EXHIBIT 10.62(f) AGREEMENTAND PLAN OF MERGER BYAND AMONG REPUBLICAIRWAYS HOLDINGS INC., RJETACQUISITION, INC. AND MIDWESTAIR GROUP, INC. Datedas of June 23, 2009 Table of Contents

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.

 

 

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.

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:

 

            (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.

 

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.

2.7 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.

 

            (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.

2.11 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.

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.

2.16 Intellectual Property.  The Company and the subsidiaries of the Company exclusively own free and clear of any Liens other than Permitted Liens, or are validly licensed or otherwise have the right to use as currently used, all Intellectual Property used in the conduct of the business of the Company and the subsidiaries of the Company taken as a whole (“Intellectual Property”), except for such Intellectual Property where the failure to so own, be validly licensed or have the right to use would not reasonably be expected to result in a Material Adverse Effect. The Company and the subsidiaries of the Company have taken all actions reasonably necessary to ensure full protection of their respective owned Intellectual Property under all applicable Laws, except where the failure to take any such actions would not reasonably be expected to result in a Material Adverse Effect. To the Knowledge of the Company, no claims are pending that allege that the Company or any of the subsidiaries of the Company is infringing or otherwise adversely affecting the rights of any Person with regard to any Intellectual Property other than claims that would not reasonably be expected to result in a Material Adverse Effect. To the Knowledge of the Company, no Person is infringing the rights of the Company or any of the subsidiaries of the Company with respect to any of their respective owned Intellectual Property in a manner that would reasonably be expected to result in a Material Adverse Effect.

2.18 Slots.  The Company and the subsidiaries of the Company have complied with the requirements of the Aviation Act and any other applicable Laws with respect to each Company Slot used by the Company or any of the subsidiaries of the Company on the date hereof at any domestic or international airport, except for such instances of noncompliance as would not reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any of the subsidiaries of the Company has received any notice of any proposed withdrawal of the Company Slots by the FAA, the DOT or any other Governmental Entity as of the date hereof. As of the date hereof, the Company Slots have not been designated for the provision of essential air services in accordance with the regulations issued under the Aviation Act, have not been acquired pursuant to 14 C.F.R. Section 93.219 and have not been designated for international operations, as more fully detailed in 14 C.F.R. Section 93.217. All reports required by the FAA or any other Governmental Entity relating to the Company Slots have been filed in a timely manner, except for such failures to so file as would not reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any of the subsidiaries of the Company has agreed to any trade, purchase, sale or other transfer of any of the Company Slots.  Each Company Slot is listed in Schedule 2.18 of the Disclosure Letter.

 

2.19 Gate Interests.  The Company and the subsidiaries of the Company have complied with the requirements of the Aviation Act and any other applicable Laws with respect to all Gate Interests held or used by the Company or any of the subsidiaries of the Company on the date hereof at any domestic or international airport, except for such instances of noncompliance as would not reasonably be expected to result in a Material Adverse Effect. Each such Gate Interest is listed in Schedule 2.19 of the Disclosure Letter, and neither the Company nor any of the subsidiaries of the Company has received any notice of any proposed withdrawal of the Gate Interests by any Governmental Entity as of the date hereof.  Neither the Company nor any of the subsidiaries of the Company has agreed to any trade, purchase, sale or other transfer of any of the Gate Interests.

 

 

2.21 Insurance.  Each insurance policy maintained by, at the expense of or for the benefit of the Company or any of the subsidiaries of the Company with respect to its assets, properties or operations is in full force and effect and neither the Company nor any subsidiary of the Company is in default with respect to its obligations under any such insurance policy, except as would not be reasonably expected to result in a Material Adverse Effect. The insurance coverage of the Company and the subsidiaries of the Company is customary for business entities of similar size engaged in similar lines of business. Neither the Company nor any subsidiary of the Company has received any written notice regarding any (i) cancellation or invalidation of any material insurance policy, (ii) refusal of any coverage or rejection of any material claim under any material insurance policy or (iii) material adjustment in the amount of premiums payable with respect to any material insurance policy.

