EXHIBIT 99.3
AGREEMENT AND PLAN OF MERGER
dated as of
February 15, 1999
among
ASA HOLDINGS, INC.,
DELTA AIR LINES, INC.
and
DELTA SUB, INC.
TABLE OF CONTENTS
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Page
ARTICLE 1
The Offer
Section 1.01. The Offer.....................................................1
Section 1.02. Company Action................................................2
Section 1.03. Directors.....................................................3
ARTICLE 2
The Merger
Section 2.01. The Merger....................................................4
Section 2.02. Conversion of Shares..........................................5
Section 2.03. Surrender and Payment.........................................5
Section 2.04. Dissenting Shares.............................................6
Section 2.05. Stock Options.................................................7
ARTICLE 3
The Surviving Company
Section 3.01. Articles of Incorporation.....................................8
Section 3.02. Bylaws........................................................8
Section 3.03. Directors and Officers........................................8
ARTICLE 4
Representations and Warranties of the Company
Section 4.01. Corporate Existence and Power.................................8
Section 4.02. Corporate Authorization.......................................9
Section 4.03. Governmental Authorization....................................9
Section 4.04. Non-Contravention............................................10
Section 4.05. Capitalization...............................................10
Section 4.06. Subsidiaries.................................................11
Section 4.07. SEC Filings..................................................12
Section 4.08. Permits; Compliance..........................................13
Section 4.09. Financial Statements.........................................13
Section 4.10. Disclosure Documents.........................................13
Section 4.11. Absence of Certain Changes...................................14
Section 4.12. No Undisclosed Material Liabilities..........................16
Section 4.13. Litigation...................................................16
Section 4.14. Taxes........................................................17
Section 4.15. ERISA........................................................17
Section 4.16. Compliance with Laws.........................................18
Section 4.17. Finders' Fees................................................19
Section 4.18. Environmental Matters........................................19
Section 4.19. Assets.......................................................20
Section 4.20. Labor Matters................................................21
Section 4.21. Material Contracts...........................................21
Section 4.22. Insurance....................................................22
Section 4.23. Year 2000 Compliance.........................................23
Section 4.24. Anti-takeover Statutes.......................................23
Section 4.25. No Other Representations or Warranties.......................23
ARTICLE 5
Representations and Warranties of Buyer
Section 5.01. Corporate Existence and Power................................23
Section 5.02. Corporate Authorization......................................23
Section 5.03. Governmental Authorization...................................24
Section 5.04. Non-contravention............................................24
Section 5.05. Disclosure Documents.........................................24
Section 5.06. Finders' Fees................................................25
ARTICLE 6
Covenants of the Company
Section 6.01. Conduct of the Company.......................................25
Section 6.02. Shareholder Meeting; Proxy Material..........................29
Section 6.03. Access to Information........................................29
Section 6.04. Other Offers.................................................30
Section 6.05. Notices of Certain Events....................................33
ARTICLE 7
Covenants of Buyer
Section 7.01. Obligations of Merger Subsidiary.............................33
Section 7.02. Voting of Shares.............................................33
Section 7.03. Director and Officer Liability...............................33
Section 7.04. Employee Benefits............................................34
Section 7.05. Notices of Certain Events....................................34
ARTICLE 8
Covenants of Buyer and the Company
Section 8.01. Reasonable Best Efforts......................................35
Section 8.02. Certain Filings..............................................35
Section 8.03. Public Announcements.........................................35
Section 8.04. Further Assurances...........................................35
Section 8.05. Merger Without Meeting of Shareholders.......................35
ARTICLE 9
Conditions to the Merger
Section 9.01. Conditions to the Obligations of Each Party..................36
ARTICLE 10
Termination
Section 10.01. Termination.................................................36
Section 10.02. Effect of Termination.......................................38
ARTICLE 11
Miscellaneous
Section 11.01. Notices.....................................................38
Section 11.02. Survival of Representations and Warranties..................39
Section 11.03. Amendments; No Waivers......................................39
Section 11.04. Fees and Expenses...........................................40
Section 11.05. Successors and Assigns......................................40
Section 11.06. Governing Law...............................................40
Section 11.07. Jurisdiction................................................41
Section 11.08. Counterparts; Effectiveness.................................41
Section 11.09. Entire Agreement; Third Party Beneficiaries.................41
Section 11.10. Definitions.................................................41
Annex I - Conditions to the Offer
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of February 15, 1999 among ASA
Holdings, Inc., a Georgia corporation (the "Company"), Delta Air Lines Inc.,
a Delaware corporation ("Buyer"), and Delta Sub, Inc., a Georgia corporation
and an indirect, wholly-owned subsidiary of Buyer ("Merger Subsidiary").
WHEREAS, of the shares of common stock, $0.10 par value per share, of
the Company ("Shares") outstanding as of the date hereof, Buyer and its
affiliates own an aggregate of 7,995,000 Shares;
WHEREAS, Buyer and Merger Subsidiary wish to consummate the
transactions contemplated by this Agreement pursuant to which, subject to the
terms and conditions set forth in this Agreement, the Merger Subsidiary will
merge with and into the Company and the Company will become an indirect,
wholly-owned subsidiary of Buyer;
WHEREAS, the Board of Directors of the Company (the "Company's
Board") has unanimously approved this Agreement and the transactions
contemplated hereby and has unanimously determined that each of the Offer
and the Merger (each as defined herein) are fair to, and in the best
interests of, the holders of Shares and recommended the acceptance of the
Offer and approval and adoption of this Agreement by the shareholders of
the Company; and
WHEREAS, the Board of Directors of Buyer (on its own behalf and as
the beneficial owner of all of the capital stock of Merger Subsidiary) has
unanimously approved this Agreement and the transactions contemplated hereby,
including the Offer and the Merger;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
The Offer
Section 1.01. The Offer. (a) Provided that nothing shall have
occurred that would result in a failure to satisfy any of the conditions
set forth in Annex I hereto, Merger Subsidiary shall, as promptly as
practicable after the date hereof, but in no event later than five business
days following the public announcement of the terms of this Agreement,
commence an offer (the "Offer") to purchase all of the outstanding Shares
of the Company at a price of $34.00 per Share, net to the seller in cash.
The Offer shall be subject to the condition that there shall have
been tendered a number of Shares which, together with the Shares then owned
by Buyer and its affiliates, represents at least a majority of the Shares
outstanding on a fully diluted basis (the "Minimum Condition") and to the
other conditions set forth in Annex I hereto. Merger Subsidiary expressly
reserves the right to waive any of the other conditions to the Offer (other
than the Minimum Condition) and to make any change in the terms or
conditions of the Offer; provided that no change may be made which changes
the form of consideration to be paid or decreases the price per Share or
the number of Shares sought in the Offer, which imposes conditions to the
Offer in addition to those set forth in Annex I, amends the terms and
conditions of the Offer in a manner adverse to the Company or, except as
provided in the next two sentences, extends the Offer. Notwithstanding the
foregoing, Merger Subsidiary may, without the consent of the Company (i)
extend the Offer beyond the scheduled expiration date, which shall be 20
business days following the date of commencement of the Offer, if, at the
scheduled expiration date, which shall be 20 business days following the
date of commencement of the Offer, if, at the scheduled expiration of the
Offer, any of the conditions to Merger Subsidiary's obligation to accept for
payment and to pay for the Shares shall not be satisfied or waived, or (ii)
extend the Offer for any period required by any rule, regulation or
interpretation of the Securities and Exchange Commission (the "SEC") or the
staff thereof applicable to the Offer. So long as this Agreement is in effect
and the condition of the Offer set forth in clause (y) of the first paragraph
of Annex I has not been satisfied or waived, Merger Subsidiary shall extend
the Offer from time to time for a period or successive periods not to exceed
10 business days each after the previously scheduled expiration date of the
Offer.
(b) As soon as practicable on the date of commencement of the Offer,
Merger Subsidiary shall file with the Securities and Exchange Commission (the
"SEC") a Rule 13E-3 Transaction Statement on Schedule 13E-3 (the "Schedule
13E-3") and a Tender Offer Statement on schedule 14D-1 (the "Schedule 14D-1")
with respect to the Offer. The Schedule 13E-3, the Schedule 14D-1 and the
related offer to purchase and letter of transmittal, together with any
supplements or amendments thereto, are collectively referred to herein as the
"Offer Documents". Buyer and the Company each agrees promptly to correct any
information provided by it for use in the Offer Documents if and to the extent
that it shall have become false or misleading in any material respect. Merger
Subsidiary agrees to take all steps necessary to cause the Offer Documents
as so corrected to be filed with the SEC and to be disseminated to holders
of Shares, in each case as and to the extent required by applicable federal
securities laws. The Company and its counsel shall be given an opportunity
to review and comment on the Schedule 14D-1 and Schedule 13E-3 prior to
their being filed with the SEC.
Section 1.02. Company Action. (a) The Company hereby consents to the
Offer and represents that the Company's Board, at a meeting duly called and
held, has
(i) unanimously determined that this Agreement and the
transactions contemplated hereby, including the Offer and the Merger
(as defined in Section 2.01), are fair to and in the best interest of
the Company's shareholders,
(ii) unanimously approved this Agreement and the
transactions contemplated hereby, including the Offer and the
Merger, and
(iii) unanimously resolved to recommend acceptance of the
Offer and approval and adoption of this Agreement and the Merger by
its shareholders.
The Company further represents that Xxxxxx Xxxxxxx & Co. Incorporated
has delivered to the Company's Board its written opinion that the consideration
to be paid in the Offer and the Merger is fair to the holders of Shares from a
financial point of view (other than Buyer and its affiliates). The Company has
been advised that all of its directors intend to tender their Shares (if any)
pursuant to the Offer and to vote in favor of the Merger.
The Company will promptly furnish Buyer with a list of its
shareholders, mailing labels and any available listing or computer file
containing the names and addresses of all record holders of Shares and lists of
securities positions of Shares held in stock depositories, in each case true
and correct as of the most recent practicable date, and will provide to Buyer
such additional information (including, without limitation, updated lists of
shareholders, mailing labels and lists of securities positions) and such other
assistance as Buyer may reasonably request in connection with the Offer. Buyer
will return such materials promptly if the Offer is not consummated.
(b) As soon as practicable on the day that the Offer is commenced,
the Company will file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 (the "Schedule 14D-9") and the Schedule 13E-3, which shall
reflect the recommendations of the Company's Board referred to above. The
Company and Buyer each agree promptly to correct any information provided by it
for use in the Schedule 14D-9 and the Schedule 13E-3 if and to the extent that
it shall have become false or misleading in any material respect. The Company
agrees to take all steps necessary to cause the Schedule 14D-9 or the Schedule
13E-3, as applicable, as so corrected to be filed with the SEC and to be
disseminated to holders of Shares, in each case as and to the extent required
by applicable federal securities laws. Buyer and its counsel shall be given an
opportunity to review and comment on the Schedule 14D-9 and Schedule 13E-3
prior to its being filed with the SEC.
Section 1.03. Directors. (a) Effective upon the acceptance for payment
pursuant to the Offer of any Shares, Buyer shall be entitled to designate the
number of directors, rounded up to the next whole number, on the Company's
Board that equals the product of
(i) the total number of directors on the Company's Board
(giving effect to the election of any additional directors pursuant
to this Section)
multiplied by
(ii) the percentage that the number of Shares beneficially
owned by Buyer (including Shares accepted for payment) bears to the
total number of Shares outstanding;
and the Company shall take all action necessary to cause Buyer's designees
to be elected or appointed to the Company's Board, including, without
limitation, increasing the number of directors and seeking and accepting
resignations of incumbent directors. At such times, the Company will use
its best efforts to cause individuals designated by Buyer to constitute the
same percentage as such individuals represent on the Company's Board of (A)
each committee of the Board and (B) each board of directors (and committee
thereof) of each Subsidiary. Notwithstanding the foregoing, until the
Effective Time (as defined below), the Company shall use its reasonable
best efforts to cause at least two persons who are not employees of the
Company or affiliated with Buyer to be members of the Company's Board (the
"Independent Directors") (and such efforts shall include but not be
limited to offering directors on the Company's Board on the date hereof the
opportunity to remain on the Company's Board). For the purposes of this
Agreement, "affiliate" of a specified person means a person who directly or
indirectly through one or more intermediaries controls, is controlled by,
or is under common control with, such specified person.
