AGREEMENT AND PLAN OF
MERGER
BY AND AMONG
REPUBLIC AIRWAYS HOLDINGS
INC.,
RJET ACQUISITION,
INC.
AND
MIDWEST AIR GROUP,
INC.
Dated as of June 23,
2009
Table of
Contents
Page
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Surviving
Corporation’s Charter Documents
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Surviving
Corporation’s Directors and Officers
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Adjustments
for Dilution and Other Matters
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ARTICLE 2 -
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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Organization,
Good Standing and Qualification
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Third
Party Consents; No Violations
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Absence
of Certain Changes
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Compliance
with Laws; Licenses
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U.S.
Citizen; Air Carrier
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ARTICLE 3 -
REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE MERGER
SUB
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Conduct
of the Business Pending Closing
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Notice
of Incidents; Accidents and Litigation
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Information
Rights and Access
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ARTICLE 5
– ADDITIONAL AGREEMENTS.
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No
Control of Other Party’s Business
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ARTICLE 6 -
CONDITIONS OF MERGER
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Conditions
to Both the Parent’s and the Company’s
Obligations
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Additional
Conditions Applicable to Parent and Merger Sub
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Additional
Conditions Applicable to Company
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Notice
of Termination; Effect of Termination
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ARTICLE 8 -
GENERAL PROVISIONS
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Non-Survival
of Representations and Warranties
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No
Third Party Beneficiaries
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Exhibit
A
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Glossary of
Defined Terms
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Exhibit
B
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Calculation of
Per Shareholder Consideration
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AGREEMENT AND PLAN OF
MERGER
THIS AGREEMENT AND PLAN OF
MERGER is dated and
effective as of June 23, 2009, by and among Republic Airways
Holdings Inc., a Delaware corporation (the “ Parent
”), RJET Acquisition, Inc., a Delaware corporation and wholly
owned subsidiary of the Parent (the “ Merger Sub
”), and Midwest Air Group, Inc. a Wisconsin corporation (the
“ Company ”). A glossary of defined
terms is attached to this Agreement as Exhibit A
.
RECITALS
WHEREAS , the Merger Sub’s Board of Directors (the
“ Merger Sub Board ”) has determined that it is
advisable to, fair to and in the best interests of its stockholders
for the Merger Sub to merge with and into the Company (the “
Merger ”) upon the terms and subject to the conditions
set forth in this Agreement and in accordance with the DGCL and the
WBCL;
WHEREAS , the Company’s Board of Directors (the
“ Company Board ”), the Parent’s Board of
Directors (the “ Parent Board ”) and the Merger
Sub Board have each approved the Merger, upon the terms and subject
to the conditions set forth in this Agreement;
WHEREAS , the Company, the Parent and the Merger Sub
desire to make certain representations, warranties, covenants and
agreements in connection with the transactions contemplated hereby
and also to prescribe various conditions to consummation of the
transactions contemplated hereby; and
WHEREAS , concurrently with the execution of this
Agreement, TPG Midwest US V, LLC and TPG Midwest International V,
LLC (together, the “ TPG Entities ”) and the
Parent, are entering into an Investment Agreement, dated as of the
date hereof (the “ Investment Agreement ”),
pursuant to which, and on the terms and subject to the conditions
of which, the TPG Entities have agreed to assign to the Parent all
of the TPG Entities’ rights and obligations in their
capacities as “Lenders” under the Amended and Restated
Senior Secured Credit Agreement, dated as of September 3, 2008,
among Midwest Airlines, Inc., a Wisconsin corporation, the Company,
each of the subsidiaries of Midwest from time to time party
thereto, each of the TPG Entities, the Parent, Wells Fargo Bank
Northwest, National Association, as administrative agent and as
collateral agent, as amended by Amendment No. 1 to Amended and
Restated Credit Agreement, dated as of October 28, 2008, Amendment
No. 2 to Amended and Restated Credit Agreement, dated as of January
28, 2009 and Amendment No. 3 to Amended and Restated Credit
Agreement, dated as of June 2, 2009, and as further amended,
modified or supplemented from time to time.
NOW, THEREFORE, in consideration of the
foregoing and the respective representations, warranties, covenants
and agreements set forth herein, and subject to the terms and
conditions set forth herein, the Company, the Parent and the Merger
Sub hereby agree as follows:
1.1 Merger
. Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with the DGCL, a certificate
of merger to be prepared in accordance with the DGCL, the WBCL and
a plan of merger to be prepared in accordance with the WBCL, at the
Effective Time the Merger Sub shall be merged with and into the
Company. As a result of the Merger, the separate
corporate existence of the Merger Sub shall cease and the Company
shall continue as the surviving corporation of the Merger (the
“ Surviving Corporation ”) as a wholly owned
subsidiary of the Parent incorporated under the laws of the State
of Wisconsin.
