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EXHIBIT 10.40
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VOUCHER PURCHASE AGREEMENT
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This Voucher Purchase Agreement dated as of October 18, 1995 (the
"Agreement")is made by and between Trans World Airlines, Inc., a Delaware
corporation (the "Company") and M.D. Sass Re/Enterprise Partners, L.P., a
Delaware limited partnership ("Sass Partnership") and M.D. Sass Re/Enterprise
International, Ltd., a British Virgin Islands Company ("International"; Sass
Partnership and International being hereinafter referred to collectively as the
"Purchasers");
WITNESSETH:
WHEREAS, on June 30, 1995 the Company filed a petition under Chapter
11 of the United States Bankruptcy Code (the "Bankruptcy Code");
WHEREAS, pursuant to the Company's plan of reorganization confirmed by
the United States Bankruptcy Court for the Eastern District of Missouri on
August 4, 1995 (the "Plan"), the Company issued 600,000 Ticket Vouchers (as
defined in Section 1.1.159 of the Plan), the form of which Ticket Vouchers is
attached as Exhibit "A" hereto, having an aggregate face amount of $30,000,000;
WHEREAS, the Company's Plan became effective on August 23, 1995 (the
"Effective Date") and the Company emerged from protection under the Bankruptcy
Code on that date;
WHEREAS, the Company and the Purchasers entered into a Standby
Purchase Agreement dated as of August 8, 1995 (the "Standby Agreement")
pursuant to which the Purchasers agreed to purchase Ticket Vouchers at $26 per
$50 face amount of Ticket Vouchers tendered during the period from the
Effective Date and ending on October 15, 1995;
WHEREAS, as of October 19, 1995 the Purchasers will purchase all
Ticket Vouchers tendered in accordance with the Standby Agreement;
WHEREAS, the Company and Purchasers wish to enter into this Agreement
to provide for a further purchase arrangement with respect to Ticket Vouchers
not tendered and purchased under the StandBy Agreement;
NOW THEREFORE, in consideration of the mutual covenants hereinafter
contained and other good and valuable considerations, the receipt and
sufficiency thereof which are hereby acknowledged, the Company and the
Purchasers, agree as follows:
1. COMMITMENT TO PURCHASE TICKET VOUCHERS. On the basis of the
covenants, representations and warranties herein contained, but subject to the
terms and conditions herein set forth, the Purchasers agree as follows:
a. Each of the Purchasers will on October 19, 1995 (the
"Commencement Date"), or as soon thereafter as the conditions
set forth in Section 13 hereof are accomplished, issue its
unconditional contractual undertaking (the "Purchase
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Commitment") to purchase, without setoff or reduction of any
kind, all Ticket Vouchers tendered to and accepted by American
Stock Transfer and Trust Company as agent (the "Agent") during
the period commencing on the Commencement Date and ending on
November 16, 1995 (the "Expiration Date"), such purchase to be
at a price of $32.00 per $50.00 face amount of the Ticket
Vouchers so tendered (the "Purchase Price"). Ticket Vouchers
so purchased by the Purchasers after being validated by the
Agent shall be conclusively deemed, as between the Purchasers
and the Company, to be Ticket Vouchers for all purposes of
this Agreement. Promptly following the Commencement Date, the
Company will enter into an agreement with the Agent for the
processing and holding of Ticket Vouchers tendered in
accordance with this Agreement, such agreement to be
reasonably satisfactory to Purchasers and provide that the
Company will pay the Agent's reasonable fees and expenses
thereunder.
b. The Purchase Commitment provides that payment of the
Purchase Price will be made to the Agent within three days
after the Expiration Date (the "Settlement Date") in
immediately available funds. The form of the Purchase
Commitment will be substantially as set forth as EXHIBIT "B"
hereto.
c. On the Settlement Date, the Purchasers will notify
the Company of the aggregate face amount of Ticket Vouchers
tendered and purchased by the Purchasers pursuant to Section
1.a. above (the "Purchased Ticket Vouchers").
2. REDEMPTION OF TICKET VOUCHERS.
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a. The Company unconditionally agrees to redeem, at a
price of $39.00 per $50.00 face amount (the "Scheduled
Redemption Price"), without setoff or reduction of any kind,
all unredeemed Purchased Ticket Vouchers from the Purchasers
in accordance with the following schedule (the "Scheduled
Redemption").
(1) On the Settlement Date, the Company will
redeem at the Scheduled Redemption Price, 1/9th of
the Purchased Ticket Vouchers; and
(2) On March 15, 1996, the Company will redeem
all remaining unredeemed Purchased Ticket Vouchers,
subject to the credit set forth below.
Payment of the aggregate Scheduled Redemption Price for a
Scheduled Redemption shall be made on or before the dates
stated above (each a "Scheduled Redemption Date") in
immediately available funds in accordance with wire transfer
instructions from the Purchasers upon tender to the Company of
the Purchased Ticket Vouchers to be redeemed in a manner
sufficient to convey good title thereto free and clear of any
lien or encumbrance arising by, through or under the
Purchasers, to the Company. Any Scheduled Redemption payment
or portion thereof shall, if not so made upon proper tender by
the Purchasers of the Purchased Ticket Vouchers, include
interest from and including the Scheduled
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Redemption Date until paid at an overdue rate equal to the
then applicable Prime Commercial rate of Chase Manhattan Bank
N.A. plus 250 basis points (the "Overdue Rate") and
reasonable out-of-pocket collection costs, including
reasonable attorneys' fees and disbursements, if any, incurred
by the Purchasers. Payments received will be applied first,
to pay reasonable out-of-pocket collection costs, including
reasonable attorneys' fees and disbursements, if any, incurred
by Purchasers, and second, to pay overdue interest due under
this Agreement and third, to pay overdue Scheduled Redemption
amounts.
b. The Company may credit against the final Scheduled
Redemption an amount equal to (i) $7.00 times (ii) the number
of Purchased Ticket Vouchers redeemed on or about the
Settlement Date.
