mertin and Constellation aircraft. The exccution of —

the 1950 Agreement vas wace a condition precedent by Equitable

to its consent to the purchase by TWA of 30 Martin Mcdel 408

aircraft and to the creation of injebtcéncss, secured by 2

. chattel wertanes on such aircraft, requircd to finance such *

5 purchase. The execution of the 1951 Agreerent was cade 2

condition precedent by Equitable to its consent to the purchase , :

by TWA of 10 Lockheed Mod21 1059 Constellation Aircraft na

to the creation of indebtecness, secured by a chattel mort-

— «3 2 —22

gage on such aircraft, requirea to finance such purchase

—— ce

18. The 1950 Agreement and the 1951 Agreement

were entered into dy Hugnes to enable TWA to purchase air-

craft required by THA and essential to its future operations.

——

’ „

Their purpose 28 to aid TWA by providing it with additicnal —

equity capitsi, whether by sale of siock to others, vy sale |

of 911 such steck to Hughes, by the purchase by Hughes of

rae

its pro rata share cf stock offered to others or by means an

—

of a subordinated loan. The execution and performance of both .

these’ agreenents will be of substantial benefit to TWA, *

. .

——„—-———— me Ores a eh

— ae ee

WHEREFORE, TWA respectfully moves the Board to °

enter an order herein approving (1) the sale by TWA to Hughes

of one Martin nose dod Airplane; (2) the financing by Hughes - .

of four Lockheed Constellation Medel 739A Airplanes; (3) the

sale dy TWA to Hughes of one Lockheed Constellation Model 789A

Airplane; ard (9) the agreerents relating to the 0 of stock _

(of TWA attached hereto as Exhibits b and E. eos hereinabove „

bet forth; and that te Board modify {ts order approving the

eue tion by Rughe s of control of TWA, Order Serial No.

* dio, issved cetoder 17, 194%, as amended, so as to permit the =

2 ence .— +

DX321 1d., Iten

~ (CAB Orders & 56

performar.ce of such transections end agresnente,. ene for such

ether and further relief as may de appropriste,

Respectfully subsitted, 0

TRANS WORLD AIRLINSS, 16e. :

CHADBOURNE, PARKE, WHTTESIDE, WOLPP & worm. Ps Rs ae

Attorneys for Ms iia ca .

Trans World Airlines, Ine. 2 She oats „

“ay, : : prs

New York % . Y.

N * 5 1 i

—

— > e

—

. =

— * 81

* ig — “ — =e *.

— sy .

— 8 \ e

2 — 4

: . .

1 ° “Shr

° ‘

- a4 3

a —

1 *

5 7

* e e

—

—— ee — — —— — — —

: . AX-2057

Dx 321 id., Item 5a, page 8

(CAB Orders & Documents)

Starr er KEW YCSK

‘ 88.2

ener cP XBW T ) 3

bf bee Avrsean „ being duly sworn, deposes.

and says that he 18 ce of Nr B hu .

of ars WCRLD AIRLINES, INC.; that he has read and is

feutliar with the contents of the foregoing motion and the

exhibits attacked thereto; that he intends and desires that

zn granting or denying the relief requested, the Board ~ 3

shall place full and complete reliance upon the accuracy

of each and every state=ent therein contained; that he is

fentliar with the facts therein set forth; that to tho.

dest ‘of his inforzation and belief every statexent - V

* om ee *

tained in. the motion is true and no such statement 14 pee acy :

' gisleading. a 5 : N tee : 8 1 — a

1 2 1 83 8 8 2

—

— —

: _ Subscribed and svorn to ui ae eee. = ie 3

defore me this Ida cay Seen TFF i a we ee -

of March, 1952. okie ee N 3

3 2 * ‘ * : 2 . By! 0 :

botary Public 5 : a

AS EF tte 3 3 a wo 5 a

e tar er of Rew Yor Pies hae 5 2 8 8

Se „ C 8 5 . 3 ‘ . * Wi

eee 8 . „ ; 3

n. Hue Ca et Bee K “A 5 8 8 °

tra . 8 a ; ie ee, 3

; (CAB Orders §

* ‘Exhibit A

HUGHES TOOL COMPANY

5325 Polk Avenue,

: Houston, Texas.

Decender d, 1950

Trans World Airlines, Ine. , 5 |

101 West ilth St., ee bain 3

Kansas City 6, Missouri. Rie SIS Ata

: we: . 5

Gentlemen: Srey WS os

2 —

— -«-

We understand that you have entered into a eon

tract, dated February 22, 1950, with The Glenn L. Martin

Company, referred to as Contract ko. 1116, relating orig-

inally to the purchase by you of thirty Martin Model 3-0-3

airplanes. We also understand that dy anencsent to con- 5

tract No. 1116, pursuant to Contract Chunge Order No. N, 2

you have contracted to purchase from The Glenn L. kartian 5

Company eleven gcdit1ongi Martin Model 4-0-8 airplanes and ae

that under Contract No. 1116, as presently anended, sinilar

contractual terms and conditions are applicable to the 5

eleven additional airplanes as to the thirty original air- ;

planes except that the price of each cf the eleven addi- aa

tional airplanes may be increased cve to escalation. This „

will confirm our agrecrent with respect to one of the :

eleven additional Martin Model No- airplanes, herein-

after referred to as “the Airplane", which you have con-

tracted to purchase pursuant to Contract Change Order No. 4%. -

We. agrce to purchase, and you agree to sell and

transfer, 3211 your right, title and interest in and to —

ee upon the following terms and conditions:

