EXHIBIT 10.62(g) INVESTMENTAGREEMENT

This Investment Agreement (this “Agreement”) is made as of June 23, 2009, by and among TPG Midwest US V, LLC and TPG Midwest International V, LLC (each, a “Purchaser” and, together, the “Purchasers”), and Republic Airways Holdings Inc., a Delaware corporation (the “Company”).

 

WHEREAS, each of the Purchasers and the Company is a “Lender” (including under any related promissory note) under the Amended and Restated Senior Secured Credit Agreement (the “Credit Agreement”), dated as of September 3, 2008, among Midwest Airlines, Inc., a Wisconsin corporation (“Midwest”), Midwest Air Group, a Wisconsin corporation (“MAG”), each of the subsidiaries of Midwest from time to time party thereto, each of the Purchasers, the Company, 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;

 

WHEREAS, the Purchasers desire to assign to the Company, and the Company desires to acquire from the Purchasers, all of the Purchasers’ rights and obligations in their capacities as “Lenders” under the Credit Agreement; and

 

WHEREAS, concurrently with the execution of this Agreement, the Company, Midwest Air Group, Inc., a Wisconsin corporation (“MAG”), and RJET Acquisition, Inc., a Delaware corporation and a wholly owned subsidiary of the Company, are entering into an Agreement and Plan of Merger, dated as of the date hereof (the “Merger Agreement”), pursuant to which, and on the terms and subject to the conditions of which, the Company will acquire MAG.

 

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, mutual covenants and agreements set forth herein, the parties hereto agree as follows:

 

  1.1 Agreement to Purchase and Sell.  Upon the basis of the representations, warranties and covenants, and on the terms and subject to the conditions set forth in this Agreement, at the Closing (as defined below), the Purchasers shall assign to the Company, pursuant to Section 12.07(b) of the Credit Agreement, all of each Purchaser’s rights and obligations in its capacity as a “Lender” under the Credit Agreement, in exchange for:

 

(a)  an amount in cash equal to the sum of (i) Six Million Dollars ($6,000,000.00), plus (ii) accrued and unpaid interest through the Closing Date (as defined below) on the Term Loans extended by the Purchasers under the Credit Agreement, plus (iii) any Cure Payments (as defined in the Agreement, dated as of June 2, 2009 (the “Indemnity Agreement”), among the Company, TPG Partners V, L.P. (“TPG Fund”) and each of the Purchasers) for which TPG Fund has indemnified the Company, and actually paid, under the Indemnity Agreement (the sum of clauses (i), (ii) and (iii), the “Cash Consideration”); and

 

(b) a convertible note issued by the Company, having a principal amount of Twenty-Five Million Dollars ($25,000,000.00), in the form attached as Annex A hereto (the “Convertible Note”).

 

        1.2 Closing.  The closing (the “Closing”) of the transactions contemplated by this Agreement shall be held at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 300 South Grand Avenue, Suite 3400, Los Angeles, California 90071, concurrently with the closing of the transactions contemplated by the Merger Agreement (the date of the Closing under this Agreement is hereinafter referred to as the “Closing Date”).

 

        1.3 Deliverables.  At the Closing:

 

(a) the Purchasers shall deliver or cause to be delivered to the Company:

 

                (i) an Assignment and Assumption, substantially in the form of Exhibit C to the Credit Agreement, duly executed by the Purchasers and the Company, evidencing the assignment of all of each Purchaser’s rights and obligations in its capacity as a “Lender” under the Credit Agreement to the Company, and the assumption by the Company of all of each Purchaser’s rights and obligations in its capacity as a “Lender” under the Credit Agreement;

 

                (ii) a copy of the letter agreement attached as Annex B hereto, executed by the Purchasers and TPG Fund, terminating the Indemnity Agreement; and

 

                (iii) a resignation of Midwest Air Partners, LLC as a manager of Midwest SPV (as defined in Section 4.3 hereof).

 

(b) the Company shall deliver or cause to be delivered to the Purchasers:

 

                (i) the Cash Consideration, by wire transfer of immediately available funds to an account designated by the Purchasers,

 

                (ii) the Convertible Note executed by the Company, and

 

                (iii) a copy of the letter agreement attached as Annex B hereto, executed by the Company, terminating the Indemnity Agreement.

