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EXHIBIT 10.88
AMENDED AND RESTATED ASSET PURCHASE AGREEMENT
between
AMERICAN AIRLINES, INC.,
as Purchaser,
and
TRANS WORLD AIRLINES, INC.,
as Seller
February 28, 2001
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS....................................................................1
1.1 Definitions...........................................................................1
1.2 Disclosure Schedules..................................................................1
ARTICLE II PURCHASE OF ASSETS.............................................................2
2.1 Purchase and Sale of Transferred Assets...............................................2
2.2 Excluded Assets.......................................................................2
ARTICLE III ASSUMPTION OF LIABILITIES......................................................2
3.1 Assumed Liabilities...................................................................2
3.2 Retained Liabilities..................................................................3
ARTICLE IV PURCHASE PRICE.................................................................5
4.1 Purchase Price........................................................................5
4.2 Allocation of Purchase Price..........................................................5
4.3 Working Capital Adjustment............................................................5
4.4 Other Adjustments to Purchase Price...................................................8
4.5 Prorations............................................................................9
4.6 Transfer Taxes........................................................................9
4.7 Offsets to Purchase Price............................................................10
4.8 Holdbacks to Purchase Price..........................................................10
ARTICLE V CLOSING.......................................................................10
5.1 Closing..............................................................................10
5.2 Deliveries at Closing................................................................10
5.3 Delivery of Transferred Assets.......................................................11
5.4 Conditions Precedent to Obligations of Purchaser.....................................12
5.5 Conditions Precedent to Obligations of TWA...........................................15
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF SELLERS.....................................16
6.1 Organization and Good Standing.......................................................16
6.2 Authorization and Effect of Agreement................................................16
6.3 No Conflicts.........................................................................17
6.4 No Third Party Options...............................................................17
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6.5 Data.................................................................................18
6.6 Consents and Approvals...............................................................18
6.7 Permits; Compliance with Law.........................................................18
6.8 Litigation...........................................................................18
6.9 Title to and Condition of Assets.....................................................18
6.10 U.S. Citizen; Air Carrier............................................................19
6.11 Assumed Contracts....................................................................19
6.12 Aircraft; Engines and Spare Parts....................................................19
6.13 Slots................................................................................21
6.14 No Casualty..........................................................................22
6.15 Insurance............................................................................22
6.16 Gates; Gate Property and Ground Equipment............................................22
6.17 Environmental Matters................................................................23
6.18 Taxes................................................................................25
6.19 Labor Matters........................................................................26
6.20 Employee Matters.....................................................................27
6.21 Routes...............................................................................28
6.22 Intellectual Property................................................................28
6.23 Worldspan............................................................................29
6.24 Real Property........................................................................29
6.25 Disclosure...........................................................................31
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF PURCHASER...................................31
7.1 Corporate Organization...............................................................31
7.2 Authorization and Effect of Agreement................................................31
7.3 No Conflicts.........................................................................31
7.4 Litigation...........................................................................32
ARTICLE VIII PRE-CLOSING COVENANTS.........................................................32
8.1 Access...............................................................................32
8.2 Conduct of Business..................................................................33
8.3 Notification.........................................................................34
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8.4 No Inconsistent Action...............................................................35
8.5 Satisfaction of Conditions...........................................................35
8.6 Filings..............................................................................35
8.7 All Reasonable Efforts...............................................................35
8.8 Further Assurances...................................................................36
8.9 Publicity............................................................................36
8.10 [Intentionally Omitted]..............................................................36
8.11 Bankruptcy Court Approval............................................................36
8.12 Specific Enforcement of Covenants....................................................39
8.13 Other Agreements.....................................................................40
8.14 [Intentionally Omitted]..............................................................40
8.15 Aircraft Inspection Rights...........................................................40
8.16 Designations.........................................................................40
8.17 Marketing Agreements.................................................................41
ARTICLE IX POST-CLOSING COVENANTS........................................................41
9.1 Maintenance of Books and Records.....................................................41
9.2 Right of Subrogation.................................................................41
9.3 Confidentiality......................................................................41
9.4 Post-Closing Assignments.............................................................42
9.5 Transition Agreements................................................................43
9.6 Property Tax Payments................................................................43
9.7 Frequent Flyer Programs..............................................................43
9.8 Access to Information................................................................44
ARTICLE X EMPLOYEE MATTERS..............................................................44
10.1 Hiring Obligations...................................................................44
10.2 Union Matters........................................................................45
10.3 Treatment of Pension Plans...........................................................45
10.4 Treatment of Welfare Plans...........................................................45
10.5 Tax Reporting........................................................................46
ARTICLE XI RISK OF LOSS..................................................................46
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11.1 Risk of Loss on Sellers..............................................................46
ARTICLE XII FURTHER AGREEMENTS AND TERMINATION............................................46
12.1 Termination Payment..................................................................46
12.2 Bankruptcy Termination Payment.......................................................47
12.3 Termination..........................................................................47
12.4 Procedure and Effect of Termination..................................................49
ARTICLE XIII MISCELLANEOUS PROVISIONS......................................................49
13.1 Notices..............................................................................49
13.2 Actions by Sellers...................................................................51
13.3 Expenses.............................................................................51
13.4 Successors and Assigns...............................................................51
13.5 Waiver...............................................................................51
13.6 Entire Agreement; Disclosure Schedules...............................................51
13.7 Amendments, Supplements, Etc.........................................................52
13.8 Rights of the Parties................................................................52
13.9 Applicable Law.......................................................................52
13.10 Execution in Counterparts............................................................52
13.11 Titles and Headings..................................................................52
13.12 Invalid Provisions...................................................................52
13.13 Transfers............................................................................52
13.14 Brokers..............................................................................52
13.15 Exculpation..........................................................................53
13.16 Principles of Interpretation.........................................................53
Exhibits
Exhibit A - Definitions
Exhibit B - Sale Procedures Order
Exhibit C - Approval Order
Exhibit D - Retention Agreements
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EXHIBIT 10.88
AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
This Amended and Restated Asset Purchase Agreement (this "Agreement")
is made and entered into as of February 28, 2001, by and between American
Airlines, Inc., a Delaware corporation ("Purchaser"), and Trans World Airlines,
Inc., a Delaware corporation and debtor-in-possession under Chapter 11 Case No.
01-56 (SLR), jointly administrated, in the United States Bankruptcy Court for
the District of Delaware ("TWA").
RECITALS
WHEREAS, TWA and its direct and indirect subsidiaries (other than Royal
Ambassador Insurance Company, a Vermont insurance company, and Trans World PARS,
Inc., a Delaware corporation) are referred to herein collectively as "Sellers,"
and each is referred to herein individually as a "Seller";
WHEREAS, Purchaser and TWA are parties to that certain Asset Purchase
Agreement, dated as of January 9, 2001 (the "Original Agreement");
WHEREAS, Section 13.7 of the Original Agreement provides that the
Original Agreement may be amended or supplemented at any time as may mutually be
determined by Purchaser and TWA to be necessary, desirable or expedient to
further the purposes of the Original Agreement or to clarify the intention of
the parties thereto; and
WHEREAS, each of Purchaser and TWA has determined that it is desirable
to amend the Original Agreement as set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Purchaser and TWA hereby agree that the Original Agreement be
amended and restated in its entirety as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement, unless the context
otherwise requires, capitalized terms used in this Agreement shall have the
meanings set forth in Exhibit A hereto.
1.2 Disclosure Schedules. References to "Schedules" shall mean the
Schedule of Exceptions (and any schedules, exhibits or attachments thereto)
delivered by Purchaser or TWA that are specifically made part of this Agreement.
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ARTICLE II
PURCHASE OF ASSETS
2.1 Purchase and Sale of Transferred Assets. On the terms and subject
to the conditions set forth herein, at the Closing as described in Article V,
TWA shall, and shall cause each other Seller to, sell, transfer, convey, assign
and deliver, and Purchaser shall purchase and accept, all of each such Seller's
right, title and interest in and to all such Seller's rights, properties and
assets, wherever located, including, without limitation, (i) all personal and
real property, (ii) all general intangibles and intangible property, including
without limitation all Intellectual Property and goodwill, (iii) all equipment,
furniture and fixtures, (iv) all accounts, accounts receivable and rights to
payment, (v) claims and interests in litigation listed on Schedule 2.1(v) (which
shall exclude all Avoidance Actions), (vi) all existing and future instruments,
chattel paper, documents of title, contracts, agreements, licenses, grants and
rights, (vii) all securities, whether certificated or uncertificated, including,
without limitation, either the capital stock of TWA Stock Holding, Inc. or the
interests in Worldspan L.P., a Delaware limited partnership ("Worldspan") (at
Purchaser's option; provided that Purchaser is the successful bidder of both the
Transferred Assets and the Worldspan interest), but excluding the capital stock
of any Seller other than TWA Stock Holding, Inc., (viii) all security
entitlements, securities accounts, commodity contracts and commodity accounts,
(ix) any and all existing and assignable manufacturer or vendor warranties,
service life policies, customer support agreements and similar items (or to the
extent such items are not assignable, subrogation rights to such items), (x) all
proceeds and products of the foregoing, and (xi) all books and records relating
to the foregoing, in each case of clauses (i) through (xi) above, together with
all substitutions therefor and all accessions, replacements and renewals thereof
(collectively, the "Transferred Assets"), free and clear of all Liens except
Permitted Liens.
2.2 Excluded Assets. Notwithstanding anything contained in this
Agreement to the contrary, the rights, properties and assets identified on
Schedule 2.2 hereto (collectively, the "Excluded Assets") shall not be included
in the Transferred Assets.
ARTICLE III
ASSUMPTION OF LIABILITIES
3.1 Assumed Liabilities. As of the Closing, Purchaser shall assume and
thereafter in due course pay and fully satisfy the following liabilities and
obligations of Seller (the "Assumed Liabilities") and no other liabilities or
obligations:
(a) all liabilities and obligations of any Seller arising from
and after the Closing pursuant to the terms of the indebtedness of Sellers
listed on Schedule 3.1(a) (the "Assumed Debt Obligations");
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(b) all liabilities and obligations of any Seller arising from
and after the Closing under any Assumed Contract (other than Retention
Agreements, which are addressed in Section 3.1(d) below);
(c) all liabilities and obligations of any Seller arising at
any time under the indebtedness and other liabilities of Sellers listed on
Schedule 3.1(c);
(d) all liabilities and obligations of any Seller under the
Retention Agreements; provided, however, that, notwithstanding the foregoing or
any other provision in this Agreement to the contrary, Purchaser shall not
assume any obligation under the Retention Agreements in excess of $14,000,000 in
the aggregate unless Purchaser has requested in writing to TWA that it wishes to
expand such Retention Agreements in scope and amount;
(e) in order to retain directors of TWA, the liabilities and
obligations of TWA to provide the air travel benefits described on Schedule
3.1(e) from and after the Closing;
(f) liabilities and obligations of TWA incurred as a result of
a violation by Purchaser of Section 8.16;
(g) liabilities and obligations of TWA to honor vouchers
issued by TWA solely to passengers who were denied boarding or who voluntarily
relinquished seats on scheduled flights due to overbooking; and
(h) liabilities and obligations of any Seller arising directly
out of those proceedings set forth on Schedule 2.1(v).
Except as set forth above, Purchaser shall not assume or be liable for any other
obligations or liabilities of Sellers (including, without limitation, any cure
amounts payable to other parties to the Assumed Contracts).
3.2 Retained Liabilities. Notwithstanding anything contained in this
Agreement to the contrary, Purchaser does not assume or agree to pay, satisfy,
discharge or perform, and shall not be deemed by virtue of the execution and
delivery of this Agreement or any document delivered at the Closing pursuant to
this Agreement, or as a result of the consummation of the transactions
contemplated by this Agreement, to have assumed, or to have agreed to pay,
satisfy, discharge or perform, any liability, obligation or indebtedness of any
Seller, whether primary or secondary, direct or indirect, other than the Assumed
Liabilities. Sellers shall retain and pay, satisfy, discharge and perform in
accordance with the terms thereof, all liabilities and obligations other than
the Assumed Liabilities to the extent specifically provided in Section 3.1,
including without limitation those set forth below (all such liabilities and
obligations retained by Seller being referred to herein as the "Retained
Liabilities"):
(a) all obligations or liabilities of Sellers or any
predecessor(s) or Affiliate(s) of Sellers that relate to any of the Excluded
Assets;
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(b) all obligations or liabilities of Sellers or any
predecessor(s) or Affiliate(s) of Sellers relating to Taxes with respect to the
Transferred Assets or otherwise, for all periods, or portions thereof, on or
prior to the Closing Date;
(c) all obligations or liabilities for any legal, accounting,
investment banking, brokerage or similar fees or expenses incurred by any Seller
in connection with, resulting from or attributable to the transactions
contemplated by this Agreement and the DIP Facility;
(d) liabilities and obligations for which Purchaser assumes no
obligation or liability as described in Section 3.1(d);
(e) all obligations or liabilities for any borrowed money
incurred by any Seller or any predecessor(s) or Affiliate(s) of Sellers;
(f) all obligations of Sellers related to the right to or
issuance of any capital stock or other equity interest of any Seller, including,
without limitation, any stock options or warrants;
(g) all obligations or liabilities of Sellers to the FAA for
any fines and penalties;
(h) all obligations or liabilities of Sellers to provide air
travel or related services pursuant to any flight travel privileges, awards or
certificates or any similar agreements, arrangements or understandings (whether
written or oral), other than as expressly set forth in Section 3.1(g); and
(i) all liabilities and obligations of Sellers or any
predecessor(s) or Affiliate(s) of Sellers resulting from, caused by or arising
out of, directly or indirectly, the conduct of their respective businesses or
ownership or lease of any of their properties or assets or any properties or
assets previously used by any Seller at any time prior to or on the Closing
Date, including without limitation such of the foregoing (i) as constitute, may
constitute or are alleged to constitute a tort, breach of contract or violation
of requirement of any Law, (ii) that relate to, result in or arise out of the
existence or imposition of any liability or obligation to remediate or
contribute or otherwise pay any amount under or in respect of any environmental,
superfund or other environmental cleanup or remedial Laws, occupational safety
and health Laws or other Laws or (iii) that relate to any and all claims,
disputes, demands, actions, liabilities, damages, suits in equity,
administrative proceedings, accounts, costs, expenses, setoffs, contributions,
attorneys' fees and/or causes of action of whatever kind or character against
any Seller or any predecessor(s) or Affiliate(s) of Sellers, whether past,
present, future, known or unknown, liquidated or unliquidated, accrued or
unaccrued.
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ARTICLE IV
PURCHASE PRICE
4.1 Purchase Price. In consideration of the conveyance to Purchaser of
each Seller's right, title and interest in and to the Transferred Assets and the
other rights granted to Purchaser pursuant hereto, and subject to the conditions
and in accordance with terms hereof, at Closing, Purchaser shall (i) assume the
Assumed Liabilities and (ii) pay TWA an aggregate of $500,000,000 in cash,
subject to adjustments as provided in Section 4.3 and Section 4.4 (clauses (i)
and (ii), together in the aggregate, are referred to as the "Purchase Price"),
any offsets to the Purchase Price pursuant to Section 4.7 and any holdbacks of
the Purchase Price pursuant to Section 4.8.
4.2 Allocation of Purchase Price. Purchaser shall, within 120 days
after the Closing Date, prepare and deliver to TWA for its consent (which
consent shall not be unreasonably withheld) a schedule allocating the Purchase
Price among the Transferred Assets in accordance with Treasury Regulation
1.1060-1T (or any comparable provisions of state or local tax law) or any
successor provision. If TWA raises objections, Purchaser and TWA will negotiate
in good faith to resolve such objections. Purchaser, TWA and each other Seller
shall report and file all Tax Returns (including amended Tax Returns and claims
for refund) consistent with the allocation, and shall take no position contrary
thereto or inconsistent therewith (including, without limitation, in any audits
or examinations by any taxing authority or any other proceedings). Purchaser,
TWA and each other Seller shall cooperate in the filing of any forms (including
Form 8594) with respect to such allocation, including any amendments to such
forms required with respect to any adjustment to the Purchase Price, pursuant to
this Agreement. If and to the extent the parties are unable to agree on such
allocation, each shall be free to make its own allocation for tax purposes.
Notwithstanding any other provisions of this Agreement, the foregoing agreement
shall survive the Closing Date without limitation.
4.3 Working Capital Adjustment.
(a) Prior to Closing, Purchaser shall prepare and deliver to
TWA in accordance with Section 13.1 an estimated statement of certain working
capital accounts of TWA as of the Closing Date in the format of Schedule 4.3(a)
hereto (the "Pre-Closing Statement"). The Pre-Closing Statement shall be
prepared by Purchaser in good faith on a basis consistent in all material
respects with the methods, principles, practices and policies employed in the
preparation and presentation of the consolidated balance sheet of TWA and its
subsidiaries as of September 30, 2000 as included in TWA's quarterly report on
Form 10-Q for the quarter ended September 30, 2000, as filed with the Securities
and Exchange Commission (the "September Balance Sheet"), and in accordance with
generally accepted accounting principles consistently applied (without regard to
consummation of the transactions contemplated by this Agreement or the Chapter
11 Cases).
(b) Based on the Pre-Closing Statement, the Purchase Price
shall be adjusted immediately prior to Closing as follows:
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(i) the Purchase Price shall be (A) increased by 100%
of the amount, if any, by which the Accounts Receivable Amount is
greater than $245,732,000 or (B) decreased by 100% of the amount, if
any, by which the Accounts Receivable Amount is less than $245,732,000;
(ii) the Purchase Price shall be (A) increased by 50%
of the amount, if any, by which the Spare Parts Amount is greater than
$106,333,000 or (B) decreased by 50% of the amount, if any, by which
the Spare Parts Amount is less than $106,333,000;
(iii) the Purchase Price shall be (A) increased by
100% of the amount, if any, by which the Advance Ticket Sales Amount is
less than $304,647,000 or (B) decreased by 100% of the amount, if any,
by which the Advance Ticket Sales Amount is greater than $304,647,000;
and
(iv) the Purchase Price shall be (A) increased by
100% of the amount, if any, by which the Accrued Employee Expenses
Amount is less than $145,206,000 or (B) decreased by 100% of the
amount, if any, by which the Accrued Employee Expenses Amount is
greater than $145,206,000.
(c) Within 45 Business Days after Closing, Purchaser shall
prepare and deliver to TWA in accordance with Section 13.1 a statement of
certain working capital accounts of TWA as of the Closing Date in the format of
Schedule 4.3(a) hereto (the "Closing Statement"). The Closing Statement shall be
prepared by Purchaser in good faith on a basis consistent in all material
respects with the methods, principles, practices and policies employed in the
preparation and presentation of the September Balance Sheet, and in accordance
with generally accepted accounting principles consistently applied (without
regard to consummation of the transactions contemplated by this Agreement).
(d) After receipt of the Closing Statement, TWA shall have 10
Business Days to review it together with the work papers used in the preparation
thereof. Unless TWA delivers written notice to Purchaser on or prior to the 10th
Business Day after TWA's receipt of the Closing Statement stating that it has
objections thereto, TWA shall be deemed to have accepted and agreed to the
Closing Statement. TWA shall not object to any method, principle, practice or
policy employed in the preparation of the Closing Statement if such method,
principle, practice or policy is consistent in all material respects with that
employed in the preparation and presentation of the September Balance Sheet. If,
however, TWA notifies Purchaser of objections to the Closing Statement on or
prior to the 10th Business Day after TWA's receipt of the Closing Statement, the
parties shall in good faith attempt to resolve, within 10 Business Days (or such
longer period as the parties may agree in writing) following such notice (the
"Resolution Period"), their differences with respect to such objections and any
resolution by them as to any disputed amounts shall be final, binding and
conclusive.
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(e) Amounts relating to any working capital account set forth
in the Closing Statement remaining in dispute at the conclusion of the
Resolution Period shall be promptly submitted to the Bankruptcy Court for
determination.
(f) Once the Closing Statement has been finalized in
accordance with this Section 4.3 (as so finalized, the "Final Closing
Statement"), the Purchase Price (without giving effect to the adjustment
provided by Section 4.3(b)) shall be adjusted as follows:
(i) the Purchase Price shall be (A) increased by 100%
of the amount, if any, by which the Accounts Receivable Amount is
greater than $245,732,000 or (B) decreased by 100% of the amount, if
any, by which the Accounts Receivable Amount is less than $245,732,000;
(ii) the Purchase Price shall be (A) increased by 50%
of the amount, if any, by which the Spare Parts Amount is greater than
$106,333,000 or (B) decreased by 50% of the amount, if any, by which
the Spare Parts Amount is less than $106,333,000;
(iii) the Purchase Price shall be (A) increased by
100% of the amount, if any, by which the Advance Ticket Sales Amount is
less than $304,647,000 or (B) decreased by 100% of the amount, if any,
by which the Advance Ticket Sales Amount is greater than $304,647,000;
and
(iv) the Purchase Price shall be (A) increased by
100% of the amount, if any, by which the Accrued Employee Expenses
Amount is less than $145,206,000 or (B) decreased by 100% of the
amount, if any, by which the Accrued Employee Expenses Amount is
greater than $145,206,000.
(g) If the Purchase Price as adjusted pursuant to Section
4.3(f) is less than the Purchase Price as adjusted pursuant to Section 4.3(b),
TWA shall promptly pay Purchaser an amount of cash equal to the difference
obtained by subtracting the Purchase Price as adjusted pursuant to Section
4.3(f) from the Purchase Price as adjusted pursuant to Section 4.3(b). If the
Purchase Price as adjusted pursuant to Section 4.3(f) is greater than the
Purchase Price as adjusted pursuant to Section 4.3(b), Purchaser shall promptly
pay TWA an amount of cash equal to the difference obtained by subtracting the
Purchase Price as adjusted pursuant to Section 4.3(b) from the Purchase Price as
adjusted pursuant to Section 4.3(f).
(h) During the preparation of the Pre-Closing Statement and
Closing Statement and the period of any review or dispute within the
contemplation of this Section 4.3, TWA shall, and shall cause the other Sellers
and all representatives of the Sellers (including, without limitation, TWA's
auditors) to, (i) provide Purchaser and its authorized representatives with full
access at all reasonable times, and in a manner so as not to interfere
unreasonably with the normal business operations of TWA and the other Sellers,
to all relevant books, records, work papers, information and employees of such
Persons, and (ii) cooperate fully with the Purchaser and its authorized
representatives, in
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each case (i) and (ii), as necessary or useful for the preparation, calculation
and review of the Pre-Closing Statement and Closing Statement or for the
contemplated resolution of any dispute between the parties relating thereto.
(i) Notwithstanding anything in this Section 4.3 to the
contrary, no adjustment to the Purchase Price shall be made unless and until the
aggregate adjustment to the Purchase Price that would otherwise be required by
this Section 4.3 shall equal or exceed $5,000,000, in which case the full amount
of such adjustment shall be made to the Purchase Price pursuant to this Section
4.3 without regard to this paragraph (i).
4.4 Other Adjustments to Purchase Price.
(a) In the event that, as a result of the operation of Section
11.1 or upon mutual agreement of the parties, any Transferred Asset that would
be otherwise purchased at the Closing is not purchased at the Closing (or in the
event that any tangible Transferred Asset has been damaged as described in
Section 11.1, but such damage has not been fully repaired), then the Purchase
Price shall be reduced by the portion of the Purchase Price allocable to such
Transferred Asset in a manner consistent with Schedule 4.4 (or, in the case of
such damaged asset, by the amount necessary to fully repair such damaged asset)
except as otherwise set forth in paragraphs (b), (c), (d) and (e) below.
(b) With respect to each Owned Aircraft, the portion of the
Purchase Price allocated to each such item (and accordingly, the Purchase Price
as a whole) shall be adjusted as follows:
(i) reduced by the amount such Owned Aircraft has
depreciated, determined as set forth on Schedule 4.4, from the date of
the Original Agreement until the date of delivery of such Owned
Aircraft;
(ii) if any Owned Aircraft is not in Delivery
Condition as of the Closing Date, reduced by an amount equal to the
product obtained by multiplying the number of Owned Aircraft that are
not in Delivery Condition as of the Closing Date by $50,000; and
(iii) for each Owned Aircraft that is not to be
transferred to Purchaser at the Closing for any reason, reduced by an
amount consistent with the allocations as set forth on Schedule 4.4.
(c) With respect to each Leased Aircraft, the portion of the
Purchase Price allocated to each such item (and accordingly, the Purchase Price
as a whole) shall be adjusted as follows:
(i) if any Leased Aircraft is not in Delivery
Condition as of the Closing Date, reduced by an amount equal to the
product obtained by multiplying the number of Leased Aircraft that are
not in Delivery Condition as of the Closing Date by $50,000; and
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(ii) for each Leased Aircraft that is not to be
transferred to Purchaser at the Closing for any reason, reduced by an
amount consistent with the allocations as set forth on Schedule 4.4.
(d) With respect to any Slot, Gate, Gate Lease, Ground
Equipment, Ground Equipment Lease, Gate Property, Gate Property Lease, Engine,
Spare Part or any other Transferred Asset that is not to be transferred to
Purchaser at the Closing for any reason, the portion of the Purchase Price
allocated to each such item (and accordingly, the Purchase Price as a whole)
shall be reduced by an amount consistent with the allocations as set forth on
Schedule 4.4 or as mutually agreed by the parties hereto if not specifically
included thereon.
(e) With respect to Aircraft Leases and Gate Leases listed on
Schedule 2.2, all fees, costs, penalties and expenses incurred by Seller as a
result of a breach by Purchaser of Section 8.16 shall be reimbursed by Purchaser
to Seller and the Purchase Price shall be increased by such amount.
(f) In accordance with the Sale Procedures Order, if Purchaser
is the prevailing bidder for Transferred Assets but not for the Worldspan
interest, the Purchase Price shall be reduced by $200,000,000.00.