(i) me Airplane shall de the sixth of 8810

eleven additional airplanes and scheduled for de-

livery on or before March 31, 1952; provided, however,

that if you should subsequently wish to designate one

of the eleven additional airplanes other than the

sixth in substitution for the sixth, we will not un-

reasonably withhold our consent and agreenent to such -

substitution. The Airplane shall be subject to change

orders heretofore and hereafter agreed upon between :

yourselves and The Clenn L. Martin Cozpany, it being

agreed that the Airplone is to be substantially sini-

lar to the other 10 of said 11 additional Hort in Model

Jo- Airplanes, but you shall use your best efforts

to obtain the egreerment of The Glenn L. Martin Cozpany

to any special changes we say reasonably rer with

respect to the Airplane,

(2) During manufacture of 8214 eleven additional

airplanes, you shall perfors the sane functions of meee 5

inspection, plant representation, and general contraet ae

adpinistration without distinction as 2mong said eleven

additional airplancs; i.e., on the sace basis and to the

same stancards with respect to the Airplane as apply

to the other ten airplanes which are for your om

° gt

AX-2059

DX321 id., Item 5a, page 10

(CAB Orders & Documents)

{3) Upon your receipt of notice from The Glenn

L. Martin cerranz of the date they expect the Airplane

to de ready for flight tests, you shalt notify us

thereof, and as prozptly es possible thereafter you : U

shal? s rise vs of the arcunt of the balance of pur - :

chase price de to The Glenn L. Rartin Ccnmpany upon . 3

delivery. Ve sh3ll prorptly pet you in funds to pay N

such balance of purchaze price, and we hereby authorize x :

you to pay suck dbalence of purchese price to The - :

Glena L. Martin Coppany against delivery of the Air- ° :

plone, and in our naze and on our behalf to accept 5 fo ‘

delivery of the Airplane and execute all instrunents

ard taks 311 steps appropriate to the end that de-

livery of the Airplene for cur account be effected at

the point ard upon the basis set cut in your contract . i Aa l

with The Glenn L. Martin Corpany, with title vesting aes ae :

zin us and with 211 risk and expense for our account, : ;

end following delivery to ferry the Airplare to such 5

other point within the United States as we may request.

(3) We shall pay the sace purchase price „ as oo.

the Airplane as jou are obligated to pay The Glenn ‘

I. Martin Company, such payzent to be made as follows:

(a) Forthwith upon fulfilirent of the ie es 5

conditions set forth at paragraph 8 hereof, ee ge

we shali r2imturse you for all installzents ice Fe oe

of the purchase price of the Airplane which | 8 2 ae -*

you have theretofore made to The Glenn L. ; es

Martin Company. ae . a ae ne .

(d) Upon notice from you, we shall 8 yee mar Sas

forthwith put you in funds to meet when a - „

due all installcents of the purchase price 22 ee at

of the Sirpiane wnach vecuws Suc SuSecsusnt 5

to fulfillrent of the conditions set forta

in paragraph 8 hereof. .

(5) In addition to the purchase price of the “5

Airplane we shali pay you, following fulfillcent of the :

conditions set forth in paragraph 8 hereof and as the 3

suns become ascertained in norsal course:

(a) such suns, if any, as you nay de re-

quired to pay to The Glenn L. Martin Cozpany with „„

respect to the Airplane as an adjustcent of the

purchase price thercof, pursuant to the contract

between yourselves and The Glenn L. Martin con-

pany, including without limitation adjustments

due to change orders. gies

(>) Such suns, if any, as are represented

by any sales or use tax irposed upon or paid by

you by reason of the sale or use of the Airplane

or the purchase dy us hereunder.

(e) Such sums ss represent, under sound

accounting principles, a proper allocation to

the Airplsre cf its proportionste share of 2

the general expenses heretofore and hereafter

incurred by you in negotiating your general con-

tractucl arrangements with The Glenn L. Martin

Company, ard the performance of functions of

inspection, plant representation, and general

7 Ss DX321 id., Item

(CAB Orders & bass

8 oe '

contracts tominga cretion, Flur the total of such

sums, 1 any, 23 represent ¢frect out-of-pocket *

cos vs anz expenses to you solely on account of, and

attrabutable te, the Alrplozme an3 acceptance of de-

livery and ferrytag thereof, itncivudirg, without

liritatton, the ccst and expenses ineidental to

your providing cv3torer furnished equipzent for

the Airpiane. 5

(6) in sus trent of the sens ve are obligated

to pay Jou, you 3snall creéit or pay to us, 33 àp-

propriate, ary credits alloxed or payzents rade to

jou Sy Tne Glenn L. Kortin Ccrpaay with respect to

Ins Airplane fursusnt to your contractual errange-

ments with The Gienn I.. Martin Company, and you .

shall remit to us such interest as you receive .

