===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
SCHEDULE 14D-1
Tender Offer Statement pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
and
SCHEDULE 13D
under the Securities Act of 1934
-----------------------
Indigo Aviation AB
(Name of Issuer)
AerFi Group plc
AerFi Sverige AB
-----------------------
American Depositary Shares each
representing one Ordinary Share, SEK 3.14 Nominal Value
(Title of Class of Securities)
-----------------------
45567P104
(CUSIP Number of Class of Securities)
-----------------------
Rose Hynes, Esquire
General Counsel
AerFi Group Plc
Aviation House
Shannon, Ireland
011-353-61-360-000
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of Bidders)
-----------------------
With Copies to:
Thomas J. Reid, Esquire
Davis Polk & Wardwell
1 Frederick's Place
London, EC2R 8AB
England
011-44-171-418-1300
CALCULATION OF FILING FEE
===============================================================================
Transaction Valuation* Amount of Filing Fee**
$40,023,360 $8,004.67
===============================================================================
* Calculated by multiplying $13.00, the per share tender offer price, by
3,078,720, which represents (i) the number of ordinary shares outstanding
on November 11, 1999 (ii) minus the ordinary shares exchanged by certain
shareholders pursuant to a separate share exchange agreement with AerFi
Group plc (iii) minus the ordinary shares sold by certain shareholders
pursuant to a share purchase agreement with AerFi Sverige AB.
** Calculated as 1/50 of 1% of the transaction value.
------------------
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: Filing Party:
Form or Registration No.: Date Filed:
------------------ --------------------
<PAGE>
- --------------------------------------------
CUSIP No. 45567P104
- --------------------------------------------
- -------------------------------------------------------------------------------
1. NAMES OF REPORTING PERSONS
AERFI GROUP PLC
IRS IDENTIFICATION NOS. ABOVE PERSONS (ENTITIES ONLY)
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS
WC
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(e) OR 2(f) [ ]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
IRELAND
- -------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,197,568
- -------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
[ ]
- -------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
72.7
- -------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON
CO
- -------------------------------------------------------------------------------
2
<PAGE>
- --------------------------------------------
CUSIP No. 45567P104
- --------------------------------------------
- -------------------------------------------------------------------------------
1. NAMES OF REPORTING PERSONS
AERFI SVERIGE AB
IRS IDENTIFICATION NOS. ABOVE PERSONS (ENTITIES ONLY)
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- -------------------------------------------------------------------------------
4. SOURCE OF FUNDS
WC
- -------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(e) OR 2(f) [ ]
- -------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
KINGDOM OF SWEDEN
- -------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,305,898
- -------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
[ ]
- -------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
20.5
- -------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON
CO
- -------------------------------------------------------------------------------
3
<PAGE>
This Tender Offer Statement on Schedule 14D-1 and Notification on Schedule
13D filed by (i) AerFi Group Plc or AerFi, an Irish limited liability company,
and (ii) AerFi Sverige AB or AerFi Sverige, a Swedish corporation and an
indirectly, wholly-owned subsidiary of AerFi, relates to the offer by AerFi
Sverige to purchase all of the issued and outstanding ordinary shares (the
"Shares"), SEK 3.14 nominal value per share, and (without duplication) the
American depositary shares each representing one ordinary share of Indigo
Aviation AB or Indigo, a Swedish corporation, at a price of $13.00 per Share,
net to the seller in cash, upon the terms and subject to the conditions set
forth in the offer to purchase dated November 17, 1999 and in the related
letter of transmittal (which together constitute the offer), copies of which
are attached hereto as Exhibits (a)(1) and (a)(2), respectively. The offer is
not being made with respect to 72.7% of Indigo's issued and outstanding shares
which are owned by certain shareholders of Indigo who have agreed to
exchange/sell those shares to AerFi and AerFi Sverige in separate transactions
under a share exchange agreement and a share purchase agreement.
Item 1. Security and Subject Company
(a) The name of the subject company is Indigo Aviation AB, a Swedish
corporation, which has its principal executive offices at Sodra Forstadsgatan
4, S-211 43 Malmo, Sweden.
(b) The exact title of the class of equity securities being sought is
ordinary shares, SEK 3.14 nominal value per share, of Indigo. As of November
15, 1999, there were 11,276,288 Indigo shares issued and outstanding and
approximately 29 holders of record. The information set forth under
"Introduction" in the offer to purchase is incorporated herein by reference.
(c) The information concerning the principal market in which the Shares
are traded and certain high and low sales prices for the Shares in such
principal market is set forth in "The Tender Offer--Price Range of Shares;
Dividends" of the offer to purchase and is incorporated herein by reference.
Item 2. Identity and Background
(a)-(d) and (g) This Statement is filed by AerFi and AerFi Sverige. The
information set forth under "Introduction", "The Tender Offer--Certain
Information Concerning AerFi and AerFi Sverige" and Schedule II of the offer to
purchase is incorporated herein by reference.
(e) and (f) To the best knowledge of AerFi and AerFi Sverige, during the
last five years, none of AerFi and AerFi Sverige nor any of the persons listed
in Schedule II of the offer to purchase, has been (i) convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding any
violation of such laws.
Item 3. Past Contacts, Transactions or Negotiations with the Subject Company
(a) The information set forth under "Special Factors--Background of the
Offer", "Special Factors--The Combination Agreement", "Special
Factors--Interests of Certain Persons in the Offer" and "The Tender
Offer--Certain Information Concerning AerFi and AerFi Sverige" in the offer to
purchase is incorporated herein by reference.
(b) The information set forth under "Introduction", "Special
Factors--Background of the Offer", "Special Factors--Purpose and Structure of
the Offer; Reasons of AerFi for the Offer", "Special Factors--Plans for Indigo
after the Offer", "Special Factors--The Combination Agreement" "Special
Factors--The Share Exchange Agreement", "Special Factors--The Share Purchase
Agreement", "Special Factors--The Option Agreement", "Special Factors--The
Registration Rights Agreement", "Special Factors--The Tag-Along Rights
Agreement" and "The Tender Offer-- Certain Information Concerning AerFi and
AerFi Sverige" in the offer to purchase is incorporated herein by reference.
4
<PAGE>
Item 4. Source and Amount of Funds or Other Consideration
(a)-(c) The information set forth under "The Tender Offer--Financing of
the Offer" in the offer to purchase is incorporated herein by reference.
Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder
(a)-(e) The information set forth under "Introduction", "Special
Factors--Background of the Offer", "Special Factors--Purpose and Structure of
the Offer; Reasons of AerFi for the Offer", "Special Factors--Plans for Indigo
After the Offer", "Special Factors--The Combination Agreement", "Special
Factors-Interests of Certain Persons in the Offer", "The Tender
Offer--Financing of the Offer" and "The Tender Offer--Dividends and
Distributions" in the offer to purchase is incorporated herein by reference.
(f) and (g) The information set forth under "The Tender Offer--Certain
Effects of the Offer" in the offer to purchase is incorporated herein by
reference.
Item 6. Interest in Securities of the Subject Company
(a)-(b) The information set forth under "Special Factors--Interests of
Certain Persons in the Offer", "The Tender Offer--Certain Information
Concerning Indigo", "The Tender Offer--Certain Information Concerning AerFi and
AerFi Sverige" and Schedules I and II of the offer to purchase is incorporated
herein by reference.
Item 7. Contracts, Arrangements, Understandings or Relationships with Respect
to the Subject Company's Securities
The information set forth under "Introduction", "Special
Factors--Background of the Offer", "Special Factors--Purpose and Structure of
the Offer; Reasons of AerFi for the Offer", "Special Factors--Plans for Indigo
After the Offer", "Special Factors--The Combination Agreement", "Special
Factors--The Share Exchange Agreement", "Special Factors--The Share Purchase
Agreement", "Special Factors--Interests of Certain Persons in the Offer", "The
Tender Offer--Certain Information Concerning Indigo" and "The Tender
Offer--Certain Information Concerning AerFi and AerFi Sverige" in the offer to
purchase is incorporated herein by reference.
Item 8. Persons Retained, Employed or to Be Compensated
The information set forth under "Introduction", "Special Factors--Opinion
of Financial Advisor to the Indigo Board of Directors" and "The Tender
Offer--Fees and Expenses" in the offer to purchase is incorporated herein by
reference.
Item 9. Financial Statements of Certain Bidders
Not applicable.
Item 10. Additional Information
(a) The information set forth under "Special Factors--Interests of Certain
Persons in the Offer" in the offer to purchase is incorporated herein by
reference.
(b)-(c) The information set forth under "The Tender Offer--Certain Legal
Matters; Regulatory Approvals" in the offer to purchase is incorporated herein
by reference.
(d) The information set forth under "The Tender Offer--Certain Effects of
the Offer" in the offer to purchase is incorporated herein by reference.
5
<PAGE>
(e) Not applicable.
(f) The information set forth in the offer to purchase and letter of
transmittal copies of which appear as Exhibits (a)(1) and (a)(2) is
incorporated herein by reference.
Item 11. Material to Be Filed as Exhibits
(a)(1) Offer to Purchase dated November 17, 1999.
(a)(2) Letter of Transmittal sent to holders of Indigo shares.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter from Greenhill & Co., LLC to Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(5) Letter to Clients for Use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Summary Advertisement as published in The New York Times on
November 17, 1999.
(a)(8) Text of Press Release issued by AerFi on November 11, 1999.
(b)(1) Not applicable.
(c)(1) Combination Agreement, dated as of November 11, 1999, among Indigo,
AerFi and AerFi Sverige.
(c)(2) Share Exchange Agreement, dated as of November 11, 1999, among AerFi
and certain shareholders of Indigo.
(c)(3) Share Purchase Agreement dated as of November 11, 1999, among AerFi,
AerFi Sverige and certain shareholders of Indigo.
(c)(4) Option Agreement, dated November 11, 1999, among AerFi and certain
shareholders of Indigo.
(c)(5) Registration Rights Agreement, dated November 11, 1999, among AerFi
and certain shareholders of Indigo.
(c)(6) Tag-Along Rights Agreement, dated November 11, 1999, among AerFi and
Texas Pacific Group, AerFi and certain shareholders of Indigo.
(c)(7) Letter, dated November 9, 1999, addressed to Karl-Axel Granlund from
Industrifinans SMB III ASA.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
6
<PAGE>
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
November 17, 1999
AERFI GROUP PLC
By: /s/ Patrick Blaney
----------------------------------------
Name: Patrick Blaney
Title: Chief Executive Officer
AERFI SVERIGE AB
By: /s/ John Redmond
----------------------------------------
Name: John Redmond
Title: Director
7
<PAGE>
EXHIBIT INDEX
Exhibit No.
- -----------
(a)(1) Offer to Purchase dated November 17, 1999.
(a)(2) Letter of Transmittal sent to holders of Indigo shares.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter from Greenhill & Co., LLC to Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(5) Letter to Clients for Use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.
(a)(7) Summary Advertisement as published in The New York Times on
November 17, 1999.
(a)(8) Text of Press Release issued by AerFi on November 11, 1999.
(c)(1) Combination Agreement, dated as of November 11, 1999, among
Indigo, AerFi and AerFi Sverige.
(c)(2) Share Exchange Agreement, dated as of November 11, 1999,
among AerFi and certain shareholders of Indigo.
(c)(3) Share Purchase Agreement dated as of November 11, 1999,
among AerFi, AerFi Sverige and certain shareholders of Indigo.
(c)(4) Option Agreement, dated November 11, 1999, among AerFi and
certain shareholders of Indigo.
(c)(5) Registration Rights Agreement, dated November 11, 1999,
among AerFi and certain shareholders of Indigo.
(c)(6) Tag-Along Rights Agreement, dated November 11, 1999, among Texas
Pacific Group, AerFi and certain shareholders of Indigo.
(c)(7) Letter, dated November 9, 1999, addressed to Karl-Axel
Granlund from Industrifinans SMB III ASA.
8
Exhibit (a)(1)
Offer to Purchase for Cash
All Outstanding Ordinary Shares and
American Depositary Shares
of
Indigo Aviation AB
at
$13.00 Net per Share
by
AerFi Sverige AB,
an indirect, wholly-owned subsidiary of
AerFi Group plc
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON
WEDNESDAY DECEMBER 15, 1999, UNLESS EXTENDED.
INDIGO'S BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE COMBINATION
AGREEMENT AND DETERMINED THAT THE COMBINATION AGREEMENT AND THE OFFER ARE FAIR
TO YOU AND IN YOUR BEST INTEREST. THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU
ACCEPT THE OFFER AND TENDER YOUR SHARES UNDER THE OFFER.
Bear Stearns & Co. Inc. has delivered to Indigo's board of directors its
written opinion that, as of the date of the opinion and based on and subject
to the assumptions and qualifications stated in the opinion, the consideration
to be paid in the offer is fair, from a financial point of view, to the
holders of Indigo shares, other than Indigo's controlling shareholders.
IMPORTANT
You may tender all or any portion of your Indigo shares by:
o completing and signing the letter of transmittal that accompanies this
document according to the instructions in the letter of transmittal,
having your signature guaranteed if required by Instruction 1 to the
letter of transmittal, and mailing or delivering the letter of
transmittal together with the Indigo share certificates and any other
required documents to the depositary at the address set forth on the
back cover;
o tendering your Indigo shares according to the procedure for book-entry
transfer described in "The Tender Offer -- Procedures for Accepting
the Offer and Tendering Shares"; or
o asking your broker, dealer, commercial bank, trust company or other
nominee to tender your shares for you.
If your Indigo shares are registered in the name of a broker, dealer,
bank, trust company or other nominee you must contact that broker, dealer,
bank, trust company or other nominee if you desire to tender your Indigo
shares.
<PAGE>
If you desire to tender your Indigo shares and your Indigo share
certificates are not immediately available, or you cannot comply with the
procedure for book-entry transfer on a timely basis, or you cannot deliver all
required documents to the depositary before the expiration of the offer, you
may tender your Indigo shares by following the procedures for guaranteed
delivery described under the caption "The Tender Offer -- Procedures for
Accepting the Offer and Tendering Shares".