1.2 Closing
. The Closing shall be held at such time, date (the
“ Closing Date ”) and location as may be
mutually agreed by the Parent and the Company. In the
absence of such agreement, the Closing shall be held at the offices
of Skadden, Arps, Slate, Meagher & Flom LLP, 300 South Grand
Avenue, Los Angeles, California, commencing at 10:00 a.m., local
time, on the second (2nd) Business Day after satisfaction or waiver
of the conditions set forth in Article 6 , below (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), unless this Agreement has been theretofore terminated
pursuant to Article 7 , below.
1.3 Effective
Time . Contemporaneously with the Closing, the
parties shall cause the Merger to be consummated by filing a
Certificate of Merger (the “ Certificate of Merger
”) with the SSSD and Articles of Merger (the “
Articles of Merger ”) with the DFI in accordance with
the DGCL and the WBCL, respectively, and any other required
documents, in such form as required by applicable law, and executed
in accordance with the relevant provisions of the DGCL or WBCL, as
applicable.
1.4 Effect of the
Merger . At the Effective Time, the Merger shall
have the effect provided in this Agreement and the applicable
provisions of the DGCL and the WBCL. Without limiting
the generality of the foregoing, at the Effective Time, all of the
property, rights, privileges, powers and franchises of the Merger
Sub and the Company shall vest in the Surviving Corporation, and
all debts, liabilities, obligations and duties of the Merger Sub
and the Company shall become the debts, liabilities, obligations
and duties of the Surviving Corporation.
1.5 Surviving
Corporation’s Charter Documents . At the
Effective Time, each of the Articles of Incorporation and By-Laws
of the Company, as in effect immediately before the Effective Time,
shall be the Articles of Incorporation and By-Laws of the Surviving
Corporation upon and after the Effective Time until thereafter
amended as provided by law and such Articles of Incorporation and
By-Laws.
1.6 Surviving
Corporation’s Directors and Officers . At the
Effective Time, the directors and officers of the Merger Sub
immediately prior to the Effective Time shall be the initial
directors and officers of the Surviving Corporation, each to hold
office in accordance with the Surviving Corporation’s
Articles of Incorporation and By-Laws.
1.7 Conversion of
Securities . At the Effective Time, by virtue of the
Merger and without action on the part of any of the Parent, the
Merger Sub, the Company or any of their respective Boards of
Directors or shareholders or stockholders:
(a) Conversion of
Shares . The shares of the common stock, $.01 par
value, of the Company (“ Company Common Stock ”
or “ Shares ”) issued and outstanding
immediately prior to the Effective Time, other than (i) Shares held
in the treasury of the Company, (ii) Shares owned by the Parent,
the Merger Sub or any other Parent Subsidiary, and (iii) Shares
owned by the Company (clauses (i) through (iii) hereof,
collectively, “ Excluded Shares ”), shall cease
to be outstanding and shall be converted into the right to receive
an aggregate amount in cash equal to $1.00, which amount shall be
allocated among the holders of the Shares as set forth on
Exhibit B attached hereto opposite the name of such
shareholder under the heading “Purchase Price
Allocation,” it being agreed that the dollar amount that each
shareholder is entitled to receive is being rounded to the nearest
whole cent and that amounts payable that are equal to or less than
$0.005 are being rounded down to $0.00 (the “
Consideration ”).
(b) Cancellation of
Excluded Shares . Each Excluded Share shall be
cancelled and retired and shall cease to exist and no consideration
shall be delivered in exchange therefor.
(c) Conversion of
Merger Sub Shares . Each outstanding share of
capital stock of Merger Sub issued and outstanding immediately
prior to the Effective Time shall cease to be outstanding and shall
be converted into one share of capital stock, of the same class and
series, of the Surviving Corporation and shall constitute the only
outstanding shares of capital stock of the Surviving
Corporation. Each outstanding option, warrant or other
instrument or security of the Merger Sub which is convertible into,
exchangeable for or exercisable for shares of capital stock of the
Merger Sub and is outstanding immediately prior to the Effective
Time shall cease to be outstanding and shall be converted into an
option, warrant or other instrument or security with the same terms
and that is convertible into, exchangeable for or exercisable for
shares of capital stock of the Surviving Corporation, of the same
class and series. The Articles of Merger shall
specifically provide that all classes and series of capital stock
of Merger Sub shall be treated at the Effective Time as provided in
this Section 1.7 .
1.8 Exchange
Procedures .