Except as set forth in the Company’s required reports, proxy statements, forms, and other documents filed with the Securities and Exchange Commission (the “SEC”) since January 1, 2006 (excluding, in each case, any disclosures set forth in any “forward looking statements” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) or in the correspondingly identified schedule attached hereto, the Company hereby represents and warrants to the Purchasers, as of the Closing Date (except to the extent expressly made only as of a specified date in which case as of such date), as follows:

 

2.1 Incorporation and Organization.  The Company (a) is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware; (b) has the requisite corporate power and authority to conduct, operate and carry on its business and operations as currently conducted, and to manage, use, control, own, lease and operate its properties and assets; and (c) is duly qualified or licensed to do business as a foreign corporation and is in good standing in every jurisdiction in which such qualification or licensing is required, except where the failure to be so qualified or licensed and in good standing, individually or in the aggregate, would not reasonably be expected to have a material adverse effect on the business, condition (financial or otherwise), operations, assets or liabilities of the Company and its subsidiaries, taken as a whole (a “Material Adverse Effect”).

 

2.2 Issuance and Delivery of the Convertible Note.  The Convertible Note has been duly authorized and executed by the Company and, when issued and delivered to and paid for by the Purchasers in accordance with the terms of this Agreement, (a) shall be free and clear of all liens, security interests, options, claims, encumbrances and restrictions (collectively, “Liens”), (b) assuming accuracy of the Purchasers’ representations in Section 3.3 hereof, shall have been issued in compliance with all applicable federal and state securities laws and (c) shall be a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject, as to enforcement, to (i) applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and (ii) general principles of equity.  The shares of the Company’s common stock, par value $.001 per share (“Common Stock”), issuable upon conversion of the Convertible Note (the “Conversion Shares”) have been duly authorized and reserved for issuance and, when issued upon conversion of the Convertible Note in accordance with the terms thereof, will be validly issued, fully paid and nonassessable, and not subject to any preemptive or similar rights.

 

2.3 Capital Structure.  The authorized capital stock of the Company consists of 150,000,000 shares of Common Stock, and 5,000,000 shares of preferred stock, par value $.001 per share (“Preferred Stock”)  As of June 1, 2009, (i) 34,448,683 shares of Common Stock were issued and outstanding (not including 9,332,433 shares of Common Stock held in treasury), and no shares of Preferred Stock were issued and outstanding, and (ii) 4,845,271 shares of Common Stock were reserved for issuance upon exercise of outstanding options to purchase shares of Common Stock and 2,334,729 shares of Common Stock reserved for future issuance under the Company’s existing stock plans.  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, or any securities convertible into or exercisable or exchangeable for any shares of capital stock or other securities of the Company or any of its subsidiaries, or obligating the Company or any of its subsidiaries to issue, grant, extend or enter into any such security, option, warrant, call, right, contract, commitment, agreement, arrangement or understanding.  There are no 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, granting to any person the right to require the Company to file a registration statement under the Securities Act with respect to any securities of the Company or requiring the Company to include such securities with the Conversion Shares registered pursuant to any registration statement.

 

2.4 Subsidiaries.  Each of the subsidiaries of the Company (a) is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization; (b) has the requisite power and authority to conduct, operate and carry on its business and operations as currently conducted, and to manage, use, control, own, lease and operate its properties and assets; and (c) is duly qualified or licensed to do business and is in good standing in every jurisdiction in which such qualification or licensing is required, except where the failure to be so qualified or licensed and in good standing, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.  All of the outstanding shares of capital stock of, other securities of or other interests in, each of the Company’s subsidiaries are owned by the Company, directly or indirectly through one or more of the Company’s subsidiaries.

