EXHIBIT 10.2
THIS STANDSTILL AGREEMENT (this "Agreement") is made and
entered into as of March 20, 1997 by and among PAN AM CORPORATION, a Florida
corporation ("Pan Am") XXXXX XXXXXX ("Xxxxxx") and JDM DELAWARE, INC., as
trustee for the Xxxxx Xxxxxx 1995 Air Holding Trust (the "Trust") (Arison and
the Trust are sometimes referred to herein collectively as the "Shareholders").
Capitalized terms used herein without definition shall have the meanings
ascribed to them in that certain Acquisition Agreement (the "Acquisition
Agreement"), dated as of the date hereof, among Pan Am, CAL Acquisition
Corporation, a Florida corporation ("Acquisition"), Airline Holding Company,
Inc., a Florida corporation ("AHC") and Carnival Air Lines, Inc., a Florida
corporation ("Carnival").
W I T N E S S E T H:
WHEREAS, Pan Am, Acquisition, AHC and Carnival have entered
into the Acquisition Agreement which contemplates the merger of Acquisition with
and into Carnival; and
WHEREAS, the Trust owns all of the issued and outstanding
shares of AHC Common Stock (the "AHC Shares") and, immediately prior to the
Effective Time, will own over 90% of the issued and outstanding shares of the
Carnival Common Stock (the "Carnival Shares" and, together with the AHC Shares,
the "Shares");
WHEREAS, upon the consummation of the transactions
contemplated by the Acquisition Agreement, each of the Carnival Shares will be
converted into approximately 1.8796991 shares of Common Stock (the "Exchange
Shares"); and
WHEREAS, as a condition to the willingness of each of Pan Am
and Acquisition to enter into the Acquisition Agreement, Pan Am and Acquisition
have each requested that the Shareholders agree, and, in order to induce Pan Am
and Acquisition to enter into the Acquisition Agreement, the Shareholders have
agreed to certain limitations on their ownership of the Voting Securities (as
herein defined) of Pan Am and to certain other undertakings;
NOW, THEREFORE, in consideration of the mutual agreements and
covenants set forth herein, Pan Am and the Shareholder, intending to be legally
bound, hereby agree as follows:
1. LIMITATION ON OWNERSHIP OF VOTING SECURITIES; CERTAIN
UNDERTAKINGS. The Shareholders covenant and agree that, from and after the
Effective Date, they will not, and will cause each of their respective
Affiliates not to, singly or as part of a "partnership, limited partnership,
syndicate or other group" (as those terms are used within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), directly or indirectly, through one or more intermediaries or otherwise:
a. without the consent of the Board of
Directors of Pan Am, voluntarily acquire or offer, seek, propose or agree to
acquire, beneficial ownership (as such term is defined in regulations
promulgated under the Exchange Act) of the Voting Power (as hereinafter defined)
an aggregate of more than 45% of all Outstanding Voting Securities (as
hereinafter defined);
b. (i) solicit proxies within the meaning of
Regulation 14A promulgated under the Exchange Act with respect to the Common
Stock or any other securities of Pan Am,
(ii) become a participant in a solicitation of proxies with respect to the
Common Stock or other securities of Pan Am, (iii) form, join or in any way
participate in a Group (as such term is used within the meaning of Section
13(d)(3) of the Exchange Act, which meaning shall apply for all purposes of this
Agreement) which is soliciting or intends to solicit proxies with respect to the
Common Stock or other securities of Pan Am, or (iv) seek to advise, encourage or
influence any person or entity with respect to the voting of any Outstanding
Voting Securities;
c. form, join or in any way participate in a
Group which has acquired or plans to acquire shares of Common Stock or other
securities of Pan Am, other than as a Group composed of the Shareholders and
their respective Affiliates;
d. deposit any Common Stock or other
Outstanding Voting Securities in any voting trust or subject any Common Stock or
other Outstanding Voting Securities to a voting agreement or other arrangement
with similar effect that could reasonably be expected to result in any of the
foregoing;
e. otherwise act, alone or in concert with
others (including by providing financing for another party), to seek or offer to
control, in any manner, the management, Board of Directors or policies of Pan Am
other than through the director positions contemplated by the Acquisition
Agreement;
f. unless and until the Shareholders have
received the prior written invitation or approval of a majority of the
disinterested Board of Directors of Pan Am, the Shareholders will not, and will
