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EXHIBIT 2.1
PLAN OF REORGANIZATION
AND
AGREEMENT OF MERGER
BETWEEN
VALUJET, INC.
AND
AIRWAYS CORPORATION
THIS PLAN OF REORGANIZATION AND AGREEMENT OF MERGER (hereinafter called
the "Agreement") is dated as of the 10th day of July, 1997 by and between
VALUJET, INC., a Nevada corporation ("VJET"), and AIRWAYS CORPORATION, a
Delaware corporation ("Airways").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of VJET and Airways, respectively, deem
it advisable and in the best interests of VJET and Airways and their respective
stockholders that Airways merge with and into VJET pursuant to this Agreement,
a Plan of Merger between Airways and VJET substantially in the form of Exhibit
"A" attached hereto (the "Plan of Merger"), and applicable provisions of the
laws of the States of Nevada and Delaware (such transaction being hereinafter
called the "Merger"); and
WHEREAS, the parties propose to enter into the Plan of Merger which
provides, among other things, for the conversion of each share of Airways
common stock, no par value ("Airways Common Stock"), issued and outstanding
immediately prior to the "Effective Date of the Merger" (as herein defined),
into the "Merger Price" as determined in accordance with Section 6.01 of this
Agreement, all as more fully described in the Plan of Merger; and
WHEREAS, the Boards of Directors of VJET and Airways, respectively, have
approved and adopted this Agreement and the Plan of Merger as a plan of merger
under the provisions of Section 78.451 of the Nevada Revised Statutes and
Section 252 of the Delaware General Corporation Law; and
WHEREAS, for federal income tax purposes, it is intended that the Merger
qualify as a tax free reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, provisions and covenants herein contained, the parties hereto
hereby agree as follows:
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ARTICLE I
The Merger
1.01 The Merger, Effective Time and Conversion Ratio. Subject to Article
V of this Agreement, the Plan of Merger shall be executed and acknowledged by
each of VJET and Airways and delivered to the Secretary of State of the States
of Nevada and Delaware for filing as provided in Section 78.458 of the Nevada
Revised Statutes and Section 252 of the Delaware General Corporation Law as of
the "Closing Date" (as herein defined). The effective date of the Merger shall
be the date the Articles of Merger or a Certificate of Merger shall have been
duly filed with the Secretary of State of the States of Nevada and Delaware and
the Merger shall have become effective under Nevada and Delaware law (the
"Effective Date of the Merger"). On the Effective Date of the Merger, the
separate existence of Airways shall cease and Airways shall be merged with and
into VJET. VJET agrees on the Effective Date of the Merger to pay the Merger
Price as determined in accordance with Section 6.01 of this Agreement and
pursuant to the terms of the Plan of Merger.
1.02 Closing. Subject to the terms and conditions hereof, Airways and
VJET shall communicate and consult with each other with respect to the
fulfillment of the various conditions to their obligations under this
Agreement. The exchange of the certificates, opinions and other documents
contemplated in connection with the consummation of the Merger (the "Closing")
shall take place at the offices of Ellis, Funk, Xxxxxxxx, Xxxxxxxx & Dokson,
P.C., 0000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, on the
twenty-eighth (28th) day following the effective date of the Registration
Statement described in Section 4.07 of this Agreement or such earlier or later
date as may be agreed upon by Airways and VJET. Such date and time is herein
sometime referred to as the "Closing" or "Closing Date." In the event that at
the Closing no party exercises any right it may have to terminate this
Agreement and no condition to the obligations of the parties exists that has
not been satisfied or waived, the parties shall (i) deliver to each other the
certificates, opinions and other documents required to be delivered under this
Agreement including, the Articles of Merger and (ii) at the Closing or as soon
thereafter as possible, consummate the Merger by filing the Articles or
Certificate of Merger with the Secretary of State of the States of Delaware and
Nevada.
ARTICLE II
Representations and Warranties of Airways
Airways does hereby represent and warrant to VJET as follows:
2.01 Organization. Airways is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Each
Subsidiary of Airways has been duly organized and is validly existing and in
good standing under the laws of its state of its organization. Airways and
each of its Subsidiaries has the corporate power to own its property and to
carry on its business as now being conducted; Airways has the corporate power
and authority to execute and deliver this Agreement, subject to stockholder
approval, the Plan of Merger and to consummate the transactions contemplated
hereby.
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2.02 Authorization, Execution and Delivery of Agreement. The execution
and delivery and, subject to the stockholder approval of Airways, the
performance of this Agreement and the Plan of Merger by Airways have been duly
and validly authorized and approved by the Board of Directors of Airways, and
Airways has taken, or will use reasonable efforts to take prior to the
Effective Date of the Merger, all other action required by law on the part of
Airways, its Articles of Incorporation and bylaws or otherwise to effect the
transactions contemplated by this Agreement and the Plan of Merger.
2.03 Capital Stock of Airways; Subsidiaries.
(a) As of the date of this Agreement, the authorized capital stock of
Airways consists of 1,000,000 shares of Preferred Stock, $.01 par value per
share, none of which is outstanding and 19,000,000 shares of Common Stock, $.01
par value per share, of which 9,067,937 shares were outstanding as of June 27,
1997. No additional shares of stock have been issued between June 27, 1997 and
the date of this Agreement. As of the date of this Agreement, 1,150,000 shares
of Airways Common Stock were reserved for issuance under Airways' 1995 Stock
Option Plans and 150,000 shares of Airways Common Stock were reserved for
issuance under Airways' 1995 Directors Stock Option Plan (such plans being
hereinafter collectively referred to as the "Airways Plans"). Schedule 2.03(a)
to the Airways' Disclosure Statement delivered to VJET contemporaneously with
the execution and delivery of this Agreement ("Airways' Disclosure Statement")
is a complete list of all outstanding options and warrants granted by Airways,
including for each option and warrant, the optionee, exercise price and vesting
provisions. Other than the options and warrants described in this Section 2.03,
there are no outstanding options, warrants or rights to subscribe for or
purchase from Airways any capital stock of Airways or securities convertible
into or exchangeable for capital stock of Airways.
(b) Schedule 2.03(b) to Airways' Disclosure Statement lists each
Subsidiary of Airways. All the outstanding shares of capital stock of each such
Subsidiary have been validly issued and are fully paid and nonassessable and are
owned by Airways, by another Subsidiary of Airways or by Airways and another
such Subsidiary, free and clear of all pledges, claims, liens, charges,
encumbrances and security interests of any kind or nature whatsoever. Except
for the capital shares of its Subsidiaries, Airways does not own, directly or
indirectly, any capital stock or other ownership interest in any corporation,
partnership, joint venture or other entity. There are no outstanding options,
warrants or rights to subscribe for or purchase from Airways or any Airways
Subsidiary any capital stock of any Airways Subsidiary or securities convertible
into or exchangeable for capital stock of any Airways Subsidiary.
2.04 Financial.
(a) Airways has previously furnished VJET true and complete copies of
the following documents which have been filed by Airways with the Securities and
Exchange Commission ("SEC") pursuant to Sections 13(a), 14(a), (b) or (c) or
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") (such
documents are hereinafter collectively called the "Airways SEC Filings"): (i)
its Annual Report on Form 10-K for the year ended March 31, 1997, which report
includes, among other things, Consolidated Balance Sheets as at March 31, 1996
and
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March 31, 1997 and Consolidated Statements of Operations, Consolidated
Statements of Stockholders' Equity and Group Equity and Consolidated Statements
of Cash Flows of Airways for the periods ended March 31, 1997, March 31, 1996
and March 31, 1995, examined and reported upon by Airways' independent
certified public accountants,(ii) quarterly reports on Form 10-Q for the
quarters ended June 30, 1996, September 30, 1996 and December 31, 1996, which
reports include Consolidated Balance Sheets, Consolidated Statements of
Operations and Consolidated Statements of Cash Flows of Airways at and for the
respective fiscal periods then ended and at and for the corresponding date and
fiscal periods for the prior year, (iii) all reports on Form 8-K filed by
Airways with the SEC during the period from and after April 1, 1996, and (iv)
Airways' Proxy Statement dated July 27, 1996. The Airways SEC Filings
constitute all reports Airways was required to file under Sections 13(a),
14(a), (b) or (c) and 15(d) of the Exchange Act since April 1, 1996. At the
time of filing with the SEC, the Airways SEC Filings (i) were prepared in all
material respects in accordance with the applicable requirements of the
Exchange Act, and the rules and regulations thereunder, (ii) did not contain
any untrue statement of a material fact, and (iii) did not omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Except to the extent
information contained in any Airways SEC Filing has been revised or superseded
by a later-filed Airways SEC Filing, the audited and unaudited financial
statements contained in the Airways SEC Filings are true and correct in all
material respects and present fairly the consolidated financial condition and
results of operations and changes in stockholders' equity and group equity and
cash flows as of the dates and for the periods indicated, except as may
otherwise be stated in such financial statements. For purposes of this
Agreement, all financial statements of Airways shall be deemed to include any
notes to such financial statements. The financial statements described in this
Section 2.04 are hereinafter referred to as the "Airways Financial Statements".
(b) Except as publicly disclosed by Airways or disclosed to VJET in
Schedule 2.04(b) or any other Schedule to Airways' Disclosure Statement (in
either case, which disclosure is made prior to the execution of this Agreement),
Airways has not experienced or suffered any Material Adverse Effect between
March 31, 1997 and the date of this Agreement.
2.05 No Breach of Statute or Contract, Governmental Authorizations.
Except as set forth in Schedule 2.05 to Airways' Disclosure Statement, neither
the execution and delivery of this Agreement by Airways, nor compliance with
the terms and provisions of this Agreement by Airways will violate any law,
statute, rule or regulation of any governmental authority, domestic or foreign,
or will on the Effective Date of the Merger conflict with or result in a breach
of any of the terms, conditions or provisions of any judgment, order,
injunction, decree or ruling of any court or governmental agency or authority,
domestic or foreign, to which Airways or any Subsidiary is subject or of any
agreement or instrument to which Airways or any Subsidiary is a party or by
which it is bound, or constitute a default thereunder, or result in the
creation of any lien, charge or encumbrance upon any property or assets of
Airways or any Subsidiary or cause any acceleration of maturity of any
obligation or loan, or give to others any interest or rights, including rights
of termination or cancellation, in or with respect to any of the material
properties, assets, agreements, contracts or business of Airways or any
Subsidiary. No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required by or with
respect to Airways or any Subsidiary in connection with the execution and
delivery of this Agreement by
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Airways or the consummation by Airways of the transactions contemplated hereby,
except for (i) the filing required by the Xxxx-Xxxxx-Xxxxxx Anti-Trust
Improvements Act of 1976, as amended ("HSR" Act"), (ii) the filing with the SEC
of (A) a proxy statement relating to the adoption of this Agreement by Airways'
shareholders (the "Merger Proxy Statement") and (B) such reports and schedules
under the Exchange Act as may be required in connection with this Agreement and
the transactions contemplated hereby, (iii) the filing of the Articles of
Merger with the Secretary of the State of Delaware and appropriate documents
with the relevant authorities of other states in which Airways is qualified to
do business; and (iv) any required filings with and any approvals required by
the DOT and the FAA.
2.06 No Litigation or Adverse Events. Except as set forth in the Airways
SEC Filings or in Schedule 2.06 to Airways' Disclosure Statement, there is no
suit, action or legal, administrative, arbitration or other proceeding or
governmental investigation pending, or to the best of the knowledge of Airways
threatened, which if adversely determined, would be a Material Adverse Effect.
2.07 Employee Benefit Plans. Schedule 2.07 to Airways' Disclosure
Statement contains a list of all employment contracts (including agreements
with any union), severance agreements, and all employee policy manuals, all
deferred compensation, non-competition, bonus, stock option, profit sharing,
pension, retirement, consultation after retirement, payment upon retirement,
incentive, extraordinary vacation accrual, material consulting contracts,
education payment or benefit, disability insurance (including medical, travel,
group life or other similar insurance plans), agreements, arrangements or
plans, or any other fringe benefit arrangements of, or applicable to, employees
of Airways or any Airways Subsidiary. Each employee plan is in full compliance
with all applicable government laws, rules and regulations, except for any
noncompliance which is not a Material Adverse Effect. No such plan which is
subject to Part 3 of Subtitle B of Title 1 of the Employment Retirement Income
Security Act of 1974 and the rules and regulations thereunder ("ERISA")
("Airways' ERISA Plan") has incurred any "accumulated funding deficiency"
within the meaning of Section 302 of ERISA or Section 412 of the Code and
neither Airways nor any Airways Subsidiary has incurred any liability on
account of such an "accumulated funding deficiency" with respect to any
Airways' ERISA Plan. No liability to the Pension Benefit Guaranty Corporation
established under ERISA has been incurred with respect to any Airways' ERISA
Plan and to the best knowledge of Airways, neither Airways nor any Airways
Subsidiary has incurred any liability for any tax imposed by Section 4975 of
the Code. Neither Airways nor any Subsidiary has suffered or otherwise caused
a "complete withdrawal" or a "partial withdrawal", as such terms are defined in
Section 4203 and Section 4205, respectively, of ERISA, since the effective date
of such Sections 4203 and 4205 with respect to any Multi-employer Pension Plan.
2.08 Governmental Approvals. The business of Airways and the Airways
Subsidiaries as presently conducted does not require any approval of any
governmental body, whether federal, state, local or foreign, which has not been
obtained or applied for, except as would not result in a Material Adverse
Effect. Except as set forth in Schedule 2.08 to Airways' Disclosure Statement,
Airways and the Airways Subsidiaries have, as of the date hereof, and will have
as of the Closing Date, such permits, licenses, authorities, operating
certificates, "slot" assignments, essential air service designations, and other
certificates or approvals required by the Federal Aviation Administration
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("FAA") or the U.S. Department of Transportation ("DOT"). Except as may be
expressly permitted by the terms of this Agreement or otherwise disclosed in
this Agreement or any Schedule hereto, the business of Airways and any Airways
Subsidiary as presently conducted in any jurisdiction meets all known
applicable legal requirements of such jurisdiction and all known requisite
governmental approvals have been duly obtained or applied for and are in full
force and effect, except for any failure of legal requirements or any lack of
governmental approvals which is not a Material Adverse Effect; and to the best
of Airways' knowledge there is no basis for any governmental body to deny or
rescind any approval for the conduct of the business of Airways or of any
Airways Subsidiary.
2.09 Accuracy of Books and Records. The books and records, financial and
otherwise, of Airways and of the Airways Subsidiaries present fairly the
financial position of Airways and of the Airways Subsidiaries in all material
respects and all transactions of Airways and of the Airways Subsidiaries have
been recorded in such books and records in a manner consistent with generally
accepted accounting principles ("GAAP").
2.10 Aircraft and Other Property. Except as disclosed in Schedule 2.10,
to Airways' Disclosure Statement all aircraft owned, leased or in the
possession and control of Airways or of any Airways Subsidiary are, and on the
Closing Date will be, in an airworthy condition, and are being maintained
according to FAA regulatory standards and Airways' FAA-authorized maintenance
program. A list of all aircraft now owned, leased or in the possession and
control of Airways or of any Airways Subsidiary is attached hereto as said
Schedule 2.10. Except as set forth in said Schedule 2.10, all other operating
properties, leasehold improvements and equipment of Airways and of the Airways
Subsidiaries are in normal operating condition, free from any known defects,
except such minor defects as do not materially interfere with the continued use
thereof in the conduct of normal operations.