fro The Glena i. Martin corpany on account of 8

Instal irent feyrents with respect to the Airplane 5

for the pericd subsequent to the este we have re-

-Inturseéd you for such {nstaliment paycents, nag *

you sh2ll zerzt to us any repayrentsby The Glenna

L. Martin Cezpany of instslinent payments with :

respect to the Aifplane for which we have rein- ate

turses ou. Se

(7) Poslloving cur reizbursement to you of

any zns zal zent pazuents you have rade with respect

to the Airplen?, you shail, subject to any consents

or waivers required dy the provisions cf any con- - :

trectual arransexzents to which you are à party. 8

execute any instruments in the nature cf assignment

or to evicence subregation which we ray reasonably

request in view of our interest in the Airplane and

our rights end ctligaticns hereunder. It is under-

stoct thet ru roze ac warranzies whatsoever regard-

Cee ties Arlen Sut will ear te vs 222 sour

ass{gnabie rights and interests in all canuiacturers*

warranties ané guarantees acquired by you pursuant

to Jour agreerent with The Glenn L. Martin Coppany. -

(5) This egreerent is subject to any approval,

consent or clearance of the Civil Aeronautics Board |

which may de required pursuant to the Civil Aero--

rautics Act cf 1938, as amended. | : °

If the fcrecoing correctly sets forth the agree-

ment between us, please execute and return the enclosed copy

hereof, ane this shell ccnstitute the contract between us,

: ;

Very truly yours, 3

f By /s/ Rosh Dietrich „%%%

Agreed: 8 cd Vice President , fe. 3

TRANS WORLD AIRLINES, INC. n 8 f FD

By {sf Warren Lee Plerzen ; ; <a" 5

Iran o 5 a 3 15

dated: Eren 2, 1931

f |

(CAB Orders & Documents)

exhibit B

March 2, 1951 a.

3 Tool Company

; Remeine

follywoos, Californias

Gentierens

This will cenf zr cur agreerent with respect to the

last five (cf the total twenty-six) Lockheed Model 739A airplanes

which we have agreed to purchase frem Lockheed Aircraft Corpora-

j tler pursuant to Contract Io. LD-60, as snended, such last five - F

airplanes being hereinafter sozetices called the “Airplanes.”

I. With respect to four of the Airplanes (which

shall be the first four thereof @elivered unless we designate an

Airplane cther th3n the fifth Airplane delivered pursuant to

II del ou): . i ;

1. You shall pay to Lockheed Aircraft Corporation

the second en? final installrent of purchase price with a

respes? do esch cf such Airplanes upon notice froz us, *

fron tire to tise, Starzns the emevat of such second and Aes

final instailment zung that the Airplane to whose purchase

such payment i3 2ppiicadle 13 ready for delivery by Lock-

need Aircrafc Corporation. e

2. Upon your waxing eech such paynent provided for

by subparagreph 1. , * shall:

a. sccept delivery Fre Lockheee Aircraft tom-

ratios of the Airplane to whose purchase such pay-

ment is applicable, and effect with Lockheed Air-

craft Corporation the transfer of title to such

Airplane to you; and oe

v. retain pessession of such Airplane pursuant :

and sodzect to that certain “Conditional Sale con. a *

tract“ cf even date between us attæched hereto and 5

parked Exhibit 17. a

II. ‘ith respect to one of the Airplanes (which shall

be the fifth of the Airplanes delivered unless we designate 2

1. Tou agree to purchase, and we agree to sell and

transfer, a1: cur right, title and interest in and to such

Airplane upen your ding pay=ent therefor and upon all

the other terms and conditions with respect thercto set out

in that certain better àAcreesent of even date betveen us oe

attached here to and sarked "Exhibit II". ‘ „

* Ill. This agreement and the Conditional Sele con-

tract“ end the letter acreecent attached hereto are subject to

there having been obtained, on cr before arch 31, 1951 or such

extensicn of such date as tray be 2greed upon in writings, any 2

approval, consent cr clearance of the c. A. D. which cay be re- .

quired pursuant to the Civil Aeronautics Act of 1933, as arended,

and neither this asreezent nor such "Conditional Sale Contract”

nor such Letter Agreerent shall de effective for any purpose un-

less and until such approval, consent or clearance shall have

deen obtained, . i .

If the foregoing correctly sets forth our agreement,

—.— execute and return the copy hereof enclosed for that

Very truly yours,

TRANS WCALD AIRLINES, INC,

By /e, Erle M. Constable

* — 2 8 — — é . *

«J ; sressurer es

: _ By /s/ . A. Slack % 55 3 esos

—

as - — e

* * 7 5 .

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* — 5 2 3 5 .

o~ — 5 ~ — i . °

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4 —

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4 .

DX321 id., Item 5a, page 14

(CAB Orders & Documents)

2 Exhibit 1

gamer 1 3

; Contract of Conditional Sele mace as of the 2nd day 5

ot Ferch, 1251, vetxeen S TOOL CCMPANY, a Delaxare corpora-

tion (hérefrafter sometizes called the seller“), with its

principal place of tusiness at Houston, Texas, and TRANS WORLD .