(a) Exchange
. The Parent shall deliver or cause to be delivered the
Consideration to the holders of Shares entitled to any
Consideration, as indicated in Exhibit B , in exchange for
each such holder’s stock certificate, if such holder’s
Shares are certificated. In the event that a holder is
not entitled to any Consideration for such holder’s shares
pursuant to Section 1.7(a), such holder’s Shares shall be
deemed cancelled as of the Effective Time, and shall be retired and
shall cease to exist, in exchange for no consideration.
(b) No Further
Rights in the Shares . Each Share shall be deemed at
any time after the Effective Time to represent only the right to
receive upon such surrender the applicable Consideration, if any,
as contemplated by Section 1.7 . The Consideration, if any,
paid as set forth in Section 1.7(a) shall be deemed to have
been issued and paid in full satisfaction of all rights pertaining
to the Shares.
(c) No
Liability . Notwithstanding anything herein to the
contrary, neither the Parent nor the Merger Sub shall be liable to
any holder of Shares for any cash or other payment delivered to a
Governmental Entity pursuant to any abandoned property, escheat or
similar Laws.
(d) Withholding
Right . The Parent shall be entitled to deduct and
withhold from the Consideration otherwise payable pursuant to this
Agreement such amounts as the Parent is required to deduct and
withhold with respect to the making of such payment under the Code,
or any provision of applicable Law, and the Parent shall timely pay
over such withheld amounts to the appropriate Governmental
Entity. To the extent that amounts are so withheld by
the Parent, such withheld amounts shall be treated for all purposes
of this Agreement as having been paid to the former holder of the
Shares in respect of which such deduction and withholding was
made.
(e) Lost, Stolen or
Destroyed Certificate . If any Share certificate
shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Share
certificate to be lost, stolen or destroyed and, if requested by
the Parent, the posting by such Person of a bond, in such
reasonable amount as the Parent may direct, as indemnity against
any claim that may be made against it with respect to such Share
certificate, Parent will pay, in exchange for such lost, stolen or
destroyed Share certificate, the applicable Consideration to be
paid in respect of the Shares represented by such Share
certificate.
1.9 Adjustments for
Dilution and Other Matters . If, between the date of
this Agreement and the Effective Time, there is a recapitalization,
reclassification, stock split, stock dividend, subdivision,
combination or exchange of shares with respect to, or rights issued
in respect of, the Shares (each, an “ Adjustment
”), the Consideration shall be adjusted accordingly, without
duplication, to provide the holders of Shares with the same
economic effect as contemplated by this Agreement prior to such
Adjustment.
1.10 Company
Deliverables . At or prior to the Effective Time,
the Company shall deliver or cause to be delivered to the Parent a
copy of a resolution of the Company Board canceling, effective
immediately prior to the Effective Time, all outstanding options
issued under the Midwest Air Group, Inc. Incentive Plan (the
“ Plan ”) pursuant to Section 7(c)(B) thereof in
exchange for no consideration, being that the exercise price per
share of such options is greater than the per share Consideration
that a holder of a Share is entitled to receive under Section
1.7(a) of this Agreement.
1.11 Tax Treatment
of Merger . The parties agree that for United States
federal and state income tax purposes the Merger shall be treated
as a taxable purchase of all of the outstanding Shares (other than
Excluded Shares) by Parent for the Consideration, and the parties
further agree that they shall report and file all Tax Returns
consistent with such treatment.
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ARTICLE 2 - REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
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Except as set forth in the
corresponding section of the disclosure letter to be delivered to
the Parent and the Merger Sub by the Company on or prior to July 3,
2009 (the “ Disclosure Letter ”), it being
understood that matters disclosed pursuant to one section of the
Disclosure Letter shall be deemed disclosed with respect to any
other section of the Disclosure Letter where it is reasonably
apparent that the matters so disclosed are applicable to such other
section, the Company hereby represents and warrants
that:
2.1 Organization,
Good Standing and Qualification . The Company is a
corporation duly incorporated, validly existing and in good
standing under the laws of the State of Wisconsin and has all
requisite corporate power and authority to own, lease and operate
its properties and assets and to carry on its business as presently
conducted and is qualified to do business and is in good standing
as a foreign corporation in each jurisdiction where the ownership
or leasing of its assets or properties or conduct of its business
requires such qualification, except where the failure to be so
organized, validly existing, qualified or in good standing or
active status, or to have such power or authority, would not
reasonably be expected to result in a Material Adverse
Effect. Attached as Schedule 2.1 of the
Disclosure Letter are the complete and correct copies of the
Company’s Articles of Incorporation and By-Laws, each as
amended to date.