3.2 Authority. Each of the Parent and the Merger Sub has the requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations under this Agreement and to consummate the transactions contemplated by this Agreement.  Each of the Parent and the Merger Sub has taken all requisite action to, and no other action or proceeding on the part of the Parent or the Merger Sub is necessary for, the execution and delivery by the Parent or the Merger Sub of this Agreement, the performance by the Parent or the Merger Sub of its obligations under this Agreement or the consummation by the Parent or the Merger Sub of the transactions contemplated by this Agreement.  This Agreement has been duly executed and delivered by the Parent and the Merger Sub and, assuming due authorization, execution and delivery of this Agreement by the Company, is a valid and binding obligation of the Parent and the Merger Sub and is enforceable by the Company against the Parent and the Merger Sub in accordance with its terms, subject, as to enforcement, to applicable bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereinafter in effect affecting creditors’ rights generally and general principles of equity.

 

3.3 Consents and Approvals.  No Authorization of or from any Governmental Entity or any other person on the part of the Parent is required in connection with the execution or delivery by the Parent or the Merger Sub of this Agreement, the performance by the Parent or the Merger Sub of its obligations under this Agreement or consummation by the Parent or the Merger Sub of the transactions contemplated by this Agreement 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.

3.4 No Conflicts.  The execution and delivery by the Parent and the Merger Sub of this Agreement does not, and the performance by the Parent and the Merger Sub of its obligations under this Agreement or the consummation by the Parent and the Merger Sub of any of the transactions contemplated by this Agreement will not, (a) conflict with, or result in or constitute any violation or breach of or default under, or give rise (either with or without due notice or the passage of time or both or the happening or occurrence of any other event (including through the action or inaction of any person)) to any right of termination, amendment, cancellation or acceleration or any obligation to pay or repay with respect to, or result in the loss of any benefit under, any provision of (i) the certificate of incorporation, bylaws or similar organizational documents of the Parent or any of its subsidiaries (including the Merger Sub) or (ii) any material agreement to which the Parent or the Merger Sub is a party, or by which the Parent or the Merger Sub is bound, or to which any of the Parent’s or the Merger Sub’s properties or assets may be subject; (b) conflict with, or result in or constitute any violation of any law applicable to the Parent or the Merger Sub; or (c) result in the creation or imposition of (or the obligation to create or impose) any Liens on the assets of the Parent or the Merger Sub.

 

3.5 Brokers and Finders.  No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement that, if the Merger is not consummated, would be payable by the Company, based upon arrangements made by or on behalf of the Parent or the Merger Sub.

4.1 Conduct of the Business Pending Closing.  From the date of this Agreement until the earlier of (x) the Effective Date and (y) the termination of  this Agreement, except as (i) otherwise contemplated hereby or provided herein or by or in the Investment Agreement, (ii) set forth in Schedule 4.1 of the Disclosure Letter, (iii) required by applicable Law or Governmental Entity or (iv) consented to in writing by the Parent (such consent not to be unreasonably withheld or delayed), the Company shall, and shall cause each of its subsidiaries to:

4.3 Information Rights and Access.  Upon reasonable notice and subject to the terms of the Confidentiality Agreements, from and after the date hereof, the Company shall, and shall cause each of the Company’s subsidiaries, representatives and affiliates to, afford to the Parent, its affiliates and their respective representatives reasonable access, upon reasonable notice during normal business hours and in such manner as will not unreasonably interfere with the conduct of the Company and its subsidiaries’ respective businesses, to their respective facilities, properties, books, contracts, commitments, records (including information regarding any pending or threatened Proceeding to which any of the Company or any of its subsidiaries are, or reasonably expect to be, a party), key personnel, officers, independent accountants and legal counsel; provided, however, that such access shall only be provided to the extent that such access would not violate applicable Law; and provided, further, that the foregoing shall not require the Company (a) to permit any inspection, or to disclose any information, that violates any of the Company’s obligations with respect to confidentiality if the Company shall have used commercially reasonable efforts to obtain the consent of such third Person to such inspection or disclosure, (b) to disclose any privileged information of the Company or any subsidiary of the Company (provided that the Company shall use its reasonable best efforts to enter into a joint defense or similar agreement to prevent the loss of any such privilege), or (c) to permit invasive testing of any real property of the Company or any of the subsidiaries of the Company.  All requests for information made pursuant to this Section 4.3 shall be directed to the Company’s General Counsel.  In no event shall the Company be required to supply to the Parent, or the Parent’s officers, employees, accountants, counsel or other representatives, any information relating to indications of interest from, or discussions with, any other potential acquirors of the Company.  In the event this Agreement is terminated for any reason, the Parent shall, in accordance with the terms of the Confidentiality Agreements, return or destroy, or cause to be returned or destroyed, all nonpublic information obtained from the Company or any of the subsidiaries of the Company and any copies made of such documents for the Parent.