c. Provided that no Event of Default shall have occurred
and then be continuing under this Agreement, the Company may,
at its option, redeem any or all of the Purchased Ticket
Vouchers on any day after the Expiration Date in advance of
any Scheduled Redemption at the price (the "Discounted
Redemption Price") set opposite the month below in which such
day occurs (a "Discounted Redemption") as follows:
Month Discounted Redemption Price
on or before January 15, 1996 $37
on or before February 15, 1996 $38
The Company may exercise its option for Discounted Redemption
by giving five business days prior written notice to the
Purchasers of such exercise (i) stating the amount of Ticket
Vouchers being redeemed in advance of such Scheduled
Redemption and (ii) designating the date of such Discounted
Redemption. Upon tender to the Agent of the Purchased Ticket
Vouchers subject to the Discounted Redemption on the date
specified in the written notice for such Discounted
Redemption, the Company shall pay to the Purchasers the
required Discounted Redemption amount in the form of a wire
transfer of immediately available funds in accordance with
wire transfer instructions from the Purchasers. The
Discounted Redemption payments will be applied in inverse
order of Scheduled Redemptions. Any notice of Discounted
Redemption as to which the Company shall have exercised its
option may be withdrawn upon the giving of a notice of
revocation at least two (2) business days prior to the date
fixed for such Discounted Redemption.
d. The Purchasers agree not to sell the Purchased Ticket
Vouchers except to the Company pursuant to this Section 2 or
upon any Event of Default as hereafter defined.
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3. COMPENSATION TO PURCHASERS FOR PURCHASE COMMITMENT.
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a. As compensation for the Purchasers' commitment in
Section 1 and Purchasers' commitment under the Standby
Agreement, the Company will pay to the Purchasers a fee equal
to $.90 times the difference between (i) 600,000 and (ii) the
sum of the number of Purchased Ticket Vouchers hereunder plus
the number of Ticket Vouchers purchased by Purchasers under
the Standby Agreement (the "Commitment Fee"). As compensation
for X.X. Xxxxxxx, Inc.'s intermediary role in the Purchase
Commitment, the Company will pay to X.X. Xxxxxxx, Inc. a fee
as specified in a letter agreement of even date herewith
between X.X. Xxxxxxx, Inc. and the Company (the "TWA Broker
Fee").
b. The Commitment Fee and the TWA Broker Fee will be
paid in immediately available funds on the Settlement Date
upon confirmation by the Agent of full funding by the
Purchasers of the Purchase Price. The Purchasers will repay
to the Company on the Settlement Date any amount by which the
fee paid by the Company under Section 1a. of the Standby
Agreement exceeds the Commitment Fee as calculated under 3a.
above.
4. PAYMENT OF TRANSACTION COSTS, FEES AND EXPENSES.
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a. In the event the Purchase Commitment is issued as
herein contemplated, the Company agrees to pay upon
presentation of an appropriate invoice(s) therefor (together
with such reasonable detail concerning the matters covered by
such invoice(s) as the Company may in good faith request) the
reasonable out-of-pocket expenses of (i) the Purchasers,
including reasonable attorneys' fees and disbursements, in
connection with the negotiation, preparation and execution of
this Agreement and the issuance of the Purchase Commitment on
the Commencement Date, not to exceed in the aggregate, $45,000
(less all amounts paid by the Company for similar services
under the Standby Agreement), (ii) the Agent in connection
with its performance of the transaction contemplated to be
performed by it hereunder, and (iii) X. X. Xxxxxxx, Inc. and
its counsel, LeBoeuf, Lamb, Xxxxxx & XxxXxx, in connection
with the negotiation, preparation and execution of this
Agreement, as separately agreed in writing between the Company
and X. X. Xxxxxxx, Inc., a true and correct copy of which
writing will be provided to the Purchasers by the Company
promptly after execution hereof.
b. In the event that the Purchase Commitment is not
issued by the Purchasers as herein contemplated, (i) by mutual
agreement in writing of the Company and the Purchasers or (ii)
as a result of the breach of this Agreement by either the
Company or the Purchasers, the Company and the Purchasers, in
the case of clause (i), or the breaching party in the case of
clause (ii), as the case may be, agree(s) to pay upon
presentation of an appropriate invoice therefor (together with
such reasonable detail concerning the matters covered by such
invoice(s) as the Company may in good faith request) the
reasonable fees and out-of-pocket
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expenses of X. X. Xxxxxxx, Inc. and the reasonable fees and
disbursements of LeBoeuf, Lamb, Xxxxxx & XxxXxx in acting as
counsel for X. X. Xxxxxxx, Inc. in connection with negotiation
and preparation of this Agreement, which shall not exceed in
the aggregate $37,500 (less all amounts paid by the Company
for similar fees and expenses under the Standby Agreement);
PROVIDED, HOWEVER, that in the event the Company is the
breaching party in the case of clause (ii), the Company agrees
to pay the reasonable out-of-pocket expenses of the
Purchasers, including reasonable attorneys' fees and
disbursements, in connection with the negotiation, preparation
and execution of this Agreement prior to the Company's breach,
not to exceed in the aggregate $45,000 (less all amounts paid
by the Company for for similar fees and expenses under the
Standby Agreement); PROVIDED FURTHER, HOWEVER, that in the
event the Purchasers are the breaching parties in the case of
clause (ii), the Purchasers agree to pay the reasonable
out-of-pocket expenses of the Company, including reasonable
attorneys' fees and disbursements, in connection with the
negotiation, preparation and execution of this Agreement prior
to the Purchasers' breach, not to exceed in the aggregate
$45,000 (less all amounts paid by Purchasers for similar fees
and expenses under the Standby Agreement).
5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. On the
Commencement Date, the Purchasers will deliver to the Company a certificate
signed by their authorized representatives that represents and warrants to and
agrees that, as of the Commencement Date:
a. Each of the Purchasers has been duly organized and,
in the case of Sass Partnership, is a validly existing
Delaware limited partnership and, in the case of
International, is a validly existing British Virgin Islands
company, in each case, duly organized and in good standing
under the laws of its respective jurisdiction of organization,
with power and authority to own its respective property and
conduct its respective business and to enter into and perform
this Agreement.
b. International is generally subject to suit and
neither it nor its property has any right of sovereign or
other immunity from suit, or in respect of matters of
jurisdiction or execution.
c. This Agreement has been duly authorized, executed and
delivered by the Purchasers and constitutes the valid, legal
and binding obligation of the Purchasers enforceable against
the Purchasers in accordance with its terms.
d. The Purchasers have a combined net worth and partners
capital, computed in accordance with generally accepted
accounting principles, of not less than $200,000,000 (Sass
Partnership has a net worth (partners' capital) of not less
than $125,000,000 so computed and International has a net
worth of not less than $75,000,000 so computed) and each of
the Partners has sufficient unrestricted liquid assets and the
financial ability to fully perform its obligations under the
Purchase Commitment and its respective obligations hereunder.