cause each of their respective Affiliates not to, directly or indirectly,
solicit, seek or offer to effect, negotiate with or provide any information to
any party, or make any statement or proposal to any person with a view to
forming a Group or make any public announcement or proposal or offer whatsoever,
with respect to (i) any form of business combination or similar transaction
involving Pan Am or any Subsidiary thereof, including, without limitation, a
merger, tender or exchange offer or liquidation of assets or (ii) any form of
restructuring, recapitalization or similar transaction with respect to Pan Am or
any Subsidiary thereof; or
g. instigate, encourage or assist any third
party to do any of the foregoing, provided, however that, subject to the
restrictions contained in Section 4 hereof, nothing in this Agreement shall
prohibit the Shareholders from selling or otherwise disposing of all or a
portion of the Exchange Shares to unaffiliated person(s) or entity(ies) on the
market or in negotiated transactions.
As used in this Agreement, (i) the term "Voting
Securities" shall mean the Common Stock and all other securities of Pan Am of
any kind or class having power to vote for the election of directors, (ii) the
term "Outstanding Voting Securities" shall at any time mean the then issued and
outstanding Voting Securities, other securities of Pan Am convertible or
exchangeable into Voting Securities (which shall be counted at the highest
conversion or exchange rate at which they can be converted or exchanged), and
options or rights (whether or not presently exercisable) to purchase Voting
Securities or securities convertible or exchangeable, and (iii) the term "Voting
Power" shall mean, with respect to Outstanding Voting Securities, the highest
number of votes that the holders of all such Outstanding Voting Securities would
be entitled to cast for the election of directors or on any other matter
assuming, for purposes of this computation, the conversion or exchange into
Voting Securities of securities convertible into or exchangeable
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therefore, and the exercise of options and rights (whether or not presently
exercisable) to purchase Voting Securities.
2. REPRESENTATIONS AND WARRANTIES OF PAN AM. Pan Am hereby
represents and warrants to the Shareholders as follows:
a. Each of Pan Am and its Subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of its state or country of incorporation. Each of Pan Am and its Subsidiaries is
duly qualified to transact business as a foreign corporation in all
jurisdictions where the ownership or leasing of its properties or the conduct of
its business requires such qualification except where the failure to be so
qualified would not have a material adverse effect on the financial condition,
results of operations, assets, liabilities, prospects or business of Pan Am and
its Subsidiaries on a consolidated basis. Each of Pan Am and its Subsidiaries
has the corporate authority to (i) own or lease and operate its properties and
(ii) conduct its business as presently conducted.
b. Pan Am has the corporate authority to
execute, deliver and perform this Agreement. The execution, delivery and
performance of this Agreement by Pan Am and the consummation by Pan Am of the
transactions contemplated hereby have been duly authorized by all requisite
corporate action on the part of Pan Am. This Agreement has been duly executed
and delivered by Pan Am and constitutes the legal, valid and binding obligation
of Pan Am, enforceable against it in accordance with its terms, except to the
extent that such enforcement is limited by bankruptcy, insolvency,
reorganization or other laws relating to or affecting the enforcement of
creditors' rights generally or by general principles of equity.
c. The execution, delivery and performance by
Pan Am of this Agreement and the consummation by Pan Am of the transactions
contemplated hereby; (i) do not and will not violate or conflict with any
provision of law or regulation, or any writ, order, judgment or decree of any
court or governmental or regulatory authority specifically naming Pan Am, or any
provision of Pan Am's Articles of Incorporation or Bylaws; and (ii) do not and
will not, with or without the passage of time or the giving of notice, result in
the breach of, or constitute a default, cause the acceleration of performance,
permit the unilateral modification or termination of, or require any consent
under, or result in the creation of any lien, charge or encumbrance upon any
property or assets of Pan Am pursuant to, any material instrument or agreement
to which Pan Am is a party or by which Pan Am may be bound or affected.
3. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS. The
Shareholders each hereby represent and warrant to Pan Am as follows:
a. Each Shareholder is authorized to execute
and deliver this Agreement. This Agreement has been duly executed and delivered
by the Shareholders and constitutes the legal, valid and binding obligation of
each Shareholder, enforceable against such Shareholder in accordance with its
terms, except to the extent that such enforcement is limited by bankruptcy,
insolvency, reorganization or other laws relating to or affecting the
enforcement of creditors' rights generally or by general principles of equity.
b. The execution, delivery and performance by
the Shareholders, of this Agreement, and the consummation by Shareholders of the
transactions contemplated hereby and thereby: (i) do not and will not violate or
conflict with any provision of law or regulation, or any writ, order, judgment
or decree of any court or governmental or regulatory authority specifically
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naming any Shareholder; and (ii) do not and will not, with or without the
passage of time or the giving of notice, result in the breach of, or constitute
a default, cause the acceleration of performance, permit the unilateral
modification or termination of, or require any consent under, or result in the
creation of any lien, charge or encumbrance upon any property or assets of any
Shareholder or of AHC or Carnival pursuant to, any material instrument or
agreement to which any Shareholder or AHC or Carnival is a party or by which the
Shareholder or AHC or Carnival or any of their respective properties may be
bound or affected.
c. The Shareholders are acquiring the Exchange
Shares for investment and not with a view to the sale or distribution thereof,
are acquiring the Exchange Shares for their own account and not on behalf of
others and have not granted any other person any right or option or any
participation or beneficial interest in any of the Exchange Shares. Each
Shareholder acknowledges his respective understanding that none of the Exchange
Shares may be sold except (i) pursuant to paragraph (d) of Rule 145 under the
Securities Act, (ii) pursuant to an effective registration statement under the
Securities Act or (iii) in a transaction exempt from registration under the Act,
and acknowledges that he understands the meaning and effect of such
restrictions.
d. The AHC Shares are, and the Carnival Shares
will be, owned by the Shareholders, free and clear of any liens, encumbrances,
security interests, options or claims whatsoever, including, without limitation,
claims or rights under "buy-sell" or other shareholder or voting agreements.
4. TRANSFER OF STOCK. No Shareholder may transfer, assign,
sell or otherwise dispose of (a "Transfer") any Common Stock owned by it to any
Person which is an Affiliate of the Shareholder. If any Shareholder shall
propose to Transfer, in any transaction or series of related transactions (which
shall include a series of transactions to the same Person or its Affiliates),
any Common Stock that represents greater than 15% of the Outstanding Voting
Securities, then the Shareholder shall provide Pan Am with prior written notice
of the proposed transfer (the "Transfer Notice"). The Transfer Notice shall set
forth all of the material terms of the proposed Transfer. Pan Am shall have the
right, exercisable by written notice within 30 days of its receipt of the
Transfer Notice (the "Exercise Notice"), to purchase all of the Common Stock
which is the subject of the proposed Transfer upon the terms set forth in the
Transfer Notice (it being agreed that Pan Am may, at its option, substitute cash
in an amount equal to the fair market value of any non-cash assets reflected in
the Transfer Notice). Upon delivery of the Exercise Notice, Pan Am shall be
obligated to consummate the purchase contemplated thereby, which purchase shall
be consummated not less than 10 business days following the Shareholders receipt
of the Exercise Notice. If Pan Am defaults in its obligation to purchase all of
the Common Stock it is obligated to purchase pursuant to an Exercise Notice,
then this Agreement shall automatically terminate and shall cease to have any
force or effect. If Pan Am shall not timely deliver an Exercise Notice, then the
Shareholder may thereafter Transfer the Common Stock owned by it upon terms no
less favorable than those set forth in the Transfer Notice; PROVIDED, HOWEVER,
that if the Transfer shall not be consummated within 45 business days following
Pan Am's failure timely to deliver the Exercise Notice, then Pan Am shall have
the right of first offer set forth above with respect to any subsequent Transfer
by the Shareholder of any Common Stock that represents greater than 15% of the
Outstanding Voting Securities.