4.4 Governmental Consents.  The Parent and the Company shall, as promptly as practicable following the execution and delivery of this Agreement, make or cause to be made all filings, notices, petitions, statements, registrations, submissions of information, application or submission of other documents required by any Governmental Entity in connection with the transactions contemplated hereby.  Each of the Parent and the Company will use its reasonable best efforts to cause all documents that it is responsible for filing with any Governmental Entity under this Section 4.4 to comply in all material respects with all applicable Laws.  Each such party shall furnish to the other such necessary information and reasonable assistance as the other may reasonably request in connection with its preparation of such filings or submissions.  Each such party shall keep the other apprised of the status of any communications with, and any inquiries or requests for additional information from, any Governmental Entity and shall use its reasonable best efforts to comply promptly with any such inquiry or request.  Each such party shall use its reasonable best efforts to obtain any clearance required under applicable Law for the consummation of the transactions contemplated hereby.

4.5 Third Party Consents.  The Company shall use commercially reasonable efforts to obtain all consents from third parties which are required by the terms of any Material Contract to which it is a party to be obtained in connection with the consummation by it of the transactions contemplated hereby.  The Parent shall use its reasonable efforts to cooperate in obtaining any such consents, so long as the Parent is not required to make any payments with respect thereto.

4.6 Publicity.  Except as required by Law or by obligations pursuant to any listing agreement with or requirement of any national securities exchange or national quotation system, neither the Company (nor any of its Affiliates) nor the Parent (nor any of its Affiliates) shall, without the prior written consent of the other, which consent shall not be unreasonably withheld or delayed, make any public announcement or issue any press release with respect to the transactions contemplated by this Agreement.  Prior to making any public disclosure required by applicable Law or pursuant to any listing agreement with or requirement of any relevant national exchange or national quotation system, the Company or the Parent, as applicable, as the disclosing party shall consult with the other, to the extent feasible, as to the content and timing of such public announcement or press release.

 

 

5.1 No Control of Other Party’s Business.  Nothing contained in this Agreement is intended to give the Parent or the Merger Sub as relates to the Company or any subsidiary of the Company, or vice versa, directly or indirectly, the right to control or direct the other party’s or its subsidiary’s operations prior to the Effective Time.

 

5.2 Transfer Taxes.  The Company and the Parent 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, and transfer, recording, registration and other fees and any similar Taxes that become payable in connection with the transactions contemplated by this Agreement (together with any related interest, penalties or additions to Tax, “Transfer Taxes”).  All Transfer Taxes shall be paid by the Surviving Corporation and expressly shall not be a liability of any shareholder of the Company.

 

5.3 Takeover Statute.  If any “fair price”, “moratorium”,  “business combination”, “control share acquisition” or other form of anti-takeover statute or regulation shall become applicable to the Merger or the other transactions contemplated by this Agreement after the date of this Agreement, each of the Company, the Merger Sub and the Parent and their respective boards of directors shall grant such approvals and take such actions as are reasonably necessary so that the Merger and the other transactions contemplated hereby may be consummated as promptly as practicable on the terms contemplated herein and otherwise act to eliminate or minimize the effects of such statute or regulation on the Merger and the other transactions contemplated hereby.