4.5 Prorations. TWA shall bear all personal property and ad valorem tax
liability with respect to the Transferred Assets if the lien or assessment date
arises prior to the Closing Date irrespective of the reporting and payment dates
of such taxes. All other property taxes, ad valorem taxes and similar recurring
taxes and fees on the Transferred Assets, and all lease payments or similar
recurring payments under lease agreements that are Assumed Contracts, shall be
pro rated between Purchaser and the applicable Seller as of 12:01 a.m. local
time on the Closing Date. All payments to be made by Purchaser or any Seller in
accordance with this Section 4.5 shall be made, to the extent then determinable,
at the Closing with such payments deposited into escrow until due, or, to the
extent not determinable as of the Closing, promptly following the determination
thereof, with such payments deposited into escrow until due. Purchaser shall
have the right of reasonable review and approval of TWA's property tax returns
and assessments and the right to contest any assessment for which Purchaser
bears any economic responsibility. TWA shall reasonably cooperate with Purchaser
to advance any contest.
4.6 Transfer Taxes. Any sales, use, transfer, recording or similar
taxes due as a result of the transactions provided for herein shall be paid (i)
with respect to real property, pro rata by Sellers and Purchaser based on the
relative value of real property transferred to Purchaser pursuant to this
Agreement and (ii) with respect to personal property, by Sellers.
Notwithstanding the foregoing, the Approval Order shall contain a provision that
the Sellers' sale, transfer, assignment and conveyance of the Transferred Assets
to Purchaser hereunder shall be entitled to the protections afforded under
Section 1146(c) of the Bankruptcy Code. The parties will reasonably cooperate to
minimize any such taxes, including with respect to delivery location.
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4.7 Offsets to Purchase Price. The Purchase Price payable by Purchaser
to Sellers at the Closing shall be offset by crediting Purchaser with the
following amounts (collectively, the "Purchase Price Offset Amount"):
(a) total aggregate principal, interest, fees and other
amounts outstanding and payable to Purchaser under the DIP Facility as of the
Closing Date;
(b) TWA's payment obligation to Purchaser under Section 8.6;
and
(c) all other amounts owed by Sellers to Purchaser under this
Agreement that are unpaid and outstanding as of the Closing Date.
4.8 Holdbacks to Purchase Price. The amount of any personal property,
excise, ad valorem, sales, use, transfer, recording or similar tax liability, or
any other taxes required to be withheld by any taxing jurisdiction, relating to
a Transferred Asset that are (i) not dischargeable in the Chapter 11 Cases and
(ii) attributable to Sellers pursuant to Section 4.5 and Section 4.6 and unpaid
or not yet due and payable shall be estimated in good faith by Purchaser as of
the Closing Date and deducted from the Purchase Price payable by Purchaser to
Sellers at Closing and such amount shall be held by the Purchaser and used for
the sole purpose of discharging and releasing any liens on or claims to such
Transferred Assets with respect to such items pursuant to Section 9.6.
ARTICLE V
CLOSING
5.1 Closing. The consummation of the purchase of each Seller's right,
title and interest in and to the Transferred Assets contemplated hereby (the
"Closing") shall take place at the offices of Weil, Gotshal & ▇▇▇▇▇▇ LLP, ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ subject to the satisfaction or waiver
of the conditions set forth in Section 5.4 and Section 5.5, as soon as
practicable after the date hereof and in any event not later than the Scheduled
Closing Date, or at such other time and place and on such other date as
Purchaser and TWA shall agree (the "Closing Date").
5.2 Deliveries at Closing. At the Closing:
(a) TWA shall deliver, or cause each Seller to deliver, as
applicable, to Purchaser the items described in clauses (i) through (vi) below,
to the extent applicable with respect to the Closing:
(i) a general ▇▇▇▇ of sale and assignment, in form
and substance reasonably satisfactory to Purchaser (the "▇▇▇▇ of
Sale"), with respect to the Transferred Assets to be conveyed by such
Seller at the Closing and any other documents reasonably requested by
Purchaser so as to convey to Purchaser good title, free and clear of
all Liens (other than Permitted Liens), to all of each Seller's right,
title and interest in and to the Transferred Assets to be conveyed at
the
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Closing (other than Owned Aircraft and Engines), each executed by each
applicable Seller;
(ii) instruments of conveyance or consents to
assignment for the assignment of the Slots and Routes, in form and
substance reasonably satisfactory to Purchaser, executed by each
applicable Seller;
(iii) for each Owned Aircraft and Engine being
conveyed at the Closing, a full warranty (as to title) and a FAA ▇▇▇▇
of sale, each in form and substance reasonably satisfactory to
Purchaser, executed by each applicable Seller;
(iv) the warranty deeds, title insurance policies,
surveys and tax withholding affidavits satisfying Section 1445(b)(2) of
the Code, each in form and substance reasonably satisfactory to
Purchaser, with respect to any Owned Real Estate transferred by any
Seller;
(v) the officers' certificates referenced in Section
5.4(c); and
(vi) all other documents, certificates, instruments
or writings reasonably requested by Purchaser in connection herewith.
(b) Purchaser shall deliver to TWA, to the extent applicable
with respect to the Closing, the items described in clauses (i) through (iv)
below:
(i) the Purchase Price set forth on the Pre-Closing
Statement (less the Purchase Price Offset Amount) by wire transfer of
immediately available funds to the account or accounts designated by
TWA no later than two Business Days prior to the Closing;
(ii) an assumption agreement pursuant to which
Purchaser assumes at the Closing the Assumed Liabilities being assigned
at the Closing, in form and substance reasonably satisfactory to TWA
(the "Assumption Agreement"), executed by Purchaser;
(iii) the officer's certificate referenced in Section
5.5(c); and
(iv) all other documents, certificates, instruments
or writings reasonably requested by TWA in connection herewith.
5.3 Delivery of Transferred Assets. At Closing, TWA shall, and shall
cause each other Seller to, place Purchaser in full possession and control of
the Transferred Assets being acquired at the Closing. Each Owned Aircraft and
Leased Aircraft shall be delivered to Purchaser in accordance with the
procedures specified in this Section 5.3 and with the risk of loss remaining
with the applicable Seller until delivery has been made; provided, that
Purchaser and Seller agree to use their reasonable best efforts to coordinate
such delivery in a mutually agreeable manner such to permit the avoidance, to
the
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maximum extent possible, of any Taxes. On the Closing Date, the transfer of
aircraft from Sellers to Purchaser will require the following actions: (i) with
respect to each Leased Aircraft, the lease for which will be assumed by
Purchaser at the Closing, each such Leased Aircraft which is in scheduled
service will remain in scheduled service on the Closing Date and will not be
subject to any interruption in its planned schedule on the Closing Date, except
any Leased Aircraft which is assigned to scheduled service but which is
temporarily removed from service pending required maintenance will continue to
undergo required maintenance. Any Leased Aircraft which has been removed from
scheduled service due to scheduled maintenance will continue to undergo such
scheduled maintenance on the Closing Date; (ii) with respect to any Leased
Aircraft, the lease for which will not be assumed by Purchaser at the Closing,
and all Owned Aircraft listed on Schedule 2.2, (A) each of such aircraft which
is in scheduled service will be removed from scheduled service at Closing and
will be situated at a location deemed appropriate by TWA, or as applicable, the
lessor of such Leased Aircraft, (B) each of such aircraft assigned to scheduled
service but temporarily out of service due to corrective maintenance will be
immediately situated (or, if necessary, repaired to an airworthy condition and
parked thereafter) at a location deemed appropriate by TWA, or as applicable,
the lessor of such Leased Aircraft and (C) each of such aircraft removed from
scheduled service pending scheduled maintenance will be situated "as is" at a
location deemed most appropriate by TWA, or as applicable, the lessor of such
Leased Aircraft; and (iii) prior to the Closing, (A) Sellers will submit a
motion to establish the procedures for assuming and assigning Aircraft Leases
and (B) the Bankruptcy Court will enter an order establishing (1) which Aircraft
Leases will be rejected by the applicable Seller and (2) which Aircraft Leases
will be assumed by the applicable Seller and assigned to Purchaser.
5.4 Conditions Precedent to Obligations of Purchaser. The obligations
of Purchaser under this Agreement to consummate the transactions contemplated
hereby to be consummated at the Closing shall be subject to the satisfaction, at
or prior to the Closing, of all of the following conditions, any one or more of
which may be waived in writing at the option of Purchaser:
(a) All representations and warranties of Sellers in this
Agreement or in any exhibit, schedule or document delivered pursuant hereto
shall be true and complete in all respects (with respect to representations and
warranties qualified or limited by materiality or Material Adverse Effect) or in
all material respects (with respect to representations and warranties not so
qualified or limited), in each case when made and on and as of the Closing Date
as if made on and as of that date (other than any such representations or
warranties that expressly speak only as of an earlier date); provided, that this
condition shall be deemed satisfied if any inaccuracies in any of such
representations and warranties at and as of the applicable date (without giving
effect to any materiality or Material Adverse Effect qualifications or
exceptions contained therein) would not, individually or in the aggregate, have
or reasonably be expected to have a Material Adverse Effect.
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(b) All of the terms, covenants and conditions to be complied
with and performed by Sellers on or prior to the Closing Date shall have been
complied with or performed in all material respects.
(c) Purchaser shall have received a certificate or
certificates, dated as of the Closing Date, executed on behalf of Sellers, each
by an authorized executive officer thereof, certifying in such detail as
Purchaser may reasonably request that the conditions specified in Section 5.4(a)
and Section 5.4(b) hereof have been fulfilled.
(d) The waiting period under the HSR Act or any other
applicable competition, merger, control, antitrust Law or similar Law shall have
expired or terminated, and the FAA, DOT and any other Governmental Authorities
whose consent is required for consummation of the transactions contemplated
hereby (including without limitation the applicable regulatory body of the
European Union) shall have issued all approvals required for the transactions
contemplated hereby, and no condition or requirement unacceptable to Purchaser
in its sole discretion shall be imposed on or required of Purchaser or any of
its Affiliates as a result of or as a condition to any of the foregoing.
(e) All Consents described on Schedule 6.11 shall have been
obtained (without any limitation, restriction or condition not otherwise
applicable to the applicable Seller being imposed on Purchaser or its ownership
or use of any Transferred Assets), except for where the failure to obtain such
Consents will not have had, or would not be reasonably likely to have, a
Material Adverse Effect.
(f) No action, suit or proceeding (including, without
limitation, any proceeding over which the Bankruptcy Court has jurisdiction
under 28 U.S.C. Section 157(b) and (c)) shall be pending or overtly threatened
by or before any Governmental Authority or pending or overtly threatened by any
other party to enjoin, restrain, prohibit or obtain substantial damages or
significant equitable relief in respect of or related to any of the transactions
contemplated by this Agreement, or that would be reasonably likely to prevent or
make illegal the consummation of any transactions contemplated by this Agreement
or that, if adversely determined, could be materially adverse to the operation
or use of the Transferred Assets, and any such actions, suits or proceedings
that have theretofore been brought and determined shall have become Final
Orders.
(g) There shall not be in effect any Law of any Governmental
Authority of competent jurisdiction restraining, enjoining or otherwise
preventing consummation of the transactions contemplated by this Agreement.
(h) No loss of or damage to any Transferred Asset(s) shall
have occurred since the date of the Original Agreement, except for (i) damage
that has already been fully repaired, (ii) losses that have been replaced with
assets of comparable or higher quality with the reasonable approval of Purchaser
and (iii) other damage or losses that, in the aggregate, have not had, or would
not be reasonably likely to have, a Material Adverse Effect.
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(i) No loss or modification of or limitation on any Assumed
Contract shall have occurred since the date of the Original Agreement without
the written consent of Purchaser in its sole discretion, including without
limitation any forfeiture, expiration without renewal, termination or other loss
thereof, except for losses, modifications or limitations that, in the aggregate,
have not had, or would not be reasonably likely to have, a Material Adverse
Effect.
(j) No loss of or limitation on any Route shall have occurred
since the date of the Original Agreement without the written consent of
Purchaser in its sole discretion, including without limitation any forfeiture,
expiration without renewal, termination or other loss thereof.
(k) No Slot shall have been withdrawn by the FAA or designated
for withdrawal by the FAA for any reason whatsoever (except those that have been
reinstated as of the Closing and those relinquished with the written consent of
Purchaser in its sole discretion) and Sellers' right or license to use any Slot
shall have not expired without renewal or have been terminated or revoked by the
FAA for any reason whatsoever (except those that have been reinstated as of the
Closing, those relinquished with the written consent of Purchaser in its sole
discretion and those under leases that have expired by their terms) and no Law
shall have been enacted, adopted, modified, amended or repealed, the effect of
which is to prevent the transfer of any Slot or materially limit or prohibit the
use by Purchaser of any Slot.
(l) The Approval Order and the Sale Procedures Order shall
have been entered, shall be in form and substance reasonably satisfactory to
Purchaser, and shall have each become a Final Order, and the Approval Order, the
Sale Procedures Order and any other orders of the Bankruptcy Court with respect
to this Agreement and the DIP Facility shall be in form and substance reasonably
satisfactory to Purchaser.
(m) The CBA Amendments, in form and substance reasonably
acceptable to Purchaser in its sole discretion, shall have been obtained.
(n) The Rights Plan Amendment, if required by Purchaser, in
form and substance reasonably acceptable to Purchaser, shall have been obtained
and shall be in full force and effect.
(o) No event, events or circumstance shall have occurred since
the date of the Original Agreement and Purchaser shall not learn of any event,
events or circumstances which, independently or together with any other event,
events or circumstance that have occurred or are reasonably likely to occur,
have or are reasonably likely to have a Material Adverse Effect.
(p) A Final Order shall have been entered rejecting all
discounted, bulk-sale or similar ticketing agreements or arrangements between
TWA and any other party.
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(q) No claims, disputes, demands, actions, liabilities,
damages, suits in equity, administrative proceedings, accounts, costs, expenses,
setoffs, contributions, attorneys' fees and/or causes of action of whatever kind
or character (i) costing or expected by Purchaser to cost more than $55,000,000
in the aggregate or (ii) requiring Purchaser to take, or restraining Purchaser
from taking, any action that is determined by Purchaser to be materially adverse
to, or unduly burdensome in, conducting Purchaser's business and operations from
and after the Closing, in each case, shall be owed by or binding on, be
reasonably expected to be owed by or binding on, or, for any then pending
matters, if determined adversely, be owed by or binding on Purchaser.
5.5 Conditions Precedent to Obligations of TWA. The obligations of TWA
and each other Seller under this Agreement to consummate the transactions
contemplated hereby to be consummated at the Closing shall be subject to the
satisfaction, at or prior to the Closing, of all the following conditions, any
one or more of which may be waived in writing at the option of TWA:
(a) All representations and warranties of Purchaser made in
this Agreement or in any exhibit, schedule or document delivered pursuant hereto
shall be true and complete in all respects (with respect to representations and
warranties qualified or limited by materiality) or in all material respects
(with respect to representations and warranties not so qualified or limited), in
each case when made and as of the Closing Date as if made on and as of that date
(other than such representations or warranties that expressly speak only as of
an earlier date); provided, that this condition shall be deemed satisfied if any
inaccuracies in any of such representations and warranties at and as of the
applicable date (without giving effect to any materiality qualifications or
exceptions contained therein) would not, individually or in the aggregate, have
or reasonably be expected to have a Purchaser Material Adverse Effect.
(b) All of the terms, covenants and conditions to be complied
with and performed by Purchaser on or prior to the Closing Date shall have been
complied with or performed in all material respects.
(c) TWA shall have received a certificate, dated as of the
Closing Date, executed on behalf of Purchaser by an authorized executive officer
thereof, certifying in such detail as Seller may reasonably request that the
conditions specified in Section 5.5(a) and Section 5.5(b) have been fulfilled.
(d) The waiting period under the HSR Act or any other
applicable competition, merger, control, antitrust Law or similar Law shall have
expired or terminated, and the FAA, DOT and any other Governmental Authorities
whose consent is required for consummation of the transactions contemplated
hereby (including without limitation the applicable regulatory body of the
European Union) shall have issued all approvals required for the transactions
contemplated hereby.
(e) There shall not be in effect any Law of any Governmental
Authority of competent jurisdiction restraining, enjoining or otherwise
preventing consummation of the transactions contemplated by this Agreement.
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(f) The Approval Order shall have been entered.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SELLERS
Subject to any exceptions set forth in the Schedule of Exceptions
(whether or not an express reference is made in this Article VI to such Schedule
of Exceptions), TWA makes the following representations and warranties to
Purchaser with respect to itself and each other Seller, as applicable, each of
which shall be true and correct as of the date of the Original Agreement and as
of the Closing Date (except to the extent expressly relating to a specific date,
in which event it shall be true and correct as of such date) and shall be
unaffected by any investigation heretofore or hereafter made by or on behalf of
Purchaser.
6.1 Organization and Good Standing. Each Seller is a corporation or
other entity duly organized and validly existing and in good standing under the
laws of its respective jurisdiction of organization and has the requisite
corporate or other organizational power and authority to own, lease or otherwise
hold its properties and assets and carry on its business as presently conducted.
Each Seller is qualified or licensed to do business as a foreign corporation and
is in good standing in every jurisdiction where the nature of the business
conducted by it or the properties owned or leased by it requires qualification,
except where the failure to be so qualified, licensed or in good standing would
not reasonably be expected to have a Material Adverse Effect.
6.2 Authorization and Effect of Agreement. TWA has the requisite
corporate power and authority (a) to execute and to deliver this Agreement and
the Collateral Agreements to which it will be a party and (b) in the event the
Sale Procedures Order and the Approval Order are entered by the Bankruptcy
Court, to perform its obligations hereunder and under any such Collateral
Agreements. The execution and delivery by each Seller of the Collateral
Agreements to which it will be a party have been (or will be at the time of
execution thereof) duly authorized by all necessary corporate or other
organizational action on the part of such Seller. The execution and delivery of
this Agreement and the Collateral Agreements by TWA, and subject to clause (b)
above, the performance by TWA of its obligations hereunder and thereunder and
the consummation by TWA of the transactions contemplated hereby and thereby,
have been duly authorized by its Board of Directors and no other corporate
action on the part of TWA is necessary to authorize the execution and delivery
of this Agreement, the Collateral Agreements or the consummation of the
transactions contemplated hereby or thereby. The execution and delivery by each
Seller of the Collateral Agreements to which it will be a party have been (or
will be at the time of execution thereof) duly authorized by all necessary
corporate or other organizational action on the part of such Seller. This
Agreement has been duly and validly executed and delivered by TWA and
constitutes a valid and binding obligation of TWA, enforceable against TWA in
accordance with its terms, subject (a) to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally, including,
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without limitation, for purposes of the representation and warranty being made
as of the Closing Date, the discretion of the Bankruptcy Court for so long as
the Bankruptcy Court retains jurisdiction over the Chapter 11 Cases, and (b) as
to enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity), and (c) for purposes
of the representation and warranty being made as of the date of the Original
Agreement (but not for purposes of the representation and warranty being made as
of the Closing Date), to the commencement of the Chapter 11 Cases, competing
offers as described in Section 8.11(a), and entry of the Approval Order. Each of
the Collateral Agreements, when executed and delivered by TWA or any Seller, as
applicable, at the Closing, shall constitute a valid and binding agreement of
TWA or such Seller, enforceable against TWA or such Seller in accordance with
its terms, subject (a) to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, including, without limitation, the discretion of
the Bankruptcy Court for so long as the Bankruptcy Court retains jurisdiction
over the Chapter 11 Cases, (b) as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity).
6.3 No Conflicts. The execution and delivery by TWA of this Agreement
and any Collateral Agreements to which it will be a party and the execution and
delivery by each other Seller of each Collateral Agreement to which it will be a
party do not and will not, as applicable, and, in the event TWA commences a
Chapter 11 Case and the Approval Order is entered by the Bankruptcy Court, the
performance by each Seller of the transactions contemplated by this Agreement or
such Collateral Agreements, as applicable, will not, (a) conflict with, or
result in any violation of, or constitute a default under (except as a result of
the Chapter 11 Cases), or, as applicable, give rise to the creation of a Lien
upon any of the Transferred Assets or to a right of termination, cancellation or
acceleration of any obligation or to a loss of a benefit under, (i) any
provision of the certificate of incorporation or bylaws or other applicable
constituent documents of any Seller, (ii) and except for consents required to
assign certain Assumed Contracts as described on Schedule 6.11 hereto, any of
the terms, conditions or provisions of any Contract by which any Seller is
bound, (iii) any Law applicable to or binding on any Seller or any of its
respective assets, (b) affect the ability of Purchaser to own, use or operate
the Transferred Assets following the Closing in substantially the same manner as
the Transferred Assets are presently owned, used or operated by any Seller, (c)
create any Lien on or any right of any third party to purchase, use or operate
any of the Transferred Assets or (d) accelerate or trigger any right or
obligation of any party under any Assumed Contract.
6.4 No Third Party Options. Except as set forth in Schedule 6.4, there
are no existing agreements, options or commitments granting to any Person the
right to acquire any Seller's right, title or interest in or to any of the
Transferred Assets or any interest therein.
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6.5 Data. All Data are true and correct in all material respects (other
than FAA maintenance records, which are true and correct in all respects) and
are accurately extracted from the books and records of Sellers.
6.6 Consents and Approvals. Other than in connection with the
commencement of the Chapter 11 Cases, entry of the Sale Procedures Order, entry
of the Approval Order and as set forth on Schedule 6.6, the execution and
delivery by Sellers of this Agreement and any Collateral Agreements to which it
will be a party does not and will not, and the consummation by Sellers of the
transactions contemplated hereby and thereby will not, require any Consent,
except (i) as disclosed on Schedule 6.11, (ii) for compliance with the HSR Act,
(iii) as required by the FAA, (iv) as required by the DOT and (v) as required by
the European Union.
6.7 Permits; Compliance with Law. Schedule 6.7 sets forth a true,
correct and complete list of all Permits. Sellers possess all Permits necessary
for the operation and ownership of the Transferred Assets. All Permits issued to
any Seller are in full force and effect. No outstanding violations are or have
been recorded in respect of any of the Permits. The use and operation by any
Seller of the Transferred Assets and the conduct of its business comply with all
Laws and the requirements and conditions of all Permits, including without
limitation all applicable operating certificates and authorities, common carrier
obligations, airworthiness directives, and all other rules, regulations,
directives and policies of the FAA, DOT and all other Governmental Authorities
having jurisdiction over the Transferred Assets and the business conducted by
Sellers. No proceeding is pending or, to TWA's knowledge, threatened to revoke,
withdraw or limit any such Permit, and there is no fact, error or admission
relevant to any Permit that would permit the violation of or revocation,
withdrawal or limitation or result in the threatened violation of or revocation,
withdrawal or limitation of any such Permit. Except as set forth on Schedule
6.7, on or immediately after the Closing, each Permit will continue in full
force and effect and accrue to the benefit of Purchaser without any consent,
approval or modification required by or from any Governmental Authority.
6.8 Litigation. There are no judicial or administrative actions,
proceedings or investigations pending or, to TWA's knowledge, threatened that
question the validity of this Agreement or any action taken or to be taken by
any Seller in connection with this Agreement. Other than the Chapter 11 Cases,
there are no lawsuits, claims, administrative or other proceedings or
investigations relating to the ownership or use of the Transferred Assets or
conduct of business by Sellers or otherwise affecting the Transferred Assets
pending, or, to TWA's knowledge, threatened against any Seller. Other than
pursuant to the Chapter 11 Cases, there are no judgments, orders or decrees of
any Governmental Authority binding on any Seller that relate to the Transferred
Assets or otherwise affect the Transferred Assets.
6.9 Title to and Condition of Assets. The applicable Seller has, and at
the Closing, such Seller shall convey to Purchaser, good, valid and indefeasible
title to the Transferred Assets (other than the Leased Assets), free and clear
of all Liens other than Permitted Liens. With respect to any Leased Assets, the
applicable Seller has a valid
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leasehold interest therein for the term specified in Schedule 6.12(b) and
Schedule 6.16(a). The Transferred Assets constituting tangible property, taken
as a whole, are in good operating condition and repair, subject to normal wear,
are usable in the regular and ordinary course of business and conform in all
material respects to applicable Laws.
6.10 U.S. Citizen; Air Carrier. TWA and each other Seller is a "citizen
of the United States" as defined in the Federal Aviation Act and is an "air
carrier" within the meaning of such Act operating under certificates issued
pursuant to such Act (49 U.S.C. Sections 41101-41112).
6.11 Assumed Contracts. The Assumed Contracts are valid and enforceable
in accordance with their terms, subject to applicable bankruptcy,
reorganization, moratorium, and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to general principles of
equity. No Seller is, and to TWA's knowledge, no other party thereto is, in
material default in the performance, observance or fulfillment of any obligation
under any Assumed Contract (other than payments or amounts due thereunder, which
shall be paid or discharged by TWA at or prior to the Closing), and, to TWA's
knowledge, no event has occurred, which with or without the giving of notice or
lapse of time, or both, would constitute a material default thereunder. Other
than in connection with the commencement of the Chapter 11 Cases, entry of the
Sale Procedures Order, entry of the Approval Order and as set forth on Schedule
6.11 hereto, none of the Assumed Contracts requires the consent of any party to
its assignment in connection with the transactions contemplated hereby. True and
complete copies of all Assumed Contracts have been delivered to Purchaser.
6.12 Aircraft; Engines and Spare Parts.
(a) Schedule 6.12(a) sets forth a true, correct and complete
list of all aircraft owned by any Seller (other than aircraft listed on Schedule
2.2) (collectively, "Owned Aircraft"), including identification of which Seller
owns such aircraft, a description of the type and aircraft number of each such
aircraft and the date the applicable Seller placed such aircraft in service or
proposes to place such aircraft in service.
(b) Schedule 6.12(b) sets forth a true, correct and complete
list of all lease, sublease or other agreements (including without limitation by
means of one or more capital leases) pursuant to which any Seller operates
aircraft (other than leases relating to aircraft listed on Schedule 2.2)
(collectively, "Aircraft Leases"), including identification of which Seller
leases such aircraft, a description of the type and aircraft number of each such
aircraft and the date the applicable Seller placed such aircraft in service or
proposes to place such aircraft in service.