You should direct questions or requests for assistance to the information
agent or the dealer manager at their addresses and telephone numbers listed on
the back cover of this document. You may obtain additional copies of this
document, the letter of transmittal, the notice of guaranteed delivery and
other related materials from the information agent or the dealer manager.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE FAIRNESS OR MERITS OF THIS TRANSACTION NOR UPON THE ACCURACY OR
ADEQUACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO
THE CONTRARY IS UNLAWFUL.
---------------
The dealer manager for the offer is:
GREENHILL & CO., LLC
November 17, 1999
<PAGE>
TABLE OF CONTENTS
Page
INTRODUCTION......................... 1
SPECIAL FACTORS...................... 3
Background of the Offer............ 3
Recommendation of Indigo's Board of
Directors; Fairness of the
Offer........................... 6
Opinion of Financial Advisor to
Indigo's Board of Directors..... 7
Position of AerFi and AerFi Sverige
Regarding Fairness of the Offer. 12
Purpose and Structure of the Offer;
Reasons of AerFi for the Offer.. 12
Plans for Indigo after the Offer... 13
Rights of Shareholders in the
Offer........................... 13
The Combination Agreement.......... 14
The Share Exchange Agreement....... 20
The Share Purchase Agreement....... 23
The Option Agreement............... 23
The Registration Rights Agreement.. 23
The Tag-Along Rights Agreement..... 24
Letter Regarding Intention to
Tender.......................... 24
Interests of Certain Persons in the
Offer........................... 24
THE TENDER OFFER..................... 28
Terms of the Offer................. 28
Acceptance for Payment and Payment
for Shares...................... 29
Procedures for Accepting the Offer
and Tendering Shares............ 30
Withdrawal Rights.................. 32
United States Federal Income Tax
Consequences.................... 33
Price Range of Shares; Dividends... 34
Certain Information Concerning
Indigo.......................... 35
Certain Information Concerning AerFi
and AerFi Sverige............... 38
Financing of the Offer............. 41
Dividends and Distributions........ 42
Certain Effects of the Offer....... 42
Certain Conditions of the Offer.... 43
Certain Legal Matters; Regulatory
Approvals....................... 45
Fees and Expenses.................. 47
Miscellaneous...................... 48
SCHEDULES
SCHEDULE I -- Directors and
Executive Officers of Indigo.... I-1
SCHEDULE II -- Directors and
Executive Officers of AerFi and
AerFi Sverige.................... II-1
ANNEX A -- Opinion of Bear Stearns. A-1
<PAGE>
To the Holders of Indigo Shares:
INTRODUCTION
AerFi Sverige AB or AerFi Sverige, a Swedish corporation, offers to
purchase any and all issued and outstanding ordinary shares nominal value SEK
3.14 per share and, without duplication, the American depositary shares each
representing one ordinary share, of Indigo Aviation AB or Indigo, a Swedish
limited liability company, at a price of $13.00 per Indigo share, net to the
seller in cash. AerFi Sverige is an indirect, wholly-owned subsidiary of AerFi
Group plc or AerFi, an Irish limited liability company. Certain shareholders
of Indigo, the controlling shareholders, who own approximately 72.7% of
Indigo's issued and outstanding shares, have agreed to exchange and/or sell
those shares to AerFi and AerFi Sverige in separate transactions under a share
exchange agreement and/or a share purchase agreement. This offer is made
subject to the terms and conditions listed in this document and in the letter
of transmittal. This document refers (1) to the shares and the American
depositary shares described above collectively as the Indigo shares, (2) to
the offer described in this document, together with any amendments and
supplements (including the letter of transmittal), as the offer, (3) to AerFi
Group plc as AerFi, we or us and (4) to the time when the offer is declared
unconditional as the unconditional time.
You will not be obligated to pay brokerage fees or commissions or, except
as otherwise provided in Instruction 6 of the letter of transmittal, stock
transfer taxes on our purchase of Indigo shares under the offer. We will pay
all charges and expenses incurred in connection with the offer of Greenhill &
Co., LLC, the dealer manager for the offer, Bankers Trust Company, the
depositary with respect to the Indigo shares and the offer, and Corporate
Investor Communications, Inc., the information agent for the offer. See "The
Tender Offer -- Fees and Expenses".
INDIGO'S BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE COMBINATION
AGREEMENT AND DETERMINED THAT THE COMBINATION AGREEMENT AND THE OFFER ARE FAIR
TO YOU AND IN YOUR BEST INTERESTS. THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU
ACCEPT THE OFFER AND TENDER YOUR SHARES UNDER THE OFFER.
Indigo has filed with the Securities and Exchange Commission a
Solicitation/Recommendation Statement on Schedule 14D-9, which is being mailed
to you with this document.
Bear Stearns & Co. Inc., has delivered to Indigo's board of directors its
written opinion that, as of the date of the opinion and based on and subject
to the matters stated in the opinion, the consideration to be paid in the
offer is fair, from a financial point of view, to the holders of Indigo shares
other than Indigo's controlling shareholders. See "Special Factors -- Opinion
of Financial Advisor to Indigo's Board of Directors" for further information
concerning Bear Stearns' opinion.
The controlling shareholders of Indigo have agreed not to tender their
shares in the offer and, in a separate transaction, those shareholders have
entered into a share exchange agreement and/or a share purchase agreement with
us and AerFi Sverige. These shareholders own 8,197,568, or approximately
72.7%, of Indigo's issued and outstanding shares. Under the share exchange and
share purchase agreements, 5,891,670 of these shares will be exchanged for
21,799,179 new ordinary shares of AerFi and the remaining 2,305,898 Indigo
shares will be sold to AerFi Sverige for $13.00 per share in cash. The
consummation of the offer is not conditional upon consummation of the share
exchange and share purchase agreements. The consummation of the share exchange
agreement and share purchase agreement transactions are not contingent upon
consummation of the offer. The controlling shareholders of Indigo will be
granted options to purchase up to 1,000,000 new ordinary shares of AerFi at
$3.17 per share pursuant to an option agreement. See "Special Factors -- The
Share Exchange Agreement", "Special Factors -- The Share Purchase Agreement"
and "Special Factors -- The Option Agreement".
The offer is being made under a combination agreement dated November 11,
1999 among Indigo, AerFi and AerFi Sverige. The offer is not conditioned on
obtaining financing. The combination agreement provides, among other things,
that following the unconditional time if AerFi Sverige owns more than 90% of
the voting rights and more than 90% of the outstanding Indigo shares at that
time, AerFi Sverige intends to take all action required to commence a
compulsory acquisition under the Swedish Companies Act. The price to be paid
to holders of Indigo shares in the compulsory acquisition will be determined
under the Swedish Companies Act and may be higher, lower or equal to the offer
price.
Under the Swedish Companies Act, dissenters' rights are not available to
you in connection with the offer. You should refer to "Special Factors --
Rights of Shareholders in the Offer" for a discussion of your rights under the
Swedish Companies Act.
<PAGE>
Upon the closing of the share exchange agreement and share purchase
agreement transactions, we have agreed to take all action that is necessary to
appoint Mr. Karl-Axel Granlund and Mr. John Evans to AerFi's board of
directors. Furthermore, we shall take all action necessary to appoint Mr. John
Evans President and Chief Executive Officer of ErgoFi Inc., a subsidiary of
AerFi. Finally, Indigo's existing employee stock option plans will be
cancelled and replaced with, at the employee's choice, cash compensation in
respect of the cancelled Indigo stock options or replacement options in
AerFi's employee share option scheme, as set out in the combination agreement.
As of November 11, 1999, there were 11,276,288 outstanding Indigo ordinary
shares and options to purchase an aggregate of 295,920 Indigo ordinary shares
at an average exercise price of $11.01 per Indigo share. Based upon the
foregoing, there were approximately 11,572,208 Indigo shares outstanding on a
fully diluted basis. Upon the terms and subject to the conditions of the offer
(including, if the offer is extended or amended, the terms and conditions of
that extension or amendment), AerFi Sverige will accept and pay for all Indigo
shares validly tendered and not withdrawn before the expiration date. AerFi
Sverige reserves the right, subject to the terms and conditions of the
combination agreement, to extend the period during which the offer is open by
giving oral or written notice of the extension to the depositary. During any
extension, all Indigo shares previously tendered and not withdrawn will remain
subject to the offer, subject to your rights to your Indigo shares as
described under "The Tender Offer -- Withdrawal Rights".
Indigo's board of directors has not declared any dividends which have not
been paid. If we acquire control of Indigo, we currently intend that, before
the acquisition of the entire equity interest in Indigo, no further dividends
will be declared on the Indigo shares.
On April 7, 1998, Indigo filed a registration statement on Form F-1 under
the Securities Act of 1933 for an offering of American Depositary Shares
representing 3,300,000 ordinary shares. The offering price for the issue was
$13.00 and the aggregate proceeds received by Indigo were $35,061,000. On
March 18, 1998, Indigo filed a registration statement on Form F-6 to register
the American depositary shares that were issuable upon registration and
deposit of the ordinary shares.
This document and the letter of transmittal contain important information
which you should read carefully before making any decision about the offer.
<PAGE>
SPECIAL FACTORS
Background of the Offer
Recent Contacts, Negotiations and Transactions Between AerFi and Indigo
On December 18, 1998, Mr. Patrick Blaney, the Chief Executive of AerFi,
wrote to Mr. Karl-Axel Granlund, the Chairman of Indigo, to inform him of the
recent completion of AerFi's restructuring and suggested a meeting to consider
whether an opportunity may exist for both organizations to work together to
their mutual benefit. Mr. Granlund responded on December 21, 1998 by noting
that Indigo was agreeable to a meeting to explore what opportunities might
exist which could benefit Indigo and AerFi.
On January 13, 1999, Mr. Blaney and Mr. Edward Hansom, AerFi's Chief
Financial Officer, met with Mr. Granlund at AerFi's offices in Shannon, Co.
Clare, Ireland. Both parties discussed their respective businesses and their
respective strategies for future growth. In particular, Mr. Blaney discussed
AerCo Limited, a bankruptcy-remote special purpose company that owns and
leases 33 commercial jet aircraft and in which AerFi holds certain
subordinated debt securities and all of the residual economic interest. Mr.
Blaney discussed how AerCo Limited could purchase additional aircraft, and if
Indigo was interested, a proposal to securitize some or all of Indigo's
existing fleet in AerCo Limited could be submitted to AerCo Limited's board of
directors.
On January 14, 1999, Mr. Bradley Winograd, Executive Vice President and
Chief Financial Officer of Indigo Airlease Corporation, a wholly owned U.S.
subsidiary of Indigo, wrote to Mr. Blaney offering a Boeing 737-200 aircraft
for sale. Mr. Blaney replied to Mr. Winograd on January 14, 1999 to the effect
that the proposed sale fell outside AerFi's acquisition criteria and therefore
was not of interest to AerFi.
On February 4, 1999, Mr. Hansom made a presentation on securitization
opportunities for Indigo to the Indigo board of directors. Mr. Hansom outlined
AerFi's experience with aircraft securitization, including the structure and
economic aspects of AerCo Limited. In addition, Mr. Hansom gave his views on
each of the funding options available to Indigo including bank debt, public
debt, aircraft sales and securitizations. Mr. Hansom also provided a
comparison of the possible financial terms of an aircraft securitization by
AerCo Limited compared with other aircraft securitization vehicles. On March
19, 1999, Mr. Blaney spoke with Mr. Granlund during which conversation Mr.
Blaney stated that he would write to Mr. Granlund in this regard.
On March 30, 1999, Mr. Blaney wrote to Mr. Granlund concerning the
consolidation trend in the aircraft leasing industry. Mr. Blaney stated that
it was his view that Indigo and AerFi must identify either a chosen niche in
the industry or seek amalgamation opportunities in order to compete
effectively with industry leaders. Mr. Blaney noted that AerFi and Indigo had
businesses and management teams which were complementary with little overlap.
In addition, Indigo had achieved good market recognition and had developed a
significant track record in the aircraft leasing industry in a short space of
time. Meanwhile, AerFi had become a strong, cash rich company which had
successfully launched the AerCo Limited securitization vehicle. In his letter,
Mr. Blaney proposed that AerFi and Indigo merge their businesses as this would
combine complementary skills and achieve critical mass in terms of portfolio
and financing capability. Mr. Blaney stated that he believed the following
issues would have to be addressed to achieve such a combination:
o the relative valuation of both entities;
o the amount of liquidity or cash provided to those shareholders who
wished to exit; and
o the balance of continuing shareholders and allocation of control.
During the first week of April 1999, Mr. Granlund advised Mr. Blaney that
Indigo was already in discussions with other parties who were interested in
possible investment in, or combination with, Indigo. However, Mr. Granlund
indicated that Indigo's Board of directors would be prepared to consider any
offer AerFi was prepared to make. Mr. Granlund emphasized that Indigo did not
feel it was obliged to find a combination opportunity at that time and
consequently, in any proposals to be made by AerFi, the valuation attributed
to Indigo and the liquidity offered to Indigo's shareholders would be very
important.
On April 16, 1999, AerFi and Indigo entered into a confidentiality
agreement following which AerFi provided Indigo with certain confidential
information relating to AerFi.
<PAGE>
On April 26, 1999, Mr. Blaney and representatives of Greenhill & Co.,
financial adviser to AerFi, met with Mr. Mitchell Gordon, a non-executive
director of Indigo, appointed by Indigo's Board to represent the interests of
Indigo's public shareholders. The parties discussed which Indigo shareholders
wanted liquidity and the possible advantages to Indigo of proceeding with a
combination with AerFi.
On May 4, 1999, Mr. Blaney wrote to Mr. Granlund proposing that, subject
to Board approval and customary due diligence, AerFi would make a cash tender
offer for some of Indigo's shares, with certain Indigo shareholders agreeing
to exchange their Indigo shares for AerFi's ordinary shares at an agreed
exchange ratio. Mr. Blaney attached an analysis from Greenhill & Co. that
assumed a $13.00 per share offer price in the cash tender offer. In addition,
Mr. Blaney also proposed that Mr. John Evans, Chief Executive Officer of
Indigo Airlease Corporation, a U.S. wholly owned subsidiary of Indigo, would
be offered a senior management position in the combined entity.