2.2
Capitalization . The authorized capital stock of
the Company consists of 1,000,000,000 shares of Common
Stock. The Shares constitute all of the issued and
outstanding shares of Common Stock and except for stock options
granted to certain employees of the Company under the Plan, which
options are being canceled for no consideration as set forth in
Section 1.10 hereof, there are no outstanding securities,
options, warrants, calls, rights, contracts, commitments,
agreements, arrangements or understandings to which the Company or
any of its subsidiaries is a party, or by which any of them is
bound, obligating the Company or any of its subsidiaries to issue,
deliver or sell, or cause to be issued, delivered or sold, shares
of capital stock or other securities of the Company or any of its
subsidiaries. There are no obligations of the Company to
repurchase, redeem or otherwise acquire any shares of Common Stock
or the capital stock or other equity interests of any of its
subsidiaries or to provide funds to or make any investment in any
of its subsidiaries or any other Person.
2.3
Subsidiaries . All of the outstanding shares of
capital stock of each subsidiary of the Company that is a
corporation have been duly authorized and validly issued and are
fully paid and nonassessable, subject to the personal liability
which may be imposed on shareholders by former Section
180.0622(2)(b) of the Wisconsin Business Corporation Law and the
rules and regulations promulgated thereunder, if any, each as
amended from time to time (the “ WBCL ”) for
debts incurred prior to June 14, 2006 (for debts incurred on or
after such date, Section 180.0622(2)(b) of the WBCL has been
repealed) owing to employees for service performed, but not
exceeding six (6) months service in any one case, and were not
issued in violation of any preemptive or similar right of any
shareholder of the Company or any other Person. No shares of any
subsidiary of the Company are owned by any Person other than the
Company. Except for the capital stock and other equity interests of
subsidiaries of the Company, the Company does not own, directly or
indirectly, any capital stock or other ownership interest in any
Person.
2.4 Authority;
Approval .
(a) The execution,
delivery and performance by the Company of this Agreement and the
consummation by the Company of the Merger and the other
transactions contemplated hereby are within the Company’s
corporate powers and, except for the filing and recordation of the
Certificate of Merger in accordance with the DGCL and the Articles
of Merger in accordance with the WBCL, have been duly and validly
authorized by all necessary corporate action on the part of the
Company and no other corporate proceedings on the part of 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 the Company and,
assuming that this Agreement constitutes the legal, valid and
binding obligation of the Parent and the Merger Sub, constitutes
the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors’ rights and to general equity
principles.
(b) The Company Board
at a meeting duly called and held on or prior to the date hereof
has approved and adopted this Agreement and the transactions
contemplated hereby, including the Merger.
2.5 Third Party
Consents; No Violations .
(a) No notices,
reports or other filings are required to be made by the Company
with, nor are any consents, registrations, approvals, permits or
authorizations required to be obtained or any actions required to
be taken, by the Company from, as applicable, any Governmental
Entity or other Person in connection with the execution, delivery
and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated
hereby, except for notification to the DOT of the substantial
change in ownership and management of subsidiaries of the Company
and such filings, if applicable, as the DOT might require with
respect to the international and exemption authority of
subsidiaries of the Company.
(b) The execution,
delivery and performance of this Agreement by the Company does not,
and the consummation by the Company of the transactions
contemplated hereby will not, constitute or result in (i) a breach
or violation of, or a default under, the Company’s Articles
of Incorporation or By-Laws, or (ii) with or without notice, lapse
of time or both, a breach or violation of, a termination or default
under, the creation or acceleration of any obligations under or the
creation of a Lien on any of the assets of the Company pursuant to,
(x) any Contract binding upon the Company or (y) any material Law
to which the Company is subject or any Company License; except in
the case of clause (ii)(x), above, for any such breach, violation,
termination, default, creation, acceleration or change that would
not reasonably be expected to result in a Material Adverse
Effect.
2.6 Financial
Statements .
(a) The Company has
delivered to the Parent copies of the Company’s audited
consolidated financial statements as of, and for the years ended,
December 31, 2007 and 2006 and unaudited consolidated financial
statements as of, and for the three months ended, March 31,
2009.
(b) The consolidated
financial statements (including, in each case, any related notes
thereto) have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be
indicated in the notes thereto) and each fairly presents in all
material respects the consolidated financial position of the
Company and subsidiaries of the Company as of the respective dates
thereof and the consolidated results of its operations and cash
flows and changes in financial position for the periods indicated,
except that any unaudited interim financial statements do not
contain the notes required by GAAP and were or are subject to
normal and recurring year-end adjustments, which were not or are
not expected to be material in amount, either individually or in
the aggregate.
(c) The Company has
established and maintains “disclosure controls and
procedures” (as defined in Rule 13a-15(e) promulgated under
the Exchange Act) that are reasonably designed to ensure that
material information (both financial and non-financial) relating to
the Company and the subsidiaries of the Company is recorded,
processed, summarized and reported, and that such information is
accumulated and communicated to the Company’s principal
executive officer and principal financial officer, or persons
performing similar functions. For purposes of this Agreement,
“principal executive officer” and “principal
financial officer” shall have the meanings given to such
terms in Sarbanes-Oxley.