7.2 Notice of Termination; Effect of Termination.  Any termination of this Agreement under Section 7.1 hereof will be effective immediately upon (or if termination is pursuant to Section 7.1(b)(ii) or 7.1(c) hereof and the proviso therein is applicable, ten (10) consecutive days after) the delivery of written notice thereof by the terminating party to the other party.  In the event of termination of this Agreement as provided in Section 7.1 hereof, this Agreement shall be of no further force or effect, with no liability of any party to the other parties, except (i) the provisions set forth in the last sentence of Section 4.3 hereof, this Section 7.2 and Article 8 hereof shall survive the termination of this Agreement indefinitely, (ii) the provisions of the Confidentiality Agreements shall survive the termination of this Agreement (subject to the time period set forth therein), and (iii) each party shall bear its own costs and expenses; provided, however, nothing herein shall relieve any party from liability for any intentional or willful breach of this Agreement.  Termination of this Agreement pursuant to Section 7.1(b) shall be the sole and exclusive remedy of the Parent and the Merger Sub in respect of any breach of or inaccuracy contained in any of the Company’s covenants, agreements, representations or warranties other than an intentional or willful breach of this Agreement.

 

 

8.1 Non-Survival of Representations and Warranties.  None of the representations, warranties or covenants in this Agreement or in any officer’s certificate delivered pursuant to Section 6.2(a)(ii) or 6.3(a) shall survive the Closing Date.  Nothing in this Section 8.1 shall in any way affect the survival of the covenants and agreements contained in the Investment Agreement and the Note.

 

8.2 Notices.  Unless otherwise provided, any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon delivery, when delivered personally or by overnight courier or sent by facsimile or electronic mail, or 48 hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed as follows (or at such other address for a party as shall be specified by like notice):

8.3 Amendments and Waivers.  Any term of this Agreement may be amended or waived only with the written consent of each of the parties hereto.

 

8.4 Interpretation.  When a reference is made in this Agreement to Sections, paragraphs, clauses or Exhibits, such reference shall be to a Section, paragraph, clause or Exhibit to this Agreement unless otherwise indicated.  The words “include,” “includes,” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation.”  The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  This Agreement has been negotiated by the respective parties hereto and their attorneys and the language hereof will not be construed for or against any party.  The phrases “the date of this Agreement,” “the date hereof,” and terms of similar import, unless the context otherwise requires, shall be deemed to refer to June 23, 2009.  The words “hereof,” “herein,” “herewith,”  “hereby” and “hereunder” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement.  All references in this Agreement to the representations and warranties and to Section 4.1 hereof, whether made as of the date of this Agreement, the Effective Time, the Closing Date or any other date, shall mean the representations and warranties and Section 4.1 hereof, as the case may be, as modified by the Disclosure Letter, notwithstanding the fact that the Disclosure Letter is delivered after the date of this Agreement.

8.5 Fee and Expenses.  Each party shall pay all costs and expenses incurred by it in connection with the execution and delivery of this Agreement and the transactions contemplated hereby, including fees of legal counsel; provided, however, that (i) the Company shall pay for the first $400,000 of legal fees incurred by the Company in connection with the negotiation and preparation of this Agreement and the other Transaction Documents, and (ii) the TPG Entities shall pay or reimburse the Company for legal fees in excess of $400,000 incurred by the Company in connection with the negotiation and preparation of this Agreement and the other Transaction Documents.

 

8.6 Further Assurances.  Each party to this Agreement shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such agreements, certificates, instruments and documents as the other party hereto may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

8.7 Entire Agreement.  This Agreement and all other documents required to be delivered pursuant hereto constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior documents, agreements and understandings, both written and verbal, among the parties with respect to the subject matter hereof and the transactions contemplated hereby.

