EXHIBIT 10.37
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of January 17, 1997 (this
"Agreement"), by and among Midway Airlines Corporation, a Delaware corporation
(the "Company"), GoodAero, Inc., a Delaware corporation ("GoodAero"), and, for
purposes of Article III, Section 4.02, Section 4.08, Article VIII and Article X
only, Xxxxx X. Xxxxxxxxx, Ph.D and Xxxx X. Xxxx (collectively, the "GoodAero
Stockholders"), and Xxxx/Chilmark Fund L.P. ("Z/C"), a Delaware limited
partnership. Capitalized terms used and not otherwise defined in this Agreement
shall have the meanings ascribed to them in Article IX hereof.
W I T N E S S E T H:
WHEREAS, GoodAero, the Company and Z/C wish to set forth the
representations, warranties, agreements and conditions under which a merger of
the Company and GoodAero will occur;
NOW, THEREFORE, in consideration of the premises, the representations,
warranties and agreements herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
subject to the conditions set forth herein, GoodAero, the Company and Z/C hereby
agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01 THE MERGER. At the Effective Time (as defined in
Section 1.02(b) hereof) and subject to and upon the terms of this Agreement,
GoodAero shall be merged with and into the Company (the "Merger") in accordance
with the provisions of the General Corporation Law of the State of Delaware (the
"GCL"). Following the Merger, the Company shall continue as the surviving
corporation (the "Surviving Corporation") and the separate corporate existence
of GoodAero shall cease. The Company and GoodAero are sometimes collectively
referred to as the "Constituent Corporations".
SECTION 1.02. CLOSING AND EFFECTIVE TIME.
(a) Subject to the provisions of Article VI hereof, the closing (the
"Closing") of the Merger shall take place at 10:00 a.m., New York time, at the
offices of Fulbright & Xxxxxxxx L.L.P., 000 Xxxxxxxxxxxx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000, on the fifth (5th) Business Day following the later to
occur of (i) the obtaining of the Last Regulatory Approval, or (ii) the
execution and delivery of the Creditor Agreements, but in no event later than
the Outside Closing Date or (iii) such other time, place or date as the Company,
GoodAero and Z/C may mutually agree. Failure to consummate the transactions
provided for in this Agreement on the date and time selected pursuant to this
Section 1.02(a) shall not, except as permitted by Section 7.01 hereof, result in
the termination of this Agreement and shall not relieve any party to this
Agreement of any obligation hereunder.
(b) The Merger shall become effective upon the filing of the
Certificate of Merger, substantially in the form of EXHIBIT 1.02 hereof (the
"Certificate of Merger"). The Certificate of Merger shall be filed with the
Secretary of State of the State of Delaware in accordance with the provisions of
Section 251 of the GCL at the time of the Closing. The date and time when the
Merger shall become effective are hereinafter referred to as the "Effective
Time."
SECTION 1.03. EFFECTS OF THE MERGER. The separate corporate
existence of the Company, as the Surviving Corporation, with all its purposes,
objects, rights, privileges, powers, certificates and franchises, shall continue
unimpaired by the Merger. At the Effective Time, the Surviving Corporation
shall succeed to all the properties and assets of the Constituent Corporations
and to all debts, choses in action and other interests due or belonging to the
Constituent Corporations and shall be subject to, and responsible for, all the
debts, liabilities and duties of the Constituent Corporations with the effects
provided by applicable provisions of the GCL.
SECTION 1.04. CERTIFICATE OF INCORPORATION AND BY-LAWS.
(a) The Certificate of Incorporation of the Company in effect
immediately prior to the Effective Time shall be the Second Amended and Restated
Certificate of Incorporation of the Surviving Corporation until amended in
accordance with the provisions of the GCL, except that at the Effective Time the
Second Amended and Restated Certificate of Incorporation of the Company shall be
amended and restated as provided in the form of Certificate of Merger attached
hereto as EXHIBIT 1.02.
(b) The By-laws of GoodAero as in effect immediately prior to the
Effective Time as attached hereto as Exhibit 1.04(b) shall be the By-laws of the
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Surviving Corporation, until duly amended in accordance with applicable law, the
Certificate of Incorporation of the Surviving Corporation and such By-laws.
SECTION 1.05. DIRECTORS. The directors of GoodAero immediately prior
to the Effective Time shall be the initial directors of the Surviving
Corporation except as otherwise provided in the Stockholders' Agreement and
shall hold office in accordance with the Certificate of Incorporation and
By-laws of the Surviving Corporation from the Effective Time until their
respective successors are duly elected or appointed and qualified.
SECTION 1.06. OFFICERS. The officers of the Company immediately
prior to the Effective Time shall be the initial officers of the Surviving
Corporation and shall hold office in accordance with the Certificate of
Incorporation and By-laws of the Surviving Corporation from the Effective Time
until their respective successors are duly elected or appointed and qualified.
SECTION 1.07. CONVERSION/CANCELLATION OF STOCK. Except as provided in
Section 1.08 hereof, as of the Effective Time, by virtue of the Merger and
without any action on the part of the holders of any shares of GoodAero Stock,
each share of GoodAero Stock issued and outstanding immediately prior to the
Effective Time shall be converted into and become shares of senior convertible
preferred stock of the Surviving Corporation (the "Senior Convertible Preferred
Stock"), at the conversion ratio of 105 shares of Senior Convertible Preferred
Stock for each share of GoodAero Stock, such that the total number of shares of
GoodAero Stock outstanding immediately prior to the Effective Time shall be
converted into 5460 shares of Senior Convertible Preferred Stock in the
aggregate. Except as provided in Sections 1.08 and 1.09 hereof, as of the
Effective Time, by virtue of the Merger and without any action on the part of
the holders of any Company Stock, each share of Company Stock issued and
outstanding immediately prior to the Effective Time shall be cancelled without
any consideration being payable or paid by the Company therefor. Except as
provided in this Section 1.07 and in Section 1.09 hereof, as of and after the
Effective Time, no holder of any certificate that immediately before the
Effective Time represented GoodAero Stock or Company Stock shall have any rights
as a holder of GoodAero Stock or Company Stock, respectively. All options,
warrants or other rights, if any, to acquire any GoodAero Stock or Company Stock
existing immediately before the Effective Time shall be canceled, without any
consideration being payable or paid by the Company therefor.
SECTION 1.08. CANCELLATION OF TREASURY STOCK. At the Effective Time,
all shares of GoodAero Stock, if any, that are owned directly or indirectly by
GoodAero, and all shares of Company Stock, if any, that are owned directly or
indirectly by the
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Company, as treasury stock shall be cancelled without any consideration being
payable or paid therefor.
SECTION 1.09. SHARES OF DISSENTING STOCKHOLDERS. Any shares of
Company Stock held by Persons who are entitled under applicable law to exercise,
and who have duly exercised, their rights of appraisal with respect to the
Merger pursuant to Section 262 of the GCL (the "Dissenting Stockholders") shall
become the right to receive the consideration as may be determined to be due to
such Dissenting Stockholders pursuant to the GCL; PROVIDED, HOWEVER, that shares
of Company Stock outstanding at the Effective Time held by any Dissenting
Stockholder who shall, after the Effective Time, withdraw his demand for
appraisal or otherwise lose his right of appraisal as provided in such laws,
shall thereupon be cancelled without any consideration being payable or paid
therefor as provided in Section 1.07 hereof.
SECTION 1.10. EXCHANGE OF CERTIFICATES. At the Effective Time, the
Surviving Corporation shall deliver to the holders of the GoodAero Stock
certificates representing in the aggregate 5460 shares of Senior Convertible
Preferred Stock, in exchange for the certificates representing all the issued
and outstanding shares of GoodAero Stock.
SECTION 1.11. CLOSING OF TRANSFER BOOKS. At the Effective Time,
the stock transfer books of GoodAero and of the Company as to GoodAero Stock
and Company Stock shall be closed and no transfer of shares of GoodAero Stock
or Company Stock shall thereafter be made. If, after the Effective Time,
certificates formerly representing shares of GoodAero Stock or Company Stock
are presented to the Surviving Corporation, they shall be cancelled as
provided in Section 1.07 hereof.
SECTION 1.12. WITHHOLDING RIGHTS. The Company shall be entitled to
deduct and withhold from the consideration otherwise payable pursuant to this
Agreement to any holder of GoodAero Stock or Company Stock such amounts as the
Company is required to deduct and withhold with respect to the making of such
payment under the Internal Revenue Code of 1986, as amended (the "Code"), or any
provision of state, local or foreign tax law. To the extent that amounts are so
withheld by the Company, such withheld amounts shall be treated for all purposes
of this Agreement as having been paid to the holder of GoodAero Stock or Company
Stock in respect of which such deduction and withholding was made by the
Company.
SECTION 1.13. LOST CERTIFICATES. In the event any certificate for
shares of GoodAero Stock shall have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the person claiming such certificate to
be lost, stolen or
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destroyed, the Company shall issue in exchange for such lost, stolen or
destroyed certificate the shares of Senior Convertible Preferred Stock (and any
dividends or distributions with respect thereto and any cash in lieu of
fractional shares) deliverable in respect thereof as determined herein. When
authorizing such payment in exchange for any lost, stolen or destroyed
Certificate, the person to whom the Senior Convertible Preferred Stock is to be
issued shall, if requested by the Company, give the Company a bond satisfactory
to the Company in such sum as the Company may reasonably direct or otherwise
indemnify the Company in a manner satisfactory to the Company against any claim
that may be made against the Company or GoodAero with respect to the certificate
alleged to have been lost, stolen or destroyed.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND Z/C
The Company (except as to Sections 2.31 through 2.34) and Z/C hereby
jointly and severally represent and warrant to GoodAero and the GoodAero
Stockholders as follows (which representations and warranties shall survive the
Closing only to the extent provided in Section 8.01).
SECTION 2.01. ORGANIZATION, ETC. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full corporate power and authority to conduct its business as
it is now being conducted and to own, operate or lease the properties and assets
it currently owns, operates or holds under lease. The Company is duly qualified
or licensed to do business and is in good standing as a foreign corporation in
each jurisdiction set forth on SCHEDULE 2.01 hereto, which are all of the
jurisdictions where the character of its business or the nature of its
properties makes such qualification or licensing necessary, except where the
failure to so qualify or be licensed would not have a material adverse effect on
the business, prospects, results of operations, financial condition or assets of
the Company. The Company has heretofore delivered to GoodAero true and correct
copies of the Second Amended and Restated Certificate of Incorporation and
Second Amended and Restated By-laws of the Company as in effect on the date
hereof. The Company has all requisite corporate power and authority to enter
into this Agreement and, subject to receipt of Stockholder Approval, Third Party
Approvals and all Requisite Regulatory Approvals, to carry out its obligations
under this Agreement and to consummate the transactions contemplated hereby.
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SECTION 2.02. SUBSIDIARIES. (a) The Company has no subsidiaries and
does not have any legal or beneficial interest in any corporation, partnership,
joint venture or other entity.
SECTION 2.03. CAPITALIZATION. The authorized capital stock of the
Company consists of (a) 9,000,000 shares of Class A Common Stock, of which
8,872,200 shares are issued and outstanding as of the date hereof and owned of
record by the Persons set forth on SCHEDULE 2.03 hereto, (b) 2,000,000 shares of
Class B Common Stock, of which no shares are issued and outstanding as of the
date hereof, (c) 25,000,000 shares of Class C Common Stock, of which 1,405,548
shares are issued and outstanding as of the date hereof and owned of record by
the Persons set forth on SCHEDULE 2.03 hereto, (d) 1,000,000 shares of Prior
Preferred Stock, of which 480,000 shares are issued and outstanding as of the
date hereof and owned of record by the Persons set forth on SCHEDULE 2.03
hereto, (e) 600,000 shares of Junior Preferred Stock, of which 600,000 shares
are issued and outstanding on the date hereof, and owned of record by the
Persons set forth on SCHEDULE 2.03 hereto, and (f) 1,000,000 shares of
Preference Stock, of which no shares are issued and outstanding on the date
hereof. There are no shares of Company Stock held as treasury shares. All
outstanding shares of Company Stock have been duly authorized and validly issued
and are fully paid and non-assessable. Except as set forth in SCHEDULE 2.03,
there are no outstanding options, warrants, convertible securities, calls,
rights, commitments, preemptive rights or agreements or instruments or
understandings of any character, to which the Company is a party or by which the
Company is bound, obligating the Company to issue, deliver or sell, or cause to
be issued, delivered or sold, contingently or otherwise, additional shares of
Company Stock or any securities or obligations convertible into or exchangeable
for such shares or to grant, extend or enter into any such option, warrant,
convertible security, call, right, commitment, preemptive right or agreement
(all of the foregoing, collectively, "Company Stock Options"). Those Persons
identified on SCHEDULE 2.03 hereto are herein referred to as "Company
Stockholders." There are no outstanding obligations of the Company to purchase
or otherwise acquire any Company Stock (collectively, "Company Put
Obligations").
SECTION 2.04. AUTHORIZATION. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly approved by the Board of Directors of the Company, subject to Stockholder
Approval, and no other corporate proceedings on the part of the Board of
Directors of the Company or the Company are necessary to authorize the Merger,
this Agreement and the transactions contemplated hereby. The vote of Z/C is the
only vote of any Company Stockholders under the GCL that is necessary for
Stockholder Approval of the Merger, this Agreement, and the transactions
contemplated thereby. This
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Agreement has been duly executed and delivered by the Company and constitutes
the legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as such enforcement may be subject
to (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to creditors' rights generally and (ii) general principles of equity
(whether applied in a proceeding at law or in equity).
SECTION 2.05. NO VIOLATION. The execution and delivery of this
Agreement by the Company does not, and the consummation by the Company of the
transactions contemplated by this Agreement will not, (i) conflict with, or
result in any violation of or default or loss of any benefit under, any
provision of the Company's Second Amended and Restated Certificate of
Incorporation or Second Amended and Restated By-laws; (ii) except as otherwise
set forth in Schedule 2.05 hereto and subject to the matters described in
Section 2.06 hereof, conflict with or result in any violation of or default or
loss of any benefit under, any Permit, concession, grant, franchise, law, rule
or regulation, or any judgment, decree or order of any court or other
governmental agency or instrumentality to which the Company is a party or to
which any of its property is subject; or (iii) except as otherwise set forth in
SCHEDULE 2.05, conflict with, or result in a breach or violation of or default
or loss of any benefit under, or accelerate the performance required by, the
terms of any agreement, contract, indenture or other instrument to which the
Company is a party or to which any of its property is subject, or constitute a
default or loss of any right thereunder or an event which, with the lapse of
time or notice or both, might result in a default or loss of any right
thereunder or the creation of any lien, charge or encumbrance upon any of the
assets or properties of the Company.
SECTION 2.06. APPROVALS. The execution and delivery of this
Agreement and the consummation of the transactions contemplated by this
Agreement by the Company will not require the consent, approval, order or
authorization of any Governmental Entity or Regulatory Authority or any other
Person under any Permit, agreement, indenture or other instrument to which the
Company is a party or to which any of its properties is subject, other than
Stockholder Approval and the items disclosed in SCHEDULE 2.05, and no
declaration, filing or registration with any Governmental Entity or Regulatory
Authority is required or advisable by the Company in connection with the
execution and delivery of this Agreement and the consummation of transactions
contemplated by this Agreement, except for (a) the delivery and filing of the
Certificate of Amendment to the Company's Second Amended and Restated
Certificate of Incorporation as contemplated by Section 6.02(l) hereof, (b) the
delivery and filing of the Certificate of Merger as required by the GCL, (c) the
filing pursuant to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, and the
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termination of the applicable waiting period under such Act, (d) the applicable
requirements of the Federal Aviation Act of 1958, as amended, and the
regulations of the Department of Transportation thereunder.
SECTION 2.07. FINANCIAL STATEMENTS AND OTHER INFORMATION.
(a) The Company has delivered to GoodAero complete copies of the
Company's audited consolidated balance sheets (including, without limitation, a
retained earnings line item) as of December 31, 1994 and 1995, and the related
statements of operations, and cash flows (together with the auditors' reports
thereon) for the fiscal years then ended, together with notes to such financial
statements (the "Audited Financial Statements").
The Company has also delivered to GoodAero complete copies of the
Company's unaudited consolidated balance sheet as at November 30, 1996 (the
"November 30 Balance Sheet"), and the related statements of operations, and cash
flows for the eleven months then ended (the "Interim Financial Statements",
which term shall include without limitation the November 30 Balance Sheet).
The Audited Financial Statements and the Interim Financial Statements
are herein collectively referred to as the "Financial Statements."
(b) Except as set forth in SCHEDULE 2.07(B), the Financial Statements
have been prepared in accordance with generally accepted accounting principles
consistently applied ("GAAP") throughout the periods covered thereby, and the
balance sheets included therein present fairly as of their respective dates the
financial condition of the Company (subject, in the case of Interim Financial
Statements, to normal year-end adjustments and the omission of footnote
disclosure required by GAAP). Except as set forth in Schedule 2.07(b), all
liabilities and obligations, whether absolute, accrued, contingent or otherwise,
whether direct or indirect, and whether due or to become due, which existed at
the date of the 1995 Audited Financial Statements and/or the Interim Financial
Statements have been disclosed in the balance sheets included in the 1995
Audited Financial Statements, in notes to the 1995 Audited Financial Statements
or in the Interim Financial Statements. The statements of operations and
retained earnings included in the Financial Statements present fairly the
results of operations and retained earnings of the Company for the periods
indicated, and the statements of cash flows and notes included in the Financial
Statements present fairly the information purported to be shown thereby. The
statements of operations included in the Financial Statements do not contain any
items of special or non-recurring income
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or other income not earned in the ordinary course of business except as
expressly specified therein.
(c) Except as projected to occur as contemplated by SCHEDULE 2.10,
since November 30, 1996 there has been (i) no material adverse change in the
assets or liabilities, or in the business or condition, financial or otherwise,
or in the results of operations or prospects, of the Company, whether as a
result of any legislative or regulatory change, revocation of any license or
right to do business, fire, explosion, accident, casualty, labor trouble, flood,
drought, riot, storm, condemnation or act of God or otherwise, or (ii) no change
in the assets or liabilities or in the business or condition, financial or
otherwise, of the Company except in the ordinary course of business; and no fact
or condition exists or, to the best knowledge of the Company, is contemplated or
threatened which might cause such a change in the future.
SECTION 2.08. INTENTIONALLY OMITTED.