 

2.5 Authorization; Validity of Agreement; Company Action.  The Company 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.  The execution and delivery by the Company of this Agreement and the consummation by the Company of the transactions contemplated by this Agreement have been duly authorized by, and this Agreement and each of the transactions contemplated by this Agreement have been validly approved by, the requisite vote of the Company’s Board of Directors (the “Board”).  No other corporate action or proceeding on the part of the Company is necessary for the execution and delivery by the Company of this Agreement, the performance by the Company of its obligations under this Agreement or the consummation by the Company of the transactions contemplated by the this Agreement.  This Agreement has been duly executed and delivered by the Company and, assuming due authorization, execution and delivery of this Agreement by the Purchasers, is a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, subject, as to enforcement, to (a) applicable bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereinafter in effect affecting creditors’ rights generally and (b) general principles of equity.

 

2.6 Consents and Approvals.  Assuming the accuracy of the representations of the Purchasers set forth in Section 3 hereof, no registration (including any registration under the Securities Act) or filing with, or any notification to, or any approval, permission, consent, ratification, waiver, authorization, order, finding of suitability, permit, license, franchise, exemption, certification or similar instrument or document (each, an “Authorization”) of or from, any court, arbitral tribunal, arbitrator, administrative or regulatory agency or commission or other governmental or regulatory authority, agency or governing body, domestic or foreign, including any national securities exchange or national quotation system (each, a “Governmental Entity”), or any other person, or under any statute, law, ordinance, rule, regulation or agency requirement of or listing agreement with any Governmental Entity (each, a “Law”), on the part of the Company or any of its subsidiaries is required in connection with the execution or delivery by the Company of this Agreement, the performance by the Company of its obligations under this Agreement or the consummation by the Company of the transactions contemplated by this Agreement, except for such filings as will be required to be made in connection with the consummation of the transactions contemplated by the Merger Agreement and any additional listing application that may be required in respect of the Conversion Shares.

 

2.7 No Conflict.  The execution and delivery by the Company of this Agreement does not, and the performance by the Company of its obligations under this Agreement or the consummation by the Company 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 Company or any of its subsidiaries or (ii) any indenture, loan agreement, mortgage, guarantee, other indebtedness, lease or other agreement, contract, instrument, obligation, understanding or arrangement to which the Company or any of its subsidiaries is a party, or by which the Company or any of its subsidiaries may be bound, or to which any of the respective properties or assets of the Company or any of its subsidiaries may be subject; (b) conflict with, or result in or constitute any violation of, any award, decision, judgment, decree, injunction, writ, order, subpoena, ruling, verdict or arbitration award entered, issued, made or rendered by any federal, state, local or foreign government or any other Governmental Entity (each an “Order”), or any Law, applicable to the Company or any of its subsidiaries, or to any of their respective properties or assets; (c) result in the creation or imposition of (or the obligation to create or impose) any Liens on any of the properties or assets of the Company or any of its subsidiaries; or (d) conflict with, or result in or constitute any violation of, or result in the termination, suspension or revocation of, any Authorization applicable to the Company or any of its subsidiaries, or to any of their respective properties or assets, or result in any other impairment of the rights of the holder of any such Authorization, except in the case of clauses (a)(ii), (b), (c) and (d), where such conflict, violation, breach, default, termination, amendment, cancellation, acceleration, obligation to repay or loss of benefit, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

2.8 Authorizations; Compliance with Law.  Each of the Company and its subsidiaries has such Authorizations of, and has made all registrations and filings with and notices to, all Governmental Entities as are necessary to manage, use, control, own, lease and operate its properties and assets and to conduct, operate and carry on its business and operations as currently conducted, except where the failure to have any such Authorization or to make any such registration, filing or notice, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. Each of the Company and its subsidiaries is in compliance with all Laws and Orders applicable to the Company or any of its subsidiaries, or to any of their respective properties or assets, or to any Shares, except where the failure to be in compliance, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

 

2.9 No Solicitation.  Neither the Company nor any of its subsidiaries or affiliates, nor any person acting on its or their behalf, (a) has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with the offer or sale of the Convertible Note or (b) has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under any circumstances that would require registration of the Convertible Note under the Securities Act, nor will the Company or any of its subsidiaries or affiliates take any action or steps that would require registration of any of the Convertible Note under the Securities Act.  Assuming the accuracy of the representations and warranties of the Purchasers in Section 3 of this Agreement, the offer and sale of the Convertible Note by the Company to the Purchasers pursuant to this Agreement will be exempt from the registration requirements of the Securities Act.