2.11 Material Contracts. Schedule 2.11 to Airways' Disclosure Statement
is a list of all contracts of Airways or of any Airways Subsidiary involving
aggregate payments by Airways or any Airways Subsidiary or to Airways or to any
Airways Subsidiary of more than $200,000, or extending for a term beyond
twenty-four (24) months or providing for severance benefits upon a termination
of employment after the consummation of the Merger. Said Schedule 2.11 also
contains a list showing all policies of insurance in force as of the date
hereof.
2.12 Taxes. Airways and the Airways Subsidiaries have filed or secured
extensions for filing all tax returns required to be filed by the United States
Government, by any of the states of the United States and by any other
governmental authority; all taxes, assessments and other governmental charges
known by the officers of Airways to be due from Airways or from any Airways
Subsidiary or with respect to any of their income, property or assets have been
duly paid and no extensions for the time of payment have been requested, except
as disclosed in Schedule 2.12 to Airways' Disclosure Statement. There are no
pending or, to the best of Airways' knowledge, threatened additional
assessments of taxes by any governmental authority known to any of the officers
of Airways, except as disclosed in said Schedule 2.12. No unexpired waivers of
the statute of limitations executed by Airways or by any Airways Subsidiary
with respect to federal or state income taxes are in effect on the date hereof,
except as disclosed in said Schedule 2.12. Except as set forth in Schedule
2.12, the accruals and reserves made for tax liabilities of Airways in the
March
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31, 1997, Consolidated Balance Sheet of Airways are adequate for the payment of
all of Airways and Airways Subsidiaries' federal, state and local tax
liabilities for all periods ending on or before March 31, 1997. Airways and
each of its Subsidiaries has withheld all required amounts from its employees
for all periods in full and complete compliance with the tax withholding
provisions of applicable laws, all required returns with respect to income tax
withholding, social security and unemployment and other taxes have been filed
by Airways and the Airways Subsidiaries for all periods for which returns were
due and the amounts shown on such returns to be due and payable have been paid
in full, except for any such failure to do any of the foregoing which is not a
Material Adverse Effect.
2.13 Title to Properties. Except as disclosed in Schedule 2.13 to
Airways' Disclosure Statement, Airways and the Airways Subsidiaries have good
and (in the case of owned real property) marketable title, free and clear of
any mortgage, pledge, lien, charge or other encumbrance, to all of their real
or personal property and other assets reflected on Airways' Consolidated
Balance Sheet as of March 31, 1997, or acquired by Airways or the Airways
Subsidiaries subsequent to the date thereof except for (i) liens or
encumbrances on such property or assets described in the Consolidated Balance
Sheet as of Xxxxx 00, 0000, (xx) liens for current taxes not yet due and
payable, and (iii) such imperfections of title and encumbrances, if any, as are
not material in character, amount or extent, and do not detract from the value
or interfere with the present or presently contemplated future use of the
properties subject thereto or affected thereby or those arising by operation of
law for which payment is not yet delinquent, and (iv) dispositions in the
ordinary course of business. Airways and the Airways Subsidiaries enjoy
peaceable and undisturbed possession under all material leases under which they
are operating and all of their equipment and premises which are leased are in
good condition and repair (ordinary wear and tear excepted) and are suitable
for the purposes for which such equipment and premises are being utilized.
Except as disclosed in said Schedule 2.13, neither Airways nor any of the
Airways Subsidiaries is in default under or has received any notice of default
under any lease agreement. Except as disclosed in said Schedule 2.13, neither
Airways nor any of the Airways Subsidiaries has received any notice of
violation of any applicable zoning ordinance or other law, order, regulation or
requirement relating to their operations or to their owned or leased
properties. To the best of its knowledge, each parcel of real property owned,
leased or operated by Airways or by any Airways Subsidiary is reasonably free
of any and all hazardous wastes, hazardous emissions, toxic substances or other
types of contamination or matters of environmental concern, and neither Airways
nor any Airways Subsidiary is subject to any material liability (under the
Comprehensive Environmental Response, Compensation and Liability Act or
otherwise) resulting from or related to any such wastes, emissions, substances,
contaminants or matters of environmental concern in connection with any such
property.
2.14 Disclosure. No representation or warranty by Airways contained in
this Agreement and no statement contained in any certificate, exhibit, schedule
or other instrument furnished or to be furnished to VJET pursuant hereto,
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary to make the statements contained
therein not misleading. The information contained in the Prospectus/Proxy
Statement to be furnished to the stockholders of the parties pursuant to the
Merger (other than information included in reliance upon and in conformity with
information furnished by VJET in writing expressly for use therein) will not
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contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading.
2.15 Broker's or Finder's Fees. Except as provided in Schedule 2.15 to
Airways' Disclosure Statement, no agent, broker, person or firm acting on
behalf of Airways or any of its subsidiaries or under the authority of any of
them is or will be entitled to any commission or broker's or finder's fee from
any of the parties hereto in connection with any of the transactions
contemplated herein.
2.16 No Antitakeover Provisions. Except as disclosed in Schedule 2.16 to
Airways' Disclosure Statement, there are no antitakeover provisions or other
provisions of similar effect applicable to Airways under the terms of Airways'
Articles of Incorporation or By-laws or under Delaware or other law applicable
to Airways that must be complied with prior to the consummation of the Merger.
2.17 Intellectual Property.
(a) Schedule 2.17 to Airways' Disclosure Statement contains a correct
and complete list of all of intellectual property of Airways and its
Subsidiaries ("Airways' Intellectual Property"). Neither Airways nor any of its
Subsidiaries has violated, infringed upon or unlawfully or wrongfully used the
Intellectual Property of others and none of Airways' Intellectual Property or
any related rights as used in its business or in the other businesses now or
heretofore conducted by Airways infringes upon or otherwise violates the rights
of others, nor has any person asserted a claim of such infringement or misuse.
Airways has taken all reasonable measures (other than registration) to enforce,
maintain and protect its interests and to the extent applicable, the rights of
third parties, in and to Airways' Intellectual Property. Airways has, and upon
consummation of the transactions contemplated by this Agreement, VJET will have,
all right, title and interest in the Intellectual Property identified on said
Schedule 2.17. The consummation of the transactions contemplated by this
Agreement will not alter or impair any Intellectual Property rights of Airways
or result in a default under any contract of Airways. Except as set forth in
said Schedule 2.17, Airways is not obligated nor has Airways incurred any
liability to make any payments for royalties, fees or otherwise to any person in
connection with any of Airways' Intellectual Property. All patents, trademarks,
trade names, service marks, assumed names and copyrights and all registrations
thereof included in or related to Airways' Intellectual Property are valid,
subsisting and in full force and effect.
(b) No present or former officer, director, partner or employee of
Airways owns or has any proprietary, financial or other interest, direct or
indirect, in any of Airways' Intellectual Property, except as described on said
Schedule 2.17. No officer, director, partner or employee of Airways has entered
into any contract that requires such officer, director, partner or employee to
assign any interest in any Airways Intellectual Property.
2.18 Labor Matters. Airways has made available to VJET copies of all
collective bargaining agreements, contracts or other agreements or
understandings with a labor union or labor organization to which Airways or any
of its Subsidiaries is a party or by which any of them is
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bound. Except as and to the extent set forth in Schedule 2.18 to Airways'
Disclosure Statement, (i) Airways or any of its Subsidiaries is not a party to
any union agreement or collective bargaining agreement or work rules or
practices agreed to with any labor organization or employee association
applicable to any employees of Airways or any of its Subsidiaries and no
attempt to organize any of the employees of Airways' business is currently
proposed or threatened, (ii) Airways or any of its Subsidiaries has not had any
Equal Employment Opportunity Commission charges or other claims of employment
discrimination made against it which, if resolved adversely to Airways or its
Subsidiaries, would result in a Material Adverse Effect to Airways or its
Subsidiaries, (iii) no Wage and Hour Department investigations have been made
of Airways or any of its Subsidiaries which, if resolved adversely to Airways
or its Subsidiaries, would result in a Material Adverse Effect to Airways or
its Subsidiaries, (iv) no labor strike, dispute, stoppage or lockout is pending
or threatened against or affecting Airways or any of its Subsidiaries, the
assets or the business of Airways or any of its Subsidiaries, and (v) no unfair
labor practice charge or complaint against Airways or any of its Subsidiaries
is pending or threatened before the National Labor Relations Board or any
similar governmental authority. Since the enactment of the Worker Adjustment
and Retraining Notification Act (the "WARN Act"), Airways and any of its
Subsidiaries has not effectuated (i) a "plant closing" (as defined in the WARN
Act) affecting any site of employment or one or more facilities or operating
units within any site of employment or facility of Airways or any of its
Subsidiaries, or (ii) a "mass layoff" (as defined in the WARN Act) affecting
any site of employment or facility of Airways or any of its Subsidiaries, nor
has Airways or any of its Subsidiaries been affected by any transaction or
engaged in layoffs or employment terminations sufficient in number to trigger
application of any similar state or local law. Except as set forth in said
Schedule 2.18, none of Airways' or any of its Subsidiaries' employees suffered
an "employment loss" (as defined in the WARN Act) within the six (6) month
period prior to the date hereof.
ARTICLE III
Representations and Warranties of VJET
VJET represents and warrants to Airways as follows:
3.01 Organization, etc. VJET is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada. Each
Subsidiary of VJET has been duly organized and is validly existing and in good
standing under the laws of the state of its organization. VJET and each of its
Subsidiaries has the corporate power to own its property and to carry on its
business as now being conducted; VJET has the corporate power and authority to
execute and deliver this Agreement and the Plan of Merger and, subject to the
stockholder approval referenced in Section 5.02(a)(i) hereof, to consummate the
transactions contemplated hereby.
3.02 Authorization, Execution and Delivery of Agreement. The execution
and delivery and, subject to the stockholder approval of VJET, the performance
of this Agreement and the Plan of Merger by VJET have been duly and validly
authorized and approved by the Board of Directors of VJET, and VJET has taken,
or will use reasonable efforts to take prior to the Effective Date of the
Merger, all other action required by law on the part of VJET, its respective
Articles of
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Incorporation and bylaws or otherwise to effect the transactions contemplated
by this Agreement and the Plan of Merger.
3.03 Capital Stock of VJET.
(a) As of the date of this Agreement, the authorized capital stock of
VJET consists of 5,000,000 shares of Preferred Stock, $.01 par value, none of
which is outstanding and 1,000,000,000 shares of Common Stock, $.001 par value,
of which 54,969,238 shares were outstanding as of June 30, 1997. No additional
shares of stock have been issued between June 30, 1997, and the date of
execution of this Agreement. As of the date of this Agreement, 3,420,000 shares
of VJET Common Stock were reserved for issuance under VJET's 1993 Incentive
Stock Option Plan, 3,640,790 shares of VJET Common Stock were reserved for
issuance under VJET's Stock Option Plan, 5,000,000 shares of VJET Common Stock
were reserved for issuance under VJET's 1996 Stock Option Plan and 3,979,864
shares of VJET Common Stock were reserved for issuance under VJET's Employee
Stock Purchase Plan (such plans being hereinafter collectively referred to as
the "VJET Plans"). Other than the options described in this Section 3.03, there
are no outstanding options, warrants or rights to subscribe for or purchase from
VJET any capital stock of VJET or securities convertible into or exchangeable
for capital stock of VJET.
(b) Schedule 3.03(b) to VJET's Disclosure Statement delivered to
Airways contemporaneously with the execution and delivery of this Agreement
("VJET's Disclosure Statement") lists each Subsidiary of VJET. All the
outstanding shares of capital stock of each such Subsidiary have been validly
issued and are fully paid and nonassessable and are owned by VJET, by another
Subsidiary of VJET or by VJET and another such Subsidiary, free and clear of all
pledges, claims, liens, charges, encumbrances and security interests of any kind
or nature whatsoever. Except for the capital shares of its Subsidiaries, VJET
does not own, directly or indirectly, any capital stock or other ownership
interest in any corporation, partnership, joint venture or other entity. There
are no outstanding options, warrants or rights to subscribe for or purchase from
VJET or any VJET Subsidiary any capital stock of any VJET Subsidiary or
securities convertible into or exchangeable for capital stock of any VJET
Subsidiary.
3.04 Financial.
(a) VJET has previously furnished Airways true and complete copies of
the following documents which have been filed by VJET with the SEC pursuant to
Sections 13(a), 14(a), (b) or (c) or 15(d) of the Exchange Act (such documents
are hereinafter collectively called the "VJET SEC Filings"): (i) its Annual
Report on Form 10-K for the year ended December 31, 1996, which report includes,
among other things, Consolidated Balance Sheets as at December 31, 1995 and
December 31, 1996 and Consolidated Statements of Operations, Consolidated
Statements of Stockholders' Equity and Consolidated Statements of Cash Flows of
VJET for the periods ended December 31, 1996, December 31, 1995 and December 31,
1994, examined and reported upon by Ernst & Young, LLP, independent certified
public accountants, (ii) quarterly reports on Form 10-Q for the quarter ended
March 31, 1997, which reports include Consolidated Balance Sheets, Consolidated
Statements of Operations and Consolidated Statements of Cash Flows of VJET at
and for the respective fiscal periods then ended and at and for the
corresponding date and fiscal periods
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for the prior year, (iii) all reports on Form 8-K filed by VJET with the SEC
during the period from and after January 1, 1997, (iv) VJET's Proxy Statement
dated April 10, 1997, and (v) VJET's S-4 Registration Statement declared
effective as of October 11, 1996. The VJET SEC Filings constitute all reports
VJET was required to file under Sections 13(a), 14(a), (b) or (c) and 15(d) of
the Exchange Act since January 1, 1997. At the time of filing with the SEC,
the VJET SEC Filings (i) were prepared in all material respects in accordance
with the applicable requirements of the Exchange Act, and the rules and
regulations thereunder, (ii) did not contain any untrue statement of a material
fact, and (iii) did not omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Except to the extent information contained in any VJET SEC
Filing has been revised or superseded by a later filed VJET SEC Filing, the
audited and unaudited financial statements contained in the VJET SEC Filings
are true and correct in all material respects and present fairly the
consolidated financial condition and results of operations and changes in
stockholders' equity and cash flows as of the dates and for the periods
indicated, except as may otherwise be stated in such financial statements. For
purposes of this Agreement, all financial statements of VJET shall be deemed to
include any notes to such financial statements. The financial statements
described in this Section 3.04 are hereinafter referred to as the "VJET
Financial Statements".
(b) Except as publicly disclosed by VJET or disclosed to Airways in
Schedule 3.04(b) or any other Schedule to VJET's Disclosure Statement (in
either case, which disclosure is made prior to the execution of this
Agreement), VJET has not experienced or suffered any Material Adverse Effect
between March 31, 1997 and the date of this Agreement.
