Exhibit 1
EXECUTION VERSION
AGREEMENT AND PLAN OF MERGER
By and Among
AIP GENERAL PARTNER, INC.,
AIP, INC.,
TURNWORKS ACQUISITION III, INC.,
and
TURNWORKS, INC.
Dated as of December 19, 2001
TABLE OF CONTENTS
PAGE
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ARTICLE I THE MERGERS; DIRECTORS AND OFFICERS OF THE COMPANY..........................................3
SECTION 1.01 The Merger..................................................................................3
SECTION 1.02 Effective Time of the Merger; Closing.......................................................3
SECTION 1.03 Certificate of Incorporation and Bylaws.....................................................4
SECTION 1.04 Directors and Officers......................................................................4
ARTICLE II CONVERSION OF SECURITIES; ISSUANCE OF NEW SECURITIES; EXCHANGE OF CERTIFICATES..............4
SECTION 2.01 Conversion of Securities; Issuance of New Securities........................................4
SECTION 2.02 Exchange of Certificates....................................................................5
SECTION 2.03 Stock Transfer Books........................................................................8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF C GP AND C INC............................................8
SECTION 3.01 Organization and Qualification..............................................................8
SECTION 3.02 Certificate of Incorporation and Bylaws.....................................................9
SECTION 3.03 Capitalization..............................................................................9
SECTION 3.04 Authority Relative to this Agreement.......................................................10
SECTION 3.05 No Conflict; Required Filings and Consents.................................................10
SECTION 3.06 Permits; Compliance........................................................................11
SECTION 3.07 Absence of Litigation......................................................................12
SECTION 3.08 Operations and Liabilities.................................................................12
SECTION 3.09 Takeover Laws..............................................................................12
SECTION 3.10 Brokers; Expenses..........................................................................14
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF TW AND THE COMPANY.......................................14
SECTION 4.01 Organization and Qualification; Operations.................................................14
SECTION 4.02 Certificate of Incorporation and Bylaws....................................................15
SECTION 4.03 Capitalization.............................................................................15
SECTION 4.04 Authority Relative to this Agreement.......................................................15
SECTION 4.05 No Conflict; Required Filing and Consent...................................................15
SECTION 4.06 Absence of Litigation......................................................................16
SECTION 4.07 Registration Statement and Prospectus......................................................16
SECTION 4.08 Brokers....................................................................................16
SECTION 4.09 No Operations or Liabilities...............................................................17
ARTICLE V CONDUCT OF BUSINESS PENDING THE MERGER.....................................................17
SECTION 5.01 Conduct of Business by C GP, C Inc. and C Pending the Merger...............................17
SECTION 5.02 Conduct of Business by the Company Pending the Merger......................................18
ARTICLE VI ADDITIONAL AGREEMENTS......................................................................18
SECTION 6.01 Registration Statement; Trust Indenture Act Qualification..................................18
SECTION 6.02 Access to Information; Confidentiality.....................................................19
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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SECTION 6.03 Further Action; Consents; Filings..........................................................19
SECTION 6.04 Notification Requirements..................................................................20
SECTION 6.05 Plan of Reorganization.....................................................................20
SECTION 6.06 Public Announcements.......................................................................21
SECTION 6.07 Conveyance Taxes...........................................................................21
SECTION 6.08 Listing Application........................................................................21
SECTION 6.09 Takeover Statute...........................................................................21
ARTICLE VII CONDITIONS TO THE MERGER...................................................................22
SECTION 7.01 Conditions to the Obligations of Each Party................................................22
SECTION 7.02 Conditions to the Obligations of C GP and C Inc............................................23
SECTION 7.03 Conditions to the Obligations of the Company...............................................23
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER..........................................................23
SECTION 8.01 Termination................................................................................23
SECTION 8.02 Effect of Termination......................................................................24
SECTION 8.03 Amendment..................................................................................25
SECTION 8.04 Waiver.....................................................................................25
SECTION 8.05 Expenses...................................................................................25
ARTICLE IX GENERAL PROVISIONS.........................................................................25
SECTION 9.01 Non-Survival of Representations, Warranties and Agreements.................................25
SECTION 9.02 Notices....................................................................................25
SECTION 9.03 Certain Definitions........................................................................26
SECTION 9.04 Assignment; Binding Effect; Benefit........................................................27
SECTION 9.05 Incorporation of Exhibits..................................................................27
SECTION 9.06 Specific Performance.......................................................................27
SECTION 9.07 Governing Law; Jurisdiction; Waiver of Jury Trial..........................................28
SECTION 9.08 Headings...................................................................................28
SECTION 9.09 Counterparts...............................................................................28
SECTION 9.10 Entire Agreement...........................................................................28
SECTION 9.11 Mutual Drafting............................................................................28
Exhibit A Form of Tax Certificate of the Company
Exhibit B Form of Tax Certificate of CGP and C Inc.
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Glossary of Defined Terms
Definition Location of Defined Terms
---------- -------------------------
A................................................................................................... Recitals
A Corporate Merger.................................................................................. Recitals
A LLC Merger........................................................................................ Recitals
A Merger............................................................................................ Recitals
A Principal Holders................................................................................. Recitals
A/B Effective Time.................................................................................. Recitals
A/B Merger Agreement................................................................................ Recitals
A/B Mergers......................................................................................... Recitals
Advisory Agreements................................................................................. Section 4.08(a)
affiliate........................................................................................... Section 9.03(a)
Agreement........................................................................................... Preamble
AMEX................................................................................................ Section 3.05(b)
ancillary agreements................................................................................ Section 9.03(b)
B................................................................................................... Recitals
B Common Stock...................................................................................... Section 3.03(c)
B LLC Merger........................................................................................ Recitals
B Merger............................................................................................ Recitals
B Parent Merger..................................................................................... Recitals
B Rights Agreement.................................................................................. Section 3.10(c)
B Series B Special Preferred Stock.................................................................. Recitals
Blue Sky Laws....................................................................................... Section 3.05(b)
business day........................................................................................ Section 9.03(c)
C................................................................................................... Recitals
C Contracts........................................................................................ Section 3.08(b)
C GP................................................................................................ Preamble
C GP Cash Consideration............................................................................. Section 2.01(b)(i)
C GP Common Stock................................................................................... Section 2.01(b)(i)
C GP Exchange Ratio................................................................................. Section 2.01(b)(i)
C Inc............................................................................................... Preamble
C Inc. Cash Consideration........................................................................... Section 2.01(b)(ii)
C Inc. Class A Common Stock......................................................................... Section 2.01(b)(ii)
C Inc. Class B Common Stock......................................................................... Section 2.01(b)(ii)
C Inc. Common Stock................................................................................. Section 2.01(b)(ii)
C Inc. Exchange Ratio............................................................................... Section 2.01(b)(ii)
C LLC............................................................................................... Recitals
C Partnership Agreement............................................................................. Section 3.01(b)
C Permits........................................................................................... Section 3.06
C Voting Agreement.................................................................................. Recitals
Cash Consideration.................................................................................. Section 2.01(b)(ii)
Certificates........................................................................................ Section 2.02(b)
Certificate of Merger............................................................................... Section 1.02(a)
Closing............................................................................................. Section 1.02(b)
Closing Date........................................................................................ Section 1.02(b)
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Definition Location of Defined Terms
---------- -------------------------
Code................................................................................................ Recitals
Company............................................................................................. Preamble
Company Common Stock................................................................................ Section 2.01(b)(i)
Confidential Information............................................................................ Section 6.02(a)
Control............................................................................................. Section 9.03(d)
controlled by....................................................................................... Section 9.03(d)
Converted Shares.................................................................................... Section 2.02(b)
DGCL ............................................................................................... Recitals
DLLCA............................................................................................... Recitals
DOT................................................................................................. Section 3.05(b)
Drop-Down Condition................................................................................. Recitals
Effective Time...................................................................................... Section 1.02(a)
Exchange Act........................................................................................ Section 3.05(b)
Exchange Agent...................................................................................... Section 2.02(a)
Exchange Agent Agreement ........................................................................... Section 2.02(a)
Expense Payment Agreement........................................................................... Section 8.05
FAA................................................................................................. Section 3.01(a)
FCC................................................................................................. Section 3.05(b)
Federal Aviation Act................................................................................ Section 3.01(a)
Fractional Amounts.................................................................................. Section 2.02(f)
Governmental Authority.............................................................................. Section 3.05(b)
HBCA................................................................................................ Recitals
HSR Act............................................................................................. Section 3.05(b)
Indenture........................................................................................... Section 2.01(b)(i)
knowledge........................................................................................... Section 9.03(e)
known............................................................................................... Section 9.03(e)
Law................................................................................................. Section 3.05(a)
Liens............................................................................................... Section 3.01(b)
Merger.............................................................................................. Recitals
Minimum Denomination................................................................................ Section 2.02(f)
MMC................................................................................................. Section 4.08(a)
MMC Advisory Agreement.............................................................................. Section 4.08
Newco A Corporation................................................................................. Recitals
Newco A LLC......................................................................................... Recitals
Newco A Sub......................................................................................... Recitals
Newco B LLC......................................................................................... Recitals
Notes .............................................................................................. Section 2.01(b)(i)
Order............................................................................................... Section 6.03(b)
Person.............................................................................................. Section 3.09
person.............................................................................................. Section 9.03(f)
Prospectus.......................................................................................... Section 6.01(a)
PSE................................................................................................. Section 3.05(b)
Registration Statement.............................................................................. Section 6.01(a)
Representatives..................................................................................... Section 6.02(a)
SEC................................................................................................. Section 6.01(a)
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Definition Location of Defined Terms
---------- -------------------------
Securities Act...................................................................................... Section 3.05(b)
Share............................................................................................... Section 2.02(b)
SMC................................................................................................. Section 4.08(a)
SMC/▇▇▇▇▇ Advisory Agreement........................................................................ Section 4.08(a)
Stockholders Agreements............................................................................. Recitals
subsidiaries........................................................................................ Section 9.03(g)
subsidiary.......................................................................................... Section 9.03(g)
Surviving Corporation............................................................................... Section 1.01
Tax................................................................................................. Section 3.09
Taxable............................................................................................. Section 3.09
Taxes............................................................................................... Section 3.09
Taxing Authority.................................................................................... Section 3.09
Tax Return(s)....................................................................................... Section 3.09
Terminating C Breach................................................................................ Section 8.01(d)
Terminating Company Breach.......................................................................... Section 8.01(c)
Trust Indenture Act................................................................................. Section 3.05(b)
TW.................................................................................................. Preamble
TW Advisory Agreement............................................................................... Section 4.08(a)
under common control with........................................................................... Section 9.03(d)
U.S. GAAP........................................................................................... Section 3.09
WARN................................................................................................ Section 3.05(b)
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AGREEMENT AND PLAN OF
MERGER
AGREEMENT AND PLAN OF MERGER, dated as of December 19, 2001
(this "AGREEMENT"), among AIP General Partner, Inc., a
Delaware corporation ("C
GP"), AIP, Inc., a
Delaware corporation ("C INC."), TurnWorks Acquisition III,
Inc., a wholly-owned subsidiary of TurnWorks, Inc. and a
Delaware corporation
(the "COMPANY"), and TurnWorks, Inc., the sole stockholder of the Company and a
Texas corporation ("TW").