SECTION 2.09. CORPORATE ACTION. All corporate action of the Board of
Directors and of the stockholders of the Company taken on or prior to the date
hereof has been duly authorized and adopted in accordance with applicable law
and the Second Amended and Restated Certificate of Incorporation and Second
Amended and Restated By-laws of the Company and has been duly recorded in its
corporate minute books.
SECTION 2.10. ABSENCE OF CERTAIN TRANSACTIONS. Except as set forth
on SCHEDULE 2.10 and except for the execution of this Agreement or as otherwise
specifically contemplated or permitted by this Agreement, since November 30,
1996:
(a) ORDINARY COURSE. In the reasonable judgment of the Company's
executive management, the Company has: (i) carried on its business in the usual,
regular and ordinary course consistent with past practice and in compliance in
all material respects with all applicable laws, rules and regulations; (ii) used
commercially reasonable efforts to preserve its business organization, maintain
its rights and franchises, keep available the services of its officers and
employees and preserve the goodwill and its relationships with customers,
suppliers and others having business dealings with it; and (iii) used
commercially reasonable efforts to preserve in full force and effect all
material leases, operating agreements, easements, rights-of-way, permits,
Permits, contracts and other material agreements which relate to the assets of
the Company and has performed or caused to be performed all material obligations
of the Company in or under any of such leases, agreements and contracts relating
to such assets.
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(b) DIVIDENDS; SECURITIES. The Company has not (i) declared or paid
any dividend or made any other distribution with respect to Company Stock, (ii)
redeemed, purchased, cancelled or otherwise acquired, directly or indirectly,
any outstanding shares of Company Stock except as otherwise contemplated in this
Agreement without payment of any other or additional consideration therefor,
(iii) issued additional stock, warrants, options or any other similar rights to
acquire Company Stock, (iv) made any payments of principal or interest on
Company Debt Securities, (v) split, combined or reclassified any of its capital
stock or issued or authorized the issuance of any other securities in respect
of, in lieu of or in substitution for shares of, its capital stock except as
otherwise contemplated in this Agreement in exchange therefor without payment of
any other or additional consideration therefor, or (vi) taken any preliminary
action with respect to the foregoing. Except as expressly provided herein, the
Company has not (i) purchased, acquired, issued, delivered, sold or authorized
the issuance, delivery or sale of any stock appreciation rights or of any shares
of its capital stock of any class or any securities convertible into or
exchangeable for, or rights, warrants or options to acquire, any such shares or
convertible or exchangeable securities or (ii) entered into any agreement or
understanding or take any preliminary action with respect to the matters
referred to in clause (i) of this sentence.
(c) CERTAIN TRANSACTIONS. Except for the Merger, the Company has not
merged or consolidated, reorganized, restructured, recapitalized, liquidated or
filed a voluntary petition in bankruptcy.
(d) GOVERNING DOCUMENTS; INCONSISTENT AGREEMENTS. Except as provided
in Section 1.04 and 6.02(l) hereof, the Company has not (i) amended its Second
Amended and Restated Certificate of Incorporation or Second Amended and Restated
By-laws or (ii) entered into, any agreement or incurred any obligation, the
terms of which would be violated by the consummation of the transactions
contemplated by this Agreement.
(e) INDEBTEDNESS. Except as expressly provided in the Creditor
Agreements or as set forth in SCHEDULE 2.10(E), the Company has not incurred,
assumed or guaranteed any obligation for borrowed money, incurred any account
payable except in the ordinary course of business, or entered into or modified
any contract, agreement, commitment or arrangement with respect to the
foregoing.
(f) EMPLOYEE CONTRACTS AND BENEFIT PLANS. Except as expressly
provided herein, the Company has not adopted or amended, or permitted any ERISA
Affiliate to adopt or amend, (other than amendments that reduce the amounts
payable
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by the Company or any ERISA Affiliate or amendments required by law to preserve
the qualified status of a Plan) any Plan, Benefit Program, employee benefit plan
(within the meaning of Section 3(3) of ERISA) or collective bargaining agreement
or entered into any employment, severance or similar contract with any Person
(including, without limitation, contracts with management of the Company or any
ERISA Affiliate that might require that payments be made upon the consummation
of the transactions contemplated hereby) or amended any such existing contracts
to increase any amounts payable thereunder or benefits provided thereunder. The
Company has not granted any increase in compensation to any employees or paid
any bonus, except for increases in salary or wages of the Company in the
ordinary course of business in accordance with past practice. Neither the
Company, not any ERISA Affiliate nor any Plan, nor any trust created thereunder,
has (i) engaged in any transaction in connection with which the Company, or any
ERISA Affiliate could be subjected (directly or indirectly) to either a civil
penalty assessed pursuant to subsections (c), (i) or (l) of Section 502 of ERISA
or a tax imposed by Section 4975 of the Code, (ii) incurred any "accumulated
funding deficiency" (as such term is defined in Section 302 of ERISA or Section
412 of the Code) whether or not waived, (iii) terminated any Plan in a manner,
or taken any other action with respect to any Plan, that could result in the
imposition of a lien on any property of the Company or any ERISA Affiliate
pursuant to Section 4068 of ERISA or that could otherwise result in the
liability of any of such entities to any Person, (iv) taken any action that
could adversely affect the qualification of any Plan or its compliance with the
applicable requirements of ERISA or that might result in any "reportable event"
(as such term is defined in Section 4043(b) of ERISA) or (v) failed to make full
payment when due of all amounts which, under the provisions of any Plan, Benefit
Program, agreement relating thereto or applicable law, the Company or any ERISA
Affiliate is required to pay as contributions thereto. The Company has filed,
and has caused each ERISA Affiliate to file, on a timely basis, all reports and
forms required by federal regulations with respect to any Plan or Benefit
Program except where the failure to make such filing on a timely basis would
have no material adverse affect on the business, prospects, results of
operations, financial condition or assets of the Company or such ERISA
Affiliate.
(g) PROHIBITED DISPOSITIONS. Except as set forth on SCHEDULE 2.10,
other than provision of services in the ordinary course of business and
consistent with present practice or except as expressly permitted by GoodAero in
writing, the Company has not, (i) sold, leased, transferred or otherwise
disposed of any of its assets or property having a book or market value in
excess of $50,000 in the aggregate or that was otherwise, material, individually
or in the aggregate, to the business, results of operations or financial
condition of the Company, (ii) entered into, or consented to the entering into,
any agreement granting a preferential right to sell, lease or otherwise
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dispose of any of such assets. Except as set forth on SCHEDULE 5.07,
notwithstanding anything to the contrary above, the Company has not leased,
sold, purchased or otherwise acquired or disposed of any interest in or usage of
any rights to any (i) aircraft, (ii) landing rights or landing slots or (iii)
gates, ticket counters or other airport facilities.
(h) LINES OF BUSINESS AND CAPITAL EXPENDITURES. Except as set forth
on Schedule 2.10, the Company has not (i) entered into any new line of business;
(ii) changed its investment, liability management and other material policies in
any material respect; (iii) incurred or committed to any capital expenditures,
obligations or liabilities in connection therewith other than capital
expenditures, obligations or liabilities that do not exceed in the aggregate
$50,000; (iv) acquired or agreed to acquire by merging or consolidating with, or
acquired or agreed to acquire by purchasing a substantial portion of the assets
of, or in any other manner, any business or Person; or (v) otherwise, except as
to the acquisition of materials and supplies for its services and activities in
the ordinary course of business and consistent with past practices, acquired or
agreed to acquire any assets or made any lease commitments for a total
consideration in the aggregate in excess of $50,000. Except as set forth on
SCHEDULE 2.10, the Company has not made any investment in any Person. The
Company has not waived any material right or cancelled any material contract,
debt or claim or prepaid any of its obligations, except as set forth on Schedule
2.10.
(i) ACCOUNTING METHODS. Except as set forth on SCHEDULE 2.10(I), the
Company has not changed its methods of accounting in effect at December 31, 1995
except as required by GAAP as concurred in by Xxxxxx Xxxxxxxx & Co., the
Company's independent auditors, or changed any of its methods of accounting for
income and deductions for federal income tax purposes from those employed in the
preparation of the federal income tax return of the Company for the taxable year
ended December 31, 1995, except as required by changes in law. The Company has
not changed its fiscal year.
SECTION 2.11. TAXES. Except as disclosed on SCHEDULE 2.11 hereto (a)
all tax returns (including, without limitation, income, profit, franchise, sales
and use, excise, severance, occupation, property, gross receipts, payroll and
withholding tax returns and information returns), deposits and reports (all such
returns, deposits and reports herein referred to collectively as "Tax Returns"
or singularly as a "Tax Return") of or relating to any foreign, federal, state
or local or other governmental tax (all, together with any penalties, additions
to tax, fines and interest thereon or related thereto, herein referred to
collectively as "Taxes" or singularly as a "Tax") that are required to be filed
or deposited (taking into account all extensions) before the Effective
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Time for, by, on behalf of or with respect to the Company, including, but not
limited to, those relating to the income, business, operations or property of
the Company and those which include or should include the Company, have been or
will be filed or deposited with the governmental authorities when due and all
Taxes shown to be due and payable on such Tax Returns have been or will be paid
in full when due; (b) all such Tax Returns and the information and data
contained therein have been or will be properly and accurately compiled and
completed, fairly present or will fairly present the information purported to be
shown therein and reflect or will reflect all liabilities for Taxes for the
periods covered by such Tax Returns; (c) to the Company's knowledge, none of
such Tax Returns are now under audit or examination by any foreign, federal,
state or local or other governmental authority; and there are no agreements,
waivers or other arrangements providing for an extension of time with respect to
the assessment or collection of any Tax or deficiency of any nature against the
Company or with respect to any such Tax Return or any suits or other judicial or
administrative actions, proceedings, investigations or claims now pending or to
the Company's knowledge, overtly threatened against the Company with respect to
any Tax; and (d) the latest balance sheet included in the Financial Statements
reflects and includes adequate provisions for the payment in full of any and all
Taxes not yet due for any and all periods up to and including the date of such
balance sheet.
SECTION 2.12. LITIGATION. Except as set forth on SCHEDULE 2.12,
there is no action, suit, investigation or proceeding pending or, to the
knowledge of the Company, overtly threatened against the Company or any of its
properties or rights (including without limitation no charge of patent and/or
trademark infringement or claim that a patent license should or need be taken to
enable the Company to continue its present commercial activities free of patent
infringement) by or before any Governmental Entity or by any Person, or any
basis in fact therefor known to the Company, against the Company or any of its
officers, directors, employees in their capacities as such, or the Company's
assets, business or products, whether at law or in equity. No insolvency
proceedings of any character, including, without limitation, bankruptcy,
receivership, reorganization, composition or arrangement with creditors,
voluntary or involuntary, involving the Company, are pending, or, to the
knowledge of the Company, overtly threatened and the Company has not made any
assignment for the benefit of creditors, or taken any action with a view to any
such insolvency proceedings. Except as set forth on SCHEDULE 2.12, the Company
is not a party to or bound by any judgment, writ, injunction, order or decree.
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SECTION 2.13. COMPLIANCE WITH LAWS; ENVIRONMENTAL MATTERS.
(a) COMPLIANCE WITH LAWS. (i) Except as set forth on SCHEDULE
2.13(A), the Company is in compliance in all material respects with all
applicable laws, rules or regulations relating to or affecting the operation,
conduct or ownership of its property or business. (ii) Except as set forth on
SCHEDULE 2.13(A), to the Company's knowledge, no investigation or review by any
Governmental Entity with respect to the Company is pending or, to the knowledge
of the Company, overtly threatened, nor has any Governmental Entity indicated to
the Company an intention to conduct the same.
(b) ENVIRONMENTAL MATTERS. Specifically, without limiting the
representations contained in subsection (a) hereof, the Company represents and
warrants with respect to the Company and its properties and operations as
follows:
(i) The Company and its properties and operations have been,
and are, in compliance in all material respects with all Environmental Laws;
(ii) There is no suit, claim, action, investigation, inquiry,
or proceeding now pending or, to the Company's knowledge, overtly threatened
by any Governmental Entity or by any other Person or entity for
non-compliance with any Environmental Law by the Company or with respect to
the Company's property or operations;
(iii) There are no citations, fines or penalties heretofore
assessed against the Company or with respect to any of its property under any
Environmental Law that remain unpaid, nor has the Company received any
notices or any other material communications from any Governmental Entity
with respect to any violations or alleged violations of any Environmental Law
or any federal, state, local or foreign law, regulation, ordinance,
directive, guidance or agency policy relating to worker health and safety
that remain unresolved (which resolution is not appealable).
(iv) (A) The Company has obtained all Environmental Permits, if
any, necessary for the operation of the Company by the Company.
(v) The Company is not currently operating or required to be
operating any business or facility under any judicial or administrative
compliance order, schedule, decree, or agreement, any judicial or
administrative consent decree, order or agreement, or any other judicial or
administrative corrective action decree, order, or agreement issued or
entered into under any Environmental Law;
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(vi) To the Company's knowledge, there are no underground
storage tanks on any property currently leased by the Company.
(vii) To the Company's knowledge, there is no asbestos or
asbestos-containing material at, on, or in any real property or improvement
currently leased by the Company;
(viii) All Hazardous Substances generated by the Company have
been stored, transported, treated and disposed of by carriers or treatment,
storage and disposal facilities authorized or maintaining valid permits under
all applicable Environmental Laws;
(ix) No Person has disposed of or Released any Hazardous
Substances on, at, or under any property currently or in the past owned,
leased, or operated by the Company;
(x) There are no Environmental Remediation Costs for which the
Company reasonably anticipates payment or accrual that are required or are
planned to be expended relating to the operation of the business;
(xi) There is no suit, claim, action, investigation, inquiry,
or proceeding now pending or, to the Company's knowledge, overtly threatened
by any Governmental Entity or by any Person relating to any Release of any
Hazardous Substance generated by or relating to the Company or any of its
properties or operations, whether occurring at, on, or from property owned,
leased or operated by the Company or occurring at, on, or from property
owned, leased, or operated by another Person.
(xii) The Company has no Environmental Liability, contingent or
otherwise; and
(xiii) There are no Environmental Reports in the Company's
possession or control.
SECTION 2.14. TITLE TO PROPERTY.
(a) SCHEDULE 2.14 identifies by street address all real estate leased
by the Company (the "Leased Premises"). The Company does not own any real
property. The Leased Premises are leased to the Company pursuant to written
leases, copies of which have been provided to GoodAero. Except as set forth in
SCHEDULE 2.14, the
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Company is not in default under any material term of any lease or other
agreement relating to the Leased Premises.
(b) The Company has good and merchantable title to all personalty of
any kind or nature owned by the Company free and clear of all liens,
encumbrances or claims whatsoever (including, to the Company's knowledge, liens
on the lessor's interest in leasehold estates leased to the Company), except for
(i) liens, encumbrances, defects or irregularities of title identified on
SCHEDULE 2.14, (ii) liens for non-delinquent ad valorem taxes and non-delinquent
statutory liens arising other than by reason of default, (iii) statutory liens
of landlords, liens of carriers, warehousemen, mechanics and materialmen
incurred in the ordinary course of business for sums not yet due, (iv) liens
incurred or deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security; and (v) minor irregularities of title which do not in the aggregate
materially detract from the value or use of said personalty. The Company as
lessee has the right under valid and subsisting leases to use, possess and
control all personalty leased by and material to the Company as now used,
possessed and controlled by the Company.
SECTION 2.15. CONDITION OF PROPERTY AND RELATED MATTERS.
(a) SCHEDULE 2.15 sets forth a complete and accurate list of all
aircraft and all aircraft engines used by the Company, all of which are leased
by the Company, and during the Company's use or possession of such aircraft and
aircraft engines all such aircraft and aircraft engines have been maintained in
all material respects by or on behalf of the Company in accordance with and are
in compliance with the Company's maintenance program approved by the Federal
Aviation Administration in all material respects by or on behalf of the Company
and there is in force an appropriate airworthiness certification with respect to
each such aircraft.
(b) All buildings, machinery, equipment and other tangible assets
owned or leased by the Company are in good operating condition, maintenance and
repair, ordinary wear and tear excepted, are usable in the ordinary course of
business and are reasonably adequate and suitable for the uses to which they are
being put. All such property conforms in all material respects to all
applicable federal, state and local laws, statutes, ordinances, rules and
regulations, including the Federal Aviation Act of 1958, as amended, and the
rules and regulations promulgated thereunder. None of the Company's premises or
equipment is in need of maintenance or repairs other than ordinary routine
maintenance and repairs which are not material, individually or in the
aggregate, in nature or cost.
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(c) All properties and assets reflected in the latest balance sheet
included in the Financial Statements have a fair market or realizable value
approximately equal to the value thereof as reflected therein.
(d) The inventories owned by the Company shown in the latest balance
sheet included in the Financial Statements are properly valued at the lower of
cost or market in accordance with GAAP, are usable or saleable and not obsolete
and can reasonably be anticipated to be used in the ordinary course of business
of the Company.
(e) The accounts receivable of all kinds of the Company, net of the
allowance for doubtful accounts applicable thereto included in the latest
balance sheet included in the Financial Statements, are collectible in full over
the period of usual trade terms, and there do not exist any defenses,
counterclaims and set-offs, and all such receivables are actual and bona fide
receivables representing obligations for the total dollar amount thereof shown
on the books of the Company. The Company has fully performed all obligations
with respect thereto which it was obligated to perform to the date hereof.