On May 10, 1999, Mr. Granlund spoke with Mr. Blaney and Mr. Hansom and
indicated that AerFi's proposal was not acceptable to Indigo for a number of
reasons, including the total amount of cash available for the cash tender
offer. Mr. Granlund also indicated that Indigo wished to receive $15 per
share. Subsequently, AerFi indicated to Indigo that it was not willing to
improve its offer.
On June 9, 1999, Mr. Blaney met Mr. Evans in London where they discussed
whether it was possible to re-commence discussions on a merger. On June 16,
1999, Mr. Blaney met with certain senior Indigo employees at the Paris Air
Show during which the Indigo employees outlined their experience and
achievements to date.
On June 14, 1999, Indigo's board of directors held a special telephonic
meeting to discuss the possibility of a transaction with AerFi. Mr. Granlund
and Mr. Evans reported on the status of the discussions with AerFi and another
potential acquiror that had expressed an interest in a combination with
Indigo. Indigo's board agreed to engage an investment bank to act as financial
advisor in evaluating a possible transaction and appointed a sub-committee,
consisting of Mr. Granlund, Mr. Evans, Mr. Gordon, Mr. David Neeleman and Mr.
Geir Stormorken as members, Mr. Bradley Winograd as secretary and Mr. Jan-Eric
Osterlund as deputy, to select the investment bank and to handle contacts with
the investment bank relating to a possible
transaction.
On June 15, 1999, the sub-committee of Indigo's board of directors met and
selected Bear Stearns & Co., Inc. to act as its financial advisor.
On June 18, 1999, Indigo and AerFi entered into a further confidentiality
agreement following which both parties exchanged information relating to each
other's business, including financial projections relating to Indigo's
business. See "The Tender Offer -- Certain Information Concerning Indigo".
On June 23, 1999, Mr. Blaney, certain AerFi employees and representatives
of Greenhill & Co. met with Mr. Evans, Mr. Winograd and representatives of
Bear Stearns in New York, and Mr. Evans and Mr. Winograd made a presentation
about Indigo's business and financial situation.
On July 16, 1999, Mr. Blaney wrote to Mr. Granlund to outline AerFi's
proposed terms for a potential acquisition of Indigo by AerFi. The proposal
was subject to AerFi's board of directors' approval, all necessary regulatory
approvals and to due diligence. It included a cash offer of $11.00 per Indigo
share for 6.706 million Indigo shares and a share exchange in respect of
Indigo's remaining shares at an exchange ratio of one Indigo share for 3.593
AerFi ordinary shares. The proposal also offered two AerFi board seats to
representatives of Indigo following the combination.
On July 21, 1999, Mr. Gordon spoke with Greenhill & Co. during which he
emphasized that the cash purchase price would have to be over $13.00 per
share. Following further discussions between the parties, on July 26, 1999,
Mr. Gordon called Greenhill & Co. to confirm that a cash tender offer of
$13.00 per Indigo share up to a maximum of $70 million, with the remaining
shares exchanging at a ratio of one Indigo share for 3.875 AerFi ordinary
shares, would be acceptable to Indigo subject to satisfaction of significant
remaining outstanding issues.
On July 30, 1999, Mr. Blaney wrote to Mr. Granlund to outline AerFi's
proposed terms for a potential acquisition of Indigo, subject to AerFi's board
of directors' approval, regulatory approval and due diligence. Mr. Blaney
indicated that AerFi would be prepared to pay $13.00 per share for 5.385
million Indigo shares with the remaining Indigo shares exchanging for AerFi
shares at a ratio of one Indigo share for 3.875 AerFi ordinary shares.
On August 5, 1999, Indigo's board of directors held a special meeting to
consider the proposed transaction with AerFi. Indigo's
<PAGE>
board reviewed the status of discussions with AerFi and received an oral
report from Bear Stearns. Indigo's board of directors resolved to enter into
an exclusivity agreement with AerFi and to dissolve the sub-committee that had
been formed at the June 14, 1999 meeting. Mr. Granlund and Mr. Evans were
designated the contact persons for further discussions with AerFi.
On August 6, 1999, Indigo granted AerFi an exclusivity period for the
negotiation of terms on a combination of both entities. Subsequently this was
extended to November 10, 1999.
During August and September 1999, the parties undertook extensive due
diligence on each other's businesses. Following the completion of the due
diligence reviews in mid September, both parties held discussions to consider
issues raised by the due diligence process.
Following their discussion, on September 24, 1999, Mr. Blaney wrote to Mr.
Granlund to propose a combination on the following terms:
(i) a cash tender offer of $13.00 per Indigo share,
(ii) a total cash tender offer of $70 million,
(iii) an exchange ratio of 3.7 AerFi ordinary shares per Indigo share
not tendered in the offer,
(iv) new options over 4 million AerFi ordinary shares at an exercise price
of $3.00 per share for Indigo employees,
(v) a loyalty bonus of $0.75 per new AerFi share option granted to Indigo
employees,
(vi) AerFi board seats for Mr. Granlund and Mr. Evans,
(vii) Mr. Evans to become Chief Executive Officer of AerFi's newly formed
U.S. subsidiary.
Mr. Blaney also wrote to Mr. Evans on September 24, 1999, to outline in
more detail the benefits of the proposed merger for Indigo's employees,
including proposed terms for exchanging existing Indigo employee options for
AerFi options. Following further discussions between Mr. Blaney, Mr. Granlund
and Mr. Evans, it was agreed that those shareholders in Indigo participating
in the share exchange would receive options to purchase in aggregate 1 million
AerFi ordinary shares at $3.17 per share exercisable within three years of the
closing of any combination transaction.
On October 19 and 20, 1999 the management of both entities met in Ireland
to discuss each other's businesses further.
During the remainder of October and November 1999, AerFi, Indigo, the
controlling shareholders and their respective counsel negotiated the structure
of the combination and the agreements to implement it, including the
combination agreement, the share exchange agreement, the share purchase
agreement and the option agreement.
On November 7, 1999, AerFi's directors held a conference call with AerFi's
management and AerFi's legal and financial advisors to review the status of
the proposed transaction with Indigo.
On November 9, 1999, Indigo's board of directors held a special telephonic
meeting to review, with the advice and assistance of Indigo's financial and
legal advisors, the final proposed terms and conditions of the combination
agreement, the tender offer and related transactions. Indigo's Swedish and
U.S. counsel reviewed the terms and conditions of the combination agreement as
well as the agreements that were to be entered into by the controlling
shareholders, including the share exchange agreement, the share purchase
agreement and the option agreement. Representatives of Bear Stearns summarized
and reviewed their financial analysis of the proposed transaction and
delivered Bear Stearns' opinion that, as of November 9, 1999, the $13.00 per
share in cash to be received by the holders of Indigo shares in the offer was
fair, from a financial point of view, to such holders, other than Indigo's
controlling shareholders. Indigo's board of directors then discussed the
merits of the proposed combination agreement and offer. At the conclusion of
this discussion, Mr. Evans informed the board that there were outstanding
issues relating to the terms of employment that were being offered by AerFi to
Indigo's key management employees and requested that the board allow him an
additional day to continue to negotiate such terms prior to making a final
decision on the proposal. The members of the board agreed to allow Mr. Evans
an additional day to negotiate such terms and accordingly the board meeting
was adjourned until November 10, 1999.
<PAGE>
On November 10, 1999, Indigo's board of directors reconvened its special
telephonic meeting. Mr. Evans informed the board that Indigo's key management
employees were satisfied with the terms of their proposed employment
arrangements. Following a brief discussion on the terms of the combination
agreement and the offer, Indigo's board of directors unanimously approved that
Indigo enter into the combination agreement, determined that the combination
agreement and the offer are fair to and in the best interests of the holders
of Indigo shares and recommended that the shareholders of Indigo, other than
the controlling shareholders, accept the offer and tender their Indigo shares
pursuant to the offer.
On November 10, 1999, AerFi's board of directors met and reviewed the
terms and conditions of the combination agreement, the offer, the share
exchange agreement, the share purchase agreement and all related agreements.
Following such review AerFi's board of directors unanimously approved the
offer and AerFi's entry into the combination agreement, the share exchange
agreement, the share purchase agreement and all related agreements.
The combination agreement, the share exchange agreement, the share
purchase agreement and the other related agreements were signed on November
11, 1999.
Recommendation of Indigo's Board of Directors; Fairness of the Offer
(a) Recommendation of Indigo's Board of Directors.
AT A MEETING ON NOVEMBER 10, 1999, INDIGO'S BOARD OF DIRECTORS UNANIMOUSLY
APPROVED THE COMBINATION AGREEMENT AND THE OFFER AND DETERMINED THAT THE
COMBINATION AGREEMENT AND THE OFFER ARE FAIR TO YOU AND IN YOUR BEST INTEREST.
THE BOARD RECOMMENDS THAT YOU ACCEPT THE OFFER AND TENDER YOUR SHARES UNDER
THE OFFER.
(b) Reasons for the Recommendation of the Board of Directors.
In making its recommendation to Indigo's shareholders, Indigo's board of
directors considered a number of factors, including, but not limited to, the
following:
(i) the terms and provisions of the combination agreement and the offer;
(ii) discussions with management of Indigo (at board meetings on June 14,
1999, August 5, 1999, November 9, 1999 and November 10, 1999 and at
previous board meetings) relating to Indigo's financial position,
results of operations, business and prospects, including Indigo's
prospects if it were to remain independent;
(iii) the unfavorable treatment in the capital markets for small-cap
commercial finance companies, such as Indigo, which made it difficult
for Indigo to remain independent and obtain on attractive terms the
additional capital necessary to grow its business;
(iv) the results of previous discussions with third parties regarding
potential merger or other business combination transactions with
Indigo;
(v) the trading price of Indigo's shares since its initial public offering
in April 1998, and in particular the fact that over the past 12 months
the shares had traded on the Nasdaq National Market primarily in a
range between $6.00 and $9.00 and the fact that the $13.00 cash tender
offer price represents a premium of approximately 27% over the last
sale price of $10.25 for the Indigo shares on the Nasdaq National
Market on November 9, 1999, the day prior to the meeting of the board
to approve the combination agreement;
(vi) the presentation by Bear Stearns at the November 9, 1999 board
meeting and the oral opinion of Bear Stearns to the effect that, as
of such date, and based on the assumptions made, matters considered
and limits of review as set forth in the opinion, the $13.00 per
Indigo share in cash to be received by the holders of Indigo shares
in the offer was fair, from a financial point of view to such
holders, other than the controlling shareholders. A copy of the
written opinion of Bear Stearns, dated November 11, 1999, which sets
forth the assumptions made, matters considered and certain
limitations on the scope of review undertaken by Bear Stearns, is
attached as Annex A hereto. Shareholders are urged to read the
opinion of Bear Stearns carefully in its entirety;
(vii) the fact that holders of approximately 72.7% of the Indigo shares
were prepared to enter into the related share exchange
<PAGE>
and share purchase agreements;
(viii) the fact that the offer is not conditioned on the availability of
financing; and
(ix) the fact that the combination agreement permits Indigo's board of
directors, in the exercise of its fiduciary duties, to terminate the
combination agreement in favor of a superior alternative acquisition
proposal although such termination would trigger the payment of a fee
to AerFi by Indigo of $5 million and the reimbursement of expenses
incurred by AerFi up to a maximum of $2 million.
Indigo's board of directors recognized that the consummation of the offer
and the combination will deprive Indigo's current public shareholders of the
opportunity to participate in Indigo's future growth prospects and, therefore,
in reaching its conclusion, the board determined that the historical results
of operations and the future prospects of Indigo were adequately reflected in
the $13.00 cash tender offer price per Indigo share. Indigo's board of
directors also considered that although Indigo had in the past held
discussions with third parties regarding possible merger or business
combination transactions, no buyer other than AerFi had indicated an intention
to make a proposal as favorable to Indigo and its shareholders as that in the
offer and related transactions.
In view of the variety of factors considered in connection with its
evaluation of the transaction, Indigo's board did not assign relative weights
to the specific factors considered in reaching its decision.
Considering the above factors, Indigo's board of directors determined that
acceptance of the offer and the tender of Indigo shares pursuant to the offer
would be in the best interest of Indigo's shareholders.
Opinion of Financial Advisor to Indigo's Board of Directors
Indigo engaged Bear Stearns as its financial advisor based on Bear
Stearns' experience and expertise. Bear Stearns is an internationally
recognized investment banking firm that has substantial experience in merger
and acquisition transactions. Bear Stearns, as part of its investment banking
business, is continuously engaged in the valuation of businesses and
securities in connection with mergers and acquisitions, negotiated
underwritings, secondary distributions of listed and unlisted securities,
private placements and valuations for corporate and other purposes.
At the November 9, 1999, meeting of Indigo's board of directors, Bear
Stearns orally delivered its opinion to the effect that, as of the date
thereof, and subject to the assumptions, qualifications and limitations set
forth therein and to delivery of definitive agreements which Bear Stearns
received on November 11, 1999 from Indigo, the cash tender offer was fair,
from a financial point of view, to the holders of Indigo shares, other than
Indigo's controlling shareholders.
On November 11, 1999, Bear Stearns delivered its written opinion. We have
attached as Annex A to this document the full text of Bear Stearns' written
opinion and we urge you to read the opinion in its entirety. This opinion sets
forth the assumptions made, matters considered and qualifications and
limitations on the review undertaken by Bear Stearns and is incorporated
herein by reference. THE SUMMARY OF THE BEAR STEARNS OPINION SET FORTH BELOW
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF THE OPINION
WHICH IS ATTACHED AS ANNEX A TO THIS DOCUMENT.
In reading the discussion of the fairness opinion set forth below, Indigo
shareholders should be aware that Bear Stearns' opinion:
o was provided to the Indigo board of directors for its use and benefit;
o did not address Indigo's underlying business decision to enter into the
combination agreement;
o did not constitute a recommendation to the Indigo board of directors in
connection with the combination agreement or the offer;
o did not address the consideration to be received by Indigo's controlling
shareholders; and
o does not constitute a recommendation to any Indigo shareholder as to
whether to accept the offer and tender shares.