W I T N E S S E T H:
WHEREAS, pursuant to the Agreement and Plan of Merger, dated
as of the date hereof, among Aloha Airgroup, Inc., a Hawaii corporation ("A"),
Hawaiian Airlines, Inc., a Hawaii corporation ("B"), the Company and TW (the
"A/B
MERGER AGREEMENT"), immediately after the Effective Time (as defined below)
and at the effective time of the A/B Mergers (as defined below) (the "A/B
EFFECTIVE TIME"), on the terms and subject to the conditions in the A/B
Merger
Agreement, INTER ALIA, (a) (i) A will, in accordance with the Hawaii Business
Corporation Act, as amended (the "HBCA"), and the
Delaware General Corporation
Law, as amended (the "DGCL"), merge with and into a wholly-owned subsidiary of
the Company to be organized as a single-member
Delaware limited liability
company ("NEWCO A LLC"), with Newco A LLC as the surviving entity (the "A LLC
MERGER") or (ii) if, immediately prior to the Effective Time, (y) the A LLC
Merger or the B LLC Merger (as defined below) would not be permitted by
applicable Law (as defined below) or (z) if any of the conditions to Closing (as
defined below) in Article VIII of the A/B
Merger Agreement would not be
satisfied or waived if the A LLC Merger or the B LLC Merger were to be effected
but would be satisfied or waived if the A Corporation Merger (as defined below)
and the B Parent Merger (as defined below) were to be effected (each such
condition, a "DROP-DOWN CONDITION"), A will, in accordance with the HBCA, and
the
Delaware General Corporation Law, as amended, merge with and into a
wholly-owned subsidiary of the Company to be organized as a
Delaware corporation
("NEWCO A CORPORATION," it being understood that references herein to "NEWCO A
SUB" shall be deemed to refer to Newco A LLC (or, if any Drop-Down Condition is
satisfied, Newco A Corporation)), with Newco A Corporation as the surviving
corporation (the "A CORPORATION MERGER," it being understood that references
herein to the "A MERGER" shall be deemed to refer to the A LLC Merger (or, if
any Drop-Down Condition is satisfied, the A Corporation Merger)); (b) (i) B
will, in accordance with the HBCA and the
Delaware Limited Liability Company Act
(the "DLLCA"), merge with and into a wholly-owned subsidiary of the Company to
be organized as a single-member
Delaware limited liability company ("NEWCO B
LLC"), with Newco B LLC as the surviving entity (the "B LLC MERGER") or (ii) if
any Drop-Down Condition is satisfied, B will, in accordance with the HBCA and
the DGCL, merge with and into the Company, with the Company as the surviving
corporation (the "B PARENT MERGER" it being understood that references herein to
the "B MERGER" shall refer to the B LLC Merger (or, if any Drop-Down Condition
is satisfied, the B Parent Merger), and references herein to the "A/B MERGERS"
shall refer collectively to the A Merger and the B Merger, but not the C
Merger); (c) the stockholders of A will have their shares converted into the
right to receive shares of capital stock of the Company; and (d) the
stockholders of B (other than the Company) will have their shares converted into
the right to receive shares of capital stock of the Company and Notes (as
defined below);
WHEREAS, Airline Investors Partnership, L.P., a
Delaware
limited partnership ("C"), beneficially owns shares of capital stock of B
representing at least 53% of the issued and outstanding capital stock of B, and
has entered into a Voting Agreement for the benefit of A and the Company (the "C
VOTING Agreement") pursuant to which C has committed, INTER ALIA, on the terms
set forth in the C Voting Agreement, to vote its shares of capital stock of B in
favor of the adoption and approval of the A/B Agreement and the ancillary
agreements (as defined below) and the transactions contemplated hereby and
thereby;
WHEREAS, C GP is the sole general partner, and C Inc. is the
sole limited partner, of C;
WHEREAS, the respective Boards of Directors of each of C GP, C
Inc., the Company and TW have each approved and adopted this Agreement and the
transactions contemplated by this Agreement in each case after making a
determination that this Agreement and such transactions are advisable and fair
to, and in the best interests of, such company and its stockholders;
WHEREAS, TW, as sole stockholder of the Company, and the
stockholders of each of C GP and C Inc., have approved and adopted this
Agreement and the transactions contemplated by this Agreement;
WHEREAS, (a) immediately prior to the Effective Time, (i) the
stockholders of each of C GP and C Inc. will form a Delaware limited liability
company ("C LLC") and will contribute all of the outstanding shares of capital
stock of C GP and C Inc., respectively, to C LLC in exchange for interests
therein, and (ii) C will transfer its shares of Series B Special Preferred
Stock, par value $.01 per share, of B (the "B SERIES B SPECIAL PREFERRED STOCK")
to ▇▇▇▇ ▇. ▇▇▇▇▇ for an aggregate purchase price of $4.00, and (b) at the
Effective Time, (i) each of C GP and C Inc. will, in accordance with the DGCL,
merge with and into the Company, with the Company as the surviving corporation
in each such merger (such mergers, collectively, the "MERGER"), (ii) C LLC will
have its shares of capital stock of C GP and C Inc. converted into the right to
receive shares of capital stock of the Company, Notes and $10,000,000 in cash in
the aggregate, and (iii) C will cease to exist;
WHEREAS, for federal income tax purposes, it is intended that
(i) the Merger shall qualify as a reorganization under Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "CODE"), and (ii) C LLC will
recognize no gain or loss for federal income tax purposes on the receipt of
shares as a result of the consummation of the Merger (except with respect to any
cash or Notes received);
WHEREAS, a voting trust to be formed (which will hold the
shares of capital stock of A held by the A Principal Stockholders and by certain
related parties (the "A VOTING TRUST")), C LLC, TW and the Company will enter
into a Stockholders Agreement (the "STOCKHOLDERS AGREEMENT") in the form
attached to the A/B
Merger Agreement as EXHIBIT A and as a condition to the
Closing, setting forth, INTER ALIA, certain governance and other arrangements
among such holders and the Company, including with respect to the issuance of
special preferred stock of the Company;
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WHEREAS, the A Voting Trust, C LLC, ▇▇▇▇▇ Management LLC
("SMC"), which is an affiliate of C, TW and the Company will enter into a
Registration Rights Agreement (the "REGISTRATION RIGHTS AGREEMENT") in the form
attached to the A/B
Merger Agreement as EXHIBIT B and as a condition to the
Closing; and
WHEREAS, certain principal stockholders of A (the "A PRINCIPAL
HOLDERS"), C LLC, ▇▇▇▇▇ Management LLC ("SMC"), which is an affiliate of C, TW
and the Company will enter into a Stockholders Agreement and a Registration
Rights Agreement (collectively, the "STOCKHOLDERS AGREEMENTS"), in the forms
attached to the A/B
Merger Agreement as EXHIBIT A and EXHIBIT B, respectively,
and as a condition to the closing of the A/B Mergers, setting forth, INTER ALIA,
certain governance and other arrangements among such holders and the Company,
including with respect to the issuance of special preferred stock of the
Company, which shall become effective at the A/B Effective Time.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to be legally
bound hereby, C GP, C Inc., the Company and TW hereby agree as follows:
ARTICLE I
THE MERGERS; DIRECTORS AND OFFICERS OF THE COMPANY
SECTION 1.01 THE MERGER. Upon the terms and subject to the
conditions set forth in this Agreement and in accordance with the DGCL, at the
Effective Time, each of C GP and C Inc. shall be merged with and into the
Company. The Company shall be the surviving corporation (the "SURVIVING
CORPORATION") in the Merger and shall continue its corporate existence under the
DGCL, and the separate corporate existence of each of C GP and C Inc. shall
cease. The effects and the consequences of the Merger shall be as set forth in
this Agreement and the DGCL.
SECTION 1.02 EFFECTIVE TIME OF THE MERGER; CLOSING. (a)
Subject to the conditions of this Agreement, the parties shall cause the Merger
to be consummated by filing a certificate of merger (the "CERTIFICATE OF
MERGER") with respect to the Merger complying with Section 251(c) of the DGCL
with the Secretary of State of the State of Delaware on the Closing Date (as
defined below). The Merger shall become effective upon such filing or at such
time thereafter as the parties shall agree and as shall be provided in the
Certificate of Merger (the "EFFECTIVE TIME"); PROVIDED, that such Effective Time
shall be prior to, but on the same day as, the A/B Effective Time.
(b) Subject to the terms and conditions of this Agreement, the
closing of the Merger and all related transactions contemplated by this
Agreement and the ancillary agreements (the "CLOSING") shall take place at the
offices of Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ in New York, New York at 10:00
A.M., local time, as promptly as practicable (and in any event within three
business days) after the last of the conditions set forth in Article VII hereof
is fulfilled or waived (other than those conditions that by their nature are to
be satisfied at the Closing, but subject to the fulfillment or waiver of those
conditions at the Closing), or at such other time and
3
date and place as the parties shall mutually agree. The date on which the
Closing occurs is referred to herein as the "CLOSING DATE".
(c) The Merger shall have the effects set forth in the DGCL,
including without limitation, Section 259 of the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time, all the
properties, rights, privileges, immunities, powers and franchises of C GP and C
Inc. shall vest in the Surviving Corporation, and all debts, liabilities,
obligations and duties of C GP and C Inc. shall become the debts, liabilities,
obligations and duties of the Surviving Corporation.
(d) A Certificate of Cancellation of C shall be filed with the
Secretary of State of the State of Delaware immediately after the Effective Time
to evidence the dissolution of C in the public record.
SECTION 1.03 CERTIFICATE OF INCORPORATION AND BYLAWS. At the
Effective Time, the Certificate of Incorporation and the Bylaws of the Company
shall be the Certificate of Incorporation and Bylaws of the Surviving
Corporation until thereafter changed or amended either (a) as provided therein
or by the DGCL, in the case of such Certificate of Incorporation, or (b) as
provided therein, by the Certificate of Incorporation or by the DGCL, in the
case of such Bylaws.
SECTION 1.04 DIRECTORS AND OFFICERS. At the Effective Time,
the directors and officers of the Company shall be the directors and officers of
the Surviving Corporation, and each such director and officer shall hold office
in accordance with the Certificate of Incorporation and Bylaws of the Surviving
Corporation, until his or her death, resignation or removal or until his or her
successor is duly elected or appointed and qualified.
ARTICLE II
CONVERSION OF SECURITIES; ISSUANCE OF NEW SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.01 CONVERSION OF SECURITIES; ISSUANCE OF NEW
SECURITIES. (a) Prior to the Effective Time, each of C GP and C Inc. shall form
C LLC pursuant to and in accordance with the DLLCA, by filing a Certificate of
Formation with the Secretary of State of the State of Delaware, and cause each
of its stockholders to contribute all of the outstanding shares of capital stock
of C GP and C Inc., respectively, to C LLC in exchange for limited liability
company interests therein. The limited liability company agreement of C LLC
shall provide, INTER ALIA, that (a) ▇▇▇▇ ▇. ▇▇▇▇▇ (or his successor, who shall
be a "citizen of the United States," as defined below) shall be the sole
managing member of C LLC and shall have sole voting power with respect to any
shares of capital stock or other securities of any person held by C LLC, (b) at
least two-thirds of the board of managers and officers of C LLC shall at all
times be comprised of "citizens of the United States" (as defined in the Federal
Aviation Act (as defined below)) and (c) any members of C LLC who are not such
"citizens of the United States" shall irrevocably delegate all voting power over
C LLC to ▇▇▇▇ ▇. ▇▇▇▇▇ (or his successor who shall be a "citizen of the United
States," as defined below).