SECTION 2.16. CONTRACTS. (a) SCHEDULE 2.16 is a complete list of
all written or oral (i) employment contracts, arrangements or policies,
(including without limitation any collective bargaining contract or union
agreement) of the Company which may not be immediately terminated without
penalty (or any augmentation or acceleration of benefits); (ii) leases, sales
contracts and other agreements with respect to any property, real or personal,
of the Company which provide for the receipt or expenditure by the Company after
January 1, 1997, of more than $100,000; (iii) contracts or commitments for
capital expenditures or acquisitions in excess of $100,000 for one project or
set of related projects; (iv) agreements, contracts, indentures or other
instruments relating to the borrowing of money, or the guarantee of any
obligation (third party or otherwise) for the borrowing of money; (v) contracts
or agreements providing for any covenant not to compete by the Company or
otherwise restricting in any way the Company's engaging in the airline business
or competing in any business activity (including a description of the businesses
to which the covenant not to compete applies); (vi) contracts or agreements
relating to consultancies, professional retentions, agency or sales arrangements
pertaining to the Company or its activities which provide for the receipt or
expenditure by the Company after January 1, 1997, of more than $100,000; (vii)
contracts, agreements or commitments requiring the Company to indemnify or hold
harmless any Person providing for the potential expenditure by the Company of
more than $100,000 in the aggregate; and (viii) contracts, agreements,
arrangements or commitments, other than the foregoing, which provide for the
receipt or expenditure by the Company after January 1, 1997, of
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more than $100,000, (all agreements, arrangements or commitments required to be
identified in SCHEDULE 2.16 being hereinafter referred to as "Contracts"). True
and correct copies of all the Contracts identified in SCHEDULE 2.16 have been
furnished to GoodAero or its counsel. Except as set forth on SCHEDULE 2.16: (i)
all Contracts are valid and subsisting, and the Company has duly performed its
obligations thereunder in all material respects to the extent such obligations
have accrued, and (ii) no breach or default thereunder by the Company or, to the
knowledge of the Company, any other party thereto has occurred that could impair
the ability of the Company to enforce any material rights thereunder. Except as
set forth on SCHEDULE 2.16, there are no liabilities of any of the parties to
any of the Contracts arising from any breach of or default in any provision
thereof or which would permit the acceleration of any obligation of any party
thereto or the creation of a lien or encumbrance upon any asset of the Company.
(b) Except as otherwise contemplated by this Agreement, following
receipt of all of the Third Party Approvals, the continuation, validity and
effectiveness of all Contracts under the current material terms thereof will not
be adversely affected by the transactions contemplated by this Agreement, and
there are no negotiations pending or in progress to revise any such Contracts
outside the ordinary course of business, except as contemplated by Sections
6.02(k) and 6.02(m) hereof.
(c) Except as set forth on SCHEDULE 2.16 or otherwise contemplated by
this Agreement, the Company does not have outstanding any bid, contract,
commitment or proposal not made in the ordinary course of business.
(d) To the Company's knowledge, (i) no material customers or
suppliers of the Company intend to cease purchasing from, selling to or dealing
with the Company, and (ii) no such customer or supplier intends to alter in any
material respect the amount of such purchases, sales or the extent of dealings
with the Company or would alter in any significant respect such purchases, sales
or dealings in the event of the consummation of the transactions contemplated
hereby.
SECTION 2.17. EMPLOYEE AND LABOR MATTERS AND PLANS.
(a) SCHEDULE 2.17(A) lists each of the following plans, contracts,
policies and arrangements which is or, within six years prior to the Closing
Date, was sponsored, maintained or contributed to by, or otherwise binding upon
the Company, or, in the case of an "employee pension plan" (as defined in
Section 3(2) of ERISA), an ERISA Affiliate for the benefit of any current or
former employee, director or other personnel (including any such plan, contract,
policy or arrangement approved or
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adopted before, but effective on or after, the date of this Agreement): (i) any
"employee benefit plan," as such term is defined in Section 3(3) of ERISA,
whether or not subject to the provisions of ERISA, (ii) any personnel policy,
and (iii) any other employment, consulting, collective bargaining, stock option,
stock bonus, stock purchase, phantom stock, incentive, bonus, deferred
compensation, retirement, severance, vacation, dependent care, employee
assistance, fringe benefit, medical, dental, sick leave, death benefit, golden
parachute or other compensatory plan, contract, policy or arrangement which is
not an employee benefit plan as defined in Section 3(3) of ERISA (each such
plan, contract, policy and arrangement being herein referred to as an "Employee
Plan").
(b) With respect to each Employee Plan, except as set forth on
Schedule 2.17(b), the Company has delivered to GoodAero true and complete copies
of (1) each contract, plan document, policy statement, summary plan description
and other written material governing or describing the Employee Plan and/or any
related funding arrangements (including, without limitation, any related trust
agreement or insurance company contract) or, if there are no such written
materials, a summary description of the Employee Plan; and (2), WHERE
APPLICABLE, (a) the last two annual reports (5500 series) filed with the
Internal Revenue Service or the Department of Labor; (b) the most recent balance
sheet and financial statement; (c) the most recent actuarial report or valuation
statement; (d) the most recent determination letter issued by the Internal
Revenue Service, as well as any other determination letter, private letter
ruling, opinion letter or prohibited transaction exemption issued by the
Internal Revenue Service or the Department of Labor within the last six years
and any application therefor which is currently pending; and (e) the last PBGC-1
filed with Pension Benefit Guaranty Corporation ("PBGC").
(c) Each Employee Plan has been maintained and administered in
accordance with its terms and in compliance with the provisions of applicable
law, including, without limitation, applicable disclosure, reporting, funding
and fiduciary requirements imposed by ERISA and/or the Code in all material
respects. All contributions, insurance premiums, benefits and other payments
required to be made to or under each Employee Plan have been made timely and in
accordance with the governing documents and applicable law. With respect to
each Employee Plan, (1) no application, proceeding or other matter is pending
before the Internal Revenue Service, the Department of Labor or any other
governmental agency; (2) except as set forth in SCHEDULE 2.17(C), no action,
suit, proceeding or claim (other than routine claims for benefits) is pending or
threatened; and (3) to the knowledge of the Company, no facts exist which could
give rise to an action, suit, proceeding or claim which, if asserted, could
result in any liability or expense to the Company, or the plan assets.
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(d) With respect to each Employee Plan which is an "employee benefit
plan" within the meaning of Section 3(3) of ERISA or which is a "plan" within
the meaning of Section 4975(e) of the Code, there has occurred no transaction
which is prohibited by Section 406 of ERISA or which constitutes a "prohibited
transaction" under Section 4975(c) of the Code and with respect to which a
prohibited transaction exemption has not been granted and is not currently in
effect.
(e) SCHEDULE 2.17(E) identifies each funded Employee Plan which is an
employee pension plan within the meaning of Section 3(2) of ERISA (other than a
multiemployer plan within the meaning of Section 3(37) of ERISA). With respect
to each such Employee Plan, (a) the Employee Plan is a qualified plan under
Section 401(a) or 403(a) of the Code, and its related trust is exempt from
federal income taxation under Section 501(a) of the Code; (b) a request for
favorable IRS determination letter has been made and, since the date of such
request, the Employee Plan has not been amended or operated in a manner which
would adversely affect its qualified status and no event has occurred which has
caused or could cause the loss of such status; (c) there has been no termination
or partial termination within the meaning of Section 411(d)(3) of the Code; (d)
no Employee Plan is covered by Section 412 of the Code; and (e) no such Employee
Plan is covered by Title IV of ERISA. Neither the Company nor any ERISA
Affiliate has ceased operations at a facility so as to become subject to the
provisions of Section 4068(f) of ERISA, withdrawn as a substantial employer so
as to become subject to the provisions of Section 4063 of ERISA or ceased making
contributions on or before the Closing Date to any Employee Plan which is a
pension plan subject to Section 4064(a) of ERISA.
(f) Each trust which is intended to be exempt from federal income
taxation pursuant to Section 501(c)(9) of the Internal Revenue Code has been
identified as such on SCHEDULE 2.17(F), and each such trust satisfies the
requirements of that Section and is covered by a favorable IRS determination
letter, and neither the trust nor any related plan has been amended or operated
since the date of the most recent determination letter in a manner which would
adversely affect such exempt status.
(g) None of the Employee Plans is a multiemployer plan within the
meaning of Section 3(37) of ERISA.
(h) The Company and its ERISA Affiliates have complied in all
material respects with the provisions of Section 4980B of the Code with respect
to any Employee Plan which is a group health plan within the meaning of Section
5001(b)(1) of the Code. Except as set forth in the agreements on SCHEDULE 2.16,
No Employee Plan provides health or death benefits (whether or not insured) to
current or former
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employees or other personnel of the Company beyond the termination of their
employment or other services. Except as set forth in SCHEDULES 2.16 AND
2.17(H), each Employee Plan may be unilaterally terminated and/or amended by the
Company at any time.
(i) Other than the Special Bonuses, the consummation of the
transactions contemplated by this Agreement will not (either alone or in
conjunction with another event, such as a termination of employment or other
services) entitle any employee or other person to receive severance or other
compensation which would not otherwise be payable absent the consummation of the
transactions contemplated by this Agreement or cause the acceleration of the
time of payment or vesting of any award or entitlement under any Employee Plan.
(j) Except as set forth in the agreements on SCHEDULE 2.16, SCHEDULE
2.17(J) hereto sets forth a complete and accurate list showing the names and the
rate of compensation (and the portions thereof attributable to salary and
bonuses, respectively) of all officers of the Company, or any ERISA Affiliate
and of all employees of the Company, or any ERISA Affiliate that are entitled to
receive annual base salary or other compensation in excess of $50,000 (or the
equivalent thereof in foreign currency). Except as set forth in the employment
agreements identified in SCHEDULE 2.16(A), there are no covenants, agreements or
restrictions to which the Company, or any ERISA Affiliate is a party, including
but not limited to employee non-compete agreements, prohibiting, limiting or in
any way restricting any officer or employee listed on SCHEDULE 2.17(J) hereto
from engaging in any types of business activity in any location. To the best of
the Company's knowledge, no officer or employee listed on SCHEDULE 2.17(J)
hereto, and no group of the Company's or any ERISA Affiliate's employees, has
any plans to terminate their employment. There has not been, and the Company
does not anticipate, any adverse change in relations with employees as a result
of the announcement of the transactions contemplated by this Agreement. Neither
the Company, nor any ERISA Affiliate has instituted any "freeze" of, or delayed
or deferred the grant of, any cost-of-living or other salary adjustments for any
of its employees.
(k) SCHEDULE 2.17(K) hereto sets forth a complete and accurate list
of all employees of the Company and the ERISA Affiliates receiving short-term
disability benefits, long-term disability benefits and/or workers' compensation
benefits as of the date of this Agreement.
(l) SCHEDULE 2.17(L) hereto sets forth by number and employment
classification the approximate numbers of employees employed by the Company, and
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each ERISA Affiliate as of November 30, 1996, and, except as set forth therein,
none of said employees is subject to union or collective bargaining agreements.
There have been no governmental audits of the equal employment opportunity
practices of the Company and, to the knowledge of the Company, no basis for such
claim exists, except in connection with the matters disclosed in SCHEDULE 2.12.
There is no unfair labor practice charge or complaint against the Company
pending before the National Labor Relations Board or strike, dispute, slowdown
or stoppage pending or threatened against or involving the Company and none has
occurred since July 22, 1994. No representation question exists respecting the
employees of the Company and no collective bargaining agreement is currently
being negotiated by the Company, nor is any grievance procedure or arbitration
proceeding pending under any collective bargaining agreement and no claim
therefor has been asserted. Except for a pending vote of ramp employees
regarding representation by the International Association of Machinists, the
Company has not received notice from any union or employees setting forth
demands for representation, elections which have not yet been held, terms of
employment or working conditions or from any union or group of employees for
present or future changes in wages.
SECTION 2.18. INSURANCE POLICIES. SCHEDULE 2.18 to this Agreement
contains a correct and complete summary description of all insurance policies of
the Company covering the Company, any employees or other agents of the Company
or any assets of the Company. Each such policy is in full force and effect, is
with responsible insurance carriers and is substantially equivalent in coverage
and amount to policies covering companies of approximately the size of the
Company and in businesses similar to that in which the Company are engaged, in
light of the risk to which such companies and their employees, businesses,
properties and other assets may be exposed. All retroactive premium adjustments
under any worker's compensation policy of the Company have been recorded in the
Company's financial statements in accordance with GAAP. All premiums with
respect to the insurance policies listed on SCHEDULE 2.18 which are due and
payable prior to the Effective Time have been paid or will be paid prior to the
Effective Time on a timely basis, and no notice of cancellation or termination
has been received with respect to any such policy. The Company has not failed
to give any notice or present any claim thereunder known to the Company in due
and timely fashion. There are no pending claims against such insurance by the
Company as to which the insurers have denied coverage or otherwise reserved
rights. The Company has not been refused any insurance with respect to its
assets or operations, nor has its coverage been limited, by any insurance
carrier to which it has applied for any such insurance or with which it has
carried insurance since the date it commenced operations.
-22-
The Company has provided to GoodAero computer print-outs containing
information furnished by the Company's insurance carriers, which provides a
brief description of all product liability claims, workers' compensation claims,
automobile claims and general liability claims for the Company which includes
all unresolved claims.
SECTION 2.19. RECORDS. The Company has records that accurately and
validly reflect its transactions and accounting controls sufficient to insure
that such transactions are (i) in all material respects executed in accordance
with its management's general or specific authorization and (ii) recorded in
conformity with GAAP. The data processing equipment, data transmission
equipment, related peripheral equipment and software used by the Company in the
operation of its business (including any disaster recovery facility) to generate
and retrieve such records are comparable to those of companies of approximately
the size of the Company and in businesses similar to that in which the Company
is engaged.
SECTION 2.20. NO UNDISCLOSED LIABILITIES. Except as set forth on
SCHEDULE 2.20 hereto, the liabilities on the latest balance sheet included in
the Financial Statements consist solely of accrued obligations and liabilities
incurred by the Company in the ordinary course of its business to Persons which
are not Affiliates of the Company. Except as set forth on SCHEDULE 2.20 hereto,
there are no liabilities of the Company of any kind whatsoever, whether or not
accrued and whether or not contingent or absolute, determined or determinable or
otherwise, including without limitation documentary or standby letters of
credit, bid or performance bonds, or customer or third party guarantees, and no
existing condition, situation or set of circumstances that could reasonably
result in such a liability, other than (i) liabilities disclosed in the
Financial Statements, (ii) liabilities which have arisen after the date of the
latest balance sheet included in the Financial Statements in the ordinary course
of business and consistent with past practice (none of which is a liability for
breach of contract, breach of warranty, tort, infringement claim or lawsuit),
(iii) liabilities under the executory portion of any Contract or other written
purchase order, sales order, lease, agreement or commitment of any kind by which
the Company is bound and which was entered into in the ordinary course of the
Company's business and consistent with past practice, and (iv) liabilities under
the executory portion of any Permit. Except as set forth on SCHEDULE 2.20
hereto, no claims have been asserted for indemnification by any Person against
the Company under any law or agreement or pursuant to the Company's Amended and
Restated Certificate of Incorporation or Amended and Restated By-laws (or
equivalent governing document) and, to the Company's knowledge, there do not
exist any facts or circumstances that might reasonably give rise to such a claim
against the Company thereunder.
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SECTION 2.21. BROKERAGE FEES. Neither the Company, Z/C nor any of
their Affiliates has retained any financial advisor, broker, agent or finder or
paid or agreed to pay any financial advisor, broker, agent or finder on account
of this Agreement or any transaction contemplated hereby or any transaction of
like nature that would be required to be paid by the Company or GoodAero. Z/C
agrees to indemnify and hold the GoodAero Group and the Company Group harmless
from and against any and all claims, liabilities or obligations with respect to
any fees, commissions or expenses asserted by any person against the Company
Group or the GoodAero Group on the basis of any act, statement, agreement or
commitment alleged to have been made by the Company, Z/C, or their Affiliates.
SECTION 2.22. BANK ACCOUNTS. SCHEDULE 2.22 sets forth completely and
accurately the name of each bank in which the Company has an account or safe
deposit box, the name in which the account or box is held and the names of all
persons authorized to draw thereon or to have access thereto.
SECTION 2.23. WARRANTIES. Intentionally Omitted.
SECTION 2.24. NO PRODUCT LIABILITIES. The Company has not incurred,
nor does the Company know or have any reason to believe there is any basis for
alleging, any liability, damage, loss, cost or expense as a result of any defect
or other deficiency (whether of design, materials, workmanship, labeling,
instructions or otherwise) ("Product Liability") with respect to any service
rendered by the Company prior to the Effective Time, whether such Product
Liability is incurred by reason of any express or implied warranty, any doctrine
of common law (tort, contract or other), any statutory provision or otherwise
and irrespective of whether such Product Liability is covered by insurance.
SECTION 2.25. SUPPLIERS AND CUSTOMERS. Except as set forth on
SCHEDULE 2.25, neither the Company nor, to the knowledge of the Company, any
officer, director or Affiliate of the Company, nor any relative or spouse (or
relative of such spouse) of any such officer, director or Affiliate of the
Company nor any entity controlled by one of more of the foregoing:
(i) owns, directly or indirectly, any interest in (excepting less
than 5% stock holdings for investment purposes in securities of
publicly held and traded companies), or is an officer, director,
employee or consultant of, any Person which is, or is engaged in
business as, a competitor, lessor, lessee, supplier, distributor,
sales agent, customer or client of the Company;
-24-
(ii) owns, directly or indirectly, in whole or in part, any material
tangible or intangible property that the Company uses in the conduct
of the Company's business; or
(iii) has any cause of action or other claim whatsoever against,
or owes any amount in excess of $25,000 to, the Company, except for
claims in the ordinary course of business such as for accrued vacation
pay, travel and entertainment reimbursement, accrued benefits under
employee benefit plans, and similar matters and agreements existing on
the date hereof.
SECTION 2.26. INTELLECTUAL PROPERTIES. (a) SCHEDULE 2.26 contains an
accurate and complete list of all domestic and foreign patents, patent
applications, patent licenses, trade names, trademarks and service marks
(collectively with the associated goodwill of each, "Trademarks"), Trademark
registrations and applications (whether pending or abandoned), copyright
registrations and applications (whether pending or abandoned), and licenses of
rights in computer software, Trademarks, copyrights, owned (in whole or in
part), licensed to any extent or used or anticipated to be used by the Company
in the conduct of its business (collectively, the "Intellectual Property").
(b) (i) The Company is the owner of or duly licensed to use the entire
right, title and interest in and to the Intellectual Property, copyrights, trade
secrets and technology used in the conduct of its business; (ii) each item
constituting part of the Intellectual Property in which the Company has an
ownership or license interest has been, to the extent indicated in SCHEDULE
2.26, duly registered with, filed in or issued by, as the case may be, the
United States Patent and Trademark Office or such other Governmental Entities,
domestic or foreign, as are indicated in SCHEDULE 2.26; and (iii) each Trademark
registration, copyright registration and patent owned by the Company, and to the
Company's knowledge, used by the Company, exists, has been maintained in good
standing, and remains in full force and effect.
