INVESTMENT AGREEMENT
by and among
xxxxxx lease finance corporation,
Flighttechnics, LLC,
flightlease ag,
sr technics group
and
SR TECHNICS GROUP AMERICA, INC.
November 7, 2000
XXXXXX LEASE FINANCE CORPORATION
INVESTMENT AGREEMENT
THIS INVESTMENT AGREEMENT (the "Agreement") is made as of November 7, 2000
by and among XXXXXX LEASE FINANCE CORPORATION, a Delaware corporation (the
"Company"), FLIGHTTECHNICS, LLC, a Delaware limited liability company (the
"Investor"), FLIGHTLEASE AG, a company organized under the laws of Switzerland
("Flightlease"), SR TECHNICS Group, a company organized under the laws of
Switzerland ("SRT"), SR TECHNICS GROUP AMERICA, INC., a Delaware corporation
("SRT Group America") and any person which is a SAirGroup Affiliate as defined
in the Stockholder's Agreement dated as of the date hereof (the "Stockholders'
Agreement") and which executes a counterpart of this Agreement.
WHEREAS, the Company desires to issue to the Investor, and the Investor
desires to acquire from the Company, common stock of the Company as herein
described, on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, the parties, intending to be legally bound, agree as
follows:
1. Purchase and Sale of Stock and Option to Purchase Additional Stock. The
Investor hereby agrees to purchase from the Company, and the Company hereby
agrees to sell to the Investor, an aggregate of One Million Three Hundred
Thousand (1,300,000) shares of the common stock of the Company, par value
US$0.01, (the "Stock") for US$15.00 per share, for an aggregate purchase price
of US$19,500,000. The closing hereunder (the "First Closing"), including payment
for and delivery of the Stock, will occur at the offices of the Company within
five business days of the satisfaction of all of the conditions contained in
Section 7(a), or at such other time and place as the parties mutually agree (the
"First Closing Date"). For a period beginning immediately after the First
Closing Date and ending on the eighteen month anniversary of the First Closing
Date, the Investor will have the one-time option (the "Option"), upon delivery
of a written notice to the Company and subject to satisfaction of all of the
conditions contained in Section 7(b), to purchase a number of additional shares
determined by the Investor of the common stock of the Company, par value US$0.01
(the "Additional Stock"), between One Million Seven Hundred Thousand (1,700,000)
and that number of shares that when added with the Stock would equal 34.9% of
the outstanding common stock of the Company immediately after and giving effect
to the exercise of the Option. The purchase price for the first One Million
Seven Hundred Thousand (1,700,000) shares of Additional Stock shall be US$15.00
per share and the purchase price for shares in excess thereof will be US$16.50
per share. If the Investor exercises the Option, the closing of the sale of the
Additional Stock (the "Second Closing"), including payment for and delivery of
the Additional Stock, will occur at the offices of the Company within five
business days of the satisfaction of all of the conditions contained in Section
7(b), or at such other time and place as the parties mutually agree (the "Second
Closing Date"). In each case the Stock and the Additional Stock will be issued
with a corresponding number of rights pursuant to the Rights Agreement as
amended (the "Rights Agreement"), dated as of September 24, 1999, by and between
the Company and the American Stock Transfer & Trust Company.
2. Limitations on Transfer. The Investor will not sell, transfer, assign,
hypothecate, donate, encumber or otherwise dispose of any interest in the Stock
and the Additional Stock except in compliance with the provisions herein, in the
Stockholders' Agreement and applicable securities laws, rules and regulations.
The Company will not be
required (a) to transfer on its books and records any shares of Stock and the
Additional Stock of the Company which will have been transferred in violation of
any of the provisions of this Agreement or (b) to treat as owner of such shares
or to accord the right to vote as such owner or to pay dividends to any
transferee to whom such shares will have been so transferred.
3. Restrictive Legends. All certificates representing the Stock and the
Additional Stock will have endorsed thereon legends in substantially the
following forms (in addition to any legend required by appropriate state or
foreign securities laws and any other legend which may be required by other
agreements between the parties hereto):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED."
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
ASSIGNED, TRANSFERRED, ENCUMBERED, OR IN ANY MANNER DISPOSED OF EXCEPT IN
CONFORMITY WITH THE TERMS OF THE INVESTMENT AGREEMENT DATED AS OF NOVEMBER
7, 2000, AS AMENDED FROM TIME TO TIME. THE SHARES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO A STOCKHOLDERS' AGREEMENT DATED AS OF NOVEMBER
7, 2000 THAT CONTAINS CERTAIN RESTRICTIONS ON THE RIGHT TO TRANSFER AND
VOTE THE SHARES. THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF
SUCH AGREEMENTS TO THE HOLDER OF THIS CERTIFICATE WITHOUT CHARGE."
"THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO
CERTAIN RIGHTS AS SET FORTH IN A RIGHTS AGREEMENT DATED AS OF SEPTEMBER
24, 1999 BETWEEN THE COMPANY AND AMERICAN STOCK TRANSFER & TRUST COMPANY,
AS RIGHTS AGENT, AS AMENDED (THE "RIGHTS AGREEMENT"), THE TERMS AND
CONDITIONS OF WHICH ARE HEREBY INCORPORATED HEREIN BY REFERENCE AND A COPY
OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY.
UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT, SUCH RIGHTS
WILL BE REPRESENTED BY SEPARATE CERTIFICATES AND WILL NO LONGER BE
REPRESENTED BY THIS CERTIFICATE. THE COMPANY WILL MAIL TO THE RECORD
HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT WITHOUT CHARGE
PROMPTLY FOLLOWING RECEIPT OF A WRITTEN REQUEST THEREFOR. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY ANY PERSON WHO BECOMES A 15%
STOCKHOLDER OR ANY AFFILIATE OR ASSOCIATE OF A 15% STOCKHOLDER (AS SUCH
CAPITALIZED TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) MAY BECOME NULL AND
VOID."
4. Company Representations.
2
(a) In connection with the issuance of the Stock, the Company
represents to the Investor, subject to the exceptions, modifications,
supplements and disclosures contained, in the disclosure schedule
delivered on or before the date of this Agreement (the "Disclosure
Schedule"), as of the date hereof and, subject to the exceptions,
modifications, supplements and disclosures contained, in the Disclosure
Schedule and any supplement to the Disclosure Schedule delivered on or
before the First Closing Date that discloses events or occurrences that
occurred after the date hereof, as of the First Closing Date, the
following:
(i) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and
has full corporate power and authority to conduct its business as
presently conducted and as proposed to be conducted by it and to enter
into and perform the Transaction Documents (as defined in Section
7(a)(iii) below) and to carry out the transactions to be consummated
hereby and thereby on the First Closing Date. The Company is duly
qualified to do business as a foreign corporation and is in good standing
in the State of California and in any other jurisdiction in which either
the ownership or use of the properties owned or used by it, or the nature
of the activities conducted by it, requires such qualification, except for
those jurisdictions in which the failure to so qualify would not have a
Company Material Adverse Effect. For purposes of this Agreement, a
"Company Material Adverse Effect" means an event or occurrence that
materially adversely affects the business, financial condition,
operations, results of operations or properties (considered in the
aggregate) of the Company and the Company Subsidiaries taken as a whole,
provided that none of the following will be deemed, either alone or in
combination, to constitute a Company Material Adverse Effect (i) general
industry or economic conditions affecting the U.S., Swiss, European Union
or world economy as a whole, (ii) conditions affecting the commercial
airline, aircraft or aircraft engine manufacturing, the aircraft or
aircraft engine parts or repair industry, so long as such conditions do
not affect the Company and the Company Subsidiaries taken as a whole in a
disproportionate manner as compared to companies of a similar size, or
(iii) any disruption of customer, supplier or employee relationships
resulting from the announcement of this Agreement or the other Transaction
Documents or the consummation of the transactions contemplated hereby or
thereby.
(ii) Each of the Company's subsidiaries (other than Pacific
Gas Turbine Center, LLC and Xxxxxx Aeronautical Services, Inc.) (the
"Company Subsidiaries") is a corporation duly organized, validly existing
and in good standing under the laws of its state of incorporation and has
full corporate power and authority to conduct its business as presently
conducted and as proposed to be conducted. Each Company Subsidiary is duly
qualified to do business as a foreign corporation and is in good standing
in each jurisdiction in which either the ownership or use of the
properties owned or used by it, or the nature of the activities conducted
by it, requires such qualification, except for those jurisdictions in
which the failure to so qualify would not have a Company Material Adverse
Effect.