(d) The Company has
established and maintains a system of internal control over
financial reporting (as defined in Rule 13a-15(f) promulgated under
the Exchange Act) (“ internal controls ”). To
the Knowledge of the Company, such internal controls are sufficient
to provide reasonable assurance regarding the reliability of the
Company’s financial reporting and the preparation of the
Company’s financial statements for external purposes in
accordance with GAAP.
(e) To the Knowledge
of the Company, the Company has disclosed, based on its most recent
evaluation of internal controls prior to the date hereof, to the
Company’s auditors and audit committee (i) any significant
deficiencies and material weaknesses known to the Company in the
design or operation of internal controls which are reasonably
likely to adversely affect in a material respect the
Company’s ability to record, process, summarize and report
financial information and (ii) any material fraud known to the
Company that involves management or other employees who have a
significant role in internal controls. The Company has made
available to the Parent a summary of any such disclosure regarding
material weaknesses and fraud made by management to the
Company’s auditors and audit committee since January 1, 2006.
For purposes of this Agreement, a “significant
deficiency” in controls means an internal control deficiency
that adversely affects an entity’s ability to initiate,
authorize, record, process, or report external financial data
reliably in accordance with GAAP. A “significant
deficiency” may be a single deficiency or a combination of
deficiencies that results in more than a remote likelihood that a
misstatement of the annual or interim financial statements that is
more than inconsequential will not be prevented or detected. For
purposes of this Agreement, a “material weakness” in
internal controls means a significant deficiency or a combination
of significant deficiencies, that results in more than a remote
likelihood that a material misstatement of the annual or interim
financial statements will not be prevented or detected.
2.7 Absence of
Certain Changes . Since December 31, 2008, the
business of the Company and the subsidiaries of the Company has
been conducted in the ordinary course consistent with past
practice.
2.8 Litigation
. There is no Proceeding pending or, to the Knowledge of
the Company, threatened against the Company or any of the
subsidiaries of the Company that would reasonably be expected to
result in a Material Adverse Effect or challenge, prevent or
materially impair or delay the consummation of the transactions
contemplated by this Agreement. Neither the Company nor any of the
subsidiaries of the Company is subject to or bound by any
outstanding Order that would reasonably be expected to (i) result
in a Material Adverse Effect or (ii) prevent or materially impair
or delay the consummation of the transactions contemplated by this
Agreement.
(a) The Company has
made available to the Parent a complete and correct copy of (to the
extent applicable): (i) all material employee benefit plans (as
defined in Section 3(3) of ERISA), and all bonus, stock option,
stock purchase, restricted stock, incentive, deferred compensation,
retiree medical or life insurance, supplemental retirement,
severance, flight benefits and other benefit plans, programs or
arrangements, and all written employment, termination, severance
and other employment Contracts or written employment arrangements,
with respect to which the Company or any Company ERISA Affiliate
has any obligation, whether absolute, accrued, contingent or
otherwise due or to become due (each, a “ Company Benefit
Plan ”) (or, if such Company Benefit Plan is not written,
a written summary thereof) and all amendments thereto; (ii) each
trust or insurance policy relating to each Company Benefit Plan;
(iii) the most recent summary plan description or other written
explanation of each Company Benefit Plan provided to participants;
(iv) the most recent annual report (Form 5500) filed with the U.S.
Department of Labor; and (v) the most recent determination letter,
if any, issued by the IRS with respect to any Company Benefit Plan
intended to be qualified under Section 401(a) of the
Code. There has been no material change in flight
benefits to employees in the last twelve (12) months.
(b) Except as would
not reasonably be expected to result in a Material Adverse Effect,
(i) each Company Benefit Plan maintained by the Company or any of
the Company ERISA Affiliates has been maintained in compliance with
its terms and, both as to form and in operation, with the
requirements of applicable Law, and (ii) all employer or employee
contributions, premiums and expenses to or in respect of each
Company Benefit Plan have been paid in full or, to the extent not
yet due, have been adequately accrued on the applicable financial
statements of the Company in accordance with GAAP. Neither the
Company nor any of the Company ERISA Affiliates has at any time
during the five (5) year period immediately preceding the date
hereof maintained, contributed to, been obligated to contribute to
or incurred any liability under any “multiemployer
plan” (as defined in Section 3(37) of ERISA) or any ERISA
Benefit Plan that is subject to Title IV of ERISA or Section 412 of
the Code.
(c) As of the date of
this Agreement, there are no pending or, to the Knowledge of the
Company, threatened Proceedings involving a Company Benefit Plan
(other than routine claims for benefits payable under any such
Company Benefit Plan) that would reasonably be expected to result
in a Material Adverse Effect.