3.05 Status of VJET Common Stock. All shares of VJET Common Stock, when
issued to the stockholders of Airways pursuant to this Agreement and the Plan
of Merger, will be duly and validly authorized and issued, fully paid and
nonassessable.
3.06 No Breach of Statute or Contract, Governmental Authorizations.
Except as set forth in Schedule 3.06 to VJET's Disclosure Statement, neither
the execution and delivery of this Agreement by VJET, nor compliance with the
terms and provisions of this Agreement by VJET, will violate any law, statute,
rule or regulation of any governmental authority, domestic or foreign, or will
on the Effective Date of the Merger conflict with or result in a breach of any
of the terms, conditions or provisions of any judgment, order, injunction,
decree or ruling of any court or governmental agency or authority, domestic or
foreign, to which VJET or any Subsidiary is subject or of any agreement or
instrument to which VJET or any Subsidiary is a party or by which it is bound,
or constitute a default thereunder, or result in the creation of any lien,
charge or encumbrance upon any property or assets of VJET or any Subsidiary or
cause any acceleration of maturity of any obligation or loan, or give to others
any interest or rights, including rights of termination or cancellation, in or
with respect to any of the material properties, assets, agreements, contracts
or business of VJET or any Subsidiary. No consent, approval, order or
authorization of, or registration, declaration or filing with, any Governmental
Entity is required by or with respect to VJET or any subsidiary or in
connection with the execution and delivery of this Agreement by VJET or the
consummation by VJET of the transactions contemplated hereby, except for (i)
the filings required by the HSR Act, (ii) the filing with the SEC of (A) the
Registration Statement required by Section 4.07, (B) a proxy statement relating
to the VJET shareholders meeting to be held prior to
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Closing to approve the Merger and to amend VJET's Articles of Incorporation and
Bylaws and (C) such reports and schedules under the Exchange Act as may be
required in connection with this Agreement and the transactions contemplated
hereby and (iii) the filing of the Articles or Certificate of Merger with the
Secretary of State of Nevada and appropriate documents with the relevant
authorities of other states in which VJET is qualified to do business, and (iv)
any required filings with and any approvals required by the DOT and the FAA.
3.07 No Litigation or Adverse Events. Except as set forth in the VJET
SEC Filings or in Schedule 3.07 to VJET's Disclosure Statement, there is no
suit, action or legal, administrative, arbitration or other proceeding or
governmental investigation pending, or to the best of the knowledge of VJET
threatened, which, if adversely determined, would be a Material Adverse Effect.
3.08 Employee Benefit Plans. Schedule 3.08 to VJET's Disclosure Statement
hereto contains a list of all employment contracts (including agreements with
any union), severance agreements, and all employee policy manuals, all deferred
compensation, non-competition, bonus, stock option, profit sharing, pension,
retirement, consultation after retirement, payment upon retirement, incentive,
extraordinary vacation accrual, material consulting contracts, education
payment or benefit, disability insurance (including medical, travel, group life
or other similar insurance plans), agreements, arrangements or plans, or any
other fringe benefit arrangements of, or applicable to, employees of VJET or
any VJET Subsidiary. Each employee plan is in full compliance with all
applicable government laws, rules and regulations, except for any noncompliance
which is not a Material Adverse Effect. No such plan which is subject to ERISA
("VJET ERISA Plan") has incurred any "accumulated funding deficiency" within
the meaning of Section 302 of ERISA or Section 412 of the Code and neither VJET
nor any Subsidiary has incurred any liability on account of such an
"accumulated funding deficiency" with respect to any VJET ERISA Plan. No
liability to the Pension Benefit Guaranty Corporation established under ERISA
has been incurred with respect to any VJET ERISA Plan and to the best knowledge
of VJET, neither VJET nor any VJET Subsidiary has incurred any liability for
any tax imposed by Section 4975 of the Code. Neither VJET nor any VJET
Subsidiary has suffered or otherwise caused a "complete withdrawal" or a
"partial withdrawal", as such terms are defined in Section 4203 and Section
4205, respectively, of ERISA, since the effective date of such Sections 4203
and 4205 with respect to any Multi-employer Pension Plan.
3.09 Governmental Approvals. The business of VJET and the VJET
Subsidiaries as presently conducted does not require any approval of any
governmental body, whether federal, state, local or foreign, which has not been
obtained or applied for, except as would not result in a Material Adverse
Effect. Except as set forth in Schedule 3.09 to VJET's Disclosure Statement,
VJET and the VJET Subsidiaries have, as of the date hereof, and will have as of
the Closing Date, such permits, licenses, authorities, operating certificates,
"slot" assignments, essential air service designations, and other certificates
or approvals required by the FAA or the DOT. Except as may be expressly
permitted by the terms of this Agreement or otherwise disclosed in this
Agreement or any Schedule hereto, the business of VJET and any VJET Subsidiary
as presently conducted in any jurisdiction meets all known applicable legal
requirements of such jurisdiction and all known requisite governmental
approvals have been duly obtained or applied for and are in full force and
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effect, except for any failure of legal requirements or any lack of
governmental approvals which is not a Material Adverse Effect; and to the best
of its knowledge there is no basis for any governmental body to deny or rescind
any approval for the conduct of the business of VJET or of any VJET Subsidiary.
3.10 Accuracy of Books and Records. The books and records, financial and
otherwise, of VJET present fairly the financial position of VJET in all
material respects and all transactions of VJET have been recorded in such books
and records in a manner consistent with GAAP.
3.11 Surviving Corporation After Merger. Immediately after the Closing
Date and after giving effect to any changes in the assets and liabilities of
VJET as a result of the Merger, VJET will not (i) be insolvent (either because
its financial condition is such that the sum of its debts is greater than the
fair value of its assets or because the fair saleable value of its assets is
less than the amount required to pay its probable liability on its existing
debts as they mature), (ii) have unreasonably small capital with which to
engage in its business, or (iii) have incurred debts beyond its ability to pay
the same as they become due.
3.12 Aircraft and Other Property. Except as disclosed in Schedule 3.12 to
VJET's Disclosure Statement, all aircraft owned, leased or in the possession
and control of VJET or of any VJET Subsidiary are, and on the Closing Date will
be, in an airworthy condition, and are being maintained according to FAA
regulatory standards and VJET's FAA-authorized maintenance program. A list of
all aircraft now owned, leased or in the possession and control of VJET or of
any VJET Subsidiary is attached hereto as Schedule 3.12. Except as set forth
in said Schedule 3.12, all other operating properties, leasehold improvements
and equipment of VJET and of the VJET Subsidiaries are in normal operating
condition, free from any known defects, except such minor defects as do not
materially interfere with the continued use thereof in the conduct of normal
operations.
3.13 Material Contracts. Attached hereto as Schedule 3.13 to VJET's
Disclosure Statement is a list of all contracts of VJET or of any VJET
Subsidiary involving aggregate payments by VJET or any VJET Subsidiary or to
VJET or to any VJET Subsidiary of more than $200,000, or extending for a term
beyond twenty-four (24) months and a list showing all policies of insurance in
force as of the date hereof.
3.14 Taxes. VJET and the VJET Subsidiaries have filed or secured
extensions for filing all tax returns required to be filed by the United States
Government, by any of the states of the United States and by any other
governmental authority; all taxes, assessments and other governmental charges
known by the officers of VJET to be due from VJET or from any VJET Subsidiary
or with respect to any of their income, property or assets have been duly paid
and no extensions for the time of payment have been requested, except as
disclosed in Schedule 3.14 to VJET's Disclosure Statement. There are no
pending or, to the best of VJET's knowledge, threatened additional assessments
of taxes by any governmental authority known to any of the officers of VJET,
except as disclosed in said Schedule 3.14. No unexpired waivers of the statute
of limitations executed by VJET or by any VJET Subsidiary with respect to
federal or state income taxes are in effect on the date hereof, except as
disclosed in said Schedule 3.14. Except as set forth
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in said Schedule 3.14, the accruals and reserves made for tax liabilities of
VJET in the March 31, 1997, Consolidated Balance Sheet of VJET are adequate for
the payment of all of VJET and VJET Subsidiaries' federal, state and local tax
liabilities for all periods ending on or before March 31, 1997. VJET and each
of its Subsidiaries has withheld all required amounts from its employees for
all periods in full and complete compliance with the tax withholding provisions
of applicable laws, all required returns with respect to income tax
withholding, social security and unemployment and other taxes have been filed
by VJET and the VJET Subsidiaries for all periods for which returns were due
and the amounts shown on such returns to be due and payable have been paid in
full, except for any such failure to do the foregoing which is not a Material
Adverse Effect.
3.15 Title to Properties. Except as disclosed in Schedule 3.15 to VJET's
Disclosure Statement, VJET and the VJET Subsidiaries have good and, (in the
case of owned real property) marketable title, free and clear of any mortgage,
pledge, lien, charge or other encumbrance, to all of their real or personal
property and other assets reflected on VJET's Consolidated Balance Sheet as of
March 31, 1997, or acquired by VJET or the VJET Subsidiaries subsequent to the
date thereof except for (i) liens or encumbrances on such property or assets
described in the Consolidated Balance Sheet as of Xxxxx 00, 0000, (xx) liens
for current taxes not yet due and payable, and (iii) such imperfections of
title and encumbrances, if any, as are not material in character, amount or
extent, and do not detract from the value or interfere with the present or
presently contemplated future use of the properties subject thereto or affected
thereby or those arising by operation of law for which payment is not yet
delinquent, and (iv) dispositions in the ordinary course of business. VJET and
the VJET Subsidiaries enjoy peaceable and undisturbed possession under all
material leases under which they are operating and all of their equipment and
premises which are leased are in good condition and repair (ordinary wear and
tear excepted) and are suitable for the purposes for which such equipment and
premises are being utilized. Except as disclosed in said Schedule 3.15,
neither VJET nor any of the VJET Subsidiaries is in default under or has
received any notice of default under any lease agreement. Except as disclosed
in said Schedule 3.15, neither VJET nor any of the VJET Subsidiaries has
received any notice of violation of any applicable zoning ordinance or other
law, order, regulation or requirement relating to their operations or to their
owned or leased properties. To the best of its knowledge, each parcel of real
property owned, leased or operated by VJET or by any VJET Subsidiary is
reasonably free of any and all hazardous wastes, hazardous emissions, toxic
substances or other types of contamination or matters of environmental concern,
and neither VJET nor any VJET Subsidiary is subject to any material liability
(under the Comprehensive Environmental Response, Compensation and Liability Act
or otherwise) resulting from or related to any such wastes, emissions,
substances, contaminants or matters of environmental concern in connection with
any such property.
3.16 Disclosure. No representation or warranty by VJET contained in this
Agreement and no statement contained in any certificate, exhibit or other
instrument furnished or to be furnished to Airways pursuant hereto, contains or
will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary to make the statements contained therein not
misleading. The information contained in the Prospectus/Proxy Statement to be
furnished to stockholders of the parties pursuant to the Merger (other than
information included in reliance upon and in conformity with information
furnished by Airways in writing expressly for use therein) will
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not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading.
3.17 Broker's or Finder's Fees. Except as provided in Schedule 3.17 to
VJET's Disclosure Statement, no agent, broker, person or firm acting on behalf
of VJET or any of its Subsidiaries or under the authority of any of them is or
will be entitled to any commission or broker's or finder's fee from any of the
parties hereto in connection with any of the transactions contemplated herein.
3.18 No Antitakeover Provisions. Except as disclosed in Schedule 3.18 to
VJET's Disclosure Statement, there are no antitakeover provisions or other
provisions of similar effect applicable to VJET under the terms of VJET's
Articles of Incorporation or By-laws or under Nevada or other law applicable to
VJET that must be complied with prior to the consummation of the Merger.
3.19 Intellectual Property.
(a) Schedule 3.19 to VJET's Disclosure Statement contains a correct
and complete list of all of intellectual property of VJET and its Subsidiaries
("VJET's Intellectual Property"). Neither VJET nor any of its Subsidiaries has
violated, infringed upon or unlawfully or wrongfully used the Intellectual
Property of others and none of VJET's Intellectual Property or any related
rights as used in its business or in the other businesses now or heretofore
conducted by VJET infringes upon or otherwise violates the rights of others, nor
has any person asserted a claim of such infringement or misuse. VJET has taken
all reasonable measures (other than registration) to enforce, maintain and
protect its interests and to the extent applicable, the rights of third parties,
in and to VJET's Intellectual Property. VJET has, and upon consummation of the
transactions contemplated by this Agreement, VJET will have, all right, title
and interest in the Intellectual Property identified on said Schedule 3.19. The
consummation of the transactions contemplated by this Agreement will not alter
or impair any Intellectual Property rights of VJET or result in a default under
any contract of VJET. Except as set forth in said Schedule 3.19, VJET is not
obligated nor has VJET incurred any liability to make any payments for
royalties, fees or otherwise to any person in connection with any of VJET's
Intellectual Property. All patents, trademarks, trade names, service marks,
assumed names and copyrights and all registrations thereof included in or
related to VJET's Intellectual Property are valid, subsisting and in full force
and effect.
(b) No present or former officer, director, partner or employee of
VJET owns or has any proprietary, financial or other interest, direct or
indirect, in any of VJET's Intellectual Property, except as described on said
Schedule 3.19. No officer, director, partner or employee of VJET has entered
into any contract that requires such officer, director, partner or employee to
assign any interest in any VJET Intellectual Property.
3.20 Labor Matters. VJET has made available to Airways copies of all
collective bargaining agreements, contracts or other agreements or
understandings with a labor union or labor organization to which VJET or any of
its Subsidiaries is a party or by which any of them is bound. Except as and to
the extent set forth in Schedule 3.20 to VJET's Disclosure Statement, (i) VJET
or
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any of its Subsidiaries is not a party to any union agreement or collective
bargaining agreement or work rules or practices agreed to with any labor
organization or employee association applicable to any employees of VJET or any
of its Subsidiaries and no attempt to organize any of the employees of VJET's
business is currently proposed or threatened, (ii) VJET or any of its
Subsidiaries has not had any Equal Employment Opportunity Commission charges or
other claims of employment discrimination made against it which, if resolved
adversely to VJET or its Subsidiaries, would result in a Material Adverse
Effect to VJET or its Subsidiaries, (iii) no Wage and Hour Department
investigations have been made of VJET or any of its Subsidiaries which, if
resolved adversely to VJET or its Subsidiaries, would result in a Material
Adverse Effect to VJET or its Subsidiaries, (iv) no labor strike, dispute,
stoppage or lockout is pending or threatened against or affecting VJET or any
of its Subsidiaries, the assets or the business of VJET or any of its
Subsidiaries, and (v) no unfair labor practice charge or complaint against VJET
or any of its Subsidiaries is pending or threatened before the National Labor
Relations Board or any similar governmental authority. Since the enactment of
the Worker Adjustment and Retraining Notification Act (the "WARN Act"), VJET
and any of its Subsidiaries has not effectuated (i) a "plant closing" (as
defined in the WARN Act) affecting any site of employment or one or more
facilities or operating units within any site of employment or facility of VJET
or any of its Subsidiaries, or (ii) a "mass layoff" (as defined in the WARN
Act) affecting any site of employment or facility of VJET or any of its
Subsidiaries, nor has VJET or any of its Subsidiaries been affected by any
transaction or engaged in layoffs or employment terminations sufficient in
number to trigger application of any similar state or local law. Except as set
forth in said Schedule 3.20, none of VJET's or any of its Subsidiaries'
employees suffered an "employment loss" (as defined in the WARN Act) within the
six (6) month period prior to the date hereof.