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(b) At the Effective Time, by virtue of the Merger without any
action on the part of any holder of any capital stock of C GP, C Inc. or the
Company:
(i) each share of Common Stock, par value $.01 per share, of C
GP ("C GP COMMON STOCK") issued and outstanding immediately prior to
the Effective Time shall be converted into the right to receive (A)
363.636 validly issued, fully paid and nonassessable shares of Common
Stock, par value $.0001 per share, of the Company (the "COMPANY COMMON
STOCK")(the "C GP EXCHANGE RATIO"), (B) subject to Section 2.02(f),
$727.272 principal amount of the same issue of Notes due 2008 of the
Company (the "NOTES"), which are to be issued under the indenture
referred to in A/B
Merger Agreement (the "INDENTURE") and (C) a cash
payment (the "C GP CASH CONSIDERATION") equal to the quotient of
$200,000 divided by the number of such shares of C GP Common Stock;
(ii) each share of Class A Common Stock, par value $.01 per
share, of C Inc. (the "C INC. CLASS A COMMON Stock") and each share of
Class B Common Stock, par value $.01 per share, of C Inc. (the "C INC.
CLASS B COMMON STOCK" and, collectively with the C Inc. Class A Common
Stock, the "C INC. COMMON STOCK"), issued and outstanding immediately
prior to the Effective Time, shall be converted into the right to
receive (A) 17,818.182 validly issued, fully paid and nonassessable
shares of Company Common Stock (the "C INC. EXCHANGE RATIO"), (B)
subject to Section 2.02(f), $35,636.364 principal amount of Notes and
(C) a cash payment (the "C INC. CASH CONSIDERATION" and, collectively
with the C GP Cash Consideration, the "CASH CONSIDERATION") equal to
the quotient of $9,800,000 divided by the number of such shares of C
Inc. Common Stock; and
(iii) each share of common stock of the Company issued and
outstanding immediately prior to the Effective Time shall remain issued
and outstanding and unchanged as validly issued, fully paid and
nonassessable securities of the Surviving Corporation.
SECTION 2.02 EXCHANGE OF CERTIFICATES. (a) EXCHANGE AGENT. As
soon as practicable after the Effective Time, the Company shall deposit with
such bank or trust company mutually agreeable to the Company, C GP and C Inc.
(the "EXCHANGE AGENT"), certificates evidencing a sufficient number of shares of
Company Common Stock issuable pursuant to Section 2.01 and (ii) a sufficient
number of Notes with sufficient principal amounts issuable pursuant to Section
2.01, all pursuant to an agreement to be entered into prior to the Effective
Time between the Company and the Exchange Agent (the "EXCHANGE AGENT
AGREEMENT").
(b) EXCHANGE PROCEDURES. As soon as practicable after the
Effective Time, the Company shall cause the Exchange Agent to deliver to each
holder of a certificate or certificates (the "CERTIFICATES") that immediately
prior to the Effective Time evidenced outstanding shares of capital stock of C
GP and C Inc. (each, a "SHARE"), including, without limitation, C GP Common
Stock, C Inc. Class A Common Stock and C Inc. Class B Common Stock, that were
converted (the "CONVERTED SHARES") into the right to receive shares of Company
Common Stock, Notes and Cash Consideration pursuant to Section 2.01, (i) a
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon actual
5
delivery of the Certificates to the Exchange Agent) and (ii) instructions for
use in effecting the surrender of the Certificates in exchange for certificates
representing shares of Company Common Stock, Notes and Cash Consideration. Upon
surrender of a Certificate to the Exchange Agent for cancellation (or to such
other agent or agents as may be appointed by the Company), together with a duly
executed letter of transmittal and such other documents as the Exchange Agent
shall require, the holder of such Certificate shall be entitled to receive in
exchange therefor (A) one or more shares of Company Common Stock (which shall be
in a physical certificate) representing, in the aggregate, the whole number of
shares that such holder has the right to receive pursuant to Section 2.01 after
taking into account, in the case of holders of Certificates that immediately
prior to the Effective Time evidenced outstanding shares of C GP Common Stock,
all shares of C GP Common Stock then held by such holder, and in the case of
holders of Certificates that immediately prior to the Effective Time evidenced
outstanding shares of C Inc. Common Stock, all shares of C Inc. Common Stock
then held by such holder,) (B) subject to Section 2.02(f), one or more Notes
(which shall be in a physical note) with an aggregate principal amount equal to
the amount that such holder is entitled to receive pursuant to Section 2.01, and
(C) a check (or wire transfer of funds to an account designated by such holder)
in the amount equal to the cash (which shall under no circumstances include any
interest) that such holder has the right to receive pursuant to the provisions
of this Article II in respect of Cash Consideration, dividends and other
distributions pursuant to Section 2.02(c), cash in lieu of Fractional Amounts
pursuant to Section 2.02(f) and interest and other amounts payable on the Notes
pursuant to their terms. Each Certificate surrendered pursuant to the previous
sentence shall forthwith be canceled. No interest shall accrue or be payable
under this Section 2.02 except that interest shall accrue and be payable with
respect to the Notes only to the extent that the Notes, by their terms,
specifically provide for the accrual and payment of interest. No interest or
other amount payable after the Effective Time with respect to the Notes shall be
paid to the holder of any unsurrendered Certificate until the holder thereof
surrenders such Certificate. Until so surrendered and exchanged, each such
Certificate shall, after the Effective Time, be deemed to represent only the
right to receive shares of Company Common Stock, Notes and cash (each to the
extent applicable), and until such surrender or exchange, no such shares of
Company Common Stock, Notes or cash shall be delivered to the holder of such
outstanding Certificate in respect thereof. In the event of a transfer of
ownership of Converted Shares that is not registered in the transfer records of
C GP or C Inc., as the case may be, a certificate evidencing the proper number
of shares of Company Common Stock, together with any dividends or other
distributions to which the holder of such Converted Shares is entitled pursuant
to Section 2.02(c), Notes with the proper principal amount, together with any
cash in lieu of Fractional Amounts to which such holder is entitled pursuant to
Section 2.02(f) and any interest or other amounts payable to which such holder
is entitled by their terms, and the Cash Consideration may be issued to a
transferee if the Certificate evidencing such Converted Shares is presented to
the Exchange Agent, accompanied by all documents required to evidence and effect
such transfer and by evidence that any applicable stock transfer taxes have been
paid.
(c) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES OF
COMPANY COMMON STOCK. No dividends or other distributions declared or made after
the Effective Time with respect to shares of Company Common Stock with a record
date after the Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the shares of Company Common Stock evidenced
thereby, until the holder of such Certificate shall surrender such Certificate.
Subject to the effect of escheat, tax or other applicable Laws (as defined
below),
6
following surrender of any such Certificate, there shall be paid to the holder
of the certificates evidencing shares of Company Common Stock issued in exchange
therefor, without interest, (i) the amount of dividends or other distributions
with a record date after the Effective Time and theretofore paid with respect to
such shares of Company Common Stock and (ii) at the appropriate payment date,
the amount of dividends or other distributions, with a record date after the
Effective Time but prior to surrender and a payment date occurring after
surrender, payable with respect to such shares of Company Common Stock.
(d) NO FURTHER RIGHTS IN CONVERTED SHARES. All shares of
Company Common Stock, Notes and Cash Consideration issued and paid in exchange
for Converted Shares in accordance with the terms hereof (including any amounts
paid pursuant to Section 2.02(c) or 2.02(f)) shall be deemed to have been issued
and paid in full satisfaction of all rights pertaining to such Converted Shares.
(e) NO FRACTIONAL SHARES. No certificates or scrip evidencing
fractional shares of Company Common Stock shall be issued upon the surrender for
exchange of Certificates, and such fractional share interests will not entitle
the owner thereof to vote or to any other rights of a stockholder of the
Company. Any fractional share interest of Company Common Stock shall be rounded
up to the nearest whole share.
(f) NOTE DENOMINATIONS. Notwithstanding any other provision of
this Agreement, Notes shall be issued only in denominations of $2.00 (or, if
$2.00 denominations are not commercially reasonable or otherwise practicable,
the lowest commercially reasonable and practicable denomination above $2.00)
($2.00 or, if applicable, such higher minimum denomination, the "MINIMUM
DENOMINATION") and integral multiples of the Minimum Denomination. Former
holders of Shares who are otherwise entitled to receive Notes under this Article
II will not be entitled to receive Notes in principal amounts less than the
Minimum Denomination, or in principal amounts in excess of the Minimum
Denomination (or an integral multiple of the Minimum Denomination) but less than
the next highest integral multiple ("FRACTIONAL AMOUNTS") but, instead, will be
entitled to receive promptly from the Exchange Agent a cash payment (without any
interest) in lieu of Fractional Amounts representing each such former holder's
proportionate interest in the net proceeds from the sale by the Exchange Agent
on behalf of such former holders of the aggregate Fractional Amounts pursuant to
the terms of the Exchange Agent Agreement. Such sale shall be made within ten
days after the Effective Time. Such cash payments will be made to each such
former holder only upon proper surrender of such former holder's Certificates,
together with a properly completed and duly executed transmittal form and any
other required documents.
(g) TERMINATION OF EXCHANGE AGENT. Any certificates
representing shares of Company Common Stock deposited with the Exchange Agent
pursuant to Section 2.02(a) and not exchanged within one year after the
Effective Time pursuant to this Section 2.02 shall be returned by the Exchange
Agent to the Company, which shall thereafter act as Exchange Agent. All funds
and Notes, if any, held by the Exchange Agent for payment or delivery to the
holders of unsurrendered Certificates and unclaimed at the end of one year from
the Effective Time shall be returned to the Company, after which time any holder
of unsurrendered Certificates shall look as a general creditor only to the
Company for payment of such funds or delivery of such Notes to which such holder
may be due, subject to applicable Law. All Notes so returned shall be
7
cancelled by the Company pursuant to the Indenture, without prejudice to any
rights of any holder of unsurrendered certificates.
(h) NO LIABILITY. The Company shall not be liable to any
holder of Shares for any such shares of Company Common Stock (or dividends or
distributions with respect thereto), Notes or cash delivered to a public
official pursuant to any abandoned property, escheat or similar Law.
(i) WITHHOLDING RIGHTS. The Company shall be entitled to
deduct and withhold from the consideration otherwise payable pursuant to this
Agreement to any holder of Shares, such amounts as it is required to deduct and
withhold with respect to the making of such payment under the Code, or any
provision of state, local or foreign Tax Law. To the extent that amounts are so
withheld by the Company, such withheld amounts shall be treated for all purposes
of this Agreement as having been paid to the holder of Shares in respect of
which such deduction and withholding was made by the Company.