(iii) The authorized capital stock of the Company (immediately
prior to the First Closing) consists of (a) 5,000,000 shares of preferred
stock, US$0.01 par value per share, which may be issued from time to time
in one or more series, of which 200,000 have been designated as the
Company's Series A Junior Participating Preferred Stock, none of which are
issued and outstanding and (b) 20,000,000 shares
3
of common stock, US$0.01 par value per share of which 7,404,638 shares
(the "Issued Stock") were issued and outstanding as of October 31, 2000.
The Issued Stock represents all of the issued and outstanding shares of
capital stock of the Company and all shares of Issued Stock have been duly
authorized and validly issued and are fully paid and nonassessable. All of
the shares of Issued Stock and other securities of the Company have been
offered, issued and sold by the Company in compliance in all material
respects with the Securities Act of 1933, as amended (the "Act") and
applicable state securities laws. There are no contracts or other
agreements relating to the issuance, sale, or transfer of Issued Stock,
the Stock, the Additional Stock or any equity or other securities of the
Company other than pursuant to the 1996 Stock Option/Stock Issuance Plan,
as amended to date (the "1996 Stock Option/Stock Issuance Plan"), the 1999
Stock Appreciation Rights Plan (the "1999 Stock Appreciation Rights
Plan"), this Agreement, the Transaction Documents, the rights issued
pursuant to the Rights Agreement, and as described in the SEC Documents.
(iv) The issuance, sale and delivery of the Stock in
accordance with this Agreement have been duly authorized by all necessary
corporate action, and all such shares have been duly reserved for
issuance. The Stock, when so issued, sold and delivered against payment
therefor in accordance with this Agreement will be duly authorized,
validly issued, fully paid, nonassessable and free and clear of all
encumbrances other than as set forth in the legends contained in Section 3
of this Agreement.
(v) The execution, delivery and performance by the Company of
this Agreement and the Transaction Documents have been duly authorized by
all necessary corporate action. The board of directors of the Company, at
a meeting thereof duly called and held, has duly adopted resolutions by
the requisite majority vote approving this Agreement and the Transactions
Documents, determining that the terms and conditions of this Agreement and
the Transaction Documents are fair to and in the best interests of the
Company and its stockholders. Such resolutions of the board of directors
are sufficient to cause the provisions of Section 203 of the Delaware
General Corporation Law to be inapplicable to this Agreement and the
transactions contemplated hereby. To the Company's knowledge, no other
fair price, moratorium, control share acquisition or other form of
anti-takeover statute, rule or regulation of any state or jurisdiction
applies or purports to apply to this Agreement or the transactions
contemplated hereby. Assuming due authorization, execution and delivery of
this Agreement by the Investor, this Agreement constitutes the legal,
valid, and binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights generally or to general
principles of equity. Assuming due authorization, execution and delivery
by the other parties thereto, each Transaction Document to which the
Company is a party will, upon execution and delivery, constitute legal,
valid and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, subject to any
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws now or hereafter in effect relating to creditors' rights generally or
to general principles of equity. The execution, delivery and performance
of this Agreement and the Transaction Documents will not violate any law
applicable to the Company and will not conflict with, result in any breach
of any of the terms, conditions or provisions of, constitute a default
under, or require a consent or waiver under the Company's Certificate of
4
Incorporation or Bylaws (each as amended to date), except as set forth on
the Disclosure Schedule, any material indenture, lease, agreement or other
instrument to which the Company is a party or by which it or any of its
properties is bound, or any decree, judgment, order, statute, rule or
regulation applicable to the Company which would have a Company Material
Adverse Effect.
(vi) The Company has furnished or made available to the
Investor true and complete copies of all reports, definitive proxy
materials and registration statements filed by it with the U.S. Securities
and Exchange Commission (the "SEC") under the Securities Exchange Act of
1934, as amended (the "Exchange Act") for all periods ending on or
subsequent to December 31, 1998 and on or prior to the date hereof (all of
the foregoing and any other reports, definitive proxy materials and
registration statements filed by the Company with the SEC under the
Exchange Act for all periods ending on or subsequent to the date hereof
and on or prior to the First Closing being collectively referred to as the
"SEC Documents"). The SEC Documents are all the documents (other than
preliminary proxy materials) that the Company was required to file with
the SEC since that date. As of their respective filing dates, the SEC
Documents complied in all material respects with the requirements of the
Exchange Act, and none of such SEC Documents contained any untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements made therein, in
light of the circumstances in which they were made, not misleading, except
to the extent corrected by a subsequently filed document with the SEC. The
financial statements of the Company, including the notes thereto, included
in the SEC Documents (the "Company Financial Statements") comply as to
form in all material respects with applicable accounting requirements and
with the published rules and regulations of the SEC with respect thereto,
have been prepared in accordance with United States generally accepted
accounting principles consistently applied (except as may be indicated in
the notes thereto) and present fairly the consolidated financial position
of the Company at the dates thereof and of its operations and cash flows
for the periods then ended (subject, in the case of unaudited statements,
to normal audit adjustments, which individually or in the aggregate are
not reasonably expected to have a Company Material Adverse Effect). There
has been no change in the Company accounting policies except as described
in the notes to the Company Financial Statements.
(vii) There is no action, suit or proceeding pending or, to
the Company's knowledge, threatened that reasonably could be expected to
have a Company Material Adverse Effect, or in any manner challenge,
prevent, enjoin, alter or materially delay any of the transactions
contemplated in this Agreement or the Transaction Documents.
(viii) The Company has no liabilities or obligations (whether
absolute or contingent, liquidated or unliquidated, or due or to become
due) of a character or amount required to be included in the Company
Financial Statements in accordance with Generally Accepted Accounting
Principles except for (a) liabilities and obligations reflected in the
Company Financial Statements and (b) other liabilities and obligations
which, individually or in the aggregate, would not have a Company Material
Adverse Effect.
5
(ix) Except as set forth in the Disclosure Schedule, since
December 31, 1999, there has not occurred any event, change, effect or
development which, individually or in the aggregate, would have a Company
Material Adverse Effect.
(x) Except for instances of noncompliance which, individually
or in the aggregate, would not have a Company Material Adverse Effect, the
Company is in compliance with each constitutional provision, law, rule,
regulation, permit, order, writ, injunction, judgment and decree to which
the Company is subject.
(xi) Except for the fees and expenses payable by the Company
to Lazard Freres & Co. LLC, neither the Company nor any of its
subsidiaries or affiliates has any liability or obligation to pay any fees
or commissions to any financial advisor, broker or finder with respect to
the transactions contemplated by this Agreement and the Transaction
Documents.
(xii) The Company is not, and has not been, a United States
real property holding corporation (as defined in Section 897(c)(2) of the
United States Internal Revenue Code of 1986 as amended (the "Code"))
during the applicable period specified in Section 897(c)(1)(A)(ii) of the
Code.
(b) In connection with the issuance of the Additional Stock, the
Company represents to the Investor, subject to the exceptions,
modifications, supplements and disclosures contained, in a supplement to
the Disclosure Schedule, which will be delivered within ten days after the
date that the Company receives written notice of the Investor's exercise
of the Option (the "Option Exercise Date"), and which the Investor will
have five business days to review and either accept and proceed to the
Second Closing Date or reject and withdraw its exercise of the Option, as
of the Option Exercise Date and as of the Second Closing Date, the
following:
(i) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and
has full corporate power and authority to conduct its business as
presently conducted and as proposed to be conducted by it and to carry out
the transactions to be consummated hereby and thereby on the Second
Closing Date. The Company is duly qualified to do business as a foreign
corporation and is in good standing in the State of California and in any
other jurisdiction in which either the ownership or use of the properties
owned or used by it, or the nature of the activities conducted by it,
requires such qualification, except for those jurisdictions in which the
failure to so qualify would not have a Company Material Adverse Effect.
(ii) Each of the Company Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of its
state of incorporation and has full corporate power and authority to
conduct its business as presently conducted and as proposed to be
conducted. Each Company Subsidiary is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in which
either the ownership or use of the properties owned or used by it, or the
nature of the activities conducted by it, requires such qualification,
except for those jurisdictions in which the failure to so qualify would
not have a Company Material Adverse Effect.
(iii) Except as set forth in a supplement to the Disclosure
Schedule, the authorized capital stock of the Company and the issued stock
is as set forth in the
6
Company's most recent quarterly report filed on Form 10-Q with the SEC
before the Option Exercise Date. Such issued stock represents all of the
issued and outstanding shares of capital stock of the Company and all
shares of such issued stock have been duly authorized and validly issued
and are fully paid and nonassessable. All of the shares of such issued
stock and other securities of the Company have been offered, issued and
sold by the Company in compliance in all material respects with the Act
and applicable state securities laws. Other than pursuant to the 1996
Stock Option/Stock Issuance Plan, the 1999 Stock Appreciation Rights Plan,
this Agreement, the Transaction Documents, the Rights Agreement and as
described in the SEC Documents, there are no contracts or other agreements
relating to the issuance, sale, or transfer of such issued stock, the
Stock, the Additional Stock or any equity or other securities of the
Company.