(c) Each Owned Aircraft and aircraft subject to Aircraft
Leases ("Leased Aircraft") has as of February 26, 2001 the number of flight
hours and calendar time indicated on Schedule 6.12(c) remaining prior to its
next "C" or "D" check and a notation as to whether the aircraft (i) complies
with Stage 3 noise level requirements of the Airport Noise and Capacity Act of
1990; and (ii) requires refitting or repair to bring it
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into compliance with any outstanding FAA aircraft requirements mandated by
certain airworthiness directives promulgated by the FAA.
(d) Except as set forth in Schedule 6.12(d), each Owned
Aircraft and Leased Aircraft is in Delivery Condition and has a validly issued,
current individual aircraft FAA Certificate of Airworthiness with respect to
such aircraft which satisfies all requirements for the effectiveness of such FAA
Certificate of Airworthiness.
(e) Each Owned Aircraft and Leased Aircraft complies with the
aircraft records requirements of the Federal Aviation Act.
(f) Each Owned Aircraft's and Leased Aircraft's structure,
systems and components are functioning in accordance with its intended use as
set forth in FAA-approved documentation, including any applicable manuals,
technical standard orders or parts manufacturing approval certificates.
(g) Other than in the ordinary course of business consistent
with past practice and except as set forth on Schedule 6.12(g), no deferred or
carryover maintenance items exist with respect to any Owned Aircraft and Leased
Aircraft and all temporary repairs to each such aircraft have been made
permanent.
(h) Each Owned Aircraft and Leased Aircraft is properly
registered on the FAA aircraft registry.
(i) Except as set forth on Schedule 6.12(i), no Seller is a
party to any interchange or pooling agreements with respect to its Owned
Aircraft and Leased Aircraft, Engines or Spare Parts.
(j) Each Seller has maintained Owned Aircraft and Leased
Aircraft in compliance in all material respects with all applicable statutes and
regulations as in effect from time to time and in accordance with such Seller's
standard maintenance procedures approved by applicable Government Authorities.
(k) Except as set forth in Schedule 6.12(d), each Seller has
maintained, inspected, serviced, repaired, overhauled and tested (or caused to
be maintained, inspected, serviced, repaired, overhauled and tested) the Owned
Aircraft, Leased Aircraft and Engines (including spare Engines) so as to keep
such items (i) in Delivery Condition and in as good operating condition as when
delivered to such Seller, ordinary wear and tear excepted, and within the
acceptable limits of performance provided in the applicable manufacturer's
maintenance manuals and service bulletins, all in accordance with standards that
are approved by the FAA, (ii) in conformity with the applicable operating
manual, instructions and mandatory service bulletins and all airworthiness
directives issued by the FAA and any other Governmental Authority having
jurisdiction over such aircraft, (iii) in such condition that such aircraft,
including each engine installed thereon, complies with the FAA type certificate
(as in effect form time to time) issued to the manufacturer of such aircraft or
such engine, and (iv) in such a condition as is necessary to enable the
applicable airworthiness certification for each such aircraft and engine to be
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maintained in good standing, valid and current, at all times (other than
temporary periods of storage in accordance with applicable regulations) under
the Federal Aviation Act and all regulations issued pursuant thereto.
(l) Each Seller has maintained or caused to be maintained all
records, logs and other materials required to be maintained in respect of the
Owned Aircraft and Leased Aircraft, Engines and Spare Parts by the FAA and any
other applicable Governmental Authority, including all historical maintenance
records and other data with respect to such aircraft and Engines in a manner
such that there are no missing pieces of material information from the earliest
date required by applicable Law (including without limitation the Federal
Aviation Act and FAA directives) with respect to each such aircraft or Engine.
(m) No Seller has maintained, used or operated any Owned
Aircraft and Leased Aircraft in violation, in any material respect, of any law
or any rule, regulation or order of any Governmental Authority having
jurisdiction over such aircraft or in violation of any airworthiness
certificate, license or registration relating to any such aircraft.
(n) Each Seller has complied with all issued and effective
mandatory manufacturer's service bulletins and airworthiness directives with
respect to the Owned Aircraft and Leased Aircraft.
(o) No Owned Aircraft and Leased Aircraft is subleased to or
otherwise in the possession of another air carrier or other Person other than
the applicable Seller, to operate such aircraft in air transportation or
otherwise.
6.13 Slots. Schedule 6.13 sets forth a true, correct and complete list
of all takeoff and landing slots and other similar takeoff and landing rights
("Slots") used by any Seller on the date of the Original Agreement at any
domestic or international airport, including a true, correct and complete list
of all Slot lease agreements. Sellers will have complied in all material
respects with the requirements of the regulations issued under the Federal
Aviation Act and any other Laws with respect to the Slots. The Slots have not
been identified as being subject to withdrawal under the provisions of SCAR No.
48, and Sellers have not received any notice, and they have no knowledge, of any
proposed withdrawal of the Slots by the FAA, the DOT or any other Governmental
Authority. The Slots have not been designated for the provision of essential air
services in accordance with the regulations issued under the Federal Aviation
Act, were not acquired pursuant to 14 C.F.R. Section 93.219 and have not been
designated for international operations, as more fully detailed in 14 C.F.R.
Section 93.217. Sellers have used each Slot either at least 80% of the maximum
amount that each Slot could have been used during each full and partial
reporting period (as described in 14 C.F.R. Section 93.227(i)) or such greater
or lesser amount of minimum usage as may have been required to protect such
Slot's authorization from termination or withdrawal under regulations
established by any Governmental Authority or airport authority. All reports
required by the FAA or any Governmental Authority relating to the Slots have
been filed in a timely manner. Except as set forth on Schedule
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6.13, no Seller has agreed to any Slot slide, Slot trade, Slot purchase, Slot
sale or other transfer of any of the Slots.
6.14 No Casualty. Except as set forth on Schedule 6.14, the Transferred
Assets have not been affected by any fire, explosion, accident, drought, storm,
hail, earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance).
6.15 Insurance. TWA or each other Seller has in place insurance
policies with respect to the Transferred Assets, in amounts and types that are
customary in the industry for similar assets, and all such policies are in full
force and effect.
6.16 Gates; Gate Property and Ground Equipment.
(a) Schedule 6.16(a) sets forth a true, correct and complete
list of all the airport gates leased, occupied or otherwise used by any Seller
(the "Gates"), including the gate number and the airport and terminal or
concourse location of each such Gate.
(b) Schedule 6.16(b) sets forth a true, correct and complete
list of all the lease, sublease, use agreements, licenses, permits, certificates
or other documents or agreements under which any Seller leases, occupies or
otherwise has the right to use any Gate, and all amendments thereto (the "Gate
Leases"), in each case, including identification of the applicable Seller and
the lease expiration date, and corresponding Gate Property Leases and Ground
Equipment Leases.
(c) Schedule 6.16(c) sets forth a true, correct and complete
list of all the lease, sublease, use agreements, licenses, permits, certificates
or other documents or agreements under which any Seller leases, occupies or
otherwise has the right to use any Gate Property, and all amendments thereto
(the "Gate Property Leases"), in each case, including identification of the
applicable Seller and the lease expiration date.
(d) Schedule 6.16(d) sets forth a true, correct and complete
list of all the lease, sublease, use agreements, licenses, permits, certificates
or other documents or agreements under which any Seller leases, occupies or
otherwise has the right to use any Ground Equipment, and all amendments thereto
(the "Ground Equipment Leases"), in each case, including identification of the
applicable Seller and the lease expiration date.
(e) Schedule 6.16(e) sets forth a true, correct and complete
list of all the Gates, Gate Property and Ground Equipment owned by any Seller
(the "Owned Gate Items"), including identification of the applicable Seller.
(f) The Owned Gate Items and the Gate Property and Ground
Equipment subject to the Gate Property Leases and Ground Equipment Leases,
respectively, are all in good operating condition and repair, subject to normal
wear, are usable in the regular and ordinary course of business and conform in
all material respects to applicable Laws.
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(g) The Gate Property Documents are in full force and effect,
TWA has no knowledge of any material default under the Gate Property Documents
and TWA knows of no material condition or event which has occurred which with
notice or the passage of time or both would constitute a material default by any
Seller under the Gate Property Documents.
(h) Sellers have not received any notice that any portion of
the Gates, Gate Property or Owned Gate Items is or will be subject to, or
affected by, any condemnation, eminent domain or similar proceeding and there
are no material violations of record or otherwise against any portion of the
Gates, Gate Property or Owned Gate Items.
(i) To TWA's knowledge, the Gates, Gate Property and Owned
Gate Items, as applicable, have been constructed in good and workmanlike manner,
are structurally sound and free from material defects and all building systems,
including without limitation, the heat, ventilation and air conditioning,
plumbing, electrical, elevator, sewage and other systems and systems related to
the specific uses thereof (as, for example, passenger terminal facilities,
office space, cargo facilities, and ground support equipment maintenance spaces,
and aircraft maintenance space) are free from material defects. The Gates, Gate
Property and Owned Gate Items, as applicable, are in good working order, subject
to reasonable wear and tear. Except as set forth in Schedule 6.16(i), no Seller
has deferred any of its maintenance or repair obligations under the Gate
Property Documents.
(j) With respect to the Owned Gate Items, the applicable
Seller has, and at the Closing, such Seller shall convey to Purchaser, good,
valid and indefeasible title thereto free and clear of all Liens other than
Permitted Liens.
6.17 Environmental Matters.
(a) Except as set forth on Schedule 6.17(a) hereto, to TWA's
knowledge after reasonable inquiry, the use and operation of the Transferred
Assets is and has been in full compliance with all applicable Environmental
Laws, and consistent with the consummation of the transactions contemplated
hereby or Purchaser's ability to own, use or operate the Transferred Assets in
substantially the same manner as the Transferred Assets are presently owned,
used or operated by Seller. Except as set forth on Schedule 6.17(a), Sellers
have not received any written communication from any Person that alleges that
such Seller is not in such full compliance, the subject matter of which written
communication has not been fully resolved and satisfied, and, to TWA's knowledge
after reasonable inquiry, there are no circumstances (other than changes in
existing, or future requirements of, Environmental Laws) that would reasonably
be expected to prevent or interfere with such full compliance in the future.
Schedule 6.17(a) sets forth a true, correct and complete list of all orders,
decrees or other agreements relating to any Seller or any of its properties
issued pursuant to or entered into under any Environmental Law.
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(b) Except as set forth on Schedule 6.17(b), there is no
Environmental Claim relating to ownership or use of the Transferred Assets
pending or threatened against any Seller or, to TWA's knowledge after reasonable
inquiry, against any Person whose liability for such Environmental Claim Sellers
have retained or assumed either contractually or by operation of law.
(c) Except as set forth on Schedule 6.17(c), Sellers have not
received any written allegation or other information , the subject matter of
which allegation or information has not been fully resolved and satisfied, that
past or present actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the release, emission, discharge or
disposal of any Material of Environmental Concern relating to the ownership or
use of the Transferred Assets could form the basis of any Environmental Claim
relating to the Transferred Assets against any Seller or against any Person
whose liability for such Environmental Claim any Seller retained or assumed
either contractually or by operation of law.
(d) Without in any way limiting the generality of the
foregoing, to TWA's knowledge after reasonable inquiry, (i) all onsite and
off-site locations where any Seller or any other occupant has stored, disposed
or arranged for the disposal of Materials of Environmental Concern from 1980 to
the date of the Original Agreement relating to the transferred maintenance bases
are identified on Schedule 6.17(d), (ii) all underground storage tanks, and the
capacity and contents of such tanks, located on the Transferred Assets are
identified on Schedule 6.17(d), (iii) except as set forth on Schedule 6.17(d),
there is no damaged and friable asbestos or lead based paint coatings in poor
condition contained in or forming part of any building, building component,
structure or office space with respect to the Gates and (iv) except as set forth
on Schedule 6.17(d), no polychlorinated biphenyls (PCB's) are used at any Gate
in violation of Environmental Laws.
(e) For purposes of this Agreement but only as it relates to
the Transferred Assets, the following terms shall have the following meanings:
(i) "Environmental Claim" means any written notice by
any Governmental Authority or Person alleging potential liability
(including, without limitation, potential liability for investigatory
costs, cleanup costs, governmental response costs, natural resources
damages, property damages, personal injuries or penalties) (A) which
would have a material and adverse effect on any of the Transferred
Assets, the consummation of the transactions contemplated hereby or
Purchaser's ability to own, use or operate the Transferred Assets in
substantially the same manner as the Transferred Assets are presently
owned, used or operated by Seller and (B) arising out of, based on or
resulting from (x) the presence, or release into the environment, of
any Material of Environmental Concern at any location, whether or not
owned by any Seller or Purchaser or (y) any material violation, or
alleged violation, of any Environmental Law.
(ii) "Environmental Laws" means all Laws applicable
to the respective Transferred Assets and relating to pollution or
protection of human
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health or the environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata),
including, without limitation, laws and regulations relating to
emissions, discharges, releases or threatened releases of Materials of
Environmental Concern arising from or relating to the Transferred
Assets, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling
of Materials of Environmental Concern arising from or relating to the
Transferred Assets or the operation thereof.
(iii) "Materials of Environmental Concern" means
dangerous goods, hazardous, toxic or regulated substances, materials,
or wastes as defined in the Environmental Laws.
6.18 Taxes. Except as set forth on Schedule 6.18:
(a) All Tax Returns that are required to be filed on or before
the Closing Date by any Seller have been or will be duly filed on a timely basis
and all such Tax Returns were or will be true, correct and complete in all
material respects. All Taxes due with respect to any taxable period or partial
taxable period of each such Seller ending on or before the Closing Date have
been or will be timely paid or withheld. No Seller has executed or filed with
the Internal Revenue Service or any other taxing authority any agreement
extending the period for filing any Tax Return.
(b) No claim for assessment or collection of Taxes has been
asserted against any Seller. No Seller is a party to any pending action,
proceeding or investigation by any Governmental Authority for the assessment or
collection of Taxes, nor does any Seller have knowledge of any such threatened
action, proceeding or investigation.
(c) No waivers of statutes of limitation in respect of any Tax
Returns have been given or requested by any Seller nor has any Seller agreed to
any extension of time with respect to a Tax assessment or deficiency. No claim
has been made at any time during the ten-year period ending on the date of the
Original Agreement by a Governmental Authority in a jurisdiction where any
Seller does not currently file Tax Returns that it is or may be subject to
taxation by that jurisdiction, nor is any Seller aware that any such assertion
of jurisdiction is threatened. No security interests have been imposed upon or
asserted against any of any Seller's assets or any of the Transferred Assets as
a result of or in connection with any failure, or alleged failure, to pay any
Tax.
(d) Each Seller has withheld and paid all Taxes required to be
withheld in connection with any amounts paid or owing to any employee, creditor,
independent contractor or other third party.
(e) No Seller is a foreign person within the meaning of
Section 1445 of the Code.
(f) None of the Transferred Assets is (i) "tax-exempt use
property" within the meaning of Section 168(h) of the Code, (ii) "tax-exempt
bond-financed
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property" within the meaning of Section 168(g) of the Code, (iii) "limited use
property" within the meaning of Revenue Procedure 76-30, (iv) subject to Section
168(g)(i)(A) of the Code or (v) property that is or will be required to be
treated as being owned by any Person (other than any Seller) pursuant to the
provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as
amended, and in effect immediately before the enactment of the Tax Reform Act of
1986.
6.19 Labor Matters.
(a) Schedule 6.19(a) identifies all collective bargaining
agreements (including any side letter, supplemental agreement or memorandum of
understanding) covering employees of each Seller (collectively, the "Collective
Bargaining Agreements"). TWA has made available to Purchaser copies of all such
Collective Bargaining Agreements. TWA has informed Purchaser of all material
communications and current proposals of TWA, any other Seller or any union in
all ongoing negotiations with representatives of any unions representing pilots,
flight attendants, mechanics, dispatchers and all other organized employee
groups and all matters on which any tentative agreements have been reached in
the course of such negotiations.
(b) TWA has made available to Purchaser a true, correct and
complete list of all the current employees of each Seller that are members of an
organized labor unit covered by any of the Collective Bargaining Agreements,
their current respective positions or job classifications and their current
respective wage scales or salaries, as the case may be, as of the date of the
Original Agreement.
(c) Except as set forth in Schedule 6.19(c):
(i) There are no controversies pending or, to the
knowledge of TWA, threatened, or which TWA, based on its knowledge of
its employees and labor units, believes will be more likely than not to
occur, between any Seller and any of its employees or organized labor
units, which controversies have or could have a Material Adverse
Effect;
(ii) No Seller has breached or otherwise failed to
comply or has been alleged to have breached or otherwise failed to
comply in any material respect with any provision of any Collective
Bargaining Agreement or other labor union contract applicable to
persons employed by any Seller (because of the transactions
contemplated by this Agreement or otherwise), and there are no material
grievances outstanding against any Seller under any such agreement or
contract;
(iii) To the knowledge of TWA, there is no petition
pending before the National Mediation Board seeking certification or
any change in certification of a labor representative with respect to
any craft or class of employees of any Seller;
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(iv) There is no strike, slowdown, work stoppage,
labor action or lockout, or, to the knowledge of TWA, threat thereof,
by or with respect to any employees of any Seller; and
(v) There is no unfair labor practice or analogous
complaint or claim against any Seller pending before the National
Mediation Board or any similar board or agency or before any court of
competent jurisdiction or any other forum.
(vi) There is no complaint for violation of the
Railway Labor Act, 45 U.S.C. 8, as amended, against any Seller pending
before any Governmental Authority.
(d) That certain Settlement Agreement (the "Pension Plans
Agreement") dated January 5, 1993, by and between The Official Unsecured
Creditors' Committee of Trans World Airlines, Inc., The International
Association of Machinists and Aerospace Workers, the Independent Federation of
Flight Attendants, The Air Line Pilots Association, International, the Transport
Workers of America, ▇▇▇▇ ▇▇▇▇▇, an Icahn Entity, Pichin Corp. and the Pension
Benefit Guaranty Corporation, is in full force and effect and is enforceable in
accordance with its terms. TWA has at all times performed in compliance with the
Pension Plans Agreement and there are no defaults thereunder. TWA has no
remaining duties or liabilities under the Pension Plans Agreement other than in
connection with the administration of the employee benefit plans subject to the
Pension Plans Agreement. Pursuant to the Pension Plans Agreement and applicable
law, TWA has no incurred or potential liability to the Pension Benefit Guaranty
Corporation or any other Person under Title IV of ERISA, under the Pension Plans
Agreement, or otherwise, and TWA has no liability to any participant in or any
fiduciary of any employee benefit plan that is subject to the Pension Plans
Agreement for pension benefits or otherwise. By entering into this Agreement and
performing their respective duties hereunder neither TWA, the other Sellers nor
Purchaser or any Affiliates of Purchaser shall be liable, or incur any
obligation, to the Pension Benefit Guaranty Corporation or any participant or
fiduciary of any employee benefit plan pursuant to the Pension Plans Agreement,
ERISA or otherwise, and no lien shall result that shall affect any property that
is subject to this Agreement. The releases entered into in connection with the
Pension Plans Agreement (i) are binding and in full force and effect, (ii) are
enforceable against the parties thereto in accordance with their respective
terms, and (iii) will not be invalidated or adversely affected by the execution
and delivery of this Agreement, performance of any Person hereunder or by any
transaction occurring pursuant to this Agreement.
6.20 Employee Matters.
(a) TWA has made available to Purchaser a true, correct and
complete list of all the current employees of each Seller (other than employees
on the list described in Section 6.19(b)), their current respective positions or
job classifications and their current respective wage scales or salaries, as the
case may be, as of the date of the Original Agreement. Each Seller is in
compliance in all material respects with all
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applicable laws respecting employment and employment practices, terms and
conditions of employment and wages and hours, and are not engaged in any unfair
labor practice.
(b) Schedule 6.20(b) sets forth a true, correct and complete
list and brief description of each "employee pension benefit plan" (as defined
in Section 3(2) of ERISA), "employee welfare benefit plan" (as defined in
Section 3(1) of ERISA), stock option, stock purchase, deferred compensation plan
or arrangement, and other material employee fringe benefit plan or arrangement
maintained, contributed to or required to be maintained or contributed to by TWA
or any other Seller for the benefit of any present or former employees of
Sellers or their beneficiaries (all the foregoing herein called "Benefit
Plans"). TWA has delivered to Purchaser true, complete, and correct copies of
(1) each Benefit Plan (or, in the case of any unwritten Benefit Plans,
descriptions thereof) and (2) the most recent summary plan description for each
Benefit Plan (if any such description was required).
(c) TWA complies in all material respects with the applicable
requirements of Section 4980B(f) of the Code with respect to each Benefit Plan
that is a group health plan, as such term is defined in Section 5000(b)(1) of
the Code.
(d) As of the Closing Date, Sellers have paid all
contributions which are due and required by the Benefit Plans sponsored by
Sellers in accordance with the terms of such Benefit Plans and all applicable
Laws.
6.21 Routes. Schedule 6.21 sets forth a true, correct and complete list
of all flight routes flown by any Seller as of the date of the Original
Agreement to the extent authorized, regulated or limited by any Governmental
Authority or other route authority (each, a "Route"). Except as set forth on
Schedule 6.21, no Route has been or, to TWA's knowledge, is threatened to be
subject to any forfeiture, expiration without renewal, termination or other loss
thereof.
6.22 Intellectual Property. Schedule 6.22 contains an accurate and
complete list of all Intellectual Property owned or used by any Seller. Except
as set forth on Schedule 6.22, Sellers own the entire right, title and interest
in and to the Intellectual Property (including, without limitation, the right to
use and license the same). Except as set forth in Schedule 6.22, there are no
pending, or to the knowledge of TWA, threatened actions, claims or proceedings
of any nature affecting or relating to the Intellectual Property. Schedule 6.22
lists all notices or claims currently pending or received by any Seller that
claim infringement of any domestic or foreign letters patent, patent
applications, patent licenses, software licenses and know-how licenses, trade
names, trademark registrations and applications, service marks, copyrights,
copyright registrations or applications, trade secrets, technical knowledge,
know-how or other confidential proprietary information. Except as set forth on
Schedule 6.22, there is, to the knowledge of TWA, no reasonable basis upon which
any claim may be asserted against any Seller for infringement or
misappropriation of any domestic or foreign letters patent, patents, patent
applications, patent licenses, software licenses, and know-how licenses, trade
names, trademark registrations and applications, trademarks, service marks,
copyrights, copyright registrations or applications, trade secrets, technical
knowledge,
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know-how or other confidential proprietary information. All letters patent,
registrations and certificates issued by any Governmental Authority relating to
any of the Intellectual Property and all licenses and other agreements pursuant
to which any Seller uses any of the Intellectual Property are valid and
subsisting, have been properly maintained and neither any Seller, nor to the
knowledge of TWA, any other Person, is in default or violation thereunder.
6.23 Worldspan. Trans World PARS, Inc., a Delaware corporation, is an
indirect wholly owned subsidiary of TWA, and a general partner of Worldspan and
directly owns a 26.315% interest in Worldspan. Except for compliance with the
right of first refusal set forth in the Sixth Amended and Restated Limited
Partnership Agreement, dated as of April 30, 1993, of Worldspan, no action,
approval, notice or consent is required in connection with the transfer by Trans
World PARS, Inc. to Purchaser of all of such right, title and interest in and to
Worldspan, including without limitation the Worldspan partnership interest and
rights as a general partner thereof.
6.24 Real Property.
(a) Except as set forth on Schedule 6.24(a), each applicable
Seller owns fee simple absolute title to all owned real properties used in the
conduct of Sellers' business (the "Owned Real Estate") and has good title to, or
valid leasehold interests in, all other real properties used in the conduct of
Sellers' business (the "Leased Real Estate" and together with the Owned Real
Estate, the "Real Estate Assets"). Schedule 6.24(a) contains a true, correct and
complete list of all the Real Estate Assets, including the name of the owner of
record thereof, an accurate street address, a brief description of the use of
such Real Estate Asset and the lease, sublease or other agreement for all Leased
Real Estate. No Seller owns or holds, or is obligated under or a party to, any
option, right of first refusal or other contractual right to purchase, acquire,
sell, assign or dispose of any of the Real Estate Assets.
(b) All components of all improvements included within any
Real Estate Asset (collectively, the "Improvements"), including, without
limitation, the roofs and structural elements thereof and the heating,
ventilation, air conditioning, plumbing, electrical, mechanical, sewer, waste
water, storm water, paving and parking equipment, systems and facilities
included therein, (i) in the case of any Owned Real Property, are or (ii) in the
case of any Leased Real Property, (x) to the extent required to be maintained,
repaired or replaced under the related Lease, are or (y) to the extent not so
required to be maintained, repaired or replaced, to TWA's knowledge, are, in
each case, in good working order and repair (ordinary wear and tear excepted).
All water, gas, electrical, steam, compressed air, telecommunication, sanitary
and storm sewage lines and systems and other similar systems currently serving
the Real Estate Assets are installed and operating and are sufficient to enable
the Real Estate Assets to continue to be used and operated in the manner
currently being used and operated, and no Seller has any knowledge of any factor
or condition that could result in the termination or material impairment of the
furnishing thereof. No Improvement or portion thereof is dependent for its
access, operation or utility on any land, building or other Improvement that is
not
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both included in the Real Estate Assets that is not available for use pursuant
to a reciprocal easement agreement or other contractual right of the applicable
Seller.
(c) All Permits required to have been issued to any Seller to
enable any Real Estate Asset to be lawfully occupied and used for all of the
purposes for which they are currently occupied and used have been lawfully
issued and are in full force and effect. No Seller has received any notice, or
has any knowledge, of any pending, threatened or contemplated condemnation
proceeding affecting any Real Estate Asset or any part thereof or any proposed
termination or impairment of any parking at any such owned or leased real
property or of any sale or other disposition of any such Real Estate Asset or
any part thereof in lieu of condemnation.
(d) No portion of any Real Estate Asset has suffered any
damage by fire or other casualty loss which has not heretofore been completely
repaired and restored to its original condition.