Certain shareholders of Indigo have entered into agreements simultaneously
with the execution of the combination agreement pursuant to which, among other
things, such shareholders have agreed to sell a portion of their shares for
the same per share consideration as the offer and will exchange their
remaining Indigo shares for AerFi ordinary shares. Although Bear Stearns
evaluated
<PAGE>
the fairness, from a financial point of view, of the cash tender offer to
the public shareholders of Indigo, the terms and conditions of the offer
itself were determined by AerFi and Indigo through arm's-length negotiations.
Bear Stearns provided advice to Indigo during the course of such negotiations.
Indigo did not provide specific instructions to, or place any limitations on,
Bear Stearns with respect to the procedures to be followed or factors to be
considered by it in performing its analyses or providing its opinion.
In the course of performing its review and analyses for rendering this
opinion, Bear Stearns has:
(i) reviewed the combination agreement, the share exchange agreement,
the share purchase agreement and the option agreement;
(ii) reviewed Indigo's Annual Report on Form 20-F for the year ended
December 31, 1998 and its Quarterly Reports on Form 6-K for the periods
ended March 31, 1999, June 30, 1999 and September 30, 1999;
(iii) reviewed Indigo's Registration Statement on Form F-1 filed April
7, 1998;
(iv) reviewed certain operating and financial information, including
budgets and estimates, provided to Bear Stearns by Indigo's management
relating to Indigo's businesses and prospects;
(v) met with certain members of Indigo's senior management to discuss
Indigo's business, operations, historical and projected financial results
and future prospects;
(vi) reviewed the historical prices, valuation parameters and trading
volumes of the common shares of Indigo;
(vii) reviewed certain publicly available financial data, stock market
performance data and valuation parameters of companies which Bear Stearns
deemed generally comparable to Indigo;
(viii) reviewed the terms of recent acquisitions of companies which
Bear Stearns deemed generally comparable to Indigo and the combination;
and
(ix) conducted such other studies, analyses, inquiries and
investigations as Bear Stearns deemed appropriate.
Bear Stearns has relied upon and assumed, without independent
verification, the accuracy and completeness of the financial and other
information, including without limitation, the budgets and estimates provided
to Bear Stearns by Indigo. Bear Stearns has assumed, without independent
verification, that the budgets and estimates have been reasonably prepared on
bases reflecting the best currently available estimates and judgments of the
senior management of Indigo as to their expected future performance. Bear
Stearns has also relied upon the current and future estimates of aircraft
values as published in the AVITAS BlueBook of Jet Aircraft Values and
adjusted, as appropriate, by Indigo management. Bear Stearns has not assumed
any responsibility for the independent verification of any such information or
of the budgets and estimates provided to it, and has further relied upon the
assurances of the senior management of Indigo that they are unaware of any
facts that would make the information and budgets and estimates provided to
Bear Stearns incomplete or misleading.
In arriving at its opinion, Bear Stearns relied on the information set
forth above and did not perform or obtain any independent appraisal of the
assets or liabilities of Indigo and AerFi, nor was Bear Stearns furnished with
any such appraisals. Bear Stearns assumed with Indigo's consent that the offer
will be conducted in accordance with the terms described in the combination
agreement, without the waiver of any material condition and with all the
necessary material consents and approvals having been obtained without any
limitations, restrictions, conditions, amendments or modifications that
collectively would be material to Bear Stearns' analysis. Bear Stearns'
opinion is necessarily based on economic, market and other conditions, and the
information made available to Bear Stearns, as they exist and can be
evaluated, as of the date of the opinion.
The following is a brief summary of the material valuation and financial
and comparative analyses considered by Bear Stearns in connection with the
rendering of the Bear Stearns opinion. This summary does not purport to be a
complete description of the analyses underlying the Bear Stearns opinion and
is qualified in its entirety by reference to the full text of Bear Stearns'
opinion.
In performing its analysis, Bear Stearns made numerous assumptions with
respect to industry performance, general business, economic, market and
financial conditions and other matters, many of which are beyond the control
of Bear Stearns, AerFi and Indigo. Any estimates contained in the analysis
performed by Bear Stearns are not necessarily indicative of actual values or
future results,
<PAGE>
which may be significantly more or less favorable than suggested by this
analysis. Additionally, estimates of the value of businesses or securities do
not purport to be appraisals or to reflect the prices at which such businesses
or securities may actually be sold. Accordingly, these analyses and estimates
are inherently subject to substantial uncertainty. In addition, as described
above, Bear Stearns' opinion was among several factors taken into
consideration by Indigo's board of directors in making its determination to
approve the offer and the combination agreement.
Bear Stearns' conclusion that the consideration to be received by the
public shareholders is fair from a financial point of view was based on the
following analyses:
1) Comparable Companies Analysis. The company that Bear Stearns believed
to be most comparable to Indigo is International Aircraft Investors or IAIS, a
similar small-capitalization commercial finance company engaged in leasing
aircraft. Based on closing prices as of November 4, 1999, IAIS was trading at
a multiple of tangible book of 0.8x, a multiple of most recent quarter's
annualized earnings before remarketing income of 7.3x, a multiple of estimated
1999 earnings of 7.9x and multiple of estimated 2000 earnings of 6.8x. The
$13.00 cash tender offer price for the Indigo shares implies transaction
multiples of 1.4x Indigo's book value, 18.2x Indigo's most recent quarter's
earnings annualized before remarketing income, 10.2x Indigo's estimated 1999
earnings and 9.5x Indigo's estimated 2000 earnings.
IAAB
IAIS (Offer price)
---- -------------
Price/Tangible Book.......... 0.8x 1.4x
Price/MRQA before Remarketing 7.3x 18.2x
Price/1999E EPS.............. 7.9x 10.2x
Price/2000E EPS.............. 6.8x 9.5x
Bear Stearns also reviewed the trading multiples of a group of other
transportation related commercial finance companies (comprised of Willis Lease
Finance Corp., XTRA Corp., Rollins Truck Leasing Corp., and Interpool Inc.):
IAAB
Min Max Median (Offer price)
---- ----- ------ ------------
Price/Tangible Book 0.8x 1.9x 1.2x 1.4x
Price/1999E EPS.... 7.3x 10.3x 10.0x 10.2x
Price/2000E EPS.... 4.6x 9.0x 6.7x 9.5x
Bear Stearns also reviewed the trading multiples of a group of other
non-investment grade commercial finance companies (comprised of LINC Capital,
DVI, and Microfinancial):
IAAB
Min Max Median (Offer price)
---- ---- ------ ------------
Price/Tangible Book 0.8x 2.2x 1.2x 1.4x
Price/1999E EPS.... 7.8x 9.8x 8.8x 10.2x
Price/2000E EPS.... 5.9x 8.3x 6.4x 9.5x
2) Discounted Cash Flow Analysis. Bear Stearns performed two discounted
cash flow analyses on Indigo: (i) a portfolio run-off scenario and (ii) a
going concern scenario.
o Portfolio Run-Off Scenario. The portfolio run-off scenario assumes that
Indigo liquidates its existing portfolio of aircraft by selling each
airplane as it comes off lease and does not originate any new leases
other than existing commitments. Free cash would be distributed to
Indigo's shareholders based on leverage assumptions. For residual
values of the aircraft, Bear Stearns used values published in the
AVITAS BlueBook of Jet Aircraft Values which were provided to it by
Indigo management. Bear Stearns used discount rates of 14.7%-18.7% and
looked at residual values between 95% and 105% of the AVITAS base
values. This provided a range of $8.04 to $11.66 and a midpoint of
$9.75 (based on a 16.7% discount rate).
o Going Concern Scenario -- Base Case. The base case going concern
scenario assumes that Indigo re-leases each aircraft as it comes off
lease and utilizes free cash to purchase new aircraft. Using a range
of discount rates of 14.7%-18.7%, Bear Stearns calculated a terminal
value for Indigo based on multiples of book value (0.85x-1.45x) and
earnings (7.0x-10.0x) and discounted these values back to December 31,
1999. Using terminal value based on a multiple to book value, this
resulted in values ranging from $6.98-$12.75 and a midpoint of $8.65
(assuming a terminal book value multiple of 1.00x and a discount rate
of 16.7%). Using a terminal value based on a multiple of earnings,
this resulted in a range of values from $7.42-$11.75 and a midpoint of
$8.92 (assuming a terminal earnings multiple of 8.0x and a discount
rate of 16.7%).
<PAGE>
o Going Concern Scenario -- Releverage Case. The releverage case going
concern scenario assumes that Indigo would be able to access the
capital markets and releverage its balance sheet. The proceeds would
be invested in new aircraft. Bear Stearns believed that case was
aggressive because the ability of small-cap finance companies to
access the financial markets has been and continues to be limited.
Using a range of discount rates of 14.7%-18.7%, Bear Stearns
calculated a terminal value for Indigo based on multiples of book
value (0.85x-1.45x) and earnings (7.0x-10.0x) and discounted these
values back to December 31, 1999. Using a terminal value based on a
multiple of book value, this resulted in values ranging from
$7.13-$13.48 and a midpoint of $8.83 (assuming a terminal book value
multiple of 1.00x and a discount rate of 16.7%). Using a terminal
value based on a multiple of earnings, this resulted in a range of
values from $8.34-$13.20 and a midpoint of $10.03 (assuming a terminal
earnings multiple of 8.0x and a discount rate of 16.7%).
3) Net Asset Value. Bear Stearns computed an adjusted book value per
Indigo share of $8.73 using 2000 AVITAS BlueBook values and $11.66 using 1999
AVITAS BlueBook values, as directed by Indigo management, as estimates of
current fair market value for Indigo's aircraft. Due to the leveraged nature
of Indigo's balance sheet, a small change in the fair market value of the
aircraft can have a significant impact on adjusted book value. For example, an
assumed value equal to 95% of AVITAS BlueBook base values implies an adjusted
book value per Indigo share of $6.46 based on year 2000 values and $9.24 based
on year 1999 values, while an assumed value equal to 105% of AVITAS BlueBook
base values implies an adjusted book value per Indigo share of $11.01 based on
year 2000 values and $14.08 based on year 1999 values.
4) Other Issues. In addition to the quantitative analysis above, Bear
Stearns considered the following issues that Indigo would face as a going
concern.
o Access to capital. In order to grow its balance sheet and earnings,
Indigo will be required to secure additional sources of funds. This
has become increasingly difficult for small capitalization
non-investment grade finance companies.
o Credit risks. The airline industry tends to be cyclical and Indigo, as
a monoline commercial finance lender, would be impacted if the credit
quality of its lessees deteriorates.
o Residual risk. A significant portion of Indigo's value is derived from
the value of the aircraft in its portfolio. Any decrease in the demand
for narrowbody airplanes could reduce Indigo's true book value by tens
of millions of dollars.
o Limited float. Indigo's public float is approximately 3.0 million shares
or approximately $27 million.
The preparation of a fairness opinion is a complex process and involves
various judgments and determinations as to the most appropriate and relevant
assumptions and financial analyses and the application of these methods to the
particular circumstances involved. The opinions are therefore not readily
susceptible to partial analysis or summary description, and taking portions of
the analyses set out above, without considering the analysis as a whole,
would, in the view of Bear Stearns, create an incomplete and misleading
picture of the processes underlying the analyses considered in rendering its
opinion. Bear Stearns did not form an opinion as to whether any individual
analysis or factor (positive or negative), considered in isolation, supported
or failed to support its opinion. In arriving at its opinion, Bear Stearns
considered the results of its separate analyses and did not attribute
particular weight to any one analysis or factor. The analyses performed by
Bear Stearns, particularly those based on estimates and budgets, are not
necessarily indicative of actual values or actual future results, which may be
significantly more or less favorable than suggested by these analyses. These
analyses were prepared solely as part of the Bear Stearns analysis of the
fairness, from a financial point of view, of the exchange ratio to the
shareholders of Indigo, other than Indigo's controlling shareholders.
The engagement letter dated June 25, 1999 between Indigo and Bear Stearns
provides for an initial cash fee of $100,000. If the offer is not consummated
by January 15, 2000, Bear Stearns will receive a cash fee of $100,000 upon
termination. Upon consummation of the offer, Indigo will pay Bear Stearns a
cash fee of $700,000, against which any fairness opinion fees shall be
credited. Indigo agreed to pay Bear Stearns a cash fee of $400,000 at the time
the fairness opinion was rendered. In addition, Indigo has agreed to reimburse
Bear Stearns for all reasonable out-of-pocket expenses.
Bear Stearns has not previously been engaged by Indigo to provide
investment banking or financial advisory services. In the ordinary course of
business, Bear Stearns may actively trade the equity securities of Indigo for
its own account and for the account of its customers and, accordingly, may at
any time hold a long or short position in these securities.
Position of AerFi and AerFi Sverige Regarding Fairness of the Offer
<PAGE>
We believe that the consideration to be received by Indigo's shareholders
under the offer is fair to those shareholders, other than Indigo's controlling
shareholders. We base our belief on the following facts:
o that Indigo's board of directors concluded that the combination
agreement and the offer are fair to you and in your best interests;
o notwithstanding the fact that Bear Stearns' opinion was addressed to
Indigo's board of directors and that we are not entitled to rely on
the opinion, the fact that Indigo's board of directors received an
opinion from Bear Stearns that, as of the date of the opinion and
based on and subject to the assumptions and qualifications stated in
the opinion, the consideration to be paid in the offer is fair, from a
financial point of view, to the holders of Indigo shares other than
Indigo's controlling shareholders;
o that the offer, at a price of $13.00 per share constitutes a 14.9%
premium over the closing market price of the Indigo shares on November
10, 1999, the business day immediately before the date on which the
offer was announced and a 53.4% premium over the average closing
market price of the Indigo shares in the three months preceding that
date; and
o there has been little liquidity for the Indigo shares in recent months
and, given the relatively small capitalization of Indigo, there may be
limited liquidity for the Indigo shares in the future. An investment
in the Indigo shares remains subject to significant risks.
