EXHIBIT 10-27
STOCKHOLDERS AGREEMENT
Agreement made as of this 11th day of February, 1997 by and among Midway
Airlines Corporation, a Delaware corporation (the "Company"), Xxxx/Chilmark Fund
L.P., a Delaware limited partnership ("Z/C"), AMR Corporation, a Delaware
corporation ("AA"), Wings Aircraft Finance, Inc., a Delaware corporation
("WAF"), debis AirFinance B.V., a company incorporated under the laws of the
Netherlands ("AF"), Xxxxx X. Xxxxxxxxx ("JG") and Xxxx X. Xxxx ("JS") (Z/C, AA,
WAF, AF, JG and JS are collectively referred to as the "Stockholders"). WAF and
AF are sometimes collectively referred to as the Aircraft Creditors.
WHEREAS, each of Z/C, WAF, and AF has agreed to acquire and AA has the
right to acquire upon exercise of the Warrant the number of shares of Common
Stock of the Company as set forth opposite his, her, or its name on Schedule A
attached hereto;
WHEREAS, JG and JS will acquire as a result of the transactions
contemplated by the Merger Agreement the number of shares of Preferred Stock of
the Company as set forth opposite their names on Schedule B attached hereto (the
Common Stock and the Preferred Stock are collectively referred to as
"Securities").
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Company and the Stockholders hereby agree as
follows:
1. CERTAIN DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
AIRCRAFT CREDITORS shall mean Wings Aircraft Finance, Inc. and debis
AirFinance B.V.
BOARD shall have the meaning set forth in Section 2.1(a).
COMMISSION means the Securities and Exchange Commission, or any other
federal agency at the time administering the Securities Act and the Exchange
Act.
COMMON STOCK means the Company's Common Stock, $.01 par value per share, as
authorized on the date of this Agreement and any other securities into
which or for which the Common Stock may be converted or exchanged pursuant to a
plan of recapitalization, reorganization, merger, sale of assets or otherwise.
COMPANY shall have the meaning set forth in the preamble.
CONSUMMATION DATE shall have the meaning set forth in Section 3.3.
CONTROL shall have the meaning set forth in Section 8.13.
DESIGNATING PARTY shall have the meaning set forth in Section 2.1(b).
EXCHANGE ACT means the Securities Exchange Act of 1934, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
FAMILY MEMBER shall have the meaning set forth in Section 8.13.
GS GROUP means JG, JS and their Permitted Transferees.
GS GROUP AFFILIATE shall have the meaning set forth in Section 8.13.
HOLDERS shall have the meaning set forth in Section 5.2.
MARKET CAPITALIZATION shall have the meaning set forth in Section 7.
MERGER AGREEMENT means that certain Agreement and Plan of Merger dated as
of January 17, 1997, as amended as of January 31, 1997 and February 7, 1997 by
and among the Company, GoodAero, Inc., Z/C, JG and JS.
NON-OFFERING STOCKHOLDERS shall have the meaning set forth in Section
3.1(a).
NON-PROPOSING STOCKHOLDER shall have the meaning set forth in Section 3.2.
NOTICE shall have the meaning set forth in Section 3.1(a).
OFFERED SECURITIES shall have the meaning set forth in Section 3.1(a).
OFFERING STOCKHOLDER shall have the meaning set forth in Section 3.1(a).
OTHER NON-OFFERING STOCKHOLDER shall have the meaning set forth in Section
3.1(a).
OTHER STOCKHOLDERS shall have the meaning set forth in Section 3.3.
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PERMITTED TRANSFEREE shall have the meaning set forth in Section 3.4.
PERSON means an individual, corporation, partnership, joint venture, trust,
or unincorporated organization, or a government or any agency or political
subdivision thereof.
PREFERRED STOCK means the Company's Senior Convertible Preferred Stock.
PROPOSING STOCKHOLDER shall have the meaning set forth in Section 3.2.
PURCHASERS shall have the meaning set forth in Section 3.3.
QUALIFIED PUBLIC OFFERING shall have the meaning set forth in Section 7.
REGISTRABLE SECURITIES means any shares of Common Stock owned as of the
date hereof by, or issued in connection with this Stockholders Agreement to, the
stockholders listed in Schedule A hereof or by their permitted successors and
assigns as defined herein; shares of Common Stock issued or issuable upon
exercise of the Warrant; and shares of Common Stock issued or issuable upon
conversion of any shares of Preferred Stock owned by JG and JS or by their
permitted successors and assigns as defined herein (all such shares as adjusted
for stock splits, stock dividends, reclassifications or other similar events)
but excluding any shares of Common Stock or Preferred Stock, any shares of
Common Stock issuable upon exercise of the Warrant and any shares of Common
Stock issuable upon conversion of any shares of Preferred Stock that have been
(a) sold by such parties other than to a permitted transferee, as set forth in
Section 5.7 hereof, (b) registered under the Securities Act pursuant to an
effective registration statement filed thereunder and disposed of in accordance
with the registration statement covering such shares of Common Stock or
Preferred Stock or (c) sold pursuant to Rule 144 or Rule 144A of the Securities
Act (or any successor exemptive rule hereinafter in effect).
REMAINING STOCK shall have the meaning set forth in Section 3.1(b).
SALE shall have the meaning set forth in Section 3.3.
SALES PERCENTAGE shall have the meaning set forth in Section 3.2(a).
SECURITIES shall have the meaning set forth in the preamble.
SECURITIES ACT means the Securities Act of 1933, as amended, or any similar
federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.
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STOCKHOLDERS shall have the meaning set forth in the preamble.
TRANSFER shall have the meaning set forth in Section 3.4(a).
WARRANT shall mean that certain Warrant dated as of February 11, 1997
issued by the Company to AMR Corporation for the purchase of Five Hundred
Seventy Two (572) shares of the Common Stock.
Z/C GROUP means Z/C and its Permitted Transferees.
2. ELECTION OF DIRECTORS; REQUIREMENT FOR CERTAIN ACTIONS
Section 2.1. ELECTION; REMOVAL. The number of Directors comprising the
Company's Board of Directors (the "Board") shall be fixed by the Board in
accordance with the By-laws of the Company. The By-laws of the Company shall
require a minimum of 3 Board members. Subject to the provisions of
Section 2.1(d)(ii) hereof, the Z/C Group shall designate (i) 1 nominee for
election to the Board, if the number of Directors is fixed at 3 or 4; (ii) 2
nominees for election to the Board, if the number of Directors is fixed at 5, 6
or 7; and (iii) 3 nominees for election to the Board, if the number of Directors
is fixed at 8 or 9. If the Board appoints an Executive Committee, the Z/C Group
shall designate such number of nominees to such Executive Committee in the same
ratio as set forth in the preceding sentence. All other members of the Board of
Directors and Executive Committee, if any, shall be designated by the GS Group.
