Common use of CONVERSION OF SECURITIES; ISSUANCE OF NEW SECURITIES Clause in Contracts

CONVERSION OF SECURITIES; ISSUANCE OF NEW SECURITIES. (a) On the Closing Date, but prior to the Effective Time: (i) A shall cause each issued and outstanding share of Series B 7% Convertible Cumulative Participating Preferred Stock, par value $1.00 per share, of A ("A SERIES B PREFERRED STOCK") to be converted into the maximum number of shares of Class A Common Stock, par value $1.00 per share, of A ("A CLASS A COMMON STOCK") as expressly required by SECTION 6.3(c)(9) of the Articles of Incorporation of A; (ii) B shall purchase and accept from the Aloha Airlines, Inc. Non-Pilots Pension Trust (the "A PENSION TRUST"), and the A Pension Trust shall sell and deliver to B, each issued and outstanding share of Series C 10% Exchangeable Preferred Stock, par value $.01 per share, of A (the "A SERIES C PREFERRED STOCK") held by the A Pension Trust against the payment by B of $10,000,000, plus the accrued but unpaid dividends in respect of such shares, in immediately available U.S. dollar funds, on the terms, and subject to the conditions, set forth in the Stock Purchase Agreement, dated as of the date hereof, between B and the A Pension Trust; and (iii) B shall purchase and accept from certain of the A Principal Holders, and such A Principal Holders shall sell and deliver to B, for aggregate cash consideration equal to $5,000,000, each issued and outstanding share of A Series C Preferred Stock held by such A Principal Holders on the terms, and subject to the conditions, set forth in the Stock Purchase Agreement, dated as of the date hereof, between B and such A Principal Holders. (b) At the Effective Time, by virtue of the A Merger and without any action on the part of any holder of any capital stock or other equity interest of A or Newco A Sub: (i) each share of A Class A Common Stock and Class B Common Stock, par value $1.00 per share, of A ("A CLASS B COMMON STOCK" and, together with the A Class A Common Stock, the "A COMMON STOCK"), issued and outstanding immediately prior to the Effective Time (other than any shares of A Common Stock to be canceled pursuant to SECTION 2.01(b)(ii) and each A Dissenting Share (as defined below)) shall be converted into the right to receive a number of validly issued, fully paid and nonassessable shares of Common Stock, par value $.0001 per share, of the Company ("COMPANY COMMON STOCK") equal to the number (the "A EXCHANGE RATIO") obtained by dividing (A) 19,555,458 (plus, if the aggregate number of shares of B Common Stock issued between the date hereof and the Closing Date pursuant to the exercise of B Options exceeds 250,000, 14.58% of such aggregate number) by (B) the aggregate number of shares of A Common Stock subject to conversion pursuant to this Section 2.01(b)(i); (ii) each share of capital stock of A (each, an "A SHARE"), including, without limitation, A Class A Common Stock, A Class B Common Stock and A Series C Preferred Stock, that is issued and outstanding immediately prior to the Effective Time and owned by A, the Company, B or any direct or indirect wholly-owned subsidiary of A, B or the Company (other than shares in trust accounts, managed accounts, custodial accounts and the like that are beneficially owned by third parties) immediately prior to the Effective Time (including, without limitation, the A Series C Preferred Stock purchased by B pursuant to SECTION 2.01(a)(ii) and Section 2.01(a)(iii)) shall be cancelled and extinguished without any conversion thereof and no payment shall be made with respect thereto; and (iii) the single membership interest of Newco A LLC (or, if any Drop-Down Condition is satisfied, each share of common stock of Newco A Corporation) issued and outstanding immediately prior to the A Effective Time shall remain issued and outstanding and unchanged as validly issued, fully paid and nonassessable securities of the A Surviving Entity. (c) At the Effective Time, by virtue of the B Merger without any action on the part of any holder of capital stock or other equity interest of B or either Newco B LLC or the Company, as the case may be: (i) each share of Common Stock, par value $.01 per share, of B, together with the rights associated with such shares pursuant to the B Rights Agreement (as defined below) ("B COMMON STOCK"), issued and outstanding immediately prior to the Effective Time (other than any shares of B Common Stock to be canceled pursuant to SECTION 2.01(c)(iii) and each B Dissenting Share (as defined below)), shall be converted into the right to receive one validly issued, fully paid and nonassessable share of Company Common Stock and, subject to SECTION 2.03(f), $2.00 principal amount of a new issue of Notes due 2008 of the Company (the "NOTES"), which shall contain, and be issued pursuant to an indenture (the "INDENTURE") entered into containing, (A) terms and conditions substantially as set forth in EXHIBIT E annexed hereto, as it may be modified from time to time, after the