(b) The Company's obligations to appoint designees to the
Company's Board shall be subject to Section 14(f) of the Exchange Act (as
defined in Section 4.03) and Rule 14f-1 promulgated thereunder. The
Company shall promptly take all actions required pursuant to Section 14(f)
and Rule 14f-1 in order to fulfill its obligations under this Section and
shall include in the Schedule 14D-9 such information with respect to the
Company and its officers and directors as is required under Section 14(f)
and Rule 14f-1 to fulfill its obligations under this Section. Buyer will
supply to the Company in writing and be solely responsible for any
information with respect to itself and its nominees, officers, directors
and affiliates required by Section 14(f) and Rule 14f-1.
ARTICLE 2
The Merger
Section 2.01. The Merger. (a) At the Effective Time (as defined
below), Merger Subsidiary shall be merged (the "Merger") with and into the
Company pursuant to all applicable requirements of the Business Corporation
Code of the State of Georgia ("Georgia Law"), whereupon the separate
existence of Merger Subsidiary shall cease, and the Company shall be the
surviving entity (the "Surviving Company").
(b) As soon as practicable after satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Merger, the Company
and Merger Subsidiary will file articles of merger ("Articles of Merger")
with the Secretary of State of the State of Georgia and make all other
filings or recordings required by Georgia Law in connection with the
Merger. The Merger shall become effective at such time as the Articles of
Merger are duly filed with the Secretary of State of the State of Georgia
(the "Effective Time").
(c) From and after the Effective Time, the Surviving Company shall
possess all the rights, privileges, powers and franchises and be subject to
all of the restrictions, disabilities and duties of the Company and Merger
Subsidiary, all as provided under Section 14-2-1106 of Georgia Law.
Section 2.02. Conversion of Shares. At the Effective Time:
(a) each Share held by the Company as treasury stock or owned by Buyer
or any subsidiary of Buyer immediately prior to the Effective Time shall be
canceled, and no payment shall be made with respect thereto;
(b) each Share outstanding immediately prior to the Effective Time
shall, except as otherwise provided in paragraph (a) hereof or as provided in
Section 2.04 with respect to Shares as to which appraisal rights have been
exercised, be converted into the right to receive $34.00 in cash, without
interest (the "Merger Consideration"); and
(c) each share of common stock of the Merger Subsidiary outstanding
immediately prior to the Effective Time shall be converted into and become one
share of common stock in the Surviving Company with the same rights, powers
and privileges as the shares so converted and shall constitute the only
outstanding equity of the Surviving Company.
Section 2.03. Surrender and Payment. (a) Prior to the Effective Time,
Buyer shall appoint an agent (the "Exchange Agent") for the purpose of
exchanging certificates representing Shares for the Merger Consideration. Buyer
will make available to the Exchange Agent, in such amounts as may be needed
from time to time, the Merger Consideration to be paid in respect of the
Shares. Promptly after the Effective Time, Buyer will send, or will cause
the Exchange Agent to send, to each holder of Shares at the Effective Time
a letter of transmittal for use in such exchange (which shall specify that
the delivery shall be effected, and risk of loss and title shall pass, only
upon proper delivery of the certificates representing Shares to the
Exchange Agent).
(b) Each holder of Shares that have been converted into a right to
receive the Merger Consideration, upon surrender to the Exchange Agent of a
certificate or certificates representing such Shares, together with a properly
completed letter of transmittal covering such Shares, will be entitled to
receive the Merger Consideration payable in respect of such Shares. From and
after the Effective Time, all Shares which have been so converted shall no
longer be outstanding and shall automatically be canceled and retired, and
each such certificate shall, after the Effective Time, represent for all
purposes, only the right to receive such Merger Consideration.
(c) If any portion of the Merger Consideration is to be paid to a
Person other than the registered holder of the Shares represented by the
certificate or certificates surrendered in exchange therefor, it shall be a
condition to such payment that the certificate or certificates so surrendered
shall be properly endorsed or otherwise be in proper form for transfer and that
the Person requesting such payment shall pay to the Exchange Agent any transfer
or other taxes required as a result of such payment to a Person other than the
registered holder of such Shares or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not payable.
For purposes of this Agreement, "Person" means an individual, a
corporation, a limited liability company, a partnership, an association, a
trust or any other entity or organization, including a government or
political subdivision or any agency or instrumentality thereof.
(d) After the Effective Time, there shall be no further registration
of transfers of Shares. If, after the Effective Time, certificates
representing Shares are presented to the Surviving Company, they shall be
canceled and exchanged for the consideration provided for, and in
accordance with the procedures set forth, in this Article 2.
(e) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 2.03(a) that remains unclaimed by the
holders of Shares six months after the Effective Time shall be returned to
Buyer, upon demand, and any such holder who has not exchanged Shares for
the Merger Consideration in accordance with this Section 2.03 prior to that
time shall thereafter look only to Buyer for payment of the Merger
Consideration in respect of Shares. Notwithstanding the foregoing, Buyer
shall not be liable to any holder of Shares for any amount paid to a public
official pursuant to applicable abandoned property laws. Any amounts
remaining unclaimed by holders of Shares two years after the Effective Time
(or such earlier date immediately prior to such time as such amounts would
otherwise escheat to or become property of any governmental entity) shall,
to the extent permitted by applicable law, become the property of Buyer
free and clear of any claims or interest of any Person previously entitled
thereto.
(f) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 2.03(a) to pay for Shares for which
appraisal rights have been perfected shall be returned to Buyer, upon
demand.
Section 2.04. Dissenting Shares. (a) Notwithstanding Section 2.02,
Shares outstanding immediately prior to the Effective Time and that are
held by any shareholder who has delivered to the Company, prior to the
Company Shareholders Meeting (as defined below), a written notice in
accordance with Article 13 of the Georgia Law of such shareholder's intent
to demand payment for such shareholder's Shares if the Merger is effected
and who shall not have voted such Shares in favor of the approval and
adoption of this Agreement (collectively, the "Dissenting Shares") shall
not be converted into the right to receive the Merger Consideration.
Holders of such Dissenting Shares shall be entitled to payment of the fair
value of such Dissenting Shares in accordance with the provisions of
Article 13 of the Georgia Law; provided, however, that if such shareholder
waives such shareholder's right to demand payment under Article 13 of the
Georgia Law or a court of competent jurisdiction determines that such
shareholder is not entitled to the relief provided by said Article 13, then
the right of such holder of Dissenting Shares to be paid the fair value of
such shareholder's Dissenting Shares shall cease and such Dissenting Shares
shall thereupon be deemed to have been converted into, as of the Effective
Time, the right to receive the Merger Consideration, without any interest
thereon.
(b) The Company shall give Buyer and Merger Subsidiary (i) prompt
notice of any notices or other instruments received by the Company pursuant to
Article 13 of the Georgia Law and (ii) the opportunity to direct all
negotiations and proceedings with respect to demands for payment for
Dissenting Shares. The Company shall not, except with the prior written
consent of Buyer and Merger Subsidiary, voluntarily offer to make or make
any payment with respect to any demands for payment for Dissenting Shares
or settle or offer to settle any such demands.
(c) Dissenting Shares, if any, shall be canceled after payments of
fair value in respect thereto have been made to dissenting shareholders of the
Company pursuant to the Georgia Law.
Section 2.05. Stock Options. (a) At the Effective Time, each
option to purchase Shares under each of (x) the ASA Holdings, Inc. 1997
Nonqualified Stock Option Plan and (y) the ASA Holdings, Inc. 1998
Nonqualified Stock Option Plan for Non-Employee Directors (the "Company
Stock Option Plans") that is vested and exercisable (including any option
that becomes vested and exercisable by its terms as a result of the
transactions contemplated hereby) shall be canceled, and Buyer shall pay
each such holder in cash at the Effective Time for each such option an
amount determined by multiplying (A) the excess, if any, of the Merger
Consideration over the applicable exercise price per Share of such option
by (B) the number of Shares to which such option relates.
(b) Prior to the Effective Time, the Company shall take all actions
(including, if appropriate, amending the terms of the Company Stock Option
Plans) that are necessary to give effect to the transactions contemplated by
Sections 2.05(a).
ARTICLE 3
The Surviving Company
Section 3.01. Articles of Incorporation. (a) The Articles of
Incorporation of the Surviving Company shall be amended pursuant to the
Certificate of Merger to read in its entirety as set forth in the Certificate
of Incorporation of Merger Subsidiary, except that the name of the Surviving
Company shall be "ASA Holdings, Inc."
(b) The Surviving Company shall initially be authorized to issue up to
1,000 shares of its common stock, par value $.01 per share.
Section 3.02. Bylaws. The bylaws of Merger Subsidiary in effect at the
Effective Time shall be the bylaws of the Surviving Company until amended in
accordance with applicable law.
Section 3.03. Directors and Officers. From and after the Effective
Time, until successors are duly elected or appointed and qualified in accordance
with applicable law, (a) the directors of Merger Subsidiary at the Effective
Time shall be the directors of the Surviving Company and (b) the officers of the
Company at the Effective Time shall be the officers of the Surviving Company.
ARTICLE 4
Representations and Warranties of the Company
The Company represents and warrants to Buyer that, except as set forth
in a correspondingly numbered schedule in the Disclosure Schedule to this
Agreement delivered to Buyer on the date hereof:
Section 4.01. Corporate Existence and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of Georgia and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted other than those that would not reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect. The Company is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction where the character of the property owned or leased by it
or the nature of its activities makes such qualification necessary, except for
those jurisdictions where the failure to be so qualified would not, individually
or in the aggregate, have a Material Adverse Effect. The Company has heretofore
delivered or made available to Buyer true and complete copies of the Company's
Articles of Incorporation and bylaws as currently in effect.
For purposes of this Agreement, "Material Adverse Effect" means a
material adverse effect on the financial condition, business, operations,
assets, liabilities, results of operations or prospects of the Company and the
Subsidiaries taken as a whole, except that an effect resulting primarily from
either of the following shall not be considered when determining if a Material
Adverse Effect has occurred:
(x) any change in (i) economic, business, or financial market
conditions generally, (ii) the air transportation industry or market
specifically, (iii) the economic, business or financial market
conditions with respect to the Southeastern United States or (iv) any
change affecting the commuter or regional air transportation industry
or market generally; provided that nothing in clauses (i) through (iv)
shall include any change which disproportionately affects the Company,
including any change that is disproportionate as a result of the type
of aircraft operated by the Company; or
(y) any action or inaction on the part of Buyer or any
affiliate thereof, including in connection with the currently existing
commercial arrangements between such persons and the Company.
Section 4.02. Corporate Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby are within the Company's corporate
powers and, except as set forth in the following sentence, have been duly
authorized by all necessary corporate action. The affirmative vote of the
holders of a majority of the outstanding Shares, if necessary, is the only vote
of the holders of the Company's capital stock necessary to approve the
transactions contemplated by this Agreement. This Agreement
constitutes a valid and binding agreement of the Company.
Section 4.03. Governmental Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation of the Merger
by the Company require no action by or in respect of, or filing with, or
procurement of any material permit, authorization, consent or approval of, any
governmental or regulatory body, agency, official or authority other than
(i) the filing of a Certificate of Merger in accordance with
Georgia Law;
(ii) compliance with any applicable requirements of the Xxxx-
Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX Xxx"); and
(iii) compliance with any applicable requirements of the
Securities Exchange Act of 1934 and the rules and regulations
promulgated thereunder (the "Exchange Act").