(iv) The issuance, sale and delivery of the Additional Stock
in accordance with this Agreement have been duly authorized by all
necessary corporate action, and all such shares have been duly reserved
for issuance. The Additional Stock, when so issued, sold and delivered
against payment therefor in accordance with this Agreement will be duly
authorized, validly issued, fully paid, nonassessable and free and clear
of all encumbrances other than as set forth in the legends contained in
Section 3 of this Agreement.
(v) The execution, delivery and performance by the Company of
this Agreement and the Transaction Documents have been duly authorized by
all necessary corporate action. The board of directors of the Company, at
a meeting thereof duly called and held, has duly adopted resolutions by
the requisite majority vote approving this Agreement and the Transactions
Documents, determining that the terms and conditions of this Agreement and
the Transaction Documents are fair to and in the best interests of the
Company and its stockholders, and recommending that the Company's
stockholders adopt and approve this Agreement and the Transaction
Documents. Such resolutions of the board of directors are sufficient to
cause the provisions of Section 203 of the Delaware General Corporation
Law to be inapplicable to this Agreement and the transactions contemplated
hereby. To the Company's knowledge, no other fair price, moratorium,
control share acquisition or other form of anti-takeover statute, rule or
regulation of any state or jurisdiction applies or purports to apply to
this Agreement or the transactions contemplated hereby. Assuming due
authorization, execution and delivery of this Agreement by the Investor,
this Agreement constitutes the legal, valid, and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
subject to any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to
creditors' rights generally or to general principles of equity. Assuming
due authorization, execution and delivery by the other parties thereto,
each Transaction Document to which the Company is a party will, upon
execution and delivery, constitute legal, valid and binding obligations of
the Company, enforceable against the Company in accordance with their
respective terms, subject to any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect
relating to creditors' rights generally or to general principles of
equity. The execution, delivery and performance of this Agreement and the
Transaction Documents will not violate any law applicable to the Company
and will not conflict with, result in any breach of any of the terms,
conditions or provisions of, constitute a default under, or require a
consent or waiver under the Company's Certificate of Incorporation or
Bylaws (each as amended to
7
date), except as set forth on a supplement to the Disclosure Schedule, any
material indenture, lease, agreement or other instrument to which the
Company is a party or by which it or any of its properties is bound, or
any decree, judgment, order, statute, rule or regulation applicable to the
Company which would have a Company Material Adverse Effect.
(vi) The Company has furnished or made available to the
Investor true and complete copies of all SEC Documents for all periods
ending on or subsequent to December 31, 1998 and on or prior to the Option
Exercise Date. Such SEC Documents are all the documents (other than
preliminary proxy materials) that the Company was required to file with
the SEC since that date. As of their respective filing dates, such SEC
Documents complied in all material respects with the requirements of the
Exchange Act, and none of such SEC Documents contained any untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements made therein, in
light of the circumstances in which they were made, not misleading, except
to the extent corrected by a subsequently filed document with the SEC. The
Company Financial Statements (defined for this section 4(b) to include
those filed in such SEC Documents) comply as to form in all material
respects with applicable accounting requirements and with the published
rules and regulations of the SEC with respect thereto, have been prepared
in accordance with United States generally accepted accounting principles
consistently applied (except as may be indicated in the notes thereto) and
present fairly the consolidated financial position of the Company at the
dates thereof and of its operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal audit
adjustments, which individually or in the aggregate are not reasonably
expected to have a Company Material Adverse Effect). There has been no
change in the Company accounting policies except as described in the notes
to the Company Financial Statements.
(vii) There is no action, suit or proceeding pending or, to
the Company's knowledge, threatened that reasonably could be expected to
have a Company Material Adverse Effect, or in any manner challenge,
prevent, enjoin, alter or materially delay any of the transactions
contemplated in this Agreement or the Transaction Documents.
(viii) The Company has no liabilities or obligations (whether
absolute or contingent, liquidated or unliquidated, or due or to become
due) of a character or amount required to be included in the Company
Financial Statements in accordance with Generally Accepted Accounting
Principles except for (i) liabilities and obligations reflected in the
Company Financial Statements and (ii) other liabilities and obligations
which, individually or in the aggregate, would not have a Company Material
Adverse Effect.
(ix) Since the most recent Company Financial Statement prior
to the Option Exercise Date, there has not occurred any event, change,
effect or development which, individually or in the aggregate, would have
a Company Material Adverse Effect.
(x) Except for instances of noncompliance which, individually
or in the aggregate, would not have a Company Material Adverse Effect, the
Company is in compliance with each constitutional provision, law, rule,
regulation, permit, order, writ, injunction, judgment and decree to which
the Company is subject.
8
(xi) Except for the fees and expenses payable by the Company
to Lazard Freres & Co. LLC, neither the Company nor any of its
subsidiaries or affiliates has any liability or obligation to pay any fees
or commissions to any financial advisor, broker or finder with respect to
the transactions contemplated by this Agreement and the Transaction
Documents.
(xii) The Company is not, and has not been, a United States
real property holding corporation (as defined in Section 897(c)(2) of the
United States Internal Revenue Code of 1986 as amended (the "Code"))
during the applicable period specified in Section 897(c)(1)(A)(ii) of the
Code.
5. Representations. In connection with the purchase of the Stock and the
Additional Stock, the Investor represents to the Company as of the date hereof
and as of each of the First Closing Date as to the Stock and the Second Closing
Date as to the Additional Stock, the following:
(a) The Investor is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of
Delaware and has full company power and authority to conduct its business
as presently conducted and as proposed to be conducted, and to enter into
and perform this Agreement and the Transaction Documents and to carry out
the transactions contemplated hereby and thereby. The Investor is not
owned or controlled by a non-United States government or governmental
entity.
(b) The execution, delivery and performance by the Investor of this
Agreement and the Transaction Documents have been duly authorized by all
necessary action. Assuming due authorization, execution and delivery of
this Agreement by the Company, this Agreement constitutes the legal,
valid, and binding obligation of the Investor, enforceable against the
Investor in accordance with its terms, subject to any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights generally or to general
principles of equity. Assuming due authorization, execution and delivery
by the other parties thereto, each Transaction Document to which the
Investor is a party will, upon execution and delivery, constitute legal,
valid, and binding obligations of the Investor, enforceable against the
Investor in accordance with their respective terms, subject to any
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws now or hereafter in effect relating to creditors' rights generally or
to general principles of equity.
(c) The execution, delivery and performance of this Agreement and
the Transaction Documents will not violate any law applicable to the
Investor and will not conflict with, result in any breach of any of the
terms, conditions or provisions of, constitute a default under, or require
a consent or waiver under the Investor's organizational documents, any
material indenture, lease, agreement or other instrument to which the
Investor is a party or by which either they or any of their properties is
bound, or any decree, judgment, order, statute, rule or regulation
applicable to the Investor which would have a material adverse effect on
the business, properties, financial condition, operations or results of
operations of the Investor (a "Investor Material Adverse Effect").
(d) Except for the fees and expenses payable by the Investor or its
affiliates to PricewaterhouseCoopers, neither the Investor nor any of its
subsidiaries or
9
affiliates has any liability or obligation to pay any fees or commissions
to any financial advisor, broker or finder with respect to the
transactions contemplated by this Agreement and the Transaction Documents.
(e) There is no action, suit or proceeding pending or, to the
Investor's knowledge, threatened that reasonably could be expected to have
an Investor Material Adverse Effect or in any manner challenge prevent,
enjoin, alter or materially delay any of the transactions contemplated in
this Agreement or the Transaction Documents.
6. Investment Representations.
(a) In connection with the purchase of the Stock and the Additional
Stock (collectively referred to as the "Stock" for purposes of Sections 6
(a) and 6 (b)), the Investor represents to the Company the following:
(i) The Investor is aware of the Company's business affairs
and financial condition and has acquired sufficient information about the
Company to reach an informed and knowledgeable decision to acquire the
Stock. The Investor is purchasing the Stock for investment for the
Investor's own account only and not with a view to, or for resale in
connection with, any "distribution" thereof within the meaning of the Act.
(ii) The Investor understands that the Stock has not been
registered under the Act by reason of a specific exemption therefrom,
which exemption depends upon, among other things, the bona fide nature of
the Investor's investment intent as expressed herein.
(iii) The Investor further acknowledges and understands that
the Stock must be held indefinitely unless the Stock is subsequently
registered under the Act or an exemption from such registration is
available. The Investor further acknowledges and understands that, except
as provided in Section 9 hereof, the Company is under no obligation to
register the Stock. The Investor understands that the certificate
evidencing the Stock will be imprinted with a legend which prohibits the
sale of the Stock unless the Stock is registered or such registration is
not required in the opinion of counsel for the Company.