(c) (i) To the Company's best knowledge, no claim of infringement or
misappropriation of patents, trade secrets, trademarks, trade names, service
marks or copyrights of any other Person has been made against the Company; and
(ii) to the Company's best knowledge, the Company is not infringing or
misappropriating any patents, trade secrets, trademarks, trade names, service
marks or copyrights of any other Person. Without limiting the foregoing, to the
best knowledge of the Company, no claim is pending or threatened or, except as
set forth on SCHEDULE 2.26, has been made since January 1, 1986, to the effect
that the conduct by the Company of its business conflicts with or infringes in
any way upon any patents, trade secrets, trademarks, trade names, service marks
or copyrights owned by others, that the Company needs or should enter into
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a license arrangement so as to continue the conduct of its business without
infringing any other Person's patents, trade secrets, trademarks, trade names,
service marks or copyrights, or that any of the trademarks, service marks or
trade names set forth on SCHEDULE 2.26 has been abandoned.
(d) Without limiting any other provisions hereof, except as set forth on
SCHEDULE 2.26, the Company has not granted any license, franchise or permit to
any Person to use any of the Intellectual Property of the Company and no other
Person has the right to use the same trademarks, service marks or trade names
owned by the Company or any similar trademarks, service marks or trade name in
connection with the same or similar services as the Company.
(e) Since January 1, 1994, the business conducted by the Company has not
been conducted under any corporate, trade or fictitious name other than "Midway
Airlines Corporation" and "Midway Airlines".
SECTION 2.27. PERMITS. The Company has all Permits. SCHEDULE 2.27
contains a true and complete list of the Permits, exclusive of any Permits with
respect to state or local sales, use or other Taxes. All of the Permits are in
full force and effect. No outstanding notice of cancellation or termination has
been delivered to the Company in connection with any such Permit nor has any
such cancellation or termination been threatened. No application, action or
proceeding is pending for the modification of any such Permits or, to the
knowledge of the Company, overtly threatened that may result in the revocation,
modification, nonrenewal or suspension of any Permits, the issuance of a
cease-and-desist order, or the imposition of any administrative or judicial
sanction. The Company has filed when due all documents required to be filed
with any Governmental Entity in connection with such Permits and all such
filings were accurate and complete in all material respects. The most recent
report filed with respect to the Company pursuant to 14 C.F.R. Part 204 was
accurate and complete in all material respects as of the date of such filing
and, except as disclosed on SCHEDULE 2.27, remains accurate and complete in all
material respects as of the date hereof.
SECTION 2.28. NO ILLEGAL OR IMPROPER TRANSACTIONS. Except as set
forth on SCHEDULE 2.28 hereto, neither the Company, nor, to the Company's
knowledge, any director, officer or employee of the Company, has directly or
indirectly used funds or other assets of the Company, or made any promise or
undertaking in such regards, for (i) illegal contributions, gifts, entertainment
or other expenses relating to political activity; (ii) illegal payments to or
for the benefit of governmental officials or employees, whether domestic or
foreign; (iii) illegal payments to or for the benefit of any person, firm,
corporation or other entity, or any director, officer, employee, agent or
representative thereof; (iv) gifts,
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entertainment or other expenses that jeopardize the normal business relations
between the Company and any of its respective customers; or (v) the
establishment or maintenance of a secret or unrecorded fund; and (vi) there have
been no false or fictitious entries made in the books or records of the Company.
SECTION 2.29. RESTRICTIVE DOCUMENTS, TERRITORIAL RESTRICTIONS AND
LOCATION OF ASSETS. Except as set forth in the agreements set forth on SCHEDULE
2.16 and SCHEDULE 2.29 hereto, the Company is not subject to, or a party to, any
charter, by-law, mortgage, lien, lease, license, permit, agreement, contract,
instrument, law, rule, ordinance, regulation, order, judgment or decree, or any
other restriction of any kind or character, which would prevent consummation of
the transactions contemplated by this Agreement, or the continued operation of
the Company's business after the date hereof or the Effective Time on
substantially the same basis as heretofore operated or which would restrict the
ability of the Company to acquire any property or conduct business in any area.
Except as set forth in SCHEDULE 2.29, the Company is not restricted by any
written agreement or understanding with third parties from carrying on its
business anywhere in the world. Except as set forth in SCHEDULE 2.29, all
assets of the Company are located in the United States of America, and, except
for technical services and sales activities, the Company does not (i) conduct
operations, (ii) own or lease real property, (iii) maintain offices or (iv)
employ personnel in countries other than the United States of America.
SECTION 2.30. NO MISLEADING STATEMENTS. This Agreement, the
information and schedules referred to herein and the information contained in
the Financial Statements that have been furnished to GoodAero in connection with
the transactions contemplated by this Agreement do not and will not include any
untrue statement of a material fact and do not and will not omit to state any
material fact necessary to make the statements contained herein or therein, in
light of the circumstances under which they were made, not misleading.
SECTION 2.31. ORGANIZATION. Z/C is a limited partnership duly
organized, validly existing and in good standing under the laws of Delaware.
Z/C has full corporate power and authority to enter into this Agreement and to
carry out its obligations hereunder and to consummate the transactions
contemplated hereby.
SECTION 2.32. AUTHORIZATION. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly approved by the Executive Committee of Z/C and no other corporate
proceedings on the part of Z/C are necessary to authorize the Merger, this
Agreement and the transactions contemplated hereby. This Agreement has been
duly executed and delivered by Z/C and constitutes the legal valid and binding
obligation of Z/C, enforceable against Z/C in accordance with its
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terms, except as such enforcement may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to creditors' rights
generally and (ii) general principles of equity (whether applied in a proceeding
at law or in equity).
SECTION 2.33. NO VIOLATION. The execution and delivery of this
Agreement by Z/C do not, and the consummation by it of the transactions
contemplated hereby will not, (i) conflict with, or result in any violation of
or default under, any provision of the governing documents of Z/C; (ii) conflict
with or result in any violation of any Permit, concession, grant, franchise,
law, rule or regulation, or any judgment, decree or order of any court or other
governmental agency or instrumentality to which Z/C is a party or to which any
of its property is subject; or (iii) conflict with, or result in a breach or
violation of or default under, or accelerate the performance required by, the
terms of any agreement, contract, indenture or other instrument to which Z/C is
a party or to which any of its property is subject, or constitute a default
thereunder or an event which, with the lapse of time or notice or both, might
result in a default or the creation of any lien, charge or encumbrance upon any
of the assets or properties of Z/C. Z/C is in compliance in all material
respects with all applicable laws, rules or regulations relating to or affecting
the operation, conduct or ownership of its property or business.
SECTION 2.34. APPROVALS. The execution and delivery of this Agreement
and the consummation of the transactions contemplated by this Agreement by Z/C
will not require the consent, approval, order or authorization of any
Governmental Entity or Regulatory Authority or any other Person under any
Permit, agreement, indenture or other instrument to which Z/C is a party or to
which any of its properties are subject, and no declaration, filing or
registration with any Governmental Entity or Regulatory Authority is required or
advisable by Z/C in connection with the execution and delivery of this Agreement
and the consummation of such transactions, except for (i) the delivery and
filing of the Certificate of Merger as required by the GCL, (ii) the filing
pursuant to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 as amended,
and the termination of the applicable waiting period under such Act and (iii)
the applicable requirements of the Federal Aviation Act of 1958, as amended, and
the regulations of the Department of Transportation thereunder.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF GOODAERO
AND THE GOODAERO STOCKHOLDERS
GoodAero and the GoodAero Stockholders hereby jointly and severally
represent and warrant to the Company and Z/C as follows:
SECTION 3.01. ORGANIZATION. GoodAero is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. GoodAero has full corporate power and authority to enter into this
Agreement and to carry out its obligations under this Agreement and to
consummate the transactions contemplated hereby.
SECTION 3.02. CAPITALIZATION. The authorized capital stock of
GoodAero consists of 10,000 shares of common stock, of $1.00 par value per
share, of which 52 shares are issued and outstanding as of the date hereof and
owned of record by the Persons set forth on SCHEDULE 3.02 hereto. No shares of
GoodAero Stock are held as treasury shares. All outstanding shares of GoodAero
Stock have been duly authorized and validly issued and are fully paid and
non-assessable. Except as set forth in SCHEDULE 3.02, there are no outstanding
options, warrants, convertible securities, calls, rights, commitments,
preemptive rights or agreements or instruments or understandings of any
character, to which GoodAero is a party or by which GoodAero is bound,
obligating GoodAero to issue, deliver or sell, or cause to be issued, delivered
or sold, contingently or otherwise, additional shares of GoodAero Stock or any
securities or obligations convertible into or exchangeable for such shares or to
grant, extend or enter into any such option, warrant, convertible security,
call, right, commitment, preemptive right or agreement. There are no
outstanding obligations of GoodAero to purchase or otherwise acquire any
GoodAero Stock.
SECTION 3.03. AUTHORIZATION. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly approved by the Board of Directors of GoodAero, subject to Stockholder
Approval, and no other corporate proceedings on the part of the Board of
Directors of GoodAero are necessary to authorize the Merger, this Agreement and
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by GoodAero and constitutes the legal, valid and binding obligation of
GoodAero, enforceable against GoodAero in accordance with its terms, except as
such enforcement may be subject to (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors' rights generally and
(ii) general principles of equity (whether applied in a proceeding at law or in
equity).
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SECTION 3.04. NO VIOLATION. The execution and delivery of this
Agreement by GoodAero does not, and the consummation by GoodAero of the
transactions contemplated by this Agreement will not, (i) conflict with, or
result in any violation of or default under, any provision of GoodAero's
Certificate of Incorporation or By-laws; (ii) conflict with or result in any
violation of any Permit, concession, grant, franchise, law, rule or regulation,
or any judgment, decree or order of any court or other governmental agency or
instrumentality to which GoodAero is a party or to which any of its property is
subject; or (iii) conflict with, or result in a breach or violation of or
default under, or accelerate the performance required by, the terms of any
agreement, contract, indenture or other instrument to which GoodAero is a party
or to which any of its property is subject, or constitute a default thereunder
or an event which, with the lapse of time or notice or both, might result in a
default or the creation of any lien, charge or encumbrance upon any of the
assets or properties of GoodAero. GoodAero is in compliance in all material
respects with all applicable laws, rules or regulations relating to or affecting
the operation, conduct or ownership of its property or business.
SECTION 3.05. APPROVALS. The execution and delivery of this Agreement
and the consummation of the transactions contemplated by this Agreement by
GoodAero will not require the consent, approval, order or authorization of any
Governmental Entity or Regulatory Authority or any other Person under any
Permit, agreement, indenture or other instrument to which GoodAero is a party or
to which any of its properties is subject, other than Stockholder Approval, and
no declaration, filing or registration with any Governmental Entity or
Regulatory Authority is required or advisable by GoodAero in connection with the
execution and delivery of this Agreement and the consummation of such
transactions, except for (i) the delivery and filing of the Certificate of
Merger as required by the GCL, (ii) the filing pursuant to the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, and the termination of the
applicable waiting period under such Act and (iii) the applicable requirements
of the Federal Aviation Act of 1958, as amended, and the regulations of the
Department of Transportation thereunder.
SECTION 3.06. NO LIABILITIES/NET CAPITAL. Except for expenses
incurred in connection with the formation of GoodAero and the transactions
contemplated by this Agreement, there are no liabilities or obligations of
GoodAero of any kind whatsoever, whether or not accrued and whether or not
contingent or absolute, determined, determinable or otherwise. As of the
Closing, GoodAero shall have capital in the amount of $15 million in cash, net
of any liabilities or obligations of GoodAero whatsoever, including without
limitation those referred to in the immediately preceding sentence.
SECTION 3.07. BROKERAGE FEES. Neither GoodAero nor any of its
Affiliates has retained any financial advisor, broker, agent or finder or paid
or agreed to pay any
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financial advisor, broker, agent or finder on account of this Agreement or any
transaction contemplated hereby or any transaction of like nature that would be
required to be paid by the Company or Z/C. GoodAero and the GoodAero
Stockholders jointly and severally agree to indemnify and hold the Z/C Group and
the Company Group harmless from and against any and all claims, liabilities or
obligations with respect to any fees, commissions or expenses asserted by any
person against the Company Group or Z/C Group on the basis of any act,
statement, agreement or commitment alleged to have been made by the GoodAero or
its Affiliates.
ARTICLE IV
COVENANTS
SECTION 4.01. ACCESS TO RECORDS. At all reasonable times from and
after the date hereof until the Effective Time, the Company shall afford
GoodAero and its accountants, counsel and other representatives full and
complete access to the properties, employees and officers of the Company and to
all books, accounts, financial and other records and contracts of every kind of
the Company. Any information regarding the Company heretofore obtained from the
Company by GoodAero, its accountants, counsel or other representatives or
hereafter obtained by any of them pursuant to this Section 4.01 shall be used
and held by them in accordance with that certain Confidentiality Agreement dated
October 24, 1996, between the shareholders of GoodAero and the Company. The
Company shall also furnish to GoodAero as promptly as practicable (i) following
the end of each calendar month after the date hereof, balance sheets and related
statements of operations, retained earnings and cash flows of the Company as of
the end of such month (all such financial statements shall be covered by and
conform to the representations and warranties set forth in Section 2.07 hereof
and shall be included in the term "Financial Statements" for purposes of this
Agreement); and (ii) all financial and operating data and other information
concerning its business, properties and personnel as GoodAero may reasonably
request. Before the Effective Time, the Company will, as requested by GoodAero,
make available on a reasonable basis the officers and other appropriate
employees of the Company to discuss with representatives of GoodAero the
condition, operation, business and prospects of the Company and shall use
commercially reasonable efforts to arrange for the officers and other
appropriate employees of each operator, owner or lessor of properties in which
the Company has an interest and of each supplier and customer whose relationship
with the Company is material to the Company to discuss with representatives of
GoodAero such relationship.
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SECTION 4.02. STOCKHOLDER APPROVAL. Each of the Company and GoodAero
shall, through its respective board of directors, recommend to each of the
Company Stockholders and the GoodAero Stockholders, respectively, approval of
this Agreement and the Merger and, as promptly as practicable after the date of
this Agreement, use its best efforts to obtain Stockholder Approval. Z/C agrees
to vote its shares of Company Stock in favor of Stockholder Approval. GoodAero
Stockholders agree to vote their shares of GoodAero Stock in favor of
Stockholder Approval.
SECTION 4.03. LITIGATION AND CLAIMS. The Company shall promptly
inform GoodAero in writing of any litigation against the Company, or of any
claim or controversy or contingent liability known to the Company that might
reasonably be expected to become the subject of litigation, against the Company
or affecting any of its property.
SECTION 4.04. NOTICE OF CHANGES BY THE COMPANY. The Company shall
promptly inform GoodAero in writing of any change, which in the Company's
reasonable judgment, shall have occurred or shall have been threatened (or any
development shall have occurred or shall have been threatened involving a
prospective change) in the financial condition, results of operations, business,
prospects or assets of the Company that is or may reasonably be expected to
become materially adverse to the Company. The Company shall promptly inform
GoodAero in writing if in the Company's reasonable judgment any representation
or warranty made by the Company in this Agreement shall cease to be accurate;
provided that this covenant does not supersede the application of
Sections 6.02(a) and 6.02(e) at the Closing. From time to time prior to the
Effective Time, the Company will promptly supplement or amend the Schedules and
Exhibits hereto with respect to any matter hereafter arising which, if existing
or occurring at the date of this Agreement, would have been required to be set
forth or described in the Schedules and Exhibits hereto; provided that this
covenant does not supersede the application of Sections 6.02(a) and 6.02(e) at
the Closing. No supplement or amendment of a Schedule or Exhibit made pursuant
to this Section shall be deemed to cure any breach of, affect or otherwise
diminish any representation or warranty made in this Agreement unless GoodAero
specifically agrees thereto in writing; provided that this covenant does not
supersede the application of Sections 6.02(a) and 6.02(e) at the Closing.
SECTION 4.05. DISSENTING STOCKHOLDERS. The Company shall give
GoodAero prompt notice of any demands received from Dissenting Stockholders, if
any, for payment of the fair value for their shares of Company Stock.
SECTION 4.06. CAPITAL STRUCTURE OF THE SURVIVING CORPORATION. In
connection with the Merger, the Surviving Corporation shall issue Surviving
Corporation Common Stock as set forth in subparagraphs (i) through (iv) below of
this Section 4.06, such that,
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after taking into account the Merger and all of the transactions contemplated
by such subparagraphs, the capital structure of the Surviving Corporation
shall be as set forth on EXHIBIT 4.06:
(i) As of the Closing, the Surviving Corporation shall have
reserved 1144 shares of Surviving Corporation Common Stock which represents
10% of the Fully Diluted Surviving Corporation Stock for issuance (and/or
issued) to management employees of the Surviving Corporation pursuant to a
stock option plan and/or stock award plan to be adopted by the Surviving
Corporation;
(ii) In connection with the restructuring of the obligations
owed by the Company to AA and the Aircraft Creditors, at the Closing the
Surviving Corporation shall issue (A) warrants for the purchase of 572 shares
of Surviving Corporation Common Stock which represents 5% of the Fully
Diluted Surviving Corporation Stock to AA pursuant to the agreements
concerning AA referred to in Section 6.02(k), and (B) 572 shares of Surviving
Corporation Common Stock which represents 5% of the Fully Diluted Surviving
Corporation Stock to the Aircraft Creditors, pursuant to the agreements
concerning the Aircraft Creditors referred to in Section 6.02(k);
(iii) At the Closing, the Surviving Corporation shall issue to
Z/C 2548 shares of Surviving Corporation Common Stock (which represents
approximately 22.3% of the Fully Diluted Surviving Corporation Stock), in
consideration of an amount equal to $7,000,000; and
(iv) At the Closing, the Surviving Corporation shall issue to
Xxxxxx X. Xxxxxxxx, III, options for the purchase of 1144 shares of Surviving
Corporation Common Stock which represents 10% of the Fully Diluted Surviving
Corporation Stock.
SECTION 4.07. OBLIGATIONS OF Z/C. Z/C shall be liable for and shall
pay as primary obligor (a) all amounts in excess of $7,000,000 necessary to
obtain the release from all liabilities and obligations under the First Bank
Guaranty as set forth in section 6.04 hereof; and (b) all amounts incurred in
connection with cancellation of (i) any and all outstanding Company Stock
Options held by any Person prior to the Effective Time and shares of Company
Stock held by Company Stockholders and all declared, undeclared or accrued, but
unpaid, dividends on the foregoing Company Stock; (ii) the Company Debt
Securities (as hereafter defined); and (iii) payment of the Special Bonuses.