(e) Except as set forth on Schedule 6.24(e):
(i) no structure on any Real Estate Asset fails to
conform in any material respect with applicable ordinances,
regulations, zoning laws and restrictive covenants nor encroaches upon
real property of others, nor is any such Real Estate Asset encroached
upon by structures of others in any case in any manner that would have
or would be reasonably likely to have a Material Adverse Effect;
(ii) no charges or violations have been filed,
served, made or threatened against any Seller, to the knowledge of TWA,
any other Person, against or relating to any such property or structure
on or any of the operations conducted at any Real Estate Asset, as a
result of any violation or alleged violation of any applicable
ordinances, requirements, regulations, zoning laws or restrictive
covenants or as a result of any encroachment on the property of others
where the effect of same would have or would be reasonably likely to
have a Material Adverse Effect;
(iii) other than pursuant to applicable laws, rules,
regulations or ordinances, covenants that run with the land or
provisions in any agreement listed on Schedule 6.24(a), there exists no
restriction on the use, transfer or mortgaging of any Real Estate
Asset;
(iv) each Seller, as applicable, has adequate
permanent rights of ingress to and egress from any such property used
by it for the operations conducted thereon; and
(v) there are no developments affecting any of the
Real Estate Assets or interests of any Seller therein pending or, to
the knowledge of TWA, threatened which might reasonably be expected to
curtail or interfere in any
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material respect with the use of any such Real Estate Asset for the
purposes for which it is now used.
6.25 Disclosure. No representation or warranty of Sellers contained
herein, and no statement contained in any document or other instrument to be
furnished by any Seller to Purchaser in connection with the transactions
contemplated hereby, contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact necessary to make the
representation, warranty or statement so made not misleading.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby makes the following representations and warranties to
Sellers each of which shall be true and correct as of the date of the Original
Agreement and as of the Closing Date (except to the extent expressly relating to
a specific date, in which event it shall be true and correct as of such date)
and shall be unaffected by any investigation heretofore or hereafter made.
7.1 Corporate Organization. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the requisite corporate power and authority to own, lease or otherwise
hold its properties and assets and to carry on its business as presently
conducted.
7.2 Authorization and Effect of Agreement. Purchaser has the requisite
corporate power and authority to execute and deliver this Agreement and the
Collateral Agreements to which it will be a party and to perform its obligations
hereunder and thereunder. The execution and delivery by Purchaser of this
Agreement and the performance by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action on the part
of Purchaser. This Agreement has been duly executed and delivered by Purchaser
and constitutes a valid and binding agreement of Purchaser, enforceable against
Purchaser in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to general principles of
equity. Each of the Collateral Agreements to which Purchaser will be a party,
when executed and delivered by Purchaser, will constitute a valid and binding
agreement of Purchaser, enforceable against Purchaser in accordance with its
terms, subject to applicable bankruptcy, reorganization, moratorium, and similar
laws affecting creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity.
7.3 No Conflicts. The execution and delivery of this Agreement and the
Collateral Agreements to which Purchaser will be a party by Purchaser does not
or will not (as applicable), and the performance by Purchaser of the
transactions contemplated by this Agreement and such Collateral Agreements will
not, conflict with, or result in any violation of, or constitute a default under
(a) any provision of the certificate of incorporation or bylaws of Purchaser,
(b) any of the terms, conditions, or provisions of
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any material agreement or other material document by which Purchaser is bound,
or (c) any Law or order applicable to or binding on Purchaser. Except for the
Approval Order and the expiration of the waiting period under the HSR Act, no
Consent is required to be obtained, made or given (whether pursuant to
applicable Law, contract or otherwise) in connection with the execution and
delivery of this Agreement by Purchaser or the performance by Purchaser of the
transactions contemplated hereby.
7.4 Litigation. As of the date of the Original Agreement, there are no
judicial or administrative actions, proceedings or investigations pending or, to
Purchaser's knowledge, threatened that question the validity of this Agreement
or any action taken or to be taken by Purchaser in connection with this
Agreement.
ARTICLE VIII
PRE-CLOSING COVENANTS
8.1 Access. Prior to the Closing, upon reasonable notice from
Purchaser, TWA shall, and shall cause each other Seller to, afford to the
officers, attorneys, accountants or other authorized representatives of
Purchaser reasonable access during normal business hours to the employees,
Transferred Assets, facilities and books and records of such Seller relating to
the Transferred Assets then owned or previously owned and/or operated by such
Seller so as to afford Purchaser full opportunity to make such review,
examination and investigation of such Transferred Assets as Purchaser determines
are reasonably necessary in connection with the consummation of the transactions
contemplated hereby; provided, however, that the foregoing right of access shall
not be exercisable in such a manner as to interfere unreasonably with the normal
operations and business of such Seller. Purchaser shall be permitted to make
extracts from or to make copies of such books and records as may be reasonably
necessary in connection therewith. Prior to the Closing, TWA shall, and shall
cause each Seller to, promptly furnish Purchaser with access to such maintenance
records, operating data and other information relating to the Transferred Assets
then owned and/or operated by such Seller as Purchaser may reasonably request.
TWA shall promptly deliver to Purchaser such copies of all pleadings, motions,
notices, statements, schedules, applications, reports and other papers filed by
TWA in the Chapter 11 Cases. Seller shall promptly provide to Purchaser all
documents and materials relating to the proposed sale of the Transferred Assets,
Assumed Contracts or any portion thereof, including, without limitation, with
respect to competing bids, and otherwise cooperate with Purchaser, to the extent
reasonably necessary in connection with Purchaser's preparation for or
participation in any part of the Chapter 11 Cases in which Purchaser's
participation is necessary, required or reasonably appropriate. Seller shall
promptly deliver to Purchaser all pleadings, motions, notices, statements,
schedules, applications, reports and other papers filed in any other judicial or
administrative proceeding as Purchaser may reasonably request. In addition, TWA
shall, and shall cause the other Sellers to, consult with Purchaser with respect
to any written or oral communication concerning, in whole or in part, the
transactions contemplated by this Agreement. Without limiting the generality of
this Section 8.1, if requested by Purchaser, Sellers shall provide access to the
Transferred
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Assets to Purchaser and its representatives and agents for purposes of
conducting nonintrusive environmental assessments, including Phase I analyses.
8.2 Conduct of Business. Except as expressly contemplated by this
Agreement (including, without limitation, the commencement and prosecution of
the Chapter 11 Cases) or as otherwise consented to by Purchaser in writing,
during the period from the date of the Original Agreement and continuing until
the Closing, TWA shall, and shall cause each Seller to, in respect of the
Transferred Assets then owned and/or operated by such Seller:
(a) to (i) conduct its business with respect to such
Transferred Assets in the usual, regular and ordinary course as presently
conducted and consistent with past practice, (ii) keep such Transferred Assets
intact, and (iii) maintain such Transferred Assets in at least as good a
condition as their current condition (reasonable wear and tear excepted);
(b) not take or omit to take any action as a result of which
any representation or warranty of TWA made in Article VI would be rendered
untrue or incorrect if such representation or warranty were made immediately
following the taking or failure to take such action;
(c) not mortgage, pledge, sell or dispose of any such
Transferred Assets, and not waive, release, grant, transfer or permit to lapse
any rights of material value, including without limitation any Routes or Slots
to which any Seller has any right on the date of the Original Agreement;
(d) not assign, modify, cancel, otherwise impair or permit to
lapse any Assumed Contract;
(e) comply in all material respects with all provisions of any
Assumed Contract to which such Seller is a party;
(f) comply in all material respects with all applicable Laws
that relate to or affect any Transferred Assets or such Seller's ownership
and/or use thereof, including but not limited to the timely, complete and
correct filing of all reports and maintenance of all records required by any
Governmental Authority to be filed or maintained;
(g) other than adoption of the Retention Agreements and salary
increases in the ordinary course consistent with past practice, not adopt or
amend any bonus, profit-sharing, compensation, severance, termination, stock
option, pension, retirement, deferred compensation, employment or employee
benefit plan, agreement, trust, plan, fund or other arrangement for the benefit
and welfare of any director, officer or employee, or increase in any manner the
compensation or fringe benefits of any director, officer or employee or pay any
benefit not required by any existing plan or arrangement (including, without
limitation, the removal of existing restrictions in any benefit plans or
agreements);
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(h) except as specifically required by Article X, not enter
into any new or amended contract, agreement, side letter or memorandum of
understanding with any unions representing employees of any Seller;
(i) continue, in respect of all Owned Aircraft, Leased
Aircraft, Engines and Spare Parts intended for use in its operations, their
maintenance programs consistent with past practice (except as required or
permitted by applicable law), including using reasonable best efforts to keep
all such aircraft in such condition as may be necessary to enable the
airworthiness certification of such aircraft under the Federal Aviation Act to
be maintained in good standing at all times;
(j) continue to use and operate the Slots, Routes and all
other Transferred Assets used and operated by Sellers as of the date of the
Original Agreement in a manner consistent with prior practice and in accordance
with all applicable laws, and shall not enter into any contract nor otherwise
act, nor suffer or permit any other person to act, to restrict, interfere with
or prevent the use of such Slots, Routes and Transferred Assets;
(k) notify Purchaser in writing of any incidents or accidents
occurring on or after the date of the Original Agreement involving any property
owned or operated by any Seller that resulted or could reasonably be expected to
result in damages or losses in excess of $1,000,000;
(l) notify Purchaser in writing of the commencement of any
material litigation against any Seller or of the existence of any adverse
business conditions arising on or after the date of the Original Agreement
threatening the continued, normal business operations of Sellers or of any
agreement, consent or order of the FAA or DOT involving any Seller;
(m) not take any action, or fail to take action, which action
or failure could result in the loss of any Slot or Route;
(n) not enter into any agreement or understanding with any
other party involving expenditures in excess of $5.0 million in the aggregate or
involving terms of duration or commitments in excess of twelve months;
(o) not enter into any agreement or understanding in excess of
twelve months with any other party containing any exclusivity, non-competition
or similarly restrictive provisions; and
(p) not enter into any marketing arrangement or alliance
(involving code sharing or frequent-flyer program reciprocity) with any other
carrier.
8.3 Notification.
(a) TWA shall notify Purchaser, and Purchaser shall notify
TWA, of any litigation, arbitration or administrative proceeding pending or, to
their knowledge,
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threatened against any Seller or Purchaser, as the case may be, which challenges
or would materially affect the transactions contemplated hereby.
(b) TWA shall provide prompt written notice to Purchaser of
any change in any of the information contained in the representations and
warranties made by TWA in Article VI hereof or any exhibits or schedules
referred to herein or attached hereto and shall promptly furnish any information
which Purchaser may reasonably request in relation to such change; provided,
however, that such notice shall not operate to cure any breach of the
representations and warranties made by TWA in Article VI hereof or any exhibits
or schedules referred to herein or attached hereto.
8.4 No Inconsistent Action. Neither Purchaser nor TWA shall take any
action which is materially inconsistent with its obligations under this
Agreement, and TWA shall cause the other Sellers to refrain from taking any such
action.
8.5 Satisfaction of Conditions. Prior to the Closing, each of the
parties shall use reasonable best efforts with due diligence and in good faith
to satisfy promptly all conditions required hereby to be satisfied by such party
in order to expedite the consummation of the transactions contemplated hereby.
8.6 Filings. Each party shall use its reasonable best efforts to
obtain, and to cooperate with the other party in obtaining, all authorizations,
consents, orders and approvals of any Governmental Authority that may be or
become necessary in connection with the consummation of the transactions
contemplated by this Agreement, and to take all reasonable actions to avoid the
entry of any order or decree by any Governmental Authority prohibiting the
consummation of the transactions contemplated hereby, including without
limitation, the notifications required to be filed by it under the HSR Act, and
shall furnish to the other all such information in its possession as may be
necessary for the completion of the notifications to be filed by the other;
provided that, in complying with this Section 8.6, neither Purchaser nor any of
its Affiliates shall be required to (i) divest any assets or discontinue or
modify any of its operations or (ii) accept or become subject to any condition
or requirement unacceptable to Purchaser in its sole discretion. No party shall
withdraw any such filing or submission prior to the termination of this
Agreement without the written consent of the other parties. Purchaser and TWA
agree that the filing fee required to be paid in connection with the filing
under any regulatory filings (including without limitation under the HSR Act)
shall be paid by Purchaser and divided equally between Purchaser and TWA by
subtracting TWA's half of such filing fees from the Purchase Price in accordance
with Section 4.7.
8.7 All Reasonable Efforts. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use its reasonable best efforts
to take, or cause to be taken, all action, and to do, or cause to be done as
promptly as practicable, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement, including, without
limitation, the prompt preparation by Sellers of all pleadings, motions,
notices, statements, schedules, applications, reports and other papers
reasonably necessary in connection with the Chapter 11 Cases.
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8.8 Further Assurances. From time to time following the Closing, TWA
shall, and shall cause the other Sellers to, execute, acknowledge and deliver
such additional documents, instruments of conveyance, transfer and assignment or
assurances and take such other action as Purchaser may reasonably request to
more effectively assign, convey and transfer to Purchaser, and fully vest title
in Purchaser, with respect to the Transferred Assets.
8.9 Publicity. The parties hereto shall consult with each other and
shall mutually agree (the agreement of each party not to be unreasonably
withheld or delayed) upon the content and timing of any press release or other
public statements with respect to the transactions contemplated by this
Agreement and shall not issue any such press release or make any such public
statement prior to such consultation and agreement, except as may be required by
applicable law or by obligations pursuant to any listing agreement with any
securities exchange or any stock exchange regulations as advised by counsel;
provided, however, that each party shall give prior notice to the other parties
of the content and timing of any such press release or other public statement
required by applicable law or by obligations pursuant to any listing agreement
with any securities exchange or any stock exchange regulations.
8.10 [Intentionally Omitted].
8.11 Bankruptcy Court Approval.
(a) The ORDER (A) AUTHORIZING AND SCHEDULING A PUBLIC AUCTION
AT WHICH THE DEBTORS WILL SOLICIT BIDS FOR ONE OR MORE SALES OF OR OTHER
TRANSACTIONS CONCERNING SUBSTANTIALLY ALL OF THEIR ASSETS FREE AND CLEAR OF
LIENS, CLAIMS AND ENCUMBRANCES; (B) APPROVING PROCEDURES FOR THE SUBMISSION OF
COMPETING OFFERS; (C) APPROVING CERTAIN TERMINATION RIGHTS, EXPENSE
REIMBURSEMENT AND OTHER BIDDING RIGHTS PROVISIONS; (D) SCHEDULING A HEARING TO
CONSIDER APPROVAL OF SUCH TRANSACTION; AND (E) APPROVING THE FORM AND MANNER OF
NOTICE OF THE TRANSACTIONS AND COMPETING OFFER PROCEDURES PURSUANT TO FED. R.
BANKR. PROC. 2002 entered by the Bankruptcy Court on February 7, 2001 and
attached hereto as Exhibit C (with such changes thereto as Purchaser shall
approve in its sole discretion, the "Sale Procedures Order"), (A) approved the
Termination Amount and the Bankruptcy Termination Amount and provided that, in
the event the obligation of Seller to pay Purchaser either the Termination
Amount or the Bankruptcy Termination Amount arises, such obligation shall
constitute a superpriority administrative expense under sections 503(b) and
507(a)(1) of the Bankruptcy Code and shall be payable in accordance with the
provisions of Section 12.1 or Section 12.2 without further order of the
Bankruptcy Court, (B) established procedures and deadlines for the submission of
competing offers, including, without limitation, that (1) a competing offer,
whether a proposed Recapitalization Transaction or a proposed purchase or other
disposition of the Transferred Assets (collectively, a "Competing Offer"), shall
not be considered to be a higher and better offer unless, at a
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minimum, such offer provides for aggregate consideration of at least $75,000,000
in excess of the Purchase Price (with respect to the initial round of bidding)
and of at least $5,000,000 in excess of the aggregate consideration contained in
such bidder's prior Competing Offer (with respect to each subsequent round of
bidding, if any) and is otherwise a Superior Proposal, (2) a Competing Offer
must be accompanied by a good faith cash deposit of at least $50,000,000 and (3)
Purchaser shall be entitled to credit bid the amount of the Bankruptcy
Termination Amount against any revised offer Purchaser may make following such
Competing Offer, and (C) scheduled a hearing to consider entry of the Approval
Order on March 9, 2001 (the "Approval Order Hearing Date") and provided that
notice of such hearing be given to all of Sellers' creditors and interest
holders of record and published in the Wall Street Journal (National Edition).
Purchaser and Sellers agree to make promptly any filings, to take all actions
and to use their reasonable best efforts to obtain entry of the Sale Procedures
Order and the Approval Order and any and all other approvals and orders
necessary or appropriate for the consummation of the transactions contemplated
hereby.
(b) Prior to entry of the Approval Order, TWA and Purchaser
shall, and TWA shall cause the other Chapter 11 Sellers to, accurately inform
the Bankruptcy Court of all material facts of which they are aware relating to
this Agreement and the transactions contemplated hereby.
(c) If the Approval Order, Sale Procedures Order or any other
orders of the Bankruptcy Court relating to this Agreement shall be appealed by
any Person (or a petition for certiorari or motion for rehearing or reargument
shall be filed with respect thereto), TWA agrees to, and shall cause the other
Chapter 11 Sellers to, take all steps as may be reasonable and appropriate to
defend against such appeal, petition or motion, and Purchaser agrees to
cooperate in such efforts, and each party hereto agrees to use its reasonable
best efforts to obtain an expedited resolution of such appeal; provided,
however, that nothing herein shall preclude the parties hereto from consummating
the transactions contemplated herein if the Approval Order shall have been
entered and has not been stayed and Purchaser, in its sole discretion, has
waived in writing the requirement that the Approval Order be a Final Order in
which event Purchaser shall be able to assert the benefits of Section 363(m) of
the Bankruptcy Code as a consequence of which such appeal shall become moot.
(d) Prior to Closing, the sale of the Transferred Assets to
Purchaser pursuant to this Agreement and the other transactions contemplated by
this Agreement shall have been approved by order of the Bankruptcy Court
pursuant to sections 363 and 365 of the Bankruptcy Code, pursuant to an order in
substantially the form attached hereto as Exhibit D (with such changes thereto
as Purchaser shall approve or request in its sole discretion, the "Approval
Order"), and the Approval Order shall have become a Final Order. Purchaser and
TWA agree to use their reasonable best efforts to cause the Bankruptcy Court to
enter an Approval Order which contains, among other provisions reasonably
requested by Purchaser, the following provisions (it being understood that
certain of such provisions may be contained in either the findings of fact or
conclusions of law to be made by the Bankruptcy Court as part of the Approval
Order): (i) the
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transfers of the Transferred Assets by Sellers to Purchaser (A) are or will be
legal, valid and effective transfers of the Transferred Assets; (B) vest or will
vest Purchaser with all right, title and interest of Sellers in and to the
Transferred Assets free and clear of all Liens (other than Permitted Liens) and
claims (as defined in section 101(5) of the Bankruptcy Code) pursuant to section
363(f) of the Bankruptcy Code (other than Liens created by Purchaser) whatsoever
known or unknown including, but not limited to, any of Sellers' creditors,
vendors, suppliers, employees or lessors and that Purchaser shall not be liable
in any way (as successor entity or otherwise) for any claims that any of the
foregoing or any other third party may have against any of the Sellers, the
business of Sellers and the Transferred Assets and permanently enjoins and
restrains the assertion and prosecution of any claims against Purchaser,
Purchaser's Affiliates and the ownership, use and operation of the Transferred
Assets, other than claims on the account of Assumed Liabilities; and (C)
constitute transfers for reasonably equivalent value and fair consideration
under the Bankruptcy Code and the laws of the States of New York and Delaware;
(ii) all amounts to be paid to Purchaser pursuant to this Agreement constitute
superpriority administrative expenses under sections 503(b) and 507(a)(1) of the
Bankruptcy Code and are immediately payable if and when the obligations of
Sellers arise under this Agreement, without any further order of the Bankruptcy
Court; provided, however, that Sellers shall have the right to contest the
validity and amount of such asserted claims; (iii) all Persons are enjoined from
taking any action against Purchaser, Purchaser's Affiliates (as they existed
immediately prior to the Closing) or the Sellers to recover any claim which such
Person has solely against Sellers or any of Sellers' Affiliates (as they existed
immediately following the Closing); (iv) the Bankruptcy Court retains exclusive
jurisdiction through the Bankruptcy Resolution Date to interpret, construe and
enforce the provisions of this Agreement, the Sale Procedures Order and the
Approval Order in all respects; provided, however, that in the event the
Bankruptcy Court abstains from exercising or declines to exercise jurisdiction
with respect to any matter provided for in this clause (iv) or is without
jurisdiction, such abstention, refusal or lack of jurisdiction shall have no
effect upon and shall not control, prohibit or limit the exercise of
jurisdiction of any other court having competent jurisdiction with respect to
any such matter; (v) the provisions of the Approval Order are nonseverable and
mutually dependent; (vi) the transactions contemplated by this Agreement are
undertaken by Purchaser and Sellers at arm's length, without collusion and in
good faith within the meaning of section 363(m) of the Bankruptcy Code, and such
parties are entitled to the protections of section 363(m) of the Bankruptcy
Code, (vii) not selling the Transferred Assets free and clear of liens and
claims would impact adversely on Sellers' bankruptcy estates; (viii) a sale of
the Transferred Assets other than one free and clear of liens and claims would
be of substantially less benefit to the estate of the Sellers; (ix) Sellers may
assign and transfer to Purchaser all of Sellers' right, title and interest
(including common law rights) to all of their intangible property; (x) approves
the Sellers' assignment of the Assumed Contracts pursuant to sections 363 and
365 of the Bankruptcy Code and orders Sellers to pay any cure amounts payable to
the other parties to the Assumed Contracts from the Purchase Price proceeds;
(xi) provides for the retention of jurisdiction by the Bankruptcy Court to
resolve any and all disputes that may arise under this Agreement as between
Sellers and Purchaser, and further to hear and determine any and all disputes
between Sellers and/or Purchaser, as the case may be, and any non-Sellers party
to,
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among other things, any Assumed Contracts, concerning inter alia, Sellers'
assignment thereof to Purchaser under this Agreement and any non-Seller's claims
arising under any agreements relating to Retained Liabilities; (xii) pursuant to
section 1146(c) of the Bankruptcy Code, provides for the exemption of the
transactions contemplated herein from certain taxes, provides for the waiver of
so-called "bulk-sale" laws in all necessary jurisdictions, and provides that the
transactions contemplated herein are deemed to be under or in contemplation of a
plan to be confirmed under section 1129 of the Bankruptcy Code; and (xiii)
provides that except for the items set forth on Schedule 2.1(v), the Assumed
Liabilities do not include any of Sellers' liabilities or obligations relating
to any claims, disputes, demands, actions, liabilities, damages, suits in
equity, administrative proceedings accounts, costs, expenses, setoffs,
contributions, attorneys' fees and/or causes of action of whatever kind or
character, whether past, present, future, known or unknown, liquidated or
unliquidated, accrued or unaccrued.
(e) TWA shall, and shall cause the other Chapter 11 Sellers
to, cooperate reasonably with Purchaser and its representatives in connection
with the Approval Order, the Sale Procedures Order and the bankruptcy
proceedings in connection therewith. Such cooperation shall include, but not be
limited to, consulting with Purchaser at Purchaser's reasonable request
concerning the status of such proceedings and providing Purchaser with copies of
requested pleadings, notices, proposed orders and other documents relating to
such proceedings as soon as reasonably practicable prior to any submission
thereof to the Bankruptcy Court. Sellers further covenant and agree that the
terms of any plan submitted by Sellers to the Bankruptcy Court for confirmation
shall not conflict with, supersede, abrogate, nullify, modify or restrict the
terms of this Agreement and the rights of Purchaser hereunder, or in any way
prevent or interfere with the consummation or performance of the transactions
contemplated by this Agreement including, without limitation, any transaction
that is contemplated by or approved pursuant to the Approval Order and the Sale
Procedures Order.
8.12 Specific Enforcement of Covenants. Sellers acknowledge that
irreparable damage would occur in the event that any of the covenants and
agreements of Sellers set forth in this Article VIII or in any other part of
this Agreement were not timely performed in accordance with their specific terms
or were otherwise breached. It is accordingly agreed that Purchaser shall be
entitled to an injunction or injunctions to prevent or cure any breach of such
covenants and agreements of Sellers and to enforce specifically the terms and
provisions thereof, this being in addition to any other remedy to which it may
be entitled at law or in equity, it being understood that, after commencement of
the Chapter 11 Cases, the Bankruptcy Court shall have exclusive jurisdiction
over such matters; provided, however, that in the event the Bankruptcy Court
abstains from exercising or declines to exercise jurisdiction with respect to
any matter provided for in this sentence or is without jurisdiction, such
abstention, refusal or lack of jurisdiction shall have no effect upon and shall
not control, prohibit or limit the exercise of jurisdiction of any other court
having competent jurisdiction with respect to any such matter.
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8.13 Other Agreements. After the date of the Original Agreement should
any Seller enter into any contract, agreement or other arrangement, TWA shall
(i) immediately deliver written notice to Purchaser of the occurrence of such
event and provide Purchaser with all the information about and with access to
such items as Purchaser may reasonably request and (ii) if notified in writing
by Purchaser prior to Closing, transfer, convey or assign to Purchaser such item
in the manner and on the terms and conditions as if it were a Transferred Asset
or Assumed Contract under this Agreement.
8.14 [Intentionally Omitted].
8.15 Aircraft Inspection Rights. Purchaser shall have the right to
conduct an inspection of the Owned Aircraft and Leased Aircraft as would be
required in connection with the performance of a "B" maintenance check of the
aircraft under Purchaser's approved maintenance program, including the right to
open those sealed items, including any sealed bays, panels or doors, which would
be required to be opened during such "B" check (but not to open any other sealed
items, except as would be so required during such "B" check), and to inspect (in
such manner consistent with a "B" check level inspection) those parts,
components, and structures behind such sealed items (i) which would be required
to be inspected during such "B" check or (ii) whose maintenance condition would
be otherwise immediately apparent during the course of such required inspection.