During the term of this Agreement, all the capital stock of the Company held by
the Z/C Group or the GS Group, whether owned now or hereafter acquired, shall be
voted in accordance with the provisions hereof on all of the following matters
on which the Stockholders vote:
(a) Immediately upon receiving notice of any stockholders' meeting at
which members of the Board are to be elected, the Z/C Group shall designate such
number of nominees and the GS Group shall designate such number of nominees for
election to the Board as provided in this Section 2.1. Each of the Z/C Group
and the GS Group hereby binds itself to vote its capital stock for, or give its
written consent to, the election of each nominee designated by the Z/C Group or
the GS Group. If either the Z/C Group or the GS Group fails to designate such
nominee(s), the Board shall designate such nominees.
(b) In the event any Director elected to the Board after being
designated as a candidate for membership pursuant to this Agreement dies,
resigns, is removed or otherwise ceases to serve as a member of the Board, the
Company shall give notice thereof to the party that designated such director
(the "Designating Party") to designate a successor and notify the Company of
such
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designee's selection. If a vacancy on the Board is filled in the interim by the
remaining Directors with a Director who is not the successor designated by the
Designating Party, each of the Z/C Group and the GS Group agrees to cast its
votes for, or give its written consent to, the removal of such Director at any
time upon receipt of instructions, in writing to such effect, signed by the Z/C
Group or the GS Group, as the case may be; and
(c) Each of the Z/C Group and the GS Group agrees to vote its capital
stock for, or give its written consent to, the removal of the Designating
Party's designee on the Board at any time upon receipt of instructions in
writing to such effect, signed by the Designating Party. In the absence of such
written instructions, no Designating Party's designee shall be removed without
cause from the Board at any time.
(d) Notwithstanding the foregoing, it is the understanding and
agreement of the parties hereto that in the event (i) the number of directors
comprising the Board shall be increased above 9, then the Z/C Group shall be
entitled to designate as close to 33-1/3% of the members of the Board as
possible; all other provisions of this Section 2.1 shall be applicable to all
such designee(s); and (ii) there is a capital infusion into the Company the
effect of which is to reduce the proportionate holdings of the Common Stock of
the Z/C Group and the GS Group, then the number of directors the Z/C Group and
the GS Group are entitled to designate shall be proportionately reduced, with
such number in the case of the Z/C Group becoming zero when the holdings of the
Z/C Group are less than 10% of the then outstanding shares of Common Stock.
3. TRANSFER OF SHARES
Section 3.1. RIGHT OF FIRST OFFER. No Stockholder shall offer to
Transfer or engage in negotiations to Transfer any or all of such Stockholder's
Securities (except to Permitted Transferees) without first complying with the
provisions of this Section 3.1.
(a) In the event any Stockholder (in such capacity, an "Offering
Stockholder") desires to Transfer any or all of such Stockholder's Securities
("Offered Securities"), prior to offering to Transfer such Offered Securities,
or to engaging in negotiations related thereto, such Offering Stockholder shall
first provide written notice of the contemplated Transfer (the "Notice") at
least twenty (20) day prior to offering to Transfer such Securities or to
engaging in negotiations related thereto. The Notice shall be sent to the
Company which will immediately forward the same to the Stockholders reflected as
holders of record in the Company's books and records. The Notice shall entitle
those Stockholders holding securities equal to at least 10% of the Common Stock
then outstanding on a fully diluted basis assuming
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Conversion of the Preferred Stock and exercise of the Warrant only to the extent
that such Stockholders are either original signatories to this Agreement or
their Permitted Transferees (except for the limited partners of Z/C) (the
"Non-Offering Stockholders") to those rights described below. The Notice shall
include a description of the contemplated Transfer, including the number of
shares of Offered Securities, and an offer by the Offering Stockholder to enter
into good faith negotiations to sell to the Non-Offering Stockholders each
Non-Offering Stockholder's pro rata share of the Offered Securities (which for
purposes of this Section 3.1 shall mean the ratio of (X) the number of shares of
Common Stock held, or issuable upon conversion of Preferred Stock then held, or
issuable upon exercise of the Warrant then held, by such Non-Offering
Stockholder at the time of the Notice to (Y) the total number of shares of
Common Stock held, or issuable upon conversion of all shares of Preferred Stock
then held, or issuable upon exercise of the Warrant then held, by the
Non-Offering Stockholders). The Non-Offering Stockholders shall have twenty
(20) days after the receipt of the Notice to enter into good faith negotiations
and execute an agreement to purchase their pro rata share of the Offered
Securities that are the subject of the contemplated Transfer by the Offering
Stockholder. Each Non-Offering Stockholder's right to negotiate for the
purchase of the Offered Securities hereunder shall terminate upon the expiration
of such twenty (20) day period. Each Non-Offering Stockholder shall have a
right of over-allotment such that if any other Non-Offering Stockholder fails to
agree to purchase its pro rata share of the Offered Securities prior to the
conclusion of the twenty (20) day period, the other Non-Offering Stockholders
shall have ten (10) days to enter into good faith negotiations with the Offering
Stockholder and execute an agreement to purchase the non-purchasing Non-Offering
Stockholder's portion on a pro rata basis; PROVIDED, HOWEVER, that in the event
that the Company shall issue any class of equity securities granting the
purchasers thereof (also referred to herein as the "Other Non-Offering
Stockholders") a right of first offer substantially identical to that set forth
herein, then each Non-Offering Stockholder shall have a right of over-allotment
such that if any Other Non-Offering Stockholder fails to agree to purchase its
pro rata share of the Offered Securities prior to the conclusion of the twenty
(20) day period, such Non-Offering Stockholder and the Other Non-Offering
Stockholders who have exercised their rights of first offer shall have ten (10)
days to enter into good faith negotiations and execute an agreement to purchase
the non-purchasing Other Non-Offering Stockholder's portion on a pro rata basis.
(b) In the event that the Non-Offering Stockholders and the Other
Non-Offering Stockholders (if applicable) fail to agree to purchase all of the
Offered Securities that are the subject of the contemplated Transfer by the
Offering Stockholder pursuant to the foregoing provisions of this Section 3.1,
the Offering Stockholder shall then provide additional written notice to the
Company of such contemplated Transfer, including the number of shares affected
(which shall be
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the number of shares of Offered Securities originally subject to the
contemplated Transfer minus the shares of Offered Securities subject to executed
agreements for purchase by the Non-Offering Stockholders and the Other
Non-Offering Stockholders pursuant to Section 3.1(a) (hereinafter the "Remaining
Stock")), and the nature of the proposed Transfer. Such notice shall include an
offer to enter into good faith negotiations to sell such Remaining Stock to the
Company. The Company shall have ten (10) days after the receipt of such written
notice to enter into good faith negotiations and execute an agreement to
purchase the Remaining Stock. The Company's right to negotiate to purchase the
Remaining Stock hereunder shall terminate upon the expiration of such ten (10)
day period.