The financial statements of the Purchasers furnished to the
Company prior to execution and
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delivery of this Agreement have been prepared in accordance
with generally accepted accounting principles consistently
applied and fairly present the pertinent results of operations
for the periods indicated and the financial position at the
end of such periods of the Purchasers, except as set forth in
the footnotes thereto.
e. No consent, approval, authorization or order of, or
filing with, any governmental agency or body of any court is
required for the consummation by the Purchasers of the
transactions contemplated by this Agreement in connection with
the performance by Purchasers of the Purchase Commitment.
f. The execution, delivery and performance of this
Agreement and the Purchase Commitment and the consummation of
the transactions herein and therein contemplated will not
result in a breach or violation by Purchasers of any of the
terms and provisions of, or constitute a default under, (i)
any statute, rule or regulation, or any order of any
governmental agency or body or any court having jurisdiction
over the Purchasers or any subsidiary of the Purchasers or any
of their properties or (ii) any agreement or instrument to
which the Purchasers or any subsidiary is a party or by which
the Purchasers or any subsidiary is bound or to which any of
the properties of the Purchasers or any subsidiary is subject,
or (iii) the certificate of incorporation or by-laws of the
Purchasers or any subsidiary of the Purchasers which currently
conducts business.
g. No suit, action, claim or governmental proceeding has
been instituted or, to the knowledge of the Purchasers,
threatened against, and no order, decree or judgment of any
court agency or other governmental authority shall have been
rendered against, the Purchasers to restrain or prohibit the
performance by Purchasers of this Agreement or the
transactions contemplated by this Agreement.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. On the
Commencement Date, the Company will deliver to the Purchasers a certificate
signed by its President or General Counsel that represents and warrants that,
as of the Commencement Date:
a. The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own
its properties and conduct its business as described in the
Prospectus (as hereafter defined).
b. A registration statement (No. 33-89764), including a
prospectus, relating to (i) the Plan, (ii) securities to be
issued in connection with the Plan and (iii) the Ticket
Vouchers, has been filed by the Company with and declared
effective on May 12, 1995 by, the Securities and Exchange
Commission (the "Commission"). Such registration statement is
hereinafter referred to as the "Registration Statement," and
such prospectus, including all materials incorporated therein
by reference therein, as the "Prospectus."
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c. The Registration Statement including the Prospectus,
taken as a whole, does not include any untrue statement of a
material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein
not misleading in so far as relevant and material to the
financial condition of the Company, to the Ticket Vouchers or
the transactions contemplated hereby.
d. This Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid, legal and
binding obligation of the Company enforceable against the
Company in accordance with its terms.
e. The Ticket Vouchers have been duly authorized and
validly issued by the Company and the redemption of the Ticket
Vouchers by the Company in accordance with Section 2 of this
Agreement has been duly authorized by all necessary corporate
or judicial action.
f. The Ticket Vouchers conform to the description
thereof under the definition of "Ticket Voucher" contained in
Section 1.1.159 of the Plan.
g. As of August 23, 1995, $30,000,000 face amount of
Ticket Vouchers were issued and outstanding.
h. No consent, approval, authorization or order of, or
filing with, any governmental agency or body of any court is
required for the consummation by the Company of the
transactions contemplated by this Agreement in connection with
the issuance and redemption by the Company of the Ticket
Vouchers, or resale of the Ticket Vouchers, except any such as
have been obtained and made.
i. The execution, delivery and performance of this
Agreement and the consummation of the transactions herein
contemplated will not result in a breach or violation by the
Company of any of the terms and provisions of, or constitute a
default under, (i) any statute, rule or regulation, or any
order of any governmental agency or body or any court having
jurisdiction over the Company or any subsidiary of the Company
or any of their properties or (ii) any agreement or instrument
to which the Company or any subsidiary is a party or by which
the Company or any subsidiary is bound or to which any of the
properties of the Company or any subsidiary is subject, or
(iii) the certificate of incorporation or by-laws of the
Company or any subsidiary of the Company which currently
conducts business.
j. No suit, action, claim or governmental proceeding has
been instituted or, to the knowledge of the Company,
threatened against, and no order, decree or judgment of any
court agency or other governmental authority shall have been
rendered against, the Company to restrain or prohibit this
Agreement or the transactions contemplated by this Agreement,
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7. COVENANTS OF THE COMPANY. The Company covenants and agrees
with the Purchasers that:
a. The Company will endeavor in good faith to advise the
Purchasers of any judicial or administrative order materially
affecting the Plan or any of the transactions contemplated by
the Plan or this Agreement and will use its best efforts to
prevent the issuance of any such order materially adversely
affecting the rights of the Purchasers.
b. The Ticket Vouchers will be in bearer form
substantially in the form attached hereto as EXHIBIT "A".
Records of the serial numbers applicable to specific holders
of Ticket Vouchers will be maintained by the Agent rather than
the Company and will be accessed by the Company only for
purposes of security and/or control when and to the extent the
Company in good faith believes there has been, or may have
been, improper use, reproduction or alteration of Ticket
Vouchers. The Agent will also utilize such serial numbers to
ensure that Ticket Vouchers purchased by the Purchasers under
the Standby Agreement are administered under the Standby
Agreement and the Purchased Ticket Vouchers purchased by the
Purchasers under this Agreement are administered under this
Agreement.
c. If required by any governmental agency of competent
jurisdiction in the United States, the Company will arrange
for the qualification of the purchase and resale of the Ticket
Vouchers under the laws of such jurisdictions as the
Purchasers may reasonably designate and will continue such
qualification in effect so long as reasonably requested by the
Purchasers.
d. The Company will promptly file any forms 10K, 10Q or
8K required to be filed with the Commission under applicable
law and furnish to the Purchasers copies thereof promptly upon
the filing thereof.
e. The Company will honor Ticket Vouchers in accordance
with their terms whether tendered directly to the Company or
indirectly through a travel agent, interline agreement or
otherwise.
f. In any subsequent bankruptcy, reorganization or
similar proceeding, the Company will (i) continue to honor the
Ticket Vouchers in accordance with their terms and (ii) treat
the Ticket Vouchers as "tickets" and holders of the Ticket
Vouchers as "passengers/ticket holders."
g. The Company will use commercially reasonable efforts
to notify the persons who were entitled to receive Ticket
Vouchers under the Plan of the existence of the Purchase
Commitment and will furnish to the Purchasers such copies
thereof as the Purchasers may reasonably request.