We did not find it practicable to assign, nor did we assign, relative
weights to the individual factors considered in reaching our conclusion as to
fairness. Because of the nature of Indigo's business, we did not consider net
book value or liquidation value to be relevant indicators of the value of the
Indigo shares.
Purpose and Structure of the Offer; Reasons of AerFi for the Offer
The purpose of the offer, being made under a combination agreement dated
November 11, 1999 among Indigo, AerFi and AerFi Sverige, is for AerFi Sverige
to acquire all of the outstanding shares in Indigo. The acquisition will occur
as a result of the following:
o the share exchange agreement with certain controlling shareholders of
Indigo under which they have agreed to exchange 5,891,670, or 52.2%,
of the issued and outstanding Indigo shares for AerFi's ordinary
shares, irrespective of the result of the offer;
o the share purchase agreement with certain controlling shareholders of
Indigo under which they have agreed to sell to AerFi Sverige
2,305,898, or 20.5%, of the issued and outstanding Indigo shares, for
$13.00 per share in cash, irrespective of the result of the offer;
o the offer; and
o a compulsory acquisition under the Swedish Companies Act if AerFi
Sverige owns more than 90% of the voting rights and more than 90% of
the outstanding Indigo shares following the unconditional time.
Upon consummation of the offer and, if necessary, the compulsory
acquisition, Indigo will become a wholly-owned subsidiary of AerFi Sverige,
which in turn is an indirect wholly-owned subsidiary of AerFi. The offer for
the Indigo shares has been structured as a cash tender offer to (i) effect a
prompt and orderly transfer from Indigo's public shareholders to AerFi Sverige
of the Indigo shares that will not be acquired directly from the controlling
shareholders of Indigo in separate share exchange and share purchase
agreements and (ii) provide you with cash for all of your Indigo shares.
Under the Swedish Companies Act, Indigo's board of directors must approve
Indigo's entry into the combination agreement. Indigo's board of directors has
approved Indigo's entry into the combination agreement.
We have decided to acquire Indigo at this time to implement AerFi's
business strategy of growth through acquisition of used new technology
aircraft without significant new aircraft order commitments.
Indigo's management strengths are complementary to ours: Indigo has strong
airline marketing and technical skills, while AerFi has strong financial and
capital market skills.
The combination enables AerFi to become a "full service" aircraft leasing
organization with the financial ability and management
<PAGE>
resources to buy and sell aircraft and manage and service any future aircraft
it acquires, in addition to the existing Indigo aircraft and, upon termination
in October 2001 of third party servicing arrangements, AerFi's existing
aircraft.
Both companies will benefit from the increased scale of the combined
businesses.
The combination provides opportunities for cost savings through reduced
funding costs by providing access to securitization financing for the existing
Indigo aircraft, realizing certain tax synergies through the management of the
combined aircraft fleets and the potential replacement of existing third party
aircraft servicers.
Plans for Indigo after the Offer
Upon completion of the offer, if necessary, we intend to effect a
compulsory acquisition under the Swedish Companies Act. See "Special Factors
- -- The Combination Agreement".
As promptly as practicable following the unconditional time, Indigo and
its directors will use their best efforts to appoint AerFi's designees to
Indigo's board of directors and obtain the resignation of those incumbent
directors not designated by AerFi.
Following completion of the offer, and subject to any restrictions
contained within applicable financing arrangements, we may seek to sell or
transfer a material amount of Indigo's aircraft assets to AerCo Limited, a
bankruptcy- remote, special purpose company in which we hold certain
subordinated debt securities and all of the residual economic interest, or to
other securitization vehicles. We do not hold the share capital of AerCo
Limited and AerCo Limited is governed by a board of directors comprised
largely of persons independent from us.
Except as otherwise described in this document and except for the
transactions contemplated by the combination agreement, we have no current
plans or proposals which relate to or would result in:
o an extraordinary corporate transaction, such as a merger, reorganization
or liquidation involving Indigo;
o any change in Indigo's present management or any change in any material
term of the employment contract of any executive officer;
o any material change in Indigo's present dividend rate or policy or
indebtedness or capitalization; or
o any other material change in Indigo's corporate structure or business.
Nevertheless, we may initiate a review of Indigo and its assets, corporate
structure, capitalization, operations, properties, policies, management and
personnel to determine what changes, if any, would be desirable, following the
combination, to best organize and coordinate our activities with Indigo's
activities.
Rights of Shareholders in the Offer
You will not have dissenter's rights as a result of the offer. If you do
not tender your Indigo shares under the offer, and assuming AerFi Sverige owns
more than 90% of the voting rights and more than 90% of the outstanding Indigo
shares following the unconditional time, we intend to acquire your Indigo
shares under the compulsory acquisition as described below provided we acquire
more than 90% of the voting rights and more than 90% of the outstanding Indigo
shares.
Under the Swedish Companies Act of 1975, minority shareholders have
certain rights to protect them from detrimental acts of the majority. A
shareholder or a group of shareholders holding one-tenth of all shares or one
third of the shares represented at the general meeting may request the
appointment of an additional auditor by the county administrative board (Sw.
Iansstyrelsen).
Further, a shareholder or a group of shareholders holding at least 10% of
the shares of a company have the right to request that an extraordinary
general meeting be convened. In addition, each individual shareholder may
request an item to be placed on the agenda for a general meeting.
As a rule, the board of directors or other representatives of a Swedish
limited liability company or a voting majority at a shareholders meeting may
not enter into transactions or take other actions which are likely to give an
undue advantage to a
<PAGE>
shareholder or a third party to the detriment of the company or other
shareholders, unless expressly provided in the Swedish Companies Act.
If AerFi Sverige owns more than 90% of the voting rights and more than 90%
of the outstanding Indigo shares after the unconditional time, AerFi Sverige
intends to commence a compulsory acquisition of the remaining Indigo shares
under the Swedish Companies Act. In such circumstances, the Swedish Companies
Act also allows a holder of Indigo shares who has not accepted the offer to
demand the compulsory acquisition of his Indigo shares by AerFi Sverige. The
price to be paid in the compulsory acquisition will be determined under the
Swedish Companies Act and, although it is usually equal to the offer price, it
may be higher or lower than the offer price.
If the process of compulsory acquisition is initiated and if AerFi Sverige
and the remaining minority shareholders in Indigo cannot agree on the price to
be paid, an arbitration tribunal will be determined to establish the price.
After the arbitration tribunal has been constituted and either the right of
compulsory acquisition is undisputed or a decision on the right of compulsory
acquisition has become final, AerFi Sverige may secure title to the remaining
Indigo shares by providing security for its obligation to pay the compulsory
acquisition price and interest when determined by the arbitration tribunal and
by filing a request with the arbitrators to approve the security offered by
AerFi Sverige for payment by it of the compulsory acquisition price. Once the
arbitrators approve the security offered, the ownership of Indigo shares will
transfer immediately to AerFi Sverige. The compulsory acquisition price,
including interest payable from the date that compulsory acquisition
proceedings are initiated, will then be determined by the arbitrators. The
parties may appeal against the arbitrators' award to the district court in
Malmo, Sweden. The process of determining the compulsory acquisition price and
interest may involve legal submissions from the various parties and may take
considerable time to complete.
This summary of your rights is not a complete statement of the procedures
that you should follow to exercise your rights under the Swedish Companies
Act. The applicable provisions of the Swedish Companies Act appears as Exhibit
(e)(1) to the Schedule 13E-3.
The Combination Agreement
The following is a summary of the material provisions of the combination
agreement, a copy of which is filed as Exhibit (c)(1) to the Schedule 14D-1.
The summary is qualified in its entirety by reference to the combination
agreement, which is incorporated herein by reference.
You are urged to read the combination agreement in its entirety.
The Offer
AerFi Sverige agreed to commence the offer no later than five business
days after the combination agreement is announced. AerFi Sverige only has to
accept for payment and pay for Indigo shares tendered under the offer if
certain conditions that are described in "The Tender Offer -- Certain
Conditions of the Offer" are satisfied or waived.
AerFi Sverige expressly reserves the right to waive the conditions to the
offer and to make any change in the terms or conditions of the offer. However,
AerFi Sverige may not without the consent of Indigo:
o change the form of consideration to be paid;
o decrease the price per Indigo share or the number of Indigo shares
sought in the offer;
o add conditions to the offer in addition to those listed in "The Tender
Offer -- Certain Conditions of the Offer";
o establish a minimum number of Indigo shares that must be tendered in the
offer;
o otherwise amend the terms or conditions of the offer in a manner that,
in Indigo's reasonable judgment, is adverse to Indigo or holders of
Indigo shares.
However, AerFi Sverige may, without the consent of Indigo, extend the
offer:
o if any condition to the offer shall not have been satisfied or waived
when the offer expires, until those conditions are satisfied or
waived; or
<PAGE>
o for any period required by any rule, regulation or interpretation of the
Securities and Exchange Commission or by applicable law; or
o on one or more occasions for an aggregate period of not more than 20
business days if, when the offer expires the number of Indigo shares
validly tendered and not withdrawn do not, together with the Indigo
shares exchanged/sold to us and AerFi Sverige by controlling
shareholders of Indigo pursuant to the share exchange and share
purchase agreements, represent more than 90% of the voting rights and
more than 90% of the Indigo shares outstanding.
As soon as practicable after the conditions described under "The Tender
Offer -- Conditions to the Offer" are satisfied or waived and in compliance
with its obligations under the Securities Exchange Act, AerFi Sverige shall
accept all validly tendered Indigo shares for payment that have not been
withdrawn. If any of the conditions listed in paragraph (1), subclauses (1),
(2), (3) and (4) of paragraph (2)(a) and paragraph 2(b) (without the reference
to subclause (5) of paragraph 2(a)) under "The Tender Offer -- Certain
Conditions of the Offer" shall not have been satisfied when the offer expires,
and AerFi Sverige and Indigo reasonably believe that that condition can be
satisfied, AerFi Sverige shall extend the offer from time to time. AerFi
Sverige shall not, however, be required to extend the offer beyond March 31,
2000.
The Compulsory Acquisition
If AerFi Sverige owns more than 90% of the voting rights and more than 90%
of the outstanding Indigo shares after the unconditional time, AerFi Sverige
intends to commence a compulsory acquisition of the remaining Indigo shares
under the Swedish Companies Act.
Stock Options
Each option or warrant to purchase Indigo shares from Indigo that is
outstanding under any of Indigo's employee stock option or compensation plans
or arrangements will be canceled. Holders of options or warrants will, at the
election of the holder, either receive cash or options to purchase AerFi's
ordinary shares.
Representations and Warranties
We, AerFi Sverige and Indigo have given various customary representations
and warranties, including the following:
o Indigo, AerFi Sverige and we have represented as to our and their
corporate status, the authorization and the enforceability of the
combination agreement against each of us and them, the information to
be provided by each of us and them for inclusion in the U.S.
Securities and Exchange Commission filings related to the offer and
the combination, finders' fees and noncontravention,
o We have represented as to the sources of financing for the combination
and the offer; and
o Indigo has represented as to its capitalization, its subsidiaries and
equity investments, certain information about its aircraft and leases,
third party contracts, indebtedness, the accuracy of its financial
statements and filings with the U.S. Securities and Exchange
Commission, compliance with laws, the absence of undisclosed material
liabilities, the absence of certain changes or events concerning its
business from December 31, 1998 to the date of the combination
agreement, the absence of material litigation, certain tax matters,
certain employee benefit and pension plan matters, certain
environmental matters, assets, certain labor matters, insurance, the
inapplicability of any anti-takeover statutes, year 2000 compliance
and the identification of and absence of material adverse changes.
The representations and warranties contained in the combination agreement
will only be in effect until the unconditional time.
Covenants
We, AerFi Sverige and Indigo have given various customary covenants. Below
is a description of certain of these covenants:
Conduct of Business. Indigo agreed that, from November 11, 1999 until the
unconditional time, it will conduct its businesses as in the ordinary course
consistent with past practice and will preserve its business organizations and
relationships with third parties intact
<PAGE>
and keep available the services of its present officers and employees.
Specifically, Indigo will not, except as otherwise permitted by the
combination agreement or if we consent in writing:
o adopt or propose any change in its organizational documents;
o merge or consolidate with any other person or acquire a material
amount of stock or assets of any other person;
o acquire any aircraft other than under contracts or commitments in
effect as of November 11, 1999;
o sell or otherwise dispose of any aircraft or any material subsidiary
or material amount of assets, securities or property, except under
existing contracts or commitments and in the ordinary course
consistent with past practice;
o take any action that would make any of its representations and
warranties under the combination agreement inaccurate at or as of any
time before the unconditional time; or
o omit to take any action necessary to prevent any of its
representations or warranties from being inaccurate at any time.
However, nothing described in the preceding paragraph shall prevent Indigo
from leasing, financing or refinancing its aircraft or any interest in its
aircraft in the ordinary course of business consistent with past practice.
Access to Information. From November 11, 1999 until the unconditional
time and subject to applicable law Indigo agreed to:
o give us full access to Indigo's offices, properties, books and records;
o furnish us all financial and operating data and other information
that they may reasonably request; and
o instruct its employees, counsel, financial advisors, auditors and
other authorized representatives to cooperate with us in our
investigation of Indigo.
No Solicitation; Other Offers. Indigo agreed that it will:
o not solicit or encourage the submission of an acquisition proposal;
o not engage in discussions or negotiations with, or disclose any
nonpublic information about Indigo or give access to its properties,
books or records to any person who makes, may be considering making,
or has made, an acquisition proposal;
o not grant any waiver or release under any standstill or similar
agreement relating to any class of its equity securities; or
o notify us promptly after receipt of any acquisition proposal (or
indication thereof) or any information request related to an
acquisition proposal.