Purchaser shall have customary rights for an acceptance flight of the aircraft.
Purchaser shall also have the right to borescope the engines to the same extent
as would be required in connection with the performance of a "B" maintenance
check of the aircraft under Purchaser's approved maintenance program.
8.16 Designations. With respect to any lease that would be an Aircraft
Lease but for the fact that the aircraft to which it relates is listed on
Schedule 2.2 or Gate Lease listed on Schedule 2.2, Purchaser shall not purchase,
lease or otherwise obtain a direct or indirect interest in the aircraft or gate
underlying such lease during the period commencing on the date of the Original
Agreement and ending on the first anniversary of the Closing Date; provided,
however, that this Section 8.16 shall not apply to (i) any Aircraft underlying
an Aircraft Lease not (A) assigned by the applicable Seller to Purchaser at
Closing or (B) amended at Closing to incorporate terms agreed to by Purchaser
with the parties to such Aircraft Lease due in either case solely to the
inability to obtain any necessary consents of any party with rights with respect
to such Aircraft or Aircraft Lease (including, without limitation, lenders,
guarantors, residual holders, lienholders, pre-delivery financing providers and
parties with purchase options, but excluding the primary lessor under such
Aircraft Leases) and (ii) any Gate at any of the following airports JFK, SFO,
BQN and any other airport designated by Purchaser and consented to by TWA (which
consent shall not be unreasonably withheld); provided, further that any lease or
license of an Aircraft or Gate to, or similar use by, Purchaser pursuant to
Section 9.5 shall not be a violation of this Section 8.16.
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8.17 Marketing Agreements. Purchaser and TWA shall promptly negotiate
in good faith agreements between them regarding accrual of AAdvantage frequent
flyer miles on TWA flights and reciprocal airport lounge access.
ARTICLE IX
POST-CLOSING COVENANTS
9.1 Maintenance of Books and Records. Sellers and Purchaser shall
preserve until the seventh anniversary of the Closing Date (or, with respect to
any Sellers, until such time as such Seller is liquidated) all records possessed
by such party relating to the assets, liabilities or operations of the
Transferred Assets prior to the Closing Date. After the Closing Date, where
there is a legitimate purpose, such party shall provide the other party with
access, upon prior reasonable written request specifying the need therefor,
during regular business hours, to (i) the relevant officers and employees of
such party and (ii) the books of account and records of such party, but, in each
case, only to the extent relating to the assets, liabilities and operations of
the Transferred Assets prior to the Closing Date, and the other party and its
representatives shall have the right to make copies of such books and records;
provided, however, that the foregoing right of access shall not be exercisable
in such a manner as to interfere unreasonably with the normal operations and
business of such party; and further provided that, as to so much of such
information as constitutes trade secrets or confidential business information of
such party, the requesting party and its representatives shall use due care to
not disclose such information except (i) as required by Law, (ii) with the prior
written consent of such party, which consent shall not be unreasonably withheld,
or (iii) where such information becomes available to the public generally, or
becomes generally known to competitors of such party, through sources other than
the requesting party and its representatives. Such records may nevertheless be
destroyed by a party if such party sends the other party written notice of its
intent to destroy records, specifying with particularity the contents of the
records to be destroyed. Such records may then be destroyed after the 30th day
following delivery of such notice unless the other party objects to the
destruction, in which case the party seeking to destroy the records shall either
agree to retain such records or to deliver such records to the objecting party.
9.2 Right of Subrogation. In connection with Purchaser's right of
subrogation pursuant to Section 2.1(ix), upon the written request of Purchaser,
TWA shall, and shall cause each other Seller to, cooperate with Purchaser in
connection with any action or proceeding by Purchaser (whether or not in the
name of any such Seller) to enforce any such subrogation right.
9.3 Confidentiality. Each party hereto acknowledges that the other
parties have legitimate and continuing proprietary interests in the protection
of their confidential information and that the parties have invested substantial
sums and will continue to invest substantial sums to develop, maintain and
protect such confidential information. Prior to and after the Closing, each
party agrees not to disclose, furnish or make accessible to anyone or use for
its own benefit (other than as contemplated hereby) any trade secrets or
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other confidential or proprietary information of another party relating to any
Seller, Purchaser and/or their respective businesses or the other parties
including, but not limited to, information obtained by or revealed to such party
during any investigations, negotiations or review relating to this Agreement and
any other document contemplated hereby or thereby or any past or future actions
taken in connection with, pursuant to, in accordance with, or under this
Agreement, including without limitation any business plans, marketing plans,
financial information, strategies, systems, programs, methods and computer
programs; provided, however, that such protected information shall not include
(i) information required to be disclosed by law, legal or judicial process
(including a court order, subpoena or order of a Governmental Authority) or the
rules of any stock exchange, (ii) information that is or becomes available to
the disclosing party on a non-confidential basis from a source other than the
other parties and not obtained in violation of this Agreement and (iii)
information known to the public or otherwise in the public domain without
violation of this Section 9.3; provided, further, that this Section 9.3 shall
not in any way limit the disclosure of information by TWA (a) in connection with
the commencement and prosecution of the Chapter 11 Cases or (b) regarding TWA
(i) to other bidders or potential bidders to the extent specifically permitted
by this Agreement or (ii) following the termination of this Agreement. Each
party hereto further agrees that: (i) unless otherwise approved by antitrust
counsel to Purchaser and TWA, respectively, only information relating to due
diligence matters (and not information relating to integration or otherwise)
shall be delivered by TWA to Purchaser and its representatives for purposes of
Purchaser conducting any due diligence in accordance with this Agreement; (ii)
Purchaser agrees that any information provided by TWA will only be used by
Purchaser to conduct due diligence in accordance with this Agreement; (iii)
information received by Purchaser will be disclosed only to those Purchaser
personnel and representatives (a) who need to know such information for the
purpose of conducting due diligence in accordance with this Agreement and (b)
have agreed to only use such information for purposes of conducting due
diligence in accordance with this Agreement; (iv) TWA acknowledges that it will
be necessary for Purchaser, in the course of its due diligence investigation, to
have discussions regarding TWA with third parties who have contractual
relationships with TWA and Purchaser hereby agrees that it will, upon commencing
any such discussion or as soon as practicable thereafter, notify TWA of the
identity of any such third party; and (v) Purchaser hereby agrees that all
requests by Purchaser and its representatives for additional information or
access will be submitted to one or more of the appropriate information
representatives previously designated by TWA (or any officer, director, employee
or agent of TWA approved by ▇▇▇▇ ▇▇▇▇▇▇▇▇▇).
9.4 Post-Closing Assignments. After the Closing Date and upon the
discovery by any Seller of any items included within the definition of
Transferred Assets or Assumed Contracts but not transferred, conveyed or
assigned to or assumed by Purchaser in the ▇▇▇▇ of Sale, the Assumption
Agreement or any other applicable instrument of conveyance, TWA shall (i)
immediately deliver written notice to Purchaser of the existence and
non-transfer or non-assumption of such item and provide Purchaser with all the
information about and with access to such item as Purchaser may reasonably
request and (ii) if notified in writing by Purchaser within 30 days after the
delivery of such notice by TWA, transfer, convey or assign to Purchaser such
item in the manner and on the
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terms and conditions as if it were a Transferred Asset or Assumed Contract under
this Agreement.
9.5 Transition Agreements.
(a) If requested in writing by Purchaser on or before 10 days
prior to the Closing Date, TWA shall use its best efforts to (i) enter into one
or more of a lease, sublease, license, use agreement, transition services
agreement or any other similar arrangement on terms reasonably acceptable to
Purchaser and TWA and/or (ii) at Purchaser's sole expense, keep in force and
effect any existing agreements or arrangements in order to provide Purchaser
access to and/or the full use and benefit of any Excluded Asset, any item listed
on Schedule 2.2 (including, without limitation, real property leases and third
party administration contracts) or any other item not transferred to Purchaser
under this Agreement and listed by Purchaser in such request for a reasonable
period of time. TWA will defend and dispute any efforts to preclude Purchaser
from having the benefits of this Section 9.5(a).
(b) At the Closing, the Purchaser and TWA, on behalf of itself
and the other Sellers, agree to negotiate and enter into a mutually acceptable
transition services agreement (the "Transition Services Agreement") whereby the
Purchaser shall provide, or shall cause its wholly-owned direct and indirect
subsidiaries to provide, to Sellers various services, including without
limitation, financial services (e.g., controller functions, payroll functions,
financial reporting functions, systems management functions, accounts payable
functions), infrastructure support services (e.g., information technology and
application support), operations support services (e.g., storage space, office
space, etc.), and human resources services (e.g., staffing), pursuant to
mutually acceptable and reasonable terms and conditions.
9.6 Property Tax Payments. From and after the Closing Date, Purchaser
shall use that portion of the Purchase Price held back pursuant to Section 4.8
to pay and discharge all personal property, ad valorem and other tax payments
owed by Sellers pursuant to Section 4.5 and Section 4.6 and any remaining
amounts held back shall be returned to the account of TWA.
9.7 Frequent Flyer Programs. Purchaser agrees that, following the
Closing, participants in TWA's Aviators frequent-flyer program will be given the
opportunity to exchange accrued miles in the Aviators program for miles in
Purchaser's AAdvantage frequent-flyer program on a mile-for-mile basis;
provided, that it shall be a condition of such exchange that, to the extent that
such participant is not already an AAdvantage member, such participant shall be
required to enroll in the AAdvantage program and all AAdvantage miles delivered
in exchange for Aviators miles shall be subject to the terms and conditions of
(i) such enrollment and (ii) the AAdvantage program as may be in effect from
time to time. In addition, Purchaser (or its permitted assignee hereunder)
agrees to negotiate in good faith with TWA for the purposes of entering into an
agreement with TWA whereby Purchaser (or its permitted assignee) will provide
services to TWA from and after the Closing for the purposes of (i) administering
the Aviators program on behalf of TWA, and (ii) honoring partner and
participation contracts of TWA
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with respect to the Aviators program; provided, however, that such agreement
between TWA and Purchaser (or its permitted assignee) will expire no less than
180 days following the Closing Date and provided, further, that Purchaser (or
its permitted assignee) shall not, by virtue of any such agreement, be deemed to
have assumed any contract, arrangement or other understanding with respect to
the Aviators program except as may otherwise be expressly set forth in this
Agreement.
9.8 Access to Information For a period of thirty six (36) months after
the Closing Date (the "Transition Period"), TWA, Purchaser and their
representatives shall have reasonable access to, and each shall the right to
photocopy at their own expense, all of the books and records, including any
computerized databases and files and programs and associated software, (the
"Books and Records") relating to the pre-Closing operations of TWA and/or the
Transferred Assets as they existed as of the Closing Date, including but not
limited to (i) the investigation, evaluation and prosecution of any and all
causes of action retained by any Seller, (ii) the evaluation and defense of any
and all claims brought against the estate of any Seller and (iii) all
transferred employees' records or other personnel and medical records required
by law, legal process or subpoena, in the possession of the other party to the
extent that such access may reasonably be required by such party in connection
with the Assumed Liabilities and Retained Liabilities, or other matters relating
to or affected by the operation of TWA's business or use of the Transferred
Assets. During the Transition Period, Purchaser agrees to provide TWA and any of
its representatives, during ordinary business hours, upon reasonable request and
notice and at TWA's expense, with reasonable access to employees of the
Purchaser for purposes of winding down the estates of Sellers. Access pursuant
to this Section 9.8 shall be afforded by the party in possession of such Books
and Records, upon receipt of reasonable advance notice, during normal business
hours and at the expense of the requesting party; provided, however, that (A)
any such investigation shall be conducted in such a manner as not to interfere
unreasonably with the operation of the business of any party, (B) no party shall
be required to take any action which would constitute a waiver of the
attorney-client privilege or which would require the disclosure of confidential
information and (C) no party need to supply the other party with any information
which such party is under a legal obligation not to supply. The party exercising
this right of access shall be solely responsible for any costs or expenses
incurred by it pursuant to this Section 9.8. If the party in possession of such
Books and Records shall desire to dispose of any such Books and Records upon or
prior to the expiration of such period, such party shall, prior to such
disposition, give the other party a reasonable opportunity at such other party's
expense, to segregate and remove such Books and Records as such other party may
select.
ARTICLE X
EMPLOYEE MATTERS
10.1 Hiring Obligations. Upon the occurrence of the Closing, Purchaser
shall (i) offer all of Sellers' U.S.-based union employees (other than personnel
who (A) have previously been terminated by Purchaser or an entity controlled by
Purchaser or (B)
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would not be qualified for employment under Purchaser's general hiring policies
as in effect at Closing) employment by Purchaser or one or more entities
controlled by Purchaser at compensation levels substantially equivalent to those
currently enjoyed by similarly situated employees of Purchaser or such
controlled entity, (ii) offer employment to certain members of TWA's executive
management and non-union employees on a case-by-case basis at Purchaser's sole
discretion and (iii) provide employment benefits and post-retirement benefits to
all employees actually hired by Purchaser pursuant to (i) and (ii) above at
levels substantially no less favorable than those benefits provided to
Purchaser's similarly situated employees. Any Seller employees to be hired by
Purchaser or an entity controlled by Purchaser in accordance with this Section
10.1 will be hired in accordance with terms and conditions established by
Purchaser or such entity (and, where applicable, in accordance with and pursuant
to collective bargaining agreements relating to employees of Purchaser or such
controlled entity).
10.2 Union Matters. All offers of employment made by Purchaser in
accordance with Section 10.1(i) above and all benefits to be provided pursuant
to Section 10.1(iii) above will be conditioned on acceptance by all such
employees of Purchaser's work rules then in effect and in effect after the
Closing Date from time to time that are generally applicable to similarly
situated employees of Purchaser. Purchaser and Sellers agree to encourage their
respective unions to negotiate in good faith to resolve fair and equitable
seniority integration. Prior to Closing, TWA shall amend all existing Collective
Bargaining Agreements relating to any present or former employee of TWA to
provide that (i) scope, successorship, and benefits provisions of the Collective
Bargaining Agreements are not applicable to or being assumed by Purchaser as
part of or as the result of the transactions contemplated by this Agreement, and
(ii) consummation of the transactions contemplated by this Article X will not
violate or breach in any manner any provision of any Collective Bargaining
Agreement (collectively, the "CBA Amendments").
10.3 Treatment of Pension Plans. Sellers' employees hired by Purchaser
pursuant to Section 10.1 above shall cease to participate in all pension plans
(within the meaning of section 3(2) of ERISA) maintained or contributed to by
any of Sellers. Purchaser shall not assume or be liable for any such pension
plans. Purchaser intends to permit a transfer or merger of the assets of any
such pension plan which is a defined contribution plan (as defined in section
3(34) of ERISA) that Purchaser determines is qualified under section 401(a) of
the Code, or may permit the receipt of eligible rollover distributions (within
the meaning of section 402(f)(2)(A) of the Code) from such plan, with or to any
plan of Purchaser after the Closing Date.
10.4 Treatment of Welfare Plans. Sellers' employees hired by Purchaser
pursuant to Section 10.1 above shall cease to participate in all welfare plans
(within the meaning of section 3(1) of ERISA) maintained or contributed to by
any of Sellers. Purchaser shall not assume or be liable for any such welfare
plans. Sellers shall have sole responsibility for "continuation coverage"
benefits provided under Sellers' group health plans to all former employees of
Sellers, and "qualified beneficiaries" of former employees of Sellers, for whom
a "qualifying event" has occurred on or prior to the
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Closing Date. Terms used in this subsection and not otherwise defined herein
shall have the meanings ascribed to them under section 4980B of the Code and
sections 601-608 of ERISA.
10.5 Tax Reporting. If requested by Purchaser, Purchaser, TWA and each
other Seller agree that, pursuant to the "Alternative Procedure" provided in
Section 5 of Revenue Procedure 96-60, 1996-2 C.B. 399, (i) Purchaser, TWA and
each other Seller will report on a predecessor-successor basis as set forth
therein, (ii) TWA and each other Seller will be relieved from filing a Form W-2
with respect to any employee of TWA and each other Seller who accepts employment
with Purchaser, and (iii) Purchaser will file (or cause to be filed) a Form W-2
for each such employee for the year that includes the Closing Date (including
the portion of such year that such employee was employed by TWA or any other
Seller). TWA agrees to provide Purchaser with all payroll and employment-related
information reasonably requested by Purchaser with respect to each employee of
TWA and each other Seller who commences employment with Purchaser.
ARTICLE XI
RISK OF LOSS
11.1 Risk of Loss on Sellers. TWA shall bear the risk of any loss or
damage to any Transferred Assets at all times prior to the delivery of physical
possession thereof to Purchaser in accordance with Section 5.3. TWA shall
promptly notify Purchaser if any such loss or damage occurs. If any such
Transferred Asset has been damaged but not destroyed then TWA promptly shall
fully repair (or cause the applicable Seller to fully repair) such Transferred
Asset; provided, however, that such repair obligation shall not exist if the
cost of repair would be sufficiently large that the only reasonable course of
action would be to treat such Transferred Asset as a total loss. In the event of
any total loss (or loss treated as a total loss in accordance with the
immediately prior sentence) of any Transferred Asset, the Purchase Price shall
be reduced in accordance with Section 4.4. If any loss or damage to any tangible
Transferred Asset occurs following the Closing at which such Transferred Asset
was conveyed to Purchaser but prior to the delivery of physical possession
thereof to Purchaser in accordance with Section 5.3, then TWA promptly shall pay
or cause the applicable Seller to pay to Purchaser the amount by which the
Purchase Price would have been reduced in accordance with Section 4.4 if such
loss or damage had occurred prior to the Closing.
ARTICLE XII
FURTHER AGREEMENTS AND TERMINATION
12.1 Termination Payment.
(a) In the event that this Agreement is terminated pursuant to
Section 12.3(c)(iii) (in a case in which any Seller is in material default or
material breach of this Agreement, or where a representation or warranty made as
of the date of the Original Agreement is shown to have been inaccurate as of the
date of the Original
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Agreement, subject to the other terms and conditions of Section 12.3(c)(iii)
regarding such inaccuracy) or Section 12.3(c)(iv) of this Agreement or by TWA
pursuant to Section 12.3(b)(iii) of this Agreement, then in any such case TWA
shall be obligated to pay Purchaser, in cash, an amount (not to exceed
$10,000,000) on account of the Purchaser Expenses.
(b) Any amount payable pursuant to this Section 12.1 shall be
referred to as the "Termination Amount". The Termination Amount shall be paid
immediately prior to the termination of this Agreement.
12.2 Bankruptcy Termination Payment. In the event this Agreement is
terminated pursuant to Section 12.3(b)(i) of this Agreement, TWA shall be
obligated to pay to Purchaser, in cash, the sum of $55,000,000 plus an amount
(not to exceed $10,000,000) on account of the Purchaser Expenses (such sum being
the "Section 12.3(b)(i) Termination Amount"), which amount shall be payable no
later than the earlier of (i) the consummation of the Recapitalization
Transaction or sale (whether in one transaction or a series of transactions) of
either TWA or all or substantially all of the assets of TWA or all or
substantially all of the Transferred Assets to a Person or Persons other than
Purchaser or an Affiliate of Purchaser, (ii) the effective date of any plan of
reorganization (that is not a plan of liquidation) confirmed in the Chapter 11
Cases, (iii) the dismissal of the Chapter 11 Cases, and (iv) the conversion of
the Chapter 11 Cases to cases under chapter 7 of the Bankruptcy Code. In the
event this Agreement is terminated pursuant to Section 12.3(c)(i) or Section
12.3(c)(ii) of this Agreement, then (i) TWA shall be obligated to pay Purchaser,
immediately upon such termination of this Agreement, an amount (not to exceed
$10,000,000) on account of the Purchaser Expenses, and (ii) if, (x) within
twelve (12) months following such termination of this Agreement, TWA or the
other Sellers consummate a Recapitalization Transaction or sale of either TWA or
all or substantially all of the assets of TWA or all or substantially all of the
Transferred Assets to a Person (or group of Persons) other than Purchaser or an
Affiliate of Purchaser, or (y) within twenty-four (24) months following such
termination of this Agreement, a chapter 11 plan for TWA or the other Sellers is
confirmed, then TWA shall be obligated to pay to Purchaser, immediately upon the
consummation of any such transaction, an amount equal to $55,000,000 (the sum of
the amounts described in clauses (i) and (ii) above being the "Alternative
Termination Amount," with the Section 12.3(b)(i) Termination Amount and the
Alternative Termination Amount being referred to herein collectively as the
"Bankruptcy Termination Amount"); provided, however, that, in accordance with
the terms and conditions of the Sale Procedures Order, the Bankruptcy
Termination Amount shall not be applicable to and Purchaser shall not be paid
the Bankruptcy Termination Amount if Purchaser is the successful bidder for the
Transferred Assets but not the successful bidder for the Worldspan interest.
12.3 Termination. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing:
(a) by mutual consent of each of TWA and Purchaser;
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(b) by either of TWA or Purchaser (provided that such party is
not then in material breach of any provision of this Agreement or any agreement
underlying the DIP Facility):
(i) if the Bankruptcy Court approves a
Recapitalization Transaction or a sale of TWA or all or substantially
all of the assets of TWA or any of the Transferred Assets to a Person
(or group of Persons) other than Purchaser or an Affiliate of
Purchaser, provided, that no termination under this Section 12.3(b)(i)
shall be effective until the Section 12.3(b)(i) Termination Amount
shall have been paid to Purchaser;
(ii) if a Governmental Authority shall have issued an
order, decree or ruling or taken any other action (which order, decree
or ruling the parties hereto shall use their reasonable best efforts to
lift), in each case permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement and such
order, decree, ruling or other action shall have become final and
nonappealable; or
(iii) if the Closing shall not have occurred on or
before the Scheduled Closing Date.
(c) by Purchaser (provided that Purchaser is not then in
material breach of any provision of this Agreement or any agreement underlying
the DIP Facility):
(i) if the Sale Procedures Order is modified in any
respect without the consent of Purchaser;
(ii) if the Approval Order has not been entered by
the Bankruptcy Court within 10 days of the Approval Order Hearing Date
and, as of the time of such termination of this Agreement, the Approval
Order has not been entered by the Bankruptcy Court; or
(iii) if a material default or material breach shall
be made by any Seller with respect to the due and timely performance of
any of its covenants or agreements contained herein, or if its
representations or warranties contained in the Agreement shall have
become inaccurate (without giving effect to any materiality or Material
Adverse Effect qualifications or exceptions contained therein) and such
inaccuracy has had or would be reasonably likely to have a Material
Adverse Effect, if such default, breach or inaccuracy has not been
cured or waived within 30 days after written notice to such Seller
specifying, in reasonable detail, such claimed default, breach or
inaccuracy and demanding its cure or satisfaction; or
(iv) if an event or events or circumstance shall have
occurred since the date of the Original Agreement which, independently
or together with any other event, events or circumstance that have
occurred or are reasonably likely to occur, have or are reasonably
likely to have a Material Adverse Effect.
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(d) by TWA (provided that TWA is not then in material breach
of any provision of this Agreement or any agreement underlying the DIP Facility)
if a material default or breach shall be made by Purchaser with respect to the
due and timely performance of any of its covenants or agreements contained
herein, or if its representations or warranties contained in the Agreement shall
have become inaccurate and such inaccuracy has had or would be reasonably likely
to have a Purchaser Material Adverse Effect, if such default, breach or
inaccuracy has not been cured or waived within 30 days after written notice to
Purchaser specifying, in reasonable detail, such claimed default, breach or
inaccuracy and demanding its cure or satisfaction;
12.4 Procedure and Effect of Termination. This Agreement shall in no
event terminate unless and until any and all amounts payable to Purchaser
pursuant to Section 12.1 and Section 12.2 in connection with such proposed
termination shall have been paid in full to Purchaser. In the event of
termination and abandonment of the transactions contemplated hereby pursuant to
Section 12.3, written notice thereof shall forthwith be given to the other
parties to this Agreement and this Agreement shall terminate (subject to the
provisions of this Section 12.4) and the transactions contemplated hereby shall
be abandoned, without further action by any of the parties hereto. If this
Agreement is terminated as provided herein:
(a) upon request therefor, each party shall redeliver all
documents, work papers and other material of any other party relating to the
transactions contemplated hereby, whether obtained before or after the execution
hereof, to the party furnishing the same;
(b) no party hereto shall have any liability or further
obligation to any other party to this Agreement resulting from such termination
except (i) that the provisions of Section 12.1, Section 12.2, this Section 12.4
and Section 9.3 shall remain in full force and effect and (ii) no party waives
any claim or right against a breaching party to the extent that such termination
results from the breach by a party hereto of any of its representations,
warranties, covenants or agreements set forth in this Agreement; provided,
however, that in the event Purchaser is entitled to receive the Termination
Amount or the Bankruptcy Termination Amount, the right of Purchaser to receive
such amount shall constitute Purchaser's sole remedy for (and such amount shall
constitute liquidated damages in respect of) any breach by any Seller of any of
its representations, warranties, covenants or agreements set forth in this
Agreement; and
(c) the DIP Facility shall be terminated or shall terminate in
accordance with its terms.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.1 Notices. All notices and other communications required or
permitted hereunder shall be in writing and, unless otherwise provided in this
Agreement, will be deemed to have been duly given when delivered in person or
when dispatched by
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electronic facsimile transfer (confirmed in writing by mail simultaneously
dispatched) or one business day after having been dispatched by a nationally
recognized overnight courier service to the appropriate party at the address
specified below:
(a) If to TWA, to:
Trans World Airlines, Inc.
One City Centre
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ Soled
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
Aon Center
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Purchaser, to:
American Airlines
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & ▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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or to such other address or addresses as any such party may from time to time
designate as to itself by like notice.
13.2 Actions by Sellers. Where any provision of this Agreement
indicates that any Seller shall take any specified action (or refrain from
taking any specified action) or requires any Seller to take any specified action
(or to refrain from taking any specified action), then, regardless of whether
this Agreement specifically provides that TWA shall do so, TWA shall cause such
Seller to take such action (or to refrain from taking such action, as
applicable). TWA shall be responsible for the failure of any such Seller to take
any such action (or to refrain from taking any such action, as applicable).