AIRLINES, Te. (forrerly Transcontinental & bestern Air, Ine. ).

a Delaxare corporation (hereinafter sorcet ines called the ae

*"guyer"), with its principal place of business at Kansas City, ; cs

Miesouri, ~ ra * “ee 2 :

THE INTEREST OP THE SELLER IN THE AIRCRAFT AND EQUIPMENT

Cm — — — -

COVERED HEREBY IS THAT CP A CCNDITICNAL SELLER AND TI 8

INTEREST OP THE EVYER THEREIN IS THAT OF A CONDITIONAL te.

BUYER. ; 25 5 55 5 = 9 : : eo a 3

v . ae Ad 1 5 i 8 . ae oo

—

— N e

WHEREAS, TWA has contracted to purchase froma Lockheed

Aireraft Corporation (hereinafter sometimes called “Lockheed")

certain Lockheed Model 749A Constellation airplanes, and, with

respect to each of four of the last five thereof to be delivered

(such four being hereinafter soxetimes called the "Airplanes")

TWA has paid to Loczheed a first installment of purchase price ~

in the amount of $230,625; and . :

; WHEREAS, Rughes has agreed to pay to Lockheed the „„

second and final instslinent of purchase price with respect to ree

each of the Airplares and in consiceration thereof will obtain 8

title to the Airplanes as delivered by Lockheed; and 5

WHEREAS, Hughes desires to sell and TWA desires to

buy the Airplanes pursuant to the conditional sale arrangements

set forth herein, 5

ron, THEREFORE, in consideration of the mutual cov-

enants herein contained, the parties hereto agree as followss

„„ „ „ „„ oe Ad

° t.

„„ oc wera w ate

1. Seller agrees to sell to Buyer and Buyer agrees aes

to purchase the Airplancs upon the terns and conditions herein- 8

after set forth. The serial numbers applicable to the respec- . f 5

tive Airplanes, as soon as determined, shall de set out in an 825

amendment to this Contract. "og

. 2. Simultaneously upon conveyance of title to each . + =-

Airplare from Lockheed to Seller, such Airplane shall forthwith |

de delivercd to Buyer and Buyer shall accept such delivery at

Burbank, California. 58 ; .

7 :

vee 3. The purchase price of each Airplane for purposes 8 „

of this contract shall de the amount which Seller shall have oo : 2

paid Lockheed as the second and final installrent of the pu- a :

chase price under Contract No. LD-60, as arcnded, and such 5

purchase price shall be paid by Buyer to Seller in sixty equslk ’

' consecutive monthly installnents, together with interest on the

_ unpaid balance at the rate of three percent (3:5) per

annum. The first of such payzernts relating to cach Airplane

Pana

es,

DX321 14.

(CAB Order

7 bi

* 922 © om

¢ .

shall be made on the first day of the coenth next following the ae

° : wonth in which the Airplane is delivered 2nd one of the re=aining

Parents shall de mace on the first day of cach ronth thereaftep

until the whole cf such purchase price shall have been paid,

All payxents 3hall be cade to the Seller at the Hughes Tool

Company, Houston, Texas, :

d. atze to the Airplanes shall not pass to Buyer “-

dy delivery, but shall revain in Seller until such tire as the.

purchase price znali have been paid in full and Buyer shall

have paid to Seller ail other suns then due and payable to

Seller hereunder, xherevpon absolute title to the Airplanes

shall pass to Buyer. é =

: 5. Upon the happening of any one or more of to

following events, namely: : 5 5 5

(2) default in maxing any payzent, in the manner

herein specified, of sny conthly installment of the pur. -

chase price of the Airplanes and such default shall con-

tinve unrerecied for five (5) days after written notice

thereof shall have been delivered dy Seller to Buyer; or

(d) default shall te radz by the Buyer in the obser-

vance or performance by the Suyer of any other covenant

. or 2greezent contained herein, and such default shall

continue unrezedied for thirty (30) days after written

notice thereof. shall have been delivered by Seller to

8 ee Buyer; or . ‘ 5 N ‘

„ (e) the Buyer shall becore insolvent, or shall file

@ voluntary petition in bankruptcy, or shall file a

geen voluntary petiticn or answer seeking or consenting to

eo + ++. reorganization pursuant to or purporting to be pursuant

te the icts of VW ban*-uptey or anw

other statute, state or Federal for the relief rr

debtors, or shall be adjudicated a bankrupt, or shall

make on asszganent for the benefit of creditors, or shall

consent to the appointgent of a receiver or trustee of or

for it or a substantial part of its property; or

(4) an order shall be entered pur to or pur-

porting to de pursuant to the Acts of Co S relating to

bankruptcy or any other statute, state or Federal, for

the relief of debtors approving a petition seeking a re- 2

organization of, or if an order shall be entered appoint- -

ing a receiver or trustce of, or for any substantial part

of the property of, or if a warrant of attachment shall

be issued against any substantial part of the property

of, the Buyer, ard any such order is not dismissed or

. Stayed within sixty (€0) days fron its entry or such

attachzent is not dismissed or bonded within thirty (30) - - .