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h. The Company will take such further actions and
execute and deliver to the Purchasers such further documents
and instruments as may be necessary to fully and completely
consummate the transactions and agreements contemplated by
this Agreement.
i. The Company agrees not to enter into any agreements
for the sale or disposition of all or substantially all of the
Company's assets (in one or more transactions), or a merger,
consolidation or other business combination involving all or
substantially all of the Company's assets unless the Company
provides the Purchasers with the express, written agreement by
the purchaser(s) or other successor(s) to assume the Company's
obligations and covenants hereunder and, after giving effect
to any such sale, disposition, merger, consolidation or other
business combination, the company or other successor(s) shall
meet the requirements of Section 6 hereof.
j. In the event the Company shall fail, for any calendar
month after the Expiration Date until all of the Ticket
Vouchers are redeemed in full, to maintain an average balance
of unrestricted domestic cash of not less than $70 million,
the Company shall be obligated to repurchase from the
Purchasers all Purchased Ticket Vouchers then held by the
Purchasers at the applicable Discounted Redemption price as
set forth in Section 2.c. hereof, such mandatory repurchase to
be effected within 5 business days after receipt of written
demand therefor from the Purchasers. Unrestricted domestic
cash computed for this purpose with respect to any calendar
month after December 31, 1995 shall exclude 50% of the cash
proceeds to the Company, if any, derived from any of the
following subsequent to the Commencement Date: (i) an equity
rights offering, (ii) any working capital loan facility in
addition to the Company's currently existing and fully drawn
asset and receivables based loans from Karabu Corp., (iii) any
change in the applicable formulae (as distinct from day to day
changes in holdback levels in accordance with current
procedures) which results in any reduction in credit card
processing holdback levels and (iv) any sale of capital assets
outside the ordinary course of business. Conversely, any
decrease in unrestricted domestic cash, resulting from any
change in the applicable formulae (as distinct from day to day
changes in holdback levels in accordance with current
procedures) governing credit card processing holdback levels,
shall be excluded.
In addition, the Company will maintain for the period of four
calendar months ended October 31, 1995 and on a cumulative
monthly basis thereafter, tested as of the last day of each
month through December 1995, earnings before interest and
taxes plus depreciation and amortization ("EBITDA") of not
less than 50% of the following amounts:
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Cumulative
PERIOD EBITDA EBITDA
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July 1 - October 31, 1995 $227,600,000 $227,600,000
November 1995 $ 28,900,000 $256,500,000
December 1995 $ 30,100,000 $286,600,000
; PROVIDED, HOWEVER, the Company shall not be required to
maintain such EBITDA levels with respect to any calendar month
during which the Company maintains an average balance of
unrestricted domestic cash of not less than $120 million.
Upon request by the Purchaser, the Company's chief financial
officer will execute and deliver to the Purchaser a
certificate certifying that the conditions of this subsection
are satisfied.
k. The Company will not purchase, publicly offer to
purchase, or otherwise enter into any legally binding
agreement to acquire prior to the Expiration Date any of the
600,000 Ticket Vouchers issued on August 23, 1995 other than
in accordance with (i) the Standby Agreement, (ii) this
Agreement and (iii) the terms of the Ticket Vouchers.
l. Prior to entering into any standby purchase agreement
for the standby purchase by any third party of any Ticket
Vouchers distributed by the Company subsequent to the
Settlement Date before the redemption of all Ticket Vouchers
purchased by the Purchasers pursuant to the Purchase
Commitment, the Company will provide not less than 72 hours
prior written notice to the Purchasers at the address
specified in Section 16 to permit Purchasers to make a written
offer to the Company to act as standby purchaser with respect
to the Ticket Vouchers to be distributed subsequent to the
Settlement Date before the redemption of all Ticket Vouchers
purchased by the Purchasers pursuant to the Purchase
Commitment. Should the Company not accept any offer made by
the Purchasers or should the Purchasers not make any offer
within said 72 hour period, the Company shall be free to make
whatever arrangements it may desire with third parties with
respect to any such standby purchase.
8. COVENANTS OF THE PURCHASERS. The Purchasers covenant and
agree with the Company that:
a. The Purchasers will take such further actions and
execute and deliver to the Company such further documents and
instruments as may be necessary to fully and completely
consummate the transactions and agreements contemplated by
this Agreement.
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b. The Purchasers agree not to enter into any agreements
for the sale or disposition of all or substantially all of the
Purchasers' assets (in one or more transactions), or a merger,
consolidation or other business combination involving all or
substantially all of the Purchasers' assets unless the
Purchasers provide the Company with the express, written
agreement by the Purchasers or other successor(s) to assume
the Purchasers' obligations and covenants hereunder and, after
giving effect to any such sale, disposition, merger,
consolidation or other business combination, the Purchasers or
other successor(s) shall meet the requirements of Section 5
hereof.
c. Purchasers agree that any legal action or proceeding
against Purchasers relating to or arising out of or under this
Agreement may be brought in any court of competent
jurisdiction in the State of New York or of the United States
of America for the Southern District of New York, and
Purchasers accept with regard to any such action or proceeding
for themselves and in respect to their property, generally and
unconditionally, the jurisdiction of the aforesaid courts.
Purchasers further irrevocably consent to the service of
process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by
registered or certified U.S. mail, postage prepaid, to the
Purchasers at their addresses provided in Section 16 hereof,
such service to become effective upon receipt or five (5) days
after such mailing, whichever shall first occur. Nothing
herein contained shall affect the right of the Company to
serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against
International in the British Virgin Islands or against
Purchasers in any other jurisdiction in which Purchasers may
be subject to suit. To the fullest extent permitted by
applicable law, Purchasers hereby waive, and agree not to
assert, by way of motion, defense, counterclaim or otherwise,
in any such suit, action or proceeding any claim that (i)
Purchasers are not personally subject to the jurisdiction of
any of the above-named courts by reason of any immunity or
otherwise (ii) their respective properties are exempt or
immune from setoff, execution or attachment, either prior to
judgment or in aid of execution or (iii) any suit, action or
proceeding so brought is in an inconvenient forum or that the
venue of the suit, action or proceeding is improper or that
the subject matter hereof may not be enforced in or by such
courts. Purchasers further agree that, after final judgment
by any such court, they will, to the fullest extent permitted
by applicable law, waive the benefit of any defense that would
hinder or delay the levy, execution or collection of any
amount to which the Company is entitled hereunder or pursuant
to a final judgment of any court having jurisdiction. The
Purchasers hereby irrevocably designate M.D. Sass Associates,
Inc., in the case of Sass Partnership and M.D. Sass
Management, Inc., in case of International, in each case
having an office on the date hereof at 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as the designee, appointee
and agent of the Purchasers to receive service of process in
such jurisdiction in any legal action or proceeding with
respect to this Agreement and such service shall be deemed
complete five (5)
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days after delivery thereof to said agent, if written notice
of such service shall be given to Purchasers either by such
agent or by the Company, by mailing the same by registered or
certified mail to Purchasers at the addresses set forth in
Section 16 or otherwise as notice is permitted to be given
under such paragraph.