date hereof but prior to the mailing of the Joint Proxy Statement/ Prospectus, by the mutual agreement of the Boards of Directors of each of A, B and the Company and (B) such other terms and conditions as are customary for indentures qualified under the Trust Indenture Act of 1939, as amended (the "TRUST INDENTURE ACT"); (ii) each share of (A) Series B Special Preferred Stock, par value $.01 per share, of B (the "B SERIES B SPECIAL PREFERRED STOCK"), (B) Series C Special Preferred Stock, par value $.01 per share, of B (the "B SERIES C SPECIAL PREFERRED STOCK"), (C) Series D Special Preferred Stock, par value $.01 per share, of B (the "B SERIES D SPECIAL PREFERRED STOCK") and (D) Series E Special Preferred Stock, par value $.01, of B (the "B SERIES E SPECIAL PREFERRED STOCK" and, collectively with the foregoing, the "B SPECIAL PREFERRED STOCK") issued and outstanding immediately prior to the Effective Time shall be converted into the right to receive one validly issued, fully paid and nonassessable share of Company Common Stock and, subject to SECTION 2.03(f), $2.00 principal amount of Notes, as expressly required by SECTION 7 of the Designation of the B Special Preferred Stock; (iii) each share of capital stock of B (each, a "B SHARE"), including, without limitation, B Common Stock, B Series B Special Preferred Stock, B Series C Special Preferred Stock, B Series D Special Preferred Stock and B Series E Special Preferred Stock, that is issued and outstanding immediately prior to the Effective Time and owned by B, A or the Company or any direct or indirect wholly-owned subsidiary of B, A or the Company (other than shares in trust accounts, managed accounts, custodial accounts and the like that are beneficially owned by third parties) immediately prior to the Effective Time (including, without limitation, the B Common Stock held by the Company as a result of the C Merger) shall be cancelled and extinguished without any conversion thereof and no payment shall be made with respect thereto; and (iv) the single membership interest of Newco B LLC (or, if any Drop-Down Condition is satisfied, each share of common stock of the Company) issued and outstanding immediately prior to the B Effective Time shall remain issued and outstanding and unchanged as validly issued, fully paid and nonassessable securities of the B Surviving Entity.

CONVERSION OF SECURITIES; ISSUANCE OF NEW SECURITIES. (a) On the Closing Date, but prior to the Effective Time: (i) A shall cause each issued and outstanding share of Series B 7% Convertible Cumulative Participating Preferred Stock, par value $1.00 per share, of A ("A SERIES Series B PREFERRED STOCKPreferred Stock") to be converted into the maximum number of shares of Class A Common Stock, par value $1.00 per share, of A ("A CLASS Class A COMMON STOCKCommon Stock") as expressly required by SECTION Section 6.3(c)(9) of the Articles of Incorporation of A; (ii) B shall purchase and accept from the Aloha Airlines, Inc. Non-Pilots Pension Trust (the "A PENSION TRUSTPension Trust"), and the A Pension Trust shall sell and deliver to B, each issued and outstanding share of Series C 10% Exchangeable Preferred Stock, par value $.01 per share, of A (the "A SERIES Series C PREFERRED STOCKPreferred Stock") held by the A Pension Trust against the payment by B of $10,000,000, plus the accrued but unpaid dividends in respect of such shares, in immediately available U.S. dollar funds, on the terms, and subject to the conditions, set forth in the Stock Purchase Agreement, dated as of the date hereof, between B and the A Pension Trust; and (iii) B shall purchase and accept from certain of the A Principal Holders, and such A Principal Holders shall sell and deliver to B, for aggregate cash consideration equal to $5,000,000, each issued and outstanding share of A Series C Preferred Stock held by such A Principal Holders on the terms, and subject to the conditions, set forth in the Stock Purchase Agreement, dated as of the date hereof, between B and such A Principal Holders. (b) At the Effective Time, by virtue of the A Merger and without any action on the part of any holder of any capital stock or other equity interest of A or Newco A Sub: (i) each share of A Class A Common Stock and Class B Common Stock, par value $1.00 per share, of A ("A CLASS Class B COMMON STOCKCommon Stock" and, together with the A Class A Common Stock, the "A COMMON STOCKCommon Stock"), issued and outstanding immediately prior to the Effective Time (other than any shares of A Common Stock to be canceled pursuant to SECTION Section 2.01(b)(ii) and each A Dissenting Share (as defined below)) shall be converted into the right to receive a number of validly issued, fully paid and nonassessable shares of Common Stock, par value $.0001 per share, of the Company ("COMPANY COMMON STOCKCompany Common Stock") equal to the number (the "A EXCHANGE RATIOExchange Ratio") obtained by dividing (A) 19,555,458 (plus, if the aggregate number of shares of B Common Stock issued between the date