(c) The Offering Stockholder shall not be required to make any sale
of the Offered Securities to a Non-Offering Stockholder, Other Non-Offering
Stockholder or the Company unless all Offered Securities are sold. In the event
such agreements cover less than all of the Offered Securities, the Offering
Stockholder may at its election either (i) effect the sales for that portion of
the Offered Securities covered by the agreements or (ii) decline to effect the
sales covered by the agreements and retain the right for a period of sixty (60)
days from the date the negotiation period expires under Section 3.1(b) to enter
into negotiations to Transfer any or all of the then remaining shares of the
Offered Securities, which were the subject of the contemplated Transfer, free
from the restrictions of this Section 3.1 in a bona fide transaction with any
person. At the end of such sixty (60) day period, the Offering Stockholder
shall notify the other parties hereto in writing of any shares of Securities
which such Offering Stockholder then owns and the number of shares of the
Securities which have during such period been subject to Transfer in bona fide
transactions. All such Securities of such Offering Stockholder not subject to a
contract of sale at the end of such sixty (60) day period shall again become
subject to all the restrictions and provisions of this Agreement.
Section 3.2. CO-SALE RIGHTS. If any Stockholder at any time or times
proposes to Transfer (except to Permitted Transferees) any Securities owned of
record by him or it (except where such Securities when combined with Securities
held by such Stockholder's Permitted Transferees represent less than or equal to
5% of the Securities outstanding on a fully diluted basis on the date of this
Agreement), such Stockholder (in such capacity, a "Proposing Stockholder")
shall, as a condition precedent to any such Transfer by him or it, afford each
other Stockholder (including Permitted Transferees but excluding any
Non-Offering Stockholder that failed to agree to purchase its pro rata share of
the Offered Securities in accordance with Section 3.1(a) hereof) (in such
capacity, a "Non-Proposing Stockholder") the right to Transfer Securities owned
by such Non-Proposing Stockholder as follows:
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(a) Such Proposing Stockholder shall give written notice to the
Non-Proposing Stockholders at least twenty (20) days prior to any proposed
Transfer of any of the Securities, and such notice shall specify the number of
such Securities which such Proposing Stockholder desires to Transfer, the
percentage of the total number of Securities (determined by giving effect to the
conversion of Preferred Stock or any securities convertible into Common Stock)
then held by him or it represented thereby (the "Sales Percentage"), the
identity of the proposed transferee of such Securities, and the time within
which, the price and all other material terms and conditions upon which such
Proposing Stockholder proposes to Transfer such Securities. Each Non-Proposing
Stockholder shall notify such Proposing Stockholder in writing, within ten (10)
days after receipt of such Proposing Stockholder's notice, whether such
Non-Proposing Stockholder desires to Transfer any Securities held by him or it
concurrently with the Proposing Stockholder in accordance with the terms and
provisions of this Section 3.2(a). Failure to provide such written notice after
actual receipt of notice from such Proposing Stockholder within said 10-day
period shall, for the purpose hereof, be deemed to constitute a refusal by a
particular Non-Proposing Stockholder to Transfer any of his or its Securities
concurrently with such Proposing Stockholder.
(b) Concurrently with the delivery by the Proposing Stockholder of
the notice referred to in Section 3.2(a) above, such Proposing Stockholder shall
offer the Non-Proposing Stockholders the opportunity to Transfer to the proposed
transferee of the Securities, or to such other transferee or transferees as such
Proposing Stockholder shall obtain (except pursuant to a Transfer by such
Proposing Stockholder made under Rule 144 (other than pursuant to paragraph (k)
of Rule 144) as promulgated by the Commission under the Securities Act), that
percentage of the Securities then held by each Non-Proposing Stockholder which
is equal to the Sales Percentage. It is agreed and understood that such
Proposing Stockholder shall obtain the same agreements and commitments from the
transferee or transferees of the Securities to be Transferred by the
Non-Proposing Stockholders as such Proposing Stockholder has obtained from the
transferee of the Securities proposed to be Transferred by him or it, including
the time of Transfer, the Transfer price and the other terms and conditions upon
which the Transfer of such Proposing Stockholder's Securities is to be made.
(c) In the event that such Proposing Stockholder cannot obtain
agreements or commitments from the transferee or other transferees to have
Transferred to it or them that percentage of the Securities held by the
Non-Proposing Stockholders which is equal to the Sales Percentage of the
Securities, then such Proposing Stockholder shall reduce the number of
Securities which he proposes to Transfer and allow the Non-Proposing
Stockholders to Transfer the number of Securities represented by such reduction,
so that both such Proposing Stockholder and each Non-Proposing Stockholder shall
be entitled to sell an identi-
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cal percentage of the Securities of the same type then held by them,
respectively. In the event that the proposed Transfer relates to shares of
Preferred Stock and the proposed transferee or transferees refuses to purchase
shares of Common Stock from the Non-Proposing Stockholders, JG and JS shall
purchase from each Non-Proposing Stockholder that percentage of the Securities
than held by such Non-Proposing Stockholder which is equal to the Sales
Percentage at the same price per share and on the same terms (on an as converted
basis) as are applicable to the shares of Preferred Stock being sold by the GS
Group.
(d) Any Transfer of Securities by such Proposing Stockholder pursuant
to the provisions of this Section 3.2 shall be made concurrently with the
Transfer of the Securities by the Non-Proposing Stockholders.
If any Transfer or attempted Transfer of the Securities is made
contrary to the provisions of this Section 3.2, each Non-Proposing Stockholder
shall have the right, in addition to any other legal or equitable remedies which
it may have, to enforce its rights hereunder by an action for specific
performance; the parties hereto recognize the rights set forth herein as unique,
the violation of which cannot be remedied by an award of monetary damages.