(d) Each Company
Benefit Plan that is intended by its terms to be qualified under
Section 401(a) of the Code has been determined by the IRS to be so
qualified, a timely application for such determination is now
pending or is not yet required to be filed or the Company or the
Company ERISA Affiliate has duly adopted a prototype plan and is
relying on the opinion letter for such prototype plan, and, except
as would not reasonably be expected to result in a Material Adverse
Effect, each such Company Benefit Plan is qualified in operation.
Except as would not reasonably be expected to result in a Material
Adverse Effect, neither the Company nor any of the Company ERISA
Affiliates has any liability or obligation under any welfare plan
or agreement to provide benefits after termination of employment to
any employee or dependent other than as required by Section 4980B
of the Code or applicable Law or the terms of a separation or
retention plan or agreement.
(e) On and after the
effectiveness of the Pension Protection Act of 2006, no Company
Benefit Plan currently is, or is reasonably expected to be, in at
risk status (within the meaning of Title IV of ERISA).
(f) No amounts payable
under any of the Company Benefit Plans or any other contract,
agreement or arrangement with respect to which the Company or any
subsidiary of the Company may have any liability could fail to be
deductible for federal income tax purposes by virtue of Section
280G of the Code or Section 162(m) of the Code.
2.10 Compliance with
Laws; Licenses .
(a) The businesses of
the Company and each subsidiary of the Company have not been, and
are not being, conducted in violation of any applicable operating
certificates, airworthiness directives (“ ADs
”), Federal Aviation Regulations (“ FARs
”) or any other rules, regulations, directives or policies of
the FAA, DOT, FCC, DHS or any other Governmental Entity, except for
such violations that would not reasonably be expected to result in
a Material Adverse Effect. No investigation or review by any
Governmental Entity with respect to the Company or any of the
subsidiaries of the Company is pending or, to the Knowledge of the
Company, threatened, nor has any Governmental Entity indicated an
intention to conduct the same, except for any such investigations
or reviews that would not reasonably be expected to result in a
Material Adverse Effect. Each of the Company and the subsidiaries
of the Company has obtained and is in compliance with all Licenses
necessary to conduct its business as presently conducted (each, a
“ Company License ”), except for any failures to
have or to be in compliance with such Company Licenses which would
not reasonably be expected to result in a Material Adverse
Effect.
(b) Each of the
Company and the subsidiaries of the Company is, and since December
31, 2008, has been, in compliance with (i) its obligations under
each of the material Company Licenses and (ii) any applicable
material Laws and the rules and regulations of the Governmental
Entity issuing such Company Licenses. There is not pending or, to
the Knowledge of the Company, threatened before the FAA, DOT or any
other Governmental Entity any material proceeding, notice of
violation, order of forfeiture or complaint or investigation
against the Company or any of the subsidiaries of the Company
relating to any of the material Company Licenses. The actions of
the applicable Governmental Authorities granting all Company
Licenses have not been reversed, stayed, enjoined, annulled or
suspended, and there is not pending or, to the Knowledge of the
Company, threatened any material application, petition, objection
or other pleading with the FAA, DOT or any other Governmental
Entity which challenges or questions the validity of or any rights
of the holder under any material Company
License. Neither the DOT nor FAA nor any other
Governmental Entity has taken any action or proposed or, to the
Knowledge of the Company, threatened to take any action, to amend,
modify, suspend, revoke, terminate, cancel, or otherwise affect
such Company Licenses, in each case, in a materially adverse
manner.
2.11 Material
Contracts . Neither the Company nor any subsidiary
of the Company is a party to or obligated under any Contract which
(i) obligates the Company or any subsidiary of the Company for
payments in any future calendar year in excess of $500,000, in the
aggregate, and which is not terminable by the Company or the
subsidiary of the Company without additional payment or penalty
within one hundred eighty (180) days of delivery of notice of such
termination, (ii) would be considered a material contract pursuant
to Item 601(b)(10) of Regulation S-K under the Exchange Act
(assuming such regulation applied to the Company), and (iii) any
Contract restricting the Company (or the subsidiaries of the
Company or Affiliates) from engaging in any line of business or in
any geographic region (collectively, “ Material
Contracts ”). Except as would not reasonably be expected
to have a Material Adverse Effect, (a) neither the Company nor any
subsidiary of the Company is in breach of or default (with or
without notice, lapse of time or both) under the terms of any
Material Contract, (b) to the Knowledge of the Company, as of the
date hereof, no other party to any Material Contract is in breach
of or default (with or without notice, lapse of time or both) under
the terms of any Material Contract and (c) each Material Contract
is a valid and binding obligation of the Company or the subsidiary
of the Company a party thereto and is in full force and effect
assuming that each such Material Contract is a valid and binding
obligation of the other party or parties to the Material
Contract.