 

2.10 Investment Company Act.  The Company is not and, after giving effect to the transactions contemplated by this Agreement, will not be an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

2.11 Sufficient Funds.  The Company has, and will have at the Closing, sufficient immediately available funds in cash to pay the Cash Consideration and all costs and expenses incurred by the Company in connection with the execution and delivery of this Agreement and the transactions contemplated hereby, including fees of legal counsel.

 

SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

 

The Purchasers hereby, jointly and severally, represent and warrant to the Company, as of the Closing Date, that:

 

3.1 Authority.  Each of the Purchasers has the requisite limited liability company 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 Purchasers has taken all requisite action to, and no other action or proceeding on the part of the Purchasers is necessary for, the execution and delivery by the Purchasers of this Agreement, the performance by the Purchasers of their obligations under this Agreement or the consummation by the Purchasers of the transactions contemplated by this Agreement.  This Agreement has been duly executed and delivered by the Purchasers and, assuming due authorization, execution and delivery of this Agreement by the Company, is a valid and binding obligation of the Purchasers and is enforceable by the Company against the Purchasers in accordance with its terms, subject, as to enforcement, to (a) applicable bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereinafter in effect affecting creditors’ rights generally and (b) general principles of equity.

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

 

3.3 Ownership of Securities; Purpose of Investment.  The Purchasers are acquiring the Convertible Note and the Conversion Shares solely for the purpose of investment and not with a view to, or for sale in connection with, any distribution thereof in violation of the Securities Act and applicable state securities or “blue sky laws.”  Each Purchaser is an “accredited investor” as such term is defined in Regulation D of the Securities Act.  Each Purchaser has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in the Convertible Note and the Conversion Shares, and each Purchaser is capable of bearing the economic risks of such investment, including a complete loss of its investment.  Each Purchaser has been given the opportunity to ask questions of and receive answers from the Company regarding the Company, the Convertible Note, the Conversion Shares and other related matters.  Each Purchaser has been furnished with all information it deems necessary or desirable to evaluate the merits and risks of the acquisition of the Convertible Note and the Conversion Shares and that the Company has made available to the Purchasers or its agents all documents and information relating to an investment in the Convertible Note and the Conversion Shares requested by or on behalf of the Purchasers.  In evaluating the suitability of an investment in the Convertible Note and the Conversion Shares and in making the investment, the Purchasers have not relied upon any representations or warranties of any person by or on behalf of any of the Company other than those representations and warranties that are expressly set forth in this Agreement, whether oral or written.

 

SECTION 4. ADDITIONAL AGREEMENTS

 

4.1 Board Representation.  After the Closing, for so long as the Purchasers and their affiliates (collectively, the “TPG Entities”) in the aggregate beneficially hold at least 50% of the principal amount of the Convertible Note or beneficially own at least 50% of the Conversion Shares:

(a) The TPG Entities shall have the collective right to designate one person for nomination for election to the Board (such designee, a “Holder Director”), and the Company shall use its reasonable best efforts to cause the election of such person to the Board, including by (i) nominating such individual to be elected as a director as provided herein, (ii) including such nomination and other required information regarding such individual in the Company’s proxy statement for its annual meeting of stockholders and (iii) soliciting or causing the solicitation of proxies in connection with the election of such individual as a director.  The Company shall take all necessary or desirable actions as may be required under applicable law or regulatory requirements to cause the individual designated by the TPG Entities as the initial Holder Director to be appointed or elected to the Board as soon as practicable but not later than ten (10) business days after the date hereof.

 

(b) In the event that a vacancy is created at any time by the death, disability, retirement, resignation or removal (with or without cause) of a Holder Director, the TPG Entities shall have the collective right to designate a replacement to fill such vacancy, and the Company shall take all necessary or desirable actions as may be required under applicable law to cause the individual designated by the TPG Entities to be appointed or elected.  The Company shall not take any action to cause the removal of a Holder Director without cause unless it is directed to do so by the TPG Entities, and if the Company is so directed, the Company shall take all necessary or desirable actions to effect such removal and to elect a replacement Holder Director as provided in the immediately preceding sentence.