Section 4.04. Non-Contravention. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby do not and will not
(a) contravene or conflict with the Articles of Incorporation
or bylaws of the Company or any Subsidiary;
(b) assuming compliance with the matters referred to in
Section 4.03, contravene or conflict with or constitute a violation of
any provision of any law, regulation, judgment, injunction, order or
decree binding upon or applicable to the Company or any Subsidiary or
any of their respective properties or assets;
(c) result in a violation or a breach of, or (with or
without due notice or a lapse of time or both) constitute a
default or require any consent under or give rise to a right of
termination, cancellation or acceleration of any right or
obligation of the Company or any Subsidiary or any of their
respective properties or assets or to a loss of any benefit to
which the Company or any Subsidiary is entitled under any
provision of any note, bond, mortgage, indenture, lease,
agreement, contract, obligation or other instrument to which the
Company or any Subsidiary is bound, or by which any of their
respective properties or assets are bound, or any license,
franchise, permit or other similar authorization held by the
Company or any Subsidiary;
(d) assuming compliance with the matters referred to in
Section 4.03, require any consent or other action by any person
under, or give rise to any right of termination, cancellation or
acceleration of any right or obligation of the Company or any of
its Subsidiaries or to a loss of any benefit to which the Company
or any of its Subsidiaries is entitled under, any Collective
Bargaining Agreement binding upon the Company or any of its
Subsidiaries; or
(e) result in the creation or imposition of any Lien on any
asset of the Company or any Subsidiary
except, in the case of clauses (c) and (e), for such matters as would not,
individually or in the aggregate, have a Material Adverse Effect or materially
impair or delay the ability of the Company to consummate the transactions
contemplated by this Agreement.
For purposes of this Agreement, "Lien" means, with respect to any
asset, any mortgage, lien, pledge, charge, security interest or encumbrance of
any kind in respect of such asset.
Section 4.05. Capitalization. The authorized capital stock of the
Company consists of 150,000,000 Shares. As of February 13, 1999, there were
outstanding 28,523,177 Shares, and stock options to purchase an aggregate of
1,353,200 Shares (of which options to purchase an aggregate of 676,700
Shares were vested). All outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable. All Shares issuable upon exercise of outstanding stock
options have been duly authorized and, upon issuance following payment of
the exercise price therefor, will have been validly issued and will be
fully paid and nonassessable. Except as set forth in this Section and
except for changes since February 13, 1999 resulting from the exercise of
stock options outstanding on such date, there are outstanding
(a) no shares of capital stock or other voting securities of
the Company,
(b) no securities of the Company convertible into or
exchangeable for shares of capital stock or voting securities of the
Company and
(c) no options or other rights to acquire from the Company,
and no obligation of the Company to issue, any capital stock, voting
securities or securities convertible into or exchangeable for capital
stock or voting securities of the Company
(the items in clauses (a), (b) and (c) being referred to collectively as the
"Company Securities"). There are no outstanding obligations of the Company or
any Subsidiary to repurchase, redeem or otherwise acquire any Company
Securities.
Section 4.06. Subsidiaries. (a) Each Subsidiary is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, has all powers and all governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted other
than those that could not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect. Each Subsidiary is duly
qualified to do business and is in good standing in each jurisdiction where
the character of the property owned or leased by it or the nature of its
activities makes such qualification necessary, except for those
jurisdictions where failure to be so qualified would not, individually or
in the aggregate, have a Material Adverse Effect. All Subsidiaries and
their respective jurisdictions of organization are identified in the
Company's annual report on Form 10-K for the fiscal year ended December 31,
1997 (the "Company 1997 10-K").
For purposes of this Agreement, "Subsidiary" means any corporation or
other entity of which the Company owns, directly or indirectly, stock,
securities or other ownership interests having ordinary voting power sufficient
to elect a majority of the board of directors or other persons performing
similar functions.
(b) All of the outstanding capital stock of, or other voting securities
or ownership interests in, each Subsidiary, is owned by the Company, directly or
indirectly, free and clear of any Lien and free of any other limitation or
restriction (including any restriction on the right to vote, sell or
otherwise dispose of such stock or other securities or ownership
interests). There are no outstanding
(i) securities of the Company or any Subsidiary convertible
into or exchangeable for shares of capital stock or other voting
securities or ownership interests in any Subsidiary or
(ii) options or other rights to acquire from the Company or
any Subsidiary, or other obligation of the Company or any Subsidiary to
issue, any capital stock, voting securities or other ownership
interests in, or any securities convertible into or exchangeable for
any capital stock, voting securities or ownership interests in, any
Subsidiary
(the items in clauses (i) and (ii) being referred to collectively as the
"Subsidiary Securities"). There are no outstanding obligations of the
Company or any Subsidiary to repurchase, redeem or otherwise acquire any
outstanding Subsidiary Securities.
Section 4.07. SEC Filings. (a) The Company has delivered or made
available to Buyer
(i) the Company's annual reports on Form 10-K for its fiscal
years ended December 31, 1997, 1996, and 1995 (each, a "Company
10-K");
(ii) its quarterly reports on Form 10-Q for its fiscal
quarters ended March 31, 1998, June 30, 1998 and September 30, 1998
(each, a "Company 10-Q");
(iii) its proxy or information statements relating to meetings
of, or actions taken without a meeting by, the shareholders of the
Company held since December 31, 1997; and
(iv) all of its other reports, statements, schedules and
registration statements filed with the SEC since December 31, 1997.
(b) As of its filing date, each such report or statement filed pursuant
to the Exchange Act did not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading.
(c) Each such registration statement, as amended or supplemented, if
applicable, filed pursuant to the Securities Act of 1933 as of the date such
statement or amendment became effective did not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading.
Section 4.08. Permits; Compliance. (a) Except as would not individually
or in the aggregate, (x) have a Material Adverse Effect or (y) prevent or
materially delay the performance of this Agreement by the Company, the Company
and each of its Subsidiaries is in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances, exceptions, consents,
certificates, approvals, takeoff and landing authorizations (including "slots"
at United States airports), clearances and orders of any governmental entity
necessary for the Company or such Subsidiary to operate scheduled domestic air
transportation, to own, lease and operate its properties and to carry on its
respective businesses substantially in the manner described in the Company
10-Ks and as it is now being conducted (the "Company Permits").
(b) All of the Company Permits are valid, and in full force and
effect, except where the failure to have, or the suspension or cancellation
of, any of the Company Permits would neither, individually or in the
aggregate, (a) have a Material Adverse Effect nor (b) prevent or materially
delay the performance of this Agreement by the Company. As of the date
hereof, no suspension or cancellation of any of the Company Permits is
pending or, to the knowledge of the Company, threatened, except where the
failure to have, or the suspension or cancellation of, any of the Company
Permits would neither, individually or in the aggregate, (x) have a
Material Adverse Effect nor (y) prevent or materially delay the performance
of this Agreement by the Company.
(c) Neither the Company nor any of its Subsidiaries is in default or
violation of, (i) any law applicable to the Company or any of its Subsidiaries
or by which any property, asset or operation of the Company or any of its
Subsidiaries is bound or affected or (ii) any Company Permits, except for any
such defaults or violations that would neither, individually or in the
aggregate, (x) have a Material Adverse Effect nor (y) prevent or materially
delay the performance of this Agreement by the Company.
Section 4.09. Financial Statements. (a) The audited consolidated
financial statements and unaudited consolidated interim financial statements
of the Company included in the Company 10-Ks and in each of the Company 10-Qs
fairly present, in conformity with generally accepted accounting principles
applied on a consistent basis (except as may be indicated in the notes
thereto), the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and their consolidated
results of operations and cash flows for the periods then ended (subject to
normal year-end adjustments in the case of any unaudited interim financial
statements).
For purposes of this Agreement, "Balance Sheet" means the consolidated
balance sheet of the Company as of December 31, 1997 set forth in the Company
1997 10-K and "Balance Sheet Date" means December 31, 1997.
Section 4.10. Disclosure Documents. (a) Each document required to be
filed by the Company with the SEC in connection with the transactions
contemplated by this Agreement (the "Company Disclosure Documents"), including,
without limitation, the Schedule 13E-3, the Schedule 14D-9, the proxy or
information statement of the Company (the "Company Proxy Statement"), if
any, to be filed with the SEC in connection with the Merger, and any
amendments or supplements thereto will, when filed, comply as to form in
all material respects with the applicable requirements of the Exchange Act.
(b) At the time the Company Proxy Statement, if one is required,
or any amendment or supplement thereto is first mailed to shareholders of
the Company and at the time such shareholders vote on adoption of this
Agreement, the Company Proxy Statement, as supplemented or amended, if
applicable, will not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made,
not misleading. At the time of the filing of any Company Disclosure
Document other than the Company Proxy Statement, at the time of any
distribution thereof and at the time of consummation of the Offer, such
Company Disclosure Document will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements made therein, in the light of the circumstances under which
they were made, not misleading. The representations and warranties
contained in this Subsection 4.10(b) will not apply to statements or
omissions included in the Company Disclosure Documents based upon
information furnished to the Company in writing by Buyer specifically for
use therein.
(c) The information with respect to the Company or any Subsidiary
that the Company furnishes to Buyer in writing specifically for use in the
Offer Documents will not, at the time of the filing thereof, at the time of
any distribution thereof and at the time of the consummation of the Offer,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements made therein, in the light of the circumstances under which
they were made, not misleading.
Section 4.11. Absence of Certain Changes. Since the Balance
Sheet Date, the Company and Subsidiaries have conducted their business in
the ordinary course consistent with past practice and there has not been:
(a) any event, occurrence or development or state of circumstances or
facts which has had or could reasonably be expected to have a Material Adverse
Effect;
(b) any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of the Company,
or any repurchase, redemption or other acquisition by the Company or any
Subsidiary of any outstanding shares of capital stock or other securities
of, or other ownership interests in, the Company or any Subsidiary, other
than regular, quarterly cash dividends on the Shares not in excess of
$0.115 per Share per quarter and having customary record and payment dates;
(c) any amendment of any material term of any outstanding security of
the Company or any Subsidiary;
(d) any incurrence, assumption or guarantee by the Company or any
Subsidiary of any indebtedness for borrowed money, or any foreign currency,
hedging, financial derivative or similar transactions, other than in the
ordinary course of business and in amounts and on terms consistent with past
practices;
(e) any creation or assumption by the Company or any Subsidiary of any
Lien on any material asset other than in the ordinary course of business
consistent with past practices;
(f) any making of any loan, advance or capital contributions to or
investment in any Person other than loans, advances or capital contributions to
or investments in wholly-owned Subsidiaries made in the ordinary course of
business consistent with past practices or any amendment of the terms of any
loan to executive officers or directors;
(g) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the business or assets of the Company or any
Subsidiary which, individually or in the aggregate, has had or could reasonably
be expected to have a Material Adverse Effect;
(h) any transaction or commitment made, or any contract or agreement
entered into, by the Company or any Subsidiary relating to its assets or
business (including the acquisition or disposition of any assets) or any
relinquishment by the Company or any Subsidiary of any contract or other right,
in either case, material to the Company and the Subsidiaries taken as a whole
(including any right relating to any gates at Xxxxxxxxxx Atlanta International
Airport), other than transactions and commitments in the ordinary course of
business consistent with past practice and those contemplated by this Agreement;
(i) any change in any method of accounting or accounting practice by
the Company or any Subsidiary, except for any such change required by reason of
a concurrent change in generally accepted accounting principles or in Regulation
S-X promulgated under the Exchange Act;
(j) any tax election, other than those consistent with past practice,
not required by law or any settlement or compromise of any tax liability in
either case that is material to the Company and the Subsidiaries;
(k) any (i) grant of any severance or termination pay to any director,
officer or employee of the Company or any Subsidiary, (ii) increase in benefits
payable under any existing severance or termination pay policies or employment
agreements, (iii) entering into of any employment, deferred compensation or
other similar agreement (or any amendment to any such existing agreement)
with any director, officer or employee of the Company or any Subsidiary or
(iv) increase in compensation, bonus or other benefits payable to
directors, officers or employees of the Company or any Subsidiary, other
than any such increases payable to employees other than directors or
officers in the ordinary course of business consistent with past practice;
(l) any labor dispute that has not been resolved as of the date of
this Agreement, other than routine individual grievances, or any activity or
proceeding by a labor union or representative thereof to organize any employees
of the Company or any Subsidiary, which employees were not subject to a
Collective Bargaining Agreement at the Balance Sheet Date, or any lockouts,
strikes, slowdowns, labor actions, work stoppages or threats thereof by or with
respect to such employees; or
(m) any cancellation of any licenses, sublicenses, franchises, permits,
takeoff or landing authorization, "slots" or agreements to which the Company or
any Subsidiary is a party, or any notification to the Company or any Subsidiary
that any party to any such arrangements intends to cancel or not renew such
arrangements beyond their expiration date as in effect on the date hereof, which
cancellation or notification, individually or in the aggregate, has had or
reasonably could be expected to have a Material Adverse Effect.