However, this covenant does not prohibit Indigo from engaging in
substantive discussions with, or furnishing nonpublic information to, any
person who delivers an acquisition proposal for at least a majority of the
Indigo shares which Indigo's board of directors determines in good faith by a
majority vote to be superior to our proposal pursuant to the combination
agreement, if:
o Indigo has complied with the covenant above;
o Indigo's board of directors determines in good faith by a majority
vote, after consultation with Indigo's outside legal counsel, that it
should, in its reasonable judgment, engage in discussions or furnish
nonpublic information in order to comply with its fiduciary duties to
Indigo under applicable law;
o the person who delivers the superior acquisition proposal executes a
confidentiality agreement with terms at least as favorable to Indigo
as those contained in the confidentiality agreement with us which was
superseded by the combination agreement; and
o Indigo notifies us about its intentions to engage in discussions or
furnish nonpublic information.
<PAGE>
Indigo further agreed to terminate all activities, discussions and
negotiations with any persons conducted before November 11, 1999, relating to
any acquisition proposal. However nothing prevents Indigo's board of directors
from complying with Rule 14e-2 under the Exchange Act or the Swedish Companies
Act regarding any acquisition proposal.
Indigo's board of directors may withdraw, or modify in a manner adverse to
us, its recommendation to holders of Indigo shares if:
o Indigo has complied with its obligations to us described above;
o a superior acquisition proposal is pending at the time the board of
directors determines to take that action;
o the board of directors determines in good faith by a majority vote,
after consultation with Indigo's outside legal counsel, that it
should, in its reasonable judgment, take that action to comply with
its fiduciary duties to Indigo under applicable law; and
o Indigo notifies us that it intends to take that action and identifies
the person making, and the material terms and conditions of, that
superior acquisition proposal.
Indemnification and Insurance of Indigo's Directors and Officers. We
agreed to indemnify Indigo's directors, officers or employees against specific
claims asserted or made within a period of five years after the unconditional
time. We have also agreed to pay all reasonable expenses incurred by or on
behalf of any indemnified party in defending against any claim promptly after
statements for those reasonable expenses are received, so long as:
o payment is permitted under applicable law; and
o the relevant indemnified party agrees to reimburse us for the payment
of any expenses if it is ultimately determined that that person is not
entitled to indemnification.
For a period of five years after the unconditional time, we shall cause
Indigo to maintain the officers' and directors' liability insurance covering
persons who are presently covered by Indigo's officers' and directors'
liability insurance policies, for acts or omissions occurring at or before the
unconditional time on terms at least as favorable as those in effect on the
date of the combination agreement or at the unconditional time. However, AerFi
will not be required to expend in any one year an amount in excess of 150% of
the annual premiums currently paid by Indigo for that insurance.
Conditions of the Offer
See "The Tender Offer -- Certain Conditions of the Offer".
Termination
The combination agreement may be terminated before the unconditional time
of the offer as follows:
(1) by mutual written consent of Indigo, AerFi Sverige and us;
(2) by either Indigo or us if:
(a) the offer is not consummated by March 31, 2000. (This right is not
available to any party whose breach of any provision of the combination
agreement has been the cause of, or resulted in, the failure of the offer
to be consummated by that time.); or
(b) the acceptance and payment for the Indigo shares under the offer
is prohibited or AerFi Sverige is enjoined from accepting and paying for
the Indigo shares;
(3) by us and AerFi Sverige, if, before acceptance for payment of the
Indigo shares under the offer:
(a) any person or group (other than AerFi Sverige, any of its
affiliates or any institutional investor) acquires or proposes to acquire,
after November 11, 1999 beneficial ownership of more than 10% of the
Indigo shares or more than 10% of the assets of Indigo, or is granted any
option, right or warrant, conditional or otherwise, to acquire beneficial
ownership of those Indigo shares
<PAGE>
or assets (this termination right shall not be implicated solely by
virtue of the Indigo shares beneficially owned by any Indigo
shareholder who, on November 11, 1999, already beneficially owned more
than 10% of the outstanding Indigo shares.);
(b) any person or group (other than AerFi Sverige or any of its
affiliates) makes or publicly announces an intention to make, a tender or
exchange offer for at least 10% of the outstanding Indigo shares or
publicly proposes to enter into a definitive agreement or an agreement in
principle with Indigo regarding an acquisition proposal;
(c) (1) Indigo's board of directors withdraws or modifies in a manner
adverse to AerFi Sverige, its approval or recommendation of the
combination agreement, the offer or the combination, or recommends or
enters into, or publicly announces its intention to enter into, an
agreement or an agreement in principle for an acquisition proposal (or
shall have resolved to do any of the foregoing); (2) there is a material
breach of the provisions described in "-- Covenants -- No Solicitation;
Other Offers"; or (3) Indigo enters into a definitive agreement or an
agreement in principle with a third party regarding an acquisition
proposal;
(d) (1) any of Indigo's representations or warranties in the
combination agreement that is (A) qualified by materiality or material
adverse effect or any similar standard or qualification, was not true and
correct when made or at any time before the acceptance for purchase of the
Indigo shares or (B) not so qualified, was true and correct in all
material respects when made or at any time before the acceptance for
purchase of the Indigo shares; or (2) Indigo breaches or fails to perform
any of its obligations under the combination agreement, and in the case of
either clause (1) or (2), we reasonably determine, after five Swedish
business days' notice by us to Indigo, that the inaccuracy, breach or
failure is incapable of being cured by March 31, 2000; or
(e) AerFi Sverige terminates the offer because of any of the events
described in "The Tender Offer -- Conditions to the Offer"; or
(4) by Indigo if:
(a) AerFi Sverige terminates the offer or allows the offer to expire
without either the purchase of any Indigo shares, or an extension of, the
offer, other than because of any of the events described in "The Tender
Offer -- Conditions to the Offer";
(b) before the purchase of Indigo shares under the offer, a person or
group makes a superior proposal and Indigo's board of directors terminates
the combination agreement and enters into a binding agreement concerning
that acquisition proposal; provided that Indigo may not exercise this
right to terminate, and may not enter into a binding written agreement
regarding that acquisition proposal, unless:
(1) Indigo notifies us at least five business days in advance that
Indigo's board of directors has authorized and intends to terminate the
combination agreement, specifying the material terms and conditions of the
acquisition proposal,
(2) We do not make, within five business days of receiving that
notice, an offer such that a majority of Indigo's board of directors
determines that (A) the foregoing acquisition proposal no longer is superior
to our proposal or (B) its fiduciary duties to Indigo no longer dictate that
it should, in its reasonable judgment, terminate the combination agreement,
and
(3) on or before that termination, Indigo pays us a $5 million termination
fee.
In connection with the foregoing, Indigo agreed that it will (1) not
enter into a binding agreement with respect to any acquisition proposal
until at least the sixth business day after it notifies us, (2) negotiate
in good faith with us, and consider in good faith any offer made by us,
during that period and (3) notify us promptly if it changes its intention
to enter into such binding agreement; or
(c) (1) any of our representations or warranties made in the
combination agreement that is (A) qualified by materiality or material
adverse effect or any similar standard or qualification, was not true and
correct when made or at any time before the acceptance for purchase of the
Indigo shares or (B) not so qualified, was not true and correct in all
material respects when made or at any time before the acceptance for
purchase of the Indigo shares, or
(2) AerFi breaches or fails to perform any of its obligations under
the combination agreement, and in the case of either clause (1) or (2),
Indigo reasonably determines, after five Swedish business days' notice by
Indigo to AerFi, that that inaccuracy, breach or failure is incapable of
being cured by March 31, 2000.
<PAGE>
Certain Fees and Expenses
Indigo has agreed to pay us a termination fee of $5 million if:
o we terminate the combination agreement under clause (c) of paragraph (3)
under "-- Termination" above; or
o Indigo terminates the combination agreement under clause (b) of
paragraph (4) under "-- Termination" above.
Indigo has agreed to pay us a termination fee of $5 million plus our
documented out-of-pocket costs and expenses (not to exceed $2 million) in
connection with the negotiation, execution, delivery and performance of the
combination agreement and any consideration, investigation, negotiation and
structuring of the transactions contemplated by the combination agreement if:
o we terminate the combination agreement under clause (a) or (b) of
paragraph (3) under "-- Termination" above; and
o before that termination any of the events described in clause (a) or
(b) of paragraph (3) under "-- Termination" above shall have occurred
and concurrently with or within 12 months after that termination, a
third party acquisition event occurs with the party or any of its
affiliates that made the acquisition, offer or public proposal
described in such clauses.
A "third party acquisition event" means (1) the consummation of an
acquisition proposal or series of acquisition proposals that results in (a)
holders of Indigo shares before that transaction, by virtue of their ownership
of those Indigo shares, in the aggregate owning less than 50% of the voting
securities of the entity surviving or resulting from that transaction (or, if
that entity is not its own ultimate parent, then its ultimate parent), (b) the
sale, lease, exchange, transfer or other disposition of at least 50% of the
assets of Indigo and its subsidiaries, taken as a whole or (c) the
acquisition, directly or indirectly, by any person or group (other than the
current Indigo shareholders, but only with respect to the Indigo shares
beneficially owned by them as of the date of the combination agreement) of
beneficial ownership of 50% or more of the Indigo shares (whether by merger,
consolidation, share exchange, business combination, tender or exchange offer
or otherwise) or (2) the entering into by Indigo, certain Indigo shareholders
or any of their respective affiliates of a definitive agreement with respect
to any such transaction.
Indigo has agreed to pay our documented out-of-pocket costs and expenses
(not to exceed $2 million) in connection with the negotiation, execution,
delivery and performance of the combination agreement and any consideration,
investigation, negotiation and structuring of the transactions contemplated by
the combination agreement if:
o if the combination agreement is terminated under clause (c) or (d) of
paragraph (3) or Clause (b) of paragraph (4) under "-- Termination"
above, and
o at the time of that termination AerFi was in compliance with its
obligations under the combination agreement.
We have agreed to pay Indigo a termination fee of $5 million if Indigo
terminates the combination agreement under clause (a) of paragraph (4) under
"-- Termination" above.
We have agreed to pay Indigo its documented out-of-pocket costs and
expenses (not to exceed $2 million) in connection with the negotiation,
execution, delivery and performance of the combination agreement and any
consideration, investigation, negotiation and structuring of the transactions
contemplated by the combination agreement if:
o Indigo terminates the combination agreement under (a) or (c) of
paragraph (4) under "-- Termination" above, and
o at the time of the termination Indigo was in compliance with its
obligations under the combination agreement.
If we or Indigo fail(s) to promptly pay any amount due as described above,
we or Indigo shall also pay any costs and expenses incurred by the other in
connection with a legal action to enforce the combination agreement that
results in a judgment against us or Indigo.
Except as discussed above, all costs and expenses incurred in connection
with the combination agreement will be paid by the party incurring that cost
or expense.
Amendments and Waivers
<PAGE>
The combination agreement may be amended or waived before the
unconditional time if that amendment or waiver is in writing and signed, in
the case of an amendment, by Indigo, AerFi Sverige and us or in the case of a
waiver, by the party against whom the waiver is to be effective.
The Share Exchange Agreement
On November 11, 1999, we entered into a share exchange agreement with
certain of Indigo's shareholders. See also "Interests of Certain Persons in
the Offer -- Beneficial Ownership of the Indigo Shares." This document refers
to these individuals and entities as the exchanging shareholders. Each
exchanging shareholder agreed to:
o transfer and deliver a portion of its Indigo shares to AerFi in exchange
for 3.7 of AerFi's ordinary shares;
o grant all of the consents of that exchanging shareholder that may be
required under the terms and conditions of Indigo's stock option or
compensation plans or arrangements to effect the exchange of the
options and warrants that is contemplated by the combination
agreement.
Each exchanging shareholder also agreed not to:
o grant any proxy or enter into any voting arrangement regarding its
Indigo shares;
o place any encumbrance on or dispose of its Indigo shares or its employee
options except to its affiliates;
o solicit or initiate the acquisition of any interest in the business,
assets or capital stock of Indigo;
o transfer or grant any option to transfer any rights in its AerFi
shares during the six month period following the transfer of the
Indigo shares to AerFi except to certain permitted transferees;
o exercise any registration rights regarding its Indigo shares; and
o disclose any confidential documents and information concerning AerFi
or any of its subsidiaries furnished to that exchanging shareholder in
connection with the share exchange agreement.
Board of Directors and Management
We have agreed that when the share exchange has been consummated, we will:
o appoint Mr. Karl-Axel Granlund and Mr. John Evans to our board of
directors. These appointments will only be in effect until November 1,
2000. We have no obligation after such time to cause any of these
appointments to our board of directors. During the time that Mr.
Granlund serves as a member of our board of directors, he will have
the right to appoint an observer, subject to certain restrictions and
limitations, to attend meetings of AerFi's board of directors on his
behalf. Mr. Granlund has informed us that he intends to appoint Mr.
Geir Stormorken, managing director of Braathen Lease and Aviation Know
How A/S and of Braganza A/S as his observer.
o appoint Mr. John Evans President and Chief Executive Officer of ErgoFi
Inc., our wholly-owned subsidiary.
Representations and Warranties
The share exchange agreement contains various customary representations
and warranties, including the following:
o by us as to our corporate status, the authorization and enforceability
of the share exchange agreement against us, capitalization, the
accuracy of our financial statements, the absence of occurrence of
certain events that would reasonably be expected to have a material
adverse effect on our ability to perform our obligations under the
share exchange agreement, our aircraft fleet and related leases, as to
certain tax matters, and our year 2000 compliant status.
o by each exchanging shareholder as to its valid title to its Indigo
shares, the authorization and enforceability of the share
<PAGE>
exchange agreement against it, the number of Indigo shares owned by
it, its understanding that the AerFi shares to be issued to it will
not be registered under the Securities Act of 1933 and finders' fees.
Certain Conditions to the Share Exchange Agreement
The sale and exchange of Indigo shares will not take place unless the
following conditions are met:
o the expiration or termination of any applicable waiting period under
the Hart-Scott-Rodino Act (the U.S. antitrust legislation);
o compliance with the Irish mergers and takeovers legislation;
o the sale and exchange of shares is not illegal; and
o all necessary filings in relation to the sale and the exchange have been
made.