days from its levy; or

(e] the Pebertures at the tine issued and outstanding

. under that certain Indenture, dated as of Decenter 1, 19%5,

- de tween Euyer end The Cognereza! National Bank and Trust

* Company of lew York, 3s Trustee, as said Indenture bay have

heretofore teen or may hereafter be asenied, shall be

Geclared ard tecome due and payable, prior to the date cf

maturity of such Detentures as set forth therein, upon the

occurrence of any of the “events of default“ déscribed in

81d Ingenture, 3s enented (and the Suyer hereby agrees to

notify the Seller of any declaration of default forthwith

upon the receipt thereof); then Seller may at once (or at

ba) a)

— 8

— ——— X—2— — A Ae

DX 321 id., Item 5a, page 16

(CAB Orders & Documents)

& |

any later time} proceed to cake possession of the Airplanes

in any meaner proviced by law, co Seller usy at its option,

and Seller is hereby erpowercd to, with or without legal

process, and with or without cerand, enter upon the premises

where the Airplanes gag be and t2xe possession thereof and

remove the same. Seller ray resz11 the Airplanes, so re-

taken, at public or private sale, with or without having

the Airplanes at the piace of sale, and upon such terms and

in such nonmer as Seller cay Cetersine. Notice of the

intention of Seller to so sell the Airplancs shall be given

dy Seliér to Buyer er Least ter 10) days prior to the tire

of such sale. Seller vay bid ard purchase at any such

public sale. From the proceeds of any such sale, Seller

* shail ceduct all expenses for retaking, repairing, storing

U and selling the Airplanes, including any reasonable a ;

: ’ gttorneys' fees incurred. The talance of such proceeds 3

shall te applied to the payrent of all sums owing to

Seller under tnis agreement and ary surplus of such pro- ey,

ceeds remaining shail de paid to Buyer or to whoever ray 3 Fyne

te lawfully entitled to receive the sage. Buyer shall be “oa

under no ocligation to Seller for any deficiency resulting

from any such sale or to deze 29 Payzents cn account of l

the purchase price of any Airgiane falling due after * oie

Seller has taken possession cf such Airplane pursuant co

this provision. :

6. From and after delivery of the Airplanes to Buyer

and until absolute tztle thereto is vested in Buyer or its.

nominee, or Selier repossesses the Airplanes,

(1) Buyer shali procure and maintain at its expense -

public liability, passenger 1:25 111t and property derage - ~

BeeUrSssce acd ucts F.: nr vith such companies 23 shall

be satisfactory to S-ller, covcring Seller's li2bility as

holder of legal citle to the Airplanes. The policies

evidencing such) insurance shali ccntain such provisions

as shail be satisfactory to Seller and shall name Seller

as assured. es st

(2) Buyer shall at its expense maintain all risk .

aircraft hull insurance in respect of the Airplanes in

favor of Burer and Seller, as their interests nay appear, „55

in an amount at least sufficient to cover the then unpa. d oe

porticn of the purchase price of the Airplanes. If any

such Airplane shail be lost, cestroyed or dazaged to such i

an extent that repair thereof 1s impractical, such insurance -

shall be paid to the Seller to the extent cf the unpaid

balance of the purchase price of such Airplane together

with any accrued and unpaid zuterzst thereon, plus ail

_ other amounts then cue to Seller hereunds>. Uppn such

payncnt to the Selier of insurance to the extent of the :

unpaid balance cf the purchase price of any Airplane,

ebseiute title to tne Aispiane so deraged or to any’...

parts of an Airplane so destrozee shail vest in Buyer ana:

. Seller shall deiiver to Buyer such proper docupents of 2

0 i title with respect thereto as Buyer bay reasonably require,

Buyer shall de under no coligaticn to make any payrents on

account cf the purchsse price of such Airplane falling dus

after such lons, destrection or Gamage. Any insurance

proceeds in excess of the ancunt payable to the Seller, .

3 and any insurance proceeds paysble a3 3 result of darage :

not rendering repair impractical, shall be payable to Buyer

or its designee. :

DX321 14. Item 3 ing

(CAB Orders 3 des nents)

2 . a}

7. Euyer may at any tire pay to Seller the unpaid

balance cf the Rurchpse price of the Airplanes, or any part:

thereof, without prenzun or penalty. : 155

8. neon the penent to Seller of the balance of the °

purchase srice cf the Airplanes together with 311 other amounts

era to Selier hereunder, Seller shall deliver to Buyer at

‘Such pliase in the United States as Buyer may designate (1) a

bill cf sale Culy vesting in Buyer the title to the Airplanes -

Free and clear cf all liens, claims, charges and encurbrances

attaching subsequent to the delivery of the Airplanes to Seller 5 :

ard net erising out of the possession, use or operation of the „

Airpienes dy Buyer, and (2) such other appropriate docuzcnts of se

title with respect thereto as Buyer may reasonably require.

. „ 1

9. In the event any sales tax or use tax is here -

after iInrosed upon or paid by Seller by reason of the sale or 2

use of tre Ai>plarnes or the purchase thereof by Seller, then

in acd3ition to the sales price provided for in paragraph 3,

Buyer shall pay to Seller the amount thereof, upon demand, .