Section 4.12. No Undisclosed Material Liabilities. There are no
material liabilities or obligations of the Company or any Subsidiary of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise, and there is no existing condition, situation or set of circumstances
which could reasonably be expected to result in such a liability or obligation,
other than:
(a) liabilities or obligations disclosed or provided for in the
Balance Sheet;
(b) liabilities or obligations incurred in the ordinary course of
business consistent with past practice since the Balance Sheet Date;
(c) liabilities or obligations under this Agreement; and
(d) liabilities or obligations which are not material.
Section 4.13. Litigation. Except as set forth in the Company 10-K,
there is no action, suit, investigation or proceeding pending, or to the
knowledge of the Company, threatened (and, to the knowledge of the Company,
there are no circumstances which are imminently likely to give rise to any such
proceedings) against or affecting the Company or any Subsidiary or any of their
respective properties or any of their respective officers or directors in their
capacity as officers or directors of the Company (or any basis therefor) before
any court or arbitrator or before or by any governmental body, agency or
official (x) as of the date hereof, and (y) which could reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
Section 4.14. Taxes. The Company has filed all material tax returns,
statements, reports and forms required to be filed with any tax authority when
due and in accordance with all applicable laws, and all taxes shown as due and
payable thereon have been timely paid, or withheld and remitted, to the
appropriate taxing authority. No deficiency in payment of any taxes for any
period has been asserted by any taxing authority which remains unsettled at the
date hereof except for deficiencies which would not have a Material Adverse
Effect. The Company and Subsidiaries do not own any interest in real property in
the State of New York or in any other jurisdiction in which a tax is imposed on
the transfer of a controlling interest in an entity that owns any interest in
real property.
Section 4.15. ERISA. (a) Schedule 4.15(a) contains a correct
and complete list identifying each "employee benefit plan", as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974
("ERISA"), each employment, severance or similar contract, plan,
arrangement or policy and each other plan or arrangement (written or oral)
providing for compensation, bonuses, profit-sharing, stock option or other
stock related rights or other forms of incentive or deferred compensation
(whether or not such plan or arrangement is qualified under Section 401(a)
of the Code), vacation benefits, insurance coverage (including any self-
insured arrangements), health or medical benefits, employee assistance
program, disability or sick leave benefits, workers' compensation,
supplemental unemployment benefits, severance benefits and post-employment
or retirement benefits (including compensation, pension, health, medical or
life insurance benefits) which is maintained, administered or contributed
to by the Company or any of its employees or any ERISA Affiliate and covers
any employee or former employee of the Company or any Subsidiary, or with
respect to which the Company or any Subsidiary has any liability. Copies
of such plans (and, if applicable, related trust or funding agreements or
insurance policies) and all amendments thereto and written interpretations
thereof have been furnished to Buyer together with the most recent annual
report (Form 5500 including, if applicable, Schedule B thereto) and tax
return (Form 990) prepared in connection with any such plan or trust. Such
plans are referred to collectively herein as the "Employee Plans".
For purposes of this Section, "ERISA Affiliate" of any Person means
any other Person which, together with such Person, would be treated as a
single employer under Section 414 of the Code.
(b) Neither the Company nor any ERISA Affiliate nor any predecessor
thereof presently nor has in the past sponsored, maintained or contributed to,
or agreed to sponsor, maintain or contribute to, any Employee Plan subject to
Title IV.
(c) Each Employee Plan which is intended to be qualified under Section
401(a) of the Code or designated to qualify as tax exempt under Section
501(c)(9) of the Code is so qualified and has been so qualified during the
period from its adoption to date, and each trust forming a part thereof is
exempt from tax pursuant to Section 501(a) of the Code. The Company has
furnished to the Buyer copies of the most recent Internal Revenue Service
determination or tax exemption letters with respect to each such Plan.
Each Employee Plan has been maintained in compliance in all material
respects with its terms and with the requirements prescribed by any and all
statutes, orders, rules and regulations, including but not limited to ERISA
and the Code, which are applicable to such Employee Plan. No events have
occurred with respect to any Employee Plan that could result in payment or
assessment of any material excise taxes under Sections 4972, 4975, 4976,
4977, 4979, 4980B, 4980D, 4980E or 5000 of the Code.
(d) The consummation of the transactions contemplated by this
Agreement will not (either alone or together with any other event) entitle
any employee or director of the Company or any Subsidiary to severance pay
or accelerate the time of payment or vesting or trigger any payment or
funding (through a grantor trust or otherwise) of compensation or benefits
under, increase the amount payable or trigger any other material obligation
pursuant to, any Employee Plan. There is no contract, agreement, plan or
arrangement covering any employee or former employee of the Company or any
affiliate that, individually or collectively, could give rise to the
payment of any amount that would not be deductible pursuant to the terms of
Sections 162(m) or 280G of the Code.
(e) Neither the Company nor any Subsidiary has any liability in
respect of post-retirement health, medical or life insurance benefits for
retired, former or current employees of the Company or its Subsidiaries
except as required to avoid excise tax under Section 4980B of the Code.
(f) There has been no amendment to, written interpretation or
announcement (whether or not written) by the Company or any of its affiliates
relating to, or change in employee participation or coverage under, any
Employee Plan which would increase materially the expense of maintaining
such Employee Plan above the level of the expense incurred in respect
thereof for the fiscal year ended December 31, 1998.
(g) All contributions and payments accrued under each Employee Plan,
determined in accordance with prior funding and accrual practices, as adjusted
to include proportional accruals for the period ending prior to the date
hereof, have been discharged and paid on or prior to the date hereof except
to the extent reflected as a liability on the Company's financial
statements.
(h) Except as could not reasonably be expected to have a Material
Adverse Effect, there is no action, suit, investigation, audit or proceeding
pending against or involving, or to the knowledge of the Company threatened
against or involving, any Employee Plan before any court or arbitrator or any
state, federal or local governmental body, agency or official.
Section 4.16. Compliance with Laws. Neither the Company nor any
Subsidiary is in violation of, or has violated, any applicable provisions
of any laws, statutes, ordinances or regulations, except for any such
violation that, individually or in the aggregate, has not had since the
Balance Sheet Date and could not reasonably be expected to have a Material
Adverse Effect.
Section 4.17. Finders' Fees. Except for Xxxxxx Xxxxxxx & Co.
Incorporated, the material terms of whose engagement agreement have been
disclosed to Buyer, there is no investment banker, broker, finder or other
intermediary which has been retained by or is authorized to act on behalf, of
the Company or any Subsidiary who might be entitled to any fee or commission
from Buyer or any of its affiliates upon consummation of the transactions
contemplated by this Agreement.
Section 4.18. Environmental Matters. (a) Except as would not have a
Material Adverse Effect:
(i) no written notice, notification, demand, request for
information, citation, summons or order has been received, no complaint
has been filed, no penalty has been assessed, and no investigation,
action, claim, suit, proceeding or review is pending or, to the
knowledge of the Company or any Subsidiary, is threatened by any
governmental entity or other Person against the Company or any
Subsidiary and relating to any Environmental Law;
(ii) the Company and its Subsidiaries are and have been in
compliance with all Environmental Laws and have obtained and are in
compliance with all permits, licenses, franchises, certificates,
approvals and other similar authorizations of governmental authorities
required by Environmental Laws and affecting the business of the
Company or any of its Subsidiaries;
(iii) there are no liabilities of or relating to the Company or
any Subsidiary, of any kind whatsoever, whether contingent or fixed,
actual or potential, known or unknown, arising under or relating to any
Environmental Law, and there are no facts, conditions, situations or
set of circumstances that would reasonably be expected to result in or
be the basis for any such liability; and
(iv) there has been no environmental investigation, study, or
audit conducted of which the Company has knowledge in relation to the
current or prior business of the Company or any Subsidiary or any
property or facility now or previously owned or leased by the Company
or any Subsidiary.
(b) For purposes of this Section 4.18, the following terms shall have
the meanings set forth below:
"Company" and "Subsidiary" shall include any entity which is a legal
predecessor of the Company or any Subsidiary;
"Environmental Laws" means any and all federal, state, local and
foreign laws, judicial decisions, regulations, rules, judgments,
orders, decrees, injunctions, permits, licenses, agreements and
governmental restrictions or any agreement or contract with any
governmental authority, relating to human health as it relates to
hazardous materials, the environment or employee safety, or to
pollutants, contaminants, wastes or chemicals or any toxic,
radioactive, ignitable, corrosive or reactive or otherwise hazardous
substances, wastes or materials.
Section 4.19. Assets. (a) Except as would not, individually or in the
aggregate, have a Material Adverse Effect, the assets, properties, rights and
contracts, including (as applicable) title or leasehold thereto, of the Company
and its Subsidiaries, taken as a whole, are sufficient to permit the Company and
its Subsidiaries to conduct their business as currently being conducted. All
material real property owned or leased by the Company and its Subsidiaries is
owned or leased free and clear of all Liens, except for (i) Liens reflected or
reserved against in the Company Balance Sheet or disclosed in the notes thereto,
(ii) taxes and general and special assessments not in default and payable
without penalty or interest or (iii) Liens that do not materially adversely
interfere with any present use of such property.
(b) All aircraft, engines, spare engines and spare parts owned, leased
or in the possession or control of the Company or any of its Subsidiaries are in
sound operating condition, normal wear and tear excepted, except for those
engines, spare engines and spare parts under repair or overhaul pursuant to the
Company's FAA approved maintenance programs. A certificate of airworthiness for
each aircraft of the Company has been duly issued pursuant to relevant federal
aviation laws and is in full force and effect (except for the period of time any
aircraft may be out of service and such certificate is suspended in connection
therewith). Each aircraft owned by the Company is duly registered in the name of
the Company in accordance with federal aviation laws, and is not registered
under the laws of any other country. Each aircraft used by the Company but owned
by a third party is duly registered in the name of such third party in
accordance with all applicable federal aviation laws and the Company is
authorized to use such aircraft under all applicable federal aviation laws.
(c) Schedule 4.19 hereto sets forth a list of all owned and leased
aircraft, or aircraft under contract for future purchase or lease, a description
of the type and aircraft number of each such aircraft, the date the Company
placed such aircraft in service or proposes to place such aircraft in service,
the lease expiration date of such aircraft, and a notation as to whether the
aircraft (i) is owned or leased; (ii) complies with Stage 3 noise level
requirements of the Airport Noise and Capacity Act of 1990; and (iii) requires
refitting or repair to bring it into compliance with any outstanding FAA
aircraft requirements mandated by certain airworthiness directives promulgated
by the FAA.
Schedule 4.19 hereto also contains a list of all airline slots owned or
leased by the Company or any of its Subsidiaries. No event has occurred which
would subject any of such slots to recall by the FAA.
Section 4.20. Labor Matters. (a) Schedule 4.20(a) identifies all
collective bargaining agreements (including any side letter, supplemental
agreement or memorandum of understanding) covering employees of the Company or
its Subsidiaries (collectively, the "Collective Bargaining Agreements"). The
Company has made available to Buyer copies of all such Collective Bargaining
Agreements. The Company has informed Buyer of all material current proposals of
the Company or any of its Subsidiaries in all ongoing negotiations with
representatives of any unions representing pilots, flight attendants, or
dispatchers, and all matters on which any tentative agreements have been reached
in the course of such negotiations.