Section 3.3. DRAG ALONG RIGHTS. In the event of any contemporaneous sale
of or agreement to sell (whether for cash, securities or other property) on arms
length terms by the GS Group to any person other than a GS Group Affiliate (as
defined in Section 8.13 hereof) of an aggregate of 50% or more of the Common
Stock then outstanding to a single person or a group of persons pursuant to a
single plan or related plans for the sale of such Common Stock (such person or
group being referred to as the "Purchasers"), the GS Group shall have the option
to purchase (pro rata in accordance with their respective holdings of Common
Stock or in such other proportions as may be agreed upon) all (but not less than
all) the Common Stock (including the Common Stock represented by the Warrant) of
the Stockholders then owning Common Stock or having the right to acquire Common
Stock upon exercise of the Warrant who are not parties to such sale or agreement
of sale (the "Other Stockholders"), and each of the Other Stockholders shall
have the option to require the GS Group to purchase (pro rata in accordance with
their respective holdings of Common Stock or in such other proportions as may be
agreed upon), all (but not less than all) Common Stock then owned by such Other
Stockholder, all in accordance with the following provisions of this Section
3.3. As used in this Section 3.3, the term "Sale" means a sale made or agreed
to by the GS Group in the manner described in the first sentence of this
Section 3.3, and the term "Consummation Date" means the date fixed for the
consummation of a Sale.
(a) Not less than 30 days prior to the Consummation Date, the GS
Group shall give written notice to the Other Stockholders setting forth the
names
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of the Purchasers, the terms and conditions of the Sale and the Consummation
Date. If the GS Group elects to exercise its option to purchase, or cause the
purchase of, all Common Stock owned by the Other Stockholders, the notice shall
so state. If such option is not exercised, the notice shall set forth an
address for the giving of notice by the Other Stockholders of the exercise of
the option of the Other Stockholders pursuant to paragraph (b) of this
Section 3.3. In the event of the exercise of the option by the GS Group, the
Other Stockholders shall, on the Consummation Date and conditioned upon and
contemporaneously with the Sale, sell the Common Stock owned by them to the GS
Group, or to the Purchasers if so designated in the notice of the GS Group, at
the same price per share and on the same terms as are applicable to shares being
sold by the GS Group. If the GS Group exercises such option and elects to
purchase (rather than cause the purchase of) the Common Stock owned by the Other
Stockholders, then the GS Group must resell to the Purchasers the Common Stock
so purchased contemporaneously with the Sale and upon terms and conditions the
same as those of the Sale. By execution of this Agreement, each Stockholder
hereby irrevocably designates and appoints the GS Group as his attorney to
transfer his Common Stock on the books of the Company in connection with any
sale made or required to be made by him pursuant to this paragraph (a), and each
Stockholder hereby agrees to execute and deliver such instruments of conveyance
and transfer and take such other action as the GS Group or the Purchasers may
reasonably require to carry out the terms of and provisions of this paragraph
(a); PROVIDED, HOWEVER, that none of the Aircraft Creditors or AA shall be
required to enter into any agreement pursuant to which such Aircraft Creditors
or AA shall make any representations or warranties with respect to the Company
except as to ownership of the Common Stock which is being sold by such Aircraft
Creditor or AA.
(b) If the GS Group does not elect to purchase, or cause the purchase
of, the Common Stock of the Other Stockholders by the exercise of the option
granted the GS Group under the foregoing provisions of this Section 3.3, each
Other Stockholder shall have the option to require the GS Group to purchase, or
cause the purchase of, all (but not less than all) the Common Stock owned by
him, her or it upon the terms and conditions of the Sale as set forth in the
notice furnished pursuant to paragraph (a) of this Section 3.3. Such option may
be exercised by any Other Stockholder by the giving of written notice by such
Other Stockholder of the exercise of such option to the GS Group at the address
set forth in the notice referred to in paragraph (a) of this Section 3.3 not
less than ten days prior to the Consummation Date. The GS Group shall, on the
Consummation Date and conditioned upon and contemporaneously with the Sale,
purchase, or cause the purchase by the Purchasers of, the Common Stock of each
Other Stockholder giving such notice, such purchase to be at the same purchase
price per share and on the same terms as are applicable to shares being sold by
the GS Group. If any
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Other Stockholder exercises his option under this paragraph (b), and if the GS
Group elected to purchase (rather than cause the purchase of) the Common Stock
owned by such Other Stockholder, then the GS Group must resell to the Purchasers
the Common Stock so purchased contemporaneously with the Sale and upon terms and
conditions the same as those of the Sale. If the GS Group shall fail to so
purchase, or cause the purchase of, the Common Stock of such Other Stockholders
as provided in this paragraph (b), then the GS Group may not consummate the
Sale.
(c) Notwithstanding anything to the contrary in this Section 3.3, in
the event shares of Common Stock represented by the Warrant are purchased
hereunder, AA shall cause the exercise of the Warrant.
Section 3.4. PROHIBITED AND PERMITTED TRANSFERS.
(a) A Stockholder shall not sell, grant an option to or for, assign,
mortgage, transfer, pledge, create a security interest in or lien upon,
encumber, give place in trust, hypothecate or otherwise in any manner
voluntarily dispose of (collectively referred to as a "Transfer"), all or any of
his Securities except as expressly provided in this Agreement.
(b) Notwithstanding anything to the contrary contained herein, the
procedures specified in this Section 3 shall not be applicable to a Transfer by
a Stockholder to a Permitted Transferee (as defined below) of such Stockholder
if such Permitted Transferee agrees in writing with the parties hereto to be
bound by and comply with all provisions of this Agreement applicable to the
individual or entity Transferring the Securities immediately prior to such
Transfer. For purposes of this Section 3.4(b), a "Permitted Transferee" shall
mean a transferee in direct privity with an original signatory of this Agreement
and (i) in the case of an individual, any Stockholder, the spouse or immediate
family member of such individual, a trust for the benefit of such individual,
spouse or immediate family member or any partnership, corporation or other
entity wholly-owned by such individual, (ii) in the case of a partnership, any
Stockholder, any of its limited or general partners, and any one partnership,
corporation or other entity controlled by or under common control with such
partnership or general partners thereof, (iii) in the case of a corporation, any
Stockholder, any one corporation, partnership or other entity controlling,
controlled by or under common control with such corporation and (iv) in the case
of Z/C to those parties identified in Schedule 3.4(b) hereto in the proportions
identified therein.
As used herein, the term "Stockholder" is deemed to include any Permitted
Transferees of the Stockholder, except as expressly provided otherwise herein.
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(c) Without regard to the obligations of the GS Group with respect to the
co-sale rights, rights of first offer and other obligations and restrictions
contained in Sections 3.1 through 3.4 of this Agreement, neither the Company nor
any member of the GS Group shall register any shares of Preferred Stock for sale
or other Transfer under the Securities Act. From and after the conversion of
all the shares of Preferred Stock held by the GS Group into shares of Common
Stock, this Section 3.4(c) shall expire and shall not apply to the shares of
Common Stock issuable upon conversion of the Preferred Stock. Any purported
Transfer in violation of this Section 3.4(c) shall be void and ineffectual, and
shall not operate to transfer any interest or title in any shares of Preferred
Stock to the purported transferee.