13.3 Expenses. Except as otherwise expressly provided herein, each
party hereto shall pay any expenses incurred by it incident to this Agreement
and in preparing to consummate and consummating the transactions provided for
herein.
13.4 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors
(including, without limitation, any trustee appointed for TWA or any of the
Sellers) and permitted assigns, but shall not be assignable or delegable by any
party without the prior written consent of the other party; provided, however,
that upon notice to TWA or any other Seller delivered in accordance with Section
13.1, Purchaser may assign or delegate any or all of their rights or obligations
under this Agreement to any Affiliate thereof or to any Person that directly or
indirectly acquires, after the Closing, all or substantially all of the assets
or voting stock of Purchaser, but such assignment or delegation shall not
relieve Purchaser of any obligation hereunder.
13.5 Waiver. Purchaser may, by written notice to TWA, and TWA (for
itself and on behalf of all other Sellers) may, by written notice to Purchaser,
(a) extend the time for performance of any of the obligations of the other party
under this Agreement, (b) waive any inaccuracies in the representations or
warranties of the other party contained in this Agreement, (c) waive compliance
with any of the conditions or covenants of the other party contained in this
Agreement, or (d) waive or modify performance of any of the obligations of the
other party under this Agreement; provided, however, that no such party may,
without the prior written consent of the other party, make or grant such
extension of time, waiver of inaccuracies or compliance or waiver or
modification of performance with respect to its representations, warranties,
conditions or covenants hereunder. Except as provided in the immediately
preceding sentence, no action taken pursuant to this Agreement shall be deemed
to constitute a waiver of compliance with any representations, warranties,
conditions or covenants contained in this Agreement or shall operate or be
construed as a waiver of any subsequent breach, whether of a similar or
dissimilar nature.
13.6 Entire Agreement; Disclosure Schedules. This Agreement, which
includes the schedules and exhibits hereto, supersedes any other agreement,
whether written or oral, that may have been made or entered into by any party
relating to the matters contemplated hereby, including without limitation that
certain Letter Agreement dated as
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of February 5, 2001 between TWA and Purchaser, and constitutes the entire
agreement by and among the parties hereto.
13.7 Amendments, Supplements, Etc. This Agreement may be amended or
supplemented at any time by additional written agreements as may mutually be
determined by Purchaser and TWA to be necessary, desirable or expedient to
further the purposes of this Agreement or to clarify the intention of the
parties.
13.8 Rights of the Parties. Nothing expressed or implied in this
Agreement is intended or shall be construed to confer upon or give any Person
other than the parties hereto any rights or remedies under or by reason of this
Agreement or any transaction contemplated hereby.
13.9 Applicable Law. This Agreement and the legal relations among the
parties hereto shall be governed by and construed in accordance with the rules
and substantive Laws of the State of New York, without regard to conflicts of
law provisions thereof.
13.10 Execution in 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 agreement. Any counterpart may
be executed by facsimile signature and such facsimile signature shall be deemed
an original.
13.11 Titles and Headings. Titles and headings to Sections herein are
inserted for convenience of reference only, and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
13.12 Invalid Provisions. If any provision of this Agreement (other
than Section 5.4 or Article XII of this Agreement or any part or provision
thereof) is held to be illegal, invalid, or unenforceable under any present or
future Law, and if the rights or obligations under this Agreement of TWA on the
one hand and Purchaser on the other hand will not be materially and adversely
affected thereby, (a) such provision shall be fully severable; (b) this
Agreement shall be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part hereof; (c) the remaining
provisions of this Agreement shall remain in full force and effect and shall not
be affected by the illegal, invalid, or unenforceable provision or by its
severance from this Agreement; and (d) in lieu of such illegal, invalid, or
unenforceable provision, there shall be added automatically as a part of this
Agreement a legal, valid, and enforceable provision as similar in terms to such
illegal, invalid, or unenforceable provision as may be possible.
13.13 Transfers. Purchaser and TWA shall, and TWA shall cause each
other Seller to, cooperate and take such action as may be reasonably requested
by the other in order to effect an orderly transfer of the Transferred Assets
with a minimum of disruption to the operations and employees of the businesses
of Purchaser, TWA or any other Seller.
13.14 Brokers. TWA hereby agrees to indemnify and hold harmless the
Purchaser against any liability, claim, loss, damage or expense incurred by TWA
or any
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other Seller relating to any fees or commissions owed to any broker, finder or
financial advisor as a result of actions taken by TWA or any other Seller.
Purchaser hereby agrees to indemnify and hold harmless TWA against any
liability, claim, loss, damage or expense incurred by Purchaser relating to any
fees or commissions owed to any broker, finder or financial advisor as a result
of actions taken by Purchaser.
13.15 Exculpation. Each Seller agrees that neither Purchaser nor its
respective controlling persons, officers, directors, partners, agents, employees
or other representatives shall be liable for any action heretofore or hereafter
taken or omitted to be taken by any of them in connection with the transactions
contemplated by this Agreement.
13.16 Principles of Interpretation. Whenever used in this Agreement,
except as otherwise expressly provided or unless the context otherwise requires,
any noun or pronoun shall be deemed to include the plural as well as the
singular and to cover all genders. Unless otherwise specified, the terms
"hereof," "herein," "hereby" and similar terms refer to this Agreement as a
whole (including the exhibits and schedules hereto), and references herein to
Articles or Sections refer to Articles or Sections of this Agreement.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Asset Purchase Agreement as of the day and year first above written.
AMERICAN AIRLINES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------
Title: Corporate Secretary
-----------------------
TRANS WORLD AIRLINES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------
Title: President & CEO
-----------------------
60
EXHIBIT A
DEFINITIONS
"Accounts Receivable Amount" shall mean "Receivables, Less Allowance
for Doubtful Accounts" of TWA and its consolidated subsidiaries as of the
Closing Date, as stated in the Pre-Closing Statement or Final Closing Statement,
calculated on a basis consistent in all material respects with the methods,
principles, practices and policies employed in the preparation and presentation
of "Receivables, Less Allowance for Doubtful Accounts" contained in the
September Balance Sheet and in accordance with generally accepted accounting
principles consistently applied (without regard to consummation of the
transactions contemplated by this Agreement).
"Accrued Employee Expenses Amount" shall mean the sum of "Accrued
Expenses: Employee Compensation and Vacations Earned" and "Accrued Expenses:
Contributions to Retirement and Pension Trusts", in each case of TWA and its
consolidated subsidiaries as of the Closing Date, as stated in the Pre-Closing
Statement or Final Closing Statement, calculated on a basis consistent in all
material respects with the methods, principles, practices and policies employed
in the preparation and presentation of "Accrued Expenses: Employee Compensation
and Vacations Earned" and "Accrued Expenses: Contributions to Retirement and
Pension Trusts" contained in the September Balance Sheet and in accordance with
generally accepted accounting principles consistently applied (without regard to
consummation of the transactions contemplated by this Agreement).
"Acquisition Proposal" means any proposal or offer, other than a
proposal or offer by Purchaser or any of its Affiliates, for (a) any merger,
consolidation, share exchange, business combination or other similar transaction
with TWA or any of the other Sellers, (b) any sale, lease, exchange, mortgage,
pledge, transfer or other disposition of 10% or more of the assets and
liabilities of TWA in a single transaction or series of transactions (whether
related or unrelated), (c) any tender offer or exchange offer for 20% or more of
the outstanding shares of TWA's common stock or any class of TWA's debt
securities or the filing of a registration statement under the Securities Act of
1933, as amended, in connection therewith, (d) the acquisition of beneficial
ownership or a right to acquire beneficial ownership of, or the formation of any
"group" (as defined under Section 13(d)(3) of the Securities Exchange Act of
1934, as amended) which beneficially owns or has the right to acquire beneficial
ownership of 20% or more of the then outstanding shares of any class of TWA's
common stock or any class of TWA's debt securities or (e) any public
announcement of a proposal, plan or intention to do any of the foregoing or any
agreement to engage in any of the foregoing.
"Advance Ticket Sales Amount" shall mean "Advance Ticket Sales" of TWA
and its consolidated subsidiaries as of the Closing Date, as stated in the
Pre-Closing Statement or Final Closing Statement, calculated on a basis
consistent in all material respects with the methods, principles, practices and
policies employed in the preparation and presentation of "Advance Ticket Sales"
contained in the September Balance Sheet
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and in accordance with generally accepted accounting principles consistently
applied (without regard to consummation of the transactions contemplated by this
Agreement).
"Affiliate" shall mean with respect to any Person, any other person
who, directly or indirectly, controls, is controlled by, or is under common
control with that Person.
"Agreement" shall have the meaning ascribed to such term in the
preamble to this Agreement.
"Aircraft" shall mean each of the Owned Aircraft and Leased Aircraft
contemplated by this Agreement, each consisting of an airframe and each of the
following items installed on or in such airframe: Engines, landing gear,
auxiliary power units, avionics, appliances, parts, furnishings, instruments,
accessories and equipment.
"Aircraft Leases" shall have the meaning ascribed to such term in
Section 6.12(b) of this Agreement.
"Alternative Termination Amount" shall have the meaning ascribed to
such term in Section 12.2 of this Agreement.
"Approval Order" shall have the meaning ascribed to such term in
Section 8.11(d) of this Agreement.
"Approval Order Hearing Date" shall have the meaning ascribed to such
term in Section 8.11(a) of this Agreement.
"Assumed Aircraft Leases" shall mean the Aircraft Leases (as may be
modified prior to Closing with the consent of Purchaser and TWA) other than
Designated Aircraft Leases.
"Assumed Contracts" shall mean the following contracts or agreements in
effect as of the date of the Original Agreement, as may be modified prior to
Closing with the consent of Purchaser and TWA (provided that if any such
contracts or agreements relate not only to Transferred Assets but also other
assets, then only the portions of such contracts and agreements that relate
specifically to the Transferred Assets shall be deemed to be Assumed Contracts),
in each case other than Designated Contracts:
(a) the Assumed Aircraft Leases;
(b) the Assumed Gate Leases;
(c) the Assumed Ground Equipment Leases;
(d) the Assumed Gate Property Leases;
(e) the Retention Agreements; and
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(f) all other contracts, agreements, arrangements and
understandings of Sellers, other than Retained Liabilities and
Excluded Assets.
"Assumed Debt Obligations" shall have the meaning ascribed to such term
in Section 3.1(a) of this Agreement.
"Assumed Gate Leases" shall mean the Gate Leases (as may be modified
prior to Closing with the consent of Purchaser and TWA) other than Designated
Gate Leases.
"Assumed Gate Property Leases" shall mean the Gate Property Leases (as
may be modified prior to Closing with the consent of Purchaser and TWA) other
than Designated Gate Property Leases.
"Assumed Ground Equipment Leases" shall mean the Ground Equipment
Leases (as may be modified prior to Closing with the consent of Purchaser and
TWA) other than Designated Ground Equipment Leases.
"Assumed Liabilities" shall have the meaning ascribed to such term in
Section 3.1 of this Agreement.
"Assumption Agreement" shall have the meaning ascribed to such term in
Section 5.2(b)(ii) of this Agreement.
"Avoidance Actions" shall mean all claims and rights of action against
vendors and lessors of the Assumed Contracts and lenders under the Assumed Debt
Obligations, including, but not limited to, all rights and avoidance claims of
Sellers under chapter 5 of the Bankruptcy Code.
"Bankruptcy Code" shall have the meaning ascribed to such term in the
Recitals of the Original Agreement.
"Bankruptcy Court" shall have the meaning ascribed to such term in the
Recitals of the Original Agreement.
"Bankruptcy Resolution Date" means the date on which a Final Order of
the Bankruptcy Court has been entered dismissing, closing or otherwise
terminating the Chapter 11 Cases.
"Bankruptcy Termination Amount" shall have the meaning ascribed to such
term in Section 12.2 of this Agreement.
"Benefit Plans" shall have the meaning ascribed to such term in Section
6.20(b) of this Agreement.
"▇▇▇▇ of Sale" shall have the meaning ascribed to such term in Section
5.2(a)(i) of this Agreement.
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"Books and Records" shall have the meaning ascribed to such term in
Section 9.8 of this Agreement.
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in New York City, New York are authorized or
required by Law to close.
"CBA Amendments" shall have the meaning ascribed to such term in
Section 10.2 of this Agreement.
"Chapter 11 Cases" shall mean the voluntary cases commenced by Sellers
under chapter 11 of the Bankruptcy Code.
"Chapter 11 Sellers" shall mean all Sellers other than Constellation
Finance LLC, a Delaware limited liability company.
"Closing" shall have the meaning ascribed to such term in Section 5.1
of this Agreement.
"Closing Date" shall have the meaning ascribed to such term in Section
5.1 of this Agreement.
"Closing Statement" shall have the meaning ascribed to such term in
Section 4.3(c) of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
all regulations promulgated thereunder.
"Collateral Agreements" shall mean the ▇▇▇▇ of Sale, Assumption
Agreement and the other assignment or transfer documents delivered at the
Closing.
"Collective Bargaining Agreements" shall have the meaning ascribed to
such term in Section 6.19(a) of this Agreement.
"Competing Offer" shall have the meaning ascribed to such term in
Section 8.11(a) of this Agreement.
"Consent" shall mean any consent, approval or authorization of, notice
to, or designation, registration, declaration or filing with, any Person.
"Contract" shall mean any agreement, contract, lease, commitment,
license, undertaking or other legally binding contractual right or obligation to
which a Person is a party or by which a Person or its assets or properties are
bound.
"Data" shall mean all documents, books, drawing, logs, manuals and
records relating primarily or exclusively to the Transferred Assets (including,
without limitation, maintenance and operations records relating to the Owned
Aircraft and Engines, the
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Leased Aircraft and Engines leased pursuant to the Assumed Aircraft Leases, the
Spare Parts and the Ground Equipment).
"Delivery Condition" shall mean with respect to each Aircraft:
(A) the Aircraft shall have a validly issued, current
individual aircraft FAA Certificate of Airworthiness with respect to
such Aircraft which satisfies all requirements for the effectiveness of
such FAA Certificate of Airworthiness;
(B) the Aircraft shall be in a serviceable condition, such
that the Aircraft and each of its structures, systems and components
are functioning in accordance with its intended use as required or set
forth in any FAA regulations, rules, standards or requirements or in
any FAA-approved documentation, including any applicable manuals,
technical standard orders or parts manufacturing approval certificates;
(C) the Aircraft shall be complete, including, without
limitation, shall have installed therein one (1) set of catering and
cabin service equipment used in Seller's service; and
(D) the Aircraft shall be in compliance with all issued and
effective mandatory manufacturer's service bulletins and airworthiness
directives applicable thereto, in each case which require compliance on
or before the Closing Date.
"Designated Aircraft Leases" shall mean those Aircraft Leases that
constitute Designated Contracts.
"Designated Contracts" shall mean (A) any Contract that would be an
Assumed Contract but for the fact that is not (i) assignable by the applicable
Seller to Purchaser at Closing or (ii) amendable at Closing to incorporate terms
agreed to by Purchaser with the other parties to such Assumed Contract due in
either case to the inability to obtain any necessary consents of any party with
rights with respect to such Assumed Contract (including, without limitation,
lenders, guarantors, residual holders, lienholders, pre-delivery financing
providers and parties with purchase options, but excluding any primary lessor
under such Assumed Contract) and (B) any contract, agreement or other
arrangement of any Seller not elected to be transferred, conveyed or assigned to
Purchaser pursuant to Section 8.13 or not disclosed to Purchaser by TWA pursuant
to Section 8.13.
"Designated Gate Leases" shall mean those Gate Leases that constitute
Designated Contracts.
"Designated Gate Property Leases" shall mean those Gate Property Leases
that constitute Designated Contracts.
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"Designated Ground Equipment Leases" shall mean those Ground Equipment
Leases that constitute Designated Contracts.
"DIP Facility" shall have the meaning ascribed to such term in the
Recitals to the Original Agreement.
"DOT" shall mean the United States Department of Transportation or any
successor thereto.
"Engines" shall mean engines, spare engines, parts, tooling and other
equipment necessary to support the operation of the Owned Aircraft and the
Leased Aircraft, as applicable.
"Environmental Claims" shall have the meaning ascribed to such term in
Section 6.17(e)(i) of this Agreement.
"Environmental Laws" shall have the meaning ascribed to such term in
Section 6.17(e)(ii) of this Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Excluded Assets" shall have the meaning ascribed to such term in
Section 2.2 of this Agreement.
"FAA" shall mean the Federal Aviation Administration or any successor
thereto.
"Federal Aviation Act" shall mean the Federal Aviation Act of 1958, as
amended, together with the aviation regulations of the FAA, as the same may be
in effect from time to time.
"Final Closing Statement" shall have the meaning ascribed such term in
Section 4.3(f) of this Agreement.
"Final Order" shall mean an order or judgment the operation or effect
of which is not stayed, and as to which order or judgment (or any revision,
modification or amendment thereof), the time to appeal or seek review or
rehearing has expired, and as to which no appeal or petition for review or
motion for rehearing or reargument has been taken or been made and is pending
for argument.
"Gate Leases" shall have the meaning ascribed to such term in Section
6.16(b) of this Agreement.
"Gate Property" shall mean all facilities, equipment, fixtures,
appurtenances and personality (including, without limitation, bag rooms, ticket
counters and other exclusive use space) owned or used by any Seller and used
exclusively or primarily in connection with the Gates.
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"Gate Property Documents" shall mean the Gate Leases, the Gate Property
Leases and the Ground Equipment Leases.
"Gate Property Leases" shall have the meaning ascribed to such term in
Section 6.16(c) of this Agreement.
"Gates" shall have the meaning ascribed to such term in Section 6.16(a)
of this Agreement.
"Governmental Authority" shall mean any federal, state, local or
foreign government or any subdivision, agency, instrumentality, authority,
department, commission, board or bureau thereof or any federal, state, local or
foreign court, tribunal or arbitrator (including, without limitation, the
Bankruptcy Court).
"Ground Equipment" shall mean each vehicle, tool, piece of equipment,
or other tangible asset used in connection with aircraft operations or
maintenance (other than Owned Aircraft, Leased Aircraft, and Spare Parts).
"Ground Equipment Leases" shall have the meaning ascribed to such term
in Section 6.16(d) of this Agreement.
"HSR Act" shall mean ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act of 1976, as amended.
"Improvements" shall have the meaning ascribed to such term in Section
6.24(b) of this Agreement.
"Intellectual Property" shall mean (i) all inventions (whether
patentable or not patentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and patent
disclosures, together with all reissuances, divisions, continuations,
continuations-in-part, revisions, renewals, extensions, and reexaminations
thereof, (ii) all registered and unregistered trademarks, service marks, trade
dress, logos, trade names, and corporate names, together with all translations,
adaptations, derivations, and combinations thereof and including all goodwill
associated therewith, and all applications, registrations and renewals in
connection therewith, (iii) all works of authorship, including, without
limitation, all copyrightable works, all copyrights, and all applications,
registrations and renewals in connection therewith, and all moral rights, (iv)
all databases, data compilations and data collections, (v) all trade secrets and
confidential information (including, without limitation, ideas, research and
development, know-how, processes, methods, techniques, technical data, designs,
drawings, specifications, customer and supplier lists, pricing and cost
information, and business, technical and marketing plans and proposals), (vi)
all domain names, web addresses and websites, (vii) all computer software,
source code and object code, whether embodied in software, firmware or otherwise
(including related data and documentation), (viii) all other intellectual
property and proprietary rights, and (ix) all copies and tangible embodiments of
all of the foregoing (i) through (ix) in any form or medium.
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"Laws" shall mean all federal, state, local or foreign laws, orders,
writs, injunctions, decrees, ordinances, awards, stipulations, statutes,
judicial or administrative doctrines, rules or regulations enacted, promulgated,
issued or entered by a Governmental Authority, including without limitation, the
Bankruptcy Code, the Federal Aviation Act and any Environmental Laws.
"Leased Aircraft" shall have the meaning ascribed to such term in
Section 6.12(c) of this Agreement, but shall not include for any purpose hereof
aircraft listed on Schedule 2.2.
"Leased Assets" means the Aircraft Leases, the Gate Leases, Gate
Property Leases and the Ground Equipment Leases.
"Leased Real Estate" shall have the meaning ascribed to such term in
Section 6.24(a) of this Agreement.
"Liens" shall mean all title defects or objections, mortgages, liens,
claims, charges, pledges, or other encumbrances of any nature whatsoever,
including without limitation licenses, leases, chattel or other mortgages,
collateral security arrangements, pledges, title imperfections, defect or
objection liens, security interests, conditional and installment sales
agreements, easements, encroachments or restrictions, of any kind and other
title or interest retention arrangements, reservations or limitations of any
nature.
"Material Adverse Effect" shall mean (a) a material adverse effect on
the business, results of operations, condition (financial or otherwise) or
prospects of the business operated by TWA, other than any change, circumstance
or effect relating solely (i) to the economy or financial markets in general,
(ii) to changes in general political or regulatory conditions in the United
States, (iii) generally to the industries in which TWA operates and not
specifically relating to TWA, (iv) to or resulting from the announcement or
pendency of the transactions contemplated by this Agreement and/or (v) to or
resulting from the filing of the Chapter 11 Cases, or (b) a material adverse
effect on (w) the transactions contemplated by this Agreement, (x) the legality,
validity or enforceability of this Agreement and the agreements and instruments
to be entered into in connection herewith, or the realization of the rights and
remedies thereunder, (y) the ability of Purchaser to operate the business of TWA
from and after the Closing as a result of the failure or inability to obtain the
consents necessary to transfer a significant number of Aircraft underlying
Aircraft Leases to Purchaser or (z) the ability of TWA to perform its
obligations under this Agreement.
"Materials of Environmental Concern" shall have the meaning ascribed to
such term in Section 6.17(e)(iii) of this Agreement.
"Original Agreement" shall have the meaning ascribed to such term in
the Recitals of this Agreement.
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"Owned Aircraft" shall have the meaning ascribed to such term in
Section 6.12(a) of this Agreement, but shall not include for any purpose hereof
aircraft listed on Schedule 2.2.
"Owned Gate Items" shall have the meaning ascribed to such term in
Section 6.16(e) of this Agreement.
"Owned Real Estate" shall have the meaning ascribed to such term in
Section 6.24(a) of this Agreement.
"Pension Plans Agreement" shall have the meaning ascribed to such term
in Section 6.19(d) of this Agreement.
"Permits" shall mean all permits, licenses, approvals, franchises,
notices and authorizations issued by any Governmental Authority that relate to
or otherwise are used or are necessary in connection with the ownership,
operation or other use of any of the Transferred Assets.
"Permitted Liens" shall mean Liens for taxes, assessments and other
governmental charges which are not due and payable.
"Person" shall mean any individual, general partnership, limited
partnership, limited liability company, joint venture, corporation, trust,
unincorporated organization, Governmental Authority or other entity.
"Pre-Closing Statement" shall have the meaning ascribed to such term in
Section 4.3(a) of this Agreement.
"Purchase Price" shall have the meaning ascribed to such term in
Section 4.1 of this Agreement.
"Purchase Price Offset Amount" shall have the meaning ascribed to such
term in Section 4.7 of this Agreement.
"Purchaser" shall have the meaning ascribed to such term in the
preamble to this Agreement.
"Purchaser Expenses" shall mean Purchaser's reasonable out of pocket
expenses (including but not limited to reasonable financial advisor's account's
or attorney's fees and expenses and filing fees, including without limitation
those paid in connection with filings under the HSR Act) incurred in connection
with the negotiation and performance of this Agreement and its due diligence
investigation of the Sellers and the Transferred Assets in connection with this
Agreement.
"Purchaser Material Adverse Effect" shall mean a materially adverse
effect on the business, results of operations or financial condition of
Purchaser and its subsidiaries and Affiliates, taken as a whole, other than any
change, circumstance or effect relating (i) to the economy or financial markets
in general, (ii) to changes in general political or
▇-▇
▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, (▇▇▇) generally to the industries in
which Purchaser operates and not specifically relating to Purchaser or (iv) to
or resulting from the announcement or pendency of the transactions contemplated
by this Agreement.
"Real Estate Assets" shall have the meaning ascribed to such term in
Section 6.24(a) of this Agreement.
"Recapitalization Transaction" means a recapitalization transaction
involving TWA and its existing security holders that does not involve the sale
of any Seller or all or substantially all of the assets of any Seller.
"Resolution Period" shall have the meaning ascribed such term in
Section 4.3(d) of this Agreement.
"Retained Liabilities" shall have the meaning ascribed to such term in
Section 3.2 of this Agreement.
"Retention Agreements" shall mean the obligations of Sellers under that
certain Key Employee Retention and Severance Program filed with the Bankruptcy
Court and attached hereto as Exhibit D; excluding, however, any amounts owed or
payable by Sellers under such Key Employee Retention and Severance Program in
excess of $14,000,000 in the aggregate.
"Rights Plan Amendment" shall have the meaning ascribed to such term in
Section 8.14 of this Agreement.
"Route" shall have the meaning ascribed to such term in Section 6.21 of
this Agreement.
"Sale Procedures Order" shall have the meaning ascribed to such term in
Section 8.11(a) of this Agreement.
"Scheduled Closing Date" shall mean May 31, 2001, provided that
Purchaser may, by written notice to TWA, extend the Scheduled Closing Date to
such later date as Purchaser in its sole discretion may determine but in all
events within 30 days after satisfaction or waiver of all conditions set forth
in Section 5.4 and Section 5.5.
"Section 12.3(b)(i) Termination Amount" shall have the meaning ascribed
to such term in Section 12.2 of this Agreement.
"Sellers" shall have the meaning ascribed to such term in the Recitals
to this Agreement.
"September Balance Sheet" shall have the meaning ascribed such term in
Section 4.3(a) of this Agreement.
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"Slots" shall have the meaning ascribed to such term in Section 6.13 of
this Agreement.
"Spare Parts" shall mean spare parts used or useful in connection with
the operation and maintenance of aircraft, including without limitation
expendable and rotable spare parts and tooling.