(b) (i) There are no controversies pending or, to the best
knowledge of the Company, threatened between the Company and any of
its employees, which controversies have or could have a Material
Adverse Effect;
(ii) the Company has not breached or otherwise failed to
comply in any material respect with any provision of any Collective
Bargaining Agreement or other labor union contract applicable to
persons employed by the Company, and there are no material grievances
outstanding against the Company under any such agreement or contract;
(iii) to the best knowledge of the Company, there is no petition
pending before the National Mediation Board seeking certification of a
labor representative with respect to any craft or class of employees of
the Company of any of its Subsidiaries; and
(iv) there is no strike, slowdown, work stoppage, labor action
or lockout, or, to the best knowledge of the Company, threat thereof,
by or with respect to any employees of the Company.
(c) The consent of the labor unions which are a party to the Collective
Bargaining Agreements is not required to consummate the Offer or the Merger.
Section 4.21. Material Contracts. (a) From January 1, 1998 through the
date hereof neither the Company nor any of its Subsidiaries has entered into any
contract which, if entered into prior to January 1, 1998, would have been
required to be disclosed in the Company 1997 10-K and which is material to the
business or operations of the Company or its Subsidiaries or which has had a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries nor, to
the knowledge of the Company, any other party, is in breach of or default under
any such contract or any contract filed as an exhibit (or incorporated by
reference as an exhibit) to the Company 1997 10-K which is currently
in effect (the "Material Contracts"), except for such breaches and defaults
which would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
(b) Neither the Company nor any of its Subsidiaries is a party to or
bound by any non-competition agreement or any other agreement or binding
obligation which purports to limit in any material respect the manner in which,
or the localities in which, the Company or any such Subsidiary is entitled to
provide scheduled air transportation service.
(c) As of the date hereof, the Company and its Subsidiaries have on
firm order 38 undelivered aircraft. Since entering into the contract dated April
27, 1997, as amended on September 3, 1998, between the Company and Bombardier,
Inc., the Company and its Subsidiaries have not exercised any of the options to
acquire additional aircraft that are contained therein.
(d) The CPTC Lease between the City of Atlanta and the Company, as
amended by the letter agreement dated as of January 26, 1996, among the City of
Atlanta, the Company and Valujet Airlines, pursuant to which the Company leases,
among other things, thirteen gates on Concourse C at Xxxxxxxxxx Atlanta
International Airport for a term that does not expire before September 21, 2010
(x) is a valid and binding agreement of the parties thereto and (y) has not been
amended or supplemented since January 26, 1996.
Section 4.22. Insurance. Schedule 4.22 sets forth a complete and
correct list of all material insurance policies (including premiums, policy
limits, deductibles, type of coverage and similar information) providing
coverage in favor of the Company or any of its Subsidiaries or any of their
respective properties (including "all risk" and hull insurance policies). Except
as could not reasonably be expected to have a Material Adverse Effect,
(i) all premiums (other than premiums paid or adjusted on a
retrospective basis) with respect to such policies covering all periods
up to and including the date hereof have been paid, no written notice
of termination, cancellation or reservation of rights has been received
with respect to any such policy and, to the knowledge of the Company,
each such policy is in full force and effect;
(ii) since the Balance Sheet Date, each of the Company and its
Subsidiaries, as the case may be, has timely filed claims under such
insurance policies with respect to all material matters and occurrences
for which it believes it has coverage thereunder; and
(iii) the Company and its Subsidiaries have complied with the
terms of such policies in all material respects.
Section 4.23. Year 2000 Compliance. The Company has conducted a review
of each System used in the conduct of its business and operations to determine
whether such System is Year 2000 Compliant, and is currently implementing a
compliance plan that is intended to result in each System being Year 2000
Compliant in all material respects no later than January 1, 2000. Each action to
have been taken prior to the date of this Agreement under such plan has been
substantially completed and, as of the date of this Agreement, the Company has
no knowledge indicating that any action to be taken under such plan after the
date of this Agreement will be materially delayed or will fail to accomplish its
purpose under the plan. "System" shall mean software, hardware, computers and
devices with embedded electronics. A system is "Year 2000 Compliant" if it is
able to accurately process date and time data from, into and between the years
1999 and 2000, and any other year in the 20th and 21st centuries.
Section 4.24. Anti-takeover Statutes. Neither Section 14-2-1132 nor
Section 14- 2-1111 of the Georgia Law nor any other "fair price", "moratorium",
"control share acquisition", "interested shareholder" or other similar
antitakeover statute or regulation enacted under Georgia Law applicable to the
Company or any of its Subsidiaries is applicable to the Merger or the other
transactions contemplated hereby.
Section 4.25. No Other Representations or Warranties. Except for the
representations and warranties contained in this Article 4, neither the Company,
either of its Subsidiaries nor any other Person has made or makes any other
express or implied representation or warranty, either written or oral, on behalf
of the Company or either of its Subsidiaries.
ARTICLE 5
Representations and Warranties of Buyer
Buyer represents and warrants to the Company that:
Section 5.01. Corporate Existence and Power. Each of Buyer and Merger
Subsidiary is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all powers
and all material governmental licenses, authorizations, consents and approvals
required to carry on its business in all material respects as now conducted.
Since the date of its organization, Merger Subsidiary has not engaged in any
activities other than in connection with or as contemplated by this Agreement or
in connection with arranging any financing required to consummate the
transactions contemplated hereby.
Section 5.02. Corporate Authorization. The execution, delivery and
performance by Buyer and Merger Subsidiary of this Agreement and the
consummation by Buyer and Merger Subsidiary of the transactions
contemplated hereby are within the corporate powers of Buyer and Merger
Subsidiary and have been duly authorized by all necessary corporate action.
This Agreement constitutes a valid and binding agreement of each of Buyer
and Merger Subsidiary.
Section 5.03. Governmental Authorization. The execution, delivery and
performance by Buyer and Merger Subsidiary of this Agreement and the
consummation by Buyer and Merger Subsidiary of the transactions contemplated by
this Agreement require no action by or in respect of, or filing with, any
governmental body, agency, official or authority other than
(i) the filing of a Certificate of Merger in accordance with
Georgia Law;
(ii) compliance with any applicable requirements of the HSR
Act; and
(iii) compliance with any applicable requirements of the
Exchange Act.
Section 5.04. Non-contravention. The execution, delivery and
performance by Buyer and Merger Subsidiary of this Agreement and the
consummation by Buyer and Merger Subsidiary of the transactions contemplated
hereby do not and will not
(a) contravene or conflict with the Certificate of
Incorporation or bylaws of Buyer or Merger Subsidiary,
(b) assuming compliance with the matters referred to in
Section 5.03, contravene or conflict with any provision of law,
regulation, judgment, order or decree binding upon Buyer or Merger
Subsidiary, or
(c) constitute a default under or give rise to any right of
termination, cancellation or acceleration of any right or obligation of
Buyer or Merger Subsidiary or to a loss of any benefit to which Buyer
or Merger Subsidiary is entitled under any agreement, contract or other
instrument binding upon Buyer or Merger Subsidiary other than any such
termination, cancellation, acceleration or loss which, individually or
in the aggregate, would not reasonably be expected to have a material
adverse effect on Buyer or Merger Subsidiary.
Section 5.05. Disclosure Documents. (a) The information with respect to
Buyer and its subsidiaries that Buyer furnishes to the Company in writing
specifically for use in any Company Disclosure Document will not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading (i) in the case of the Company Proxy
Statement (if applicable), at the time the Company Proxy Statement or any
amendment or supplement thereto is first mailed to shareholders of the Company
and at the time the shareholders vote on adoption of this Agreement (if
applicable), and (ii) in the case of any Company Disclosure Document other than
the Company Proxy Statement, at the time of the filing thereof, at the time of
any distribution thereof, and at the time of consummation of the Offer.
(b) The Offer Documents, when filed, will comply as to form in all
material respects with the applicable requirements of the Exchange Act and will
not at the time of the filing thereof, at the time of any distribution thereof
or at the time of consummation of the Offer, contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading, provided, that this representation and warranty will not
apply to statements or omissions in the Offer Documents based upon information
furnished to Buyer or Merger Subsidiary in writing by the Company specifically
for use therein.
Section 5.06. Finders' Fees. Except for Xxxxxxx, Xxxxx & Co., whose
fees will be paid by Buyer, there is no investment banker, broker, finder or
other intermediary who might be entitled to any fee or commission from the
Company or any of its affiliates upon consummation of the transactions
contemplated by this Agreement.
ARTICLE 6
Covenants of the Company
Section 6.01. Conduct of the Company. From the date hereof until the
earlier of (x) the time designees of Buyer constitute a majority of the
Company's Board and (y) the Effective Time, the Company and the Subsidiaries
shall
(i) conduct their business in the ordinary course consistent
with past practice and shall use reasonable best efforts to preserve
intact their business organizations and relationships with third
parties and to keep available the services of their present officers
and employees;
(ii) use all reasonable efforts to keep all material property
and equipment useful and necessary in their business in good working
order and condition;
(iii) continue, in respect of all aircraft, engines and spare
parts intended for use in its operations, their maintenance programs
consistent with past practice (except as required or permitted by
applicable law), including using reasonable best efforts to keep all
such aircraft in such condition as may be necessary to enable the
airworthiness certification of such aircraft under the Federal
Aviation Act to be maintained in good standing at all times; and
(iv) at all times up to and including the Effective Time,
except to the extent not available on commercially reasonable terms,
maintain their existing insurance coverage of all types, including
(but not limited to) "all risk", hull and property damage, in
effect or procure substantially similar substitute insurance
policies with financially sound and reputable insurance companies
in at least such amounts and against such risks as are currently
covered by such policies.