Z/C hereby covenants and agrees that under no circumstances shall it (a)
liquidate or terminate its existence until satisfactory evidence of the payment
in full and discharge of the foregoing liabilities shall have been provided to
the Surviving Corporation or (b) assign its
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obligations hereunder without the prior written consent of the Surviving
Corporation in its sole discretion.
SECTION 4.08. CAPITAL STRUCTURE OF GOODAERO. At the Effective Time,
GoodAero Stockholders shall have capitalized GoodAero in the amount of
$15,000,000 in cash, net of all liabilities or obligations of GoodAero,
including, without limitation, in connection with the formation of GoodAero and
the transactions contemplated by this Agreement.
ARTICLE V
CONDUCT OF BUSINESS BY THE COMPANY
During the period from the date of this Agreement through the
Effective Time, the Company agrees (except to the extent GoodAero shall
otherwise consent in writing) that:
SECTION 5.01. ORDINARY COURSE. Except as provided in this Article V,
the Company shall in the reasonable judgment of the Company's executive
management, (i) carry on its business in the usual, regular and ordinary course
consistent with past practice and in compliance in all material respects with
all applicable laws, rules and regulations, (ii) use commercially reasonable
efforts to preserve its business organization, maintain its rights and
franchises, keep available the services of its officers and employees and
preserve the goodwill and its relationships with customers, suppliers and others
having business dealings with it, and (iii) use commercially reasonable efforts
to preserve in full force and effect all material leases, operating agreements,
easements, rights-of-way, permits, Permits, contracts and other material
agreements which relate to the assets of the Company and shall perform or cause
to be performed all material obligations of the Company in or under any of such
leases, agreements and contracts relating to such assets.
SECTION 5.02. DIVIDENDS; SECURITIES. The Company shall not (i)
declare or pay any dividend or make any other distribution with respect to
Company Stock, (ii) redeem, purchase, cancel or otherwise acquire, directly or
indirectly, any outstanding shares of Company Stock except as otherwise
contemplated in this Agreement without payment of any other or additional
consideration therefor, (iii) issue additional stock, warrants, options or any
other similar rights to acquire Company Stock, or (iv) make any payments of
principal or interest on Company Debt Securities, and, (v) split, combine or
reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect
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of, in lieu of or in substitution for shares of, its capital stock except as
otherwise contemplated in this Agreement in exchange therefor without payment of
any other or additional consideration therefor, or (vi) take any preliminary
action with respect to the foregoing. Except as expressly provided herein, the
Company shall not (i) purchase, acquire, issue, deliver, sell or authorize the
issuance, delivery or sale of any stock appreciation rights or of any shares of
its capital stock of any class or any securities convertible into or
exchangeable for, or rights, warrants or options to acquire, any such shares or
convertible or exchangeable securities or (ii) enter into any agreement or
understanding or take any preliminary action with respect to the matters
referred to in clause (i) of this sentence.
SECTION 5.03. CERTAIN TRANSACTIONS. Except for the Merger, the
Company shall not merge or consolidate, reorganize, restructure, recapitalize,
liquidate or file a voluntary petition in bankruptcy.
SECTION 5.04. GOVERNING DOCUMENTS; INCONSISTENT AGREEMENTS. Except
as provided in Sections 1.04 and 6.02(l) hereof, the Company shall not (i) amend
its Second Amended and Restated Certificate of Incorporation or Second Amended
and Restated By-laws or (ii) enter into any agreement or incur any obligation,
the terms of which would be violated by the consummation of the transactions
contemplated by this Agreement.
SECTION 5.05. INDEBTEDNESS. Except as expressly provided in the
Creditor Agreements, the Company shall not incur, assume or guarantee any
obligation for borrowed money, or incur any account payable except in the
ordinary course of business, or enter into or modify any contract, agreement,
commitment or arrangement with respect to the foregoing.
SECTION 5.06. EMPLOYEE CONTRACTS AND BENEFIT PLANS. Except as
expressly provided herein, the Company shall not, and shall not permit any ERISA
Affiliate to, adopt or amend (other than amendments that reduce the amounts
payable by the Company or any ERISA Affiliate or amendments required by law to
preserve the qualified status of a Plan) any Plan, Benefit Program, employee
benefit plan (within the meaning of Section 3(3) of ERISA) or collective
bargaining agreement or enter into any employment, severance or similar contract
with any Person (including, without limitation, contracts with management of the
Company, or any ERISA Affiliate that might require that payments be made upon
the consummation of the transactions contemplated hereby) or amend any such
existing contracts to increase any amounts payable thereunder or benefits
provided thereunder. The Company shall not grant any increase in compensation
to any employees or pay any bonus, except for increases in salary or wages of
the Company in the ordinary course of business in accordance with past practice
which does not include the
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Special Bonuses. Neither the Company, any ERISA Affiliate nor any Plan, nor any
trust created thereunder, shall (i) engage in any transaction in connection with
which the Company, or any ERISA Affiliate could be subjected (directly or
indirectly) to either a civil penalty assessed pursuant to subsections (c), (i)
or (l) of Section 502 of ERISA or a tax imposed by Section 4975 of the Code,
(ii) incur any "accumulated funding deficiency" (as such term is defined in
Section 302 of ERISA or Section 412 of the Code) whether or not waived, (iii)
terminate any Plan in a manner, or take any other action with respect to any
Plan, that could result in the imposition of a lien on any property of the
Company or any ERISA Affiliate pursuant to Section 4068 of ERISA or that could
otherwise result in the liability of any of such entities to any Person, (iv)
take any action that could adversely affect the qualification of any Plan or its
compliance with the applicable requirements of ERISA or that might result in any
"reportable event" (as such term is defined in Section 4043(b) of ERISA) or (v)
fail to make full payment when due of all amounts which, under the provisions of
any Plan, Benefit Program, agreement relating thereto or applicable law, the
Company or any ERISA Affiliate is required to pay as contributions thereto. The
Company shall, and shall cause each ERISA Affiliate to, file, on a timely basis,
all reports and forms required by federal regulations with respect to any Plan
or Benefit Program except where the failure to make such filing on a timely
basis would have no material adverse affect on the business, prospects, results
of operations, financial condition or assets of the Company or such ERISA
Affiliate.
SECTION 5.07. PROHIBITED DISPOSITIONS. Except as set forth on
SCHEDULE 5.07, other than provision of services in the ordinary course of
business and consistent with present practice or except as expressly permitted
by GoodAero in writing, the Company shall not, (i) sell, lease, transfer or
otherwise dispose of any of its assets or property having a book or market value
in excess of $50,000 in the aggregate or that are otherwise material,
individually or in the aggregate, to the business, results of operations or
financial condition of the Company or (ii) enter into, or consent to the
entering into, any agreement granting a preferential right to sell, lease or
otherwise dispose of any of such assets. Except as set forth on SCHEDULE 5.07,
notwithstanding anything to the contrary above, the Company shall not lease,
sell, purchase or otherwise acquire or dispose of any interest in or usage of
any rights to any (i) aircraft, (ii) landing rights or landing slots or (iii)
gates, ticket counters or other airport facilities.
SECTION 5.08. LINES OF BUSINESS AND CAPITAL EXPENDITURES. Except as
expressly permitted by GoodAero in writing the Company shall not (i) enter into
any new line of business; (ii) change its investment, liability management and
other material policies in any material respect; (iii) incur or commit to any
capital expenditures, obligations or liabilities in connection therewith other
than capital expenditures, obligations or liabilities that do not exceed in the
aggregate $50,000; (iv) acquire or agree
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to acquire by merging or consolidating with, or acquire or agree to acquire by
purchasing a substantial portion of the assets of, or in any other manner, any
business or Person; or (v) otherwise, except as to the acquisition of materials
and supplies for its services and activities in the ordinary course of business
and consistent with past practices, acquire or agree to acquire any assets or
make any lease commitments for a total consideration in the aggregate in excess
of $50,000. The Company shall not make any investment in any Person. The
Company shall not waive any material right or cancel any material contract, debt
or claim or prepay any of its obligations.
SECTION 5.09. ACCOUNTING METHODS. Except as set forth in
Schedule 5.09, the Company did not change since December 31, 1995 and shall not
change its methods of accounting in effect at December 31, 1995 except as
required by GAAP as concurred in by Xxxxxx Xxxxxxxx & Co., the Company's
independent auditors, or any of its methods of accounting for income and
deductions for federal income tax purposes from those employed in the
preparation of the federal income tax return of the Company for the taxable year
ended December 31, 1995, except as required by changes in law. The Company
shall not change its fiscal year.
SECTION 5.10. EXCLUSIVITY. In consideration of the expenditure of
time, effort and expense to be undertaken by GoodAero in connection with the
preparation of this Agreement, and the investigations and review of the business
of the Company, prior to the Closing Date, the Company and Z/C shall not, and
shall cause their respective officers, directors, employees, agents, advisors
and other representatives not to, directly or indirectly, solicit, continue or
initiate discussions with, engage in negotiations with, or provide any
information to, any corporation, partnership, person or other entity or group
other than GoodAero (a "Competitor") regarding (i) the sale or other disposition
of the capital stock or debt of the Company held by Z/C to a Competitor, (ii)
the sale or other disposition of all or substantially all of the assets of the
Company to a Competitor, (iii) any merger or consolidation involving the Company
and a Competitor, or (iv) any other transaction resulting in a change of control
of the Company to a Competitor (any of the events described in subparagraphs (i)
through (iv) above, a "Competing Transaction"); provided, however, that nothing
in this Section 5.10 shall prohibit the Board of Directors of the Company from
(i) furnishing information pursuant to an appropriate confidentiality letter
concerning the Company and its businesses, properties or assets to a Competitor
who has made an unsolicited proposal for a Competing Transaction, or (ii)
engaging in discussions or negotiations with such a Competitor who has made an
unsolicited proposal for a Competing Transaction, but in each case referred to
in the foregoing clauses (i) and (ii) only (x) after the Board of Directors of
the Company concludes in good faith based on the advice of outside counsel that
such action is necessary for the Board of Directors of the Company to comply
with its fiduciary obligations to Company Stockholders under
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applicable law. Notwithstanding anything in this Agreement to the contrary, the
Company shall immediately inform GoodAero orally and in writing of the receipt
by it of any proposal for a Competing Transaction.
(b) The Board of Directors of the Company shall not (i) withdraw or
modify, or propose to withdraw or modify, in a manner adverse to GoodAero, the
approval or recommendation by such Board of Directors of this Agreement, (ii)
approve or recommend, or propose to approve or recommend, any Competing
Transaction or (iii) approve the Company entering into any agreement with
respect to any Competing Transaction, unless an unsolicited proposal for a
Competing Transaction is received from a Competitor and the Board of Directors
of the Company concludes in good faith based on the advice of outside counsel
that in order to comply with its fiduciary obligations to stockholders under
applicable law, it is necessary for the Board of Directors to withdraw or modify
its approval or recommendation of this Agreement, approve or recommend such
Competing Transaction, enter into an agreement with respect to such Competing
Transaction or terminate this Agreement, provided that no such action shall be
taken prior to five (5) days after written notice of such Competing Transaction
has been provided to GoodAero and provided further that either the Board of
Directors shall reject such Competing Transaction or such action shall be taken
and notice thereof given to GoodAero no later than five (5) days after notice of
such Competing Transaction has been provided to GoodAero. A failure to reject
such Competing Transaction or to give such notice to GoodAero within such 5-day
period shall be deemed an election by the Company to terminate this Agreement
and shall entitle GoodAero to immediate payment of the GoodAero Costs and
Expenses and, within fifteen (15) days after the Closing of a Competing
Transaction, payment of the Topping Fee. In the event the Board of Directors of
the Company takes any of the foregoing actions, the Company shall, within
fifteen (15) days thereafter, pay GoodAero the GoodAero Costs and Expenses and,
within fifteen (15) days after the closing of a Competing Transaction, pay
GoodAero the Topping Fee. Notwithstanding anything contained in this Agreement
to the contrary, any action by the Board of Directors permitted by this Section
5.10 shall not constitute a breach of this Agreement by the Company if the
Company pays the GoodAero Costs and Expenses and, if applicable, the Topping
Fee.
SECTION 5.11. OTHER ACTIONS. The Company shall not take any action
that would or might reasonably be expected to result in any of the
representations and warranties of the Company set forth in this Agreement
becoming untrue in any material respects after the date hereof or any of the
conditions to the Merger set forth in Article VI not being satisfied in any
material respects, except as may be required by any applicable law, rule,
regulation, or any judgment, decree or order of any court or other governmental
agency or instrumentality.
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ARTICLE VI
CONDITIONS OF CLOSING
SECTION 6.01. CONDITIONS TO ALL PARTIES' OBLIGATIONS.
The obligations of all the parties to this Agreement to effect the Merger shall
be subject to the fulfillment of the following conditions:
(a) Stockholder Approval from the stockholders of each of the Company
and GoodAero shall have been obtained.
(b) No temporary restraining order, preliminary or permanent
injunction or other order or restraint issued by any court of competent
jurisdiction, no order, decree, restraint or pronouncement by any Governmental
Entity, and no other legal restraint or prohibition which would prevent or have
the effect of preventing the consummation of the Merger shall have been issued
or adopted or be in effect.
(c) All permits, approvals, filings and consents required to be
obtained or made, and all waiting periods required or contemplated to expire,
prior to the consummation of the Merger under applicable federal laws of the
United States or applicable laws of any state or foreign country having
jurisdiction over the Merger and the other transactions contemplated herein
shall have been obtained, made or expired, as the case may be, including without
limitation notifications, approvals or filings pursuant to the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, and the Federal Aviation Act of
1958, as amended (all such permits, approvals, filings and consents and the
lapse of all such waiting periods being referred to as the "Requisite Regulatory
Approvals"), if any, and all such Requisite Regulatory Approvals shall be in
full force and effect.
SECTION 6.02. CONDITIONS TO THE OBLIGATIONS OF GOODAERO TO EFFECT THE
MERGER. The obligations GoodAero under this Agreement to effect the Merger are
subject to the fulfillment at or prior to the Closing of the following
conditions:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of the Company and Z/C set forth in Article II hereof shall be
true and correct as of the date of this Agreement and at and as of the Closing,
except where the failure of such representations and warranties to be true and
correct would not result in any Material Adverse Effect; provided, however that,
notwithstanding anything to the contrary in this Section 6.02(a), there shall be
deemed to be no Material Adverse Effect if:
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(i) in the event Signing Discrepancies exceed $1,000,000 in the
aggregate, Z/C pays to the Surviving Corporation at the Closing an amount in
cash equal to the excess of the Signing Discrepancies over $1,000,000 (it being
understood that Z/C shall have the right, but under no circumstances the
obligation, to make such payment); and
(ii) in the event Changes After Signing exceed $2,000,000 in the
aggregate, Z/C pays to the Surviving Corporation at the Closing an amount in
cash equal to (x) the excess of the Changes After Signing over $2,000,000, less
(y) the amount of any payment made pursuant to the Section 6.02(a)(i) (it being
understood that Z/C shall have the right, but under no circumstances the
obligation, to make such payment).
(b) COVENANTS AND AGREEMENTS. The Company and Z/C shall have duly
performed and complied in all material respects with the covenants, agreements
and conditions required by this Agreement to be performed by or complied with by
either or both of them prior to or at the Closing. None of the events or
conditions entitling GoodAero to terminate this Agreement under Article VII
hereof shall have occurred and be continuing.
(c) CONSENTS. Any consent required for the consummation of the
Merger under any agreement, contract or license described in any exhibit or
schedule hereto or referred to herein, or for the continued enjoyment by the
Company of the benefits of any Contract or Permit after the Merger, shall have
been obtained.
(d) OPINIONS OF COUNSEL. GoodAero shall have received the opinion
of Xxxxxxxxx & Xxxxxxxxxxx as to Z/C and the General Counsel of the Company as
to the Company, each, in form and content satisfactory to GoodAero,
substantially in the form of EXHIBITS 6.02(D) (I) AND (II) hereof.
(e) CERTIFICATE OF THE COMPANY. GoodAero shall have received a
certificate from each of (i) the Company, satisfactory in form and substance to
GoodAero, executed on behalf of the Company by the President of the Company, as
to compliance with the matters set forth in paragraphs (a), (b), (c), (g), (h)
and (j) of this Section 6.02 and (ii) Z/C, satisfactory in form and substance to
GoodAero, executed on behalf of Z/C, as to compliance with the matters set forth
in paragraphs (a), (b) and (h).
(f) RESIGNATION OF DIRECTORS. GoodAero shall have received from the
Company letters of resignation from the directors of the Company.
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(g) CAPITAL STRUCTURE OF THE SURVIVING CORPORATION. The Company
shall have taken those actions set forth in Section 4.06 of this Agreement.
(h) NO ADVERSE DECISION. There shall not be any action taken or
overtly threatened, or any statute, rule, regulation or order enacted, entered,
overtly threatened, or deemed applicable to the transactions contemplated
hereby, by any United States federal or state government or governmental
authority or court that, whether in connection with the grant of a Requisite
Regulatory Approval, any agreement proposed by any United States federal or
state government or governmental authority, or otherwise, (i) requires or could
reasonably be expected to require (x) any divestiture by the Company of a
portion of the business of the Company that GoodAero in its sole judgment
believes will have a material adverse effect on the Company or (ii) imposes any
condition upon the Company that in GoodAero's sole judgment (x) would be
materially burdensome to the Company or (y) would materially increase the costs
incurred or that will be incurred by GoodAero as a result of consummating the
Merger and the other transactions contemplated hereby. There shall be no
action, suit, investigation or proceeding pending or threatened by or before any
Governmental Entity which (i) seeks to restrain, enjoin, prevent the
consummation of or otherwise affect the transactions contemplated by this
Agreement or (ii) questions the validity or legality of any such transactions or
seeks to recover damages or to obtain other relief in connection with any such
transactions.
(i) PROCEEDINGS; RECEIPT OF DOCUMENTS. All corporate and other
proceedings taken or required to be taken in connection with the transactions
contemplated hereby and all documents incident thereto shall be reasonably
satisfactory in form and substance to GoodAero and GoodAero's counsel, and
GoodAero and GoodAero's counsel shall have received all such information and
such counterpart originals or certified or other copies of such documents as
GoodAero or its counsel may reasonably request. GoodAero shall have received
such other agreements, instruments, approvals, opinions and other documents as
it may reasonably request.
(j) ADVERSE CHANGE. From November 30, 1996 to the Effective Time,
the Company shall not have suffered any Extraordinary Adverse Event.