(a) With respect to
each material real property owned by the Company or any subsidiary
of the Company (“ Owned Real Property ”), (i)
either the Company or subsidiary of the Company has good and
marketable title in fee simple to such Owned Real Property, free
and clear of all Liens other than Permitted Liens, (ii) there are
no outstanding purchase options, rights of first refusal or similar
rights in favor of any other Person to purchase such Owned Real
Property or any portion thereof or interest therein, and (iii)
there are no leases, subleases, licenses, options, rights,
concessions or other contracts affecting the ownership, possession
or use of any portion of such Owned Real Property, other than, in
the case of clause (ii) or (iii) above, as would not reasonably be
expected to have a Material Adverse Effect. There are no physical
conditions or defects at any of the Owned Real Properties that
impair or would impair the continued use of such Owned Real
Property in the ordinary course of business as presently conducted
at each such Owned Real Property, except for any such conditions or
defects that would not reasonably be expected to have a Material
Adverse Effect. Neither the Company nor any subsidiary of the
Company has received notice of any pending, and to the Knowledge of
the Company, there is no threatened, condemnation with respect to
any of the Owned Real Properties, except for any such condemnations
that would not reasonably be expected to have a Material Adverse
Effect.
(b) With respect to
all leases, subleases and other contracts under which the Company
or any subsidiary of the Company uses or occupies any material real
property (“ Real Property Leases ”), except as
would not reasonably be expected to have a Material Adverse Effect,
(i) to the Knowledge of the Company, each Real Property Lease is
valid, binding and in full force and effect and neither the Company
nor any subsidiary of the Company nor any other party thereto is in
breach or default (with or without notice, lapse of time or both)
under any Real Property Lease, and (ii) no termination event or
condition or uncured default on the part of the Company or any
subsidiary of the Company or, to the Knowledge of the Company, the
landlord thereunder exists under any Real Property Lease. Except as
would not reasonably be expected to have a Material Adverse Effect,
the Company and each subsidiary of the Company has a good and valid
leasehold interest in each parcel of material real property leased
by it, free and clear of all Liens except for Permitted Liens.
Neither the Company nor any subsidiary of the Company has received
notice of any pending, and to the Knowledge of the Company there is
no threatened, condemnation with respect to any material real
property leased pursuant to any of the Real Property Leases, except
for any such condemnations that would not reasonably be expected to
have a Material Adverse Effect.
(c) The Company and
the subsidiaries of the Company have good and marketable title to,
or valid and enforceable rights to use under existing material
franchises, easements or licenses, or valid and enforceable
leasehold interests in, all of their material tangible personal
properties and assets necessary to carry on their businesses as
such businesses are now being conducted, free and clear of all
Liens, except for Permitted Liens.
2.13 Environmental
Matters .
(a) (i) The Company
and the subsidiaries of the Company are in compliance in all
material respects with all applicable Environmental Laws and
Environmental Licenses; (ii) no property currently or, to the
Knowledge of the Company, formerly owned or leased by the Company
or any of the subsidiaries of the Company has been the subject of
any investigation by any Governmental Entity or of any demand of
another Person alleging the presence of any Hazardous Substances
that would require material remediation or other material response
actions pursuant to any Environmental Law; (iii) neither the
Company nor any of the subsidiaries of the Company (nor, to the
Knowledge of the Company, any Person for whom they may be liable by
Law or Contract) has received any written notice, demand, letter,
claim or request for information alleging that the Company or any
of the subsidiaries of the Company may be in material violation of
or subject to material liability under any Environmental Law; (iv)
neither the Company nor any of the subsidiaries of the Company is
subject to any material Environmental Claim; and (v) to the
Knowledge of the Company, there are no past or present actions,
activities, circumstances, conditions, events or incidents,
including, the release, emission, discharge, presence or disposal
of any Hazardous Substances, that could form the basis of any
material Environmental Claim against the Company or any of the
subsidiaries of the Company (nor, to the Knowledge of the Company,
any Person for whom they may be liable by Law or Contract), or
otherwise result in any material costs or liabilities under any
Environmental Law, except for matters that would not reasonably be
expected to result in a Material Adverse Effect.
(b) The Company has
made available to the Parent all material assessments, reports,
data, results of investigations or audits, and other information
that is in the possession of or reasonably available to the Company
and the subsidiaries of the Company regarding environmental matters
pertaining to the environmental condition of the business of the
Company and the subsidiaries of the Company, or the compliance (or
noncompliance) by the Company and the subsidiaries of the Company
with any Environmental Laws.