(iv) The Investor is familiar with the provisions of Rule 144,
under the Act which, in substance, permit limited public resale of
"restricted securities" acquired, directly or indirectly, from the issuer
thereof (or from an affiliate of such issuer) in a non-public offering,
subject to the satisfaction of certain conditions. The Stock may be resold
by the Investor in certain limited circumstances subject to the provisions
of Rule 144, which requires, among other things: (i) the availability of
certain public information about the Company and (ii) that the resale
occur following the required holding period under Rule 144 and after the
Investor has purchased, and made full payment of (within the meaning of
Rule 144), the securities to be sold.
(v) The Investor further understands that at the time the
Investor wishes to sell the Stock there may be no public market upon which
to make such a sale, and that, even if such a public market then exists,
the Company may not be satisfying the current public information
requirements of Rule 144 (even though the Company is required to do so by
law), and that, in such event, the Investor would be
10
precluded from selling the Stock under Rule 144 even if the minimum
holding period requirement had been satisfied.
(vi) The Investor has either (i) a preexisting business
relationship with either the Company or any of its officers, directors or
controlling persons, or (ii) the capacity to protect its own interests in
connection with the purchase of the Stock by virtue of its or its
professional advisors'(who are unaffiliated with and who are not directly
or indirectly compensated by the Company or any of its affiliates)
financial expertise.
(vii) Except for filings required by the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, competition act filings in various
other countries and the filing of a Form D under the Securities Act of
1933, as amended, (the "Act") the purchase of the Stock by the Investor is
permitted by the laws of Switzerland, the European Union and the United
States, and the purchase and sale of the Stock does not require the filing
of any notice, permit, registration or qualification with any governmental
entity of any of Switzerland, the European Union or the United States.
(viii) The Investor is an "accredited investor" as that term
is defined in Rule 501 of Regulation D of the Act.
(ix) Flightlease, SRT Group America and SRT or a SAirGroup
Affiliate are the only beneficial owners of the Investor.
(b) In connection with the purchase of the Stock and the Additional
Stock, Flightlease, SRT Group America, SRT and any SAirGroup Affiliate
which is a member of the Investor (each, a "Member") represent to the
Company the following:
(i) Such Member has either (i) a preexisting business
relationship with either the Company or any of its officers, directors or
controlling persons, or (ii) the capacity to protect its own interests in
connection with the purchase of the Stock by virtue of its financial
expertise.
(ii) Except for filings required by the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, competition act filings in various
other countries and the filing of a Form D under the Act, the purchase of
the Stock by the Investor is permitted by the laws of Switzerland, the
European Union and the United States and the purchase and sale of the
Stock does not require the filing of any notice, permit, registration or
qualification with any governmental entity of any of Switzerland, the
European Union or the United States.
(iii) Such Member is an "accredited investor" as that term is
defined in Rule 501 of Regulation D of the Act.
(iv) Flightlease, SRT Group America, SRT or a SAirGroup
Affiliate are the only beneficial owners of the Investor.
7. Condition to Closing.
(a) The respective obligations of each party to perform under this
Agreement will be subject to the satisfaction at or prior to the First
Closing of the following conditions:
11
(i) No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or
other legal or regulatory restraint or prohibition preventing the issuance
and sale of the Stock will be in effect. There is no proceeding pending,
or as to which the Company or the Investor has received any notice of
assertion against any of them, that in any manner challenges, seeks, or
reasonably could be expected to prevent, enjoin, alter or materially delay
any of the transactions contemplated by this Agreement or the Transaction
Documents.
(ii) All government and third party approvals for the issuance
and sale of the Stock and the execution, delivery and performance of this
Agreement and the Transaction Documents will have been received.
(iii) The following documents (the "Transaction Documents")
will have been executed:
(A) The Share Purchase Agreement among SRT, SRT Group
America and the Company whereby SRT Group America agrees to purchase 100%
of the capital stock of Xxxxxx Aeronautical Services, Inc.;
(B) The Member Interest Purchase Agreement among SRT,
SRT Group America and the Company whereby SRT Group America agrees to
purchase from the Company the Company's 50% interest in Pacific Gas
Turbine Center, LLC;
(C) The Stockholders' Agreement among the Company, the
Investor, Xxxxxxx X. Xxxxxx, XX, Xxxxxx Xxxxxxxx Xxxxxx 1995 Irrevocable
Trust and CFW Partners, L.P. (and the Irrevocable Proxy related thereto);
(D) The Aircraft Engine Purchase Agreement relating to
five aircraft engines between the Company and SR Technics Group AG;
(E) The Employment Agreement between the Company and
Xxxxxxx X. Xxxxxx, XX;
(F) The Amendment to the Operating Agreement of Pacific
Gas Turbine Center, LLC;
(G) The Cooperation Agreement among the Company,
Flightlease and SRT;
(H) The Transition Services Agreement between the
Company and Xxxxxx Aeronautical Services, Inc.; and
(I) The First Amendment to Rights Agreement between the
Company and American Stock Transfer & Trust Company; and
(iv) All of each party's representations and warranties in
this Agreement (considered both individually and collectively) must have
been accurate in all respects as of the date of this Agreement (except to
the extent that the aggregate of all breaches thereof would not have a
Company Material Adverse Effect or an Investor Material Adverse Effect)
and must be accurate in all material respects as of
12
the First Closing Date as if then made (except to the extent such
representations specifically relate to an earlier date, in which case such
representations will be true and correct as of such earlier date, and in
any event, subject to the foregoing Company Material Adverse Effect or an
Investor Material Adverse Effect qualification, as applicable) without
giving effect to any supplement to the Disclosure Schedule, except for any
supplements to the Disclosure Schedule relating to facts or events
occurring after the date of this Agreement.
(v) Between the date hereof and the First Closing, nothing
shall have occurred (and the Investor shall not become aware of facts or
conditions not previously known) which will have either a Company Material
Adverse Effect or an Investor Material Adverse Effect.
(vi) Expiration or early termination of the waiting period
required by the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976.
(vii) Election of Hans Xxxx Xxxxxxxx as a director of the
Company.
(b) The obligation of the Company to issue and sell the Additional
Stock to the Investor and the obligation of the Investor to purchase the
Additional Stock shall be subject to the satisfaction at or prior to the
Second Closing of the following conditions:
(i) No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or
other legal or regulatory restraint or prohibition preventing the issuance
and sale of the Additional Stock shall be in effect. There shall be no
proceeding pending, or as to which the Company or the Investor has
received any notice of assertion against any of them that in any manner
challenges, seeks, or reasonably could be expected to prevent, enjoin,
alter or materially delay the issuance and sale of the Additional Stock.
(ii) Either (a) the Company receives a written determination
from the National Association of Securities Dealers (the "NASD") and the
NASDAQ Stock Market that the issuance and sale of the Additional Stock to
the Investor does not require the Company to obtain approval from its
stockholders or (b) the issuance and sale of the Stock to the Investor
shall have been approved by the stockholders of the Company.
(iii) All government and third party approvals for the
issuance and sale of the Additional Stock will have been received.
(iv) All of each party's representations and warranties in
this Agreement (considered both individually and collectively) must have
been accurate in all respects as of the date of the Option Exercise Date
(except to the extent that the aggregate of all breaches thereof would not
have a Company Material Adverse Effect or an Investor Material Adverse
Effect), without giving effect to any supplement to the Disclosure
Schedule, except for any supplements to the Disclosure Schedule relating
to facts or events occurring between the First Closing Date and the Option
Exercise which the Company will deliver to the Investor within ten
business days after the Option Exercise Date, and which the Investor will
have five business days to
13
review and either accept and proceed to the Second Closing Date or reject
and withdraw its exercise of the Option.
(v) Between the date of the Option Exercise Date and the
Second Closing, nothing shall have occurred (and the Investor shall not
become aware of facts or conditions not previously known) which will have
either a Company Material Adverse Effect or an Investor Material Adverse
Effect.
(vi) Expiration or early termination of the waiting period
required by the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976.
(vii) All of the Company's aircraft that are registered with
the Federal Aviation Administration (the "FAA") will have been transferred
to an owner trust facility or other vehicle which will be in compliance
with FAA regulations.
8. Covenants of the Parties.
(a) Company Actions. The Company will undertake the following:
(i) NASD Determination. The Company will make an inquiry as
promptly as practicable to the NASD and the NASDAQ Stock Market as to
whether the issuance and sale of the Additional Stock to the Investor will
require the approval of the Company's stockholders.