Our obligation to exchange the Indigo shares for our shares is also
subject to the following conditions:
o all shareholders have performed their obligations under the share
exchange agreement in all material respects;
o the accuracy of Indigo's representations and warranties in the
combination agreement;
o the accuracy of the shareholders' representations and warranties in
the share exchange agreement;
o there is no law or proceeding which interferes, or could interfere,
with our ownership of Indigo or the Indigo shares or otherwise could
have a material adverse effect on Indigo or us;
o there is no change in Indigo's business, assets, financial condition
or otherwise that could be expected to have a materially adverse
effect on Indigo.
The exchanging shareholders' obligation to exchange their shares is also
subject to the following conditions:
o we have performed our obligations under the share exchange agreement
in all material respects;
o the accuracy of our representations and warranties in the share exchange
agreement;
o there is no change in our business, assets, financial condition or
otherwise that could be expected to have a materially adverse effect
on us; and
o our legal counsel shall have delivered certain opinions to Indigo.
Termination
The share exchange agreement may be terminated before the sale and
exchange of Indigo shares:
o by mutual written agreement of us and exchanging shareholders holding
more than 50% of the Indigo shares to be exchanged under the share
exchange agreement;
o by us or exchanging shareholders holding more than 50% of the Indigo
shares to be exchanged under the share exchange agreement, if the
exchange has not occurred on or before March 31, 2000;
o by us or exchanging shareholders holding more than 50% of the Indigo
shares to be exchanged under the share exchange agreement, if the
consummation of the offer and the combination is prohibited or there
is any judgment, injunction, order or decree enjoining the parties
from consummating the offer and the combination;
o by exchanging shareholders holding more than 50% of the Indigo shares
to be exchanged under the share exchange agreement if any
representation or warranty made by AerFi in the share exchange
agreement that is inaccurate when made or at any time
<PAGE>
before the exchange of shares or we have breached or failed to perform
in any material respect any of our obligations under the share
exchange agreement, and in either case, such exchanging shareholder
reasonably determines, after 30 calendar days' notice by such
exchanging shareholder to us, that inaccuracy, breach or failure is
incapable of being cured by March 31, 2000; or
o by us if any representation or warranty by Indigo in the combination
agreement or any representation or warranty by any of the exchanging
shareholders in the share exchange agreement is inaccurate when made
or at any time before the exchange of shares or any of the exchanging
shareholders shall have breached or failed to perform in any material
respect any of their respective obligations under the share exchange
agreement, and in either case, we reasonably determine, after 30
calendar days' notice by us to the exchanging shareholders, that that
inaccuracy, breach or failure is incapable of being cured by March 31,
2000.
A copy of the share exchange agreement is filed as Exhibit (c)(2) to the
Schedule 14D-1 and incorporated herein by reference, and the foregoing summary
of the share exchange agreement is qualified in its entirety by reference
thereto.
The Share Purchase Agreement
On November 11, 1999, AerFi Sverige entered into a share purchase
agreement with certain of Indigo's shareholders. See also "Interests of
Certain Persons in the Offer -- Beneficial Ownership of the Indigo Shares."
Each of these shareholders agreed to sell to AerFi Sverige the Indigo shares
that are owned by it on the date of the share purchase agreement, except for
Indigo shares to be exchanged by some of those shareholders for AerFi shares
under the share exchange agreement, at the same price per Indigo share ($13)
received by holders of Indigo shares under the offer.
The sale and purchase under the share purchase agreement is subject to the
same conditions as the share exchange under the share exchange agreement.
A copy of the share purchase agreement is filed as Exhibit (c)(3) to the
Schedule 14D-1 and incorporated herein by reference, and the foregoing summary
of the share purchase agreement is qualified in its entirety by reference
thereto.
The Option Agreement
On November 11, 1999, we entered into an option agreement with the
exchanging shareholders. Pursuant to this agreement, we will grant to the
exchanging shareholders options to purchase an aggregate of 1,000,000 AerFi
ordinary shares, exercisable at any time from the date of receipt to the third
anniversary of that date at the price of $3.17 per AerFi ordinary share in
cash.
The grant of options is subject to the same conditions as the share
exchange under the share exchange agreement.
A copy of the option agreement is filed as Exhibit (c)(4) to the Schedule
14D-1 and incorporated herein by reference, and the foregoing summary of the
option agreement is qualified in its entirety by reference thereto.
The Registration Rights Agreement
On November 11, 1999, we entered into a registration rights agreement with
the exchanging shareholders. We agreed that if we propose to sell ordinary
shares in an underwritten public equity offering in any jurisdiction under an
effective registration statement, other than a registration statement relating
solely to employee benefit plans, under the Securities Act or under a
comparable law of any other jurisdiction, we will give at least 30 days'
written notice to the exchanging shareholders before filing the registration
statement. The notice shall offer to the exchanging shareholders the
opportunity to include in the offering the number of ordinary shares as each
exchanging shareholder may request. Within 20 days after receipt of that
notice, the exchanging shareholders shall, subject to the conditions described
in the registration rights agreement, have the right by notifying us in
writing to require us to include in the registration statement relating to
that offering the number of ordinary shares as that exchanging stockholder may
request subject to the rights of holders of already outstanding registration
rights.
A copy of the registration rights agreement is filed as Exhibit (c)(5) to
the Schedule 14D-1 and incorporated herein by reference, and the foregoing
summary of the registration rights agreement is qualified in its entirety by
reference thereto.
The Tag-Along Rights Agreement
<PAGE>
On November 11, 1999, one of our major shareholders, Texas Pacific Group
or TPG, agreed to extend to the exchanging shareholders of Indigo certain
rights currently enjoyed by the officers and directors of AerFi to include
("tag-along") their AerFi ordinary shares (or a portion thereof) in sales by
TPG of its AerFi ordinary shares (or a portion thereof).
A copy of the tag-along rights agreement is filed as Exhibit (c)(6) to the
Schedule 14D-1 and incorporated herein by reference, and the foregoing summary
of the tag-along rights agreement is qualified in its entirety by reference
thereto.
Letter Regarding Intention to Tender
One of the shareholders of Indigo, Industrifinans SMB III ASA, has
informed Karl-Axel Granlund (one of the exchanging shareholders) that it
intends to tender all its Indigo shares. As of September 30, 1999
Industrifinans SMB III ASA owned 219,920 Indigo shares. The letter from
Industrifinans SMB III ASA is filed as Exhibit (c)(7) to the Schedule 14D-1
and incorporated herein by reference.
Interests of Certain Persons in the Offer
In considering the recommendation of the Indigo board of directors to
approve the combination, Indigo shareholders should consider that some of
Indigo's directors and officers have interests in the combination that differ
from, or are in addition to, their interests as Indigo shareholders. Indigo's
directors and officers may receive benefits from the combination not available
to Indigo shareholders generally. The Indigo board of directors was aware of
these interests and considered them, among other matters, in approving the
combination agreement and the transactions contemplated by the combination
agreement.
U.S. Employment Agreements
ErgoFi Inc., a wholly-owned subsidiary of AerFi, has entered into
employment agreements with the following officers of Indigo Airlease
Corporation, a U.S. wholly owned subsidiary of Indigo: John Evans, Joseph
Drobnich, Israel Padron and Arthur McChesney. The agreements will become
effective upon the completion of the combination. The employment agreements
for John Evans and Joseph Drobnich will replace their current employment
agreements with Indigo Airlease Corporation, a wholly-owned U.S. subsidiary of
Indigo. The term of the agreements is for three years commencing on the
closing date of the combination and ending on the third anniversary thereof,
unless renewed by mutual written agreement. Among other things, the agreements
provide for each employee to receive:
o base salary;
o a performance-related bonus, at the absolute discretion of the ErgoFi
Inc. board;
o such other benefits and perquisites as are generally provided by
ErgoFi Inc. to its senior management employees in the United States;
and
o a car.
In addition to the benefits listed above, Joseph Drobnich is also entitled
to, until April 2, 2001, the airfare for up to two round-trips per year for
the executive's spouse between Florida and California.
The agreements also provide that, if an executive (x) is terminated by
ErgoFi Inc. without "cause", as defined in the agreements, or (y) terminates
his employment for "good reason", as defined in the agreements, as a severance
benefit, ErgoFi Inc. will continue to pay the executive for a period of (a)
eighteen months following the date of termination if the date of termination
is within twelve months of the closing date of the combination, an amount
equal to the installments of his base salary (at the rate in effect at the
date of termination) that would have been paid to him had his agreement and
his employment with ErgoFi Inc. not been terminated or (b) six months
following the date of termination if the date of termination is not within
twelve months of the closing date of the combination, an amount equal to the
installments of his base salary (at the rate in effect at the date of
termination) that would have been paid to him had his agreement and employment
with ErgoFi Inc. not been terminated.
The agreements further provide for restrictions relating to
confidentiality and, for a two-year period after the executive's termination,
restrictions relating to nonsolicitation of employees of ErgoFi Inc. and its
affiliates. They also provide that, unless
<PAGE>
otherwise waived by ErgoFi Inc., the executive is not to compete with ErgoFi
Inc. and its affiliates for a period of two years after the executive's
termination. During the two-year noncompete period, in consideration for the
executive's covenant not to compete, ErgoFi Inc. will pay the executive:
o executive's base salary applicable at the time of termination;
o a bonus equal to the average of the aggregate amounts paid to the
executive as bonus in the two preceding years; and
o a sum equal to the aggregate amount that ErgoFi Inc. would have paid
during each year of the noncompete period for benefits for the
executive had the executive remained employed by ErgoFi Inc.
Swedish Employment Agreement
Indigo has entered into an employment agreement with Mario Schuler,
managing director of Indigo, which will become effective upon completion of
the combination. The employment agreement will replace the current employment
agreement between Mr. Schuler and Indigo. The term of the agreement is for
three years commencing on the closing date of the combination and ending on
the third anniversary thereof, unless renewed by mutual written agreement.
Among other things, the agreement provides for:
o base salary;
o a performance-related bonus, at the absolute discretion of the board;
o a house, including electricity, water, heating and fees for a
security alarm system at no cost to the executive;
o the free use of a car; and
o such other benefits and perquisites as are generally provided by
Indigo to its other senior management employees in Sweden.
The agreement also provides that, if the executive (x) is terminated by
Indigo without "cause", as defined in the agreement, or (y) terminates his
employment for "good reason", as defined in the agreement, as a severance
benefit, Indigo will continue to pay the executive for a period of (a)
eighteen months following the date of termination if the date of termination
is within twelve months of the closing date of the combination, an amount
equal to the installments of his base salary (at the rate in effect at the
date of termination) that would have been paid to him had his agreement and
his employment with Indigo not been terminated or (b) six months following the
date of termination if the date of termination is not within twelve months of
the closing date of the combination, an amount equal to the installments of
his base salary (at the rate in effect at the date of termination) that would
have been paid to him had his agreement and employment with Indigo not been
terminated.
The agreement further provides for restrictions relating to
confidentiality and, for a two-year period after executive's termination,
restrictions relating to nonsolicitation of employees of Indigo and its
affiliates. It also provides that, unless otherwise waived by Indigo, the
executive is not to compete with Indigo and its affiliates for a period of two
years after the executive's termination. During the two-year noncompete
period, in consideration for the executive's covenant not to compete, Indigo
will pay the executive:
o executive's base salary applicable at the time of termination;
o a bonus equal to the average of the aggregate amounts paid to the
executive as bonus in the two preceding years; and
o a sum equal to the aggregate amount that Indigo would have paid during
each year of the noncompete period for benefits for the executive had
the executive remained employed by Indigo.
Consulting Agreements; Director Payments
ErgoFi Inc. has entered into a consulting agreement with Bradley Winograd
which will become effective upon the completion of the combination. The
consulting agreement will replace the current employment agreement between Mr.
Winograd and Indigo Airlease Corporation. The term of the consulting agreement
is for six months commencing on the closing date of the combination. If the
parties mutually agree in writing, the term may be extended for additional
six-month periods.
<PAGE>
The agreement provides that, in consideration of Mr. Winograd's agreement
to provide consulting services to ErgoFi Inc. in relation to all financial
matters in respect of Indigo and its subsidiaries, including in relation to
the integration of the AerFi and Indigo businesses, ErgoFi Inc. will pay Mr.
Winograd a consulting fee at the rate of $242,500 per year pro-rated on a
monthly basis and will provide Mr. Winograd with such benefits as are
generally provided to employees of ErgoFi Inc.
The agreement also provides that if Mr. Winograd is terminated without
cause prior to the termination of the original six month term, Mr. Winograd
will be entitled to receive the fees and benefits he would have received
during that six month term had his agreement and consultancy with ErgoFi Inc.
not been terminated.
The agreement further provides that Mr. Winograd is entitled to a car and,
at ErgoFi Inc.'s absolute discretion, a performance-related bonus at the end
of the term.
It is expected that Mr. Karl-Axel Granlund will also enter into a
consulting agreement with Indigo in connection with his services as a director
of AerFi. The terms of this consulting agreement are currently being
negotiated.
The Indigo board of directors approved the payment to Mitchell Gordon, a
director of Indigo, of an aggregate of $140,000 for his services in advising
the board on the terms and conditions of the combination agreement and the
offer and negotiating and facilitating the transaction with AerFi.
Beneficial Ownership of the Indigo shares
Schedule I to this document lists information concerning beneficial
ownership of the Indigo shares as of November 17, 1999 by each of the
directors and executive officers of Indigo.
The table below sets forth the directors and executive officers of Indigo
who will exchange and/or sell their Indigo shares to us and to AerFi Sverige
pursuant to the share exchange and share purchase agreement transactions, and
the number of Indigo shares that each of these directors and executive
officers will exchange and/or sell pursuant to the share exchange and share
purchase agreements.