Section 3.5. PUT RIGHT. In the event of any Transfer of any Securities by
a Stockholder in violation of any provision of Section 3, each other Stockholder
shall each have the right to elect to cause such violating Stockholder to
purchase, and such Stockholder shall be obligated to purchase, from such other
Stockholder and at the same price per share and on the same terms and conditions
as involved in such sale by such violating party, such number of shares of
capital stock (calculated on a fully-diluted basis) equal to the number of
shares sold by such Stockholder multiplied by a fraction, the numerator of which
is the aggregate number of shares of Securities owned by such other Stockholder
and the denominator of which is the sum of all shares of Securities owned by all
other Stockholders desiring to sell shares to such violating Stockholder under
this Section 3.5.
4. LOCK-UP AGREEMENT
Each of the Stockholders hereby agrees that in connection with a Qualified
Public Offering, upon the request of the Company or the principal underwriter
managing the Qualified Public Offering, he or it will not sell, make any short
sale of, loan, grant an option for the purchase of, or otherwise dispose of any
Common Stock now owned or hereafter acquired by him without the prior written
consent of the Company or such underwriter, as the case may be, for one hundred
eighty (180) days or such other period of time not to exceed three hundred sixty
five (365) days as such underwriter may specify.
5. REGISTRATION RIGHTS
Section 5.1. REQUIRED REGISTRATION. (a) At any time after six months
after any registration statement covering a Qualified Public Offering shall have
become effective (but in no event within a six month period following the date
on which any registration statement (other than a registration statement on Form
S-8 or any successor form) covering a public offering of securities of the
Company under the Securities Act shall have become effective), each of (i) Z/C
and its Permitted
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Transferees and (ii) AA and the Aircraft Creditors may request the Company to
effect one registration under the Securities Act of all or any portion of the
shares of Registrable Securities held by such requesting holder or holders for
sale in the manner specified in such notice, provided that the shares of
Registrable Securities for which registration has been requested shall
constitute at least 33-1/3% of the total shares of Registrable Securities
originally issued or issuable to such requesting holder or holders if such
holder or holders shall request the registration of less than all shares of
Registrable Securities then held by such holder or holders (or any lesser
percentage if the reasonably anticipated aggregate price to the public of such
public offering would exceed $10,000,000). Notwithstanding anything to the
contrary contained herein, no request may be made under this Section 5.1 within
180 days after the effective date of a registration statement filed by the
Company covering a firm commitment underwritten public offering or a
registration requested by other holders pursuant to this Section 5.1 in which
the holders of Registrable Securities shall have been entitled to join pursuant
to Section 5.2 and in which there shall have been effectively registered all
shares of Registrable Securities as to which registration shall have been
requested. Additionally, if the Company shall furnish to the Holders of
Registrable Securities requesting registration of such shares hereunder a
certificate signed by the President of the Company stating that, in the good
faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its shareholders for such registration to be
effected at such time and that it is therefore essential to defer the filing or
effectiveness of a registration statement in connection therewith, then in such
case the Company shall have the right to defer the filing or effectiveness of
such registration statement for up to two periods of not more than 90 days each
after receipt of the request of the holders of Registrable Securities requesting
such registration; PROVIDED, HOWEVER, that the Company may not use this right
more than twice (for a total of up to 180 days) as to such requesting holders in
any 12-month period.
(b) Following receipt of any notice under this Section 5.1, the
Company shall immediately notify all holders of Registrable Securities from whom
notice has not been received and shall file a registration statement at the
Securities and Exchange Commission and shall use its best efforts to register
under the Securities Act, for public sale in accordance with the method of
disposition specified in such notice from requesting holders, the number of
shares of Registrable Securities specified in such notice (and in all notices
received by the Company from other holders within 30 days after the giving of
such notice by the Company). If such method of disposition shall be an
underwritten public offering, the holders of a majority of the shares of
Registrable Securities to be sold in such offering may designate the managing
underwriter of such offering, subject to the approval of the Company, which
approval shall not be unreasonably withheld or delayed. The Company shall be
obligated to register Registrable Securities
-13-
pursuant to this Section 5.1 on two occasions only, PROVIDED, HOWEVER, that each
such obligation shall be deemed satisfied only when a registration statement
covering all shares of Registrable Securities specified in notices received as
aforesaid, for sale in accordance with the method of disposition specified by
the requesting holders, shall have become effective and, if such method of
disposition is a firm commitment underwritten public offering, all such shares
shall have been sold pursuant thereto. For purposes of the preceding sentence,
a Registration Statement filed as described therein shall be deemed to include
all the shares of Registrable Securities requested to be registered if (a) the
number of shares requested to be registered has been reduced by the managing
underwriter in light of market conditions to no less than 75% of the number of
shares for which registration was requested, and (b) such offering contains no
Company shares pursuant to Section 5.1 (c). For purposes of clause (a) of the
preceding sentence, prior to any such reduction, the Company shall first exclude
from such registration, in the following order, all shares of Common Stock
sought to be included therein by (i) any holder thereof not having any
contractual, incidental registration rights, (ii) any holder thereof having
contractual, incidental registration rights subordinate or junior to the rights
of the Holders, and (iii) any holder thereof having separate registration rights
under this Section 5.1. In the event that holders of Registrable Securities
requesting registration of such shares by the Company under this Section 5.1
withdraw any such request for registration before any registration statement for
such shares becomes effective, such request shall count toward the Company's
obligation under this Section 5.1 to register such shares on one occasion only
as to such holders, unless and until the holders of such Registrable Securities
reimburse the Company for all expenses which the Company incurred in complying
with such withdrawn request.
(c) The Company shall be entitled to include in any registration
statement referred to in this Section 5.1, for sale in accordance with the
method of disposition specified by the requesting holders, shares of Common
Stock to be sold by the Company for its own account, except as and to the extent
that, in the opinion of the managing underwriter (if such method of disposition
shall be an underwritten public offering), such inclusion would adversely affect
the marketing of the Registrable Securities to be sold. Except for registration
statements on Forms X-0, X-0 or any successor thereto, the Company will not file
with the Commission any other registration statement with respect to its Common
Stock, whether for its own account or that of other stockholders, from the date
of receipt of a notice from requesting holders pursuant to this Section 5.1
until the completion of the period of distribution of the registration
contemplated thereby.