 

(c) In respect of any newly proposed Holder Director (other than the initial Holder Director), the TPG Entities shall notify the Company of the proposed Holder Director, in writing, a reasonable time in advance of the mailing of any proxy statement, information statement or registration statement in which any Board nominee or Board member of the Company would be named, together with all information concerning such nominee reasonably requested by the Company and necessary in order for the Company to comply with applicable disclosure rules.

 

(d) The Company agrees to reimburse each Holder Director for all reasonable and documented out-of-pocket expenses incurred in connection with the performance of his or her duties as a Holder Director, including reasonable and documented out-of-pocket expenses incurred in attending meetings of the Board or any committee thereof, and each Holder Director shall be entitled to indemnification arrangements and director and officer insurance coverage equivalent to such arrangements and insurance coverage applicable to all non-employee directors of the Company or to which all non-employee directors of the Company are entitled or receive.

 

(e) All obligations of the Company pursuant to this Section 4.1 relating to a Holder Director shall terminate immediately, and the TPG Entities shall cause the Holder Director to resign promptly from the Board (and the Company shall be entitled to take all action to remove the Holder Director from the Board), when the TPG Entities in the aggregate both (i) beneficially hold less than 50% of the principal amount of the Convertible Note and (ii) beneficially own less than 50% of the Conversion Shares.  Without prejudice to the foregoing, at any such time, the Purchasers shall cause the Holder Director not to vote or exercise any other rights or powers of office during the period pending resignation.  Any vacancy created by such resignation may be filled by the Board or the stockholders of the Company in accordance with the Company’s certificate of incorporation and bylaws and applicable law.

(a) The Company shall prepare and file or cause to be prepared and filed with the SEC, on or before the first anniversary of the Closing Date (the “Filing Deadline Date”), a registration statement for an offering to be made on a delayed or continuous basis pursuant to Rule 415 of the Securities Act (a “Shelf Registration Statement”) registering the resale from time to time by Holders (as defined below) of Registrable Securities (as defined below) (the “Initial Shelf Registration Statement”).  The Initial Shelf Registration Statement shall be on Form S-3 or another appropriate form permitting registration of such Registrable Securities for resale by the Holders in accordance with the methods of distribution elected by the Holders and set forth in the Initial Shelf Registration Statement.  The Company shall use its reasonable best efforts to cause the Initial Shelf Registration Statement to be declared effective under the Securities Act on or before the date that is one-hundred and twenty (120) days after the Filing Deadline Date (the “Effectiveness Deadline Date”), and to keep the Initial Shelf Registration Statement continuously effective under the Securities Act (including using its reasonable best efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof and as promptly as is practicable amending the Shelf Registration Statement in a manner reasonably expected to obtain the withdrawal of such order suspending the effectiveness thereof, or filing and using its reasonable best efforts to cause to become effective as promptly as is practicable after such filing, an additional Shelf Registration Statement covering all of the Registrable Securities) until the date that all Registrable Securities have ceased to be Registrable Securities (the “Effectiveness Period”).  At the time the Initial Shelf Registration Statement is declared effective, each Holder shall be named as a selling securityholder in the Initial Shelf Registration Statement and the related prospectus in such a manner as to permit such Holder to deliver such prospectus to purchasers of Registrable Securities in accordance with applicable law.  The Company shall use its reasonable best efforts to ensure that none of the Company’s securityholders (other than the Holders of Registrable Securities) shall have the right to include any of the Company’s securities in the Shelf Registration Statement.  The Company shall supplement and amend the Shelf Registration Statement if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement, if required by the Securities Act or as necessary to name a Holder as a selling securityholder.

 

(b) The rights of each Holder to registration of Registrable Securities pursuant to Section 4.2(a) may be assigned by any of the Holders, in whole or in part, to any transferee or assignee of Registrable Securities; provided, however, the transferor shall, within ten (10) days after such transfer, furnish to the Company written notice of the name and address of such transferee or assignee and the number and type of Registrable Securities that are being assigned.