(j) LOST CERTIFICATES. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Company, the posting by such person of a bond in such reasonable
amount as the Company may direct as indemnity against any claim that may be made
against it with respect to such Certificate, the Exchange Agent will issue in
exchange for such lost, stolen or destroyed Certificate the shares of Company
Common Stock, together with any dividends or other distributions to which the
holders thereof are entitled pursuant to Section 2.02(c), Notes, together with
cash in lieu of Fractional Amounts and interest and other amounts payable in
respect of the Notes pursuant to their terms, and the Cash Consideration
deliverable in respect thereof pursuant to this Agreement.
SECTION 2.03 STOCK TRANSFER BOOKS. From and after the
Effective Time, the stock transfer books of C GP and C Inc. shall be closed and
there shall be no further registration of transfers of shares of capital stock
of C GP or C Inc. thereafter on the records of C GP or C Inc., as the case may
be. On or after the Effective Time, any Certificates presented to the Exchange
Agent or the Company for any reason shall be converted into shares of Company
Common Stock, together with any dividends or other distributions payable to
which the holders thereof are entitled pursuant to Section 2.02(c), Notes,
together with cash in lieu of Fractional Amounts and interest and other amounts
payable in respect of the Notes pursuant to their terms, and the Cash
Consideration.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF C GP AND C INC.
C GP and C Inc. hereby jointly and severally represent and
warrant to the Company and TW that:
SECTION 3.01 ORGANIZATION AND QUALIFICATION. (a) Each of C GP
and C Inc. is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Each of C GP and C Inc. is
duly qualified or licensed as a foreign corporation
8
to do business, and is in good standing, in each jurisdiction where the
character of the properties owned, leased or operated by it or the nature of its
business makes such qualification or licensing necessary, except for such
failures to be so qualified or licensed and in good standing that would not,
individually or in the aggregate, have a material adverse effect on the ability
of C GP or C Inc. to perform its obligations hereunder or materially impair or
delay the consummation of the transactions contemplated hereby. Each of C GP and
C Inc. is, and (when formed) C LLC will be, a "citizen of the United States" as
defined in the Federal Aviation Act of 1958, as amended, together with the
aviation regulations of the Federal Aviation Administration (the "FAA"), as the
same may be in effect from time to time (the "FEDERAL AVIATION ACT").
(b) Neither C GP nor C Inc. or C beneficially owns directly or
indirectly and, except as expressly contemplated by this Agreement, has agreed
to purchase or otherwise acquire, any of the capital stock of or other equity
interest in, or any interest convertible into or exchangeable or exercisable
for, any of the capital stock or any other equity interest in any corporation,
partnership, joint venture or other business association or entity other than C
and B. Except as expressly contemplated by the certificate of incorporation and
bylaws of C GP and C Inc., the Agreement of Limited Partnership of C, dated as
of January 19, 1996, as amended (the "C PARTNERSHIP AGREEMENT"), or this
Agreement, (i) there are no outstanding contractual obligations of C, C GP or C
Inc. to provide funds to, or make any investment (in the form of a loan, capital
contribution or otherwise) in, any person and (ii) all the partnership interests
in C are owned directly by C GP and C Inc., free and clear of all pledges,
claims, liens, charges, encumbrances and security interests of any kind or
nature whatsoever (collectively, "LIENS"), including, without limitation, in
respect of restrictions on the right to vote, sell or otherwise dispose of such
capital stock or other ownership interests.
SECTION 3.02 CERTIFICATE OF INCORPORATION AND BYLAWS. Each of
C GP and C Inc. has heretofore made available to the Company a complete and
correct copy of the Certificate of Incorporation and the Bylaws of each of C GP,
C Inc. and the C Partnership Agreement. The Certificate of Incorporation and
Bylaws of each of C GP and C Inc. and the C Partnership Agreement are each in
full force and effect. None of C GP and C Inc. is in violation of any of the
provisions of its Certificate of Incorporation or Bylaws.
SECTION 3.03 CAPITALIZATION. (a) The authorized capital stock
of C GP consists of 1,000 shares of C GP Common Stock. As of the close of
business on December 18, 2001, 1,000 shares of C GP Common Stock were issued and
outstanding, all of which are validly issued, fully paid and nonassessable.
Except as otherwise contemplated by this Agreement, there are no options,
warrants or other rights, agreements, arrangements or commitments of any
character relating to the issued or unissued capital stock of C GP or obligating
C GP to issue, vote or sell any shares of capital stock of, or other equity
interests in, C GP. Except as otherwise contemplated by this Agreement, there
are no outstanding contractual obligations of C GP to repurchase, redeem or
otherwise acquire any shares of capital stock of C GP.
(b) The authorized capital stock of C Inc. consists of 100
shares of C Inc. Class A Common Stock and 900 shares of C Inc. Class B Common
Stock. As of the close of business on December 18, 2001, 100 shares of C Inc.
Class A Common Stock and 900 shares of C Inc. Class B Common Stock were issued
and outstanding, all of which are validly issued, fully paid and nonassessable.
Except as otherwise contemplated by this Agreement, there are no options,
9
warrants or other rights, agreements, arrangements or commitments of any
character relating to the issued or unissued capital stock of C Inc. or
obligating C Inc. to issue, vote or sell any shares of capital stock of, or
other equity interests in, C Inc. Except as otherwise contemplated by this
Agreement, there are no outstanding contractual obligations of C Inc. to
repurchase, redeem or otherwise acquire any shares of capital stock of C Inc.
(c) C is the sole record owner of 18,181,818 shares of Common
Stock, par value $.01 per share, of B (the "B COMMON STOCK") and four shares of
Series B Special Preferred Stock, and such shares constitute all of the capital
stock of B beneficially owned by C. C has good title to and legal and beneficial
ownership of (which may include holding in nominee or "street" name) all of such
shares, free and clear of all Liens, claims, options, proxies, voting agreements
and security interests (other than as created by this Agreement, the ancillary
agreements, the C Contracts (as defined below) and the restrictions on Transfer
under applicable Laws). Except for C GP and C Inc., there are no partners of C.
SECTION 3.04 AUTHORITY RELATIVE TO THIS AGREEMENT. Each of C
GP and C Inc. has all necessary corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by each of C GP and C Inc. and the consummation by each of C GP
and C Inc. of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action and no other corporate proceedings
on the part of each of C GP and C Inc. are necessary to authorize this Agreement
or to consummate the transactions contemplated hereby (other than, with respect
to the Merger only, the filing of any Certificate of Merger as required by the
DGCL). This Agreement has been (or at closing will be) duly and validly executed
and delivered by each of C GP and C Inc. and, assuming the due authorization,
execution and delivery by each of the other parties hereto and thereto,
constitutes a legal, valid and binding obligation of each of C GP and C Inc.,
enforceable against each of C GP and C Inc. in accordance with its terms.
SECTION 3.05 NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a)
The execution and delivery of this Agreement by each of C GP and C Inc. do not,
and the performance of this Agreement by each of C GP and C Inc. and the
consummation by each of C GP and C Inc. of the transactions contemplated hereby
will not, (i) conflict with or violate its Certificate of Incorporation, Bylaws
or the C Partnership Agreement , (ii) assuming that all consents, approvals,
authorizations, notifications and other actions identified in Section 3.05(b)
have been obtained and all filings and obligations described in Section 3.05(b)
have been made or complied with, conflict with or violate any foreign or
domestic (federal, state or local) law, statute, ordinance, rule, regulation,
order, judgment or decree ("LAW") applicable to C GP, C Inc. or C or by which
any property or asset of C GP, C Inc. or C is bound or affected, or (iii) result
in any breach of or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a Lien or other encumbrance on any property or asset of C GP, C Inc.
or C pursuant to, any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation, except,
with respect to clauses (ii) and (iii), for any such conflicts, violations,
breaches, defaults, or other occurrences which would not, individually or in the
aggregate, have a material adverse effect on the ability of C GP or C Inc. to
perform its obligations hereunder or materially impair or delay the
10
consummation of the transactions contemplated hereby or impair in any respect
the ownership of B Common Stock by C or its successors. When consummated, the
transfer of the shares of B Series B Special Preferred Stock by B to ▇▇▇▇ ▇.
▇▇▇▇▇ as contemplated herein will not cause such shares to be converted into B
Common Stock and ▇▇▇▇ ▇. ▇▇▇▇▇ will hold such shares free and clear of all
Liens, claims, options, proxies, voting agreements and security interests (other
than as created by this Agreement, the ancillary agreements, the C Contracts (as
defined below) and the restrictions on Transfer under applicable Laws) .
(b) The execution and delivery of this Agreement by each of C
GP and C Inc. do not, and the performance of this Agreement by C GP and C Inc.
and the consummation by C GP and C Inc. of the transactions contemplated hereby
will not, require any consent, approval, authorization or permit of, or filing
with or notification to, any United States (federal, state or local) or foreign
government or governmental, regulatory or administrative authority, agency or
commission ("GOVERNMENTAL AUTHORITY"), except (i) for applicable requirements,
if any, of the Securities Act of 1933, as amended (the "SECURITIES ACT"),
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), the Trust
Indenture Act of 1939, as amended (the "TRUST INDENTURE ACT"), state securities
or "blue sky" laws ("BLUE SKY LAWS"), the American Stock Exchange ("AMEX"), the
Pacific Stock Exchange ("PSE"), state takeover laws, the pre-merger notification
requirements of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended, and the rules and regulations thereunder (the "HSR ACT"), the notice
requirements of the Federal Communications Commission (the "FCC"), the FAA and
the Department of Transportation (the "DOT"), the Worker Adjustment and Retiring
Notification Act or any similar state law (collectively, "WARN"), the notice
requirements of the Hawaii Dislocated Workers Act, and the filing of any
Certificate of Merger as required by the DGCL and (ii) where failure to obtain
such consents, approvals, authorizations or permits, or to make such filings or
notifications, would not, individually or in the aggregate, have a material
adverse effect on the ability of C GP and C Inc. to perform its obligations
hereunder or thereunder or materially impair or delay the consummation of the
transactions contemplated hereby or thereby or impair in any respect the
ownership of B Common Stock by C or its successors.
SECTION 3.06 PERMITS; COMPLIANCE. Each of C GP, C Inc. and C
possesses all certificates, licenses, permits, authorizations and approvals of
Governmental Authorities necessary to own, lease and operate its properties and
to conduct the business that each of C GP, C Inc. and C is conducting
(collectively, the "C PERMITS"), except where the failure to possess such C
Permits would not, individually or in the aggregate, have a material adverse
effect on the ability of C GP or C Inc. to perform its obligations hereunder or
materially impair or delay the consummation of the transactions contemplated
hereby. No suspension or cancellation of any of the C Permits is pending or, to
the actual knowledge of either C GP, C Inc. or C, threatened, except where the
failure to have, or the suspension or cancellation of, any of the C Permits
would not, individually or in the aggregate, have a material adverse effect on
the ability of C GP or C Inc. to perform its obligations hereunder or materially
impair or delay the consummation of the transactions contemplated hereby or
impair in any respect the ownership of B Common Stock by C or its successors.