Without limiting the generality of the foregoing, from the date hereof until
the earlier of (x) the time designees of Buyer constitute a majority of the
Company's Board and (y) the Effective Time, the Company will not, and will
cause its Subsidiaries not to, in either case without Buyer's prior written
consent, which consent shall not be unreasonably withheld:
(a) adopt or propose any change in their respective organizational
documents (including bylaws);
(b) except pursuant to existing agreements or arrangements
(i) acquire (by merger, consolidation or acquisition of stock
or assets) any material corporation, partnership or other business
organization or division thereof, or sell, lease or otherwise dispose
of a material subsidiary or a material amount of assets or securities;
(ii) other than in the ordinary course of business, consistent
with past practice, make any investment in an amount in excess of
$250,000 in the aggregate whether by purchase of stock or securities,
contributions to capital (other than contributions to capital of a
wholly-owned Subsidiary) or any property transfer, or purchase for an
amount in excess of $250,000 in the aggregate, any property or assets
of any other individual or entity;
(iii) waive, release, grant or transfer any rights of material
value, including any routes or slots to which the Company has a right
on the date hereof;
(iv) license (as licensor), dispose of, assign, transfer or
encumber any intellectual property;
(v) modify or change in any material respect any existing
material license, lease, contract, or other document;
(vi) enter into any material agreement;
(vii) except to refund or refinance commercial paper, incur,
assume or prepay an amount of long-term or short-term debt (including
leases, financings, general airport revenue bonds, special revenue
bonds and special facility bonds) in excess of $2,000,000 in the
aggregate;
(viii) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the
obligations of any other person which are in excess of $250,000 in the
aggregate;
(ix) make any loans to any other person which are in excess of
$250,000 in the aggregate; or
(x) authorize any capital expenditures which individually are
in excess of $500,000 or in the aggregate are in excess of $10,000,000,
in either case other than ordinary course capital expenditures in
connection with (A) engine overhauls; (B) the Company's Xxxxxxxxxx
Atlanta International Airport Concourse C renovations, provided that
representatives of Buyer and the Company will meet as soon as
practicable after the date hereof (1) to review the status of the
renovations and the remaining work to be done in order to complete the
renovations and (2) to consider whether alterations to such renovations
are appropriate, taking into account the Company's operational needs
and contractual obligations; (C) increases in inventory in connection
with additions to the Company's regional jet fleet and (D) momentary
acquisitions of equity interests in regional jet aircraft pursuant to
sale-leaseback transactions on terms consistent with past practice;
(c) (i) acquire or lease any aircraft other than pursuant to contracts
or agreements in effect as of the date hereof, (ii) exercise any options to
acquire any additional aircraft under contracts and agreements in effect as of
the date hereof; (iii) enter into, or commit to enter into, any new contract or
agreement with respect to the acquisition or lease of additional aircraft, or
(iv) except as otherwise disclosed on Schedule 6.01(c)(iv), agree or commit to
accelerate the delivery of, or agree to materially delay or defer the delivery
of, aircraft for which contracts or commitments exist, or exercise any right of
substitution of different aircraft models under any contract or arrangement or
(v) operate any aircraft configured with in excess of 70 passenger seats;
(d) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of its capital stock
(other than (x) regular quarterly dividends not in excess of $0.115 per Share,
and (y) cash dividends and distributions by a wholly owned Subsidiary of the
Company to the Company or to a Subsidiary all of the capital stock which is
owned directly or indirectly by the Company) or redeem, repurchase or otherwise
acquire or offer to redeem, repurchase, or otherwise acquire any of its
securities or any securities of its Subsidiaries;
(e) enter into any agreement or arrangement that limits or otherwise
restricts the Company, any Subsidiary or any of their respective affiliates or
any successor thereto or that could, after the Effective Time, limit or restrict
the Surviving Company, any Subsidiary thereof or any of their affiliates, from
engaging or competing in any line of business or in any location, which
agreement or arrangement would be material to the business of the Company and
its Subsidiaries or the business of Buyer or any of Buyer's subsidiaries
(assuming the Merger had taken place), in either case taken as a whole;
(f) except as otherwise disclosed on Schedule 6.01(f), adopt or amend
any bonus, profit sharing, compensation, severance, termination, stock option,
pension, retirement, deferred compensation, employment or employee benefit
plan, agreement, trust, plan, fund or other arrangement for the benefit and
welfare of any director, officer or employee, or (except for normal
increases in the ordinary course of business that are consistent with past
practices and that, in the aggregate (excluding increases arising pursuant
to the Collective Bargaining Agreements) do not result in a material
increase in benefits or compensation expense to the Company) increase in
any manner the compensation or fringe benefits of any director, officer or
employee or pay any benefit not required by any existing plan or
arrangement (including, without limitation, the granting of stock options
or stock appreciation rights or the removal of existing restrictions in any
benefit plans or agreements);
(g) revalue in any material respect any of its assets, including,
without limitation, writing down the value of inventory in any material manner
or write-off of notes or accounts receivable in any material manner;
(h) pay, discharge or satisfy any material claims, liabilities or
obligations (whether absolute, accrued, asserted or unasserted, contingent or
otherwise) other than the payment, discharge or satisfaction in the ordinary
course of business, consistent with past practices, of liabilities reflected
or reserved against in the consolidated financial statements of the Company or
incurred in the ordinary course of business, consistent with past practices;
(i) make any federal or material state tax election or settle or
compromise any material income tax liability controversy;
(j) take any action other than in the ordinary course of business and
consistent with past practices with respect to accounting policies or
procedures or except as required by generally accepted accounting
principles or Regulation S-X under the Exchange Act;
(k) except as previously approved by the Buyer, enter into any new or
amended contract, agreement, side letter or memorandum of understanding with
any unions representing employees of the Company or its Subsidiaries;
(l) agree or commit to do any of the foregoing; or
(m) take or agree or commit to take any action that would make any
representation and warranty of the Company hereunder inaccurate in any material
respect at, or as of any time prior to, the Effective Time.
Section 6.02. Shareholder Meeting; Proxy Material. (a) Unless a vote
shall not be required under Georgia Law, the Company shall cause a meeting of
its shareholders (the "Company Shareholder Meeting") to be duly called and held
as soon as reasonably practicable following the consummation of the Offer for
the purpose of voting on the approval and adoption of this Agreement and the
Merger.
In connection with such meeting, the Company (i) will promptly
prepare and file with the SEC, will use its reasonable best efforts to have
cleared by the SEC and will thereafter mail to its shareholders as promptly
as practicable the Company Proxy Statement and all other proxy materials
for such meeting, (ii) will use its reasonable best efforts to obtain the
necessary approvals by its stockholders of this Agreement and the
transactions contemplated hereby (subject to fiduciary duties under
applicable law) and (iii) will otherwise comply with all legal requirements
applicable to such meeting.
(b) The Company's Board shall recommend approval and adoption of this
Agreement and the Merger by the Company's shareholders (the "Recommendation"),
and neither the Company's Board nor any committee thereof shall amend, modify,
withdraw, condition or qualify the Recommendation in a manner adverse to Buyer
or take any action or make any statement inconsistent with the Recommendation
unless
(i) the Company's Board determines in good faith, after
consultation with outside legal counsel, that it must take such
action(s) to comply with its fiduciary duties under applicable law;
(ii) a Superior Proposal is pending at the time the Company's
Board determines to take any such action(s); and
(iii) the Company has provided reasonable prior notice
advising Buyer that it intends to take such action.
(c) Nothing contained in this Agreement shall prevent the Company's
Board from complying with Rule 14e-2 under the Exchange Act with respect to any
Acquisition Proposal.
Section 6.03. Access to Information. (a) From the date hereof until
the Effective Time, the Company will, upon reasonable advance notice and at
reasonable times, give Buyer, its counsel, financial advisors, auditors and
other authorized representatives full access to the offices, properties, books
and records of the Company and its Subsidiaries and such financial and
operating data and other information as such Persons may reasonably request
and will instruct the Company's employees, counsel and financial advisors to
cooperate with Buyer in its investigation of the business of the Company
and its Subsidiaries; provided that no investigation pursuant to this
Section 6.03, shall affect any representation or warranty given by the
Company to Buyer hereunder.
(b) Information obtained by Buyer pursuant to this Section 6.03 shall
be subject to the provisions of the confidentiality agreement between the
Company and Buyer, dated February 9, 1999 (the "Confidentiality Agreement"),
which remains in full force and effect, but shall terminate upon the acceptance
by Buyer for payment pursuant to the Offer of Shares in sufficient number to
satisfy the Minimum Condition.
Section 6.04. Other Offers. (a) Neither the Company nor any of its
Subsidiaries shall (whether directly or indirectly through advisors, agents or
other intermediaries), nor shall the Company or any of its Subsidiaries
authorize or permit any of its or their officers, directors, agents,
representatives, advisors or Subsidiaries to
(i) solicit, initiate or take any action knowingly to
facilitate the submission of inquiries, proposals or offers from any
Third Party (as defined below) which constitutes or could reasonably
be expected to lead to lead to
(A) any acquisition or purchase of 20% or more of the
consolidated assets of the Company and its Subsidiaries or of
over 20% of any class of equity securities of the Company or
any of its Subsidiaries,
(B) any tender offer (including a self tender offer) or
exchange offer that if consummated would result in any Third
Party beneficially owning 20% or more of any class of equity
securities of the Company or any of its Subsidiaries,
(C) any merger, consolidation, business combination,
sale of substantially all assets, recapitalization,
liquidation, dissolution or similar transaction involving the
Company or any of its Subsidiaries whose assets, individually
or in the aggregate, constitute more than 20% of the
consolidated assets of the Company other than the transactions
contemplated by this Agreement, or
(D) any other transaction the consummation of which
would or could reasonably be expected to interfere with,
prevent or materially delay the Merger or which would or could
reasonably be expected to materially dilute the benefits to
Buyer of the transactions contemplated hereby
(collectively, "Acquisition Proposals");
(ii) enter into or participate in any discussions or
negotiations regarding any of the foregoing, or furnish to any Third
Party in connection with an Acquisition Proposal any information with
respect to its business, properties or assets or any of the foregoing,
or otherwise cooperate in any way with, or knowingly assist or
participate in, facilitate or encourage, any effort or attempt by any
Third Party (other than Buyer) to do or seek any of the foregoing;
(iii) grant any waiver or release under any standstill or
similar agreement with respect to any class of equity securities of
the Company or any of its Subsidiaries;
except that the foregoing shall not prohibit the Company (either directly or
indirectly through advisors, agents or other intermediaries) from
(x) furnishing information pursuant to an appropriate
confidentiality letter (which the Company shall use all reasonable
efforts to ensure will not be less favorable to the Company in any
material respect than the Confidentiality Agreement) concerning the
Company and its businesses, properties or assets to a Third Party who
has made or is seeking to initiate discussions with respect to an
Acquisition Proposal, and/or
(y) engaging in discussions or negotiations with such a
Third Party who has made a bona fide Acquisition Proposal,
but, in either case, only to the extent the Company's Board reasonably believes
in good faith, after consultation with an investment bank of nationally
recognized reputation and outside legal counsel, that the Acquisition Proposal
is bona fide and could reasonably lead to the delivery of a Superior Proposal
and that such action by the Company's Board is required in order for it to
comply with its fiduciary duties under applicable law.
The Company will direct each of its officers, directors, investment
bankers, attorneys, accountants, agents and other advisors and representatives
and use its reasonable best efforts to cause them to comply with the terms of
this Section 6.04(a).
(b) The Company shall notify Buyer promptly (but in no event later
than 24 hours) after receipt by the Company or any Subsidiary (or any of their
respective directors, officers, agents or advisors), of any Acquisition
Proposal, which notice shall be made orally and in writing, and shall indicate
the identity of the offeror and the material terms and conditions of such
Acquisition Proposal. The Company shall keep Buyer informed, on a reasonably
current basis, of the status and material terms of any such Acquisition
Proposal or request and the status of any negotiations or discussions.
(c) Subject to the conditions described below in this Section 6.04(c),
either the Company or Buyer may terminate this Agreement if the Company's Board
shall have determined to approve or recommend an Acquisition Proposal after
concluding that such Acquisition Proposal constitutes a Superior Proposal.
However, the Company may not exercise its right to terminate under this Section
6.04(c) (and may not enter into a binding written agreement with respect to
such an Acquisition Proposal) unless
(1) the Company shall have provided to Buyer at least two
business days' prior written notice that the Company's Board intends
to terminate this Agreement pursuant to this Section 6.04(c),
specifying the material terms and conditions of such Acquisition
Proposal, and
(2) on or prior to such termination, the Company shall have
paid to Buyer the Termination Fee (as defined below).
Buyer may exercise its right to terminate under this Section 6.04(c)
two business days after receiving the notice contemplated by this Section
6.04(c).
In connection with the foregoing, the Company agrees that it will
(x) not enter into a binding agreement with respect to an
Acquisition Proposal until at least the third business day after it
has provided the notice to Buyer required hereby,
(y) consider in good faith any offer made by Buyer during
that period; and
(z) notify Buyer promptly if its intention to enter into
such an agreement shall change at any time after such notification.
(d) As used in this Section, the following terms have the following
meanings:
"Third Party" means any person, corporation, entity or "group," as
defined in Section 13(d) of the Exchange Act, other than Buyer or any
of its affiliates.
"Superior Proposal" means a bona fide, written Acquisition Proposal
for at least a majority of the outstanding Shares of the Company
that is on terms that a majority of the Company's Board determines
in good faith, after consulting with an investment bank of
nationally recognized reputation and its outside legal counsel,
would result in a transaction, if consummated, that is more
favorable to the Company's shareholders (in their capacities as
shareholders) (other than Buyer and its affiliates), from a
financial point of view.
(e) The Company will immediately cease and cause its advisors, agents
and other intermediaries to cease any and all existing activities, discussions
or negotiations with any parties conducted heretofore with respect to any
of the foregoing, and shall use its reasonable best efforts to cause any
such parties in possession of confidential information about the Company
that was furnished by or on behalf of the Company in connection with any of
the foregoing to return or destroy all such information in the possession
of any such party or in the possession of any agent or advisor of any such
party.
Section 6.05. Notices of Certain Events. The Company shall promptly
notify Buyer of:
(a) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions contemplated
by this Agreement; and
(c) any actions, suits, claims, investigations or proceedings commenced
or, to the best of its knowledge threatened against, relating to or involving
or otherwise affecting the Company or any Subsidiary which, if pending on
the date of this Agreement, would have been required to have been disclosed
pursuant to Section 4.13 or which relate to the consummation of the
transactions contemplated by this Agreement.