If, for the purpose of obtaining a judgment in any court with respect
to any obligation of Purchasers under this Agreement it becomes
necessary to convert into any other currency any amount in Dollars due
under this Agreement, then that conversion shall be made at the buying
spot rate of exchange that would be utilized by the Company to
purchase freely transferable Dollars at the close of business on the
day before the day on which the judgment is rendered.
9. DEFAULT BY THE COMPANY. Each of the following shall
constitute an "Event of Default" by the Company under this Agreement.
a. failure of the Company to pay any Scheduled
Redemption amount or any Discounted Redemption amount or
interest, when and as due and payable in accordance with the
terms of this Agreement, which default continues for 5 days
after the date due;
b. failure of the Company to pay any amount (other than
any Scheduled Redemption amount, Discounted Redemption amount
or interest) when and as due and payable in accordance with
the terms of this Agreement, which default continues for 10
days after notice thereof by the Purchasers to the Company;
c. failure by the Company to observe and perform any of
its covenants under this Agreement, and, if curable, any such
failure continues for 30 days after notice thereof by the
Purchasers to the Company;
d. any representation or warranty of the Company set
forth in Section 6 hereof shall have been untrue or misleading
in any material respect as of the date made and, such untrue
and misleading representation or warranty shall be material as
of the date asserted as an Event of Default hereunder;
e. the Company defaults in any material way under the
terms of any of its material indebtedness for money borrowed
or material aircraft purchase contracts or material aircraft
leases and such default results in the acceleration of such
indebtedness for money borrowed, aircraft purchase contracts
or aircraft leases;
f. The Company ceases to provide commercial air
transportation at a level (based on available seat miles) at
least 70% of the level of available seat miles provided in
1994, in each case computed on a cumulative basis from July 1,
1995 compared to the cumulative average seat miles provided
for the corresponding period in 1994.
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g. the Company refuses to honor 5% or more of the
outstanding Ticket Vouchers in accordance with their terms;
h. any final judgment in excess of $25 million is
entered against the Company in any judicial or administrative
proceeding, which judgment is not stayed within 30 days
following the entry thereof;
i. the Company (i) commences a voluntary case or other
proceeding under any state or federal bankruptcy, insolvency
or receivership law, (ii) seeks or acquiesces to the
appointment of a trustee, receiver, liquidator or custodian or
any substantial part of its property, (iii) makes a general
assignment for the benefit of its creditors or (iv) takes any
corporate action authorizing the foregoing; or
j. an involuntary case or other proceeding under any
state or federal bankruptcy, insolvency or receivership law is
commenced against the Company and such involuntary case
remains undismissed and unstayed for 60 days.
10. DEFAULT BY THE PURCHASERS. Each of the following shall
constitute an "Event of Default" by the Purchasers under this Agreement:
a. failure of the Purchasers to perform its obligations
under the Purchase Commitment when and as due and payable in
accordance with the terms thereof and of this Agreement, which
default continues for 5 days after performance is due;
b. prior to performance in full of the Purchase
Commitment, failure by the Purchasers to observe and perform
any of their other covenants under this Agreement and, if
curable, any such failure continues for 30 days after notice
by the Company;
c. prior to performance in full of the Purchase
Commitment, any representation or warranty of the Purchasers
set forth in Section 6 hereof shall have been untrue or
misleading in any material respect as of the date made and,
such untrue and misleading representation or warranty shall be
material as of the date asserted as an Event of Default
hereunder;
d. prior to performance in full of the Purchase
Commitment, any final judgment in excess of $25 million is
entered against the Purchasers in any judicial or
administrative proceeding, which judgment is not stayed within
30 days following the entry thereof;
e. prior to performance in full of the Purchase
Commitment, the Purchasers (i) commence a voluntary case or
other proceeding under any state or federal bankruptcy,
insolvency or receivership law, (ii) seek or acquiesce to the
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appointment of a trustee, receiver, liquidator or custodian or
any substantial part of its property, (iii) make a general
assignment for the benefit of their creditors or (iv) take any
corporate action authorizing the foregoing; or
f. prior to performance in full of the Purchase
Commitment, an involuntary case or other proceeding under any
state or federal bankruptcy, insolvency or receivership law is
commenced against either of the Purchasers and remains
undismissed and unstayed for 60 days.
11. REMEDIES UPON DEFAULT BY THE COMPANY. Upon the occurrence of
any Event of Default by the Company, the Purchasers may, but shall not be
required to, exercise one or more of the following remedies:
a. declare all or any portion of the aggregate amount of
all Scheduled Redemptions (undiscounted) immediately due and
payable, without any presentment, demand, protest or other
notice of any kind to the Company, all of which are hereby
expressly waived. All such accelerated Scheduled Redemption
amounts shall thereafter accrue interest at the Overdue Rate
until paid.
b. sell, assign or otherwise dispose of any or all
unredeemed Ticket Vouchers in one or more public or private
transactions in a commercially reasonable manner upon 5
business days prior written notice to the Company, which is
hereby deemed by the Company to be reasonable notice. The
Company shall, to the extent not otherwise provided by law,
remain liable for any deficiency resulting from such sales.
c. use any or all of the Ticket Vouchers for the
Purchasers' own account without prejudice to the Purchasers'
right to recover all unpaid amounts under this Agreement,
provided that, the Ticket Vouchers used by the Purchasers
shall be credited against any amounts owned to the Purchasers
under this Agreement in an amount equal to the face value
thereof.
d. any other legal or equitable remedy available to the
Purchasers by law or by agreement.