(c) The Company would
not be required by virtue of the transactions set forth herein and
contemplated hereby, or as a condition to the effectiveness of any
transactions contemplated hereby, to remove or remediate Hazardous
Substances where any such removal or remediation would reasonably
be expected to have a Material Adverse Effect. The Company and the
subsidiaries of the Company are not required by virtue of the
transactions set forth herein and contemplated hereby, or as a
condition to the effectiveness of any transactions contemplated
hereby, (i) to perform a site assessment for Hazardous Substances
(ii) to give notice to or receive approval from any Governmental
Entity, except where such failure to give notice or receive
approval would not reasonably be expected to result in a Material
Adverse Effect, or (iii) record or deliver with respect to Owned
Real Property to any person or entity any disclosure document or
statement pertaining to environmental matters.
2.14 Taxes
. The Company and each of the subsidiaries of the
Company has timely filed (after taking into account all applicable
extensions) all Tax Returns required to be filed by them, except
where the failure to timely file would not reasonably be expected
to result in a Material Adverse Effect. All such Tax Returns are
complete and correct in all respects, except where the failure of
such Tax Returns to be complete and correct would not reasonably be
expected to result in a Material Adverse Effect. Each of the
Company and the subsidiaries of the Company has paid or caused to
be paid all Taxes shown as due on such Tax Returns and all Taxes
owed by the Company and the subsidiaries of the Company for which
no return was required to be filed, except where the failure to do
so would not reasonably be expected to result in a Material Adverse
Effect. No deficiencies for any Taxes have been asserted in
writing, proposed in writing or assessed in writing against the
Company or any of the subsidiaries of the Company that have not
been paid or otherwise settled or are not otherwise being
challenged under appropriate procedures, except for deficiencies
that, if finally resolved in a manner adverse to the Company or
relevant subsidiary of the Company, would not reasonably be
expected to result in a Material Adverse Effect. No written
requests for waivers of the time to assess any material Taxes of
the Company or the subsidiaries of the Company are pending as of
the date hereof. There are no audits pending or, to the Knowledge
of the Company, threatened against the Company or any of the
subsidiaries of the Company that would reasonably be expected to
have a Material Adverse Effect.
(a) The Company has
made available to the Parent complete and correct copies of all
collective bargaining agreements and other labor union contracts
(including all amendments thereto) applicable to any employees of
the Company or any of the subsidiaries of the Company (the “
Company CBAs ”).
(b) No labor union,
labor organization or group of employees of the Company or any of
the subsidiaries of the Company has made a demand for recognition
or certification pending as of the date hereof, and there are no
representation or certification proceedings or petitions seeking a
representation proceeding pending as of the date hereof or, to the
Knowledge of the Company, threatened as of the date hereof to be
brought or filed with any labor relations tribunal or authority. To
the Knowledge of the Company, there are no labor union organizing
activities pending or threatened as of the date hereof with respect
to any employees of the Company or any of the subsidiaries of the
Company.
(c) Neither the
Company nor any of the subsidiaries of the Company is currently
engaged in any layoffs or employment terminations sufficient in
number to trigger application of the Worker Adjustment and
Retraining Notification Act of 1988, as amended (the “
WARN Act ”), the Wisconsin WARN Act, Section 109.07 of
the Wisconsin Statutes, or any similar state, local or foreign law,
and neither the Company nor any of the subsidiaries of the Company
has any liabilities under the WARN Act that have had or would
reasonably be expected to have a Material Adverse
Effect.
(d) To the Knowledge
of the Company, no employee of the Company or any of the
subsidiaries of the Company is in any material respect in violation
of any term of any employment-related agreement, nondisclosure
agreement, noncompetition agreement, restrictive covenant or other
obligation to a former employer of any such employee relating (A)
to the right of any such employee to be employed by the Company or
any of the subsidiaries of the Company or (B) to the knowledge or
use of trade secrets or proprietary information.
(e) To the Knowledge
of the Company, no current officer or key employee of the Company
or any of the subsidiaries of the Company intends to terminate his
or her employment, whether on account of the transactions
contemplated by this Agreement or for any other reason.
(f) The Company and
each of the subsidiaries of the Company are and have been in
compliance with all applicable Laws respecting employment and
employment practices, including, all laws respecting terms and
conditions of employment, health and safety, wages and hours, child
labor, immigration, employment discrimination, disability rights or
benefits, equal opportunity, plant closures and layoffs,
affirmative action, workers’ compensation, labor relations,
employee leave issues and unemployment insurance, except where any
failure to be in compliance would not reasonably be expected to
result in a Material Adverse Effect. To the Knowledge of the
Company, the Company and each of the subsidiaries of the Company
are not delinquent in payments to any employees or former employees
for any services or amounts required to be reimbursed or
otherwise