 

8.8 Severability.  If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws, then, if possible, such illegal, invalid or unenforceable provision will be modified to such extent as is necessary to comply with such present or future laws and such modification shall not affect any other provision hereof; provided that if such provision may not be so modified such illegality, invalidity or unenforceability will not affect any other provision, but this Agreement will be reformed, construed and enforced as if such invalid, illegal or unenforceable provision had never been contained herein.

 

8.9 Assignment.  This Agreement shall not be assignable by operation of law (other than in connection with a merger, consolidation or similar transaction) or otherwise (any attempted assignment in contravention hereof being null and void), except that the Parent or the Merger Sub, upon written notice to the Company, may assign any or all of its rights and interests hereunder to any of its Affiliates, provided that no such assignment shall relieve the Parent of its obligations hereunder.

8.10 Governing Law.  Except to the extent that the laws of the State of Wisconsin or the State of Delaware are mandatorily applicable to the Merger, the terms of this Agreement shall be construed in accordance with the laws of the State of New York applicable to contracts made and to be performed in the State of New York applicable to contracts made and to be performed in the State of New York, including Sections 5-1401 and 5-1402 of the New York General Obligations Law and Rule 327(b) of the New York Civil Practice Law and Rules. Any action against the Company, the Parent or the Merger Sub, including any action for provisional or conservatory measures or action to enforce any judgment entered by any court in respect of any thereof, may be brought in any federal or state court of competent jurisdiction located in the Borough of Manhattan in the State of New York, and each of the Company, the Parent and the Merger Sub irrevocably consents to the jurisdiction and venue in the United States District Court for the Southern District of New York and in the courts hearing appeals therefrom unless no federal subject matter jurisdiction exists, in which event, each of the Company, the Parent and the Merger Sub irrevocably consents to jurisdiction and venue in the Supreme Court of the State of New York, New York County, and in the courts hearing appeals therefrom.  Each of the Company, the Parent and the Merger Sub hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason other than the failure to serve process in accordance with this Agreement, that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise), and to the fullest extent permitted by applicable law, that the suit, action or proceeding in any such court is brought in an inconvenient forum, that the venue of such suit, action or proceeding is improper, or that this Agreement, or the subject matter hereof or thereof, may not be enforced in or by such courts and further irrevocably waives, to the fullest extent permitted by applicable law, the benefit of any defense that would hinder, fetter or delay the levy, execution or collection of any amount to which such person is entitled pursuant to the final judgment of any court having jurisdiction.  Each of the Company, the Parent and the Merger Sub expressly acknowledges that the foregoing waiver is intended to be irrevocable under the laws of the State of New York and of the United States of America.  EACH OF THE COMPANY, THE PARENT AND THE MERGER SUB HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

8.11 Injunctive Relief.  The Company and the Parent each agrees that the other’s remedies at law in the event of any default or threatened default by the Company or by the Parent or the Merger Sub, respectively, in the performance of or compliance with any of the terms of this Agreement are not and will not be adequate to the fullest extent permitted by law, and that such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise without the Parent or the Company, respectively, having to prove actual damage or post any bond or other security.

 

8.12 No Third Party Beneficiaries.  Nothing contained in this Agreement, expressed or implied, is intended to confer upon any person other than the parties hereto and their permitted successors and assigns, any benefit right or remedies.

 

8.13 Counterparts.  This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to each of the other parties, it being understood that all parties need not sign the same counterpart.

 

8.14 Time is of the Essence.Time is of the essence as to all performance under this Agreement.

 

 

“Affiliate” means, with reference to any Person, another Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the first mentioned Person.  For purposes of this definition, “control” shall mean the possession, direct or indirect, of the power to direct or cause the direction of management and policies of a Person, whether through the ownership of voting securities, by Contract or otherwise.  Notwithstanding the foregoing, no “portfolio company” of any shareholder of the Company shall be deemed to be an Affiliate of the Company or such shareholder.

 

“Agreement” means the Agreement and Plan of Merger dated June 23, 2009, by and among the Parent, the Merger Sub and the Company, as the same may be amended from time to time in accordance with the terms and conditions thereof.

“Articles of Merger” has the meaning set forth in Section 1.3 of the Agreement.