(ii) Stockholders Meeting. If required by the NASD and the
NASDAQ Stock Market in connection with the issuance and sale of the
Additional Stock to the Investor, the Company will duly call, give notice
of, convene and hold a special meeting of its stockholders (the "Special
Stockholders Meeting") as soon as reasonably practicable after the First
Closing Date for the purpose of submitting the issuance of the Additional
Stock for approval by the holders of a majority of the Issued Stock.
(iii) Cooperation. If required by the NASD and the NASDAQ
Stock Market in connection with the issuance and sale of the Additional
Stock to the Investor, the Company will prepare and file with the SEC as
promptly as reasonably practicable after the First Closing a proxy
statement and related materials (the "Special Proxy Statement") with
respect to the Special Stockholders Meeting, which Special Proxy Statement
will satisfy the requirements of the Act and the Exchange Act. The Company
will respond reasonably promptly to any comments raised by the SEC with
respect to the Special Proxy Statement, as the case may be, and cause the
definitive version of the Special Proxy Statement to be mailed to its
stockholders as soon as reasonably practicable after it is legally
permitted to do so. Before filing the Special Proxy Statement, the Company
will provide counsel to the Investor with an adequate and appropriate
opportunity to participate in the preparation of either the Special Proxy
Statement which document will be subject to the review and consent of
counsel to the Investor, which consent may not be unreasonably withheld.
The Special Proxy Statement will comply in all material respects with the
applicable requirements of the Exchange Act and will not, at the time the
Special Proxy Statement is filed with the SEC and mailed to stockholders
of the Company, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading. Except for information
14
supplied by the Investor that is identified in a letter agreed to between
the Investor and the Company, all information included in the Special
Proxy Statement will be deemed to have been supplied by the Company.
(iv) Board Recommendation. The Company will include in the
Special Proxy Statement the recommendation of the board of directors of
the Company that the stockholders of the Company vote in favor of the
approval of the issuance of the Additional Stock, unless the board of
directors of the Company determines after consulting with counsel that its
continued approval and recommendation of the issuance and sale of the
Additional Stock will violate the directors' fiduciary duties to the
Company's stockholders.
(b) Access and Investigation. Between the date of this Agreement and
the First Closing and between the date of the Option Exercise Date and the
Second Closing Date, upon reasonable advance notice from the Investor, the
Company will, and will cause its representatives to (i) afford the
Investor and its representatives, reasonable access to the Company's
personnel, properties (including subsurface testing), contracts, books and
records, and other documents and data and (ii) furnish the Investor and
its representatives with such additional financial, operating, and other
data and information as the Investor may reasonably request.
(c) Operation of Business. Between the date of this Agreement and
the First Closing and between the date of the Option Exercise Date and the
Second Closing Date, the Company (i) will conduct, and will cause its
subsidiaries to conduct, their business consistent with past practice and
(ii) will not enter into any agreement (with the exception of grants of
stock pursuant to the 1996 Stock Option/Stock Issuance Plan) to issue
either new shares of its stock or warrants to purchase its stock.
(d) Notification by the Company. The Company will promptly notify
the Investor in writing if, between the date of this Agreement and the
First Closing or between the date of the Option Exercise Date and the
Second Closing, the Company becomes aware of: (i) any fact or condition
that causes or constitutes a breach of any of the Company's
representations and warranties as of the date of this Agreement, or (ii)
the occurrence after the date of this Agreement of any fact or condition
that would (except as expressly contemplated by this Agreement) cause or
constitute a breach of any such representation or warranty had that
representation or warranty been made at the time of the occurrence of such
fact or condition. Should any such fact or condition require any change in
the Disclosure Schedule, the Company will promptly deliver to the Investor
a supplement to the Disclosure Schedule specifying such change. During the
same period, the Company will promptly notify the Investor of the
occurrence of any breach of any covenant of the Company in this Section 8
or of the occurrence of any event that may make the satisfaction of the
conditions in Section 7 impossible or unlikely.
(e) Notification by the Investor, Flightlease, SRT, SRT Group
America and any other Member. The Investor, Flightlease, SRT, SRT Group
America and any other Member will promptly notify the Company in writing
if, between the date of this Agreement and the First Closing or between
the date of the Option Exercise Date and the Second Closing, either the
Investor, Flightlease, SRT, SRT Group America and any other Member becomes
aware of: (i) any fact or condition that causes or constitutes a breach of
any of the Investor's, Flightlease's, SRT's, SRT Group America's and any
other Member's representations and warranties
15
as of the date of this Agreement, or (ii) the occurrence after the date of
this Agreement of any fact or condition that would (except as expressly
contemplated by this Agreement) cause or constitute a breach of any such
representation or warranty had that representation or warranty been made
at the time of the occurrence of such fact or condition. During the same
period, each of the Investor, Flightlease, SRT, SRT Group America and any
other Member will promptly notify the Company of the occurrence of any
breach of any covenant of the Company in this Section 8 or of the
occurrence of any event that may make the satisfaction of the conditions
in Section 7 impossible or unlikely.
(f) Changes to the Certificate of Incorporation or By-Laws. Between
the date of this Agreement and the First Closing, the Company will not
recommend any changes or amendments to its Certificate of Incorporation or
its By-Laws, except as provided for in this Agreement or in the
Transaction Documents.
(g) Reasonable Commercial Efforts. Both the Company and the Investor
will have used reasonable commercial efforts to satisfy the conditions in
Section 7.
9. Registration Rights.
(a) Definitions. For purposes of this Section 9:
(i) Registration. The terms "register," "registered," and
"registration" refer to a registration effected by preparing and filing a
registration statement in compliance with the Act, and the declaration or
ordering of effectiveness of such registration statement.
(ii) Registrable Securities. The term "Registrable Securities"
means: (1) the Stock and the Additional Stock issued under this Agreement,
(2) any shares of common stock of the Company issued as a dividend or
other distribution with respect to, or in exchange for or in replacement
of, any shares of Stock described in clause (1) of this subsection (ii)
and (3) any other common stock of the Company hereafter acquired by the
Investor, and will be appropriately adjusted for any stock dividends,
splits, reverse splits, combinations, recapitalizations and the like
occurring after the date hereof. Notwithstanding the foregoing,
"Registrable Securities" will exclude any Registrable Securities sold in a
transaction in which rights under this Section 9 are not assigned in
accordance with this Agreement or any Registrable Securities sold in a
public offering, whether sold pursuant to Rule 144 promulgated under the
Act, or in a registered offering, or otherwise
(iii) Holder. For purposes of this Section 9, the term
"Holder" means either (A) the Investor or (B) the Investor's assignee of
greater than 50 % of the Registrable Securities (the "Registration Rights
Assignee"), so long as the Investor or the Registration Rights Assignee,
as applicable, is the owner of record of Registrable Securities.
(b) Demand Registration.
(i) Request by Holder. If the Company will at any time after
the end of the Exclusivity Period (as defined in the Stockholders'
Agreement) receive a written request from the Holder that the Company file
a registration statement under
16
the Act covering the registration of Registrable Securities pursuant to
this Section 9(b), then the Company will use reasonable commercial efforts
to effect, within ninety (90) days of such request, the registration under
the Act of all Registrable Securities that Holder requests to be
registered and included in such registration by written request given by
Holder to the Company, subject only to the limitations of this Section 9.
(ii) Underwriting. Registrable Securities covered by this
demand registration will be distributed only by means of a firm commitment
offering underwritten by a managing underwriter or underwriters selected
by Holder and reasonably acceptable to the Company, provided that the
managing underwriter or underwriters must agree that no shares of
Registrable Securities will be sold to any purchaser in the underwriting
if after such purchase, such purchaser will own five percent (5%) or more
of the issued and outstanding common stock of the Company. The right of
Holder to include its Registrable Securities in such registration will be
conditioned upon Holder's participation in such underwriting and the
inclusion of Holder's Registrable Securities in the underwriting to the
extent provided herein. Holder will enter into an underwriting agreement
in customary form with the managing underwriter or underwriters (including
a market stand-off agreement of up to 180 days if required by such
underwriters).
(iii) Maximum Number of Demand Registrations. The Company will
be obligated to effect no more than two (2) such registration pursuant to
this Section 9(b), provided that the Company will be relieved of its
obligations to effect any registration if at any time Holder will own less
than five percent (5%) of the issued and outstanding capital stock of the
Company. A registration request as provided in Section 9(b) will not count
as one of the demands to which Holder is entitled hereunder unless the
registration statement remains continuously effective until the earlier of
(i) the completion of any offering and disposition of all Registrable
Securities included in the registration statement and (ii) the expiration
of ninety (90) days from the date on which the registration statement
first became effective under the Act.