The remedies set forth in this Agreement are cumulative and not exclusive. The
exercise of any remedy shall not preclude the exercise of any other remedy by
the Purchasers.
12. REMEDIES UPON DEFAULT BY THE PURCHASERS. Upon the occurrence
of any Event of Default by the Purchasers, the Company may, but shall not be
required to, exercise one or more of the following remedies:
a. by notice in writing to Purchasers, immediately
terminate all of the Company's obligations under this
Agreement;
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b. any other legal or equitable remedy available to the
Purchasers by law or by agreement.
The remedies set forth in this Agreement are cumulative and not exclusive. The
exercise of any remedy shall not preclude the exercise of any other remedy by
the Company.
13. CONDITIONS TO THE OBLIGATIONS OF THE PURCHASERS TO ISSUE
PURCHASE COMMITMENT. (A) The obligations of the Purchasers hereunder to issue
the Purchase Commitment shall be subject to the accuracy of the representations
and warranties of the Company herein, at and as of the date hereof and the
Commencement Date, the performance of the Company of its obligations hereunder
and the following conditions precedent:
a. The Company shall have delivered the certificate
described in Section 6 of this Agreement.
b. There shall not have occurred, in the reasonable
judgment of the Purchasers, any material adverse change in the
assets, liabilities or business of the Company since the date
of this Agreement.
c. Prior to the commencement of the mailing and
publication of the notice of Purchase Commitment for the
Ticket Vouchers, the Purchasers shall have received the
opinion of Xxxxx, Xxxxxxxx & Xxxxxxx, counsel for the Company,
dated as of the Commencement Date, substantially in the form
attached hereto as EXHIBIT "B".
d. Prior to the commencement of the mailing and
publication of the notice of the Purchase Commitment for the
Ticket Vouchers, the Purchasers shall have received an
opinion, dated as of the Commencement Date, in form
satisfactory to the Purchasers, of Xxxxxxx P, Xxxxxxx, Esq.,
General Counsel of the Company, to the effect that the
execution, delivery and performance of this Agreement and the
consummation of the transactions herein contemplated will not
result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any agreement or
instrument known to such counsel to which the Company or any
subsidiary of the Company is a party or by which the Company
or any such subsidiary is bound or to which any of the
properties of the Company or any such subsidiary is subject.
e. No litigation shall have been brought or commenced
against the Purchasers prior to the Commencement Date
challenging the propriety or legality of the transactions
contemplated hereby which is not dismissed or withdrawn prior
to the Commencement Date.
(B) In the event:
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(i) any representation or warranty of the Company set
forth in Section 6 shall have been untrue or
misleading in any material respect as of the date
made, or
(ii) the Company shall not have maintained an average
balance of unrestricted domestic cash of at least $70
million for the 30 day period prior to the close of
business on the Expiration Date,
the Company shall be obligated to repurchase from the Purchasers all Ticket
Vouchers purchased by the Purchasers pursuant to the Purchase Commitment at the
Purchase Price, such repurchase to be made simultaneously with the purchases by
the Purchasers of Ticket Vouchers tendered to the Agent pursuant to the
Purchase Commitment. Nothing in this section contained or otherwise in this
Agreement shall be deemed to modify or alter the unconditional nature of the
Purchase Commitment. Unrestricted domestic cash shall, for the purposes of the
computations required by this subsection (B), exclude 50% of the cash proceeds
to the Company, if any, derived from any of the following subsequent to the
Commencement Date: (i) an equity rights offering, (ii) any working capital
loan facility in addition to the Company's currently existing and fully drawn
asset and receivables based loans from Karabu Corp., (iii) any change in the
applicable formulae (as distinct from day to day changes in holdback levels in
accordance with current procedures) which results in any reduction in credit
card processing holdback levels and (iv) any sale of capital assets outside the
ordinary course of business. Conversely, any decrease in unrestricted domestic
cash, resulting from any change in the applicable formulae (as distinct from
day to day changes in holdback levels in accordance with current procedures)
governing credit card processing holdback levels, shall be excluded.
(C) The Company agrees upon written request by the Purchasers to
make available for inspection by the Purchasers such books and records of the
Company which are necessary to verify that the conditions of this Section have
been met.
14. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The obligations
of the Company hereunder shall be subject to the accuracy of the
representations and warranties of the Purchasers herein, at and as of the date
hereof and the Expiration Date, the performance by the Purchasers of their
obligations hereunder and the following conditions precedent:
a. The Purchasers shall have delivered the certificate
described in Sections 5 of this Agreement.
b. Prior to the commencement of the mailing and
publication of the notice of Purchase Commitment for the
Ticket Vouchers, the Company shall have received the opinion
of counsel for the Purchasers, dated as of the Commencement
Date, as to the matters referred in to clauses a., b., c., e.,
and f. of Section 5 hereof, in form and substance reasonably
satisfactory to the Company.
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c. No litigation shall have been brought or commenced
against the Company prior to the Commencement Date challenging
the propriety or legality of the transactions contemplated
hereby which is not dismissed or withdrawn prior to the
Commencement Date.
15. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The
agreements, representations and warranties of the Company and of the Purchasers
set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results
thereof, made by or on behalf of the Purchasers or the Company or any of their
respective representatives, officers or directors or any controlling person
through and including the Scheduled Redemption Date, and will survive the
redemption of the Ticket vouchers hereunder by the Company.
16. NOTICES. All notices, demands, instructions and other
communications required or permitted hereunder will be in writing and shall be
personally delivered or sent by registered, certified or express mail, postage
prepaid, return receipt requested, or by telefacsimile (which shall immediately
be followed by the original of such communication) and shall be deemed to he
given when received by the intended recipient or, in the case of telefacsimile,
on the date transmitted to the intended recipient thereof. Unless otherwise
specified in writing in accordance with this Section, such notices, demands
instructions and communications shall be made to the following:
To Purchasers: M.D. Sass Re/Enterprise Partners, L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
To the Company: Trans World Airlines, Inc.
One City Centre
000 Xxxxx Xxxxx Xxxxxx
Xx. Xxxxx, Xx. 00000
Attention: General Counsel
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
17. SUCCESSOR. This Agreement will inure to the benefit of and be
binding upon the parties hereto, their respective successors and assigns.
Except as expressly stated herein, the Purchasers may not assign their
obligations under this Agreement or the Purchase Commitment but may, without
restriction, assign their rights hereunder to any affiliated entity and,
following the Settlement Date, to any three or fewer third parties or
affiliated parties. Except as expressly stated herein, the Company may not
assign its obligations under this Agreement without the consent of the
Purchasers.