 

“Aviation Act” means Title 49 of the United States Code, as amended and in effect from time to time, and the regulations promulgated pursuant thereto.

 

“Business Day” means any day except a Saturday, Sunday or other day on which commercial banking institutions in the State of Wisconsin, the State of Delaware or New York, New York are required or authorized by applicable Law or executive order to be closed.

 

“Certificate of Merger” has the meaning set forth in Section 1.3 of the Agreement.

 

“Closing” means the consummation of the transactions contemplated by the Agreement, including the Merger.

 

“Closing Date” has the meaning set forth in Section 1.2 of the Agreement.

 

“Code” means the Internal Revenue Code of 1986 and the rules and regulations promulgated thereunder, each as amended from time to time.

 

“Company” has the meaning set forth in the opening paragraph of the Agreement.

“Company ERISA Affiliate” means any trade or business, whether or not incorporated, which is treated as a single employer with the Company pursuant to Subsections (b), (c), (m) or (o) of Section 414 of the Code.

“Effective Time” means the date and time at which the Certificate of Merger is filed with the SSSD and the Articles of Merger are filed with the DFI or such later date and time as is agreed to by the Parent and the Company and set forth in the Certificate of Merger and the Articles of Merger.

 

“Environmental Claim” means any written or, to the Knowledge of the Company, oral investigation, suit, proceeding, notice, Order, demand, letter, claim or request for information alleging that the Company or any of the Company Subsidiaries (or, to the Knowledge of the Company, any Person for whom they may be liable by Law or Contract) has been, is or may be in violation of or subject to liability under any Environmental Law, or relating to Hazardous Substances including contamination or pollution of the environment or any property therefrom, and exposure of any person thereto.

 

“Environmental Law” means any applicable Law, common law (as it relates to Hazardous Substances) or Order relating to any matter of pollution, protection of human health, the environment, natural resources or environmental regulation or control or regarding Hazardous Substances.

 

“Environmental License” means any License required under any applicable Environmental Law.

 

“ERISA” means the Employee Retirement Income Security Act of 1974 and the rules and regulations promulgated thereunder, each as amended from time to time.

 

“ERISA Benefit Plan” means an employee benefit plan or program that is also an “employee pension benefit plan “ (as defined in Section 3(2) of ERISA) or that is also an “employee welfare benefit plan” (as defined in Section 3(1) of ERISA).

 

“Exchange Act” means the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder, each as amended from time to time.

 

“Excluded Shares” has the meaning set forth in Section 1.7(a) of the Agreement.

 

“FAA” means the Federal Aviation Administration of the United States and any successor thereto.

“FAA Certificate of Airworthiness” means the certificate of airworthiness issued by the FAA with respect to the Company Aircraft.

“Gate Interests” shall mean all of the right, title, privilege, interest, and authority now or hereafter acquired or held by the Company or any of the subsidiaries of the Company in connection with the right to use or occupy holdrooms, jetways and passenger boarding and deplaning space and any related airport facilities used by the Company or any of the subsidiaries of the Company for its operations, including ticket counter space, baggage claim and baggage makeup space, lounge space, maintenance/hangar facilities, and administrative office space, in any airport at which the Company or any of the subsidiaries of the Company conducts scheduled operations.

“Governmental Entity” means any federal, state, local or foreign government, or political subdivision thereof, or any multinational organization or authority or any authority, agency or commission entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power, any court or tribunal (or any department, bureau or division thereof).

 

“Hazardous Substances” means chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum and petroleum products, asbestos or asbestos-containing materials or products.

“Knowledge of the Company” means (i) those facts that are actually known by any executive officer of the Company, and (ii) those facts that would reasonably be expected to have come to the attention of any executive officer of the Company if such executive officer conducted a reasonable due diligence review of the assets, liabilities and operations of the Company and each subsidiary of the Company.

 

“Law” means any federal, state, local, municipal, foreign, international, multinational, territorial or other administrative order, constitution, law, ordinance, rule, regulation, requirement, permit, authorization, statute or treaty and any guidance issued thereunder, including any transitional relief or rules provided in connection therewith.