(iv) Deferral. Notwithstanding the foregoing, if the Company
will furnish to the Holder a certificate signed by the President or Chief
Executive Officer of the Company stating that in the good faith judgment
of the board of directors, it would be materially detrimental to the
Company and its stockholders for such registration statement to be filed
(other than any detriment caused by the sale of Stock pursuant to such
registration statement), then the Company will have the right to defer
such filing for a period of not more than sixty (60) days after receipt of
the request of the Holder.
17
(v) Expenses. All fees, costs and expenses incurred in
connection with any registration pursuant to this Section 9, including all
federal and "Blue Sky" registration, filing and qualification fees and
expenses, printer's fees and expenses, accounting fees (including in
connection with the delivery of any "comfort letter"), fees and
disbursements of counsel for the Company (including in connection with the
delivery of any required legal opinion), and all fees, costs and expenses
incurred in connection with the performance of the Company's obligations
contained in this Section 9 will be borne by the Holder and the Holder
agrees to pay and reimburse any costs, fees and expenses incurred by the
Company within three days of the presentation of an invoice therefor.
(vi) Qualification. The Company will not be required to effect
a registration in any particular jurisdiction in which the Company would
be required to qualify to do business where it is not then so qualified or
to execute a general consent to service of process in effecting such
registration, qualification or compliance in any jurisdiction where it is
not then so subject to service of process.
(c) Obligations of the Company. Whenever required to effect the
registration of Registrable Securities under this Agreement the Company
will, as expeditiously as reasonably possible:
(i) Registration Statement. Prepare and file with the SEC
within thirty (30) days of a request by Holder under Section 9(b) a
registration statement on the shortest available form for which the
Company then qualifies with respect to such Registrable Securities and use
reasonable commercial efforts to cause such registration statement to
become effective within ninety (90) days of a request by Holder under
Section 9(b) and to remain continuously effective until the earlier of (i)
the completion of any offering and disposition of all Registrable
Securities included in the registration statement and (ii) the expiration
of ninety (90) days from the date on which the registration statement
first became effective under the Act; provided, however, that before
filing a registration statement or prospectus or any amendment or
supplement to either of them, the Company will (A) provide counsel to
Holder with an adequate and appropriate opportunity to participate in the
preparation of the registration statement and each prospectus included in
the registration statement (and each amendment or supplement to it) to be
filed with the SEC, which documents will be subject to the review of
counsel to Holder and (B) notify counsel to Holder and Holder of any stop
order issued or threatened by the SEC and to take all commercially
reasonable action required to prevent the entry of the stop order or to
remove it if entered. With respect to any registration under Section 9(b),
the Company will not permit any securities other than the Registrable
Securities to be included in the registration statement if such inclusion
would cause any of the Registrable Securities to be excluded from the
registration by the managing underwriter or underwriters..
(ii) Amendments and Supplements. Prepare and file with the SEC
such amendments and supplements to such registration statement and the
prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Act with respect to the
disposition of all securities covered by such registration statement.
(iii) Prospectuses. As soon as reasonably commercially
practical, furnish to the Holder such number of copies of a prospectus,
including a preliminary
18
prospectus, in conformity with the requirements of the Act, and such other
documents as they may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by them that are included
in such registration.
(iv) Blue Sky. Use its best efforts to register and qualify
the securities covered by such registration statement under such other
securities or "Blue Sky" laws of such jurisdictions as will be reasonably
requested by the Holder, provided that the Company will not be required in
connection therewith or as a condition thereto to qualify to do business
in any jurisdiction where it is not then so qualified or to file a general
consent to service of process in any such states or jurisdictions where it
is not then so subject to service of process.
(v) Other Approvals. Use its commercially reasonable efforts
to obtain all other approvals, consents, exemptions or authorizations from
those governmental agencies or authorities at Holder's sole cost and
expense as may be necessary to enable Holder to effect the disposition of
any Registrable Securities.
(vi) Underwriting. Enter into and perform its obligations
under an underwriting agreement in usual and customary form, with the
managing underwriter(s) of such offering. Each Holder participating in
such underwriting will also enter into and perform its obligations under
such an agreement.
(vii) Notification. Notify each Holder of Registrable
Securities covered by such registration statement at any time when a
prospectus relating thereto is required to be delivered under the Act of
the happening of any event as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing and prepare and
file with the SEC a supplement or amendment to the registration statement
or prospectus so that, as subsequently delivered to the purchasers of the
Registrable Securities, the registration statement or prospectus will not
contain an untrue statement of material fact or omit to state any material
fact required to be stated in the registration statement or necessary to
make the statements therein not misleading in light of the circumstances
under which they were made; provided, that prior to the filing of the
supplement or amendment, the Company will furnish copies of the supplement
or amendment to the Holder, any underwriter and counsel to Holder and will
not file the supplement or amendment without the prior review of counsel
to Holder.
(viii) Inspection of Records. Make available for inspection by
each Holder of Registrable Securities, any managing underwriter
participating in any disposition provided for in the registration
statement, counsel to Holder and any attorney, accountant or other
appraiser retained by any Holder or any managing underwriter (each, an
"Inspector"), all financial and other records, pertinent corporate
documents and properties of the Company and any of its subsidiaries as may
be in existence at that time as will be reasonably necessary to enable
them to exercise their due diligence responsibility, and cause the
Company's and any subsidiaries' officers, directors and employees, and the
independent certified public accountants of the Company, to supply all
information reasonably requested by any Inspector in connection with the
registration statement.
19
(ix) Opinion, Comfort Letter and Closing Certificates.
Furnish, at the request of any Holder of Registrable Securities, on the
date that such Registrable Securities are delivered to the underwriters
for sale, (i) an opinion, dated as of such date, of the counsel
representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an underwritten
public offering and reasonably satisfactory to the Holder, addressed to
the underwriters and to the Holder, (ii) a "comfort" letter dated as of
such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public
offering and reasonably satisfactory to the Holder, addressed to the
underwriters and to the Holder, and (iii) officers' certificates and such
other customary closing documents.
(x) Listing on Securities Exchange. Use commercially
reasonable efforts to cause all Registrable Securities to be listed on
each securities exchange on which similar securities issued by the Company
are then listed, subject to the satisfaction of the applicable listing
requirements of the exchange.
(xi) Cooperation. Reasonably cooperate with any Holder of
Registrable Securities and each underwriter participating in the
disposition of any Registrable Securities and their respective counsel in
connection with any filings required to be made with any securities
exchange or automated quotation system.
(d) Restrictions on Public Sale by the Company. The Company agrees
not to effect any public sale or distribution of any of its securities for
its own account (except pursuant to registrations on Form S-4 or Form S-8
(or any successor form) under the Act) during the ten (10) business days
prior to, and during the ninety (90) day period (or such shorter period as
will be permitted by the managing underwriter or underwriters) beginning
on the effective date of any registration statement in which Holder is
participating under Section 9(b).
(e) Furnish Information. It will be a condition precedent to the
obligations of the Company to take any action pursuant to Section 9(b) or
(c) that the Holder will furnish to the Company such information regarding
itself, the Registrable Securities, and the intended method of disposition
of such securities as will be required to timely effect the Registration
of its Registrable Securities.
(f) Indemnification. In the event any Registrable Securities are
included in a registration statement under the Agreement:
(i) By the Company. To the extent permitted by law, the
Company will indemnify and hold harmless Holder, the partners, members,
officers, directors and employees of Holder, any underwriter (as
determined in the Act) for Holder and each person, if any, who controls
Holder or any such underwriter within the meaning of the Act or the
Exchange Act, against any losses, claims, damages, or liabilities (joint
or several) to which they may become subject under the Act, the Exchange
Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or
are based upon any of the following statements, omissions or violations
(collectively a "Violation"):
(A) any untrue statement or alleged untrue statement of
a material fact contained in such registration statement, including any
preliminary
20
prospectus or final prospectus contained therein or any amendments or
supplements thereto;
(B) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the
statements therein not misleading; or
(C) any violation or alleged violation by the Company of
the Act, the Exchange Act, any state or international securities law or
any rule or regulation promulgated under the Act, the Exchange Act or any
state or Swiss or European Union securities law in connection with the
offering covered by such registration statement;
and the Company will reimburse each such Holder, partner,
officer, director, employee underwriter or controlling person for any
legal or other expenses reasonably incurred by them, as incurred, in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement
contained in this Section 9(f) will not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company, nor will the
Company be liable in any such case for any such loss, claim, damage,
liability or action to the extent that it arises out of or is based upon a
Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such
registration by such Holder, partner, officer, director, underwriter or
controlling person of Holder.