5. TERMINATION. This Agreement shall, unless otherwise agreed
to by the Shareholder and Pan Am, terminate on the earliest of the following
dates or events, whereupon the foregoing provisions of this Agreement shall
cease to have any force or effect:
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a. June 30, 1997, if the Closing shall not
have occurred by such date, PROVIDED, HOWEVER, that if the basis for any such
termination is the failure of the Merger to be consummated by June 30, 1997 (the
"Termination Date"), and the parties to the Acquisition Agreement agree to
extend the Termination Date to any subsequent date on one or more occasions,
then no party shall be permitted to terminate this Agreement until such
subsequent date;
b. The Closing Date, if the acquisition of
Carnival by Pan Am shall qualify for treatment as a "pooling of interests" for
accounting purposes; or
c. The date which is three years from the
Closing Date.
6. NOTICES. Any notice or other communication under this
Agreement shall be in writing and shall be delivered personally or sent by
registered mail, return receipt requested, postage prepaid, by prepaid overnight
courier or by telecopier, facsimile or other electronic means (with a confirming
copy by registered or certified mail, postage prepaid) to the parties at the
addresses set forth below their names on the signature pages of this Agreement
(or at such other addresses as shall be specified by the parties by like
notice). Such notices, demands, claims and other communications shall be deemed
given when actually received or (i) in the case of delivery by overnight service
with guaranteed next day delivery, the next day or the day designated for
delivery or (ii) in the case of registered U.S. mail, five days after deposit in
the U.S. mail. A copy of any notices delivered to the Shareholder shall also be
sent to Xxxxxxx Xxxxx, Esq., 0000 X.X. 00xx Xxxxxx, Xxxxx, Xxxxxxx 00000 and to
Xxxxx Xxxxxxxxxx, Esq., Xxxxxxxxx Xxxxxxx Xxxxxxx Xxxxxx Xxxxx & Xxxxxxx, P.A.,
0000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx 00000. A copy of any notices
delivered to Pan Am shall also be sent to Xxxx X. Xxxxxx, Xx., Esq., 0000 X.X.
00xx Xxxxxx, Xxxxx, Xxxxxxx, 00000 and to Xxxxx X. Xxxxxxxxxxx, Esq., Xxxxxxx
Xxxxxx Xxxxxx Xxxxxxxx Xxxxxxxx & Xxxxxxxxx, P.A., Suite 2200, 000 Xxxx Xxxxxxx
Xxxxxx, Xxxxx, Xxxxxxx, 00000.
7. MISCELLANEOUS.
a. ENTIRE AGREEMENT. This Agreement contains
every obligation and understanding between the parties relating to the subject
matter hereof and merge all prior discussions, negotiations and agreements, if
any, between them, and none of the parties shall be bound by any
representations, warranties, covenants, or other understandings, other than as
expressly provided or referred to herein.
b. ASSIGNMENT. This Agreement may not be
assigned by any party without the written consent of the other party. Subject to
the preceding sentence, this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, heirs, personal
representatives, legal representatives, and permitted assigns.
c. WAIVER AND AMENDMENT. Any representation,
warranty, covenant, term or condition of this Agreement which may legally be
waived, may be waived, or the time of performance thereof extended, at any time
by the party hereto entitled to the benefit thereof, and any term, condition or
covenant hereof may be amended by the parties hereto at any time. Any such
waiver, extension or amendment shall be evidenced by an instrument in writing
executed on behalf of the appropriate party and, in the case of Pan Am, by a
person who has been authorized by Pan Am's Board of Directors to execute
waivers, extensions or amendments on its behalf. No waiver by any party hereto,
whether express or implied, of its rights under any provision of this Agreement
shall constitute a waiver of such party's rights under such provisions at any
other time
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or a waiver of such party's rights under any other provision of this Agreement.