10. Buyer 3h11 furnish Seller forthwith and fros

ze to time thereafter at reasonable intervals, all such 2

Inf or gat ion concerning Buyer's financial condition, including

dalance sheets and forecasts of earnings, as is customarily .

furnished to 8 commercial bank holding or considering the.

acceptance of unsecured notes of a borrower,

‘ 11. The Buyer sgrees that it will pay and discharge

211 taxes, assessrents, governzental charges and all charges “ieee a 2

for keep, repairs, storage, caintenance or accessories, which se Me eee

Af unpaid sitcht. hecene a lien, chirce or „„ fe

@sainet any of the Alrpleres; and upon the failure of the. nese

Buyer so to do the Seller pay make any such payment; pro-

vide3, however, that nothing herein contained shall requing

the Buyer to pay such tax, assessnent or charge so long 88

tke Euyer shall in good faith contest the validity thereof

and shall furnish the Seller such bond or indemnity as the

Seller shall require, unless, in the judgwent of the Seller,

forfeiture is likely to result from any such failure to pay.

Any sun cr sums so paid by the Seller, together with interest

therecn at the hignest lawful contract rate, shall be and

decoze a part of the sum which the Buyer is required to pay oe

under this contract, and sn3ll immediately, without dcmand, 7

de due ang be repaid by the Buyer to the Seller.

The Buyer will, upon written request from the Seller,

(21) reicburse the Seller fer 211 filing or recording fees in-

curred in connection with filing cr recording or refiling or.

re-recording this contract and 311 supplements and additions

hereto, if any; (2) execute and deliver to the Seller 911

such further docurents and instruments and do such further

acts as cay be recessary to perfect the rights of the Seller ;

herein contercplated: and (3) furnish to the Seller at reason- me

able intervals reports and certificates setting forth all the :

inforration necessary to inform the Seller as to the continued

existence, location and condition cf the Airplanes, The Seller

shall also have the right to inspect the Airplanes at 311 tines

when the sabe dre not in use and when such inspection can be

had without undue inconvenience or expense to the Buyer.

BA-ARDI

x DX321 id., Item 5a, page 18

‘ (CAB Orders & Documents)

5 12. Buyer agrees to maintain the Airplanes in good

mee repair and working condition at its own expense, except any *

girplane lost, des rrozzd or so damaged that insurance with re-

spect thereto 1s payable to the Seller pursuant to paragraph 6

hereof. Subject to the proper performance of such covenant,

the Buyer may caxe repsirs and replacerents to the Airplanes

and nay substitute for engines, propellers and any other equip-

nent installed in or attached to the Airplanes, engines, pro-

pellers or other equiprent of substantially the sace kind and .

value. In case of any such substitution title to the equipment .

substituted shall inzediately be vested in Seller and shall r

becore subject to the provisions of this Conditional Sale

Contract while title to the cquipnent for which such substi- Sean

tution has deen made will inoediately vest in Buyer. Nc

13. Until title to the Airplanes shall have passes 5

to the Buyer hereunder, the Buyer shall have no right, power :

of authority to sell, transfer, assign, mortgage or encumber

or in any other manner whatsoever dispose of the Airplanes or

any part thereof (except as provided in paragraph 12 hereof)

or any interest therein, and the Buyer hereby agrees that,

except as permitted by paragraph 12 hereof, the Buyer will

not (voluntarily or involuntarily), sell, transfer, wortgege,

encuzber or in any other manner whatsoever dispose of the ea ae

Airplanes or any part thereof or sny interest therein. Buyer . hes

agrees, except as provided herein, that the Airplanes will. 4 ; 1

de used exclusively for its commercial air transport opera- .

tions and related activities and that it will not peroit the

Airplanes to be used or possessed by others. Buyer may

perpit the use of the Airplanes by other airlines with which

Buyer enters into interchange agrecrents proviced that any

such use by other airlines shall for the purposes of this

apreenent. ve cunsiverce by uc uoe wy wom L

1%. To the extent, if any, that there is.8 con- 5

flict between any of the provisions of this agreerent and 8

any of the provisions of the Chattel Mortgage dated as of . : 8

March 25, 1918 between the Buyer and Bankers Trust Cospany

as Trustee, or of the Chattel Mortgage dated as of August 4,

1999 between the Buyer and Kellon Naticnal Bank & Trust Con-

pany, as Trustee, or of the chattel rcortgages conterplated by

the 1950 Credit Agreercent and the 1951 Credit Agreement de- „

tween the Buyer ard Mellon National Bank and Trust Cocpany, .

as agent, and the Lending Banks named therein, the provisions

of such chattel mortgages shall prevail and che provisions of

this agrcenent shall te deened acended to the extent neces-

sary to avoid such conflict. *

13. Before delivery of each Airplane to Buyer

hereunder, Buyer will cause to be fastened thereon in 2 ' 5

location reasonably adjacent to, and not less propinept than

that of, the airwcrthiness certificate för such Airplane, 2

name plate no larger than four inches dy seven inches vearing

the following legend: 3 5 a

"Hughes Tool Company holds legal title

to this Airplane as Conditional Seller.“

Buyer sh31l maintain such name plate in such location or in

one of at least equal prominence and visibility at a11 times,

Buyer may affix to the Airplanes Luyer's naire, insignia or

other legends customarily displayed by Buyer on its 3irplanes,

* :

RES .