"Spare Parts Amount" shall mean "Spare Parts, Materials and Supplies,
Less Allowance for Obsolescence" of TWA and its consolidated subsidiaries as of
the Closing Date, as stated in the Pre-Closing Statement or Final Closing
Statement, calculated on a basis consistent in all material respects with the
methods, principles, practices and policies employed in the preparation and
presentation of "Spare Parts, Materials and Supplies, Less Allowance for
Obsolescence" contained in the September Balance Sheet and in accordance with
generally accepted accounting principles consistently applied (without regard to
consummation of the transactions contemplated by this Agreement).
"Superior Proposal" means an Acquisition Proposal that the Board of
Directors of TWA has determined in good faith, if accepted, is reasonably likely
to be consummated taking into account all legal, financial, regulatory and other
aspects of the proposal and the person making the proposal, and that the Board
of Directors of TWA believes in good faith, after consultation with an outside
financial advisor would, if consummated, result in a transaction more favorable
from a financial point of view than the transaction proposed by this Agreement.
"Tax" and "Taxes" shall mean all federal, state, local, or foreign
income, payroll, employee withholding, unemployment insurance, social security,
sales, use, service, service use, leasing, leasing use, excise, franchise, gross
receipts, value added, alternative or add-on minimum, estimated, occupation,
real and personal property, stamp, transfer, workers' compensation, severance,
windfall profits, environmental (including taxes under Section 59A of the Code),
or other tax of the same or of a similar nature, including any interest,
penalty, or addition thereto, whether disputed or not.
"Tax Return" shall mean any return, declaration, report, claim for
refund, or information return or statement relating to Taxes or any amendment
thereto, and including any schedule or attachment thereto.
"Termination Amount" shall have the meaning ascribed to such term in
Section 12.1(b) of this Agreement.
"Transferred Assets" shall have the meaning ascribed to such term in
Section 2.1 of this Agreement.
"Transition Period" shall have the meaning ascribed to such term in
Section 9.8 of this Agreement.
"Transition Services Agreement" shall have the meaning ascribed to such
term in Section 9.5(b) of this Agreement.
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"TWA" shall have the meaning ascribed to such term in the preamble to
this Agreement.
"Warranty" shall mean all claims and rights against third parties, if
and to the extent the same relate to or arise under the Transferred Assets,
including, without limitation, all rights under manufacturers' and vendors'
warranties, if any, and all rights of recovery, set-offs and credits.
"Worldspan" shall have the meaning ascribed to such term in Section 2.1
of this Agreement.
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EXHIBIT B
SALE PROCEDURES ORDER
73
EXHIBIT C
APPROVAL ORDER
74
EXHIBIT D
RETENTION AGREEMENTS
KEY EMPLOYEE RETENTION AND SEVERANCE PROGRAM
The objective of the Key Employee Retention and Severance Program (the
"Retention Program") is to assist the Debtors in retaining the services of their
key employees, support a smooth and successful operation of the on-going
business during the restructuring, and meet the Debtors' personnel needs during
the sale or reorganization process.
Participants in one or more components of the Retention Program (as set
forth more fully below) consist of approximately 100 current employees
(collectively, the "Key Employees") deemed critical to the performance of the
Debtors' businesses during the Debtors' chapter 11 proceedings and include
without limitation (i) the President and Chief Executive Officer, (ii) Executive
Vice Presidents, (iii) Senior Vice Presidents, (iv) Other Executive Management
Positions, such as certain corporate vice-presidents and (v) Corporate and
Subsidiary managers and professionals.
The Retention Program has four components: (i) a "retention" component
which provides an incentive for essential management and professional teams to
remain with the Debtors, (ii) a "severance" component to create a stronger sense
of security through the Chapter 11 process, (iii) a "success" bonus component
for those Key Employees who remain with the Debtors through the completion of
the sale or confirmation of a plan of reorganization and a reasonable amount of
time thereafter, and (iv) a discretionary bonus component to be awarded at the
discretion of the President of TWA to encourage the retention of other valuable
employees.
I. Definitions
Definitions: As used in the Retention Program, the following terms
shall have the following meanings when used herein with initial capital letters:
1.1.1 "Amended Motion" shall mean the Amended Motion for an Order
Authorizing the Debtors to Implement a Key Employee Retention and Severance
Program and Assume Certain Employment Contracts filed with the Bankruptcy Court
on January 19, 2001.
1.1.2 "Bankruptcy Court" shall mean the United States Bankruptcy Court
of the District of Delaware.
1.1.3 "Cause" shall mean that a Key Employee has:
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75
(a) been convicted of or engaged in conduct which constitutes a felony,
or a misdemeanor involving moral turpitude;
(b) been found by the Board of Directors to have willfully engaged in
conduct which is demonstrably and materially injurious to the Debtors or
Purchaser;
(c) been found by the Board of Directors to have failed or refused to
in any material respect to competently perform his or her duties and
responsibilities (after notice and opportunity to cure if such material failure
or refusal can be cured);
(d) breached his or her duty of loyalty to, or committed any act of
fraud, theft or dishonesty against or involving, the Debtors or Purchaser; or
(e) breached any provision of this Retention Program or associated
retention agreement.
1.1.4 "Change of Control Agreement(s)" shall refer to each Key
Employees respective change of control agreement with the Debtors.
1.1.5 "Chapter 11 Cases" shall mean all actions, activities, conduct,
determinations, events, filings, proceedings and similar transactions of a legal
or non-legal nature undertaken by the Debtors pursuant to the voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code filed by Debtors
with the Bankruptcy Court on January 10, 2001.
1.1.6 "Closing" shall mean consummation of (a) the sale of
substantially all of the Debtors assets to a Purchaser or (b) any confirmed plan
of reorganization of and for the Debtors.
1.1.7 "Debtors" shall have the same meaning as set forth in the Amended
Motion.
1.1.8 "Employment Agreement(s)" shall have the same meaning as set
forth in the Amended Motion.
1.1.9 "Petition Date" shall mean January 10, 2001.
1.1.10 "Purchaser" shall mean the successful bidder for the Debtors'
assets after an auction and as approved by the Bankruptcy Court or any entity
that succeeds to the assets of the Debtors after Closing.
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76
II. Retention Component
The retention component provides incentives to Key Employees to remain
with the Debtors throughout all or a substantial portion of the Debtors'
reorganization process. Key Employees shall receive a bonus of 15% to 30% of
their annual salary (the "Retention Bonus") paid according to the following
schedule:
(1) 1/3 of the amount upon the approval of the Retention Program and
entry of the attached order with the Bankruptcy Court;
(2) 1/3 of the amount six months after the Petition Date; and
(3) 1/3 of the amount twelve months after the Petition Date.
In order to receive the applicable portion of the Retention Bonus on
any such date, the participant must be employed as of that date by the Debtors
or a Purchaser; however, the unpaid amount of any Retention Bonus shall be paid
on the earlier of (i) termination of the participant without Cause after the
Petition Date or (ii) substantial completion of a liquidation provided that, in
the event that a liquidation occurs prior to 180 days after the Closing, if a
Purchaser offers the Key Employee a comparable position with such Purchaser or a
position as a consultant to such Purchaser to facilitate the transition, the Key
Employee shall not receive payment upon substantial completion of a liquidation
of the Debtors. Instead, such Key Employee shall receive payment no earlier than
180 days after the Closing or the date such participant is terminated without
Cause . Key Employees who voluntarily terminate their employment or are
terminated for Cause shall not be entitled to receive any remaining portion of
their Retention Bonuses under the Retention Program. Upon the death or
disability of a Key Employee, any Retention Bonus then outstanding will be paid
immediately.
III. Severance Component
The severance component provides security to certain of the Key
Employees listed on Attachment A attached hereto, who were employed on the
Petition Date pursuant to an Employment Agreement, and who have not submitted
their resignation (or whose previously submitted resignation has been rescinded
and such rescission has been accepted by the Debtor) on or before such date
(each, a "Severance Participant"). Each Severance Participant shall receive a
severance payment equal to 2 to 3 times their annual salary (a "Severance
Payment"), as set forth in Attachment A, upon the occurrence of the earliest of
the following events (subject to the conditions set forth below):
(1) upon Closing, in the event the Severance Participant is terminated
without Cause prior to the Closing;
(2) upon termination of the Severance Participant without Cause
following the Closing;
(3) 180 days after Closing; or
(4) upon substantial completion of a liquidation of the Debtors
following the Closing, provided that, in the event that a liquidation occurs
prior to 180 days after the Closing, if a Purchaser offers the Severance
Participant a comparable position with such Purchaser or a
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77
position as a consultant to such Purchaser to facilitate the transition, the
Severance Participant shall not receive payment upon substantial completion of a
liquidation of the Debtors. Instead, such Severance Participant shall receive
payment no earlier than 180 days after the Closing or the date such participant
is terminated without Cause.
If any Severance Participant eligible to receive a Severance Payment is
terminated for Cause or voluntarily terminates his or her employment prior to
the Closing or within 180 days thereafter, such Severance Participant shall not
be eligible to receive any portion of the Severance Payment.
Upon the death or disability of any Severance Participant, the
severance component shall be immediately payable.
Each Severance Participant shall be provided with payments for life,
disability, accident and health insurance, for the period and on the terms and
conditions set forth in Section 4(c) of his or her respective Change of Control
Agreement (notwithstanding the language in 4(c) of the Change of Control
Agreements, the Retention Program provides only for payments for the above
benefits and a Purchaser will not be responsible for providing coverage for the
above benefits under any circumstances) from and after any of the events
outlined in Article III of the Retention Program; provided, however, that in no
event shall the Debtors' obligation to provide such insurance pursuant to this
paragraph exceed $396,000 in the aggregate.
IV. Success Bonus Component
The success bonus component will provide the financial security
necessary to retain the Key Employees. A success bonus shall be between 25% and
100% of the Key Employees annual salary (a "Success Bonus") paid according to
the following schedule:
(a) 25% upon Closing; and
(b) 75% upon the earlier of (i) 180 days after the Closing; (ii) the
date of termination of a Key Employee without Cause following the Closing; (iii)
the date of substantial completion of a liquidation of the Debtors, provided
that, in the event that a liquidation occurs prior to 180 days after the
Closing, if a Key Employee is offered a comparable position with a Purchaser or
a consulting position with a Purchaser to facilitate the transition, the Key
Employee shall not receive payment upon the date of a substantial completion of
a liquidation of the Debtors. Instead such Key Employee shall receive payment no
earlier than 180 days after the Closing, or the date such Key Employee is
terminated without Cause.
In order to receive the applicable portion of the Success Bonus on any
payment date, the Key Employee must be employed on that date by the Debtors or a
Purchaser. A pro rata portion of each such payment, however, shall be paid on
the Closing if the Key Employee is terminated without Cause after the Petition
Date and prior to the Closing. In accordance with the above listed factors and
schedule, upon the death or disability of a Key Employee any remaining Success
Bonus shall be immediately payable. In the event that a Key Employee voluntarily
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78
terminates his or her employment or is terminated for Cause, any unearned
Success Bonus will be forfeited.
V. Discretionary Component
The discretionary component allows the President of TWA to provide an
incentive to encourage retention of other valuable employees of the Debtors. The
President may, in his discretion, award monetary bonuses to other employees,
including Key Employees, of the Debtors from a $500,000 fund established for
such purpose. The President shall not allocate any amount from the discretionary
fund to himself.
VI. General Provisions
Except as set forth herein, no other provisions, including, without
limitation, any change of control provisions set forth in the Change of Control
Agreements, Employment Agreements or any other compensation agreement or
arrangement shall be binding upon the Debtors or a Purchaser. Each Severance
Participant and Key Employee who participates in the Retention Program shall be
deemed to have waived all such rights and claims in connection with his or her
Change of Control Agreement, Employment Agreement, or any other compensation
agreement.
The total cost of the Retention Program shall not exceed $15 million in
the aggregate.
D-5
▇▇
▇▇▇▇▇▇▇ ▇
▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
IN RE: ) CHAPTER 11
)
TRANS WORLD AIRLINES, INC., ET AL.,(1) ) CASE NO. 01-056(PJW)
) (JOINTLY ADMINISTERED)
)
DEBTORS. )
ORDER (A) AUTHORIZING AND SCHEDULING AN AUCTION AT WHICH THE
DEBTORS WILL SOLICIT BIDS FOR ONE OR MORE SALES OF OR OTHER
TRANSACTIONS CONCERNING SUBSTANTIALLY ALL OF THEIR ASSETS FREE
AND CLEAR OF LIENS, CLAIMS AND ENCUMBRANCES; (B) APPROVING
PROCEDURES FOR THE SUBMISSION OF COMPETING OFFERS; (C)
APPROVING CERTAIN TERMINATION RIGHTS, EXPENSE REIMBURSEMENT
AND OTHER BIDDING RIGHTS PROVISIONS; (D) SCHEDULING A HEARING TO
CONSIDER APPROVAL OF SUCH TRANSACTION; AND (E) APPROVING THE
FORM AND MANNER OF NOTICE OF THE TRANSACTIONS AND COMPETING
OFFER PROCEDURES PURSUANT TO FED. R. BANKR. PROC. 2002
A hearing having been held on January 27, 2001 (the "Procedures Hearing")
to consider the motion, dated January 10, 2001 (the "Procedures Motion"), of the
above captioned debtors and debtors in possession (collectively, the "Debtors")
for entry of an order (a) authorizing and scheduling an auction at which the
Debtors will solicit bids for the sale of all or substantially all of their
assets (the "Transferred Assets"), free and clear of liens, claims, and
encumbrances pursuant to an Asset Purchase Agreement, dated as of January 9,
2001, between American Airlines, Inc. ("American") and the Debtors as modified
during the course of the Procedures Hearing, by this Order and by a separate
amendment incorporating changes agreed to
----------
(1) THE DEBTORS ARE THE FOLLOWING ENTITIES: TRANS WORLD AIRLINES, INC.,
AMBASSADOR FUEL CORPORATION, LAX HOLDING COMPANY, INC., MEGA ADVERTISING INC.,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ CORPORATION, THE TWA AMBASSADOR CLUB, INC., TRANS WORLD
COMPUTER SERVICES, INC., TRANSCONTINENTAL & WESTERN AIR, INC., TWA AVIATION,
INC., TWA GROUP, INC., TWA STANDARDS & CONTROLS, INC., TWA STOCK HOLDING
COMPANY, TWA-D.C. GATE COMPANY, INC., TWA-LAX GATE COMPANY, INC., TWA ▇▇▇▇▇ GATE
CO., INC., TWA-NY/NJ GATE COMPANY, INC., TWA-OMNIBUS GATE COMPANY, INC., TWA-SAN
FRANCISCO GATE COMPANY, INC., TWA-HANGAR 12 HOLDING COMPANY, INC., OZARK GROUP,
INC., TWA NIPPON, INC., TWA EMPLOYEE SERVICES, INC., TWA GETAWAY VACATIONS,
INC., TRANS WORLD EXPRESS, INC., INTERNATIONAL AVIATION SECURITY INC., GETAWAY
MANAGEMENT SERVICES, INC., THE GETAWAY GROUP (U.K.) INC.
80
by American at the Procedure Hearing (the "Agreement"); (b) approving procedures
for the submission of competing offers to acquire the Transferred Assets or
offers of other Alternative Transactions (as defined below)(the "Auction
Procedures"); (c) approving certain termination rights, expense reimbursement
and other bidding rights provisions; (d) scheduling a hearing to consider
approval of such sale or other transaction (the "Transaction Hearing"); and (e)
approving the form and manner of notice of the Auction Procedures and the
Transaction Hearing pursuant to Fed. R. Bankr. Proc. 2002, all as more fully
described in the Procedures Motion and as modified during the course of the
Procedures Hearing and by this Order, and due and proper notice of the
Procedures Motion having been given; and it appearing that no other or further
notice need be given; and the Court having jurisdiction to consider the
Procedures Motion and the relief requested therein in accordance with 28 U.S.C.
Sections 157(b) and 1334; and upon consideration of the Procedures Motion, and
the responses and objections thereto, and the record of the Procedures Hearing,
and after due deliberation and sufficient cause appearing therefor, it is hereby
FOUND AND DETERMINED (2) THAT:
A. the Debtors have articulated good and sufficient reasons for
granting the Procedures Motion, as modified, and for approval of the Notice of
Auction (defined herein) and the Auction Procedures; and
----------
(2) Findings of fact shall be construed as conclusions of law and
conclusions of law shall be construed as findings of fact when
appropriate. See Fed. R. Bankr. P. 7052. Statements made by the Court
from the bench at the hearing shall constitute additional conclusions
of law and findings of fact as appropriate.
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81
B. the Auction Procedures in this Order set forth the process for the
submission and consideration of competing offers for the Transferred Assets or
the Alternative Transactions (as defined below).
NOW, THEREFORE, IT IS HEREBY:
ORDERED that the Procedures Motion as modified at the Procedures
Meeting and by this Order is granted; and it is further
ORDERED that the following procedures relating to the submission and
consideration of competing offers (an "Alternative Transaction") are hereby
approved:
A. On or before February 6, 2001, American shall, in good faith,
establish a reasonable value (the "Worldspan Allocation") not to exceed
$200,000,000 to be allocated to the cash portion of the Purchase Price, as
defined in the Agreement, for the Debtors' interest in Worldspan L.P., TWA Stock
Holding Company and Trans World FARS, Inc. (collectively, the "Worldspan
Interest"). The Debtors shall promptly file with the Court a statement setting
forth the Worldspan Allocation.
B. The Debtors shall provide copies of this Procedures Order, the
Procedures Motion and a notice of auction containing, among other things, the
competitive bidding procedures set forth herein and substantially in the form of
Exhibit "A" hereto (the "Notice of Auction"), a copy of the Agreement and a
statement of the Worldspan Allocation (a) to those persons who were contacted by
the Debtors financial advisor, Rothschild Inc. ("Rothschild"), or who contacted
or were contacted by Rothschild or the Debtors during the prepetition marketing
process, in each case with respect to a potential sale of the Transferred Assets
and (b) to all other
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82
prospective offerors and parties in interest upon written request to the
Debtors.
C. An offer for an Alternative Transaction may be an offer to acquire
(a) all of the Transferred Assets, (b) solely the Worldspan Interest, or (c) the
Transferred Assets excluding the Worldspan Interest (the "Non-Worldspan
Assets"), and such offer or offers may be submitted singly or jointly with other
offers, and also can be an offer to propose a plan of reorganization
(liquidation) for all (but not less than all) of the Debtors. Unit bidding will
not be permitted, unless such bids, when taken together, are bids for all of the
Transferred Assets.
D. Under no circumstances shall American be required to purchase the
Worldspan Interest if it is not the prevailing Auction bidder for the
Non-Worldspan Assets. If American is ultimately the prevailing bidder for the
Non-Worldspan Assets, but not the Worldspan Interest, the cash portion of the
Purchase Price shall be reduced by the Worldspan Allocation. A sale solely of
the Worldspan Interest to any party shall not entitle American to receive the
Termination Amount (as defined in Section 12.1 of the Agreement) or the
Bankruptcy Termination Amount (as defined in Section 12.1 of the Agreement), as
such Bankruptcy Termination Amount is amended in the next sentence, or any
portion thereof. the Bankruptcy Termination Amount is hereby reduced from
$65,000,000 (plus expenses up to $10,000,000) to $55,000,000 (plus expenses up
to $10,000,000).
E. Upon request to the Debtors by a prospective offeror, the Debtors
shall, upon execution by such prospective offeror of a confidentiality agreement
in form and substance reasonably satisfactory to the Debtors, American, and the
Creditors' Committee (as defined herein), and upon delivery of evidence
establishing to the Debtors' reasonable satisfaction such prospective offeror's
financial capability to timely consummate its, or its portion of a, proposed
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83
Alternative Transaction, provide such person (a "Prospective Offeror") with
access to relevant business and financial information that will enable such
person to evaluate the Debtors' assets and liabilities for the purpose of
submitting a competing offer for an Alternative Transaction. Prospective
Offerors shall have access to the same due diligence information from the
Debtors that the Debtors have made available to American, and due diligence
examinations for all Prospective Offerors shall proceed simultaneously. The
Debtors shall promptly provide American and the Statutory Committee of Unsecured
Creditors (the "Creditors' Committee") with the name of each Prospective
Offeror. American shall provide each Prospective Offeror with copies of
environmental studies and reports it has obtained.
F. Within 15 days after delivery by the Debtors to American of all
disclosure schedules provided for under the Agreement and accepted by American
pursuant to Section 1.2 of the Agreement, as well as all other requested due
diligence materials, American shall deliver notice to the Debtors as to which
contracts and/or liabilities (including, without limitation, aircraft leases,
capital leases, and other obligations) American will assume at closing, and
American's due diligence conditions under the Agreement, including without
limitation, the conditions relating to environmental matters, shall terminate
(such actions by American are hereinafter referred to as "Going Firm");
provided, however, that with respect to disclosure schedules and other due
diligence provided by the Debtors to American on or before February 12, 2001. If
American makes "follow-up" requests regarding such disclosure schedules and due
diligence requests and such follow-up requests are complied with on or before
February 27, 2001, then, prior to the Auction, American shall Go Firm concerning
due diligence conditions, contracts and/or liabilities relating to such
follow-up requests. Once American "Goes Firm," its
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84
due diligence periods and right to terminate the Agreement based on any and all
due diligence conditions shall be deemed to have concluded; provided that all
other conditions precedent set forth in Section 12.3(e)(iv) shall remain in
effect. American shall not, under any condition, be entitled to recover any
Termination Payment or the Bankruptcy Termination Amount unless and until it has
"Gone Firm." On the same day the Debtors receive American's Going Firm notice,
the Debtors will deliver copies of such notice to all Prospective Offerors and
to the Creditors' Committee.
G. To be considered, each comparing offer for an Alternative
Transaction shall remain open and be irrevocable in accordance with its terms
through the Transaction Hearing, and, if it is identified as the Final Accepted
Offer (as defined below), it shall remain open and irrevocable through the date
on which all applicable regulatory approvals of its offer are obtained and
shall:
(i) be made by a person or persons satisfying the conditions
described in this Order to qualify as a competing bidder (a "Competing
Bidder");
(ii) be submitted in a writing signed by the Competing Bidder
and contain (A) a representation that the Competing Bidder will agree
to all terms and conditions set forth in the Agreement other than
matters relating to bidding provisions, (B) a ▇▇▇▇-up of the Agreement
indicating the specific changes to the Agreement that the Competing
Bidder requires, or (C) with regard to a Chapter 11 plan of
reorganization proposed by the Competing Bidder, a separate form of
agreement which better reflects the Alternative Transaction;
(iii) (A) for the Debtors' review only, provide the Competing
Bidder's
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85
draft submissions relating to the approval of the Competing
Bidder's purchase of the Transferred Assets by the Department
of Justice in accordance with ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended, if required to
consummate the transaction, (B) represent that the Competing
Bidder(s) is/are prepared to immediately initiate all actions
necessary to obtain all other applicable regulatory approvals
for the Alternative Transaction, and (C) provide its good
faith estimate of the time within which such approvals will be
obtained;
(iv) not be considered to be a higher or better offer
unless, at a minimum, such offer or offers (A)
provides/provide for aggregate considerations to the Debtors'
estates or at least $75,000,000 in excess of the Purchase
Price (as defined in Section 4.1 of the Agreement) to be paid
by American under the Agreement, or to the extent such offer
is only for the Worldspan Interest, such offer provides for
consideration to the Debtors' estates at least ten percent
(10%) greater than the Worldspan Allocation, and (B) is not
subject to a condition based on the outcome of due diligence
or similar review or for procurement of financing or
funding of such financing,
(v) include a good faith deposit of $50,000,000 in cash
or in other form of immediately available U.S. funds (the
"Initial Deposit") and a commitment to provide, in the event
such offer ultimately is determined by the Debtors, in
consultation with the Creditors' Committee, to be the Final
Accepted Offer (as defined below), a further deposit in cash
or in other form of immediately available U.S. funds in the
amount sufficient to bring the total deposit up to the
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86
amount that is equal to $50,000,000 plus 10% of the aggregate value of such
Final Accepted Offer (as defined below) other than indebtedness assumed pursuant
to such offer (the "Full Deposit"), within one business day after the Debtors
notify the Competing Bidder(s) that its/their offer(s) has/have been determined
to be the Final Accepted Offer (as defined below); and
(vi) with respect to an offer for the Worldspan Interest, include a
good faith deposit in cash or in other form of immediately available U.S. funds
equal to 10% of the aggregate value of such offer (the "Worldspan Initial
Deposit") and a commitment to provide, in the event such offer ultimately is
determined by the Debtors, in consultation with the Creditors' Committee, is to
be part of the Final Accepted Offer (as defined below), a further deposit in
cash or in other form of immediately available U.S. funds in the amount
sufficient to bring the total deposit up to the amount that is equal to 10% of
the aggregate value of such portion of the Final Accepted Offer (as defined
below) allocated to the Worldspan Interest (the "Worldspan Full Deposit") within
one business day after the Debtors notify the Competing Bidder(s) that its/their
offer(s) has been determined to be part of the Final Accepted Offer (as defined
below); and
(vii) be submitted on or before 4:00 p.m. prevailing Eastern time on
February 28, 2001, by (A) delivering the complete competing offer(s) for
Alternative Transaction(s) together with the Initial Deposit (or, if applicable,
the Worldspan Initial Deposit) to the Debtors; (B) delivering a complete copy of
the competing offer(s) to the Debtors and their co-counsel, Rothschild, American
and
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87
its co-counsel, and the Creditors' Committee's counsel and financial advisor
Loeb Partners, at the following addresses:
to the Debtors:
TRANS WORLD AIRLINES, INC.