(k) AGREEMENTS. The agreements with AA, the Aircraft Creditors and
Ameritech Corporation, consistent with the terms set forth in EXHIBIT 6.02(K)
hereof (the "Creditor Agreements"), shall have been duly executed and delivered
in form and substance satisfactory to GoodAero in its sole discretion.
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(l) AMENDMENT TO CERTIFICATE OF INCORPORATION. The Certificate of
Incorporation of the Company shall have been amended to read as set forth in
EXHIBIT 1.02 hereof.
(m) AVSA, S.A.R.L. The obligations owed by the Company to AVSA,
S.A.R.L. shall have been resolved in form and substance satisfactory to GoodAero
in its sole discretion.
(n) STOCKHOLDERS' AGREEMENT. The Stockholders' Agreement in the form
of EXHIBIT 6.02(N) hereof (the "Stockholders' Agreement") shall have been duly
executed and delivered.
(o) CANCELLATION OF COMPANY STOCK OPTIONS. All of the Company Stock
Options issued prior to the Effective Time, if any, and all declared, undeclared
or accrued, but unpaid, dividends on shares of Company Stock shall have been
cancelled without any payment being made by the Company in consideration
therefor.
(p) CANCELLATION OF CERTAIN DEBT SECURITIES. All of the Company's
subordinated debt securities issued and outstanding immediately prior to the
Effective Time, plus all declared or accrued but unpaid interest thereon, if
any, (collectively, "Company Debt Securities") shall have been cancelled without
any payment being made by the Company in consideration therefor.
(q) PAYMENT OF SPECIAL BONUSES. Z/C shall have paid the Special
Bonuses.
(r) STOCK SUBSCRIPTION. Z/C shall have subscribed for 2548 shares of
Surviving Corporation Common Stock and paid an amount equal to $7,000,000 in
consideration therefor.
SECTION 6.03. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY AND Z/C TO
EFFECT THE MERGER. The obligations of the Company and Z/C under this Agreement
to effect the Merger are subject to the fulfillment at or prior to the Closing
of the following conditions:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of GoodAero set forth in Article III hereof shall be true and
correct in all material respects as of the date when made and at and as of the
Closing.
(b) COVENANTS. GoodAero shall have duly performed and complied in
all material respects with the covenants, agreements and conditions required by
this Agreement to be performed or complied with by it prior to or at the
Closing. None of the
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events or conditions entitling the Company or Z/C to terminate this Agreement
under Article VII shall have occurred and be continuing.
(c) CERTIFICATE OF GOODAERO. The Company shall have received a
certificate of GoodAero, satisfactory in form and substance to the Company,
executed on behalf of GoodAero by the President of GoodAero, as to compliance
with the matters set forth in paragraphs (a), (b) and (f) of this Section 6.03.
(d) OPINION OF COUNSEL. The Company and Z/C shall have received the
opinion of Fulbright & Xxxxxxxx L.L.P., counsel to GoodAero, in form and content
satisfactory to the Company and Z/C, substantially in the form of EXHIBIT
6.03(D) hereto. Z/C shall have received the opinion of the General Counsel of
the Company in the form and content satisfactory to Z/C substantially in the
form of Exhibit 6.02(d)(ii) hereto.
(e) CAPITALIZATION OF GOODAERO. GoodAero shall have capital in the
amount of $15,000,000 cash, net of all liabilities or obligations of GoodAero,
including, without limitation, in connection with the formation of GoodAero and
the transactions contemplated by this Agreement, and the Company and Z/C shall
have received satisfactory evidence thereof.
(f) NO ADVERSE DECISION. There shall not be any action taken or
overtly threatened, or any statute, rule, regulation or order enacted, entered,
overtly threatened, or deemed applicable to the transactions contemplated
hereby, by any United States federal or state government or governmental
authority or court that, whether in connection with the grant of a Requisite
Regulatory Approval, any agreement proposed by any United States federal or
state government or governmental authority, or otherwise, (i) requires or could
reasonably be expected to require (x) any divestiture by the Company of a
portion of the business of the Company that the Company or Z/C in its reasonable
judgment believes will have a material adverse effect on the Company or (ii)
imposes any condition upon the Company that in the Company's or Z/C's reasonable
judgment will be materially burdensome to the Company. There shall be no
action, suit, investigation or proceeding pending or threatened by or before any
Governmental Entity which (i) seeks to restrain, enjoin, prevent the
consummation of or otherwise affect the transactions contemplated by this
Agreement or (ii) questions the validity or legality of any such transactions or
seeks to recover damages or to obtain other relief in connection with any such
transaction, other than with respect to those matters identified in Section 4.07
for which Z/C shall be responsible.
(g) PROCEEDINGS; RECEIPT OF DOCUMENTS. All corporate and other
proceedings taken or required to be taken in connection with the transactions
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contemplated hereby and all documents incident thereto shall be reasonably
satisfactory in form and substance to the Company and Z/C and, the Company and
Z/C counsel, and the Company and Z/C and the Company and Z/C's counsel shall
have received all such information and such counterpart originals or certified
or other copies of such documents as the Company and Z/C or its counsel may
reasonably request. The Company and Z/C shall have received such other
agreements, instruments, approvals, opinions and other documents as it may
reasonably request.
(h) AVSA, S.A.R.L. The obligations owed by the Company to AVSA,
S.A.R.L. shall have been resolved in form and substance reasonably satisfactory
to the Company and Z/C in their reasonable discretion.
(i) CREDITOR AGREEMENTS. The Creditor Agreements shall have been
duly executed and delivered in form and substance reasonably satisfactory to the
Company and Z/C in their reasonable discretion.
(j) STOCKHOLDERS' AGREEMENT. The Stockholders' Agreement shall have
been duly executed and delivered.
SECTION 6.04. ADDITIONAL CONDITION TO THE OBLIGATIONS OF Z/C TO
EFFECT THE MERGER. The obligations of Z/C to effect the Merger are subject to
the fulfillment at or prior to the Closing of the following additional
condition. At GoodAero's sole cost and expense, not to exceed $7,000,000 in the
aggregate: (i) Z/C shall have been released in full (up to $7,000,000 in the
aggregate, which amount includes all amounts referred to in the parenthetical in
Paragraph 6.04(ii) below) from all liabilities and obligations under the First
Bank Guaranty by substitution of a letter of credit or otherwise (provided that
any amounts in excess of $7,000,000 required to obtain such release shall have
been paid by Z/C pursuant to Section 4.07 hereof), and (ii) all amounts (up to
$7,000,000 in the aggregate, which amount includes all amounts referred to in
the parenthetical in Paragraph 6.04(i) above) advanced by Z/C under the First
Bank Guaranty, plus all accrued but unpaid interest thereon, shall have been
returned by First Bank to Z/C.
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ARTICLE VII
TERMINATION, AMENDMENTS AND WAIVERS
SECTION 7.01. TERMINATION. This Agreement may be terminated at any
time prior to the filing of the Certificate of Merger, whether before or after
Stockholder Approval:
(a) by the mutual consent of the Boards of Directors of GoodAero and
the Company and the Executive Committee of Z/C;
(b) by GoodAero, the Company or Z/C if the Effective Time shall not
have occurred on or before the Outside Closing Date, provided that the
terminating party is not in Default;
(c) by the Company or Z/C after the occurrence of a Default by
GoodAero;
(d) by GoodAero after the occurrence of a Default by the Company;
(e) by GoodAero, if, after the date of this Agreement, there shall
have occurred an Extraordinary Adverse Event.
SECTION 7.02. EFFECT OF TERMINATION.
In the event of termination of this Agreement by either the Company,
Z/C or GoodAero as provided in Section 7.01 hereof, this Agreement shall, except
as provided in this Section 7.02, forthwith become void and there shall not be
any liability or obligation with respect to the terminated provisions of this
Agreement on the part of the Company Group, Z/C Group or GoodAero Group, except
and to the extent such termination results from the willful breach by a party of
any of its representations, warranties or agreements hereunder. The termination
of this Agreement shall not relieve Z/C of its obligations under Section 2.21 or
GoodAero of its obligations under Section 3.07 and the second sentence of
Section 4.01 or any party of its obligations under Section 10.10.
SECTION 7.03. AMENDMENT. This Agreement may be amended by the
parties hereto, by action taken by their respective Boards of Directors or
Executive Committees, at any time before or after Stockholder Approval but,
after any such Stockholder Approval, no amendment shall be made which decreases
the consideration to be received for shares of GoodAero Stock in the Merger or
which in any way materially and adversely affects the rights of the holders of
Company Stock without the further approval of such holders. This
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Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.
SECTION 7.04. WAIVER. At any time prior to the Effective Time, the
parties hereto, by action taken by their respective Boards of Directors or
Executive Committees or pursuant to delegated authority therefrom, may (i)
extend the time for the performance of any of the obligations or other acts of
the other party hereto, (ii) waive any inaccuracies in the representations and
warranties of the other party hereto contained herein or in any document
delivered pursuant hereto and (iii) waive compliance with any of the agreements
or conditions contained herein. Any agreement on the part of a party hereto to
any such extension or waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such party.
ARTICLE VIII
SURVIVAL; INDEMNIFICATION
SECTION 8.01. SURVIVAL. Except as otherwise specifically provided in
this Section 8.01, Section 8.02 or Section 8.03, none of the representations,
warranties, covenants or agreements made by the Company and/or Z/C, or GoodAero
and/or GoodAero Stockholders in this Agreement or in any closing certificate or
instrument delivered in connection herewith shall survive the Closing.
Notwithstanding the foregoing, the representations and warranties of the parties
contained in Sections 2.01 - 2.06, 2.21, 2.31 - 2.34 and 3.01 - 3.07 hereof
(collectively, the "Surviving Representations and Warranties") shall survive the
Effective Time and shall expire on the date two (2) years after the Effective
Time (the "Expiration Date"). No action or proceeding may be brought with
respect to any of the representations and warranties unless written notice
thereof, setting forth in reasonable detail the nature of the claimed
misrepresentation or breach of warranty, shall have been delivered to the party
alleged to be in breach prior to the Expiration Date. The covenants and
agreements of the parties hereto contained in this Agreement (other than in
Sections 4.01, 4.05, 4.10 and 5.10 which shall not survive the Closing)
(collectively, the "Surviving Covenants") shall survive the Effective Time
without limitation.
SECTION 8.02. INDEMNIFICATION. Subject to the other provisions of
this Article VIII, from and after the Effective Time (a) Z/C shall indemnify and
hold harmless the Company Group and the GoodAero Group from and against any
costs or expenses (including reasonable attorneys' fees), judgments, fines,
amounts paid in settlement, losses, claims and damages (collectively, "Losses
and Damages") actually incurred by the
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Company Group and/or the Z/C Group, as the case may be, to the extent they are
the direct result of any breach of the Surviving Representations and Warranties
by the Company or Z/C or nonfulfillment of or failure to perform any of the
Surviving Covenants (other than those contained in Section 4.06) made by or on
behalf of the Company or Z/C under this Agreement, and (b) GoodAero Stockholders
shall jointly and severally indemnify and hold harmless the Z/C Group and the
Company Group from and against any Losses and Damages actually incurred by the
Z/C Group and/or the Company Group, as the case may be, to the extent they are
the direct result of any breach of the Surviving Representations and Warranties
by GoodAero or the GoodAero Stockholders or nonfulfillment of or failure to
perform any of the Surviving Covenants by or on behalf of GoodAero or the
GoodAero Stockholders under this Agreement or the nonfulfillment of or failure
to perform the covenants and agreements of the Surviving Corporation contained
in Section 4.06(iii).
SECTION 8.03. ENVIRONMENTAL INDEMNIFICATION.
(a) For purposes of this Section 8.03 only, the term "Environmental
Liabilities" shall mean (i) Environmental Liabilities as defined in Article IX
hereof, and (ii) all Losses and Damages to the extent they are the direct result
of a breach of the representations and warranties in Section 2.13(b).
(b) From and after the Effective Time, Z/C shall indemnify and hold
harmless the GoodAero Stockholders from and against all Environmental
Liabilities actually incurred directly by the GoodAero Stockholders that arise
from Environmental Conditions which were caused directly by or arise from acts
or omissions of the Company which occurred before the Effective Time; provided
that in no event shall Z/C be responsible for Environmental Liabilities incurred
by GoodAero Stockholders that arise from Environmental Conditions which were
caused by or arise from acts or omissions of the Company or any other Person
(other than Z/C) after the Effective Time. In the event that Environmental
Liabilities arise from Environmental Conditions which were caused by or arise
from acts or omissions which occurred both before and after the Effective Time,
such liabilities shall be allocated between the periods before and after the
Effective Time based upon the relative contribution of the acts or omissions
occurring in each period to such Environmental Liabilities and then only that
share of the Environmental Liabilities allocated to the periods before the
Effective Time will be deemed to be allocated to Z/C.
The indemnification set forth in this subsection (b) shall survive the Effective
Time without limitation.
(c)(i) Subject to Section 8.03(c)(ii), from and after the Effective
Time, Z/C shall indemnify and hold harmless the Company from and against all
Environmental
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Liabilities actually incurred by the Company that arise from Environmental
Conditions which were caused directly by or arise from acts or omissions of the
Company which occurred before the Effective Time; provided that in no event
shall Z/C be responsible for Environmental Liabilities incurred by the Company
that arise from Environmental Conditions which were caused by or arise from acts
or omissions of the Company or any other Person (other than Z/C) after the
Effective Time. In the event that Environmental Liabilities arise from
Environmental Conditions which were caused by or arise from acts or omissions
which occurred both before and after the Effective Time, such liabilities shall
be allocated between the periods before and after the Effective Time based upon
the relative contribution of the acts or omissions occurring in each period to
such Environmental Liabilities and then only that share of the Environmental
Liabilities allocated to the periods before the Effective Time will be deemed to
be allocated to Z/C.
(ii) Notwithstanding anything to the contrary in Section 8.03(c)(i):
(A) the Company shall not be entitled to recover any amount under Section
8.03(c)(i) until the total amount which the Company would be entitled to recover
under Section 8.03(c)(i), but for this Section 8.03(c)(ii)(A) (the "Gross
Indemnity Amount"), exceeds Two Million ($2,000,000), and then the Company shall
only be entitled to recover the excess of the Gross Indemnity Amount over Two
Million ($2,000,000); and (B) the Company shall not be entitled to recover any
amount under Section 8.03(c)(i) in the event that Z/C and its Permitted
Transferees, if any, (as defined in the Stockholders Agreement) transfer to the
treasury of the Company all of the Surviving Corporation Common Stock then held
by Z/C and its Permitted Transferees, if any, in which case (x) Z/C and its
Permitted Transferees shall no longer be stockholders of the Surviving
Corporation and (y) Z/C shall have no further liability or obligation of any
kind to the Company under Section 8.03(c)(i).
The indemnification set forth in this subsection (c) shall survive until the
Expiration Date.
SECTION 8.04. PROCEDURES. The Z/C Group, the Company Group, the
GoodAero Stockholders or the GoodAero Group, as the case may be, are referred to
herein as the "Indemnified Parties." If an Indemnified Party intends to seek
indemnity under this Article VIII, such Indemnified Party shall promptly notify
Z/C or GoodAero Stockholders, as the case may be (the "Indemnifying Party"), in
writing of such claims setting forth the basis for and the amount of such claims
in reasonable detail, provided that the failure to provide such notice shall not
affect the obligations of the Indemnifying Party unless it is actually
prejudiced thereby, subject, however, to the time period in Section 8.01 hereof.
In the event such claim involves a claim by a third party against the
Indemnified Party, the Indemnifying Party shall have thirty (30) days (the "30
Day Period") after receipt of such notice to decide whether it will undertake,
conduct and control, through counsel of its own choosing and at its own expense,
the settlement or
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defense thereof, and if it so decides, the Indemnified Party shall cooperate
with it in connection therewith, provided that the Indemnified Party may
participate (subject to the Indemnifying Party's control) in such settlement or
defense through counsel chosen by it, and provided further that the fees and
expenses of such Indemnified Party's counsel shall be borne by the Indemnified
Party; PROVIDED, HOWEVER, that any Indemnified Party is hereby authorized prior
to any notice from the Indemnifying Party of its undertaking of the defense, to
file any motion, answer or other pleading which the Indemnified Party shall
reasonably deem necessary to protect its interests and which shall otherwise
have become due, provided further, however, that, within the 30 Day Period, no
such motion, answer or other pleading shall agree to pay, settle or otherwise
concede or compromise the matter which is the subject of the claim for
indemnification. The Indemnifying Party may, without the consent of the
Indemnified Party, settle or compromise or consent to the entry of any judgment
in any action involving only the payment of money which includes as an
unconditional term thereof the delivery by the claimant or plaintiff to the
Indemnified Party of a duly executed written release of the Indemnified Party
from all liability in respect of such action which written release shall be
reasonably satisfactory in form and substance to counsel for the Indemnified
Party. The Indemnifying Party shall not, without the written consent of the
Indemnified Party settle or compromise any action involving relief other than
the payment of money in any manner that, in the reasonable judgment of the
Indemnified Party, would materially and adversely affect the Indemnified Party;
provided, however, that if the Indemnified Party shall fail or refuse to consent
to a settlement, compromise or judgment proposed by the Indemnifying Party and
approved by the third Person in any such action and a judgment thereafter shall
be entered or a settlement or compromise thereafter shall be effected on terms
less favorable in the aggregate to the Indemnified Party than the settlement,
compromise or judgment proposed by the Indemnifying Party, the Indemnifying
Party shall have no liability hereunder with respect to any Losses and Damages
in excess of those that were provided for in the settlement, compromise or
judgment proposed by the Indemnifying Party or any costs or expenses related to
such claim arising after the date such settlement, compromise or judgment was so
proposed. If the Indemnifying Party does not notify the Indemnified Party
within thirty (30) days after the receipt of the Indemnified Party's notice of a
claim of indemnity hereunder that it elects to undertake the defense thereof,
the Indemnified Party shall have the right to contest, settle or compromise the
claim but shall not thereby waive any right to indemnity therefor pursuant to
this Agreement. So long as the Indemnifying Party is contesting any such claim
in good faith, the Indemnified Party shall not pay, settle or otherwise concede
or compromise any such claim, unless such settlement includes as an
unconditional term thereof the delivery by the claimant or plaintiff and by the
Indemnified Party to the Indemnifying Party of duly executed written releases of
the Indemnifying Party from all liability in respect of such claim which written
releases shall be reasonably satisfactory in form and substance to counsel for
the Indemnifying Party at
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no cost to the Indemnifying Party. The Indemnified Party shall cooperate fully
in all aspects of any investigation, defense, pre-trial activities, trial,
compromise, settlement or discharge of any claim in respect of which indemnity
is sought pursuant to this Article VIII.