 

(c) All expenses incurred in connection with any Shelf Registration Statement or registered offering covering the Registrable Securities, including without limitation, reasonable legal fees of counsel selected by the Company, reasonable accounting fees, registration filing fees and additional listing fees,  will be borne collectively by each Holder named as selling securityholder, pro rata based on the number of Registrable Securities registered by such Holder.

 

(d) For the purposes of this Section 4.2, the following definitions apply: (i) “Holder” means either of the Purchasers or their respective assigns; (ii) “Registrable Securities” means the Conversion Shares and any securities into or for which such Conversion Shares have been converted or exchanged or into which the Convertible Note may be converted, and any security issued with respect thereto upon any stock dividend, split or similar event until, in the case of any such security, the earliest of: (A) the date on which such security has been registered under the Securities Act and disposed of pursuant to an effective registration statement; (B) the date on which such security may be sold or transferred by the Holder thereof under Rule 144 under the Securities Act without any volume restrictions; and (C) the date on which such security ceases to be outstanding (whether as a result of repurchase and cancellation, conversion or otherwise).

 

4.3 Midwest SPV Upside Payments; Payments under the KfW Guaranty after Conversion.

 

(a) After the Closing, in the event that the Company receives any distributions from Midwest SPV (as defined in the KfW Settlement Agreement (as defined below)) pursuant to Section III.(D)(4) of the KfW Settlement Agreement, exclusive of any repayments of any Republic Cure Amount (as defined below) (any such distribution, an “SPV Distribution”), then, for each such SPV Distribution, promptly (and in any event within five (5) business days) after the receipt by the Company of such SPV Distribution) (a) the Company shall notify the Purchasers of the amount of such SPV Distribution so received and the cumulative amount of all SPV Distributions received and (b) the Company shall pay the Purchasers in cash to an account designated by the Purchasers: (i) for the first $1,500,000 of SPV Distributions, dollar for dollar for such SPV Distributions, and (ii) to the extent that the aggregate SPV Distributions exceed $1,500,000, by an amount equal to one half of the aggregate SPV Distributions in excess of $1,500,000. The term “Republic Cure Amount” shall have the meaning ascribed to such term in 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, MAG, the Company, KfW (formerly known as Kreditanstalt Für Wiederaufbau), an organization organized under the laws of Germany (“KfW”), 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 Purchasers in accordance with Section 4.5 hereof (such consent not to be unreasonably withheld)) (the “KfW Settlement Agreement”).

4.4 Consent.  Each of the parties hereto, in its capacity as a “Lender” under the Credit Agreement, hereby consents to the transactions contemplated by the Merger Agreement.

 

4.5 No Modification

 

4.6 .  From the date hereof until the Closing Date, the Company shall not agree or consent to or execute any amendment, waiver, restatement or other modification of, or supplement or addition to, the KfW Guaranty (as defined below) or the KfW Settlement Agreement, in each case without the prior written consent of the Purchasers (such consent not to be unreasonably withheld).  “KfW Guaranty” means the Guarantee Agreement, to be dated as of the Effective Date (as defined in the KfW Settlement Agreement), between Payor and KfW, in the form attached as Exhibit K to the KfW Settlement Agreement as of the date hereof (without giving effect to any amendment, waiver, restatement or other modification of, or supplement or addition to, such form without the consent of the Purchasers in accordance with this Section 4.5 (such consent not to be unreasonably withheld)).

 

4.7 TPG Payment of Company Expenses.  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, the Merger Agreement and the Convertible Note in accordance with Section 8.5 of the Merger Agreement.

 

5.1 Conditions to the Parties’ Obligations.  The respective obligations of each of the parties to this Agreement to effect the Closing shall be subject to the satisfaction (or waiver by the party entitled to make such a waiver) of all of the conditions to the Closing set forth in Section 6 of the Merger Agreement (other than the condition set forth in Section 6.1(a) of the Merger Agreement).