3.21 Offering Memorandum. The draft of the Offering Memorandum set forth
in Schedule 3.21 to VJET's Disclosure Statement is true and correct in all
material respects.
ARTICLE IV
Covenants and Transactions Prior to the Closing Date
4.01. Investigations; Operation of Business of Airways. Between the date
of this Agreement and the Effective Date of the Merger:
(a) Airways agrees to give to VJET full access to all the premises
and books and records of it and its Subsidiaries, and to cause its and its
Subsidiaries' officers to furnish VJET with such financial and operating data
and other information with respect to the business and properties of it and its
Subsidiaries as VJET shall from time to time request; provided, however, that
any such investigation shall not affect any of the representations, warranties
or covenants of Airways hereunder; and provided further, that any such
investigation shall be conducted in such manner as not to interfere unreasonably
with the operation of the respective businesses of Airways and its Subsidiaries.
In the event of termination of this Agreement, VJET will return to Airways or
destroy any and all financial statements, agreements, documents, memoranda or
other repositories of information relating to Airways that VJET has obtained or
prepared in connection with its review of
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Airways and its operations and VJET agrees that any information relating to
Airways, its financial condition, business, operations and prospects is
strictly confidential and shall not be disclosed to any third party or used by
VJET for its benefit or the benefit of any other person. VJET shall have the
right to have a representative present at all meetings of the Board of
Directors of Airways (the "VJET Observation Rights") and there shall be no
meeting of the Board of Directors of Airways unless (i) a representative of
VJET shall be present in person or by conference telephone call, or (ii) VJET
shall have been given notice in accordance with the by-laws of Airways with
respect to such meeting; provided, however, that failure of Airways to comply
with the terms of this Paragraph shall not affect the validity of action taken
by Airways' Board of Directors. In addition, VJET shall have the right to
review any consent resolutions of the Airways Board of Directors prior to
signing. Exercise of the VJET Observation Rights shall not be, and shall not
be construed as being, participation by VJET on the Board of Directors of
Airways. Notwithstanding the foregoing, the VJET representative shall not be
entitled to be present during discussion of any Acquisition Proposal or of any
matters directly relating to VJET and shall not have the right to review in
advance any consent resolutions relating to any Acquisition Proposal or VJET.
(b) Airways will, to the extent required for continued operation of
its business without impairment, use its best efforts to preserve substantially
intact the business organization of Airways and its Subsidiaries, to keep
available the services of the present officers and employees of Airways and its
Subsidiaries, and to preserve the present relationships of Airways and its
Subsidiaries with persons having significant business relations therewith such
as suppliers, customers, tour operators, brokers, agents or otherwise.
(c) Airways and its Subsidiaries will conduct their respective
businesses in a manner consistent with the current operation of their business
and only in the ordinary course and, by way of amplification and not limitation,
neither Airways nor its Subsidiaries will without the prior written consent of
VJET which consent shall not be unreasonably withheld (i) except with respect to
Airways Common Stock issued upon exercise of the warrants outstanding on the
date hereof and of options vested prior to the Closing Date, issue any capital
stock, or (ii) declare, set aside or pay any dividend or distribution with
respect to the capital stock of Airways or any of its Subsidiaries (other than
the payment of a dividend by a subsidiary of Airways to Airways or to another
subsidiary of Airways), or (iii) directly or indirectly redeem, purchase or
otherwise acquire any capital stock of Airways or any of its Subsidiaries, or
(iv) effect a split or reclassification of any capital stock of Airways or a
recapitalization of Airways, or (v) change the charter or bylaws of Airways, or
(vi) grant any increase in the compensation payable or to become payable by
Airways or its Subsidiaries to officers or salaried employees of Airways or its
Subsidiaries whose 1996 remuneration exceeded $50,000 or grant any increase
regardless of amount, in any bonus, insurance, pension or other benefit plan,
program, payment or arrangement made to, for or with any officers or employees,
or (vii) adopt any employee benefit plans including but not limited to stock
option plans, or (viii) borrow or agree to borrow any funds in excess of
$200,000 or guarantee or agree to guarantee the obligations of others (excluding
any refinancing of Airways' Subsidiary's hangar in an amount ranging from $6.5
million to $8.5 million secured by the hangar and Airways' Subsidiary's accounts
receivable, provided that the terms of such refinancing do not preclude
prepayment on reasonable terms; credit terms extended by creditors, lessors and
vendors in the ordinary course of business; and debt incurred for expenses of
this transaction), or (ix) make any
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capital improvement, purchase of equipment or furnishings or lease of any
aircraft (excluding the purchase, lease or repair of aircraft parts and
components required in the ordinary course of maintenance of aircraft)
involving an aggregate expenditure in excess of $200,000, or (x) transfer,
pledge, hypothecate or otherwise dispose of any assets having a book or market
value, whichever is greater, in excess of $200,000, or (xi) acquire direct or
indirect ownership or control of voting shares of any other corporation, or of
any interest in any partnership, joint venture, association or similar
organization, other than shares acquired in satisfaction of a security interest
or of a debt previously contracted for in a fiduciary or custodial capacity, or
(xii) waive any rights of substantial value, or (xiii) enter into any material
agreement, contract or commitment calling for aggregate payments in excess of
$200,000 over the life of the contract or extending for more than twelve months
other than contracts entered into for the maintenance or repair of aircraft or
those disclosed on Schedule 4.01(c) to Airways' Disclosure Statement, or (xiv)
acquire a fee interest in any real property.
(d) Subject to Section 4.04 hereof, without the prior written consent
of VJET, neither Airways nor any of its Subsidiaries will undertake or enter
into any sale, disposition, surrender, acquisition, agreement or transaction,
between the date of this Agreement and the Closing Date, relating to any of
their assets except in the ordinary course of business or as contemplated by
this Agreement or disclosed in the Airways SEC Filings.
(e) Airways will pay and discharge all taxes, assessments and
governmental charges lawfully imposed upon it, upon any Airways Subsidiary or
upon any of their property, or upon the income and profits thereof to the extent
such taxes, assessments and governmental charges are due and payable on or
before the Closing Date except for deferrals of taxes arranged by Airways with
the respective taxing authorities as indicated on Schedule 4.01(e) to Airways'
Disclosure Statement; provided, however, that nothing herein contained shall
require Airways or any Airways Subsidiary to pay or discharge any tax assessment
or governmental charge, so long as the validity thereof shall be contested in
good faith and by appropriate proceedings unless property essential to the
conduct of Airways or of any Airways Subsidiary's business will be lost,
forfeited or materially endangered.
(f) Airways will maintain its existence and the existence of the
Subsidiaries as corporations in good standing under the laws of the State of
Delaware, other states in which Airways and the Airways Subsidiaries operate and
the United States and comply and cause the Airways Subsidiaries to comply in all
material respects with all laws, governmental regulations, rules and ordinances,
and judicial orders, judgments and decrees applicable to their business or their
properties, except while contesting the validity of any of the foregoing in good
faith and by appropriate proceedings.
(g) Airways will notify VJET in writing within five (5) days of the
commencement of any material litigation against Airways, or against any Airways
Subsidiary, or of the existence of any adverse business conditions threatening
the continued, normal business operations of Airways or of any Airways
Subsidiary, or of any agreement, consent or order of the FAA or DOT involving
Airways or any Airways Subsidiary.
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(h) Airways shall at all times maintain, preserve and keep its
properties and the properties of its Subsidiaries in good repair, working order
and condition in all material respects so that the business carried on in
connection therewith may be properly and advantageously conducted, except for
those items that have been designated as obsolete or damaged beyond economic
repair.
(i) Airways will make every reasonable effort to fulfill its
contractual obligations and the contractual obligations of its Subsidiaries, and
to maintain in effect its insurance and the insurance of its Subsidiaries.
(j) Airways will not enter into, institute or permit any Airways
Subsidiary to enter into or institute, any employment contract, employee policy
manual (other than Airways' Subsidiary's current employee manual which is
undergoing revision), deferred compensation, non-competition, bonus, stock
option, profit-sharing, pension, retirement, consultation after retirement,
payments upon retirement, incentive, extraordinary vacation accrual, education
payment or benefit, disability insurance (including medical, travel, group life
or other similar insurance plans) agreement, plan or arrangement or any other
similar arrangement or plan, or, except as required by applicable law or
regulation, renew, amend, modify or terminate any such arrangement or plan now
in existence.
(k) Airways will not enter into, or permit any Subsidiary to enter
into, any agreement, understanding or commitment, written or oral, with any
other person which would be a breach of the obligations of Airways arising under
this Agreement.
(l) Airways will not make, or permit any Subsidiary to make any loan,
advance or commitment to extend credit to any of the directors, officers or any
affiliated or related persons of the directors or officers of Airways or of any
Airways Subsidiary; renew, or permit any Airways Subsidiary to renew, any
outstanding loan or any outstanding commitment to extend credit to any
directors, officers or any affiliated or related persons of the directors or
officers of Airways or of any Airways Subsidiary; increase, or permit any
Airways Subsidiary to increase, any outstanding loan to any of the directors,
officers of any affiliated or related persons of the directors or officers of
Airways or of any Airways Subsidiary; or enter into any agreement,
understanding or commitment, written or oral, which obligates Airways, any of
the Airways Subsidiaries or their successors or assigns to make any loan or
advance or payment to any of the directors or officers or to any affiliated or
related persons of any of the directors or officers of Airways or of any
Airways Subsidiary.
4.02. Investigation of VJET. Between the date of this Agreement and the
Effective Date of the Merger:
(a) VJET agrees to give to Airways full access to all the premises and
books and records of it and its Subsidiaries, and to furnish Airways with such
financial and operating data and other information with respect to the business
and properties of it and its Subsidiaries as Airways shall from time to time
request; provided, however, that any such investigation shall not affect any of
the representations, warranties or covenants of VJET hereunder; and provided
further, that any such investigation shall be conducted in such manner as not
to interfere unreasonably with the
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operation of the respective businesses of VJET and its Subsidiaries. In the
event of termination of this Agreement, Airways will return to VJET or destroy
any and all financial statements, agreements, documents, memoranda or other
repositories of information relating to VJET or its Subsidiaries that Airways
has obtained or prepared in connection with its review of VJET and its
operations and Airways agrees that any information relating to VJET, its
Subsidiaries and their financial condition, business, operations and prospects
is strictly confidential and shall not be disclosed to any third party, or used
by Airways for its benefit or the benefit of any other person. Airways shall
have the right to have a representative present at all meetings of the Board of
Directors of VJET (the "Airways Observation Rights") and there shall be no
meeting of the Board of Directors of VJET unless (i) a representative of
Airways shall be present in person or by conference telephone call, or (ii)
Airways shall have been given notice in accordance with the by-laws of VJET
with respect to such meeting; provided, however, that failure of VJET to comply
with the terms of this Paragraph shall not affect the validity of action taken
by VJET's Board of Directors. In addition, Airways shall have the right to
review any consent resolutions of the VJET Board of Directors prior to signing.
Exercise of the Airways Observation Rights shall not be, and shall not be
construed as being, participation by Airways on the Board of Directors of VJET.
Notwithstanding the foregoing, the Airways representative shall not be
entitled to be present during discussions of any matters directly relating to
Airways and shall not have the right to review in advance any consent
resolutions relating to Airways.
(b) VJET and its Subsidiaries will conduct their respective businesses
in a manner consistent with the current operation of their business and only in
the ordinary course and, by way of amplification and not limitation, neither
VJET nor its Subsidiaries will without the prior written consent of Airways
which consent shall not be unreasonably withheld (i) except with respect to VJET
Common Stock issued upon exercise of options vested prior to the Closing Date,
issue any capital stock, or (ii) declare, set aside or pay any dividend or
distribution with respect to the capital stock of VJET or any of its
Subsidiaries (other than the payment of a dividend by a subsidiary of VJET to
VJET or to another subsidiary of VJET), or (iii) directly or indirectly redeem,
purchase or otherwise acquire any capital stock of VJET or any of its
Subsidiaries, or (iv) effect a split or reclassification of any capital stock of
VJET or a recapitalization of VJET, or (v) change the charter or bylaws of VJET,
or (vi) grant any increase in the compensation payable or to become payable by
VJET or its Subsidiaries to officers or salaried employees of VJET or its
Subsidiaries whose 1996 remuneration exceeded $50,000 or grant any increase
regardless of amount, in any bonus, insurance, pension or other benefit plan,
program, payment or arrangement made to, for or with any officers or employees,
or (vii) adopt any employee benefit plans including but not limited to stock
option plans, or (viii) acquire direct or indirect ownership or control of
voting shares of any other corporation, or of any interest in any partnership,
joint venture, association or similar organization, other than shares acquired
in satisfaction of a security interest or of a debt previously contracted for in
a fiduciary or custodial capacity, or (ix) waive any rights of substantial
value, or (x) enter into any material agreement, contract or commitment calling
for aggregate payments in excess of $200,000 over the life of the contract or
extending for more than twelve months other than (a) financing or refinancing
agreements and fees and expenses paid in connection therewith, (b) fees paid to
lenders to secure consents to this transaction and to VJET's debt refinancing,
and (c) contracts entered into for the maintenance, repairs or refurbishment of
aircraft or those disclosed on Schedule 4.02(c) to VJET's Disclosure Statement
or (xi) acquire a fee interest in any real property.
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(c) Without the prior written consent of Airways, neither VJET nor any
of its Subsidiaries will undertake or enter into any sale, disposition,
surrender, acquisition, agreement or transaction, between the date of this
Agreement and the Closing Date, relating to any of their assets except in the
ordinary course of business or as contemplated by this Agreement or as disclosed
in the VJET SEC Filings.
(d) VJET will pay and discharge all taxes, assessments and
governmental charges lawfully imposed upon it, upon any VJET Subsidiary or upon
any of their property, or upon the income and profits thereof to the extent such
taxes, assessments and governmental charges are due and payable on or before the
Closing Date; provided, however, that nothing herein contained shall require
VJET or any VJET Subsidiary to pay or discharge any tax assessment or
governmental charge, so long as the validity thereof shall be contested in good
faith and by appropriate proceedings unless property essential to the conduct of
VJET or of any VJET Subsidiary's business will be lost, forfeited or materially
endangered.
(e) VJET will maintain its existence and the existence of the
Subsidiaries as corporations in good standing under the laws of the State of
Nevada, other states in which VJET and the VJET Subsidiaries operate and the
United States and comply and cause the VJET Subsidiaries to comply in all
material respects with all laws, governmental regulations, rules and ordinances,
and judicial orders, judgments and decrees applicable to their business or their
properties, except while contesting the validity of any of the foregoing in good
faith and by appropriate proceedings.