SECTION 8.05. TAX, INSURANCE AND OTHER BENEFITS. The amount of any
claim by an Indemnified Party shall be reduced by any Tax, insurance or other
benefits which such party or its Group receives in respect of or as a result of
such claim or the facts or circumstances relating thereto. If any Losses and
Damages for which indemnification is provided hereunder are subsequently reduced
by any Tax benefit, insurance payment or other recovery from a third party, the
amount of such reduction shall be remitted to the Indemnifying Party.
SECTION 8.06. INDEMNIFICATION EXCLUSIVE REMEDY. Subject to Section
10.03 hereof, from and after the Effective Time, indemnification pursuant to
(and to the extent afforded by) the provisions of this Article VIII shall be the
exclusive remedy of the parties for any branch of any representations,
warranties, covenants or agreements made by any party in this Agreement or in
any closing certificate or instrument delivered in connection herewith. Subject
to Section 10.03 hereof, from and after the Effective Time, the only legal
action which may be asserted by any party with respect to any matter which is
the subject of this Article VIII shall be a contract action to enforce, or to
recover damages for the breach of, this Article VIII.
ARTICLE IX
DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set
forth below:
"AA" shall mean AMR Corporation and its Affiliates.
"Affiliate" or "affiliate" shall mean, with respect to any Person, any
Person that, directly or indirectly, controls or is controlled by or is under
common control with such Person.
"Agreement" shall mean this Agreement and Plan of Merger.
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"Aircraft Creditors" shall mean Fokker Aircraft B.V., Wings Aircraft
Finance, Inc., Stockholm Aircraft Finance V B.V., DASA Netherlands XVI B.V., and
Debis AirFinance B.V.
"Audited Financial Statements" shall have the meaning given such term in
Section 2.07(a) hereof.
"Business Day" shall mean any day, other than a Saturday, Sunday or legal
holiday under the Federal laws of the United States.
"Certificate of Merger" shall have the meaning given such term in Section
1.02(b) hereof.
"Changes After Signing" shall mean the failure of representations and
warranties to be true and correct in all respects at and as of the Closing
(other than by reason of the failure of such representations and warranties to
be true and correct in all respects as of the date hereof).
"Class A Common Stock" shall mean the Class A Common Stock, par value $.01
per share, of the Company.
"Class B Common Stock" shall mean the Class B Common Stock, par value $.01
per share, of the Company.
"Class C Common Stock" shall mean the Class C Common Stock, par value $.01
per share, of the Company.
"Closing" shall have the meaning given such term in Section 1.02 hereof.
"Closing Date" shall be the date on which Closing occurs.
"Code" shall have the meaning given such term in Section 1.12 hereof.
"Company" shall have the meaning given such term in the opening recitals
hereof.
"Company Debt Securities" shall have the meaning given such term in Section
6.02(p) hereof.
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"Company's knowledge", "best of the Company's knowledge," or words of
similar import shall mean the actual knowledge of any of Xxxx Xxxxxxxxx, Xxxxxx
Xxxxxxxx, Xxx Xxxxxx, any officer of the Company or any individual holding a
director level position or above at the Company.
"Company Put Obligations" shall have the meaning given to such term in
Section 2.03 hereof.
"Company Stock" shall mean all shares of the Company's capital stock
authorized, issued or outstanding prior to the Effective Time, of whatever class
or series, including, without limitation, all of the Class A Common Stock, Class
B Common Stock, Class C Common Stock, Junior Preferred Stock, Prior Preferred
Stock and Preference Stock of the Company.
"Company Stockholders" shall have the meaning given such term in Section
2.03 hereof.
"Company Stock Options" shall have the meaning given to such term in
Section 2.03 hereof.
"Competing Transaction" shall have the meaning given such term in Section
5.10 hereof.
"Competitor" shall have the meaning given such term in Section 5.10 hereof.
"Constituent Corporations" shall have the meaning given such term in
Section 1.01 hereof.
"Contracts" shall have the meaning given such term in Section 2.16(a)
hereof.
"Creditor Agreements" shall have the meaning given such term in Section
6.02(k) hereof.
"Default" shall mean, as to any party to this Agreement, a default by such
party in the performance of any of its material obligations hereunder and the
continuation of such default for a period of 5 days after notice if the Company
or Z/C (in the case of a default by GoodAero) or GoodAero (in the case of a
default by the Company or Z/C) shall thereafter notify such defaulting party
that a Default has occurred.
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"Dissenting Stockholders" shall have the meaning given such term in
Section 1.09 hereof.
"Effective Time" shall have the meaning given such term in Section 1.02(b)
hereof.
"Employee Plan" shall have the meaning given such term in Section 2.17(a)
hereof.
"Environmental Conditions" means any pollution, contamination, degradation,
damage or injury caused by, related to, arising from, or in connection with the
generation, handling, use, treatment, storage, transportation, disposal,
discharge, Release (as that term is defined below), or emission of any
"Hazardous Substance."
"Environmental Law" or "Environmental Laws" shall mean all federal, state,
local, or municipal laws, statutes, rules, regulations, directives, guidances,
policies, ordinances, decrees, orders, and decisions of any Governmental Entity,
including judicial decisions at common law, relating to (i) the control of any
potential pollutant or protection of the air, water or land, (ii) solid, gaseous
or liquid waste generation, handling, treatment, storage, disposal or
transportation, and (iii) exposure to hazardous, toxic or other substances
alleged to be harmful, and includes without limitation, (1) the terms and
conditions of any Environmental Permit, and (2) judicial, administrative, or
other regulatory decrees, judgments, orders, and decisions of any Governmental
Entity. The term "Environmental Laws" shall include, but not be limited to the
following statutes and the regulations promulgated thereunder: the Clean Air
Act, 42 U.S.C. Section 7401 ET SEQ., the Clean Water Act, 33 U.S.C. Section 1251
ET SEQ., the Resource Conservation Recovery Act ("RCRA"), 42 U.S.C. Section 6901
ET SEQ., the Superfund Amendments and Reauthorization Act, 42 U.S.C. Section
11011 ET SEQ., the Toxic Substances Control Act, 15 U.S.C. Section 2601 ET
SEQ., the Water Pollution Control Act, 33 U.S.C. Section 1251, ET SEQ., the
Safe Drinking Water Act, 42 U.S.C. Section 300f ET SEQ., the Comprehensive
Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C.
Section 9601 ET SEQ., and the Emergency Planning and Community Right-to-Know
Act, 42 U.S.C. Section 11001 ET SEQ. The term "Environmental Law" shall also
mean all foreign, federal, state, local, and municipal laws, statutes, rules,
regulations, directives, guidances, policies, ordinances, decrees, orders, and
decisions of any Governmental Entity dealing with the subject matter of the
above-listed federal statutes, the subject matter of subparagraphs (i) through
(iii) above, or promulgated by any governmental or quasi-governmental agency
with authority over such matters in those municipalities, localities, states,
and countries in which the Company owns (or owned) assets or conducts (or
conducted) business.
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"Environmental Liabilities" shall mean any and all costs (including
Environmental Remediation Costs), damages, settlements, expenses, penalties,
fines, taxes, prejudgment and post-judgment interest, court costs and attorneys'
fees incurred or imposed (i) pursuant to any order, notice of responsibility,
directive, injunction, judgment or similar act (including settlements) by any
Governmental Entity to the extent arising out of or under Environmental Laws or
(ii) pursuant to any claim or cause of action by a Governmental Entity or other
third Person for personal injury, property damage, damage to natural resources,
Environmental Remediation Costs to the extent arising out of or attributable to
any violation of, or any remedial obligation under, any Environmental Law.
"Environmental Permit" shall mean any license, permit, registration,
consent, identification number, authorization, or other approval required for
the operation of the Company by any Environmental Law.
"Environmental Remediation Costs" shall mean all costs and expenses
relating to activities or actions to (i) clean up or remove Hazardous Substances
from the environment, (ii) prevent or minimize the movement, leaching, or
migration of Hazardous Substances into the environment, (iii) mitigate the
Release or threatened Release of Hazardous Substances into the environment, or
the injury or damage from such Release, or (iv) comply with the requirements of
any Environmental Laws or permits. Environmental Remediation Costs include,
without limitation, costs and expenses payable in connection with the foregoing
for reasonable legal, engineering, or other related services; for investigation,
testing, sampling, and monitoring; for boring, excavation, and construction; for
removal, modification or replacement of equipment or facilities; for labor and
material; and for proper storage, treatment or disposal of Hazardous Substances.
"Environmental Reports" shall mean any written audits, assessments,
evaluations, inspections, investigations, laboratory testing, checklists, and
surveys performed by or for any Person relating to Environmental Conditions or
compliance with Environmental Laws at any facility or parcel of real property
owned or leased at any time by the Company.
"EPA" shall mean the United States Environmental Protection Agency.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" shall mean each trade or business (whether or not
incorporated) which together with the Company would be deemed to be a "single
employer"
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within the meaning of Section 4001(b)(1) of ERISA or subsections (b), (c), (m)
or (o) of Section 414 of the Code.
"Exchange Act" shall have the meaning given such term in Section 8.05.
"Extraordinary Adverse Event" shall mean:
(i) the Company shall fail to have in force any certificates or
authorizations required by the Federal Aviation Administration or the
United States Department of Transportation to operate a commercial airline
in the United States, or any proceeding shall be pending or overtly
threatened with respect thereto, or the Company shall have agreed to a
complete or partial suspension of service covered by said certificates and
authorizations;
(ii) the filing of any petition or the commencement of any case or
proceeding by the Company under any provision or chapter of the Federal
Bankruptcy Code or any other federal or state law relating to insolvency,
bankruptcy, rehabilitation, liquidation or reorganization;
(iii) the filing of any petition or the commencement of any case or
proceeding described in subparagraph (ii) above against the Company or any
of its assets; or the filing of an answer by the Company admitting the
allegations of any such petition, case or proceeding; or the appointment of
or the taking of possession by a custodian, trustee, agent or receiver for
a material portion of the assets of the Company in any such case or
proceeding; or an adjudication that the Company is bankrupt; or
(iv) any accident that results in a passenger fatality or any material
damage to an aircraft.
"Financial Statements" shall have the meaning given such term in Section
2.07(a) hereof.
"First Bank" shall mean First Bank National Association, a national banking
association
"First Bank Guaranty" shall mean that certain Guaranty and Pledge
Agreement, dated as of August 22, 1996, as amended through the Closing, made and
given by Z/C in favor of First Bank, in consideration of certain accommodations
extended by
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First Bank to the Company relating to that certain Processing Agreement, dated
as of April 1, 1994 as thereafter amended, by and between the Company and First
Bank.
"Fully Diluted Surviving Corporation Stock" shall mean (i) all Surviving
Corporation Common Stock issuable upon conversion of the Senior Convertible
Preferred Stock issued to GoodAero in the Merger; plus (ii) all Surviving
Corporation Common Stock issued to Z/C as contemplated by Section 4.06 hereof;
plus (iii) all Surviving Corporation Common Stock issued, or reserved for
issuance, to management employees of the Surviving Corporation as of the Closing
as contemplated by Section 4.06, plus (iv) all Surviving Corporation Common
Stock issued, or reserved for issuance, to AA and the Aircraft Creditors as of
the Closing as contemplated by Section 4.06 hereof, plus (v) all Surviving
Corporation Common Stock reserved for issuance to Xxxxxx X. Xxxxxxxx, III as of
the Closing as contemplated by Section 4.06 hereof.
"GAAP" shall have the meaning given such term in Section 2.07(b) above.
"GCL" shall mean the General Corporation Law of the State of Delaware.
"GoodAero" shall have the meaning given such term in the opening recitals
hereof.
"GoodAero Costs and Expenses" shall have the meaning given such term in
Section 10.11 hereof.
"GoodAero Stock" shall mean all shares of GoodAero's capital stock,
authorized, issued or outstanding prior to the Effective Time, of whatever class
or series.
"GoodAero Stockholders" shall have the meaning given such term in the
opening recitals hereof.
"Governmental Entity" shall mean any foreign or domestic court,
administrative agency or commission or other governmental authority or
instrumentality.
"Gross Indemnity Amount" shall have the meaning given such term in Section
8.03(c)(ii).
"Group" shall mean a Person and such Person's Affiliates and their
respective directors, members of their executive committees, officers,
employees, representatives, stockholders, controlling persons and agents and
each of the heirs, executors, successors and assigns of any of the foregoing.
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"Hazardous Substance" shall mean any chemical, waste, pollutant, or
contaminant that is regulated under any Environmental Law and includes but is
not limited to: (A) petroleum and petroleum substances, (B) asbestos, (C)
polychlorinated byphenyls, (D) any substance designated as a "hazardous
substance" pursuant to Section 311 of the Federal Water Pollution Control Act,
33 U.S.C. Section 1251 ET SEQ. (33 U.S.C. Section 1321) or listed pursuant to
Section 307 of the Federal Water Pollution Control Act (33 U.S.C. Section 1317),
(E) any substance defined as a "hazardous substance" pursuant to Section 101 of
the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. Section 9601 ET SEQ. (42 U.S.C. Section 9601), and the Emergency Planning
and Community Right-to-Know Act, 42 U.S.C. Section 11001 ET SEQ., (F) any
substance defined as a "solid waste" or a "hazardous waste" pursuant to Section
1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C. Section
6901 ET SEQ. (42 U.S.C. Section 6903), and (G) any substance regulated by any
state, local, municipal, or foreign governmental entity with authority dealing
with the subject matter of the above-listed federal Environmental Laws.
"Indemnified Parties" shall have the meaning given such term in Section
8.02 hereof.
"Indemnifying Party" shall have the meaning given such term in Section 8.03
hereof.
"Intellectual Property" shall have the meaning given such term in Section
2.26 hereof.
"Interim Financial Statements" shall have the meaning given such term in
Section 2.07(a) hereof.
"IRS" shall mean the Internal Revenue Service.
"Junior Preferred Stock" shall mean Junior Preferred Stock, $.01 par value,
of the Company.
"Last Regulatory Approval" shall mean the final Requisite Regulatory
Approval required or advisable and sought by applicable federal laws of the
United States and laws of any state or foreign country having jurisdiction over
the Merger, if any, for the Merger to be consummated from any agency or
instrumentality of the United States or of such state or foreign country,
including the expiration of any applicable waiting period.
"Leased Premises" shall have the meaning set forth in Section 2.14 hereof.
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"Losses and Damages" shall have the meaning given such term in Section 8.02
hereof.
"Material Adverse Effect" shall mean a material adverse effect on the
business, financial condition, results of operations, assets, liabilities and
properties of the Company measurable solely in monetary terms and aggregating,
in the reasonable judgment of GoodAero, in excess of $1,000,000 as to Signing
Discrepancies and in excess of $2,000,000 as to Signing Discrepancies and
Changes after Signing.
"Merger" shall have the meaning given such term in Section 1.01 hereof.
"November 30 Balance Sheet" shall have the meaning given such term in
Section 2.07(a) hereof.
"Outside Closing Date" shall mean January 31, 1997, or, if by January 31,
1997, the Last Regulatory Approval has not been received, but all applications
therefor have been completed and are pending, and the parties have no reasonable
cause to believe the same will be denied, such later date as the parties shall
mutually agree upon, it being understood that the parties shall act reasonably
and in good faith to extend the Outside Closing Date beyond January 31, 1997, as
warranted to accommodate the governmental consent and approval process.
"PBGC" shall have the meaning given such term in Section 2.17(b) hereof.
"Permits" shall mean all franchises, licenses, authorizations, approvals,
permits (excluding Environmental Permits), consents or other rights granted by
Federal, state or local governmental authorities and all certificates of
convenience or necessity, immunities, privileges, licenses, consents, grants,
ordinances and other rights, of every character whatsoever required for the
conduct of business and the use of properties as presently conducted or used.
"Person" shall mean an individual, corporation, partnership, joint venture,
trust or unincorporated organization, or a government or any agency or political
subdivision thereof.
"Preference Stock" shall mean Preference Stock, $.01 par value, of the
Company.
"Prior Preferred Stock" shall mean Prior Preferred Stock, $.01 par value,
of the Company.
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"Product Liability" shall have the meaning given such term in Section 2.24
hereof.
"Regulatory Authority" shall mean any United States Federal or state
government or governmental authority the approval of which, or filing with, is
legally required or permitted for consummation of the Merger and the other
transactions contemplated hereby.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing into
the environment of any Hazardous Substances.
"Requisite Regulatory Approvals" shall have the meaning given such term in
Section 6.01(c) hereof.
"Senior Convertible Preferred Stock" shall have the meaning given such term
in Section 1.07 hereof.
"Signing Discrepancies" shall mean the failure of representations and
warranties to be true and correct in all respects as of that date of this
Agreement.
"Special Bonuses" shall mean bonuses or other payments payable to Company
personnel upon consummation of the transactions contemplated by this Agreement
without regard to whether the recipient's employment has been terminated.
"Stockholder Approval" shall mean the written consent by the holders of the
number of outstanding shares of capital stock of the Company or GoodAero, as the
case may be, required under the GCL and the applicable certificate of
incorporation to approve this Agreement, the Merger and the transactions
contemplated hereby.
"Stockholders' Agreement" shall have the meaning given such term in Section
6.02(n) hereof.
"Surviving Corporation" shall have the meaning given such term in Section
1.01 hereof.
"Surviving Corporation Common Stock" shall mean the common stock, no par
value, of the Surviving Corporation.
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"Surviving Covenants" shall have the meaning given such term in Section
8.01 hereof.
"Surviving Representations and Warranties" shall have the meaning given
such term in Section 8.01 hereof.
"Tax" shall have the meaning given such term in Section 2.11 hereof.
"Taxes" shall have the meaning given such term in Section 2.11 hereof.
"Tax Return(s)" shall have the meaning given such term in Section 2.11
hereof.
"Third Party Approvals" shall have the meaning given such term in Section
10.01 hereof.
"30 Day Period" shall have the meaning given such term in Section 8.04.
"Trademarks" shall have the meaning given such term in Section 2.26 hereof.