(ii) By Holder. In connection with any registration under
which Holder intends to make a disposition of Registrable Securities, to
the extent permitted by law, Holder will indemnify and hold harmless the
Company, each of its directors, each of its officers or employees who have
signed the registration statement, each person, if any, who controls the
Company within the meaning of the Act, any underwriter any person who
controls the Company or any such underwriter within the meaning of the Act
or the Exchange Act, against any losses, claims, damages or liabilities
(joint or several) to which the Company or any such director, officer,
employee, controlling person, or underwriter may become subject under the
Act, the Exchange Act or other Swiss, European Union, federal or state
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each
case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by
Holder expressly for use in connection with such registration; and each
Holder will reimburse any legal or other expenses reasonably incurred by
the Company or any such director, officer, controlling person, underwriter
in connection with investigating or defending any such loss, claim,
damage, liability or action: provided, however, that the indemnity
agreement contained in this Section 9(f) will not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder and provided
further that the liability of Holder under this Section 9(f) will be
limited to the amount of the net proceeds received by Holder in the
offering giving rise to such liability.
(iii) Notice. Promptly after receipt by an indemnified party
under this Section 9(f) of notice of the commencement of any action
(including any governmental action), such indemnified party will, if a
claim in respect thereof is to be
21
made against any indemnifying party under this Section 9(f), deliver to
the indemnifying party a written notice of the commencement thereof and
the indemnifying party will have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an
indemnified party will have the right to retain its own counsel, with the
fees and expenses to be paid by the indemnifying party, if representation
of such indemnified party by the counsel retained by the indemnifying
party would be inappropriate due to actual or potential conflict of
interests between such indemnified party and any other party represented
by such counsel in such proceeding; provided that there may only be one
such counsel retained for all indemnified parties. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action will relieve such indemnifying party of
liability to the indemnified party under this Section 9(f) to the extent
the indemnifying party is prejudiced as a result thereof, but the omission
so to deliver written notice to the indemnified party will not relieve it
of any liability that it may have to any indemnified party otherwise than
under this Section 9(f).
(iv) Defect Eliminated in Final Prospectus. The foregoing
indemnity agreements of the Company and Holder are subject to the
condition that, insofar as they relate to any Violation made in a
preliminary prospectus but eliminated or remedied in the amended
prospectus on file with the SEC at the time the registration statement in
question becomes effective or the amended prospectus filed with the SEC
pursuant to SEC Rule 424(b) (the "Final Prospectus"), such indemnity
agreement will not inure to the benefit of any person if a copy of the
Final Prospectus was timely furnished to the indemnified party and was not
furnished to the person asserting the loss, liability, claim or damage at
or prior to the time such action is required by the Act.
(v) Contribution. In order to provide for just and equitable
contribution to joint liability under the Act in any case in which either
(i) Holder exercising rights under this Agreement, or any controlling
person of any Holder, makes a claim for indemnification pursuant to this
Section 9(f) but it is judicially determined (by the entry of a final
judgment or decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact
that this Section 9(f) provides for indemnification in such case, or (ii)
contribution under the Act may be required on the part of Holder or any
such controlling person in circumstances for which indemnification is
provided under this Section 9(f); then, and in each such case, the Company
and Holder will contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (after contribution from others)
in such proportion as is appropriate to reflect the relative fault of the
Company and Holder in connection with the actions, statements or omissions
that resulted in such losses, claims, damages or liabilities as well as
any other relevant equitable considerations; so that Holder is responsible
for the portion represented by the percentage that the public offering
price of its Registrable Securities offered by and sold under the
registration statement bears to the public offering price of all
securities offered by and sold under such registration statement;
provided, however, that, in any such case no person or entity guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) will be entitled to contribution from any person or entity who was
not guilty of such fraudulent
22
misrepresentation. The relative faults of the Company and Holder will be
determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact, was made
by, or relates to information supplied by the Company or Holder, and the
Company's and Holder's relative intent, knowledge, access to information
and opportunity to correct or prevent that action.
(vi) Survival. The obligations of the Company and Holder under
this Section 9(f) will survive until the second anniversary of the
completion of any offering of Registrable Securities in a registration
statement, regardless of the expiration of any statutes of limitation or
extensions of such statutes.
(g) Rule 144; Other Exemptions. For so long as the Company will have
a class of securities registered under Section 12(b) or Section 12(g) of
the Exchange Act, the Company covenants that it will file, on a timely
basis, any reports required to be filed by it under the Exchange Act and
the rules and regulations adopted by the SEC thereunder and keep all such
reports and public information current to the extent required by Rule 144
under the Act, and that it will take all further action as each Holder may
reasonably request (including providing and keeping current any
information necessary to comply with Rules 144 under the Act and providing
any written opinions of counsel to the Company reasonably requested), all
to the extent required from time to time to enable the Holder to sell
Registrable Securities without registration under the Act within the
limitation of the exemptions provided by (a) Rule 144 under the Act, as
the rules may be amended from time to time, or (b) any other rules or
regulations now existing or hereafter adopted by the SEC. At such time as
the Company will not have a class of securities registered under Section
12(b) or Section 12(g) of the Exchange Act, the Company covenants that it
will furnish or otherwise make available any information required for the
Holder to sell the Registrable Securities under Rule 144A. The Company
will, upon the request of any Holder, deliver to the Holder a written
certification of a duly authorized officer as to whether the Company has
complied with the requirements.
(h) Termination of the Company's Obligations. The Company will have
no obligations pursuant to Section 9 with respect to any Registrable
Securities proposed to be sold by a Holder in a registration pursuant to
Section 9: (i) if the Company has already effected two registration
pursuant to this Section 9 or (ii) if, in the opinion of counsel to the
Company, all such Registrable Securities proposed to be sold by Holder may
then be sold under Rule 144 which written opinion will be addressed and
delivered to the Company's transfer agent (and a copy of which will be
sent to Holder).
(i) Assignment of Registration Rights. Notwithstanding anything
herein to the contrary, the registration rights of the Investor under this
Section 9 may be assigned to any affiliate of the Investor, but may only
be assigned to any third party if (A) Holder agrees in writing with the
transferee or assignee to assign (x) greater than 50% of the Stock then
owned by the Investor to such transferee or assignee, and (y) all of
Holder's registration rights to the Registrable Securities are assigned to
a third party, and a copy of such agreement is furnished to the Company as
soon as reasonably practical after such assignment, (B) as soon as
reasonably practical after such assignment, the Company is furnished with
written notice of (i) the name and address of such transferee or assignee,
and (ii) amount of the securities that are being
23
transferred or assigned, (C) following such transfer or assignment the
further disposition of such securities by the transferee or assignee is
restricted under the Act and applicable state securities laws, and (D) at
or before the time the Company receives written notice contemplated by
clause (B) of this Section 9, the transferee or assignee agrees in writing
with the Company to be bound by all of the provisions of this Section 9.
10. Miscellaneous.
(a) Termination. This Agreement may, by notice given before or
immediately prior to the First Closing and subject to Section 10(b), be
terminated:
(i) Breach. By either the Company or the Investor if a
material breach of any provision of this Agreement or any Transaction
Document has been committed by the other party, which breach has not been
cured within fifteen (15) days or waived by the non-breaching party;
(ii) Material Adverse Effect. By either the Company or the
Investor if a Company Material Adverse Effect or an Investor Material
Adverse Effect, as the case may be, has occurred;
(iii) Conditions. By either party if satisfaction of any
condition in Section 7 is or becomes impossible (other than through the
failure of the terminating party to comply with its obligations under this
Agreement);
(iv) Mutual Consent. By the mutual consent of the Company and
the Investor; and
(v) First Closing. By either party if the First Closing has
not occurred (other than through the failure of the party seeking to
terminate this Agreement to comply fully with its obligations under this
Agreement) on or before December 31, 2000, or such later date as the
parties may agree.
If this Agreement is terminated pursuant to this Section 10, all
obligations of the parties under this Agreement will terminate, except that the
obligations in Sections 10 (e) and (n) will survive; provided, however, that if
this Agreement is terminated by a party because of the breach of a covenant
contained in this Agreement by the other party or because one or more of the
conditions to the terminating party's obligations under this Agreement is not
satisfied as a result of the other party's failure to comply with its covenants
under this Agreement, the terminating party's right to pursue legal remedies for
the recovery of its costs and expenses reasonably incurred in connection with
transactions contemplated by this Agreement and the other Transaction Documents
will survive such termination unimpaired, provided that in no event will either
party have a right to recover any incidental or consequential damages; provided,
however, that the foregoing clause of this sentence will not be deemed a waiver
by any party of any right to specific performance or injunctive relief, or any
right to remedy arising by reason of any claim of fraud with respect to this
Agreement.