No failure by any party hereto to take any action against any breach of this
Agreement or default by another party shall constitute a waiver of the former
party's right to enforce any provision of this Agreement or to take action
against such breach or default or any subsequent breach or default by such other
party.
d. NO THIRD PARTY BENEFICIARY. Nothing
expressed or implied in this Agreement is intended, or shall be construed, to
confer upon or give any Person other than the parties hereto and their
respective successors and permitted assigns, any rights or remedies under or by
reason of this Agreement.
e. SEVERABILITY. In the event that any one or
more of the provisions contained in this Agreement shall be declared invalid,
void or unenforceable, the remainder of the provisions of this Agreement shall
remain in full force and effect, and such invalid, void or unenforceable
provision shall be interpreted as closely as possible to the manner in which it
was written.
f. HEADINGS. The section and other headings
contained in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of any provisions of this Agreement.
g. COUNTERPARTS. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
Any telecopied version of any manually executed signature page shall be deemed a
manually executed original.
h. LITIGATION; PREVAILING PARTY. In the event
of any litigation with regard to this Agreement, the prevailing party shall be
entitled to receive from the non-prevailing party and the non-prevailing party
shall pay upon demand all reasonable fees and expenses of counsel for the
prevailing party.
i. INJUNCTIVE RELIEF. It is possible that
remedies at law may be inadequate and, therefore, the parties hereto shall be
entitled to equitable relief including, without limitation, injunctive relief,
specific performance or other equitable remedies in addition to all other
remedies provided hereunder or available to the parties hereto at law or in
equity.
j. REMEDIES CUMULATIVE. No remedy made
available by any of the provisions of this Agreement is intended to be exclusive
of any other remedy, and each and every remedy shall be cumulative and shall be
in addition to every other remedy given hereunder or now or hereafter existing
at law or in equity.
k. PARTICIPATION OF PARTIES; CONSTRUCTION.
The parties hereto acknowledge that this Agreement and all matters contemplated
herein, have been negotiated among all parties hereto and their respective legal
counsel and that all such parties have participated in the drafting and
preparation of this Agreement from the commencement of negotiations at all times
through the execution hereof. This Agreement shall be construed and interpreted
without regard to presumption or other rule or interpretation against the party
who may have had primary responsibility for drafting this Agreement.
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l. GOVERNING LAW. This Agreement has been
entered into and shall be construed and enforced in accordance with the laws of
the State of Florida without reference to the choice of law principles thereof.
m. JURISDICTION AND VENUE. This Agreement
shall be subject to the exclusive jurisdiction of the courts of Dade County,
Florida, which shall be the exclusive jurisdiction and venue for disputes,
actions or lawsuits arising out of or relating to this Agreement or the
transactions contemplated hereby. The parties to this Agreement agree that any
breach of any term or condition of this Agreement shall be deemed to be a breach
occurring in the State of Florida by virtue of a failure to perform an act
required to be performed in the State of Florida and irrevocably and expressly
agree to submit to the jurisdiction of the courts of the State of Florida for
the purpose of resolving any disputes among the parties relating to this
Agreement or the transactions contemplated hereby. The parties irrevocably
waive, to the fullest extent permitted by law, any objection which they may now
or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement, or any judgment entered by any
court in respect hereof brought in the State of Florida, and further irrevocably
waive any claim that any suit, action or proceeding brought in the State of
Florida has been brought in an inconvenient forum.
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IN WITNESS WHEREOF, the parties hereto have each executed and delivered
this Agreement as of the day and year first above written.
PAN AM CORPORATION
By:________________________________
SHAREHOLDERS:
___________________________________
XXXXX XXXXXX
THE XXXXX XXXXXX 1995
AIR HOLDING TRUST
By: JMD Delaware, Inc., as trustee
By:________________________________
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