hereof and the Closing Date pursuant to the exercise of B Options exceeds 250,000, 14.58% of such aggregate number) by (B) the aggregate number of shares of A Common Stock subject to conversion pursuant to this Section 2.01(b)(i); (ii) each share of capital stock of A (each, an "A SHAREShare"), including, without limitation, A Class A Common Stock, A Class B Common Stock and A Series C Preferred Stock, that is issued and outstanding immediately prior to the Effective Time and owned by A, the Company, B or any direct or indirect wholly-owned subsidiary of A, B or the Company (other than shares in trust accounts, managed accounts, custodial accounts and the like that are beneficially owned by third parties) immediately prior to the Effective Time (including, without limitation, the A Series C Preferred Stock purchased by B pursuant to SECTION Section 2.01(a)(ii) and Section 2.01(a)(iii)) shall be cancelled and extinguished without any conversion thereof and no payment shall be made with respect thereto; and (iii) the single membership interest of Newco A LLC (or, if any Drop-Down Condition is satisfied, each share of common stock of Newco A Corporation) issued and outstanding immediately prior to the A Effective Time shall remain issued and outstanding and unchanged as validly issued, fully paid and nonassessable securities of the A Surviving Entity. (c) At the Effective Time, by virtue of the B Merger without any action on the part of any holder of capital stock or other equity interest of B or either Newco B LLC or the Company, as the case may be: (i) each share of Common Stock, par value $.01 per share, of B, together with the rights associated with such shares pursuant to the B Rights Agreement (as defined below) ("B COMMON STOCKCommon Stock"), issued and outstanding immediately prior to the Effective Time (other than any shares of B Common Stock to be canceled pursuant to SECTION Section 2.01(c)(iii) and each B Dissenting Share (as defined below)), shall be converted into the right to receive one validly issued, fully paid and nonassessable share of Company Common Stock and, subject to SECTION Section 2.03(f), $2.00 principal amount of a new issue of Notes due 2008 of the Company (the "NOTESNotes"), which shall contain, and be issued pursuant to an indenture (the "INDENTUREIndenture") entered into containing, (A) terms and conditions substantially as set forth in EXHIBIT Exhibit E annexed hereto, as it may be modified from time to time, after the date hereof but prior to the mailing of the Joint Proxy Statement/ Prospectus, by the mutual agreement of the Boards of Directors of each of A, B and the Company and (B) such other terms and conditions as are customary for indentures qualified under the Trust Indenture Act of 1939, as amended (the "TRUST INDENTURE ACTTrust Indenture Act"); (ii) each share of (A) Series B Special Preferred Stock, par value $.01 per share, of B (the "B SERIES Series B SPECIAL PREFERRED STOCKSpecial Preferred Stock"), (B) Series C Special Preferred Stock, par value $.01 per share, of B (the "B SERIES Series C SPECIAL PREFERRED STOCKSpecial Preferred Stock"), (C) Series D Special Preferred Stock, par value $.01 per share, of B (the "B SERIES Series D SPECIAL PREFERRED STOCKSpecial Preferred Stock") and (D) Series E Special Preferred Stock, par value $.01, of B (the "B SERIES Series E SPECIAL PREFERRED STOCKSpecial Preferred Stock" and, collectively with the foregoing, the "B SPECIAL PREFERRED STOCKSpecial Preferred Stock") issued and outstanding immediately prior to the Effective Time shall be converted into the right to receive one validly issued, fully paid and nonassessable share of Company Common Stock and, subject to SECTION Section 2.03(f), $2.00 principal amount of Notes, as expressly required by SECTION Section 7 of the Designation of the B Special Preferred Stock; (iii) each share of capital stock of B (each, a "B SHAREShare"), including, without limitation, B Common Stock, B Series B Special Preferred Stock, B Series C Special Preferred Stock, B Series D Special Preferred Stock and B Series E Special Preferred Stock, that is issued and outstanding immediately prior to the Effective Time and owned by B, A or the Company or any direct or indirect wholly-owned subsidiary of B, A or the Company (other than shares in trust accounts, managed accounts, custodial accounts and the like that are beneficially owned by third parties) immediately prior to the Effective Time (including, without limitation, the B Common Stock held by the Company as a result of the C Merger) shall be cancelled and extinguished without any conversion thereof and no payment shall be made with respect thereto; and (iv) the single membership interest of Newco B LLC (or, if any Drop-Down Condition is satisfied, each share of common stock of the Company) issued and outstanding immediately prior to the B Effective Time shall remain issued and outstanding and unchanged as validly issued, fully paid and nonassessable securities of the B Surviving Entity.