 

“Lien” means, with respect to any asset, pledges, mortgages, title defects or objections, claims, liens, charges, encumbrances or security interests of any kind or nature.

 

“Material Adverse Effect” means any change, circumstance, event or effect (each, an “Effect”) that, when considered either individually or together with all other Effects, is materially adverse to the business, properties, assets, liabilities, financial condition or results of operations of the Company and the subsidiaries of the Company taken as a whole; provided, however, that in no event shall any of the following Effects be deemed to constitute, or be taken into account in determining whether there has been, a “Material Adverse Effect” hereunder: (i) any Effect that resulted from the entry into or announcement of the execution of the Agreement, including any loss or threatened loss of, or adverse change or threatened adverse change in, the relationship of the Company or any of the subsidiaries of the Company with its customers, employees, financing sources, suppliers, or strategic partners that resulted from entry into or the announcement of the execution of the Agreement; (ii) the performance by the Company of obligations required to be taken under the Agreement (provided that this clause (ii) shall not apply to Effects resulting from compliance with Section 4.1); (iii) changes affecting the economy or the securities, credit or financial markets in general in the United States; (iv) changes that are the result of factors generally affecting any business in which the Company and/or any subsidiaries of the Company operate; (v) any adoption, implementation, proposal or change in any applicable Law or required change in GAAP or interpretation of any of the foregoing; (vi) any action taken or not taken to which the Parent has consented; or (vii) the commencement, occurrence or continuation of any war, armed hostilities or acts of terrorism (except to the extent any of the foregoing causes any damage or destruction to or renders unusable any facility or property of the Company or any of the subsidiaries of the Company); provided, however, that changes set forth in clauses (iii), (iv), (v) and (vii), above, may be taken into account in determining whether there has been or is a Material Adverse Effect to the extent such changes have a disproportionate impact on the Company and the subsidiaries of the Company, taken as a whole (after taking into account the size of the Company and the subsidiaries of the Company relative to such other participants), relative to the other participants in the industries and in the geographic markets in which the Company conducts its business and are not otherwise excluded by any of clauses (i), (ii) or (vi) above.

“Material Contracts” has the meaning set forth in Section 2.11 of the Agreement.

 

“Merger” has the meaning set forth in the recitals to the Agreement.

 

“Merger Sub” has the meaning set forth in the opening paragraph of the Agreement.

 

“Merger Sub Board” has the meaning set forth in the recitals to the Agreement.

 

“Note” means the Convertible Note, dated as of the Closing Date, in the amount of $25,000,000 made by the Parent in favor of the holders identified on the signature pages thereto under the caption “Holders” or their respective assigns.

 

“Order” means any award, decision, decree, injunction, judgment, order, ruling, subpoena or verdict entered, issued, made or rendered by, or any agreement entered into with, any court, administrative agency or any other Governmental Authority or arbitrator.

 

“Owned Real Property” has the meaning set forth in Section 2.12(a) of the Agreement.

 

“Parent” has the meaning set forth in the opening paragraph of the Agreement.

 

“Parent Board” has the meaning set forth in the recitals to the Agreement.

 

“Parent Subsidiary” means any direct or indirect Subsidiary of the Parent, including the Merger Sub.

 

“Permitted Liens” means (i) statutory liens for Taxes, assessments or other charges by Governmental Authorities not yet due and payable or the amount or validity of which is being contested in good faith and by appropriate Proceedings, (ii) mechanics’, materialmen’s, carriers’, workmen’s, warehouseman’s, repairmen’s, landlords’ and similar liens granted or which arise in the ordinary course of business, (iii) the interest of a landlord under a lease or a licensor under a license, and (iv) such other Liens or imperfections that are not material in amount or do not materially detract from the value of or materially impair the existing use of the property affected by such Lien or imperfection, in each case of clauses (i) through (iv), above, that would not reasonably be expected to result in a Material Adverse Effect.

“Person” means any individual, corporation, partnership, association, trust, unincorporated organization, limited liability company, other entity or Governmental Authority.