Section 5.2. PIGGYBACK REGISTRATIONS. If at any time or times after the
date of a Qualified Public Offering, the Company shall determine to register any
of its Common Stock or securities convertible into or exchangeable for Common
Stock
-14-
under the Securities Act, whether in connection with a public offering of
securities by the Company, a public offering thereof by stockholders, or both
(but not in connection with a registration effected solely to implement an
employee benefit plan or a transaction to which Rule 145 or any other similar
rule of the Commission under the Securities Act is applicable), the Company will
promptly give written notice thereof to the holders of Registrable Securities
then outstanding (the "Holders"), and will file a registration statement at the
Securities and Exchange Commission and use its best efforts to effect the
registration under the Securities Act of all Registrable Securities which the
Holders may request in a writing delivered to the Company within fifteen (15)
days after the notice given by the Company; PROVIDED, HOWEVER, that in the event
that any registration pursuant to this Section 5.2 shall be, in whole or in
part, an underwritten public offering of Common Stock, the number of shares of
Registrable Securities to be included in such an underwriting may be reduced
(pro rata among the requesting Holders based upon the number of shares of
Registrable Securities owned by such Holders) if and to the extent that the
managing underwriter shall be of the opinion that such inclusion would adversely
affect the marketing of the securities to be sold by the Company therein,
PROVIDED, that prior to any such reduction, the Company shall first exclude from
such registration, in the following order, all shares of Common Stock sought to
be included therein by (i) any holder thereof not having any such contractual,
incidental registration rights, and (ii) any holder thereof having contractual,
incidental registration rights subordinate or junior to the rights of the
Holders.
Section 5.3. REGISTRATION EXPENSES. In the event of a registration
described in Sections 5.1 and 5.2, all reasonable expenses of registration and
offering of the Holders participating in the offering including, without
limitation, printing expenses, fees and disbursements of counsel, including one
counsel for the selling Holders, and independent public accountants, fees and
expenses (including counsel fees incurred in connection with complying with
state securities or "blue sky" laws, fees of the National Association of
Securities Dealers, Inc. and fees of transfer agents and registrars), shall be
borne by the Company, except that the Holders shall bear underwriting
commissions and discounts attributable to their Registrable Securities being
registered.
Section 5.4. FURTHER OBLIGATIONS OF THE COMPANY. Whenever, under the
preceding sections of this Agreement, the Company is required hereunder to
register Registrable Securities, it agrees that it shall also do the following:
(a) Use its best efforts to diligently prepare for filing with the
Commission a registration statement and such amendments and supplements to said
registration statement and the prospectus used in connection therewith as may be
necessary to keep said registration statement effective for a period of at least
120 days and to comply with the provisions of the Securities Act with respect
-15-
to the sale of securities covered by said registration statement for the period
necessary to complete the proposed public offering;
(b) Furnish to each selling Holder such copies of each preliminary and
final prospectus and such other documents as such holder may reasonably request
to facilitate the public offering of its Registrable Securities;
(c) Enter into any underwriting agreement with provisions reasonably
required by the proposed underwriter for the selling Holders, if any, and
reasonably acceptable to the Company;
(d) Use its best efforts to register or qualify the Registrable
Securities covered by said registration statement under the securities or
"blue-sky" laws of such jurisdictions as any selling Holder may reasonably
request;
(e) Use its best efforts to list all Registrable Securities covered
by said registration statement on any securities exchange on which any of the
Common Stock is then listed; and
(f) Enter into such agreements, cause its independent certified
public accountants to deliver such letters, deliver such opinions or cause such
opinions to be delivered and take such other actions as the selling Holders
shall reasonably request in order to expedite or facilitate the disposition of
such Registerable Securities.
Section 5.5. INDEMNIFICATION. Incident to any registration referred to in
this Agreement, and subject to applicable law, the Company will indemnify each
underwriter, each Holder of Registrable Securities so registered, and each
person controlling any of them against all claims, losses, damages and
liabilities, including legal and other expenses reasonably incurred in
investigating or defending against the same, arising out of any untrue statement
of a material fact contained in any prospectus or other document (including any
related registration statement) or any omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or arising out of any violation by the Company of the Securities
Act, any state securities or "blue-sky" laws or any rule or regulation
thereunder in connection with such registration, PROVIDED, HOWEVER, that the
Company will not be liable in any case to the extent that any such claim, loss,
damage or liability (i) may have been caused by an untrue statement or omission
which is based upon information furnished in writing to the Company by any
Holder expressly for use therein, or (ii) may have been suffered or incurred by
the Company and resulted from an action, claim or suit by a Person who purchased
Registrable Securities or other securities of the Company from a Holder in
reliance upon any untrue statement or omission which was contained or made in
any
-16-
preliminary prospectus furnished by such Holder to such Person in connection
with such registration and which was corrected in a final prospectus which the
Holder possessed, but such Holder failed to deliver or provide a copy of such
final prospectus to such Person at or prior to the confirmation of the sale of
any such Registrable Securities in any case where such delivery is required by
the Securities Act. In the event of any registration of any of the Registrable
Securities under the Securities Act pursuant to this Agreement, each seller of
Registrable Securities, severally and not jointly, will indemnify and hold
harmless the Company, each of its directors and officers and each underwriter
(if any) and each person, if any, who controls the Company or any such
underwriter within the meaning of the Securities Act or the Exchange Act against
any claim, losses, damages and liabilities, including legal and other expenses
reasonably incurred in investigating or defending it against the same,
(i) arising out of any untrue statement of a material fact contained in any
prospectus or other document (including any related registration statement) or
any omission to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading, if the statement or
omission was made in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of such selling Holder, specifically
for use in connection with the preparation of such registration statement,
prospectus, amendment or supplement, or (ii) which may have been suffered or
incurred by the Company and which resulted from an action, claim or suit by a
Person who purchased Registrable Securities or other securities of the Company
from such Holder in reliance upon any untrue statement or omission which was
contained or made in any preliminary prospectus furnished by such Holder to such
Person and which was corrected in a final prospectus which the Holder possessed,
but such Holder failed to deliver or provide a copy of such final prospectus to
such Person at or prior to the confirmation of the sale of any such Registrable
Securities in any case where such delivery is required by the Securities Act;
PROVIDED, HOWEVER, that the obligations of such selling Holders hereunder shall
be limited to an amount equal to the proceeds to each Holder of Registrable
Securities sold as contemplated herein.
Section 5.6. RULE 144 REQUIREMENTS. If the Company becomes subject to the
reporting requirements of either Section 13 or Section 15(d) of the Exchange
Act, the Company will use its best efforts to file with the Commission such
information as the Commission may require under either of said sections; and in
such event, the Company shall use its best efforts to take all action as may be
required as a condition to the availability of Rule 144 of the Securities Act
(or any successor exemptive rule hereinafter in effect). The Company shall
furnish to any Holder upon request, a written statement executed by the Company
as to the steps it has taken to comply with the current public information
requirements of Rule 144.