Neither C GP nor C Inc. or C is in conflict with, or in default or violation of
(a) any Law applicable to it or by which any property or asset of it is bound or
affected, (b) any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which it is a
party or by which it or any property or asset of it is bound or affected or (c)
any C Permits, except for any such conflicts,
11
defaults or violations that would not, individually or in the aggregate, have a
material adverse effect on the ability of C GP or C Inc. to perform its
obligations hereunder or materially impair or delay the consummation of the
transactions contemplated hereby or impair in any respect the ownership of B
Common Stock by C or its successors.
SECTION 3.07 ABSENCE OF LITIGATION. There is no litigation,
suit, claim, action or proceeding pending or, to the knowledge of either C GP, C
Inc. or C, threatened in writing against either C GP, C Inc. or C, or any
property or asset of either C GP, C Inc. or C, before any court, arbitrator or
Governmental Authority, domestic or foreign, (i) seeking relief which, if
ordered, would, individually or in the aggregate, have a material adverse effect
on the ability of C GP or C Inc. to perform its obligations hereunder or
materially impair or delay the consummation of the transactions contemplated
hereby or impair in any respect the ownership of B Common Stock by C or its
successors or (ii) as of the date hereof, seeking relief which, if ordered,
would delay or prevent the consummation of any transaction contemplated hereby
or impair in any respect the ownership of B Common Stock by C or its successors.
Neither C GP, C Inc. or C nor any property or asset of C GP, C Inc. or C is
subject to any continuing order of, consent decree, settlement agreement or
other similar written agreement with, or, to the knowledge of either C GP, C
Inc. or C, continuing investigation by, any Governmental Authority, or any
order, writ, judgment, injunction, decree, determination or award of any
Governmental Authority or arbitrator having, individually or in the aggregate, a
material adverse effect on the ability of C GP or C Inc. to perform its
obligations hereunder or materially impair or delay the consummation of the
transactions contemplated hereby or impair in any respect the ownership of B
Common Stock by C or its successors.
SECTION 3.08 OPERATIONS AND LIABILITIES. (a) Each of C GP and
C Inc. has engaged in no other business activities, has conducted no other
operations and have no assets, properties or rights and no known liabilities or
obligations (whether accrued, absolute, contingent or otherwise) other than (i)
acting as the general partner and the limited partner, respectively, of, and
holding general partnership and limited partnership interests, respectively, in,
C, (ii) arising out of or in connection with the activities of C or its
representatives on the Board of Directors of B in the business and affairs of B
and (iii) as expressly contemplated by this Agreement.
(b) C has engaged in no other business activities, has
conducted no other operations and has no assets, properties or rights and no
known liabilities or obligations (whether accrued, absolute, contingent or
otherwise) other than (i) holding 18,181,818 shares of B Common Stock and four
shares of B Series B Special Preferred Stock, (ii) conducting the business and
affairs of B directly or indirectly through its representatives on the Board of
Directors of B, (iii) arising out of or in connection with (1) the Certificate
of Incorporation of B, (2) Bylaws of B, (3) that certain Stockholders Agreement,
dated as of January 31, 1996, by and among B, C, the Air Line Pilots Association
- Hawaiian Master Executive Council, the Association of Flight Attendants and
the International Association of Machinists, (4) that certain Registration
Rights Agreement, dated as of January 31, 1996, between B and C, (5) the C
Partnership Agreement and (6) the C Voting Agreement ((1)-(6) collectively, the
"C CONTRACTS"), (iv) arising out of or in connection with the activities of C or
its representatives on the Board of Directors of B in the business and affairs
of B and (v) as expressly contemplated by this Agreement and the ancillary
agreements. To the knowledge of C GP and C Inc., there is no default under any
of the C Contracts, and each of the C Contracts is in full force and effect.
12
SECTION 3.09 TAXES. Each of C GP, C Inc. and C (i) has
prepared and timely filed all material Tax Returns required to be filed by it,
or requests for extensions to file such Tax Returns have been timely filed,
granted and have not expired; (ii) has paid all Taxes required to be shown to be
due on such Tax Returns; (iii) is not a party to any Tax sharing agreement or
arrangement; (iv) has withheld or collected and paid over to the appropriate
Taxing Authorities (or are properly holding for such payment) all Taxes required
by Law to be withheld or collected, including but not limited to all employment
and payroll Taxes; and (v) as of the date hereof, has neither extended nor
waived any applicable statute of limitations with respect to Taxes and has not
otherwise agreed to any extension of time with respect to Tax assessment or
deficiency. No material deficiencies for any Taxes have been proposed, asserted
or assessed by any Taxing Authority against C GP, C Inc. or C that are not
adequately reserved for in accordance with U.S. generally accepted accounting
principles ("U.S. GAAP"). There are no Liens for Taxes upon the assets of C GP,
C Inc. or C except for Taxes that are not yet due and payable. As used in this
Agreement, (i) the term "TAX" (including, with correlative meaning, the terms
"TAXES" and "TAXABLE") means, with respect to any Person (as defined below), (a)
all taxes, domestic or non-U.S., including without limitation any income (net,
gross or other, including recapture of any tax items such as investment tax
credits), alternative or add-on minimum tax, gross income, gross receipts,
gains, sales, use, leasing, lease, user, ad valorem, transfer, recording,
franchise, profits, property (real or personal, tangible or intangible), fuel,
license, withholding on amounts paid to or by such person, payroll, employment,
unemployment, social security, excise, severance, stamp, occupation, premium,
environmental or windfall profit tax, custom, duty, value added or other tax, or
other like assessment or charge of any kind whatsoever, together with any
interest, levies, assessments, charges, penalties, additions to tax or
additional amounts imposed by any Taxing Authority, (b) any joint or several
liability of such Person with any other Person for the payment of any amounts of
the type described in (a) of this definition, and (c) any liability of such
Person for the payment of any amounts of the type described in (a) as a result
of any express or implied obligation to indemnify any other Person; (ii) the
term "TAX RETURN(S)" means all returns, consolidated or otherwise, report or
statement (including without limitation informational returns), required to be
filed with any Taxing Authority; (iii) the term "TAXING AUTHORITY" means any
authority of competent jurisdiction responsible for the imposition of any Tax;
and (iv) the term "PERSON" means any corporation (including not-for-profit),
general or limited partnership, limited liability company, joint venture,
estate, trust, association, organization, or other entity of any kind or nature.
SECTION 3.10 TAKEOVER LAWS.
(a) No "moratorium", "control share acquisition", "business
combination", "fair price" or other form of anti-takeover laws and regulations
of any jurisdiction (including Section 203 of the DGCL) apply to this Agreement.
(b) The Board of Directors of B, acting on the unanimous
recommendation of the Special Committee has, on December 18, 2001, resolved to
elect, to the extent permitted by Law, not to be subject to any "moratorium",
"control share acquisition", "business combination", "fair price" or other form
of anti-takeover laws and regulations of any jurisdiction (including, Section
415-171 and Section 415-172 and Chapter 417E of the HBCA) that may purport to be
applicable to this Agreement.
13
(c) The Board of Directors of B has taken all necessary action
under the Rights Agreement, dated December 23, 1994, by and between B and
ChaseMellon Shareholder Services LLC, as successor to Chemical Trust Company of
California, as such agreement has been amended, restated, modified and
supplemented from time to time (the "B RIGHTS AGREEMENT") (including any
amendment thereof) so that (A) none of the execution, delivery or performance of
this Agreement or the consummation of any of the transactions contemplated
hereby will cause (1) the rights issued pursuant to the B Rights Agreement to
become exercisable, (2) a Distribution Date to occur, (3) Share Acquisition Date
to occur, (4) a Section 11(a)(ii) Event to occur or (5) a Section 13(a) Event to
occur. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will be exempt from the B
Rights Agreement. B has furnished the other parties to this Agreement with a
true and correct copy of the resolutions of the Board of Directors of B that has
the effects specified in the preceding sentence.
SECTION 3.11 BROKERS; EXPENSES. No broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of C GP, C Inc. or C.
SECTION 3.12 RESTRICTIONS ON TRANSFERABILITY. Each of C GP and
C Inc. understand and agree that the Company Common Stock and the Notes to be
received in connection with the C Merger may not be sold unless they are
subsequently registered under the Securities Act and such other securities laws
or an exemption from registration under the Securities Act and such other
securities laws covering the sale of the Company Common Stock and the Notes to
be received in connection with the C Merger is available.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TW AND THE COMPANY
TW and the Company, jointly and severally, hereby represent
and warrant to each of C GP and C Inc. that:
SECTION 4.01 ORGANIZATION AND QUALIFICATION; OPERATIONS. Each
of TW and the Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. The Company has engaged
in no other business activities, have conducted no other operations and have no
assets, properties or rights and no liabilities or obligations (whether accrued,
absolute, contingent, known or unknown or otherwise) other than as expressly
contemplated by this Agreement and the ancillary agreements. Except for the New
Company Subsidiaries, each of which is a direct, wholly-owned subsidiary of the
Company, neither the Company nor any subsidiary of the Company beneficially owns
directly or indirectly and, except as expressly contemplated by this Agreement
or the ancillary agreements, has agreed to purchase or otherwise acquire, any of
the capital stock of or other equity interest in, or any interest convertible
into or exchangeable or exercisable for, any of the capital stock or any other
equity interest in any corporation, partnership, joint venture or other business
association or entity. Except as expressly contemplated by this Agreement or the
ancillary agreements and except for investments in the New Company Subsidiaries
not to exceed $4,000 in the aggregate,
14
there are no outstanding contractual obligations of the Company or any
subsidiary of the Company to provide funds to, or make any investment (in the
form of a loan, capital contribution or otherwise) in, any person. Each of TW
and the Company is a "citizen of the United States" as defined in the Federal
Aviation Act.
SECTION 4.02 CERTIFICATE OF INCORPORATION AND BYLAWS. The
Company heretofore has made available to C GP and C Inc. a complete and correct
copy of the Certificate of Incorporation and the Bylaws of the Company. The
Certificate of Incorporation and Bylaws of the Company are each in full force
and effect. None of TW or the Company is in violation of any of the provisions
of its Certificate of Incorporation or Bylaws.
SECTION 4.03 CAPITALIZATION. The authorized capital stock of
the Company consists of 87,301,151 shares of Company Common Stock, par value
$.0001 per share, of the Company. Until immediately before the Effective Time,
13,968,184 shares of Company Common Stock will be the only issued and
outstanding shares of capital stock of the Company and will be held exclusively
by TW or its permitted assign. Except as otherwise contemplated by this
Agreement and the ancillary agreements, there are no options, warrants or other
rights, agreements, arrangements or commitments of any character relating to the
issued or unissued capital stock of the Company or any of its subsidiaries or
obligating the Company or any of its subsidiaries to issue, vote or sell any
shares of capital stock of, or other equity interests in, the Company or any of
its subsidiaries. Except as otherwise contemplated by this Agreement and the
ancillary agreements, there are no outstanding contractual obligations of the
Company or any of its subsidiaries to repurchase, redeem or otherwise acquire
any shares of capital stock of the Company or any of its subsidiaries.