(f) VJET will notify Airways in writing within five (5) days of the
commencement of any material litigation against VJET or any of its Subsidiaries
or of the existence of any adverse business conditions threatening the
continued, normal business operations of VJET or any of its Subsidiaries, or of
any agreement, consent or order of the FAA or DOT involving VJET or any of its
Subsidiaries.
(g) VJET shall at all times maintain, preserve and keep its properties
and the properties of its Subsidiaries in good repair, working order and
condition in all material respects so that the business carried on in connection
therewith may be properly and advantageously conducted, except for those items
that have been designated as obsolete or damaged beyond economic repair.
(h) VJET will make every reasonable effort to fulfill its contractual
obligations and the contractual obligations of its Subsidiaries, and to maintain
in effect its insurance and the insurance of its Subsidiaries.
(i) VJET will not enter into, institute or permit any VJET Subsidiary
to enter into or institute, any employment contract, employee policy manual,
deferred compensation, non-competition, bonus, stock option, profit-sharing,
pension, retirement, consultation after retirement, payments upon retirement,
incentive, extraordinary vacation accrual, education payment or benefit,
disability insurance (including medical, travel, group life or other similar
insurance plans) agreement, plan or arrangement or any other similar arrangement
or plan, or, except as required by applicable law or regulation, renew, amend,
modify or terminate any such arrangement or plan now in existence.
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(j) VJET will not enter into, or permit any Subsidiary to enter into,
any agreement, understanding or commitment, written or oral, with any other
person which would be a breach of the obligations of VJET arising under this
Agreement.
(k) VJET will not make, or permit any Subsidiary to make any loan,
advance or commitment to extend credit to any of the directors, officers or any
affiliated or related persons of the directors or officers of VJET or of any
VJET Subsidiary; renew, or permit any VJET Subsidiary to renew, any outstanding
loan or any outstanding commitment to extend credit to any directors, officers
or any affiliated or related persons of the directors or officers of VJET or of
any VJET Subsidiary; increase, or permit any VJET Subsidiary to increase, any
outstanding loan to any of the directors, officers of any affiliated or related
persons of the directors or officers of VJET or of any VJET Subsidiary; or enter
into any agreement, understanding or commitment, written or oral, which
obligates VJET, any of the VJET Subsidiaries or their successors or assigns to
make any loan or advance or payment to any of the directors or officers or to
any affiliated or related persons of any of the directors or officers of VJET or
of any VJET Subsidiary.
(l) VJET agrees to provide to the law firm or accounting firm
providing the tax opinion referred to in Section 5.02(n) hereof, those customary
representations (to the extent true) which would be required by the Internal
Revenue Service under Revenue Procedure 86-42 to obtain a favorable ruling that
the Merger qualifies as a tax-deferred reorganization under Internal Revenue
Code Section 368(a).
4.03 Airways Stockholder Approval. Subject to Section 4.04 hereof,
Airways agrees to submit this Agreement and the Plan of Merger to its
stockholders for approval, all as provided by law and its Articles of
Incorporation, at a meeting (the "Airways Special Meeting") which shall be held
prior to the Closing Date. The Board of Directors of Airways will, subject to
Section 4.04 hereof, recommend that the stockholders of Airways vote to adopt
and approve the Merger and use its best efforts to solicit from stockholders
proxies in favor of such adoption and approval. By separate agreement, Xxxxxx
X. Xxxxxxx, Xxxxxx X. Xxxxxxx and Xxxx X. Xxxxxx (collectively, the "Insiders")
have agreed that they will not dispose of their shares of Airways Common Stock
and will vote in favor of the Merger; provided, however, that the Insiders'
obligations under said Agreement will be suspended if the Board of Directors of
Airways determines in the exercise of its fiduciary duties to entertain,
negotiate or participate in any other Acquisition Proposal for so long as it is
so entertaining, negotiating or participating in any such other Acquisition
Proposal (and shall terminate if Airways accepts a Superior Proposal) and pays
the termination fee set forth in Section 5.04(c).
4.04 No Solicitation. From and after the date hereof, Airways will not,
and shall use its reasonable best efforts not to permit, any of its officers,
directors, employees, attorneys, financial advisors, agents or other
representatives or those of any of its Subsidiaries to, directly or indirectly,
solicit, initiate or knowingly encourage (including by way of furnishing
information) any Acquisition Proposal from any person, or engage in or continue
discussions or negotiations relating thereto; provided, however, that Airways
may engage in discussions or negotiations with, and furnish information
concerning Airways and its Subsidiaries, businesses, properties or assets to,
any third party which makes an Acquisition Proposal if the Board of Directors
of Airways concludes in good faith after consultation with its outside counsel
(who may be Airways' engaged outside counsel) that
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the failure to take such action would present a reasonable possibility of
violating the obligations of such Board to Airways or to Airways' stockholders
under applicable law. Airways will promptly (but in no case later than 48
hours) notify VJET of the receipt of any Acquisition Proposal, including the
material terms and conditions thereof and the identify of the person or group
making such Acquisition Proposal, and will promptly (but in no case later than
48 hours) notify VJET of any determination by Airways' Board of Directors that
a Superior Proposal (as hereinafter defined) has been made. As used in this
Agreement, (i) "Acquisition Proposal" shall mean any proposal or offer, or any
expression of interest by any third party relating to Airways' willingness or
ability to receive or discuss a proposal or offer, in each case made prior to
the stockholder vote at the Airways Special Meeting, other than a proposal or
offer by VJET or any of its Subsidiaries, for a merger, consolidation or other
business combination involving, or any purchase of, all or substantially all of
the assets of Airways or Airways' Subsidiary or 100% of the voting securities
of Airways, and (ii) "Superior Proposal" shall mean a bona fide Acquisition
Proposal made by a third party on terms that a majority of the members of the
Board of Directors of Airways determines in their good faith reasonable
judgment (based on the advice of an independent financial advisor) may be more
favorable to Airways and to its stockholders than the transactions contemplated
hereby and for which any required financing is committed or which, in the good
faith reasonable judgment of a majority of such members (after consultation
with any independent financial advisor), is then available to such third party.
4.05 VJET Stockholder Approval. VJET agrees to submit to its stockholders
a proposal to amend its Articles of Incorporation and Bylaws as set forth in
Exhibit B annexed hereto and made a part hereof and, if required under Nevada
law or by NASDAQ, VJET agrees to submit this Agreement and the Plan of Merger
to its stockholders for approval, all as provided by law and its Articles of
Incorporation, at a meeting (the "VJET Meeting") which shall be held prior to
the Closing Date. The Board of Directors of VJET will recommend that the
stockholders of VJET vote to adopt and approve the amendment to its Articles of
Incorporation, Bylaws and the Merger, and use their best efforts to solicit
from stockholders proxies in favor of such adoption and approval. By separate
agreement, at least three of the following persons (Xxxxxxx X. Xxxxx, Xxxxxxx
X. Xxxxxxxxx, Xx., Xxxxx X. Xxxxxx and Xxxxxx X. Xxxxxx) shall agree that they
will vote in favor of the amendment to VJET's Articles of Incorporation and
By-laws and in favor of the Merger.
4.06 No Granting of Options.
(a) Prior to the Closing Date, neither Airways nor any of its
Subsidiaries will, without the prior written consent of VJET, grant any options,
warrants or other rights to purchase or otherwise acquire any shares of its
capital stock or issue any securities convertible into shares of its capital
stock or to accelerate the vesting of any such option, warrant or right.
(b) Prior to the Closing Date, neither VJET nor any of its
Subsidiaries will, without the prior written consent of Airways, grant any
options, warrants or other rights to purchase or otherwise acquire any shares of
its capital stock or issue any securities convertible into shares of its capital
stock or to accelerate the vesting of any such option, warrant or right except
that options may be granted to newly hired executive officers in amounts
consistent with prior practice.
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4.07 VJET Registration Statement. Prior to the Effective Date of the
Merger, VJET shall have prepared and filed with the SEC, a registration
statement on Form S-4 (the "Registration Statement") under the Securities Act
of 1933, as amended (the "Securities Act") , and under the blue sky laws of
such states as may be required by law, for the purpose of registering the
shares of VJET Common Stock into which the shares of Airways Common Stock will
be converted pursuant to Article V of the Plan of Merger, which Registration
Statement is intended to permit Airways' stockholders (other than Airways
Affiliates who would be subject to Rule 144 limitations) to freely trade their
shares. VJET will use reasonable efforts to cause such Registration Statement
to become effective as soon as reasonably practicable.
4.08 Information for Registration Statement and Proxy Statement. Airways
and VJET will each furnish to the other such data and information relating to
it as the other may reasonably request for the purpose of including such data
and information in any proxy statement or registration statement which the
other may use in connection with the special meetings of stockholders to be
held to consider and take action with respect to the approval and adoption of
this Agreement and the Plan of Merger.
4.09 Restricted VJET Common Stock. Airways will deliver to VJET not later
than three business days before the Effective Date of the Merger a schedule
listing all Airways Affiliates and the amounts of shares held by each, for the
purpose of permitting VJET to imprint appropriate legends on the certificates
representing the shares of VJET Common Stock to be issued pursuant to the
Merger to Airways Affiliates. For the purposes of this Agreement, "Airways
Affiliates" means each director of Airways and each person who, should such
person resell, transfer or distribute VJET Common Stock acquired by him in
connection with the Merger, would be subject to the requirements of paragraphs
(c) and (d) of Rule 145, as amended, under the Securities Act, or who would
otherwise be considered to be an Airways Affiliate under the applicable rules
and regulations of the SEC and the Securities Act.
4.10 Consents. Airways and VJET shall each use its best efforts to obtain
the consent or approval of each person whose consent or approval shall be
required in order to permit the respective party to consummate the Merger
without acceleration of indebtedness of such party or without breaching any
contract to which such party is subject. Airways may not, without VJET's prior
written consent, pay or agree to pay more than a mutually agreed amount to
obtain any such consent.
4.11 Best Efforts. Upon the terms and subject to the conditions of this
Agreement, each of VJET and Airways agrees to use its respective best efforts
to take, or cause to be taken, and to assist and cooperate with the other party
hereto in doing, all things reasonably necessary, proper or advisable under
applicable laws and regulations to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this Agreement
and the Plan of Merger, including, without limitation, using such best efforts
to obtain any necessary actions, waivers, consents and approvals from the DOT,
the FAA and other governmental agencies and make all necessary registrations
and filings (including, without limitation, joint filings with the DOT, the
United States Federal Trade Commission and other governmental agencies).
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4.12 Indemnification and Insurance.
(a) VJET agrees that all rights to exculpation and indemnification for
acts or omissions occurring prior to the Effective Date of the Merger now
existing in favor of the current or former directors or officers (the
"Indemnified Parties") of Airways as provided in its charter, by-laws, in any
agreement or any statute or other law shall survive the Merger and shall
continue in full force and effect in accordance with their terms. For six years
from the Effective Date of the Merger, VJET shall indemnify the Indemnified
Parties to the same extent as such Indemnified Parties are entitled to
indemnification pursuant to the preceding sentence.
(b) For six years and one month from the Effective Date of the Merger,
VJET shall, maintain in effect directors' and officers' liability insurance
covering those persons who are currently covered by Airways' directors' and
officers' liability insurance policy with respect to all acts occurring prior to
the Effective Date of the Merger. Such continuing liability insurance shall be
maintained with limits not less than $25,000,000 so long as it is commercially
reasonable to do so, but in no event less than the coverage limits applicable to
the then current officers and directors of VJET.
4.13 Governmental Reports.
(a) Between the date of this Agreement and the Closing Date, Airways
shall furnish or make available to VJET any and all reports, not heretofore
delivered to VJET under this Agreement or which are filed subsequent to the date
of this Agreement, to any state or federal government, agency or department,
including but not limited to, the FAA, DOT, IRS, EPA, FTC and PBGC.
(b) Between the date of this Agreement and the Closing Date, VJET
shall furnish or make available to Airways any and all reports, not heretofore
delivered to Airways under this Agreement or which are filed subsequent to the
date of this Agreement, to any state or federal government, agency or
department, including but not limited to, the FAA, DOT, IRS, EPA, FTC and PBGC.
4.14 SEC Filings. Each party shall provide the other party with all
reports and other filings it makes with the SEC under the Securities Act or
under the Exchange Act from the date of this Agreement to the Closing Date.
4.15 Listing of VJET Common Stock. VJET shall use reasonable efforts to
obtain, prior to the Closing Date, approval for listing on the NASDAQ Stock
Market ("NASDAQ"), upon official notice of issuance, the shares of VJET Common
Stock constituting the Merger Price.
4.16 Xxxx-Xxxxx-Xxxxxx Filing. VJET shall assume the responsibility for
completing and filing the Notification and Report Form required by the HSR Act.
Airways shall furnish VJET with all information needed from Airways to complete
the Xxxx-Xxxxx-Xxxxxx Notification and Report Form, and shall otherwise fully
cooperate with VJET in the completion and filing of the Notification and Report
Form.
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4.17 Fees and Expenses. Except to the extent set forth in Section
5.04(d), all fees and expenses incurred in connection with the Merger and the
other transactions contemplated hereby shall be paid by the party incurring
such fees or expenses, whether or not the Merger is consummated.
ARTICLE V
Conditions of Merger; Abandonment of Merger
5.01 Conditions of Obligations of VJET. The obligations of VJET to effect
the Merger shall be subject to the following conditions:
(a) Airways Stockholder and Board of Directors Approvals. Airways
shall have furnished VJET with (i) evidence that the stockholders of Airways
shall have approved the Merger, (ii) certified copies of resolutions duly
adopted by the Board of Directors of Airways authorizing all necessary and
proper corporate action to enable Airways to comply with the terms of this
Agreement and the Plan of Merger and approving the execution and delivery to
VJET of this Agreement and the execution and delivery of the Plan of Merger to
VJET; and (iii) an Incumbency Certificate for the appropriate officers of
Airways.
(b) Representations and Warranties of Airways to be True. Except to
the extent waived hereunder, (i) the representations and warranties of Airways
herein contained shall be true on the Closing Date with the same effect as
though made at such time as if none of such representations and warranties
contained any qualifications as to materiality or the absence of a Material
Adverse Effect; provided, however, that notwithstanding the foregoing, this
condition shall be deemed to be satisfied if all breaches of such
representations and warranties, do not cumulatively constitute a Material
Adverse Effect; and (ii) Airways shall have performed all obligations and
complied with all covenants required by this Agreement to be performed or
complied with by it prior to the Effective Date of the Merger. Airways shall
also have delivered to VJET a certificate of Airways, dated the Effective Date
of the Merger and signed by its Chairman of the Board or President to both of
the aforementioned effects. Notwithstanding the foregoing, VJET shall not rely
on this Section 5.01(b) to excuse its performance hereunder unless: (i) VJET
shall have given Airways written notice of any breach of covenants and Airways
fails to cure such breach within a reasonable time (but not more than ten days)
after receipt of such notice, and (ii) the breach of representations, warranties
or covenants will constitute a Material Adverse Effect with respect to Airways.