3 a

ae . DX321 id., Item 5a, :

1 5 (CAB Orders & Documents)

° *

16. Buyer shall inéernify and nold narziess Seller,

its agents and its etployess fron any and 211 liability for 8

losses, expenses, damages, derands and claics in connection with

or arising out of any death of, or injury or alleged injury or

dazage to, persons or property sutained, or alleged to have

deen Sustained, in connection with or arising or alleged to have

arisen out of buyer's possession, use or operation of the Air-

Plosees, or any of then, based on any such death, injury or

damage, or alleged infury or damage, and to pay a11 donages,

such claim or Genand, and may intervene in any such suit or

. the defense thereof, and Seller shall not settle or discharge

. any such claia, cemand, suit, action or Judgzent without :

prior notice to and the consent of Buyer. - oy year

i IN WITNESS WHERECF the parties hereto have executed --" e..

and delivered this Sgreenent as of the day and o

. above written, : es |

os 3 es HUGHES TOOL COMPANY i a

5 / T. A. Slack VV„

Attest: 8 4 ad : 1

L- Sherwoot = (Corporate Seat).

‘ TRANS WORLD AIRLINES, INC, a

er By /s/ Erle n. Constable . 1

: ae asurer :

(Corporate Seal)

Attest:

J. L. Weller — pe ae ee

Ssistan cre i ‘i > V

17 8 9 . 7 x 5 3 0 „ 81 4

„ 0 2 — 1 weer

* 4 5 7 * — .

— * ‘ * . ss *

“ed 2 . . . e 4

* 5 ge =, 1 i.

* —

(CAB Orders & Documents)

Peat ae "gt ysNeoe ee:

; March 2, 1951 e a Dk he

Lockheed Aircraft Corporation

Burd2nk, California :

Gentlenent

The undersigned request your concurrence and agree- —

rent as heresfter set forth. Por convenience, hereinafter you

will sczetires be referred to as “Lockheed”, Trans World Ar-

lines, Inc. will soretimes be referred to as "TWA", and

a Hug}res Tool Coxpany will sometimes be referred to as Hughes“

Hughes the final installment of the purchase price of four . a n

of the last five (of the total twenty-six) Lockheed Model : 5

7394 Airplanes which Tua has agreed to purchase from Lock- :

heed pursuant to Contract No. LD-60, as arended. Incidental .

to such firancing, it 1s contemplated that Hughes shall

acquire title to four of said last five Airplanes for security

purposes directly from Lockheed, and forthwith convey each of

such four Airplanes to TWA subject and pursuant to conditional

sale arrenzements between Hughes and TA. It is further

conterplated that Hughes shall purchase full legal and bene- .

ficial ownership of the fifth of said last five airplanes,

and TWA shall give Lockheed proper and tirely notice

des 1 ting such fifth airplane for this purpose.

2. It is therefore ogreed, nctwithstanding anything

to the contrary in said Contract Ko. LD-60, as anended, dut

sub ect to the condition stated in paragraph d hereof, that

nat SCopSSS tc wach fd last five AirpJanens

2. Hughes shall pay Lockheed, in the form and at

the place specified in said Contract No. LD-60, as a

azerded, the final installment of purchase price e Aad

applicable to each Airplane, pay2ble upon Lockheed

Geliverirg each Airplane in accordance with said con-

tract No. LD-60, as emended; and payrent by Hughes shall

discharge the obligation of TWA to rake such payment pur-

suant to said Contract. a ; es

d. Simultaneous with receipt of each such poynent,

Lockheed shall deliver to TWA, in the condition and at

the place specified in said Contract (except that the

fifth Airplane, referred to in paragraph 1 above, shall

be delivered to Hughes, and at Las Vegas, Nevada upon 7„‚.

proper arencgent cf said Contract pursuant to Article .

30 thereof), the Airplane to whose purchase such pay- / 25

tent is applicable, and a bill of sale culy vesting in

Hughes good title to such Airplane free and clear of all

encu-trances and such other appropriate docurcnts of title

~ as Hughes may reasonably require; and such delivery shall

discharge the obligation of Lockheed to make delivery

pursuant to said Contract.

e. Any representatives heretofore designated, or

authorized, or who ray hereafter be designated or

} authorized, by TWA to act or perfora functions with

% dy x as : f 1

E | 4402

: ; DX321 id., Item 0

reszeet to said Airplares, tncludirg utheut limitation g .

functicns of inspeek ton, delivery of payment and re- ‘. 1

ceigpt of d2livery of Airplanes and dis of sale, exccution . 1

and receipt of packing sheets, and other related matters,

acts, and instrexents, are hereby cesignated and authorized

by Hvghes to act and perforn on its behalf sinilar functios

with respect to said Airplenes.