 

5.2 Conditions to the Purchasers’ Obligations.  The obligation of the Purchasers to effect the Closing is subject to satisfaction of the following conditions precedent, unless waived by the Purchasers:

(a) Representations and Warranties; Covenants.  The representations and warranties of the Company set forth in Section 2 hereof which are not qualified by materiality or by a Material Adverse Effect shall be true and correct in all material respects and the representations and warranties of the Company set forth in Section 2 hereof which are qualified by materiality or by a Material Adverse Effect shall have been true and correct on as of the date hereof and shall be true and correct at the time immediately prior to the Closing as if made on the Closing Date (except where such representation and warranty speaks by its terms of a different date, in which case it shall be true and correct as of such date).  The Company shall have performed in all material respects all obligations and complied with all agreements, undertakings, covenants and conditions required to be performed by it under this Agreement at or prior to the Closing.  The Company shall have delivered to the Purchasers at the Closing a certificate dated the Closing Date and signed by an officer of the Company to the effect that the conditions set forth in this Section 5.2(a) have been satisfied.

 

(b) Holder Director.  The Company shall have taken all actions to cause the Holder Director to be appointed to the Board effective as of the Closing.

 

5.3 Conditions to the Company’s Obligations.  The obligation of the Company to effect the Closing is subject to satisfaction of the following condition precedent, unless waived by the Company:

(a) Representations and Warranties; Covenants.  The representations and warranties of the Purchasers set forth in Section 3 hereof which are not qualified by materiality shall be true and correct in all material respects and the representations and warranties of the Purchasers set forth in Section 3 hereof which are qualified by materiality shall have been true and correct on as of the date hereof and shall be true and correct at the time immediately prior to the Closing as if made on the Closing Date (except where such representation and warranty speaks by its terms of a different date, in which case it shall be true and correct as of such date).  The Purchasers shall have performed in all material respects all obligations and complied with all agreements, undertakings, covenants and conditions required to be performed by them under this Agreement at or prior to the Closing.  The Purchasers shall have delivered to the Company at the Closing a certificate dated the Closing Date and signed by an officer of the Purchasers to the effect that the conditions set forth in this Section 5.3(a) have been satisfied.

6.1 Termination.  If the Merger Agreement is terminated pursuant to Article 7 thereof  at any time prior to the Closing, then upon such termination, this Agreement shall immediately and automatically terminate without any action by the parties hereto and shall be of no further force or effect, with no liability of any party to the other parties, except that this Article 6 shall survive the termination of this Agreement indefinitely; provided, however, nothing herein shall relieve any party from liability for any intentional or willful breach of this Agreement or the Merger Agreement.

 

6.2 Non-Survival of Representations and Warranties; Survival of Covenants.  None of the representations and warranties in Section 2 or 3 of this Agreement or in any agreement, instrument or document delivered pursuant to this Agreement shall survive the Closing.  The covenants set forth in Section 4 of this Agreement shall survive the Closing for the periods specified therein or, if no period is specified therein, indefinitely.

 

6.3 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):

 

6.4 Amendments and Waivers.  Any term of this Agreement may be amended or waived only with the written consent of the Company and the Purchasers.

 

6.5 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 table of contents and 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.

(a) .  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, except as specified in Section 4.2(c) hereof with respect to registration expenses.

 

6.7 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.

 

6.8 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 respective permitted successors and assigns any benefit right or remedies, except that the provisions of Section 4.2 shall inure to the benefit of the persons to whom the registration rights conferred by this Agreement have been transferred in compliance with Section 4.2(b) hereof.

 

6.9 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); provided that each Purchaser may assign all or part of its rights and obligations under this Agreement (a) to one or more affiliates, but only if the transferee agrees in writing for the benefit of the Company (with a copy thereof to be furnished to the Company) to be bound by the terms of this Agreement (any such transferee shall be included in the term “Purchaser”), and (b) as provided in Section 4.2.

 

6.10 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.

6.11 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.

 

6.12 Governing Law.  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, 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 or any Purchaser, 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 and each Purchaser 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 and each Purchaser 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 and each Purchaser 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 Note, 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 and each Purchaser 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 AND EACH PURCHASER 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.

 

6.13 Injunctive Relief.  The Company agrees that the Purchasers’ remedies at law in the event of any default or threatened default by the Company 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 Purchasers having to prove actual damage or post any bond or other security.

6.14 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.