-17-
Section 5.7. TRANSFER OF REGISTRATION RIGHTS. The registration rights of
the Holders under this Agreement may be transferred to (i) their Permitted
Transferees. No transferees of any other Person shall be entitled to
registration rights except as expressly set forth herein. Each such transferee
shall be deemed to be a "Holder" for purposes of this Agreement; PROVIDED,
HOWEVER, that no transfer of registration rights by a Holder pursuant to this
Section 5.7 shall create any additional rights in the transferee beyond those
rights granted to Holders pursuant to this Agreement.
Section 5.8. GRANTING OF REGISTRATION RIGHTS. The Company shall not,
without the prior written consent of the Holders of at least a majority in
interest of the Registrable Securities, grant any rights to any Persons to
register any shares of capital stock or other securities of the Company if such
rights could reasonably be expected to be superior to or be on parity with, the
rights of the holders of Registrable Securities granted pursuant to this
Agreement; PROVIDED, HOWEVER, that in no case shall the Company grant any such
superior rights as long as the Z/C Group, AA and the Aircraft Creditors, in the
aggregate, hold an amount of Registrable Securities equal to or greater than 11%
of the shares of Common Stock held of record by them or subject to warrants as
of the date hereof as set forth on Schedule A hereto.
6. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS.
Each Stockholder, severally and not jointly, represents and warrants with
respect to such Stockholder to the Company as follows:
Section 6.1. EXPERIENCE. It has such knowledge and experience in
financing and business matters that it is capable of evaluating the merits and
risks of an investment in the Securities and of making an informed decision.
Section 6.2. INVESTMENT. It is acquiring the Securities for investment
for its own account and not with the view to, or for resale in connection with,
any distribution thereof. It understands that the Securities have not been
registered under the Securities Act by reason of a specified exemption from the
registration provisions of the Securities Act which depends upon, among other
things, the bona fide nature of its investment intent as expressed herein.
Section 6.3. RESTRICTIONS ON TRANSFERS. It understands and agrees as
follows:
(a) The certificates evidencing the Securities and each certificate
issued in transfer of the foregoing, will bear the following legend (or
substantially similar legend):
-18-
"THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF WITHOUT SUCH REGISTRATION OR THE DELIVERY TO THE COMPANY OF AN
OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
DISPOSITION WILL NOT REQUIRE REGISTRATION OF SUCH SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED."
(b) It will not offer, sell, transfer or otherwise dispose of any of
the Securities, unless (i) an effective registration under the Securities Act
covers the disposition of such securities or, (ii) except with respect to the
rights and obligations referenced in Section 5, it has delivered to the Company
an opinion of counsel (which may be in-house counsel), reasonably satisfactory
to the Company, that such offer, sale, transfer or other disposition will not
require registration of such securities under the Securities Act.
Upon request of a holder of Securities, the Company shall remove any
such legend from each certificate evidencing Securities, or shall issue to such
holder a new certificate or certificates for such Securities, which certificate
or certificates shall be free of such transfer legend, provided that with such
request, the Company shall have received an opinion of counsel, which opinion is
reasonably satisfactory to the Company, to the effect that such legend is no
longer necessary or required (including, without limitation, because of the
availability of the exemption afforded by Rule 144 promulgated under the
Securities Act).
Section 6.4. RULE 144. It acknowledges that unless redeemed, the
Securities must be held indefinitely unless they are subsequently registered
under the Securities Act or an exemption from such registration is available.
It has been advised or is aware of the provisions of Rule 144, which permits
limited resale of shares purchased in a private placement subject to the
satisfaction of certain conditions, and understands that such Rule may not
become available for resale of the Securities.
Section 6.5. ACCESS TO DATA. It has had an opportunity to discuss the
Company's business, management and financial affairs with its management and has
had the opportunity to review the Company's books, records and facilities.
Section 6.6. AUTHORIZATION. This Agreement to which such Stockholder is a
party is a valid and binding obligation of such Stockholder, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization and moratorium laws and other laws of general application
-19-
affecting enforcement of creditors' rights generally and to general equitable
principles. The execution, delivery and performance by such Stockholder of this
Agreement to which such Stockholder is a party and compliance herewith and
therewith will not result in any violation of and will not conflict with, or
result in a breach of any of the terms of, or constitute a default under, such
Stockholder's Certificate of Incorporation or By-Laws or Agreement of Limited
Partnership, as applicable, or any judgment, decree, order, rule or regulation
to which such Stockholder is bound.
7. TERMINATION
This Agreement, and the respective rights and obligations of the parties
hereto shall terminate upon the earliest to occur of the following: (i) the
expiration of ten years from the date first written above; or (ii) the
completion of the Company's Qualified Public Offering; PROVIDED, HOWEVER, that
the rights and obligations of the parties set forth in Section 5 shall only
terminate upon the expiration of the time period referenced in (i) hereof. As
used herein, the term "Qualified Public Offering" shall mean an underwritten
public offering of shares of Common Stock pursuant to a registration statement
filed with the Commission under the Securities Act, in which net proceeds, after
deducting underwriters' discounts and commissions and offering expenses, to the
Company equal or exceed $15,000,000 and the Company has a Market Capitalization
in excess of $40,000,000. For purposes of this Section 7, "Market
Capitalization" shall mean the number of shares outstanding on a fully diluted
basis multiplied by the price per share of the initial public offering.
8. MISCELLANEOUS
Section 8.1. NOTICES. As the terms "notice" or "notices" are used herein
as between the parties, such term shall mean a written document, explaining the
reason for the notice, and the same shall be mailed by United States Postal
Service Via Certified Mail, Return Receipt Requested, addressed as follows:
to the Company:
Midway Airlines Corporation
000 Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Chief Executive Officer
-20-
with a copy to:
Midway Airlines Corporation
000 Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
Attention: General Counsel
to Z/C:
Xxxx/Chilmark Fund L.P.
Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxx Xxxxxxxx
with copies to:
Xxxxxxxxx & Xxxxxxxxxxx, P.C.
Two Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
to AA:
American Airlines, Inc.
MD 5675 HDQ
X.X. Xxx 000000
XXX Xxxxxxx, XX 00000-0000
Attention: Corporate Secretary
with a required copy to:
Airline Management Services, Inc.
MD 5220
P.O. Box 619616
XXX Xxxxxxx, XX 00000-0000
Attention: Managing Director
to WAF:
Wings Aircraft Finance, Inc.
0000 X. Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Secretary
-21-
to AF:
debis AirFinance B.V.
Xxxxx van de Xxxxxxxxxx 00
XX-0000 XX Xxxxxxxxxx Xxxxxxxx
The Netherlands
Attention: Xxxx XxXxxxx
to XX
XXX Xxxxxx Xxxxx
Xxxx, Xxxxx Xxxxxxxx 00000
to JS:
XXX Xxxxxx Xxxxx
Xxxx, Xxxxx Xxxxxxxx 00000
Such notice shall be deemed to have been given on the date placed in the U.S.