ARTICLE 7
Covenants of Buyer
Section 7.01. Obligations of Merger Subsidiary. Buyer will take all
action necessary to cause Merger Subsidiary to perform its obligations under
this Agreement and to consummate the Merger on the terms and conditions set
forth in this Agreement.
Section 7.02. Voting of Shares. Buyer agrees to vote all Shares
beneficially owned by it in favor of adoption of this Agreement at the Company
Shareholder Meeting.
Section 7.03. Director and Officer Liability. (a) For six years after
the Effective Time, and for so long thereafter as any claim asserted prior to
such date has not been fully adjudicated, Buyer will cause the Surviving
Company to indemnify and hold harmless the present and former officers and
directors of the Company in respect of acts or omissions occurring prior to
the Effective Time to the extent provided under the Articles of
Incorporation and Bylaws of Merger Subsidiary in effect on the date hereof
(which shall become the Articles of Incorporation and Bylaws of the
Surviving Corporation pursuant to the Merger) and Buyer agrees to cause the
provisions of such Articles of Incorporation and Bylaws, insofar as they
relate to such matters, to continue in full force and effect for such
period of time without any amendment thereof; provided that such
indemnification and such obligation shall be subject to any limitation
imposed from time to time under applicable law. Buyer guarantees
irrevocably and unconditionally the obligations of the Surviving
Corporation under this paragraph (a) and such Articles of Incorporation and
Bylaws.
(b) For six years after the Effective Time, and for so long
thereafter as any claim asserted prior to such date has not been fully
adjudicated, Buyer will cause the Surviving Company to use its best efforts
to provide officers' and directors' liability insurance in respect of acts
or omissions occurring prior to the Effective Time covering each such
Person currently covered by the Company's officers' and directors'
liability insurance policies on terms with respect to coverage and amount
no less favorable than the aggregate coverage and amounts of such policies
in effect on the date hereof.
(c) In the event the Company or the Surviving Corporation or any
of their respective successors or assigns (i) consolidates with or merges
into any other person and shall not be the continuing or surviving
corporation or entity of such consolidation or merger or (ii) transfers all
or substantially all of its properties and assets to any person, then, and
in each such case, proper provision shall be made so that the successors
and assigns of the Company or the Surviving Corporation, as the case may
be, or at Buyer's option, Buyer, shall assume the obligations set forth in
this Section 7.03 and all obligations under indemnity agreements with
directors and executive officers of the Company. If such obligations are
assumed by any such successors or assigns, Buyer will guarantee irrevocably
and unconditionally the obligations of such successors and assigns under
this Section 7.03 and such indemnity agreements.
Section 7.04. Employee Benefits. During the period commencing on
the Effective Time and ending on the second anniversary thereof, Buyer
shall provide or cause to be provided to employees of the Company and its
Subsidiaries salary and benefits no less favorable, in the aggregate, to
the salary and benefits provided such employees immediately prior to the
Effective Time (disregarding for this purpose any stock options or other
equity-based compensation provided such employees prior to the Effective
Time).
Section 7.05. Notices of Certain Events. Buyer shall promptly notify
the Company of:
(a) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement; and
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement.
ARTICLE 8
Covenants of Buyer and the Company
Section 8.01. Reasonable Best Efforts. Subject to the terms and
conditions of this Agreement, each party will use its reasonable best efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement; provided that
nothing in this Agreement shall oblige Buyer or the Company or any of its
affiliates to agree to dispose of, agree to cease operating or agree to hold
separate any business, properties or assets which are material to the business
or operations, as such business or operations are currently conducted, of the
Company and its Subsidiaries or of Buyer and its subsidiaries (including, in
either case, without limitation, any gates at Xxxxxxxxxx Atlanta International
Airport).
Section 8.02. Certain Filings. The Company and Buyer shall cooperate
with one another (a) in connection with the preparation of the Company
Disclosure Documents and the Offer Documents, (b) in determining whether any
action by or in respect of, or filing with, any governmental body, agency or
official, or authority is required, or any actions, consents, approvals or
waivers are required to be obtained from parties to any material contracts, in
connection with the consummation of the transactions contemplated by this
Agreement and (c) in seeking any such actions, consents, approvals or waivers
or making any such filings, furnishing information required in connection
therewith or with the Company Disclosure Documents or the Offer Documents
and seeking timely to obtain any such actions, consents, approvals or
waivers.
Section 8.03. Public Announcements. Buyer and the Company will consult
with each other before issuing any press release or making any public statement
with respect to this Agreement and the transactions contemplated hereby.
Section 8.04. Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Company will be authorized to execute
and deliver, in the name and on behalf of the Company or Merger Subsidiary, any
deeds, bills of sale, assignments or assurances and to take and do, in the name
and on behalf of the Company or Merger Subsidiary, any other actions and things
to vest, perfect or confirm of record or otherwise in the Surviving Company any
and all right, title and interest in, to and under any of the rights,
properties or assets of the Company acquired or to be acquired by the
Surviving Company as a result of, or in connection with, the Merger.
Section 8.05. Merger Without Meeting of Shareholders. If Buyer
and its affiliates acquire at least 90% of the outstanding Shares pursuant
to the Offer or otherwise, then the parties hereto agree, at the request of
Buyer, if then permitted under Georgia Law, to take all necessary and
appropriate action to cause the Merger to be effective as soon as
practicable after the acceptance for payment and purchase of Shares by the
Purchaser pursuant to the Offer without a meeting of shareholders of the
Company.
ARTICLE 9
Conditions to the Merger
Section 9.01. Conditions to the Obligations of Each Party. The
obligations of the Company, Buyer and Merger Subsidiary to consummate the Merger
are subject to the satisfaction of the following conditions:
(a) if required by Georgia Law, this Agreement shall have been adopted
by the shareholders of the Company in accordance with such law;
(b) any applicable waiting period under the HSR Act relating to the
Merger shall have expired or been terminated;
(c) no provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit the consummation of the Merger; and
(d) Buyer or its affiliates shall have purchased Shares pursuant to the
Offer in sufficient number to satisfy the Minimum Condition.
ARTICLE 10
Termination
Section 10.01. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time (notwithstanding
any approval of this Agreement by the shareholders of the Company):
(a) by mutual written consent of the Company and Buyer;
(b) by either the Company or Buyer,
(i) if Buyer shall not have purchased Shares pursuant to the
Offer by August 31, 1999 (the "Expiration Date"); provided that (x) the
right to terminate this Agreement under this Section 10.01(b)(i)
shall not be available to any party whose breach of any provision
of this Agreement has been the cause of, or resulted in, the
failure of such purchase to be made on or before the Expiration
Date or (y) if the waiting period (and any extension thereof)
applicable to the consummation of the Offer under the HSR Act
shall expire or terminate less than ten business days prior to the
Expiration Date, the right to terminate this Agreement pursuant to
this Section 10.01(b)(i) shall not become effective until the
tenth business day following the Expiration Date; or
(ii) if there shall be any law or regulation that makes
consummation of the Offer or the Merger illegal or otherwise prohibited
or if any judgment, injunction, order or decree enjoining Buyer, Merger
Subsidiary or the Company from consummating the Offer or the Merger is
entered and such judgment, injunction, order or decree shall become
final and unappealable;
(c) by Buyer,
(i) in accordance with Section 6.04(c);
(ii) if the Company's Board shall or shall resolve to (x) not
recommend, or withdraw its approval or recommendation of, the Offer,
the Merger, this Agreement or any of the transactions contemplated
thereby, (y) modify such approval or recommendation in a manner adverse
to Buyer or Merger Subsidiary, or (z) approve, recommend or fail to
take a position that is adverse to any proposed Acquisition Proposal;
(iii) if the Company shall breach any of its obligations under
Section 6.04; or
(iv) if Buyer shall have terminated the Offer without purchasing
any Shares thereunder or failed to purchase any Shares prior to the
Expiration Date in accordance with the terms of this Agreement, in
either case due to any event or circumstance that would result in a
failure to satisfy any of the Offer conditions set forth in Annex I
hereto; or
(d) by the Company,
(i) in accordance with Section 6.04(c);
(ii) if Buyer shall have failed to commence the Offer in
accordance with the terms of this Agreement; or
(iii) if Buyer shall have terminated the Offer without
purchasing any Shares due to any event or circumstance, unless such
termination shall have been caused by or resulted from the failure
of the Company to perform in any material respect any material
obligation contained in this Agreement.form in any material
respect any material obligation contained in this Agreement.
The party desiring to terminate this Agreement pursuant to clauses (b), (c) or
(d) shall give written notice of such termination to the other party in
accordance with Section 11.01.
Section 10.02. Effect of Termination. If this Agreement is terminated
pursuant to Section 10.01, this Agreement shall become void and of no effect
with no liability on the part of any party hereto, except that termination of
this Agreement shall be without prejudice to any rights any party may have
hereunder against any other party for wilful breach of this Agreement. The
agreements contained in Sections 6.03(b), 7.01, 7.03, 10.02, 11.04, 11.06, 11.07
and 11.09 shall survive the termination hereof.
ARTICLE 11
Miscellaneous
Section 11.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including telecopy or similar
writing) and shall be given,
if to Buyer or Merger
Subsidiary to: Delta Air Lines, Inc.
0000 Xxxxx Xxxxxxxxx
Xxxxxxxxxx Xxxxxxx International Airport
Xxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
Att: Xxxxxx X. Xxxxxx
with copies to: Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Att: Xxxxxx Xxxxxxx
if to the Company, to: ASA Holdings, Inc.
000 Xxxxxxxxxx Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000-0000
Facsimile: 000-000-0000
Att: Xxxxxx X. Xxxxxxx
with copies to: Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
X.X.X.
Facsimile: (000) 000-0000
Att: Xxxx Xxxxxxxxxxx
and Xxxxxx, Xxxxxxx & Xxxxxx, P.C.
0000 Xxxxxx Xxxxx Xxxx, X.X.
Xxxxx 000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Att: Xxxxx X. Xxxxxxx, Esq.
or such other address or telecopy number as such party may hereafter specify for
the purpose by notice to the other parties hereto. Each such notice, request or
other communication shall be effective (a) if given by telecopy, when such
telecopy is transmitted to the telecopy number specified in this Section and the
appropriate telecopy confirmation is received or (b) if given by any other
means, when delivered at the address specified in this Section.
Section 11.02. Survival of Representations and Warranties. The
representations and warranties contained herein and in any certificate or other
writing delivered pursuant hereto shall not survive the Effective Time.
Section 11.03. Amendments; No Waivers. (a) Any provision of this
Agreement may be amended or waived prior to the Effective Time if, and only if,
such amendment or waiver is in writing and signed, in the case of an amendment,
by the Company, Buyer and Merger Subsidiary or in the case of a waiver, by the
party against whom the waiver is to be effective; provided that (1) after such
time that designees of Buyer constitute a majority of the Company's Board, such
amendment or waiver shall be approved by a majority of the Independent Directors
(if any Independent Directors are on the Company's Board at such time) and (2)
after the adoption of this Agreement and approval of the Merger by the
shareholders of the Company, no such amendment or waiver shall, without the
further approval of such shareholders, alter or change (i) the amount or kind of
consideration to be received in exchange for any shares of capital stock of the
Company, (ii) any term of the Articles of Incorporation of the Surviving Company
or (iii) any of the terms or conditions of this Agreement if such alteration or
change would adversely affect the holders of any shares of capital stock of the
Company.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
Section 11.04. Fees and Expenses. (a) Except as provided in this
Section, all costs and expenses incurred in connection with this Agreement shall
be paid by the party incurring such cost or expense.
(b) The Company agrees to pay Buyer in immediately available funds a
termination fee of $5,000,000 (the "Termination Fee") if:
(i) this Agreement is terminated by Buyer pursuant to clause
(i), (ii) or (iii) of Section 10.01(c);
(ii) this Agreement is terminated by the Company pursuant to
clause (i) of Section 10.01(d);
(iii) within 6 months after termination of this Agreement
pursuant to Section 10.01(b)(i), the Company enters into an agreement
to consummate an Acquisition Proposal with any Third Party and such
Acquisition Proposal shall subsequently be consummated.