(c) Third Party Consents. Airways shall have obtained consents to the
transactions contemplated by this Agreement to the extent required from its bank
lender group, from other persons which are parties to material contracts with
Airways or its Subsidiaries (except Comair, Inc. and Delta Air Lines, Inc.) and
from all federal, state or local governmental agencies except to the extent the
failure to obtain one or more consents would not materially affect the
continuing business of the Airways' Subsidiary. There shall have been completed
all Xxxx-Xxxxx-Xxxxxx and other like governmental filings, and there shall have
been obtained Xxxx-Xxxxx-Xxxxxx approval or expiration of the applicable waiting
period.
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(d) Registration of VJET Stock. The Registration Statement shall have
become effective under the Securities Act and no stop order suspending the
effectiveness shall have been issued and no proceedings for that purpose shall
have been instituted, pending or contemplated under such Act, and the shares to
be issued to Airways' stockholders pursuant hereto shall have been duly
registered under the Securities Act.
(e) No Material Adverse Effect. Airways shall not have suffered or
incurred any Material Adverse Effect since March 31, 1997, other than as
disclosed by Airways to VJET (whether by public filings or separate disclosure)
prior to the execution of this Agreement.
(f) VJET Bond Holder Consent. VJET shall have secured the consent to
the transactions contemplated hereby by the requisite proportion of the holders
of the VJET 10 1/4% Senior Notes due 2001. VJET agrees to use good faith
efforts to obtain such bondholder consent on or before the earlier of the date
the Registration Statement is declared effective by the SEC or the date that is
sixty (60) days after the date of this Agreement.
(g) Performance of Agreement. There shall not have been issued and be
in effect any order of any court or tribunal of competent jurisdiction or
governmental agency which in effect prohibits the performance of this Agreement
or the Merger and the transactions contemplated hereby, or would impose
limitations on the ability of VJET effectively to exercise and possess all the
rights, privileges, immunities and franchises of Airways or of any Airways
Subsidiary as of the Closing Date.
(h) Statutory Requirements; Litigation. All statutory requirements
for the valid consummation by VJET and Airways of the transactions contemplated
by this Agreement and the Plan of Merger shall have been fulfilled; all
authorizations, consents and approvals of all federal, state or local
governmental agencies and authorities required to be obtained in order to permit
consummation by VJET and Airways of the transactions contemplated by this
Agreement and the Plan of Merger and to permit the business presently carried on
by Airways and its Subsidiaries to continue unimpaired immediately following the
Effective Date of the Merger shall have been obtained; the FAA and DOT shall
have approved the transaction in such a manner that Airways and its Subsidiaries
shall not after the Merger become subject to any restrictions currently
applicable to VJET or its Subsidiaries or subject to any restrictions not
currently applicable to Airways and its Subsidiaries; between the date of this
Agreement and the Effective Date of the Merger, no governmental agency, whether
federal, state or local, shall have instituted (or threatened to institute
either orally or in a writing directed to Airways, any of its Subsidiaries, VJET
or any of its Subsidiaries) an investigation which is pending on the Effective
Date of the Merger relating to the Merger and between the date of this Agreement
and the Effective Date of the Merger no action or proceeding shall have been
instituted or, to the knowledge of VJET, shall have been threatened before a
court or other governmental body or by any public authority to restrain or
prohibit the transaction contemplated by this Agreement or the Plan of Merger or
to obtain damages in respect thereof.
(i) Opinion of Counsel of Airways. VJET shall have received from
Xxxxxx & Xxxxxx, counsel to Airways, an opinion, dated the Closing Date, in form
and substance satisfactory
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to VJET's counsel, Ellis, Funk, Xxxxxxxx, Xxxxxxxx & Dokson, P.C., to the
effect that (i) each of Airways and its Subsidiaries is a corporation duly
organized and validly existing and in good standing under the laws of the
jurisdiction of its respective incorporation, (ii) each of Airways and its
Subsidiaries is duly qualified or licensed, as may be required, as a foreign
corporation, and in good standing in each jurisdiction where the failure to do
so would constitute a Material Adverse Effect, (iii) each of Airways and its
Subsidiaries has the corporate power to carry on its business as now being
conducted, (iv) the authorized capital stock of Airways is as set forth in
Section 2.03 hereof, and stating the number of such shares which have been
issued, and that such issued shares have been duly authorized, are validly
issued and outstanding, and are fully paid and nonassessable, (v) all of the
outstanding shares of capital stock of the Airways Subsidiaries are directly or
indirectly owned free and clear of all liens, charges or encumbrances, all of
such shares have been duly authorized, are validly issued and outstanding, and
are fully paid and nonassessable, and neither Airways nor its Subsidiaries is a
party to or bound by any outstanding option or agreement to sell, issue or
otherwise dispose of any capital stock of Airways or its Subsidiaries except
the Airways options and warrants referred to in Section 2.03 hereof, and (vi)
this Agreement and the Plan of Merger each has been duly executed and delivered
by Airways and is the valid, binding and enforceable obligation of Airways
(subject to equity principles of general application and to applicable
bankruptcy, reorganization, insolvency and moratorium laws and other laws from
time to time in effect affecting the enforcement of creditor's rights generally
and no opinion shall be required with respect to the enforceability of any
liquidated damage provision contained herein), and all corporate action by the
Board of Directors and stockholders of Airways required to authorize the Merger
has been taken, and Airways has the corporate power to effect the Merger
provided for in this Agreement and the Plan of Merger. In rendering such
opinion such counsel may rely, to the extent such counsel deems such reliance
necessary or appropriate, on opinions of local counsel as to matters involving
the law other than that of the United States or the State of Delaware and, as
to matters of fact, upon certificates of state officials and of corporate
officers of Airways, provided the extent of such reliance is specified in such
opinion.
(j) VJET Stockholder Approval. The holders of a majority of the
outstanding shares of VJET Common Stock shall have approved the amendment to
VJET's Articles of Incorporation, the amendment to the By-laws set forth in
Exhibit "B" attached hereto and the Merger at a meeting of stockholders duly
called for such purpose.
(k) Plan of Merger. Airways shall have delivered to VJET a duly
executed copy of the Plan of Merger and Articles of Merger.
(l) Listing of VJET Common Stock. The shares of VJET Common Stock to
be delivered to Airways stockholders in payment of the Merger Price shall have
been approved for listing on NASDAQ, upon official notice of issuance.
(m) Fairness Opinion. The Board of Directors of VJET shall have
received a written opinion from The Xxxxxxxx-Xxxxxxxx Company, Inc. dated as of
the date of the Proxy Statement relating to VJET's stockholder meeting
contemplated by Section 5.01(j), in customary form, stating that the terms of
the Merger are fair to the stockholders of VJET from a financial point of view;
provided, however, that this condition shall be deemed to have been waived if
(i) VJET
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does not receive such fairness opinion on or before the date of such Proxy
Statement, and (ii) VJET does not terminate this Agreement as provided in
Section 5.03(g). VJET agrees to use its good faith efforts to obtain such
fairness opinion within such time period.
(n) Minute Books and Stock Ledgers. Airways shall have delivered to
VJET the minute books and stock ledgers for Airways and each of its
Subsidiaries.
(o) Tax Opinion. VJET shall have received a tax opinion from Ernst &
Young LLP to the effect that the Merger will be treated for federal income tax
purposes as a tax free reorganization within the meaning of Internal Revenue
Code Section 368(a); provided, however, that if Ernst & Young LLP does not
provide such opinion, then Airways shall have the right to have such opinion
provided by Airways' counsel or independent public accountants.
5.02 Conditions of Obligation of Airways. The obligation of Airways to
effect the Merger shall be subject to the following conditions:
(a) VJET Stockholders and Board of Director Approvals. VJET shall
have furnished Airways with (i) evidence that the stockholders of VJET shall
have approved the amendment to its Articles of Incorporation and Bylaws set
forth in Exhibit A and, if required by NASDAQ, the Merger (ii) certified copies
of resolutions duly adopted by its Board of Directors authorizing all necessary
and proper corporate action to enable VJET to comply with the terms of this
Agreement and the Plan of Merger and approving the execution and delivery to
Airways of this Agreement and the Plan of Merger; and (iii) Incumbency
Certificates for the officers of VJET.
(b) Representations and Warranties of VJET to be True. Except to the
extent waived hereunder, (i) the representations and warranties of VJET herein
contained shall be true on the Closing Date with the same effect as though made
at such time as if none of such representations and warranties contained any
qualifications as to materiality or the absence of a Material Adverse Effect;
provided, however, notwithstanding the foregoing this condition shall be deemed
to be satisfied if all breaches of such representations and warranties do not
cumulatively constitute a Material Adverse Effect; and (ii) VJET shall have
performed all obligations and complied with all covenants required by this
Agreement to be performed or complied with by it prior to the Effective Date of
the Merger. VJET shall also have delivered to Airways a certificate of VJET,
dated the Effective Date of the Merger and signed by its Chairman of the Board
or President as to both of the aforementioned effects. Notwithstanding the
foregoing, Airways shall not rely on this Section 5.02(b) to excuse its
performance hereunder unless: (i) Airways shall have given VJET written notice
of any breach of covenants and VJET fails to cure such breach within a
reasonable time (but not more than ten days) after receipt of such notice, and
(ii) the breach of representations, warranties or covenants will constitute a
Material Adverse Effect with respect to VJET or has or is likely to materially
adversely affect VJET's stock price.
(c) Third Party Consents. VJET shall have obtained consents to the
transactions contemplated by this Agreement to the extent required from all
federal, state or local governmental agencies except to the extent the failure
to obtain one or more consents would not materially affect VJET's continuing
business. There shall have been completed all Xxxx-Xxxxx-Xxxxxx and other like
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governmental filings, and there shall have been obtained Xxxx-Xxxxx-Xxxxxx
approval or expiration of the applicable waiting period.
(d) VJET Bondholder Consent. VJET shall have secured the consent of
the requisite proportion of the holders of the VJET 10 1/4% Senior Notes due
2001 to the transactions contemplated hereby.
(e) Registration of VJET Stock. The Registration Statement shall have
become effective under the Securities Act and all other applicable statutes and
no stop order suspending the effectiveness shall have been issued and no
proceedings for that purpose shall have been instituted, pending or contemplated
under such Act, and the shares to be issued to Airways' stockholders pursuant
hereto shall have been duly registered under the Securities Act.
(f) No Material Adverse Effect. VJET shall not have suffered or
incurred any Material Adverse Effect since March 31, 1997, other than as
disclosed by VJET to Airways (whether by public filings or separate disclosure)
prior to the execution of this Agreement.
(g) Statutory Requirements; Litigation. All statutory requirements
for the valid consummation by VJET and Airways of the transaction contemplated
by this Agreement and the Plan of Merger shall have been fulfilled; all
authorizations, consents and approvals of all federal, state or local
governmental agencies and authorities required to be obtained in order to permit
consummation by VJET and Airways of the transactions contemplated by this
Agreement and the Plan of Merger and to permit the business presently carried on
by VJET to continue unimpaired immediately following the Effective Date of the
Merger shall have been obtained; the FAA and DOT shall have approved the
transaction in such a manner that Airways and its Subsidiaries will not after
the Merger become subject to any restrictions currently applicable to VJET or
its Subsidiaries or subject to any restrictions not currently applicable to
Airways and its Subsidiaries; between the date of this Agreement and the
Effective Date of the Merger no governmental agency, whether federal, state or
local, shall have instituted (or threatened to institute either orally or in a
writing directed to Airways, any of its Subsidiaries, VJET or its Subsidiaries)
an investigation which is pending on the Effective Date of the Merger relating
to the Merger and between the date of this Agreement and the Effective Date of
the Merger no action or proceeding shall have been instituted or, to the
knowledge of Airways, shall have been threatened before a court or other
governmental body or by any public authority to restrain or prohibit the
transaction contemplated by this Agreement or the Plan of Merger or to obtain
damages in respect thereof.
(h) Performance of Agreement. There shall not have been issued and be
in effect any order of any court or tribunal of competent jurisdiction or
governmental agency which in effect prohibits the performance of this Agreement
or the Merger and the transactions contemplated hereby.
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(i) Opinion of Counsel of VJET. Airways shall have received from
Ellis, Funk, Xxxxxxxx, Xxxxxxxx & Dokson, P.C., counsel to VJET, an opinion,
dated the Closing Date, in form and substance satisfactory to Airways' counsel,
Xxxxxx & Xxxxxx to the effect that (i) VJET is a corporation duly organized and
validly existing and in good standing under the laws of the State of Nevada,
(ii) VJET has the corporate power to carry on its business as now being
conducted, (iii) the authorized capital stock of VJET is as set forth in Section
3.03 hereof, and stating the number of shares of such authorized capital stock
which are issued, that such issued shares have been duly authorized, are validly
issued and outstanding, and are fully paid and nonassessable, (iv) the shares of
VJET Common Stock for which the shares of Airways Common Stock are to be
exchanged pursuant to the Plan of Merger have been duly authorized and,
immediately after the Effective Date of the Merger, will be duly and validly
issued and will be fully paid and nonassessable, (v) this Agreement and the Plan
of Merger have been duly executed and delivered by VJET and this Agreement is
the valid, binding and enforceable (subject to equity principles of general
application and to bankruptcy, reorganization, insolvency and moratorium laws
and other laws from time to time in effect affecting the enforcement of
creditors' rights generally and no opinion shall be required with respect to the
enforceability of any liquidated damage provision contained herein) obligation
of VJET, the Plan of Merger is the valid and binding obligation of VJET, all
corporate action by the Board of Directors of VJET and the stockholders of VJET
required to authorize the Merger has been taken, and VJET has the corporate
power to effect the Merger provided for in this Agreement and the Plan of
Merger, and (vi) the Registration Statement shall have been declared effective
by the SEC. In rendering such opinion such counsel may rely, to the extent such
counsel deems such reliance necessary or appropriate, on opinions of local
counsel as to matters involving the law other than that of the United States or
the State of Nevada and, as to matters of fact, upon certificates of state
officials and of corporate officers of VJET, provided the extent of such
reliance is specified in such opinion.
(j) Airways Stockholder Approval. The holders of a majority of the
outstanding shares of Airways Common Stock shall have approved the Merger at a
meeting of stockholders duly called and held for such purpose.
(k) Plan of Merger. VJET shall have delivered to Airways a duly
executed copy of the Plan of Merger and Articles of Merger containing the Plan
of Merger.
(l) Listing of VJET Common Stock. The shares of VJET Common Stock to
be delivered to Airways stockholders in payment of the Merger Price shall have
been approved for listing on NASDAQ, upon official notice of issuance.
(m) Fairness Opinion. The Board of Directors of Airways shall have
received a written opinion from Xxxxx Xxxxxx Incorporated dated as of the date
of the Proxy Statement relating to Airways' stockholders meeting contemplated by
Section 5.02(j), in customary form, stating that the terms of the Merger are
fair to the stockholders of Airways from a financial point of view; provided,
however, that this condition shall be deemed to have been waived if (i) Airways
does not receive such fairness opinion on or before the date of said Proxy
Statement, and (ii) Airways does not terminate this Agreement as provided in
Section 5.03(h). Airways agrees to use its good faith efforts to obtain such
fairness opinion within such time period.