3. It 1 further agreed, notwithstanding anything te the

contrary in 221d Contract No. LD-60, as cnended, but subject to 85

the concitions stated in poratrapa § hereof, that:

a. With respect to each of the four Airplanes whose

title Bushes acquires for security purposes, all rights

and obligation? pursvant to 2810 tract No. LD-60, as

amended, whether before or after delivery (except only

those relating to paycent of final installzent of pur-

chese price and delivery of Airplenes and title as in this ;

agreecent provided) shall remain richts and obliga-. Se

tions solely between T«A and Leckheed, and shall not be- 4%

cone rights and obligations detreen Hughes end Lockheed,

all with the same full force and effect as would obtain :

but fer this agreement; provided, however, that in : +; ae

event Hughes should repossess any or ali of said four -, 8 3

Airplanes pursuant to the conditicnal sale arrangements

betxeen Hughes and TKA, Hughes shall succeed to all the

rights end assute 11 the obligations with respect to the

Airplanes repossessed applicable under said Contract LD-.

60, as amended, and subsisting as of the date of. such ro-

possession; and all rights and obligations of Rughes in

any event shall de lirited ard affected by all agreements,

covenants, actions, consents, performances, and dis- ;

charges between ‘TWA and Lockheed with respect to said ee

Airplanes prier to such repossession, whether before or 4

er es? erg ef sat? Atirnlenes: ard :

d. With t to the one of said last five Airplanes

whose full — and deneficial oxnership is purchased by

_ Rughes, . and odligations pursuant to said con-

-‘trect Ko. „ @8 arended subsisting as of the dag ce :

Rushes acquires such ownership shell become rights and ohli- :

gations solely vetween Hughes and Lockheed, and shall 3

cease to te rights and obligations between TWA and Lockheed, :

provided that all rights and obligations of Hughes in any .

event shall be limited and affected by all agreements,

covenants, actions, consents, performances, discha

between TKA and Lockheed with respect to said one

+ prior to the cate Hughes acquired such omership.

. on,

e ee * — oe

&. TWA shell have the right to nullify the appliest ies

of this agreecent to any or all of said five Airplanes

written notice to that effect delivered to Lockheed and hes : 8

at least five days prior to delivery of the Airplane to which -

such notice relates. :

If the foregoing correctly sets forth our understané-— - ae :

Ang and agrees:ent in the prepises, kindly so indicate by : . .

dad ing and signing, a3 indicated, the two duplicates of this. . ;

letter enclosed herewith and by returning one such duplicate :

| 3

DX321 id., Item Sa

' (CAB Orders ¢ 8

de each of the undersigned. |

- Very truly yours,

- HUGHES TOOL COMPANY

247 ů 2 — oh te

T. A, Slack :

Vice President N :

TRANS WORLD AIRLINES, INC.. F

—

/s/ Erie M. Constadile — N 2

Treasurer ae

The foregoing correctly sets fortn 5 e

our understanding and agreement in Me 5

the premises. 5 eee = a l ie

Dated: March 2ist, 1951 = sg Se eae

LOCKHEED AIRCRAFT CORPORATION = *

“Vice President ae oo 1

7 —

> 7 *

—

8 —

—

15 *

2 —

—

5 >

>. 5 8

—

: .

„

: *

: :

* >

. * =

DX321 id., Item 5a. pare

(ens Orders & Dociimente)

AGREEXSNT dated April 85 1950 Setween HUGHES

COMPANY, e Delaware corrorztion hereinafter called Hughes“),

TRANSCONTINENTAL & WESTERN AIR, Ne. „ @ Delaware corporation

(hereinafter called "T#a"), and THE EQUITABLE LIFE ASSURANCE

SCCIETY GP THE UNITED STATES, a Kew York. corporation (here-

inafter called Equi table“). : .

b SEEREAS nugnhes, as of the date hereof, is the

owner of approxicately 74% of the issued and outstanding

capital stock of TWA; and : :

WHEREAS TVA proposes to borrow from banks not in

5 g excess of $10,0C9,0CO to assist it in financing the purchase

of 30 Martin 45 Airplanes (hereinafter referred to as the

1 “Airplanes")3 and

ae . WHEREAS Equitable, as the owner of 211 the Debden-

: ;: ; tures issued and outstending under the Indenture dated as

of December 1, 1935 entered into between TWA and The Con-

mercial Naticnal Bank and Trust Company of New York, as

Trustee, as from time to time amended 363 referred

to as the “Indenture"), deems it desirable that TWA acquire

the Airplanes and has, co-incidentally herewith and in re-

liance hereon, Given its consent under Section 4.26 of the

Inc enture to the volver of the restrictions contained in

the Indenture so as to permit TWA to purchase such Airplanes

and to borrow money on the security thereof to assist i

in financing such purchase; as „

: : NCW, THEREFCRE, in consideration of the prenises,

it is hereby agreed as follows: .

; 1. TWA agrees that on or before December 31, :

1951 it will sell sufficient shares of its unissued cap-

. ital stock so that the net proceeds to it from such sa e,

after deducting underwriting commissions and other expenses

of such issuance payable by it, shall be at. least $5,000,000,

least $5,000,000, provided, however, that said purchase by

Hughes shall be Subject to the approval of the Civil Aero. :

nautics Eoard, but Hughes agrees that it will and it will 7

cause TWA to take such action 38 may te neccessary to obtain

such approval if such approval can be obtained,

3. Hughes agrees that if for ‘any reason it is

impossible for Tal to Ferforn its obligstion under Paragraph

1 hereof, upon the request of Equitable, Hushes will lend to

TWA said sun of $5,009,060 evidenced by a sudordinated note °,

or no

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