(c) The Company acknowledges that the agreements contained in this
Section are an integral part of the transactions contemplated by this Agreement,
and that, without these agreements, Buyer would not enter into this Agreement.
Accordingly, if the Company fails to promptly pay any amount due pursuant to
this Section and, in order to obtain such payment, the other party commences a
suit which results in a judgment against the Company for the fee or fees and
expenses set forth in this Section, the Company shall also pay to Buyer its
costs and expenses incurred in connection with such litigation.
Section 11.05. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other parties hereto except that Buyer may transfer
or assign, in whole or from time to time in part, to one or more of its
affiliates, the right to purchase Shares pursuant to the Offer, but any such
transfer or assignment will not relieve Buyer of its obligations hereunder or
prejudice the rights of tendering shareholders to receive payment for Shares
validly tendered and accepted for payment pursuant to the Offer. Any other
purported assignment, delegation or transfer shall be null and void.
Section 11.06. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Georgia, except the
conflicts of laws provisions thereof.
Section 11.07. Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the transactions contemplated hereby may be brought in
any federal court located in the State of Georgia or in any Georgia state court
located in Xxxxxx County, and each of the parties hereby consents to the
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding which is brought in any such court has
been brought in an inconvenient form. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court. Without limiting the foregoing, each
party agrees that service of process on such party as provided in Section 11.01
shall be deemed effective service of process on such party.
Section 11.08. Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
Section 11.09. Entire Agreement; Third Party Beneficiaries. This
Agreement (including the Disclosure Schedules and the Confidentiality Agreement
constitute the entire agreement among Buyer, Merger Subsidiary and the Company
with respect to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among Buyer, Merger Subsidiary and the
Company with respect to the subject matter hereof. Except as set forth in
Section 7.03, no provision of this Agreement is intended to confer upon any
Person other than the parties hereto any rights or remedies hereunder.
Section 11.10. Definitions. Each of the following terms is defined in
the Section set forth opposite such term:
Term Section
Acquisition Proposal 6.04(a)
affiliate 1.03(a)
Articles of Merger 2.01(b)
Balance Sheet 4.09(a)
Balance Sheet Date 4.09(a)
Buyer Recitals
Collective Bargaining Agreements 4.20(a)
Company Recitals
Company Disclosure Documents 4.10(a)
Company Permits 4.08(a)
Company Proxy Statement 4.10(a)
Company Securities 4.05
Company Shareholder Meeting 6.02(a)
Company Stock Option Plan 2.05(a)
Company 10-K 4.07(a)
Company 1997 10-K 4.06(a)
Company 10-Q 4.07(a)
Company's Board Recitals
Confidentiality Agreement 6.03(b)
Dissenting Shares 2.04(a)
Effective Time 2.01(b)
Employee Plans 4.15(a)
Environmental Laws 4.18(b)
ERISA Affiliate 4.15(a)
ERISA 4.15(a)
Exchange Act 4.03
Exchange Agent 2.03(a)
Expiration Date 10.01(b)
FAA 4.03
Georgia Law 2.01(a)
HSR Act 4.03
Independent Directors 1.03(a)
Lien 4.04(e)
Material Adverse Effect 4.01
Material Contracts 6.03
Merger 2.01(a)
Merger Consideration 2.02(b)
Merger Subsidiary Recitals
Minimum Condition 1.01(a)
Offer 1.01(a)
Offer Documents 1.01(b)
Person 2.03(c)
Recommendation 6.02(b)
Schedule 13E-3 1.01(b)
Schedule 14D-1 1.01(b)
Schedule 14D-9 1.02(b)
SEC 1.01(a)
Shares Recitals
Subsidiary 4.06(a)
Subsidiary Securities 4.06(b)
Superior Proposal 6.04(c)
Surviving Company 2.01(a)
Termination Fee 11.04(b)
Third Party 6.04(c)
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and
year first above written.
ASA HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman and Chief Executive Officer
DELTA AIR LINES, INC.
By: /s/ Xxxxxxx X. Worth
-------------------------------------------
Name: Xxxxxxx X. Worth
Title: Chief Operating Officer
DELTA SUB, INC.
By: /s/ Xxxxxx X. Xxxx
-------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President and Treasurer
ANNEX I
Notwithstanding any other provision of the Offer, Buyer and Merger
Subsidiary shall not be required to accept for payment or pay for any Shares,
and may terminate the Offer, if
(x) the Minimum Condition (as defined in the Merger Agreement) has not
been satisfied by August 31, 1999,
(y) the applicable waiting period under the HSR Act shall not have
expired or been terminated by the expiration date of the Offer, or
(z) at any time on or after the date of the Merger Agreement and prior
to the acceptance for payment or payment of Shares, any of the following
conditions exist:
(a) there shall be instituted or pending any action, suit, investigation
or proceeding by any government or governmental authority or agency,
domestic or foreign, before any court or governmental authority or agency,
domestic or foreign,
(i) challenging or seeking to make illegal, to delay
materially or otherwise directly or indirectly to restrain or
prohibit the making of the Offer, the acceptance for payment of or
payment for some of or all the Shares pursuant to the Offer or the
consummation of the Merger, seeking to obtain material damages in
connection with the transactions contemplated by the Offer or the
Merger;
(ii) seeking to restrain, prohibit or terminate the Company's
or, as a result of the transactions contemplated by this
Agreement, Buyer's ownership, operation or lease (or that of their
respective subsidiaries or affiliates) of any business, properties
or assets which are material to the business or operations, as
such business or operations are currently conducted, of the
Company and its Subsidiaries or of Buyer and its subsidiaries
(including, in either case, without limitation, any gates at
Xxxxxxxxxx Atlanta International Airport), as the case may be, or
to compel the Company or, as a result of the transactions
contemplated by this Agreement, Buyer or any of their respective
subsidiaries or affiliates to dispose of, cease operating or hold
separate any business, properties or assets which are material to
the business or operations, as such business or operations are
currently conducted, of the Company and the Subsidiaries or of
Buyer and its subsidiaries (including, in either case, without
limitation, any gates at Xxxxxxxxxx Atlanta International
Airport), as the case may be;
(iii) seeking to impose limitations on the ability of Buyer or
any of its subsidiaries or affiliates effectively to exercise full
rights of ownership of the Shares, including, without limitation,
the right to vote any Shares acquired or owned by Buyer or any of
its subsidiaries or affiliates on all matters properly presented
to the Company's shareholders; or
(iv) seeking to require divestiture by Buyer or any of its
subsidiaries or affiliates of any Shares; or
(v) that otherwise, in the judgment of Buyer, is likely to
have a Material Adverse Effect (as defined in the Merger
Agreement); or
(b) there shall be in effect any judgment, decree or order of any court
or governmental authority or agency, domestic or foreign, or any other
legal restraint,
(i) which makes illegal, delays materially or otherwise
restrains or prohibits the Offer, the acceptance for payment of or
payment for some or all of the Shares pursuant to the Offer or the
consummation of the Merger, or imposes material damages in
connection with the transactions contemplated by the Offer or the
Merger;
(ii) which restrains, prohibits or terminates the Company's or,
as a result of the transactions contemplated by this Agreement,
Buyer's ownership, operation or lease (or that of their respective
subsidiaries or affiliates) of any business, properties or assets
which are material to the business or operations, as such business
or operations are currently conducted, of the Company and its
Subsidiaries or of Buyer and its subsidiaries (including, in
either case, without limitation, any gates at Xxxxxxxxxx Atlanta
International Airport), as the case may be, or which compels the
Company or, as a result of the transactions contemplated by this
Agreement, Buyer or any of their respective subsidiaries or
affiliates to dispose of, cease operating or hold separate any
business, properties or assets which are material to the business
or operations, as such business or operations are currently
conducted, of the Company and the Subsidiaries or of Buyer and its
subsidiaries (including, in either case, without limitation, any
gates at Xxxxxxxxxx Atlanta International Airport), as the case
may be;
(iii) imposes limitations on the ability of Buyer or any of its
subsidiaries or affiliates effectively to exercise full rights of
ownership of the Shares, including, without limitation, the right to
vote any Shares acquired or owned by Buyer or any of its subsidiaries
or affiliates on all matters properly presented to the Company's
shareholders;
(iv) requires divestiture by Buyer or any of its subsidiaries or
affiliates of any Shares;
(v) that otherwise, in the judgment of Buyer, is likely to have
a Material Adverse Effect; or
(c) there shall be any statute, rule, regulation, injunction, order or
decree enacted, enforced, promulgated, issued or deemed applicable to the
Offer or the Merger, by any court, government or governmental authority or
agency, domestic or foreign, other than the application of the waiting
period provisions of the HSR Act to the Offer or the Merger that, in the
judgment of Buyer, is reasonably likely, directly or indirectly, to result
in any of the consequences referred to in clauses (i) through (v) of
paragraph (a) above; or
(d) there has been any event, occurrence or development or state of
circumstances or facts which has had or could reasonably be expected to
have a Material Adverse Effect (as defined in the Merger Agreement); or
(e) the Company shall have breached or failed to perform or comply with
in any material respect any of its covenants or agreements under the Merger
Agreement, or any of the representations or warranties of the Company set
forth in the Merger Agreement shall not be true in any material respect
when made or at any time prior to consummation of the Offer as if made at
and as of such time (except as to any representation or warranty which
speaks as of a specific date, which must be untrue in any material respect
as of such date); or
(f) the Company shall have entered into, or shall have publicly
announced its intention to enter into, an agreement or an agreement in
principle with respect to any Acquisition Proposal; or
(g) the Company's Board shall or shall resolve to (x) not recommend, or
withdraw its approval or recommendation of, the Offer, the Merger, the
Merger Agreement or any of the transactions contemplated thereby, (y)
modify such approval or recommendation in a manner adverse to Buyer or
Merger Subsidiary, or (z) approve, recommend or fail to take a position
that is adverse to any proposed Acquisition Proposal; or
(h) a tender or exchange offer for more than 20% of the Shares shall have
been made by a Third Party, or it shall have been publicly disclosed or
Buyer shall have otherwise learned that
(i) any person or "group" (as defined in Section 13(d)(3) of
the Exchange Act) shall have acquired or made a bona fide proposal to
acquire beneficial ownership of more than 20% of any class or series
of capital stock of the Company (including the Shares), through the
acquisition of stock, the formation of a group or otherwise, or shall
have been granted any option, right or warrant, conditional or
otherwise, to acquire beneficial ownership of more than 20% of any
class or series of capital stock of the Company (including the
Shares) other than acquisitions for bona fide arbitrage purposes only
and other than as disclosed in a Schedule 13D or 13G on file with the
Commission on the date of the Merger Agreement, or
(ii) any such person or group which, prior to the date of the
Merger Agreement, had filed such a Schedule with the Commission shall
have acquired or proposed to acquire beneficial ownership of
additional shares of any class or series of capital stock of the
Company (including the Shares), through the acquisition of stock, the
formation of a group or otherwise, constituting 10% or more of any
such class or series, or shall have been granted any option, right or
warrant, conditional or otherwise, to acquire beneficial ownership of
additional shares of any class or series of capital stock of the
Company (including the Shares) constituting 10% or more of any such
class or series or
(iii) any person or group shall have entered into a definitive
agreement or an agreement in principle with respect to a merger,
consolidation or other business combination with the Company; or
(i) the Merger Agreement shall have been terminated in accordance with
its terms;
which, in the reasonable judgment of Buyer in any such case, and regardless of
the circumstances giving rise to any such condition, makes it inadvisable to
proceed with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Buyer and Merger
Subsidiary and may, subject to the terms of the Agreement, be waived by Buyer
and Merger Subsidiary in whole or in part at any time and from time to time in
their discretion. The failure by Buyer or Merger Subsidiary at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances, and each such right shall be deemed an ongoing right that may
be asserted at any time and from time to time prior to the Effective Time.