 

“Plan” has the meaning set forth in Section 1.11 of the Agreement.

 

“Proceeding” means any action, arbitration, claim, complaint, criminal prosecution, demand letter, governmental or other examination or investigation, hearing, inquiry, administrative or other proceeding.

 

“Real Property Leases” has the meaning set forth in Section 2.12(b) of the Agreement.

 

“Regulatory Approvals” means, to the extent necessary in connection with the consummation of the transactions contemplated by the Transaction Documents, any and all certificates, permits, licenses, franchises, concessions, grants, consents, approvals, orders, registrations, authorizations, waivers, exemptions, variances or clearances from, or filings or registrations with, Governmental Entities (and shall not include waiting periods otherwise imposed by Law).

 

“Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder, each as amended from time to time.

 

“SEC” means the United States Securities and Exchange Commission and any successor thereto.

 

“Securities Act” means the Securities Act of 1933 and the rules and regulations promulgated thereunder, each as amended from time to time.

 

“Settlement Agreement” means the Settlement Agreement and Release, dated as of June 12, 2009, among Skyway Airlines, Inc. (as successor to Astral Aviation, Inc., doing business under the name Midwest Connect), a Delaware corporation, the Company, Parent, KfW (formerly known as Kreditanstalt Für Wiederaufbau), an organization organized under the laws of Germany, and Midwest SPV, as in effect as of the date hereof (without giving effect to any amendment, waiver, restatement or other modification of, or supplement or addition to, such agreement without the consent of the TPG Entities in accordance with Section 4.5 of the Investment Agreement).

 

“Shares” has the meaning set forth in Section 1.8(a) of the Agreement.

 

“Slots” or “Company Slots” mean each and every (i) “slot” as defined in 14 CFR §93.213(a)(2), as that section may be amended or re-codified from time to time, including slots at Ronald Reagan Washington National Airport; (ii) operating authorization for a landing or takeoff operation at a specified time period at any airport in the United States subject to orders or regulations issued by the FAA (including, but not limited to, operating authorizations at New York LaGuardia Airport, as defined in the FAA's final order, Operating Limitations at New York LaGuardia Airport, Docket No. FAA 2006-25755-82 dated December 13, 2006, published in the Federal Register at 71 Fed. Reg. 77854 (Dec. 27, 2006)), as such order may be amended or re-codified from time to time, and in any subsequent order or regulation issued by the FAA, as such order may be amended or re-codified from time to time, (iii) authorization granted by a Governmental Entity to conduct a landing or takeoff during a specific hour or other period at any United States or foreign airport, and (iv) slot exemption pursuant to 49 U.S.C. §§ 41716 and 41718, as such statute may be amended or re-codified from time to time, including but not limited to slot exemptions at New York LaGuardia Airport and Ronald Reagan Washington National Airport, in each case of the Company or any of the subsidiaries of the Company now held or hereafter acquired (other than “slots” which prior to the date of this Agreement have been permanently allocated to another air carrier and in which the Company or any of the subsidiaries of the Company holds temporary use rights).

“SSSD” means the Secretary of State of the State of Delaware and any successor thereto.

 

“Surviving Corporation” has the meaning set forth in Section 1.1 of the Agreement.

 

“Tax” means taxes, charges, fees, levies and other governmental assessments and impositions of any kind payable to any Governmental Authority, including all interest, penalties and additions to tax imposed with respect thereto.

 

“Tax Return” means returns, reports and information statements with respect to Taxes required to be filed with the IRS or any other Governmental Authority, including consolidated, combined and unitary tax returns.

 

“TPG Entities” has the meaning set forth in the recitals to the Agreement.

 

“Transaction Documents” means this Agreement, the Investment Agreement and the Note.

 

“Transfer Taxes” has the meaning set forth in Section 5.7 of the Agreement.

 

“WARN Act” has the meaning set forth in Section 2.15(c) of the Agreement.

 

“WBCL” has the meaning set forth in Section 2.3 of the Agreement.