Mails, and sent by fax to counsel, whether actually received by the addressee or
not. The parties shall, as a matter of convenience and courtesy, send each
party receiving notice a copy of said notice by facsimile or electronic means,
or by courier, Federal Express, or similar service, but such notifications shall
not be deemed lawful "notice" as required hereby. The parties may from time to
time amend the above addresses and names by written notice given to the other
party.
Section 8.2. SPECIFIC PERFORMANCE. The rights of the parties under this
Agreement are unique and, accordingly, the parties shall have the right, in
addition to such other remedies as may be available to any of them at law or in
equity, to enforce their rights hereunder by actions for specific performance in
addition to any other legal or equitable remedies they might have to the extent
permitted by law.
Section 8.3. LEGEND. Any certificates representing shares of capital
stock subject to this Agreement shall bear a legend indicating the existence of
the restrictions imposed hereby.
Section 8.4. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all prior oral and written agreements and understandings between them
or any of them as to such subject matter.
-22-
Section 8.5. WAIVERS AND FURTHER AGREEMENTS. Any of the provisions of
this Agreement may be waived by an instrument in writing with the consent of the
party or parties whose rights are being waived and in the event the rights of
the Stockholders are being waived. Any waiver of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach of that provision or of any other provision hereof. Each of the parties
hereto agrees to execute all such further instruments and documents and to take
all such further action as any other party may reasonably require in order to
effectuate the terms and purposes of this Agreement.
Section 8.6. AMENDMENTS. This Agreement may be amended by and shall be
effective upon the receipt of the written consent of: (i) the GS Group, (ii)
members of the Z/C Group which are then Holders, (iii) the Company, and (iv)
with respect to Xxxxxxxx 0, 0, 0, 0, 0, 0, xxx 0, XX and the Aircraft Creditors.
Section 8.7. ASSIGNMENT; SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, executors, legal representatives, successors and permitted
transferees, except that the Company shall not have the right to delegate its
obligations hereunder or to assign its rights hereunder or any interest herein
without the prior written consent of the holders of at least a majority in
interest of the Securities or except as may be expressly provided otherwise
herein.
Section 8.8. SEVERABILITY. In case any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement and such invalid, illegal
and unenforceable provision shall be reformed and construed so that it will be
valid, legal, and enforceable to the maximum extent permitted by law.
Section 8.9. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 8.10. SECTION HEADINGS. The headings contained in this Agreement
are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 8.11. GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware.
Section 8.12. FURTHER ASSURANCES. From and after the date of this
Agreement, upon the request of any party hereto, the other parties shall execute
and deliver
-23-
such instruments, documents and other writings as may be reasonably necessary or
desirable to confirm and carry out and to effectuate fully the intent and
purposes of this Agreement.
Section 8.13. RESTRICTIONS ON GS GROUP AFFILIATE TRANSACTIONS. The
Company shall not enter into any agreement, arrangement, commitment or
transaction of any kind whatsoever with any member of the GS Group or any GS
Group Affiliate, without the prior written consent of Z/C (which consent shall
not be unreasonably withheld); provided such consent shall not be required with
respect to such transaction or related series of transactions not exceeding
$75,000 which constitute services or goods which would otherwise be provided by
or to third parties and the terms therefor are no less favorable to the Company
than terms which would be offered by an independent third party; provided,
however no such consent shall be required in the case of (i) airline service at
contract rates available on the same terms to third parties; (ii) the Company's
allocable share of insurance paid to any member of the GS Group or any GS Group
Affiliate for group insurance policies which include the Company; (iii) taxes
paid to any member of the GS Group or any GS Group Affiliate under any tax
sharing agreement in connection with a consolidated group return which includes
the Company in form and substance reasonably satisfactory to Z/C; (iv) services
performed on behalf of the Company by any member of the GS Group or any GS Group
Affiliate not to exceed $100,000 per fiscal year for any single member of the GS
Group or any GS Group Affiliate and $500,000 in the aggregate per fiscal year
for all members of the GS Group and GS Group Affiliates; (v) any cash management
services provided to the Company by any member of the GS Group or any GS Group
Affiliate; (vi) any redemption or repurchase of stock from the GS Group or any
GS Group Affiliate in an offer made to all stockholders of the Company on the
same terms and conditions per share; and (vii) subject to fiduciary duties and
applicable law, any purchase of additional shares of capital stock from the
Company. As used herein, "GS Group Affiliate" means any Person which controls
any member of the GS Group, which any member of the GS Group controls, or which
is under common control with any member of the GS Group and shall include any
Family Member of any member of the GS Group. "Control" means the power, direct
or indirect, to direct or cause the direction of the management and policies of
a Person through voting securities, contract or otherwise. "Family Member"
means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
brother, sister, stepbrother, step-sister, sibling, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law, or
cousin of the individual in question and shall include adoptive relationships.
8.14 DIRECTORS' AND OFFICERS' LIABILITY INSURANCE. The Company shall
maintain directors' and officers' liability insurance with terms and coverage
consistent with its present such policy.
-24-
9. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each Stockholder as follows:
9.1 AUTHORIZATION. This Agreement is a valid and binding obligation
of the Company, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization and moratorium laws and other laws of
general application affecting enforcement of creditor's rights generally and to
general equitable principles. The execution, delivery and performance by the
Company of this Agreement and compliance therewith will not result in any
violation of and will not conflict with, or result in a breach of any of the
terms of, or constitute a default under, the Company's Certificate of
Incorporation or By-Laws or any judgment, decree, order, rule or regulation to
which the Company is bound.
9.2 COMMON STOCK. The issuance of that number of shares of
Securities to the Stockholders as set forth in Schedules A and B hereof has been
duly authorized and when issued in accordance with the Merger Agreement, will be
validly issued, fully paid and nonassessable shares of capital stock of the
Company.
-25-
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 above
written.
XXXX/CHILMARK FUND L.P.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
AMR CORPORATION
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
WINGS AIRCRAFT FINANCE, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
DEBIS AIRFINANCE B.V.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
XXXXX X. XXXXXXXXX
-----------------------------------
XXXX X. XXXX
-----------------------------------
MIDWAY AIRLINES CORPORATION
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
SCHEDULE A
Number of shares of
Stockholder Common Stock
----------- -------------------
Z/C 2548
AA 572
AF 381
WAF 191
SCHEDULE B
Number of shares of
Stockholder Preferred Stock
----------- -------------------
JG 3675
JS 1785