"Z/C" shall have the meaning given such term in the opening recitals
hereof.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.01. TAKING OF NECESSARY ACTION. Subject to the terms and
conditions of this Agreement, each of the parties hereto agrees, subject to
applicable laws, to use all commercially reasonable efforts promptly to take or
cause to be taken all action and promptly to do or cause to be done all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
Without limiting the foregoing, the Company, GoodAero and Z/C shall use their
commercially reasonable efforts to obtain and make all consents, approvals,
assurances and filings of or with third parties (the "Third Party Approvals")
and Governmental Entities necessary or, in the reasonable opinion of GoodAero,
the Company or Z/C, advisable for the consummation of the transactions
contemplated by this Agreement. Each party shall cooperate with the other in
good faith to help the other satisfy its obligations in this action. If at any
time after the Effective Time any further action is necessary or desirable to
carry out the purposes of this Agreement, or to vest the
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Surviving Corporation with full title to and benefits of all properties, assets,
rights, approvals, immunities and franchises of GoodAero, the proper officers or
directors of the Surviving Corporation, shall take all such necessary action.
SECTION 10.02. EFFECT OF DUE DILIGENCE. No investigation by or on behalf
of GoodAero into the business, operations, prospects, assets or condition
(financial or otherwise) of the Company shall diminish in any way the effect of
any representations or warranties made by the Company and Z/C in this Agreement
or shall relieve the Company and Z/C of any of their respective obligations
under this Agreement.
SECTION 10.03. SPECIFIC PERFORMANCE. GoodAero, the Company, Z/C and the
GoodAero Stockholders understand and agree that the covenants and undertakings
on each of their parts herein contained are uniquely related to the desire of
GoodAero, the GoodAero Stockholders, the Company and Z/C to consummate the
Merger, that the Merger is a unique business opportunity for the Company, Z/C,
GoodAero and the GoodAero Stockholders, and that, although monetary damages may
be available for the breach of such covenants and undertakings, monetary damages
would be an inadequate remedy therefor. Accordingly, the Company, Z/C, GoodAero
and the GoodAero Stockholders agree that GoodAero and the GoodAero Stockholders
shall be entitled to obtain specific performance and obligations by the Company
and Z/C of every such covenant and undertaking contained herein to be performed
by the Company and Z/C and that the Company and Z/C shall be entitled to obtain
specific performance from GoodAero and the GoodAero Stockholders of each and
every covenant and undertaking herein contained to be observed or performed by
GoodAero and/or the GoodAero Stockholders.
SECTION 10.04. ANNOUNCEMENTS. Until the Effective Time and except for any
public disclosure which the Company and GoodAero in good faith believe is
required by law, no party to this Agreement shall issue any press release or
make any public statement (including without limitation statements to employees,
customers and suppliers) regarding the transactions contemplated hereby, without
the prior written approval of the other party which will not be unreasonably
withheld; provided, that nothing herein shall prohibit the Company, Z/C or their
representatives from communicating with the stockholders and creditors of the
Company with respect to this Agreement and the terms hereof, provided that such
Persons shall be informed of the confidential nature of this Agreement in
connection with any such communication.
SECTION 10.05. SUCCESSORS AND ASSIGNS. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent
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of the other parties hereto. Notwithstanding the foregoing, GoodAero may assign
its rights and obligations in this Agreement to a direct or indirect wholly
owned subsidiary of GoodAero. No other Person will have any rights or
obligations hereunder except as provided in Article VIII with respect to
Indemnified Parties. Notwithstanding the foregoing GoodAero Stockholders may
assign or otherwise transfer their rights under Section 8.03 hereof to their
Permitted Transferees as defined in the Stockholders' Agreement.
SECTION 10.06. ENTIRE AGREEMENT. This Agreement, together with the
Schedule and Exhibits hereto, contains the entire agreement among the parties
hereto with respect to the Merger, this Agreement and the transactions
contemplated thereby.
SECTION 10.07. NOTICES. All notices or other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered
personally or sent by registered or certified mail, postage prepaid, addressed
as follows:
If to GoodAero or the GoodAero Stockholders, to:
GoodAero, Inc.
XXX Xxxxxx Xxxxx
Xxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Ph.D
with copies to:
GoodAero, Inc.
XXX Xxxxxx Xxxxx
Xxxx, Xxxxx Xxxxxxxx 00000
Attention: W. Xxxxxxx Xxxxxxx
Xxxxxx Xxxx, Esq.
Fulbright & Xxxxxxxx L.L.P.
0000 XxXxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Xxxxxxx Xxxxxx, Esq.
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
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If to the Company, to:
Midway Airlines Corporation
000 Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Chief Executive Officer
with copy to:
Midway Airlines Corporation
000 Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
Attention: General Counsel
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If to Z/C, to:
Xxxx/Chilmark Fund, L.P.
Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxx Xxxxxxxx
with copies to:
Xxxxxxxxx & Xxxxxxxxxxx, P.C.
Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
SECTION 10.08. APPLICABLE LAW. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Delaware,
without reference to or application of any conflicts of laws principles.
SECTION 10.09. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 10.10. EXPENSES. Subject to Section 4.08, whether or not the
Merger is consummated, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring the same (including, but not limited to, fees and expenses of legal
counsel, accountants, investment bankers, brokers or other representatives or
consultants); provided, however, that Z/C and not the Company (or the Surviving
Corporation) shall be responsible for any such fees and expenses incurred by
either of them, other than fees and expenses related to (a) obtaining the
Requisite Regulatory Approvals, (b) restructuring the Company's obligations to
AA, the Aircraft Creditors and any other creditors, and (c) services performed
by the Company's accountants (it being understood that the Company and not Z/C
shall be responsible for the payment of the fees and expenses referred to in the
immediately preceding subparagraphs (a) through (c) of this Section 10.10).
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SECTION 10.11. FEES. If, prior to the Closing, and provided that GoodAero
has not breached this Agreement, (i) Z/C or the Company breaches Section 5.10,
or (ii) Z/C or the Company enters into a letter of intent or definitive
agreement concerning a Competing Transaction, then, (A) within fifteen (15) days
after the closing of such Competing Transaction, Z/C shall pay to GoodAero in
cash an amount equal to $1,000,000 (the "Topping Fee"), and (B) within fifteen
(15) days after the occurrence of any event described in the foregoing clauses
(i) and (ii), Z/C shall pay to GoodAero in cash an amount equal to out-of-pocket
expenses reasonably incurred by GoodAero in connection with this Agreement and
the transactions contemplated hereby which are supported by reasonable
documentation provided to Z/C, (collectively, the "GoodAero Costs and
Expenses"), in each case without interest, which payments will serve as
GoodAero's sole and exclusive remedy in respect of the events described in
subparagraphs (i) and (ii) of this Section 10.11, and GoodAero will not be
entitled to any other rights and remedies provided by law or in equity.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of the parties hereto as of the date first written
above.
MIDWAY AIRLINES CORPORATION GOODAERO, INC.
By: /s/ Xxxx X. Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------- ---------------------------------
Name: Xxxx X. Xxxxxxxxx Name: Xxxxx X. Xxxxxxxxx
Title: President and CEO Title: President
XXXX/CHILMARK FUND L.P. GOODAERO STOCKHOLDERS
As to Article III, Section 4.02,
Section 4.08,
Article VIII and Article X only
By: /s/ Xxx Xxxxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------- ---------------------------------
Name: Xxx Xxxxxxxx Xxxxx X. Xxxxxxxxx, Ph.D
Title: Managing Director
By: /s/ Xxxx X. Xxxx
---------------------------------
Xxxx X. Xxxx
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FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER
FIRST AMENDMENT dated as of January 31, 1997 to Agreement and Plan of
Merger, dated as of January 17, 1997, by and among Midway Airlines Corporation,
a Delaware corporation, GoodAero, Inc., a Delaware corporation, and, for
purposes of Article III, Section 4.02, Section 4.08, Article VIII and Article X
only, Xxxxx X. Xxxxxxxxx, Ph.D and Xxxx X. Xxxx (collectively, the "GoodAero
Stockholders"), and Xxxx/Chilmark Fund L.P., a Delaware limited partnership.
Capitalized terms used and not otherwise defined in this Amendment shall have
the meanings ascribed to them in the Agreement.
The parties hereto agree to amend the definition of "Outside Closing Date"
to read as follows:
"Outside Closing Date" shall mean February 7, 1997, or, if by February
7, 1997, the Last Regulatory Approval has not been received, but all
applications therefor have been completed and are pending, and the parties
have no reasonable cause to believe the same will be denied, such later
date as the parties shall mutually agree upon, it being understood that the
parties shall act reasonably and in good faith to extend the Outside
Closing Date beyond February 7, 1997, as warranted to accommodate the
governmental consent and approval process.
IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by
the duly authorized officers of the parties hereto as of the date first written
above.
MIDWAY AIRLINES CORPORATION GOODAERO, INC.
By: /s/ Xxxxxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------- ---------------------------------
Name: Xxxxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxxxxx
Title: Senior Vice President Title: President
XXXX/CHILMARK FUND L.P. GOODAERO STOCKHOLDERS
By: /s/ Xxx Xxxxxxxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------- ---------------------------------
Xxx Xxxxxxxxxxx, Vice President Xxxxx X. Xxxxxxxxx, Ph.D
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of ZC, Inc., as a partner of
ZC Partnership, as general
partner of ZC Limited Partnership,
as general partner of
Xxxx/Chilmark Fund L.P. By: /s/ Xxxx X. Xxxx
---------------------------------
Xxxx X. Xxxx
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SECOND AMENDMENT TO AGREEMENT AND PLAN OF MERGER
SECOND AMENDMENT, dated as of February 7, 1997, to Agreement and Plan of
Merger, dated as of January 17, 1997, as amended by First Amendment to Agreement
and Plan of Merger, dated as of January 31, 1997, by and among Midway Airlines
Corporation, a Delaware corporation, GoodAero, Inc., a Delaware corporation,
and, for purposes of Article III, Section 4.02, Section 4.08, Article VIII and
Article X only, Xxxxx X. Xxxxxxxxx, Ph.D and Xxxx X. Xxxx (collectively, the
"GoodAero Stockholders"), and Xxxx/Chilmark Fund L.P., a Delaware limited
partnership. Capitalized terms used and not otherwise defined in this Amendment
shall have the meanings ascribed to them in the Agreement.
The parties hereto agree to the following:
1. Exhibit 1.02, the Certificate of Merger, including the Restated
Certificate of Incorporation attached thereto, shall be amended in its entirety
as set forth in Exhibit A.
2. Section 1.04(b) shall be amended to read as follows:
(b) The By-laws of GoodAero as in effect immediately prior to the
Effective Time in substantially the form as attached hereto as
Exhibit 1.04(b) shall be the By-laws of the Surviving Corporation, until
duly amended in accordance with applicable law, the Certificate of
Incorporation of the Surviving Corporation and such By-laws.
3. Section 1.07 shall be amended to read as follows:
SECTION 1.07. CONVERSION/CANCELLATION OF STOCK. Except as provided in
Section 1.08 hereof, as of the Effective Time, by virtue of the Merger and
without any action on the part of the holders of any shares of GoodAero
Stock, each share of GoodAero Stock issued and outstanding immediately
prior to the Effective Time shall be converted into and become shares of
senior convertible preferred stock of the Surviving Corporation (the
"Senior Convertible Preferred Stock"), at the conversion ratio of 105
shares of Senior Convertible Preferred Stock for each share of GoodAero
Stock, such that the total number of shares of GoodAero Stock outstanding
immediately prior to the Effective Time shall be converted into 5460 shares
of Senior Convertible Preferred Stock in the aggregate. Except as provided
in Sections 1.08 and 1.09 hereof, as of the Effective Time, by virtue of
the Merger and without any action on the part of the holders of any Company
Stock, each share of Company Stock issued and outstanding immediately prior
to the
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Effective Time shall be converted at the Effective Time into the right to
receive in cash (the "Cash Consideration") $.01 per outstanding share of
Company Stock. Except as provided in this Section 1.07 and in Section 1.09
hereof, as of and after the Effective Time, no holder of any certificate
that immediately before the Effective Time represented GoodAero Stock or
Company Stock shall have any rights as a holder of GoodAero Stock or
Company Stock, respectively. All options, warrants or other rights, if
any, to acquire any GoodAero Stock or Company Stock existing immediately
before the Effective Time shall be canceled, without any consideration
being payable or paid by the Company therefor.
4. Section 1.10 shall be amended to read as follows:
SECTION 1.10. EXCHANGE OF CERTIFICATES.
(a) At the Effective Time, the Surviving Corporation shall deliver to
the holders of the GoodAero Stock certificates representing in the
aggregate 5460 shares of Senior Convertible Preferred Stock, in exchange
for the certificates representing all the issued and outstanding shares of
GoodAero Stock.
(b) At the Effective Time, Z/C shall deliver to the Company an amount
of funds sufficient in the aggregate to provide all funds necessary for the
Company to disburse the payments to which the holders of Company Stock
shall be entitled, subject to reduction or reimbursement to the extent any
holder of Company Stock entitled to receive the Cash Consideration in the
Merger provides a written waiver and release in form and substance
satisfactory to GoodAero and the Company. As soon as practicable after the
Effective Time, the Company shall mail to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding Company Stock, a form letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title
to the certificate will pass, only upon delivery of the certificates to the
Company) and instructions for use in effecting the surrender of the
certificate in exchange for the consideration specified in Section 1.07.
Except as set forth in Section 1.13 hereof, payments to holders of Company
Stock shall be made only upon surrender to the Company of their
certificates for shares of Company Stock of the Company and a properly
completed letter of transmittal. Until so surrendered, certificates for
shares of Common Stock shall represent, after the Effective Time, solely
the right to receive the consideration specified in Section 1.07, except as
otherwise provided in Section 1.09 hereof. Stock certificates surrendered
to the Company shall be cancelled. No interest will be paid or will accrue
on the cash payable upon the surrender of any such certificate. If the
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payment is to be made to a person other than the registered holder of the
certificate surrendered, it shall be a condition of such payment that the
certificate so surrendered shall be properly endorsed or otherwise in
proper form for transfer and that the person requesting such payment shall
pay any transfer or other taxes required by reason of the payment to the
person other than the registered holder of the certificate surrendered, or
establish to the satisfaction of the Company that such tax has been paid or
is not applicable.
5. Section 1.11 shall be amended to read as follows:
SECTION 1.11. CLOSING OF TRANSFER BOOKS. At the Effective Time, the
stock transfer books of GoodAero and of the Company as to GoodAero Stock
and Company Stock shall be closed and no transfer of shares of GoodAero
Stock or Company Stock shall thereafter be made. If, after the Effective
Time, certificates formerly representing shares of GoodAero Stock or
Company Stock are presented to the Surviving Corporation, they shall be
exchanged for such consideration and cancelled as provided in Section 1.07
hereof.
6. Section 1.13 shall be amended to read as follows:
SECTION 1.13. LOST CERTIFICATES. In the event any certificate for
shares of GoodAero Stock or Company Stock shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person
claiming such certificate to be lost, stolen or destroyed, the Company
shall issue in exchange for such lost, stolen or destroyed certificate
(i) in the case of GoodAero Stock, shares of Senior Convertible Preferred
Stock (and any dividends or distributions with respect thereto and any cash
in lieu of fractional shares) deliverable in respect thereof as determined
herein and (ii) in the case of Company Stock, the Cash Consideration
payable in respect thereof as determined herein. When authorizing such
payment in exchange for any lost, stolen or destroyed Certificate, the
person to whom the (x) Senior Convertible Preferred Stock or (y) the Cash
Consideration, as the case may be, is to be issued shall, if requested by
the Company, give the Company a bond satisfactory to the Company in such
sum as the Company may reasonably direct or otherwise indemnify the Company
in a manner satisfactory to the Company against any claim that may be made
against the Company or GoodAero with respect to the certificate alleged to
have been lost, stolen or destroyed.
7. Section 4.06(ii) shall be amended to read as follows:
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(ii) In connection with the restructuring of the obligations owed by
the Company to AA, debis AirFinance B.V., and Wings Aircraft Finance, Inc.,
at the Closing the Surviving Corporation shall issue (A) warrants for the
purchase of 572 shares of Surviving Corporation Common Stock which
represents 5% of the Fully Diluted Surviving Corporation Stock to AA
pursuant to the agreements concerning AA referred to in Section 6.02(k),
(B) 381 shares of Surviving Corporation Common Stock which represents 3% of
the Fully Diluted Surviving Corporation Stock to debis AirFinance B.V.,
pursuant to any agreements concerning such creditor referred to in Section
6.02(k), and (C) 191 shares of Surviving Corporation Common Stock which
represents 2% of the Fully Diluted Surviving Corporation Stock to Wings
Aircraft Finance, Inc., pursuant to any agreements concerning such creditor
referred to in Section 6.02(k);
8. Section 6.02(n) shall be amended to read as follows:
(n) STOCKHOLDERS' AGREEMENT. The Stockholders' Agreement in
substantially the form of EXHIBIT 6.02(N) hereof (the "Stockholders'
Agreement") shall have been duly executed and delivered.
9. Section 6.02(s) shall be added to read as follows:
(s) Z/C shall have complied with the provisions of Section 1.10(b)
hereof.
10. The definition of "Surviving Corporation Common Stock" shall be
amended to read as follows:
"Surviving Corporation Common Stock" shall mean the common stock, par
value $.01 per share, of the Surviving Corporation.
11. The definition of "Outside Closing Date" shall be amended to read as
follows:
"Outside Closing Date" shall mean February 14, 1997, or, if by
February 14, 1997, the Last Regulatory Approval has not been received, but
all applications therefor have been completed and are pending, and the
parties have no reasonable cause to believe the same will be denied, such
later date as the parties shall mutually agree upon, it being understood
that the parties shall act reasonably and in good faith to extend the
Outside Closing Date beyond February 14, 1997, as warranted to accommodate
the governmental consent and approval process.
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[INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by
the duly authorized officers of the parties hereto as of the date first written
above.
MIDWAY AIRLINES CORPORATION GOODAERO, INC.
By: /s/ Xxxxxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------- ---------------------------------
Name: Xxxxxxxx Xxxxxx Name: Xxxxx X. Xxxxxxxxx
Title: Senior Vice President Title: President
XXXX/CHILMARK FUND L.P. GOODAERO STOCKHOLDERS
By: /s/ Xxx Xxxxxxxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------- ---------------------------------
Xxx Xxxxxxxxxxx, Vice President Xxxxx X. Xxxxxxxxx, Ph.D
of ZC, Inc., as a partner of
ZC Partnership, as general
partner of ZC Limited Partnership,
as general partner of
Xxxx/Chilmark Fund L.P.
By: /s/ Xxxx X. Xxxx
---------------------------------
Xxxx X. Xxxx
-74-