SECTION 4.04 AUTHORITY RELATIVE TO THIS AGREEMENT. Each of TW
and the Company has all necessary corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement and the ancillary agreements to which it is a party by each of TW and
the Company and the consummation by TW and the Company of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action and no other corporate proceedings on the part of TW or the
Company are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by each of TW and the Company assuming, in each case, the
due authorization, execution and delivery by each of the other parties hereto
and thereto, constitutes a legal, valid and binding obligation of TW and the
Company enforceable against TW and the Company in accordance with its terms.
SECTION 4.05 NO CONFLICT; REQUIRED FILING AND CONSENT. (a) The
execution and delivery of this Agreement by TW and the Company do not, and the
performance of this Agreement by TW and the Company will not, (i) conflict with
or violate the Certificate of Incorporation or Bylaws of TW or the Company, (ii)
assuming that all consents, approvals, authorizations, notifications and other
actions described in Section 4.05(b) have been obtained and all filings and
obligations described in Section 4.05(b) have been made or complied with,
conflict with or violate any Law applicable to TW or the Company or by which any
property or asset of TW or the Company is bound or affected, or (iii) result in
any breach of or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or
15
give to others any right of termination, amendment, acceleration or cancellation
of, or result in the creation of a Lien or other encumbrance on any property or
asset of TW or the Company pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation, except, with respect to clauses (ii) and (iii), for any such
conflicts, violations, breaches, defaults, or other occurrences which would not,
individually or in the aggregate, have a material adverse effect on the Company
or TW or on the ability of TW or the Company to perform its obligations
hereunder or thereunder or materially impair or delay the consummation of the
transactions contemplated hereby or thereby.
(b) The execution and delivery of this Agreement by TW and the
Company do not, and the performance of this Agreement by TW and the Company will
not, require any consent, approval, authorization or permit of, or filing with
or notification to, any Government Authority, except (i) for applicable
requirements, if any, of the Securities Act, the Exchange Act, the Trust
Indenture Act, Blue Sky Laws, state takeover laws, the pre-merger notification
requirements of the HSR Act, the notice requirements of the FCC, FAA and DOT,
WARN, the notice requirements of the Hawaii Dislocated Workers Act and filing of
any Certificate of Merger as required by the DGCL and (ii) where failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications would not, individually or in the aggregate, have a
material adverse effect on the Company or TW or on the ability of TW or the
Company to perform its obligations hereunder or thereunder or materially impair
or delay the consummation of the transactions contemplated hereby or thereby.
SECTION 4.06 ABSENCE OF LITIGATION. There is no litigation,
suit, claim, action or proceeding pending or, to the knowledge of the Company or
TW, threatened in writing against TW or the Company or any property or asset of
TW or the Company, before any court, arbitrator or Governmental Authority,
domestic or foreign, (i) seeking relief which, if ordered, would, individually
or in the aggregate, have a material adverse effect on the Company or TW or (ii)
as of the date hereof, seeking relief which, if ordered, would delay or prevent
the consummation of any transaction contemplated hereby or by any of the
ancillary agreements.
SECTION 4.07 REGISTRATION STATEMENT AND PROSPECTUS. None of
the information to be supplied in writing by TW or the Company for inclusion or
incorporation by reference in the Registration Statement (as defined below),
including the Prospectus (as defined below) contained therein, will contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading. The
Registration Statement will comply (with respect to the Company) in all material
respects with the provisions of the Securities Act and the Exchange Act.
SECTION 4.08 BROKERS. (a) No broker, finder or investment
banker (other than as provided in (i) the Advisory Agreement, dated as of the
date hereof, among SMC, its principal, ▇▇▇▇ ▇. ▇▇▇▇▇, and B (the "SMC/▇▇▇▇▇
ADVISORY AGREEMENT"), (ii) the Advisory Agreement, dated as of the date hereof,
between Mercer Management Consulting ("MMC") and the Company (the "MMC ADVISORY
AGREEMENT") and (iii) the Advisory Agreement, dated as of the date hereof,
between TW and the Company (the "TW ADVISORY AGREEMENT" and, together with the
SMC/▇▇▇▇▇ Advisory Agreement and the MMC Advisory Agreement, the "ADVISORY
AGREEMENTS"), is entitled to any brokerage, finder's or other fee or commission
in connection
16
with the transactions contemplated hereby based upon arrangements made by or on
behalf of the Company.
(b) Except as contemplated by the Advisory Agreements, the
Company has not funded, reimbursed or otherwise paid for (and has not agreed, or
otherwise undertaken any obligation, to fund, reimburse or otherwise pay for)
any fees, costs, expenses or other charges to TW.
SECTION 4.09 TAXES. The Company and TW: (i) have properly
prepared and timely filed all material Tax Returns required to be filed by them
and all such filed Tax Returns are complete and correct in all material
respects, or requests for extensions to file such Tax Returns have been timely
filed, granted and have not expired; (ii) have paid all Taxes shown to be due on
such Tax Returns; (iii) are not parties to any Tax sharing agreement or
arrangement other than with each other; (iv) have withheld or collected and paid
over to the appropriate Taxing Authorities (or are properly holding for such
payment) all Taxes required by Law to be withheld or collected, including but
not limited to all employment and payroll Taxes; and (v) as of the date hereof,
have neither extended nor waived any applicable statute of limitations with
respect to Taxes and have not otherwise agreed to any extension of time with
respect to Tax assessment or deficiency. No material deficiencies for any Taxes
have been proposed, asserted or assessed by any Taxing Authority against the
Company that are not adequately reserved for in accordance with U.S. GAAP. There
are no Liens for Taxes upon the assets of the Company except for Taxes that are
not yet due and payable.
SECTION 4.10 NO OPERATIONS OR LIABILITIES. Except as expressly
contemplated or permitted by this Agreement, the Company has not (a) engaged in
any business operations or transactions, (b) entered into any contract or
agreement or (c) incurred any liabilities.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01 CONDUCT OF BUSINESS BY C GP, C INC. AND C PENDING
THE MERGER. Prior to the Effective Time (except as expressly contemplated,
required or permitted by this Agreement or the ancillary agreements, or to the
extent that the Company shall otherwise consent in writing, which consent shall
not be unreasonably withheld), each of C GP, C Inc. and C shall not engage in
any operations or transactions or otherwise conduct any activities or enter into
any contracts or arrangements. Notwithstanding the foregoing, but subject to the
C Voting Agreement, C GP, C Inc. and C may continue to (i) conduct the business
and affairs of B directly or indirectly through its representatives on the Board
of Directors of B and by exercising its other governance rights and obligations,
(ii) exercise its rights and perform its obligations under any of the C
Contracts, and (iii) conduct all of the activities that are related to the
18,181,818 shares of B Common Stock and four shares of B Series B Special
Preferred Stock held by C; PROVIDED, that C GP and C Inc. shall cause the
statements made in Section 3.03 to continue to be true and correct to the
Effective Time, including the statements made therein as of December 18, 2001,
which shall continue to be true and correct to the Effective Time as if made on
and as of such subsequent dates.
17
SECTION 5.02 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE
MERGER. Prior to the Effective Time (except as expressly contemplated, required
or permitted by this Agreement or any ancillary agreements, or to the extent
that C GP and C Inc. shall otherwise consent in writing, which consent shall not
be unreasonably withheld), the Company shall not engage in any operations or
transactions or otherwise conduct any activities or enter into any contracts or
agreements.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01 REGISTRATION STATEMENT; TRUST INDENTURE ACT
QUALIFICATION. (a) As promptly as practicable after the execution of this
Agreement, (i) the Company shall prepare, and, with the cooperation of C GP and
C Inc., the Company shall file with the SEC for the benefit of C LLC from and
after the Closing Date, a registration statement to effect a continuous offering
pursuant to Rule 415 under the Securities Act (or any similar rule that may be
adopted by the Securities and Exchange Commission ("SEC") either (i) on Form
S-3, or any successor form, if the Company is then eligible to use Form S-3 or
such successor form or (ii) on Form S-1, or any successor form (together with
all amendments thereto, the "REGISTRATION STATEMENT"), which shall include a
Prospectus ("PROSPECTUS"), in connection with the registration under the
Securities Act of such number of shares of Company Common Stock and such
principal amount of Notes to be received by C LLC in connection with the Merger
that the Company has been so requested (prior to the Effective Time) to register
for disposition by C LLC, or if no number has been requested within 15 days of
the date hereof, all of such shares of Company Common Stock and Notes shall be
included in the Registration Statement. The Prospectus shall satisfy the
prospectus delivery requirements under the Securities Act applicable to the sale
on and after the Closing Date of such number of shares of Company Common Stock
and such principal amount of Notes requested to be registered by C LLC. The
Company shall use its best efforts to have the Registration Statement declared
effective by the SEC as promptly as practicable on or after the Closing Date and
to keep the Registration Statement effective until such time as all of such
shares of Company Common Stock and Notes have been disposed of in accordance
with the intended methods of disposition by C LLC, and, prior to the effective
date of the Registration Statement, the Company, C GP and C Inc. shall take all
or any action required under any applicable federal or state securities Laws in
connection with the registration of such shares of Company Common Stock and such
Notes. Each of the Company and C GP and C Inc., on behalf of C LLC, shall
furnish all information concerning itself as the other parties may reasonably
request in connection with such actions and the preparation of the Registration
Statement. The registration of the shares of Company Common Stock and Notes
pursuant to this Section 6.01 shall be made upon the terms and subject to the
conditions set forth in the form of Registration Rights Agreement attached to
the A/B
Merger Agreement as EXHIBIT B as if such Registration Rights Agreement
were valid and in full force and effect as of the date hereof; PROVIDED,
HOWEVER, that such registration shall not be counted for purposes of the number
of requests for registration to which C LLC would be entitled pursuant to
Section 2.1 thereof.
(b) The Company shall enter into an indenture with a trustee
pursuant to which the Notes shall be issued and the parties shall use all
reasonable efforts to cause the indenture to
18
be qualified under the Trust Indenture Act and to cause all necessary filings
with the SEC (including those by the trustee) to be promptly made in this
regard.
SECTION 6.02 CONFIDENTIALITY. (a) All information obtained by
one party from another ("CONFIDENTIAL INFORMATION") shall be kept confidential,
and shall not (except as required by applicable Law or legal process, and only
after compliance with Section 6.02(b) below), without the prior written consent
of the other parties, disclose any Confidential Information in any manner
whatsoever or disclose to any person the fact that the Confidential Information
exists or has been made available, and shall not use any Confidential
Information other than in connection with the Merger; PROVIDED, HOWEVER, that
such party may reveal the Confidential Information to its respective officers,
directors, employees, accountants, consultants, legal counsel, financial
advisors, agents and other representatives (collectively, "REPRESENTATIVES") (i)
who need to know the Confidential Information for the purpose of
post-consummation coordination of the operations of the Company, (ii) who are
informed by such other party of the confidential nature of the Confidential
Information and (iii) who agree to act in accordance with the terms of this
Section 6.02. Each of the Company, C GP and C Inc. shall cause its
Representatives to observe the terms of this Section 6.02, and each of the
Company, C GP and C Inc. shall be responsible for any breach of this Section
6.02 by any of its Representatives.