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(n) Tax Opinion. Airways shall have received a tax opinion from
Xxxxxx & Xxxxxx to the effect that the Merger will be treated for federal income
tax purposes as a tax free reorganization within the meaning of Internal Revenue
Code Section 368(a) and that the tax treatment to be accorded Airways'
stockholders in connection with the spin-off of Airways which occurred in
September 1995, shall not be adversely affected by the consummation of the
transactions contemplated hereby; provided, however, that if Xxxxxx & Xxxxxx
does not provide such opinion, then VJET shall have the right to have such
opinion provided by VJET's counsel or independent public accountants. For
purposes of this subparagraph (n), the law firm or accounting firm may assume
that the Airways' stockholders will maintain their respective interests in VJET
after the Merger to the extent necessary to support the rendering of such
favorable opinion.
(o) No Event of Default on VJET Secured Debt. There shall not be then
in existence any event of default under any of VJET's secured debt.
5.03 Termination of Agreement and Abandonment of Merger. Anything herein
to the contrary notwithstanding, this Agreement and the Merger contemplated
hereby may be terminated at any time before the Effective Date of the Merger,
whether before or after approval of this Agreement by the respective
stockholders of VJET and Airways, as follows, and in no other manner:
(a) Mutual Consent. By mutual consent of the Boards of Directors of
VJET and Airways.
(b) Conditions of Airways Not Met. By the Board of Directors of VJET
if, by November 30, 1997 or such later date as may be determined by mutual
agreement of VJET and Airways, the conditions set forth in Section 5.01 of this
Article V shall not have been met (or waived as provided in Article VIII of this
Agreement).
(c) Conditions of VJET Not Met. By the Board of Directors of Airways
if, by November 30, 1997 or such later date as may be determined by mutual
agreement of VJET and Airways, the conditions set forth in Section 5.02 of this
Article V shall not have been met (or waived as provided in Article VIII of this
Agreement).
(d) Expiration Date. By the Board of Directors of either VJET or
Airways if the Merger shall not have become effective by November 30, 1997,
which date may be extended by mutual agreement of the Board of Directors of VJET
and Airways.
(e) Superior Proposal. By Airways if Airways receives a Superior
Proposal and pays the termination fee set forth in Section 5.06(a).
(f) Acquisition Proposal. By VJET if Airways receives an Acquisition
Proposal which Airways continues to entertain or negotiate for a period of 21
days after its receipt.
(g) VJET Fairness Opinion. By VJET if it does not receive the
fairness opinion referred to in Section 5.01(m) within the time period provided
therein; provided, however, that this
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right to terminate may not be exercised later than ten (10) days after the date
the Registration Statement is declared effective by the SEC.
(h) Airways Fairness Opinion. By Airways if it does not receive the
fairness opinion referred to in Section 5.02(m) within the time period provided
therein; provided, however, that this right to terminate may not be exercised
later than ten (10) days after the date the Registration Statement is declared
effective by the SEC.
5.04 Liquidated Damages to VJET.
(a) In the event VJET is ready, willing and able to consummate the
Merger, but Airways shall fail to consummate the Merger after all of the
conditions to Airways' performance as set forth in Section 5.02 hereof shall
have been satisfied or shall have been waived by Airways, then Airways shall pay
to VJET upon its demand therefor, in immediately available funds, Five Million
Dollars ($5,000,000) as liquidated damages and not as a penalty.
(b) In the event VJET shall elect not to consummate the Merger as a
result of Airways' failure to comply in all material respects with all material
covenants required to be performed by Airways prior to the Effective Date of
Merger as provided in Sections 4.01 and 4.06 of this Agreement, then Airways
shall pay to VJET upon its demand therefor, in immediately available funds, Five
Million Dollars ($5,000,000) as liquidated damages and not as a penalty.
(c) In the event the Merger is not consummated for the reasons set
forth in this Section 5.04, VJET will suffer substantial damage to its
reputation and public image, in addition to the costs and expenses incurred by
it in the pursuit of this transaction. Airways acknowledges and agrees that the
actual losses to be suffered by VJET in the event the Merger is not consummated
for the reasons set forth in this Section 5.04 will be difficult to ascertain
and that these liquidated damages have been arrived at after a good faith effort
to estimate such losses and are reasonable.
5.05 Liquidated Damages to Airways.
(a) In the event Airways is ready, willing and able to consummate the
Merger, but VJET shall fail to consummate the Merger after all of the conditions
to VJET's performance as set forth in Section 5.01 of this Agreement shall have
been satisfied or shall have been waived by VJET, then VJET shall pay to Airways
upon its demand therefor, in immediately available funds, Five Million Dollars
($5,000,000) as liquidated damages and not as a penalty.
(b) In the event Airways shall elect not to consummate the Merger as a
result of VJET's failure to comply in all material respects with all material
covenants required to be performed by VJET prior to the Effective Date of
Merger as provided in Sections 4.02 and 4.06 of this Agreement, then VJET shall
pay to Airways upon its demand therefor, in immediately available funds, Five
Million Dollars ($5,000,000) as liquidated damages and not as a penalty.
(c) In the event the Merger is not consummated for the reasons set
forth in this Section 5.05, Airways will suffer substantial damage to its
reputation and public image, in addition
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to the costs and expenses incurred by it in the pursuit of this transaction.
VJET acknowledges and agrees that the actual losses to be suffered by Airways
in the event the Merger is not consummated for the reasons set forth in this
Section 5.05 will be difficult to ascertain and that these liquidated damages
have been arrived at after a good faith effort to estimate such losses and are
reasonable.
5.06 Certain Termination Payments.
(a) In the event Airways terminates this Agreement pursuant to Section
5.03(e), then Airways shall pay to VJET, upon VJET's demand, a termination fee
equal to the sum of Three Million Dollars ($3,000,000) in immediately available
funds.
(b) In the event VJET terminates this Agreement pursuant to Section
5.03(f), then Airways shall pay to VJET, upon VJET's demand all of VJET's
out-of-pocket costs incurred to third parties in connection with this Agreement
and the transactions contemplated hereby.
ARTICLE VI
Determination of the Merger Price
6.01 The Merger Price. Upon the Effective Date of the Merger, holders of
Airways Common Stock shall be entitled to receive the portion of the Merger
Price to which each is entitled pursuant to the Plan of Merger. The Merger
Price shall be paid in the form of VJET Common Stock. The total number of
shares of VJET Common Stock to be issued to the stockholders of Airways in the
Merger (the "Merger Price") shall be equal to the number of shares of Airways
Common Stock issued and outstanding on the Closing Date.
ARTICLE VII
Other Agreements After Closing
7.01 Corporate Governance After Merger. VJET shall expand its Board of
Directors to seven (7) members effective as of the Closing Date. Four (4) of
the members of the Board of Directors will be selected by VJET prior to the
Closing and three (3) of the members of the Board of Directors will be selected
by Airways prior to the Closing. Said Directors will be elected for a term
expiring upon VJET's 1999 annual stockholders' meeting.
7.02 Press Releases. Each party shall consult with the other party hereto
before publishing, releasing or otherwise disseminating to the public any
information, publicity or statements concerning this Agreement, the Plan of
Merger or any of the transactions herein contemplated; provided, however, that
this section shall not be construed to prohibit any of the
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parties hereto from making announcements to the press with respect to other
factual business or financial developments concerning its operations or making
any such releases as are time-critical under applicable law or regulations.
7.03 Other Agreements.
(a) Promptly after the Effective Date of the Merger, VJET shall issue
lifetime passes to all persons who were members of Airways' Board of Directors
immediately prior to the Effective Date of the Merger, which passes shall
provide the same level of authority as the passes granted to Xxxxxx X. Xxxxxx
and Xxxxx X. Xxxxxx and may be used by each such person, his spouse and
dependents.
(b) VJET will enter into a consulting agreement with each of Xxxxxx
X. Xxxxxx and Xxxxx X. Xxxxxx providing for: (i) a five (5) year term, (ii)
compensation of $100,000 per year, (iii) their respective option agreements with
VJET will be amended such that such options will remain exercisable until the
expiration date thereof notwithstanding his termination of employment, (iv)
lifetime pass benefits for himself, his spouse and dependents, and (v) lifetime
eligibility for coverage in VJET's health insurance plan in effect from time to
time. In consideration therefor, each of them agrees to devote such time during
such five year period as may be necessary to supervise on behalf of VJET in
connection with its defense to litigation in process prior to the Closing Date.
7.04 Tax Treatment. Each of VJET and Airways will use its best efforts to
cause the Merger to qualify as a reorganization under the provisions of Section
368(a) of the Code. Neither party nor any affiliate shall take any action that
would cause the Merger not to qualify as a reorganization under Section 368(a)
except to the extent that such action is specifically contemplated by this
Agreement.
ARTICLE VIII
Termination of Obligations and Waiver of Conditions
8.01 Termination. In the event that this Agreement shall be terminated
pursuant to Section 5.03 of Article V hereof, all further obligations of the
parties hereto under this Agreement shall terminate without further liability
of any party to another and each party hereto will pay all costs and expenses
incident to its negotiation and preparation of this Agreement and to its
performance and compliance with all agreements and conditions contained herein
on its part to be performed or complied with, including the fees, expenses and
disbursements of its counsel. The foregoing shall not apply to the extent
certain provisions survive the termination of this Agreement as provided in
Section 9.06.
8.02 Waiver. If any of the conditions specified in Section 5.01 of
Article V hereof has not been satisfied, VJET may nevertheless, at the election
of VJET, proceed with the transactions contemplated hereby and, if any of the
conditions specified in Section 5.02 of Article V hereof has
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not been satisfied, Airways may nevertheless, at its election, proceed with the
transactions contemplated hereby. Any such election to proceed shall be
evidenced by a certificate executed on behalf of the electing party by its
Chairman of the Board or President.
8.03 Confidentiality. In the event of the termination of the transactions
contemplated by this Agreement, all information acquired by either VJET or
Airways, shall be held in the strictest of confidence if not public
information, and neither party shall use such information to the disadvantage
of the other.
ARTICLE IX
General
9.01 Amendments. This Agreement and the form of any exhibit attached
hereto may be amended in writing by the parties hereto before and after the
meeting of stockholders referred to in Sections 4.03 and 4.04 hereof at any
time prior to the Effective Date of the Merger.
9.02 "Subsidiaries". A "Subsidiary" with respect to any corporation
referred to in this Agreement shall mean a corporation (or equivalent legal
entity under foreign law) of which Airways, VJET or any other corporation
referred to in this Agreement, as the case may be, owns directly or indirectly
50% or more of the stock the holders of which are ordinarily and generally, in
the absence of contingencies, entitled to vote for the election of a majority
of the directors.
9.03 "Knowledge". Wherever in this Agreement any representation or
warranty is expressed in the terms of "knowledge" or "to the best of its
knowledge" of Airways or VJET, such knowledge shall be deemed to refer to
matters which the respective officers and directors of Airways or VJET, as the
case may be, knew or should have known after diligent inquiry.
9.04 "Material Adverse Effect". With respect to any person or entity
shall mean any event, condition, development or effect which, individually or
in the aggregate, shall have had, or insofar as can reasonably be foreseen will
have, a material adverse effect on the business, operations, assets,
liabilities or condition (financial or otherwise) or prospects of a person and
its subsidiaries (if applicable) taken as a whole. For purposes of this
Agreement, the termination or expiration without renewal of Airways' code
sharing agreement with Comair, Inc. or the termination of Airways' lease of
gate space from Delta Air Lines, Inc. at the Orlando airport shall not be a
Material Adverse Effect.
9.05 Schedules. Each Disclosure Statement described in this Agreement has
been delivered simultaneously with the execution and pursuant to the terms of
this Agreement. Any information supplied to either party in writing between
the date hereof and the Closing Date if accepted by either party shall be made
a part of the Schedules hereto and be deemed to have been disclosed to the
other party for all purposes of this Agreement.
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9.06 No Survival of Representations and Warranties. The respective
covenants, representations and warranties of Airways and VJET shall expire and
be terminated and extinguished on the Effective Date of the Merger, except for
Section 4.12 relating to indemnification and D&O liability insurance and those
covenants contained in Article VII hereof. Except for the provisions of
Sections 5.04, 5.05, 7.01, and 7.03, the confidentiality provisions of Sections
4.01(a) and 4.02(a) and 8.03, the respective covenants, representations and
warranties of Airways and VJET shall expire and be terminated and extinguished
in the event of the termination and abandonment of this Agreement as provided
in Article VIII hereof. No party to this Agreement shall have any liability to
any other party to this Agreement after the Effective Date of the Merger as a
result of any breach of any covenant, representation or warranty contained in
this Agreement.
9.07 Governing Law. This Agreement and the legal relations between the
parties shall be governed by and construed in accordance with the laws of the
State of Nevada with respect to the Merger and governed by and construed in
accordance with the laws of the State of Georgia in all other respects.
9.08 Notices. All notices hereunder shall be deemed given if in writing
and delivered personally or sent by telecopy (with written evidence of
receipt), telegram, registered mail or certified mail (return receipt
requested) to the parties at the following addresses (or at such other
addresses as shall be specified by like notice):
(a) If to VJET, to: ValuJet, Inc.
0000 Xxxxxxx Xxxx.
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: D. Xxxxxx Xxxx
Fax: (000) 000-0000
With a copy to: Ellis, Funk, Xxxxxxxx, Xxxxxxxx &
Dokson, P.C.
0000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx
Fax: (000) 000-0000
(b) If to Airways, to Airways Corporation
0000 Xxxxxxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Fax: (000) 000-0000
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With a copy to: Xxxxxx & Xxxxxx
2400 IDS Center
00 Xxxxx 0xx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: X. X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
Any such notice or communication shall be deemed to have been given as of three
days after posting, one day after next day delivery service or upon personal
delivery or confirmed telecopy.
9.09 No Assignment. This Agreement may not be assigned by operation of
law or otherwise without the express written consent of the other parties.
9.10 Headings. The descriptive headings of the several Articles, Sections
and paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
9.11 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
of the parties hereto and delivered to each of the other parties hereto.
9.12 Entire Agreement. This Agreement and the exhibits hereto and other
documents delivered or to be delivered pursuant hereto or incorporated by
reference herein, taken together contain the entire agreement between the
parties hereto concerning the transactions contemplated hereby and supersede
all prior agreements or understandings, written or oral, between the parties
hereto relating to the subject matter hereof. No oral representation,
agreement or understanding made by any party hereto shall be valid or binding
upon such party or any other party hereto.
9.13 Severability. The parties intend for this Agreement to be severable.
It is mutually agreed that in the event any paragraph, subparagraph, section,
subsection, sentence, clause or phrase hereof shall be construed as illegal,
invalid or unenforceable for any reason, such determination shall in no manner
affect the other paragraphs, subparagraphs, sections, subsections, sentences,
clauses or phrases hereof which shall remain in full force and effect, as if
the said paragraph, subparagraph, section, subsection, sentence, clause or
phrase so construed as illegal, invalid or unenforceable were not originally a
part hereof, and the enforceability hereof as a whole will not be affected.
The parties hereby declare that they would have agreed to the remaining parts
hereof if they had known that such parts hereof would be construed as illegal,
invalid or unenforceable.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed on its behalf by its officers thereunto duly authorized, all as
of the day and year first above written.