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18. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and understanding of the parties hereto and supersedes any and all
prior agreements, arrangements and understandings relating to the matters
provided for herein. This Agreement does not amend or change the rights and
obligations of the parties under the Standby Agreement.
19. INDEMNIFICATION. The Company will indemnify and hold harmless
the Purchasers, X.X. Xxxxxxx, Inc., and their respective officers, directors,
employees and agents (each an "indemnified party") against any claims of,
liabilities to or actions by third persons or entities (collectively,
"Claims"), joint and several, to which such indemnified party may become
subject, insofar as such Claims result from or are based upon any untrue
statement of any material fact contained in the Registration Statement, the
Prospectus, the Plan, or any amendment or supplement to any thereof, or any
related preliminary prospectus, or result from or are based upon the omission
or alleged omission to state in any thereof a material fact required to be
stated therein or necessary to make the statements therein not misleading or
otherwise result from or are based upon any act or omission of the Company, and
will reimburse each indemnified party for any reasonable legal or other
out-of-pocket expenses reasonably incurred by such indemnified party in
connection with investigating or defending such Claims as such expenses are
incurred; PROVIDED, HOWEVER, that the Company will not be liable in any such
case for Claims or expenses resulting from or based upon the breach of this
Agreement or the Purchase Commitment by the Purchasers or the negligence, bad
faith acts or omissions or the willful misconduct of any indemnified party.
Each indemnified party shall cooperate fully with the Company in the defense of
any Claim and endeavor in good faith to keep the Company's costs and any Claim
to a minimum consistent with the retention by such parties of the benefits
intended to be conferred upon such indemnified party hereby. Each indemnified
party shall promptly notify the Company of the making of any Claim for which it
believes it is entitled to any indemnity hereunder.
20. APPLICABLE LAW. The Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of New York
without regard to principles of conflict of laws.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their authorized officers as of the date first above
written.
TRANS WORLD AIRLINES, INC.
By:
----------------------------------
Title:
----------------------------
M.D. SASS RE/ENTERPRISE PARTNERS, L.P.
BY: M.D. SASS ASSOCIATES, INC.,
Managing General Partner
By:
----------------------------------
Title:
-------------------------------
M.D. SASS RE/ENTERPRISE
INTERNATIONAL, LTD.
BY: M.D. SASS MANAGEMENT, INC.,
Investment Manager
By:
----------------------------------
Title:
-------------------------------
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Exhibit B
October ___, 1995
M.D. Sass Re/Enterprise Partners, L.P.
M.D. Sass Re/Enterprise International, Ltd.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
I am general counsel for Trans World Airlines, Inc., a Delaware
corporation ("TWA" or the "Company") and have so acted in connection with the
negotiation, execution and delivery by TWA of a Voucher Purchase Agreement
dated as of October 18, 1995 between you and TWA (the "Purchase Agreement").
Capitalized terms used herein not otherwise defined shall have the meanings
ascribed to such terms in the Purchase Agreement and/or that certain Joint Plan
of Reorganization of TWA and the Company as modified and confirmed by order
(the "Confirmation Order") of the United Bankruptcy Court for the Eastern
District of Missouri (the "Bankruptcy Court") on August 4, 1995 (the "Plan of
Reorganization").
I have examined copies of the Purchase Agreement, the Ticket Vouchers,
Plan of Reorganization, Confirmation Order and Registration Statement No.
33-84944 of TWA on Form S-4 as filed with Securities and Exchange Commission on
October 11, 1994, as amended through Post- Effective Amendment No. 6 dated May
12, 1995 (the "Registration Statement"), and such other instruments, documents
and agreements and matters of law as I have deemed necessary in the
circumstances. In such review, I have assumed the genuineness of all
signatures not affixed by officers of TWA in our presence, the authenticity of
all documents submitted to me as originals, the conformity to originals of all
documents submitted to me as copies and the authenticity of such documents so
submitted.
As to factual matters on which this opinion is based, I have relied
without independent investigation upon the representations and warranties
contained in the Purchase Agreement and upon statements and certificates of
public officials and of TWA. For purposes hereof, "factual matters" shall not
be deemed to include, except in the case of certificates of public officials,
matters which directly or in practical effect constitute the legal conclusions
in question.
Based upon the foregoing and subject to the qualifications and
limitations hereinafter set forth, I am of the opinion that the execution,
delivery and performance by the Company
22
of the Purchase Agreement, and the consummation by the Company of the
transactions therein contemplated, will not result in a breach or violation of
any of the terms and provisions of or constitute a default under, any agreement
or instrument known to me to which the Company or any subsidiary of the Company
is a party or by which the Company or any such subsidiary is bound or to which
any of the properties of the Company or any such subsidiary is subject.
I am duly admitted and qualified to practice in the State of New York
and do not hold myself out as an expert on, or as admitted to practice law in,
any other state. I am opining herein only as to the effect on the subject
transactions of the laws of the State of New York, the business corporation
laws of the State of Delaware and the federal laws of the United States of
America. Except as noted above, I am not opining as to the effect on any of
the matters covered herein of the laws of any other jurisdiction.
I undertake no responsibility to advise you of any change in the laws
after the date hereof that would alter the scope or substance of the opinions
expressed herein. This opinion is intended for your exclusive use and may not
be relied upon by any person or entity other than the addressees hereof. By
receipt and acceptance of or reliance on this opinion, you consent to the
limitations on the scope of our inquiry and the opinions stated herein.
Very truly yours,
Xxxxxxx X. Xxxxxxx
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Exhibit C
October ___, 1995
M.D. Sass Re/Enterprise Partners, L.P.
M.D. Sass Re/Enterprise International, Ltd.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
We are counsel for Trans World Airlines, Inc., a Delaware corporation
("TWA" or the "Company") and have so acted in connection with the negotiation,
execution and delivery by TWA of a Voucher Purchase Agreement dated as of
October 18, 1995 between you and TWA (the "Purchase Agreement"). Capitalized
terms used herein not otherwise defined shall have the meanings ascribed to
such terms in the Purchase Agreement and/or that certain Joint Plan of
Reorganization of TWA and the Company as modified and confirmed by order (the
"Confirmation Order") of the United Bankruptcy Court for the Eastern District
of Missouri (the "Bankruptcy Court") on August 4, 1995 (the "Plan of
Reorganization").