(b) In the event that any of the Company, C GP or C Inc. or
any of their respective Representatives are requested pursuant to, or required
by, applicable Law or legal process to disclose any of the Confidential
Information, it shall notify the other parties promptly so that such other
parties may seek a protective order or other appropriate remedy or, in the sole
discretion of such other parties, waive compliance with the terms of this
Section 6.02. In the event that no such protective order or other remedy is
obtained, or that the Company does not waive compliance with the terms of this
Section 6.02 agreement, it shall furnish only that portion of the Confidential
Information which it is advised by counsel is legally required and shall
exercise all reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded the Confidential Information.
(c) No investigations pursuant to this Section 6.02 shall
affect or be deemed to modify any representations or warranties hereunder.
SECTION 6.03 FURTHER ACTION; CONSENTS; FILINGS. (a) Upon the
terms and subject to the conditions hereof, each of the parties hereto shall use
all commercially reasonable efforts and shall cooperate fully with each other to
(i) take, or cause to be taken, all appropriate action, and do, or cause to be
done, and assist and cooperate with the other party in doing, all things
necessary, proper or advisable under applicable Law or otherwise to cause the
satisfaction of the conditions in Article VII and to consummate and make
effective, in the most expeditious manner practicable, the Merger and the other
transactions contemplated by this Agreement, (ii) obtain from Governmental
Authorities in the most expeditious manner practicable any consents, licenses,
permits, waivers, approvals, authorizations, clearances or orders required to be
obtained or made by the Company, C GP or C Inc. or any of their respective
affiliates in connection with the consummation of the Merger and the other
transactions contemplated by this Agreement, (iii) make as promptly as possible
all necessary filings, and thereafter make any other required or advisable
submissions, with respect to this Agreement and the transactions
19
contemplated hereby required under (A) the Securities Act, Exchange Act, the
Trust Indenture Act and the respective rules and regulations thereunder and any
other applicable federal or state securities Laws, (B) the HSR Act and (C) any
other applicable Law and (iv) obtain in the most expeditious manner practicable
the consent, approval or appropriate waiver, as the case may be, of each person
whose consent or approval is required in connection with the Merger or the
consummation of the transactions contemplated by this Agreement, under all
material agreements or instruments to which C GP or C Inc. is a party.
(b) Without limiting Section 6.03(a), each of the Company, C
GP and C Inc. shall use all reasonable efforts to avoid the entry of, or to have
vacated, lifted, reversed or overturned any decree, judgment, injunction, ruling
or other order (whether preliminary or permanent) or any other judicial,
administrative or legislative action or proceeding (an "ORDER") that would
restrict, prevent or prohibit the consummation of the Merger or any of the other
transactions contemplated hereby on or before the date defined in Section
8.01(b), including, without limitation, by pursuing all available avenues of
administrative and judicial appeal and all available legislative action. In
addition, notwithstanding the foregoing paragraphs of this Section 6.03, nothing
in this Agreement shall require C GP, C Inc., the Company or TW to contest any
injunction (other than a temporary restraining order) issued by a court of
competent jurisdiction in a proceeding initiated by a Governmental Authority.
SECTION 6.04 NOTIFICATION REQUIREMENTS. Each of the Company,
TW, C GP and C Inc. shall give prompt notice to the others of (i) any
representation or warranty made by it herein or in any other document or
instrument executed and delivered in connection herewith, that is qualified as
to materiality becoming untrue or inaccurate in any respect or any such
representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect, (ii) the failure by it to comply with or
satisfy in any material respect any covenant, obligation or agreement to be
complied with or satisfied by it under this Agreement or any other document
executed and delivered by it in connection herewith or therewith, or (iii) any
development that may render any of the conditions in Article VII incapable of
being satisfied before the date set forth in Section 8.01(b); PROVIDED, HOWEVER,
that no such notification shall affect the representations, warranties,
covenants or agreements of the parties or the conditions to the obligations of
the parties under this Agreement.
SECTION 6.05 PLAN OF REORGANIZATION. (a) After due
investigation, no party hereto is aware of any fact or circumstance that would
prevent the Merger from qualifying as a reorganization within the meaning of
Section 368(a) of the Code. From and after the date hereof and until the
Effective Time, each party hereto shall use its reasonable best efforts to cause
the Merger to qualify as a reorganization under Section 368(a) of the Code and
to obtain the opinions of counsel referred to in Section 7.01(h). None of the
parties hereto will knowingly take any actions or cause any actions to be taken
which could prevent the Merger from qualifying as a reorganization under Section
368(a) of the Code. Following the Effective Time, none of the parties shall
knowingly take (or permit any of its affiliates to take) any action or knowingly
cause any action to be taken which would cause the Merger to fail to qualify as
a reorganization under Section 368(a) of the Code.
(b) Notwithstanding anything herein to the contrary, if the
opinions of counsel referred to in clause (i) of Section 7.01(h) cannot be
obtained, the parties agree that the Merger
20
shall be effected as follows: immediately prior to the Effective Time, (i) each
of C GP and C Inc. will be merged with separate wholly-owned subsidiaries of the
Company to be formed pursuant to the DGCL, with C GP and C Inc. as the surviving
corporations in each such merger, (ii) pursuant to the mergers described in the
preceding clause, C LLC shall have its shares of C GP Common Stock and C Inc.
Common Stock converted in the aggregate into the right to receive 18,181,818
shares of Company Common Stock, Notes with an aggregate principal amount of
$36,363,636 (subject to adjustment as provided in this Agreement in respect of
minimum denominations of Notes) and the Cash Consideration, and (iii) the
surviving corporations in the mergers described in the preceding clause (i)
shall be merged with and into the Company, with the Company as the surviving
corporation in each such merger. Articles I and II shall apply to the mergers
under this Section 6.05(b), MUTATIS MUTANDIS.
SECTION 6.06 PUBLIC ANNOUNCEMENTS. The initial press release
relating to this Agreement and the transactions contemplated hereby shall be a
joint press release issued by the parties. Thereafter the Company shall manage
all public announcements relating thereto, and C GP and C Inc. shall not, unless
otherwise required by applicable Law (including requirements of stock exchanges
and other similar regulatory bodies) after prior notice to the other parties to
the extent practicable, issue any press release, advertisement or other public
announcement, or otherwise make any public statements with respect to this
Agreement or the transactions contemplated hereby without the consent of the
Company, which consent shall not be unreasonably withheld or delayed.
SECTION 6.07 CONVEYANCE TAXES. The Company, C GP and C Inc.
shall cooperate in the preparation, execution and filing of all returns,
questionnaires, applications or other documents regarding any real property
transfer or gains, sales, use, transfer, value added, stock transfer and stamp
taxes, any transfer, recording, registration and other fees, and any similar
taxes which become payable in connection with the transactions contemplated
hereby that are required or permitted to be filed on or before the Effective
Time.
SECTION 6.08 LISTING APPLICATION. The Company shall promptly
prepare and submit to each of the AMEX and the PSE, or such other national
securities exchange as the Company, C GP and C Inc. shall determine, a listing
application covering the shares of Company Common Stock issuable in connection
with the Merger, and shall use their respective reasonable efforts to obtain,
prior to the Effective Time, approval for the listing on such exchanges of such
Company Common Stock, subject to official notice of issuance, it being
understood that such listing application may take the form of a continuation or
succession to B's listing application on the AMEX and the PSE. The parties shall
have no obligations with respect to any listing of the Notes.
SECTION 6.09 TAKEOVER STATUTE. If any "fair price,"
"moratorium," "control share acquisition" or other form of anti-takeover statute
or regulation shall become applicable to the transactions contemplated hereby or
by the ancillary agreements, C GP and C Inc. shall, and shall cause the members
of the Board of Directors of B to, grant such approvals and take such actions as
are reasonably necessary so that the transactions contemplated hereby or by the
ancillary agreements may be consummated as promptly as practicable on the terms
contemplated hereby and to eliminate or minimize the effects of such statute or
regulation on the transactions contemplated hereby or by the ancillary
agreements.
21
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The
obligations of each party to consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction on or prior to the Closing
Date of the following conditions:
(a) each party to the A/B Merger Agreement shall have
satisfied or waived each condition to the consummation of the A/B Mergers and
the other transactions contemplated by the A/B Merger Agreement and by the
ancillary agreements set forth in Article VIII of the A/B Merger Agreement;
(b) the waiting period (and any extension thereof), if any,
applicable to the consummation of the Merger under the HSR Act shall have
expired or been terminated;
(c) no Governmental Authority or court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
law, rule, regulation, executive order or Order which is then in effect and has
the effect of prohibiting consummation of the Merger or the A/B Mergers and no
Governmental Authority shall have instituted any judicial or administrative
proceeding which continues to be pending seeking any such result;
(d) the Indenture pursuant to which the Notes are to be issued
shall have been qualified under the Trust Indenture Act;
(e) the shares of Company Common Stock issuable in the Merger
pursuant to Article II shall have been authorized for listing on the AMEX and
PSE, or such other national securities exchange as may be selected pursuant to
the terms of the A/B Merger Agreement, subject only to official notice of
issuance;
(f) all authorizations, consents, orders or approvals of, or
declarations or filings with, or expiration of waiting periods imposed by, or
notifications to, any Governmental Authority required by Law in connection with
the execution, delivery and performance of this Agreement, shall have been
obtained, filed, expired or given, except for filings in connection with the
Merger and any other documents required to be filed after the Effective Time,
except to the extent that the failure to receive such authorization, consent,
order, approval, filing or registration would not have a material adverse effect
on the combined business that would have otherwise resulted from the
consummation of the Merger and the A/B Mergers;
(g) each of the parties to the Stockholders Agreements shall
have executed and delivered each such agreement in the forms attached to the A/B
Merger Agreement as EXHIBIT A and EXHIBIT B, respectively; and
(h) Each of the Company, C GP and C Inc. shall have received a
written opinion from ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ to the effect that
(i) the Merger will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code, which opinions
may rely upon such certificates of the Company, and C GP and C Inc. as are
customary for such opinions, including certificates substantially in the forms
attached hereto
22
as EXHIBIT A and EXHIBIT B or (ii) if the Merger is effected pursuant to the
structure described in Section 6.05(b), then no gain or loss will be recognized
by any of C GP, C Inc. or the Company as a result of the Merger.
SECTION 7.02 CONDITIONS TO THE OBLIGATIONS OF C GP AND C INC..
The obligations of C GP and C Inc. to consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following further conditions:
(a) each of the representations and warranties of TW and the
Company contained in this Agreement or the ancillary agreements that is
qualified as to materiality shall be true and correct, and each that is not so
qualified shall be true and correct in all material respects, as of the
Effective Time, as though made on and as of the Effective Time (or, in the case
of those representations and warranties which address matters only as of a
particular date, as of such date), and C GP and C Inc. shall have received a
certificate of the Chairman, President or Chief Executive Officer of the Company
to such effect; and
(b) each of TW and the Company shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement or the ancillary agreements to be performed or complied with by
it on or prior to the Effective Time, and C GP and C Inc. shall have received a
certificate of the Chairman, President or Chief Executive Officer of the Company
to such effect.