VALUJET, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Chairman of the Board and
Chief Executive Officer
AIRWAYS CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
President
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DEFINED TERMS
Defined Term Section Reference
------------ -----------------
Acquisition Proposal Section 4.05
Airways Introductory Paragraph
Airways Affiliates Section 4.09
Airways Common Stock Recitals
Airways Financial Statements Section 2.04(a)
Airways' Intellectual Property Section 2.17(a)
Airways Plans Section 2.03
Airways SEC Filings Section 2.04(a)
Airways Special Meeting Section 4.03
Closing Date or Closing Section 1.02
Dissenting Stockholder Section 6.02
DOT Section 2.08
Effective Date of the Merger Section 1.01
Exchange Act Section 2.04(a)
FAA Section 2.08
GAAP Section 2.09
HSR Act Section 2.05
Insiders Section 4.03
Material Adverse Effect Section 9.04
Merger Recitals
Merger Price Section 6.01
NASDAQ Section 4.15
Plan of Merger Recitals
Proxy Statement Section 5.01(j)
Registration Statement Section 4.07
SEC Section 2.04(a)
Securities Act Section 4.07
Subsidiaries Section 9.02
Superior Proposal Section 4.04
VJET Introductory Paragraph
VJET Financial Statement Section 3.04(a)
VJET Meeting Section 4.04
VJET Plans Section 3.03
VJET SEC Filings Section 3.04(a)
VJET's Intellectual Property Section 3.19(a)
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PLAN OF MERGER
PLAN OF MERGER, dated July 10, 1997, by and between Airways
Corporation, a Delaware corporation ("Airways"), and ValuJet, Inc., a Nevada
corporation ("VJET"), herein sometimes referred to as the "Surviving
Corporation", said corporations being hereinafter collectively referred to as
the "Constituent Corporations".
W I T N E S S E T H:
WHEREAS, Airways is a corporation organized and existing under and by
virtue of the laws of the State of Delaware and having an authorized
capitalization of 1,000,000 shares of preferred stock, $.01 par value per
share, no shares of which are issued or outstanding and 19,000,000 shares of
common stock, $.01 par value per share ("Airways Common Stock"), of which
9,067,937 shares are issued and outstanding as of the date of this Plan of
Merger; and
WHEREAS, VJET is a corporation organized and existing under and by
virtue of the laws of the State of Nevada and having an authorized
capitalization of 5,000,000 shares of preferred stock, par value $.01 per share
("Preferred Stock"), no shares of which are issued or outstanding and
1,000,000,000 shares of Common Stock, par value $.001 per share ("VJET Common
Stock") of which 54,969,238 shares are issued and outstanding as of the date of
this Plan of Merger; and
WHEREAS, Airways and VJET have entered into a Plan of Reorganization
and Agreement of Merger, dated as of July 10, 1997 (the "Merger Agreement"),
providing, among other things, for the execution and acknowledgment of this
Plan of Merger, the execution, acknowledgment and filing of Articles or
Certificates of Merger and the merger of Airways with and into VJET upon the
terms set forth in the Merger Agreement and this Plan of Merger; and
WHEREAS, the respective Boards of Directors of each of the Constituent
Corporations deem it advisable and in the best interest of each of such
corporations and their respective stockholders that Airways be merged with and
into VJET in the manner contemplated herein and in the Merger Agreement and
have adopted resolutions approving this Agreement and the Merger Agreement and
have recommended that the merger of Airways with and into VJET (the "Merger")
be approved, and that this Plan of Merger and the Merger Agreement be approved
and adopted by the stockholders of VJET and by the stockholders of Airways;
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements herein contained, and subject to the conditions herein set
forth, and for the purpose of stating the terms and conditions of the Merger,
the mode of carrying the same
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into effect, the manner of exchanging the shares of VJET Common Stock issued
and outstanding immediately prior to the effective date of the Merger for the
Merger Price in accordance with Article V hereof, and such other details and
provisions as are deemed desirable all as contemplated by Section 78.451 of the
Nevada Revised Statutes and Section 252 of the Delaware General Corporation
Law, the parties hereto have agreed, and do hereby agree, subject to the terms
and conditions hereinafter set forth, as follows:
ARTICLE I.
The Constituent Corporations shall be merged into a single corporation
by Airways merging into and with VJET, the Surviving Corporation, which shall
survive the Merger, pursuant to the provisions of the Nevada Revised Statutes
and the Delaware General Corporation Law. Upon such Merger, the separate
corporate existence of Airways shall cease and the Surviving Corporation shall
become the owner, without transfer, of all rights and property of the
Constituent Corporations, and the Surviving Corporation shall become subject to
all the debt and liabilities of the Constituent Corporations in the same manner
as if the Surviving Corporation had itself incurred them.
ARTICLE II.
The name of the Surviving Corporation (heretofore "ValuJet, Inc.")
shall be changed to AirTran Holdings, Inc.
ARTICLE III.
A. On the effective date of the merger, which shall be the day
the Articles or Certificates of Merger shall have been accepted for filing and
filed with the Secretary of the State of the States of Nevada and Delaware (the
"Effective Date of the Merger"), the Articles of Incorporation of VJET shall be
the Articles of Incorporation of the Surviving Corporation, provided they shall
be amended as set forth in ARTICLE II above.
B. On the Effective Date of the Merger, the bylaws of VJET, as in
effect on the Effective Date of the Merger, shall remain the bylaws of the
Surviving Corporation. Subsequent to the Effective Date of the Merger, such
bylaws shall be the bylaws of the Surviving Corporation until they shall
thereafter be duly amended, except that such Bylaws shall be amended as set
forth in Exhibit B in the Merger Agreement.
ARTICLE IV.
A. On the Effective Date of the Merger the members of the board
of directors of the Surviving Corporation shall be as follows: [FOUR PERSONS TO
BE SELECTED BY VJET PRIOR TO THE CLOSING AND THREE PERSONS TO BE SELECTED BY
AIRWAYS PRIOR TO THE CLOSING] all of whom shall continue to hold their
positions as directors until the 1999 shareholders meeting and thereafter until
the
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election and qualification of their respective successors or until they shall
resign, die or otherwise cease to hold such directorships in accordance with
the bylaws of the Surviving Corporation.
B. The Chairman of the Board immediately after the Effective Date
of the Merger shall be Xxxxxx X. Xxxxxxx, a non-employee Director to be
designated by Airways.
C. As of the Effective Date of the Merger, D. Xxxxxx Xxxx shall
become President and Chief Executive Officer of the Surviving Corporation. All
other officers of the Surviving Corporation shall be selected by the Chief
Executive Officer, subject to the approval of the Board of Directors.
ARTICLE V.
A. On the Effective Date of the Merger, each of the then issued
and outstanding shares of VJET Common Stock shall continue to be an issued and
outstanding share of Common Stock of the Surviving Corporation.
B. On the Effective Date of the Merger, each of the then issued
and outstanding shares of Airways Common Stock shall be converted into the
right to receive the "Merger Price" which shall be one (1) share of Common
Stock of the Surviving Corporation for each share of Airways Common Stock.
C. The manner of exchanging the shares of Airways Common Stock
issued and outstanding immediately prior to the Effective Date of the Merger
for the Merger Price to be distributed to the Airways stockholders in
accordance with paragraph (1) below, shall be as follows:
(1) On the Effective Date of the Merger, each share of
Airways Common Stock issued and outstanding immediately prior to the Effective
Date of the Merger shall, by virtue of the Merger and without any action on the
part of the holder thereof, automatically be cancelled and converted into the
Merger Price, as allocated below, and each share of treasury stock of Airways
shall be cancelled.
(2) On the Effective Date of the Merger:
(i) Each record holder of a certificate
theretofore evidencing Airways Common Stock who has surrendered the same to
VJET, duly endorsed with the signatures appropriately guaranteed and
accompanied by any evidence required by VJET, shall be entitled to receive
therefor one (1) share of VJET Common Stock for each share of Airways Common
Stock surrendered. The exchange agent for VJET, First Union National Bank,
Charlotte, North Carolina, will send a notice and a transmittal form to each
holder of an outstanding certificate or certificates of Airways Common Stock
who on the Effective Date of the Merger has not so surrendered his certificate
or certificates, advising such stockholder of the terms
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of the conversion effected by the Merger, the method of selling any fractional
share interest (when applicable) as described in Section (2)(iii) of this
Article V, and the procedure for surrendering to the Exchange Agent such
certificate or certificates in exchange for the Merger Price allocated
therefor. Until so surrendered, each such outstanding certificate which prior
to the Effective Date of the Merger represented shares of Airways Common Stock
shall be deemed for all corporate purposes (subject to the further provisions
of this Section (2)) to evidence ownership of one (1) share of VJET Common
Stock. After the Effective Date of the Merger, the stock transfer book of
Airways shall be closed and no transfer of Airways Common Stock shall
thereafter be made. If, after the Effective Date of the Merger, certificates
representing shares of Airways Common Stock are presented to the Surviving
Corporation, they shall be cancelled and exchanged for certificates
representing VJET Common Stock.
(ii) If any certificate of VJET Common stock is to be issued to a
person other than the person in whose name the Airways Common Stock certificate
is surrendered in exchange therefor is registered, it shall be a condition to
such exchange that the certificate so surrendered shall be properly endorsed and
otherwise in proper form for transfer and that the person requesting such
transfer pay to Airways and VJET or the Exchange Agent, as the case may be, any
transfer or other taxes required by reason of the issuance of VJET Common Stock
in any name other than that of the registered holder of the Airways stock
certificate surrendered or establish to the satisfaction of VJET or the Exchange
Agent, as the case may be, that such tax has been paid or is not applicable.
(iii) Neither certificates nor scrip for fractional shares of
VJET Common Stock will be issued but each holder of Airways Common Stock who
otherwise would be entitled to receive a fractional share of VJET Common Stock
will be entitled in lieu thereof to an amount of cash, without interest,
determined by multiplying such fraction times the closing price of VJET's Common
Stock as reported for the NASDAQ Stock Exchange in The Wall Street Journal,
Southeast Edition, on the Effective Date of the Merger. After the expiration of
sixty (60) days after the Effective Date of the Merger, the Exchange Agent will
sell to VJET, for the account of the holders of such fractional share interests
who have not surrendered stock certificates, shares of VJET Common Stock
equivalent to the aggregate of such fractional share interests then outstanding.
The Exchange Agent will thereafter, subject to any applicable abandoned property
or similar law, until one (1) year after the Effective Date of the Merger pay to
such holders upon surrender of their certificates representing Airways Common
Stock their pro rata proceeds of any such sale, without interest. Any balance
of such proceeds and any amounts paid to the Exchange Agent in respect of VJET
Common Stock issued in the Merger, certificates for which shall not have been
surrendered by the expiration of such one (1) year period, will, together with
any interest thereon, be paid over to VJET as soon as practicable after the
expiration of such period subject to any applicable abandoned property or
similar
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law. The fee of the Exchange Agent and any expenses of the Exchange Agent
incidental to the sale of fractional share interests shall be borne by the
Surviving Corporation.
D. Prior to the Effective Date of the Merger, the Board of
Directors of VJET will adopt Airways' stock option plans and assume Airway's
obligations under all outstanding warrants and to take such other action as may
be required such that on the Effective Date of Merger, any option or warrant to
acquire Airways Common Stock granted or issued pursuant to any stock option
plan or otherwise that have not been exercised and have not lapsed, shall, by
operation of the Merger, be converted into and become, without any action on
the part of the holder thereof, an option or right to acquire shares of VJET
Common Stock equal to the number of shares of Airways Common Stock subject to
such options or warrants prior to the Merger. The exercise price for such
options or warrants to purchase shares of VJET Common Stock after the Merger
shall be the same as the exercise price under such stock options or warrants
applicable prior to the Merger. All of the other terms and conditions
applicable to the options and warrants to purchase Airways stock prior to the
Merger shall continue to apply after the Merger.
E. If between the date of this Plan of Merger and the Effective
Date of the Merger the outstanding shares of VJET Common Stock shall have been
changed into a different number of shares or a different class by reason of any
reclassification, recapitalization, split-up, combination, exchange of shares
or readjustment, or a stock dividend thereon shall be declared with a record
date within said period, the conversion ratio set forth in Sections VB and VD
above, shall be correspondingly adjusted.
ARTICLE VI.
This Plan of Merger shall be submitted to the stockholders of the
Constituent Corporations for their approval in the manner provided to the
extent required by the applicable laws of the States of Nevada and Delaware, at
meetings to be held on such date(s) as the respective Boards of Directors of
the Constituent Corporations shall agree. After approval by the vote of the
holders representing a majority of the issued and outstanding shares of VJET
and by Airways, Articles or Certificates of Merger shall be filed as required
by the laws of the States of Nevada and Delaware; the Merger being effective
when the Articles or Certificates of Merger, as provided by the laws of the
States of Nevada and Delaware, are accepted for filing and filed in the office
of the Secretary of State of the States of Nevada and Delaware.
ARTICLE VII.
The Merger may be abandoned at any time (before or after this Plan of
Merger shall have been approved by the stockholders of VJET or Airways) prior
to the Effective Date of the Merger as provided
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in, and subject to the conditions set forth in Section 5.03 of the Merger
Agreement.
ARTICLE VIII.
The Surviving Corporation hereby agrees that it may be served with process
in the State of Delaware in any proceeding for enforcement of any obligation of
Airways, as well as for enforcement of any obligation of the Surviving
Corporation arising from the Merger, including any suit or other proceeding to
enforce the rights of any stockholders as determined in appraisal proceedings
pursuant to Section 262 of the Delaware General Corporation Law, and hereby
irrevocably appoints the Secretary of State of the State of Delaware as its
agent to accept service of procession any such suit or proceedings. The address
to which a copy of such process shall be mailed by the Secretary of State is as
follows:
Xxxxxx X. Xxxxxxxx
Ellis, Funk, Xxxxxxxx, Xxxxxxxx & Dokson
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
ARTICLE IX.
For the convenience of the parties hereto and to facilitate the filing and
recording of this Plan of Merger, any number of counterparts hereof may be
executed, and each such counterpart shall be deemed to be an original
instrument.
IN WITNESS WHEREOF, each of the Constituent Corporations have caused this
Plan of Merger to be executed by its respective duly authorized officers and its
respective corporate seal to be impressed thereon, as of the 10th day of July,
1997.
VALUJET, INC.
By /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Its Chairman of the Board and
Chief Executive Officer
AIRWAYS CORPORATION
By /s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Its President
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EXHIBIT "B"
TO
PLAN OF REORGANIZATION
AND AGREEMENT OF MERGER
BETWEEN
VALUJET, INC.
AND
AIRWAYS CORPORATION
The last sentence of Section 4.2 of the By-Laws of ValuJet, Inc. shall be
amended to read as follows:
"The Directors shall be elected at an annual or special
meeting of the Shareholders and shall serve for a term of
one (1) year or until their successors are elected and
qualified; provided, however, that the Board of Directors
in place as of the effective date of the merger of Airways
Corporation with and into the corporation shall serve for
a term that will expire upon the election of Directors at
the corporation's 1999 annual meeting of Shareholders or
until their successors are elected and qualified."