In connection with our representation of TWA, we have examined copies of
the Purchase Agreement, the Ticket Vouchers, Plan of Reorganization,
Confirmation Order and Registration Statement No. 33-84944 of TWA on Form S-4
as filed with Securities and Exchange Commission on October 11, 1994, as
amended through Post-Effective Amendment No. 6 dated May 12, 1995 (the
"Registration Statement"), and such other instruments, documents and agreements
and matters of law as we have deemed necessary in the circumstances. In such
review, we have assumed the genuineness of all signatures not affixed by
officers of TWA in our presence, the authenticity of all documents submitted to
us as originals, the conformity to originals of all documents submitted to us
as copies and the authenticity of such documents so submitted.
As to factual matters on which this opinion is based, we have relied
without independent investigation upon the representations and warranties
contained in the Purchase Agreement and upon statements and certificates of
public officials and of TWA. For purposes hereof, "factual matters" shall not
be deemed to include, except in the case of certificates of public officials,
matters which directly or in practical effect constitute the legal conclusions
in question.
Based upon the foregoing and subject to the qualifications and limitations
hereinafter set forth, we are of the opinion that:
24
October ____, 1995
Page 2
1. TWA is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, and has the
corporate power and authority to own its properties and carry on its
business substantially as described in the Prospectus.
2. The Confirmation Order confirming the Reorganization Plan is
final and binding and not subject to appeal, rehearing or stay.
3. The Purchase Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid, legal and binding
obligation of the Company enforceable against the Company in accordance
with its terms.
4. The Ticket Vouchers have been duly authorized and validly issued
by the Company and the redemption of the Ticket Vouchers by the Company in
accordance with Section 2 of the Purchase Agreement has been duly
authorized by all necessary corporate or judicial action.
5. The Ticket Vouchers conform in all material respects to the
description thereof under the definition of "Ticket Voucher" contained in
Section 1.1.159 of the Plan of Reorganization.
6. No consent, approval, authorization or order of, or filing with,
any governmental agency or body or any court is required for the
consummation of the transactions contemplated by the Purchase Agreement in
connection with the issuance or redemption of the Ticket Vouchers by the
Company or resale of the Ticket Vouchers, except such as have been
obtained and made.
7. The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions therein contemplated
will not result in a breach or violation by TWA of any of the terms and
provisions of, or constitute a default under, (i) any statute, rule or
regulation, or, to the extent known to us, any order of any governmental
agency or body or any court having jurisdiction over the Company or any
subsidiary of the Company or any of their properties or (ii) to the extent
known to us, any agreement or instrument to which the Company or any
subsidiary is a party or by which the Company or any subsidiary is bound
or to which any of the properties of the Company or any subsidiary is
subject, or (iii) the certificate of incorporation or by-laws of the
Company or any subsidiary of the Company which currently conducts
business.
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October ____, 1995
Page 3
The opinions expressed herein are subject to the following assumptions and
qualifications:
(i) no opinion is expressed herein as to the validity of any waiver,
express or implied, of any statutory or constitutional right;
(ii) the opinions expressed herein include and are subject to: (a)
the effect of bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting the rights and remedies of
creditors; (b) the effect of general principles of equity,
whether applied by a court of law or equity; (c) the effect and
possible unenforceability of contractual provisions for choice
of governing law; (d) the possible unenforceability of waivers
or advance consents that have the effect of waiving statutes of
limitation or, as to the jurisdiction of courts, the venue of
actions, or, in certain cases, notice; (e) the possible
unenforceability of provisions providing that waivers or
consents by a party may not be given effect unless in writing or
in compliance with particular requirements or that a person's
course of dealing, course of performance, or the like or failure
or delay in taking actions may not constitute a waiver of
related rights or provisions or that one or more waivers may not
under certain circumstances constitute a waiver of other matters
of the same kind; (f) the effect of course of dealing, course of
performance, or the like, that would modify the terms of an
agreement or the respective rights or obligations of the parties
under an agreement; (g) the possible unenforceability of
provisions that enumerate remedies are not exclusive or that a
party has the right to pursue multiple remedies without regard
to other remedies elected or that all remedies are cumulative;
(h) the possible unenforceability of provisions permitting
modifications of an agreement only in writing; (i) the possible
unenforceability of provisions that the provisions of an
agreement are severable; (j) the effect of laws requiring
mitigation of damages; (k) the possible unenforceability of
provisions permitting the exercise, under certain circumstances,
of rights without notice or without providing reasonable
opportunity to cure failure to perform; and (l) the possible
unenforceability of provisions requiring indemnification for, or
providing exculpation, release or exemption from liability for,
action or inaction, to the extent such action or inaction
involves negligence or willful misconduct or to the extent
otherwise contrary to public policy;
(iii) no opinion is expressed herein as to the effect of laws relating
to the legally permissible rates of interest or the computation
or disclosure thereof;
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October ____, 1995
Page 4
(iv) in rendering the opinions set forth herein, as to the authority
of TWA to execute or issue, and/or the enforceability of, the
Ticket Vouchers and Purchase Agreement, we have relied on the
Confirmation Order authorizing and approving, INTER ALIA, the
issuance of the Ticket Vouchers, and in connection therewith,
authorizing TWA to consummate the transactions contemplated by
the Plan of Reorganization of TWA.
We are attorneys duly admitted and qualified to practice in the State of
Georgia and do not hold ourselves out as experts on, or as admitted to practice
law in, any other state. We are opining herein only as to the effect on the
subject transactions of the laws of the State of Georgia, the contract and
commercial laws of the State of New York, the business corporation laws of the
State of Delaware and the federal laws of the United States of America. Except
as noted above, we are not opining as to the effect on any of the matters
covered herein of the laws of any other jurisdiction. As to such laws of the
State of New York and the business corporation laws of the State of Delaware
applicable to the opinions set forth herein, we have made such investigation of
such laws as we have deemed necessary to express such opinions.
We undertake no responsibility to advise you of any change in the laws
after the date hereof that would alter the scope or substance of the opinions
expressed herein. This opinion is intended for your exclusive use and may not
be relied upon by any person or entity other than the addressees hereof. By
receipt and acceptance of or reliance on this opinion, you consent to the
limitations on the scope of our inquiry and the opinions stated herein.
Very truly yours,
XXXXX, XXXXXXXX & XXXXXXX
By:
Xxxxxx X. Xxxxxx