One City Centre
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ Soled, Esquire
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
to co-counsel for the Debtors:
▇▇▇▇▇▇▇▇▇ STANG, ZIEHL, YOUNG & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ Floor
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, Esquire
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-and-
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇▇▇, Esquire
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
to the Debtors' financial advisor:
ROTHSCHILD INC.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇'▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ ▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
to American:
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88
AMERICAN AIRLINES INC.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Esquire
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
to co-counsel for American:
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & FINGER
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-and-
WEIL, GOTSHAL & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and to counsel for the Creditors' Committee:
BLANK, ROME, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esquire
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
-and-
BLANK, ROME, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇
▇▇
-▇▇▇-
BLANK ROME ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP
The Chrysler Building
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esquire
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and to the Creditors' Committee financial advisor
LOEB PARTNERS CORPORATION
▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and (C) filing a copy of the competing offer(s) with the Court.
H. Upon receipt of a competing offer that satisfies all of the
required terms and conditions set forth herein (a "Conforming Competing Bid"),
the Debtors and the Creditors' Committee, in their discretion, may communicate
with such Competing Bidder prior to the Auction, and such Competing Bidder shall
provide to the Debtors and the Creditors' Committee within one business day
after the Debtors' or the Creditors' Committee's request therefor any
information reasonably required by the Debtors or the Creditors' Committee in
connection with the Debtors' and the Creditors' Committee's evaluation of such
Conforming Competing Bid.
I. Prior to the Auction, the Debtors shall consult with the Creditors'
Committee in evaluating American's offer, as embodied in the Agreement, and any
Conforming Competing Bids they have received, and the Debtors shall select the
offer or offers that the Debtors determine to be the highest or best offer or
offers for the Transferred Assets or
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Alternative Transaction for the Debtors and their estates (the "Initial Accepted
Offer"). Copies of the Initial Accepted Offer shall be delivered to American and
to all Competing Bidders.
J. On March 5, 2001 at 10:00 a.m. prevailing Eastern Time, the Debtors
shall conduct an Auction at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, on invitation to American and each
Competing Bidder that has made a timely Conforming Competing Bid. The only
persons who will be permitted to bid at the Auction are American and those that
have made Conforming Competing Bids, and each party bidding at the Auction shall
be entitled to learn the terms and conditions of the bids of all other bidders
as such bids are made. The Initial Accepted Offer, or any further offer
submitted at such Auction by American or a Competing Bidder, that the Debtors,
in consultation with the Creditors' Committee, determine to be the highest or
best offer for the Transferred Assets or an Alternative Transaction for the
Debtors and their estates (the "Final Accepted Offer"), shall be submitted for
approval by the Court. Within one business day after the Debtors and the
Committee notify the party/parties submitting the Final Accepted Offer (the
"Successful Offeror(s)") that its/their offer(s) has been determined by the
Debtors, in consultation with the Committee, to be the Final Accepted Offer, the
Successful Offeror(s), if other than American, shall deliver any unpaid portion
of the Full Deposit (and/or, if applicable, the Worldspan Full Deposit) to the
Debtors. The Debtors shall promptly distribute the Final Accepted Offer to
American, to the Creditors' Committee, and to all persons who have objections or
other responses in connection with the Sale Motion or the Transaction Hearing.
K. In reaching their determination of the Initial Accepted Offer and
the Final Accepted Offer, the Debtors, in consultation with the Creditors'
Committee, shall be guided by,
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but need not strictly adhere to, the concept of a Superior Proposal as set forth
in the Agreement. Further, the Debtors and the Creditors' Committee are
permitted to discuss in private with Competing Bidders their offers for an
Alternative Transaction.
L. Each Initial Deposit and Remaining Deposit received by the Debtors
shall be maintained in an interest-bearing account in accordance with the
requirements of 11 U.S.C. Section 345(b) and be subject to the jurisdiction of
the Court.
M. The Full Deposit (and/or the Worldspan Full Deposit) shall be
applied by the Debtors against the purchase price to be paid by the Successful
Offeror or Offerors at the closing of the transaction approved by the Court, and
in the event: (a) a Successful Offeror(s) other than American does not
consummate its transaction by reason of a breach of any of the terms of a Final
Accepted Offer with the Debtors, the Full Deposit (and/or, if applicable, this
Worldspan Full Deposit), together with any interest paid therein, shall be
retained by the Debtors; and (b) American does not consummate its transaction by
reason of its breach of terms of the Agreement, American shall forego repayment
of a portion of the debtor-in-possession financing of the Debtors provided by
American in an amount equal to the greater of $50,000,000 or 10% of the cash
portion of its bid (the "American Deposit"), or if no remaining balance is owed
to American on the financing, American shall pay the American Deposit to the
Debtors.
N. In the event that American shall make the Final Accepted Offer for
the Transferred Assets or the Non-Worldspan Assets, then $4,000,000 of the
facility fee paid to American in connection with its debtor-in-possession
financing of the Debtors shall be returned and refunded to the Debtors.
O. Promptly following the conclusion of the Transaction Hearing, the
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Debtors shall return to each unsuccessful Competing Bidder, its Initial Deposit,
together with any interest paid thereon, submitted by such unsuccessful
Competing Bidder(s).
P. If there is competitive bidding at the Auction, overbids other than
the Initial Overbid of $75,000,000 shall be in an amount of at least $5,000,000.
No matching bids will be permitted.
Q. American shall have the right at the Auction to credit bid the
amount of the Bankruptcy Termination Amount with respect to any offer American
may make at the Auction.
R. The Full Deposit shall be applied by the Debtors against the
purchase price to be paid by the Successful Offeror(s) at the closing of the
transaction approved by the Court. In the event the Successful Offeror(s)
do/does not consummate the transaction by reason of a breach of the terms of
its/their agreement with the Debtors, the Full Deposit (and/or, if applicable,
the Worldspan Interest), together with any interest paid thereon, shall be
retained by the Debtors or, in the event American is the Successful Offeror, and
does not consummate its Transaction as a result of its breach of the Agreement,
the provisions for default contained above shall control; and
IT IS FURTHER ORDERED that the Notice of Auction, providing notice of,
among other things, this Order, the Sale Motion, the Transaction Hearing, the
Auction, and the Auction Procedures, as modified by this Order, in the form of
Exhibit A attached hereto, shall be provided by the Debtors to all creditors,
indenture trustees, and equity holders (by publication only) (a) by first class
mail deposited as soon as practicable after the date of this Order and (b) as
soon as practicable after the date for this Order by publication (in summary
form) in The Wall
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Street Journal (National Edition), and such notice shall constitute good and
sufficient notice of this Order, the Auction, the Auction Procedures, the Sale
Motion, the Transaction Hearing and all proceedings to be held thereon; and it
is further
ORDERED, that the Debtors shall place copies of this Order, the Notice
of Auction and all other documents described in the proceeding paragraph in
their website, and it is further
ORDERED that Article 12 of the Agreement is hereby approved and in the
event that the obligation of the Debtors to pay to American the Termination
Amount of the Bankruptcy Termination Amount arises, such obligations shall
constitute an administrative expense claim under Sections 503(b) and 507(a)(1)
of the Bankruptcy Code and shall be payable in accordance with the provisions of
Article 12 of the Agreement without further order of the Court; and it is
further
ORDERED that objections, if any, to the Sale Motion shall be in
writing, shall confirm to the Federal Rules of Bankruptcy Procedure and local
rules and orders of the Court, shall set forth the nature of the objectant's
claims against or interests in the Debtors' estates, the basis for the
objections and the specific grounds therefor, and shall be filed with the United
States Bankruptcy Court for the District of Delaware, Marine Midland Plaza, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and served so as to be received on or
before 4:00 p.m. prevailing Eastern Time on February 28, 2001 by the Office of
the United States Trustee for the District of Delaware, co-counsel to the
Debtors, co-counsel to American, and counsel to the Creditors' Committee, and
any entity objecting to the Sale Motion that has not complied with the
requirements of this paragraph may not be heard at the Transaction Hearings, and
it is further
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ORDERED that nothing contained herein shall be deemed to deprive any
party of the right to object timely to the Sale Motion, all of which rights were
expressly reserved at the Procedures Hearing and are expressly reserved by the
Order; and it is further
ORDERED that replies, if any, to objections and responses to the Sale
Motion shall be filed with the United States Bankruptcy Court for the District
of Delaware, Marine Midland Plaza, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
and served so as to be received on or before 4:00 p.m. prevailing Eastern Time
on March 5, 2001 by the Office of the United States Trustee for the District of
Delaware, counsel to the objecting parties, co-counsel to the Debtors,
co-counsel to American and counsel to the Creditors' Committee; and it is
further
ORDERED that the Transaction Hearing to consider the relief requested
in the Sale Motion and to consider whether the Final Accepted Order is to be
approved by the Court shall be held before the Court on March 9, 2001 at
9:30 a.m. prevailing Eastern Time; and it is further
ORDERED that the Debtors (with the consent of American and the
Creditors' Committee or by order of this Court) may extend the deadlines set
forth in these Auction Procedures, may adjourn the Auction by announcement at
the Auction, and/or may seek adjournment of the Transaction Hearing by
announcement in open court, all without further notice (in each case, subject
to the terms and conditions of the Agreement); and it is further
ORDERED, that this Court shall retain jurisdiction to hear and
determine all matters arising from or relating to the implementation of this
Order.
Dated: February 7, 2001
-----------
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
The ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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EXHIBIT C
IN THE UNITED STATES BANKRUPTCY
COURT FOR THE DISTRICT OF DELAWARE
IN RE: ) CHAPTER 11
)
TRANS WORLD AIRLINES, INC., ET AL.,(1) ) CASE NO. 01-0___ (___)
) (JOINTLY ADMINISTERED)
)
DEBTORS. )
ORDER PURSUANT TO SECTIONS 105(a), 363, 365, AND 1146(c)
OF THE BANKRUPTCY CODE (i) AUTHORIZING THE DEBTORS'
SALE OF SUBSTANTIALLY ALL OF THEIR ASSETS, FREE
AND CLEAR OF LIENS, CLAIMS, AND ENCUMBRANCES; (ii)
APPROVING AN ASSET PURCHASE AGREEMENT; AND (iii) APPROVING
THE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY
CONTRACTS AND UNEXPIRED LEASES IN CONNECTION WITH SUCH SALE
A HEARING HAVING BEEN HELD ON JANUARY 9, 2001 (THE "HEARING"), TO CONSIDER
THE MOTION, DATED JANUARY 9, 2001 (THE "MOTION") OF THE ABOVE CAPTIONED DEBTORS
AND DEBTORS IN POSSESSION (COLLECTIVELY, THE
----------
(1) THE DEBTORS ARE THE FOLLOWING ENTITIES: TRANS WORLD AIRLINES, INC.,
AMBASSADOR FUEL CORPORATION, LAX HOLDING COMPANY, INC., MEGA ADVERTISING INC.,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ CORPORATION, THE TWA AMBASSADOR CLUB, INC., TRANS WORLD
COMPUTER SERVICES, INC., TRANSCONTINENTAL & WESTERN AIR, INC., TWA AVIATION,
INC., TWA GROUP, INC., TWA STANDARDS & CONTROLS, INC., TWA STOCK HOLDING
COMPANY, TWA-D.C. GATE COMPANY, INC., TWA-LAX GATE COMPANY, INC., TWA ▇▇▇▇▇ GATE
CO., INC., TWA-NY/NJ GATE COMPANY, INC., TWA-OMNIBUS GATE COMPANY, INC., TWA-SAN
FRANCISCO GATE COMPANY, INC., TWA-HANGAR 12 HOLDING COMPANY, INC., OZARK GROUP,
INC., TWA NIPPON, INC., TWA EMPLOYEE SERVICES, INC, TWA GETAWAY VACATIONS, INC.,
TRANS WORLD EXPRESS, INC., INTERNATIONAL AVIATION SECURITY INC., GETAWAY
MANAGEMENT SERVICES, INC., THE GETAWAY GROUP (U.K.) INC.
96
"DEBTORS") FOR AN ORDER PURSUANT TO SECTIONS 105(a), 363, 365, AND 1146(c) OF
TITLE 11 OF THE UNITED STATES CODE (THE "BANKRUPTCY CODE") (i) AUTHORIZING THE
DEBTORS' SALE OF SUBSTANTIALLY ALL OF THEIR ASSETS (THE "TRANSFERRED ASSETS"),
IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THAT CERTAIN ASSET PURCHASE
AGREEMENT, DATED AS OF JANUARY, 2001, BETWEEN THE DEBTORS, AS SELLERS
("SELLERS"), AND AMERICAN AIRLINES, INC., AS PURCHASER ("PURCHASER"), A COPY OF
WHICH IS ANNEXED TO THE MOTION AS EXHIBIT A (THE "AGREEMENT"), SUBJECT TO HIGHER
AND BETTER OFFERS, FREE AND CLEAR OF ALL LIENS, CLAIMS AND ENCUMBRANCES OTHER
THAN THE LIENS CREATED BY PURCHASER (COLLECTIVELY, "LIENS"), WITH SUCH LIENS TO
TRANSFER, AFFIX, AND ATTACH TO THE PROCEEDS OF SUCH SALE, ALL AS MORE FULLY SET
FORTH IN THE MOTION; (ii) APPROVING THE AGREEMENT; AND (iii) APPROVING THE
ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES
(THE "ASSUMED CONTRACTS") IN CONNECTION WITH SUCH SALE; AND THE COURT HAVING
ENTERED AN ORDER, DATED FEBRUARY 7, 2001 (THE "SALE PROCEDURES ORDER"),
AUTHORIZING THE DEBTORS TO CONDUCT, AND APPROVING THE TERMS AND CONDITIONS OF,
AN AUCTION (THE "AUCTION") TO CONSIDER HIGHER AND BETTER OFFERS FOR THE
TRANSFERRED ASSETS (AN "ALTERNATIVE TRANSACTION"), ESTABLISHING DATES FOR THE
AUCTION AND THE HEARING, AND APPROVING THE PROCEDURES FOR THE SUBMISSION OF
COMPETING OFFERS, THE FORM AND MANNER OF NOTICE OF THE AUCTION, THE MOTION, AND
THE HEARING, AND THE PROPOSED BANKRUPTCY TERMINATION PAYMENT SET FORTH IN
ARTICLE XII OF THE
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AGREEMENT; AND THE COURT HAVING JURISDICTION TO CONSIDER THE MOTION AND THE
RELIEF REQUESTED THEREIN IN ACCORDANCE WITH 28 U.S.C. SECTIONS 157(b)(2) AND
1334; AND CONSIDERATION OF THE MOTION, THE RELIEF REQUESTED THEREIN, AND THE
RESPONSES THERETO, IF ANY, BEING A CORE PROCEEDING IN ACCORDANCE WITH 28 U.S.C.
SECTION 157(b); AND THE APPEARANCES OF ALL INTERESTED PARTIES AND ALL RESPONSES
AND OBJECTIONS TO THE MOTION, IF ANY, HAVING BEEN DULY NOTED IN THE RECORD OF
THE HEARING; AND UPON THE RECORD OF THE HEARING, THE MOTION, SAID RESPONSES AND
OBJECTIONS, IF ANY; AND AFTER DUE DELIBERATION AND SUFFICIENT CAUSE APPEARING
THEREFOR, THE COURT HEREBY FINDS, DETERMINES, AND CONCLUDES THAT:
1. The findings and conclusions set forth herein constitute the Court's
findings of fact and conclusions of law pursuant to Fed. R. Bankr. Proc. 7052,
made applicable to this proceeding pursuant to Fed. R. Bankr. Proc. 9014.
2. To the extent any of the following findings of fact constitute
conclusions of law, they are adopted as such. To the extent any of the following
conclusions of law constitute findings of act, they are adopted as such.
3. Capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed thereto in the Agreement.
4. Notice of the Motion, the Auction, and the Hearing has been given in
accordance with Fed. R. Bankr. Proc. 2002 and 6004, the Sale Procedures Order,
and the Agreement. The foregoing notice constitutes good and sufficient notice
of the Motion, the
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Auction, and the Hearing, and no other or further notice of the Motion, the
Auction, the Hearing or the entry of this Order need be given.
5. A reasonable opportunity has been afforded any interested party to make
a higher and better offer for the Transferred Assets.
6. Emergent circumstances and sound business reasons exist for Sellers'
sale of the Transferred Assets pursuant to the Agreement. Entry into the
Agreement and consummation of the transactions contemplated thereby constitute
the exercise by the Debtors of sound business judgment and such acts are in the
best interests of the Debtors, their estates, and creditors.
7. The Agreement represents the highest and best offer received by Sellers
for the Transferred Assets.
8. The sale consideration to be realized by Sellers pursuant to the
Agreement is fair and reasonable.
9. The transactions contemplated by the Agreement are undertaken by Sellers
and Purchaser at arm's length, without collusion and in good faith within the
meaning of section 363(m) of the Bankruptcy Code, and such parties are entitled
to the protections of section 363(m) of the Bankruptcy Code.
10. A sale of the Transferred Assets other than one free and clear of
Liens, claims, and encumbrances would impact adversely on Sellers' bankruptcy
estates and would be of substantially less benefit to the estates of the
Sellers.
11. The decision to assume and assign the Assumed Contracts is based on the
reasonable exercise of the Debtors' business judgment and is in the best
interests of the Debtors' estates.
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12. Purchaser has demonstrated adequate assurance of future performance
with respect to the Assumed Contracts.
For all of the foregoing and after due deliberation, the Court ORDERS,
ADJUDGES, AND DECREES THAT:
1. The Motion, the Agreement and the transactions contemplated thereby are
hereby approved.
2. Pursuant to section 363(b) of the Bankruptcy Code, Sellers are
authorized to sell the Transferred Assets to Purchaser upon the terms and
subject to the conditions set forth in the Agreement.
3. Each of Sellers and Purchaser is hereby authorized to take all actions
and execute all documents and instruments that Sellers and Purchaser deem
necessary or appropriate to implement and effectuate the transactions
contemplated by the Agreement.
4. The sale of the Transferred Assets to Purchaser shall be free and clear
of Liens (other than Liens created by Purchaser) pursuant to section 363(f) of
the Bankruptcy Code whatsoever known or unknown including, but not limited to,
any of the Sellers' creditors, vendors, suppliers, employees or lessors and that
Purchaser shall not be liable in any way (as successor entity or otherwise) for
any claims that any of the foregoing or any other third party may have against
any of the Sellers, provided further that, with regard to employees' claims, the
free and clear delivery of the Assets shall include, but not be limited to, all
asserted or unasserted, known or unknown, employment related claims, payroll
taxes, employee contracts, employee seniority accrued while employed with any of
the Sellers and successorship liability, with any and all valid and enforceable
Liens thereon, including those asserted by Sellers' secured lenders, to be
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transferred, affixed, and attached to the net proceeds of such sale, with the
same validity, priority, force, and effect as such Liens had upon the
Transferred Assets immediately prior to the Closing.
5. Subject to the payment by Purchaser to Sellers pursuant to sections 363
and 365(a) of the Bankruptcy Code of the consideration provided for in the
Agreement, the sale of the Transferred Assets by Sellers to Purchaser shall
constitute a legal, valid, and effective transfer of the Transferred Assets and
shall vest Purchaser with all right, title, and interest of Sellers in and to
the Transferred Assets free and clear of all Liens pursuant to section 363(f) of
the Bankruptcy Code, effective as of the Closing.
6. The sale of the Transferred Assets to Purchaser under the Agreement will
constitute transfers for reasonably equivalent value and fair consideration
under the Bankruptcy Code and the laws of the States of New York and Delaware.
7. Purchaser is hereby granted the protections provided to a good-faith
purchaser under section 363(m) of the Bankruptcy Code.
8. All amounts to be paid to Purchaser pursuant to the Agreement shall
constitute administrative expenses under sections 503(b) and 507(a)(1) of the
Bankruptcy Code and shall be immediately payable if and when any such
obligations of Sellers arise under the Agreement, without any further order of
the Court; provided, however, that Sellers shall have the right to contest the
validity and amount of such asserted claims.
9. Pursuant to sections 105(a) and 363 of the Bankruptcy Code, all Persons
are hereby enjoined from taking any action against Purchaser or Purchaser's
Affiliates (as they existed immediately prior to the Closing) to recover any
claim which such Person has solely against Sellers or Sellers' Affiliates (as
they exist immediately following the Closing).
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10. Sellers are authorized to assign and transfer to Purchaser all of
Sellers' rights, title and interest (including common law rights) to all of
Sellers' intangible property to be assigned and transferred to Purchaser under
the Agreement.
11. All objections and responses concerning the Sale Motion are resolved in
accordance with the terms of this Order and as set forth in the record of the
Hearing and to the extent any such objection or response was not otherwise
withdrawn, waived, or settled, they are and all reservations and rights therein,
are overruled and denied.
12. Purchaser has not assumed or otherwise become obligated for any of
Sellers' liabilities other than as set forth in Section 3.1 of the Agreement,
and Purchaser has not purchased any of the Excluded Assets. Consequently, all
holders of Retained Liabilities against the Sellers are hereby enjoined from
asserting or prosecuting any Claim or cause of action against Purchaser or the
Purchased Assets to recover on account of any liabilities other than Assumed
Liabilities pursuant to Section 2.2 of the Asset Purchase Agreement or other
than pursuant to this Order. All persons having any interest in the Excluded
Assets are hereby enjoined from asserting or prosecuting any claim or cause of
action against Purchaser for any liability associated with the Excluded Assets.
13. The assumption and assignment of the Assumed Contracts is approved
pursuant to section 365 of the Bankruptcy Code.
14. The Sellers shall pay any cure amounts payable to the other parties to
the Assumed Contracts in accordance with section 365 of the Bankruptcy Code and
the Agreement. Purchaser shall assume obligations of the Sellers arising from
and after the Closing under the Assumed Contracts and shall not assume any
obligation other than the Assumed Contracts
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accruing thereunder prior to the Closing. Upon assumption and assignment of any
Assumed Contract, the Sellers and the estates shall be relieved of any liability
for breach of such Assumed Contract occurring after such assignment pursuant to
section 365(k) of the Bankruptcy Code. Notwithstanding the foregoing, Sellers
shall remain obligated to reimburse Purchaser for any amounts payable under any
Assumed Contract after the Closing.
15. Purchaser has provided adequate assurance of its future performance
under the Assumed Contracts and the proposed assumption and assignment of the
Assumed Contracts satisfies the requirements of the Bankruptcy Code including,
inter alia, sections 365(b)(1) and (3) and 365(f) to the extent applicable.
16. The Assumed Contracts are valid and binding, in full force and effect,
and enforceable in accordance with their terms.
17. There shall be no rent accelerations, assignment fees, increases, or
any other fees charged to Purchaser as a result of the assignment of the Assumed
Contracts, and the validity of the assumption, assignment and sale to Purchaser
shall not be affected by any dispute between any Seller and another party to an
Assumed Contract regarding the payment of the "cure" amount.
18. All parties to the Assumed Contracts are forever barred and enjoined
from raising or asserting against Purchaser any assignment fee, default or
breach under, or any claim or pecuniary loss, or condition to assignment,
arising under or related to the Assumed Contracts existing as of the Closing or
arising by reason of the Closing.
19. The Assumed Contracts, upon assignment to Purchaser, shall be deemed
valid and binding, in full force and effect in accordance with their terms,
subject to the provisions of
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this Order, and, pursuant to section 365(k) of the Bankruptcy Code, Sellers
shall be relieved from any further liability, except for any cure obligations as
herein provided.
20. Pursuant to sections 363(b), 363(f) 365(a), 365(b) and 365(f) of the
Bankruptcy Code, the assumption, assignment and sale to Purchaser of the Assumed
Contracts by the respective Seller thereto shall be effected by this Order.
21. The Assumed Contracts identified in Exhibit ___ annexed hereto,
together with any amendments and modification of such Assumed Contracts,
constitute the Assumed Contracts that are being assumed by and assigned to
Purchaser by the Seller party thereto.
22. Purchaser shall not be liable for any claims of the lessors or contract
parties under the Assumed Contracts in respect of any claim or breach of an
Assumed Contract that accrued prior to Closing.
23. This Order shall be effective and enforceable immediately upon entry
and its provisions shall be self-executing.
24. The obligations of Sellers relating to Taxes shall be fulfilled by
Sellers.
25. This Court shall retain exclusive jurisdiction through the Bankruptcy
Resolution Date to interpret and enforce the provisions of the Agreement, the
Sale Procedures Order, and this Order in all respects and further to hear and
determine any and all disputes between Sellers and/or Purchaser, as the case may
be, and any non-Sellers party to, among other things, any Assumed Contracts
concerning, inter alia, Sellers' assumption and assignment thereof to Purchaser
under the Agreement; provided, however, that in the event the Court abstains
from exercising or declines to exercise such jurisdiction or is without
jurisdiction with respect to the Agreement, Sale Procedures Order, or this
Order, such abstention, refusal, or lack of jurisdiction
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shall have no effect upon, and shall not control, prohibit, or limit the
exercise of jurisdiction of any other court having competent jurisdiction with
respect to any such matter.
26. The provisions of this Order are nonseverable and mutually dependent.
27. This Order shall inure to the benefit of Purchaser, Sellers, and their
respective successors and assigns, including but not limited to any chapter 11
or chapter 7 trustee that may be appointed in Sellers' cases and shall be
binding upon any trustee, party, entity or fiduciary that may be appointed in
connection with these cases or any other or further cases involving Sellers,
whether under chapter 7 or chapter 11 of the Bankruptcy Code.
28. Pursuant to section 1146(c) of the Bankruptcy Code, the transactions
contemplated by the Agreement are determined to be under or in contemplation of
a plan to be confirmed under section 1129 of the Bankruptcy Code in that the net
proceeds of the sale of the Transferred Assets are essential and required to
fund a chapter 11 plan for Sellers, and therefore, are exempt from any transfer,
stamp or similar tax or any so-called "bulk-sale" law in all necessary
jurisdictions arising as a result of or in connection with Sellers' sale and
transfer of the Transferred Assets to Purchaser.
29. Each and every federal, state, and local governmental agency or
department is hereby directed to accept any and all documents and instruments
necessary and appropriate to consummate the transactions contemplated by the
Agreement and this Order.
30. This Court shall retain jurisdiction to hear and determine all matters
arising from the implementation of this Order and the Agreement.
DATED: ______________, 2001
IT IS SO ORDERED:
-----------------------------------------
JUDGE
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