SECTION 7.03 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The
obligations of the Company to consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction (or waiver) of the following
further conditions:
(a) each of the representations and warranties of C GP and C
Inc. contained in this Agreement that is qualified as to materiality shall be
true and correct, and each that is not so qualified shall be true and correct in
all material respects, as of the Effective Time as though made on and as of the
Effective Time (or, in the case of those representations and warranties which
address matters only as of a particular date, as of such date), and the Company
shall have received a certificate of the Chairman, President or Executive Vice
President of C GP and C Inc. to such effect; and
(b) each of C GP and C Inc. shall have performed or complied
in all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the Effective
Time, and the Company shall have received a certificate of the Chairman,
President or Executive Vice President of each of C GP and C Inc. to that effect.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01 TERMINATION. This Agreement may be terminated and
the Merger and the other transactions contemplated by this Agreement may be
abandoned at any time prior to the Effective Time and notwithstanding that any
requisite approval and adoption of
23
this Agreement and the transactions contemplated hereby has been obtained prior
to such termination, as follows:
(a) by mutual written consent duly authorized by the Boards of
Directors of each of the Company, C GP and C Inc.;
(b) by the Company, C GP and C Inc., by written notice to the
other parties, if either (i) the Effective Time shall not have occurred on or
before the date specified in Section 9.01(b)(i) of the A/B Merger Agreement, as
such date may be extended by the parties thereto; PROVIDED, HOWEVER, that the
right to terminate this Agreement under this Section 8.01(b) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the Effective
Time to occur on or before such date; or (ii) any Order permanently enjoining,
restraining or otherwise prohibiting the consummation of the Merger shall have
become final and nonappealable;
(c) by C GP and C Inc., by written notice to the Company, if
there has been a breach of any representation, warranty, covenant or agreement
on the part of TW or the Company set forth in this Agreement or any ancillary
agreement, or if any representation or warranty of TW or the Company shall have
become untrue, in either case such that the conditions set forth in Section
8.02(a) or Section 8.02(b) would not be satisfied ("TERMINATING COMPANY
BREACH"); PROVIDED, HOWEVER, that, if such Terminating Company Breach is curable
by the Company within 30 days through the exercise of its best efforts and for
so long as the Company continues to exercise such best efforts, C GP and C Inc.
may not terminate this Agreement under this Section 8.01(c) during such 30-day
period;
(d) by the Company, by written notice to C GP and C Inc., if
there has been a breach of any representation, warranty, covenant or agreement
on the part of C GP or C Inc. set forth in this Agreement, or if any
representation or warranty of C GP and C Inc. shall have become untrue, in
either case such that the conditions set forth in Section 8.03(a) or Section
8.03(b) would not be satisfied (a "TERMINATING C BREACH"); PROVIDED, HOWEVER,
that, if such Terminating C Breach is curable by C GP and C Inc. within 30 days
through the exercise of its best efforts and for so long as C GP and C Inc.
continues to exercise such best efforts, the Company may not terminate this
Agreement under this Section 8.01(d) during such 30-day period; or
(e) immediately without the need for any further action by any
of the parties hereto if the A/B Merger Agreement is terminated for any reason
whatsoever.
The right of any party hereto to terminate this Agreement
pursuant to this Section 8.01 shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any party hereto,
any person controlling any such party or any of their respective officers or
directors, whether prior to or after the execution of this Agreement.
SECTION 8.02 EFFECT OF TERMINATION. Except as provided in
Section 9.01, in the event of termination of this Agreement pursuant to Section
8.01, this Agreement shall forthwith become void, there shall be no further
liability under this Agreement on the part of the Company, C GP or C Inc. or any
of their respective officers or directors and all rights and
24
obligations of each party hereto shall cease, subject to the 6.02 and the terms
of the Expense Payment Agreement, but such termination shall be without
prejudice to claims arising from willful breaches of this Agreement and or any
of the ancillary agreements before termination.
SECTION 8.03 AMENDMENT. This Agreement may be amended by the
parties hereto by action taken by or on behalf of their respective Boards of
Directors and stockholders at any time prior to the Effective Time. This
Agreement may not be amended except by an instrument in writing signed by the
parties hereto.
SECTION 8.04 WAIVER. At any time prior to the Effective Time,
any party hereto may (a) extend the time for the performance of any obligation
or other act of any other party hereto, (b) waive any inaccuracy in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any agreement or condition
contained herein. Any such extension or waiver shall be valid if set forth in an
instrument in writing signed only by the party or parties to be bound thereby.
SECTION 8.05 EXPENSES. Except as provided in this Section
8.05, 6.01 and the Expense Payment Agreement dated as of November, 2001 among A,
B and TW (the "EXPENSE PAYMENT AGREEMENT"), whether or not the Merger and the
other transactions contemplated hereby are consummated, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby including, without limitation, the fees and disbursements of counsel,
financial advisors and accountants, shall be paid by the party incurring such
costs and expenses. Each of the parties to the Expense Payment Agreement that is
a party to this Agreement agrees to apprise the other parties thereto promptly
of any expenses incurred by such party that are reimbursable under the Expense
Payment Agreement and to cause such party's advisors, whose fees and expenses
are covered by such agreement, to submit promptly invoices to such party for
fees and expenses. All payments under this Section 8.05 shall be made by wire
transfer of immediately available U.S. dollar funds to an account designated by
the party or parties to whom such payments are to be made.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS. The representations, warranties and agreements in this Agreement and
in any certificate delivered pursuant hereto shall terminate at the Effective
Time or upon the termination of this Agreement pursuant to Section 8.01, as the
case may be, except that the agreements that by their terms contemplate
performance at or after the Effective Time shall survive the Effective Time and
those set forth in Sections 6.02, 8.02 and 8.05 and Article IX shall survive
termination.
SECTION 9.02 NOTICES. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon delivery) by delivery, by facsimile
transmission and by courier service (with proof of service), hand delivery or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this Section
9.02):
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if to C GP or C Inc.:
Airline Investors Partnership, L.P.
c/o Smith Management Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
with copies to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
if to the Company:
TurnWorks Acquisition III, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer and President
with a copy to:
Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇, Esq. and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
SECTION 9.03 CERTAIN DEFINITIONS. For purposes of this
Agreement, the term:
(a) "AFFILIATE" of a specified person means a person who
directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with, such specified person;
(b) "ANCILLARY AGREEMENTS" means the A/B Merger Agreement, the
Voting Agreements, the Stockholders Agreements, the Management Agreements (as
defined in the A/B Merger Agreement), the CEO Employment Agreement (as defined
in the A/B Merger Agreement), the Advisory Agreements, the Stock Purchase
Agreements referred to in Sections 2.01(a)(ii) and 2.01(a)(iii) of the A/B
Merger Agreement.
(c) "BUSINESS DAY" means any day on which the principal
offices of the SEC in Washington, D.C. are open to accept filings, or, in the
case of determining a date when any
26
payment is due, any day on which banks are not required or authorized to close
in the City of New York;
(d) "CONTROL" (including the terms "CONTROLLED BY" and "UNDER
COMMON CONTROL WITH") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting securities, as
trustee or executor, by contract or credit arrangement or otherwise;
(e) "KNOWLEDGE" or "KNOWN" means, with respect to any matter
in question, the actual knowledge of (i) in the case of C GP or C Inc., the sole
stockholder of C GP and (ii) in the case of the Company or TW, the President of
the Company or TW;
(f) "PERSON" means an individual, corporation, partnership,
limited partnership, syndicate, person (including, without limitation, a
"PERSON" as defined in Section 13(d)(3) of the Exchange Act), trust, association
or entity or government, political subdivision, agency or instrumentality of a
government; and
(g) "SUBSIDIARY" or "SUBSIDIARIES" of any person means any
corporation, partnership, joint venture or other legal entity of which such
person (either alone or through or together with any other subsidiary), owns,
directly or indirectly, more than 50% of the stock or other equity interests,
the holders of which are generally entitled to vote for the election of the
Board of Directors or other governing body of such corporation or other legal
entity.
SECTION 9.04 ASSIGNMENT; BINDING EFFECT; BENEFIT. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
transferred by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other parties except that TW
may, upon prior written notice to the parties, transfer its rights and/or
obligations, in whole or in part, to one or more affiliates or immediate
relatives of any such affiliate or one or more affiliates of or trusts for the
benefit of any such affiliates or immediate relatives (it being understood that
no such transfer shall relieve TW of its obligations hereunder). Subject to the
preceding sentence, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
Notwithstanding anything contained in this Agreement to the contrary, except for
Section 6.01 Registration Statement, nothing in this Agreement, expressed or
implied, is intended to confer on any person other than the parties hereto or
their respective successors and permitted assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement. Section 6.01
may be enforced by the beneficiaries thereof.
SECTION 9.05 INCORPORATION OF EXHIBITS. All Exhibits attached
hereto and referred to herein are hereby incorporated herein and made a part
hereof for all purposes as if fully set forth herein.
SECTION 9.06 SPECIFIC PERFORMANCE. The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
were not performed in accordance with the terms hereof and that the parties
shall be entitled to specific performance of the terms hereof, in addition to
any other remedy at law or equity.
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SECTION 9.07 GOVERNING LAW; JURISDICTION; WAIVER OF JURY
TRIAL. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Delaware applicable to contracts executed in and to be
performed in that State. Each of the parties hereto (i) consents to submit
itself to the personal jurisdiction of any Delaware state court located in the
city of Wilmington if any dispute arises under this Agreement, the ancillary
agreements or any transaction contemplated hereby or thereby, (ii) agrees that
it will not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court, (iii) agrees that it will not bring
any action, suit or proceeding relating to this Agreement, the ancillary
agreements or any transaction contemplated hereby or thereby in any court other
than any such court, (iv) waives any right to trial by jury with respect to any
action; suit or proceeding related to or arising out of this Agreement, the
ancillary agreements or any transaction contemplated hereby or thereby, (v)
waives any objection to the laying of venue of any action, suit or proceeding
arising out this Agreement, the ancillary agreements or any transaction
contemplated hereby or thereby in any such court, (vi) waives and agrees not to
plead or claim that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum and (vii) agrees that a final
judgment in any such action, suit or proceeding in any such court shall be
conclusive and may be enforced in any other jurisdiction by suit on the judgment
or in any other manner provided by applicable law.
SECTION 9.08 HEADINGS. The descriptive headings contained in
this Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
SECTION 9.09 COUNTERPARTS. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed and delivered shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
SECTION 9.10 ENTIRE AGREEMENT. This Agreement (including the
Exhibits), the ancillary agreements and the Expense Payment Agreement,
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings among the
parties with respect thereto. No addition to or modification of any provision of
this Agreement shall be binding upon any party hereto unless made in writing and
signed by all parties hereto.
SECTION 9.11 MUTUAL DRAFTING. Each party hereto has participated in the drafting
of this Agreement, which each party acknowledges is the result of extensive
negotiations between the parties.
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IN WITNESS WHEREOF, C GP, C Inc., the Company and TW have
caused this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
AIP GENERAL PARTNER, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
AIP, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
TURNWORKS ACQUISITION III, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
TURNWORKS, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
29