24
(b) Notices. Any notice required or permitted hereunder will be
given in writing and will be deemed effectively given upon personal
delivery or two days after being sent by reputable international overnight
courier service, telegram or fax, addressed to the other party hereto at
his address hereinafter shown below its signature or at such other address
as such party may designate by ten (10) days' advance written notice to
the other party hereto, provided that confirmation of facsimile delivery
will be retained by the sender.
(c) Successors and Assigns. This Agreement will inure to the benefit
of the successors and assigns of the Company and, subject to the
restrictions on transfer herein set forth, be binding upon the Investor,
the Investor' successors, and assigns. A person that is a SAirGroup
Affiliate as defined in the Stockholder's Agreement may become a party to
this Agreement by executing a counterpart of this Agreement.
(d) Attorneys' Fees. The non-prevailing party will reimburse the
prevailing party for all costs incurred by the prevailing in enforcing the
performance of, or protecting its rights under, any part of this
Agreement, including reasonable costs of investigation and attorneys'
fees.
(e) Xxxx-Xxxxx-Xxxxxx Filing Fees. The Investor will be responsible
for paying the filing fees for the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act Notification and Report Form (the "HSR Form") with the
Federal Trade Commission (the "FTC") and the Investor will reimburse the
Company for any fees payable to FTC in connection with filing the HSR
Form.
(f) Dispute Resolution.
(i) Any controversy or claim arising out of or relating to
this Agreement, or breach thereof, whether arising in tort, contract or
otherwise, shall be settled in accordance with the following procedures:
(A) The parties, on written notice of a controversy or
claim given by one party to the other, shall first consult and negotiate
with each other in good faith and, recognizing their mutual interests,
attempt to reach an equitable solution.
(B) If the parties are unable to reach such a solution
within a period of 30 days from the date of the receipt of a written
notice of the controversy or claim given by the party requesting good
faith negotiations, the controversy or claim shall be referred to the
chief executive officer of each party (each, a "Chief Executive Officer").
The respective Chief Executive Officers shall negotiate with each other in
good faith and, recognizing their mutual interests, attempt to reach an
equitable solution.
(C) If the respective Chief Executive Officers are
unable to reach such a solution within a period of 30 days from the
referral of such controversy or claim, an independent mediator chosen by
both the Company and the Investor shall attempt to resolve such
controversy or claim.
(D) If the parties are unable to mutually agree upon a
mediator, then the mediator shall be appointed by the American Arbitration
25
Association in the New York, New York metropolitan area ("AAA") in
accordance with then-current commercial rules of mediation thereof.
(E) If such controversy or claim cannot be resolved by
mediation within sixty (60) days after the party raising the controversy
or claim first notifies the other party thereof in writing, then the
controversy or claim shall be submitted to AAA for binding arbitration, to
be held in the New York, New York metropolitan area, in accordance with
the then-current commercial rules of arbitration of AAA.
(ii) The award from any binding arbitration shall be binding
upon the parties and their successors and permitted assigns, whether or
not any party fails or refuses to participate therein, and judgment upon
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof.
(iii) The arbitrator shall have the power to issue injunctions
and otherwise to grant equitable relief, and shall award legal fees and
costs (including fees and costs incurred by AAA and by the arbitrator) to
the prevailing party. The arbitrator shall not have the power to award
punitive, exemplary or indirect damages.
(iv) Except as may be otherwise ordered by the arbitrator in
accordance with Section 10(f)(iii), each party shall bear its own costs
and expenses in connection with any proceeding commenced under this
Section 10(f), including legal fees and disbursements, travel expenses,
witness fees and costs, photocopying and other preparation expenses. The
costs and other fees charged by the independent mediator or AAA, whether
in connection with a mediation and/or arbitration, shall be shared equally
by the parties.
(g) Governing Law. This Agreement will be governed by and construed
in accordance with the laws of the State of Delaware
(h) Further Execution. The parties agree to take all such further
action(s) as may reasonably be necessary to carry out and consummate this
Agreement as soon as practicable, and to take whatever steps may be
necessary to obtain any governmental approval in connection with or
otherwise qualify the issuance of the securities that are the subject of
this Agreement.
(i) Entire Agreement; Amendment. This Agreement and the other
Transaction Documents constitute the entire agreement between the parties
with respect to the subject matter hereof and supersedes and merges all
prior agreements or understandings, whether written or oral, other than
(a) the Confidential Declaration, dated October 29, 1999, between the
Company and SRT and (b) the Letter Amendment to Confidential Declaration,
dated February 10, 2000, between the Company and SRT. This Agreement may
not be amended, modified or revoked, in whole or in part, except by an
agreement in writing signed by each of the parties hereto.
(j) Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith. In the event that the parties
cannot reach a mutually agreeable and enforceable replacement for such
provision, the (i) such provision will be excluded from this Agreement,
(ii) the balance of the Agreement will be interpreted as if such
26
provision were so excluded and (iii) the balance of the Agreement will be
enforceable in accordance with its terms.
(k) Waiver. The rights and remedies of the parties to this Agreement
are cumulative and not alternative. Neither any failure nor any delay by
any party in exercising any right, power, or privilege under this
Agreement or any of the documents referred to in this Agreement will
operate as a waiver of such right, power, or privilege, and no single or
partial exercise of any such right, power, or privilege will preclude any
other or further exercise of such right, power, or privilege or the
exercise of any other right, power, or privilege. To the maximum extent
permitted by applicable law, (a) no claim or right arising out of this
Agreement or any of the documents referred to in this Agreement can be
discharged by one party, in whole or in part, by a waiver or renunciation
of the claim or right unless in writing signed by the other party,
provided that if prior to the First Closing any party has actual knowledge
of a breach of any representation or warranty and such Party fails to
terminate this Agreement pursuant to Section 10(a) such actual knowledge
will act as an express waiver of such breach; (b) no waiver that may be
given by a party will be applicable except in the specific instance for
which it is given; and (c) no notice to or demand on one party will be
deemed to be a waiver of any obligation of that party or of the right of
the party giving such notice or demand to take further action without
notice or demand as provided in this Agreement or the documents referred
to in this Agreement.
(j) Survival. The representations and warranties in Sections 4, 5
and 6 will survive for one year from the First Closing with respect to
representations and warranties made with respect to the Stock and one year
from the Second Closing with respect to representations and warranties
made with respect to the Additional Stock.
(m) Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original and all of which
together will constitute one instrument.
(n) Public Announcements. Any public announcement or similar
publicity with respect to this Agreement will be issued, if at all, at
such time and in such manner as the Company and the Investor mutually
determine. The Investor will not and will not permit any of its
representatives to make any disclosure of this Agreement to any Person,
except with the prior written consent of the Company or as required by
Legal Requirements, and the Investor, Flightlease, SRT and SRT Group
America understand and acknowledge that this Agreement will be filed by
the Company as a public document with the Securities and Exchange
Commission. The Company will not and will not permit any of its
representatives to make any disclosure of this Agreement to any Person,
except with the prior written consent of the Investor or as required by
Legal Requirements.
[INTENTIONALLY LEFT BLANK]
27
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
XXXXXX LEASE FINANCE CORPORATION
By: /s/ XXXXXXX X. XXXXXX, XX
-------------------------
Xxxxxxx X. Xxxxxx, XX
Chief Executive
Officer and President
Address: 0000 Xxxxxxxxx Xxx,
Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, XX
Fax: 000-000-0000
FLIGHTTECHNICS, LLC
By: /s/ HANS XXXX XXXXXXXX
-------------------------
Hans Xxxx Xxxxxxxx
President
By: /s/ XXXX XXXXXX BEYELER
-------------------------
Xxxx Xxxxxx Xxxxxxx
Vice President
Address: c/o Flightlease AG
28
SR TECHNICS GROUP
By: /s/ XXXX XXXXXX BEYELER
-------------------------
Xxxx Xxxxxx Xxxxxxx
President and CEO
Address: TB
CH- 8058 Zurich Airport
Attn: Xxxx Xxxxxx Beyeler
Fax: 41-1-812 9100
By: /s/ GEORG RADON
-------------------------
Georg Radon
Vice President and CFO
FLIGHTLEASE AG
By: /s/ HANS XXXX XXXXXXXX
-------------------------
Hans Xxxx Xxxxxxxx
President and CEO
Address: DY
XX-0000 Xxxxxx Airport
Attn: Hans Xxxx Xxxxxxxx
Fax: 41-1-812 9813
By: /s/ XXXXXXXX XXXXXXX
-------------------------
Xxxxxxxx Xxxxxxx
Head of Business Development
29
SR TECHNICS GROUP AMERICA, INC.
By: /s/ XXXX XXXXXX BEYELER
--------------------------
Xxxx Xxxxxx Xxxxxxx
President and CEO
By: /s/ GEORG RADON
--------------------------
Georg Radon
Vice President and CFO
Address: c/o SR Technics Group
30