Number of Indigo Shares Number of Indigo Shares
to be Exchanged under the to be Sold under the
Name Share Exchange Agreement Share Purchase Agreement
--------------------- -------------------------- ------------------------
Karl-Axel Granlund(1) 2,599,858 764,285
Geir Stormorken(2)... 1,303,789 456,785
Jan-Eric Osterlund(3) 684,645 259,417
John Evans........... 696,305 503,856
Jon David Haugse(4).. 477,037 153,980
Bradley M. Winograd.. 130,036 94,075
Arne Wennberg........ 0 64,500
David Neeleman....... 0 9,000
- ----------
(1) Includes, in the aggregate, (i) 2,500,000 shares owned by Volito AB, of
which Mr. Granlund beneficially owns approximately 65.0% of the
outstanding capital stock, (ii) 864,043 shares owned by corporations that
are wholly owned by Mr. Granlund and (iii) 100 shares owned by Mr.
Granlund directly.
(2) Includes, in the aggregate, (i) 1,440,074 shares owned by Braathen Lease
and Aviation Know How A/S and (ii) 320,500 shares owned by Braganza A/S.
Mr. Stormorken is the Managing Director of each of these entities but
disclaims the beneficial ownership of these shares.
(3) Includes, in the aggregate, 944,062 shares owned by QueQuoin Holding, Ltd.
of which Mr. Osterlund is the chairman. Mr. Osterlund disclaims the
beneficial ownership of these shares.
(4) Includes, in the aggregate, 631,017 shares owned by Industrifinans SMB II
ASA of which Mr. Haugse is the Managing Director. Mr. Haugse disclaims the
beneficial ownership of these shares.
Management of Indigo After the Combination
See "Special Factors -- Plans for Indigo after the Offer".
<PAGE>
THE TENDER OFFER
Terms of the Offer
Upon the terms and subject to the conditions of the offer (including, if
the offer is extended or amended, the terms and conditions of that extension
or amendment), AerFi Sverige will accept and pay for all Indigo shares validly
tendered and not withdrawn before the expiration date. The expiration date
will be 12:00 midnight, New York City time, on Wednesday, December 15, 1999,
or the latest time and date that the offer, as extended by us, expires.
AerFi Sverige reserves the right, subject to the terms and conditions of
the combination agreement, to extend the period during which the offer is open
by giving oral or written notice of the extension to the depositary. During
any extension, all Indigo shares previously tendered and not withdrawn will
remain subject to the offer, subject to your rights to your Indigo shares as
described under "The Tender Offer -- Withdrawal Rights".
Subject to the applicable regulations of the Securities and Exchange
Commission and the terms and conditions of the combination agreement, AerFi
Sverige also expressly reserves the right, by giving oral or written notice to
the depositary and making a public announcement, to:
o delay acceptance for payment of or payment for any Indigo shares,
pending receipt of any regulatory approval specified in "The Tender
Offer -- Certain Legal Matters; Regulatory Approvals",
o terminate the offer and not accept for payment any Indigo shares if
any of the conditions specified in "The Tender Offer -- Certain
Conditions of the Offer" is unsatisfied, and
o waive any condition, or otherwise amend the offer.
AerFi Sverige acknowledges that Rule 14e-1(c) under the Exchange Act
requires AerFi Sverige to pay the consideration offered or return the Indigo
shares tendered promptly after the termination or withdrawal of the offer.
Any such extension, delay, termination, waiver or amendment will be
followed as promptly as practicable by public announcement thereof, that
announcement in the case of an extension to be made no later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
expiration date. Subject to applicable law (including Rules 14d-4(c), 14d-6(d)
and 14e-1 under the Exchange Act, which require that material changes be
promptly disseminated to shareholders in a manner reasonably designed to
inform them of those changes) and without limiting the manner in which AerFi
Sverige may choose to make any public announcement, AerFi Sverige shall have
no obligation to publish, advertise or otherwise communicate any such public
announcement other than by issuing a press release to the Dow Jones News
Service.
If AerFi Sverige makes a material change in the terms of the offer or the
information concerning the offer, or if it waives a material condition of the
offer, AerFi Sverige will extend the offer to the extent required by Rules
14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act.
Subject to the terms of the combination agreement, if, before the
expiration date, AerFi Sverige should decide to decrease the number of Indigo
shares being sought or to increase or decrease the consideration being offered
in the offer, that decrease in the number of Indigo shares being sought or
that increase or decrease in the consideration being offered will be
applicable to all shareholders whose Indigo shares are accepted for payment
under the offer and, if at the time notice of any such decrease in the number
of Indigo shares being sought or that increase or decrease in the
consideration being offered is first published, sent or given to holders of
those Indigo shares, the offer is scheduled to expire at any time earlier than
the period ending on the tenth business day from and including the date that
notice is first so published, sent or given, the offer will be extended at
least until the expiration of that ten business day period. For purposes of
the offer, a "business day" means any day other than a Saturday, Sunday or
United States federal holiday and consists of the time period from 12:01 a.m.
through 12:00 midnight, New York City time.
Consummation of the offer is conditioned upon satisfaction of the
conditions specified in "-- Certain Conditions of the Offer".
Indigo provided AerFi Sverige with Indigo's stockholder list and security
position listings for the purpose of disseminating the offer to you. This
document and the letter of transmittal will be mailed to record holders of
Indigo shares whose names appear on
<PAGE>
Indigo's stockholder list. This document and the letter of transmittal will
also be furnished, for subsequent transmittal to beneficial owners of Indigo
shares, to brokers, dealers, commercial banks, trust companies, and similar
persons whose names, or the names of whose nominees, appear on the stockholder
list or, if applicable, who are listed as participants in a clearing agency's
security position listing.
Acceptance for Payment and Payment for Shares
Upon the terms and subject to the conditions of the offer (including, if
the offer is extended or amended, the terms and conditions of any such
extension or amendment), AerFi Sverige will accept and pay for, all Indigo
shares validly tendered before the expiration date and not properly withdrawn,
promptly after the latest to occur of the expiration date and the satisfaction
or waiver of the conditions to the offer described in "The Tender Offer --
Certain Conditions of the Offer".
In all cases, payment for Indigo shares tendered and accepted under the
offer will be made only after the depositary receives:
o the Indigo share certificates or timely confirmation of a book-entry
transfer of those Indigo shares into the depositary's account at The
Depository Trust Company under the procedures described in "The Tender
Offer -- Procedures for Accepting the Offer and Tendering Shares";
o the letter of transmittal properly completed and executed, with any
required signature guarantees or, in the case of a book-entry
transfer, an Agent's Message (as defined below) in lieu of the letter
of transmittal; and
o any other documents required under the letter of transmittal.
For purposes of the offer, AerFi Sverige will be deemed to have accepted
for payment (and thereby purchased) Indigo shares validly tendered and not
properly withdrawn as, if and when AerFi Sverige gives oral or written notice
to the depositary of AerFi Sverige's acceptance for payment of those Indigo
shares under the offer. Upon the terms and subject to the conditions of the
offer, payment for Indigo shares accepted for payment under the offer will be
made by deposit of the purchase price therefor with the depositary, which will
act as agent for tendering shareholders for the purpose of receiving payments
from AerFi Sverige and transmitting those payments to tendering shareholders
whose Indigo shares have been accepted for payment. BUYER WILL NOT PAY
INTEREST ON THE PURCHASE PRICE FOR SHARES, REGARDLESS OF ANY DELAY IN MAKING
THAT PAYMENT.
If any tendered Indigo shares are not accepted for payment for any reason
under the terms and conditions of the offer, or if Indigo share certificates
are submitted evidencing more Indigo shares than are tendered, Indigo share
certificates evidencing unpurchased Indigo shares will be returned, without
expense to the tendering stockholder (or, in the case of Indigo shares
tendered by book-entry transfer into the depositary's account at The
Depository Trust Company under the procedure described in "The Tender Offer --
Procedures for Accepting the Offer and Tendering Shares", those Indigo shares
will be credited to an account maintained at The Depository Trust Company), as
promptly as practicable following the expiration or termination of the offer.
If, before the expiration date, AerFi Sverige increases the consideration
offered to any holders of Indigo shares under the offer, that increased
consideration will be paid to all holders of Indigo shares that are purchased
under the offer, whether or not those Indigo shares were tendered before that
increase in consideration.
AerFi Sverige reserves the right to transfer or assign, in whole or from
time to time in part, to one or more of its affiliates, the right to purchase
all or any portion of the Indigo shares tendered under the offer, but any such
transaction or assignment will not relieve AerFi Sverige of its obligations
under the offer and will in no way prejudice the rights of tendering
shareholders to receive payment for Indigo shares validly tendered and
accepted for payment under the offer.
Procedures for Accepting the Offer and Tendering Shares
In order for a holder of Indigo shares to validly tender Indigo shares
under the offer, the letter of transmittal (or a facsimile thereof), properly
completed and duly executed, together with any required signature guarantees
(or, in the case of a book-entry transfer, an Agent's Message in lieu of the
letter of transmittal) and any other documents required by the letter of
transmittal, must be received by the depositary at one of its addresses listed
on the back cover of this document and either:
o the Indigo share certificates evidencing tendered Indigo shares must
be received by the depositary at that address or those Indigo
<PAGE>
shares must be tendered under the procedure for book-entry transfer
described below and a book-entry confirmation must be received by the
depositary (including an Agent's Message if the tendering shareholder
has not delivered a letter of transmittal), in each case before the
expiration date, or
o the tendering shareholder must comply with the guaranteed delivery
procedures described below. The term "Agent's Message" means a
message, transmitted by The Depository Trust Company to, and received
by, the depositary and forming a part of a book-entry confirmation
which states that The Depository Trust Company has received an express
acknowledgment from the participant in The Depository Trust Company
tendering the Indigo shares which are the subject of that book-entry
confirmation, that that participant has received and agrees to be
bound by the terms of the letter of transmittal and that AerFi Sverige
may enforce that agreement against that participant.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT
THE OPTION AND RISK OF THE TENDERING SHAREHOLDER, AND THE DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
Book-Entry Transfer
The depositary will establish accounts for the Indigo shares at the
Depository Trust Company for purposes of the offer within two business days
after the date of this document. Any financial institution that is a
participant in the system of The Depository Trust Company may make a
book-entry delivery of Indigo shares by causing The Depository Trust Company
to transfer those Indigo shares into the depositary's account at The
Depository Trust Company in accordance with The Depository Trust Company's
procedures for that transfer. However, although delivery of Indigo shares may
be effected through book-entry transfer at The Depository Trust Company,
either the letter of transmittal, properly completed and executed, together
with any required signature guarantees, or an Agent's Message in lieu of the
letter of transmittal, and any other required documents, must, in any case, be
received by the depositary at one of its addresses listed on the back cover of
this document before the expiration date, or you must comply with the
guaranteed delivery procedure described below. DELIVERY OF DOCUMENTS TO A
BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Signature Guarantees
Signatures on all letters of transmittal must be guaranteed by a firm
which is a member of the Medallion Signature Guarantee Program, or by any
other "eligible guarantor institution", as that term is defined in Rule
17Ad-15 under the Exchange Act, except in cases where Indigo shares are
tendered:
o by a registered holder of Indigo shares who has not completed either
the box entitled "Special Payment Instructions" or the box entitled
"Special Delivery Instructions" on the letter of transmittal, or
o for the account of an Eligible Institution.
If an Indigo share certificate is registered in the name of a person other
than the signer of the letter of transmittal, or if payment is to be made, or
an Indigo share certificate not accepted for payment or not tendered is to be
returned, to a person other than the registered holders, then the Indigo share
certificate must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the names of the registered holders appear on
the Indigo share certificate, with the signatures on that Indigo share
certificate or stock powers guaranteed by an eligible institution. See
Instructions 1 and 5 of the letter of transmittal.
Guaranteed Delivery
If you desire to tender Indigo shares under the offer and the Indigo share
certificates evidencing your Indigo shares are not immediately available or
you cannot deliver the Indigo share certificates and all other required
documents to the depositary before the expiration date, or you cannot complete
the procedure for delivery by book-entry transfer on a timely basis, you may
tender your Indigo shares, if:
o tender is made by or through an Eligible Institution;
<PAGE>
o the depositary receives a properly completed and duly executed notice
of guaranteed delivery, substantially in the form made available by
us, before the expiration date; and
o the depositary receives the Indigo share certificates (or a book-entry
confirmation) evidencing all tendered Indigo shares, in proper form
for transfer, in each case together with the letter of transmittal,
properly completed and executed, with any required signature
guarantees (or, in the case of a book-entry transfer, an Agent's
Message), and any other documents required by the letter of
transmittal within three trading days after the date of execution of
that notice of guaranteed delivery.
A trading day is any day on which the Nasdaq National Market operated by
the National Association of Securities Dealers, Inc. is open for business.
The notice of guaranteed delivery may be delivered by hand or mail or
transmitted by telegram or facsimile transmission to the depositary and must
include a guarantee by an Eligible Institution in the form described in the
form of notice of guaranteed delivery made available by us.
In all cases, payment for Indigo shares tendered and accepted for payment
under the offer will be made only after timely receipt by the depositary of
the Indigo share certificates evidencing those Indigo shares, or a book-entry
confirmation of the delivery of those Indigo shares, and the letter of
transmittal (or a facsimile of that letter), properly completed and duly
executed, with any required signature guarantees (or, in the case of a
book-entry transfer, an Agent's Message), and any other documents required by
the letter of transmittal.
Determination of Validity
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance for payment of any tender of Indigo shares will be
determined by us in our sole discretion, which determination will be final and
binding on all parties. We reserve the absolute right to reject any and all
tenders determined by us not to be in proper form or the acceptance for
payment of which may, in the opinion of our counsel, be unlawful. Subject to
the terms of the combination agreement, we also reserve the absolute right to
waive any condition of the offer or any defect or irregularity in the tender
of any Indigo shares of any particular shareholder, whether or not similar
defects or irregularities are waived in the case of other shareholders. No
tender of Indigo shares will be deemed to have been validly made until all
defects and irregularities have been cured or waived. None of AerFi Sverige,
the dealer manager, the depositary, the information agent or any other person
will be under any duty to give notification of any defects or irregularities
in tenders or incur any liability for failure to give any such notification.
Our interpretation of the terms and conditions of the offer (including the
letter of transmittal and the instructions thereto) will be final and binding.
Other Requirements
By executing the letter of transmittal as described above, you irrevocably
appoint our designees as your proxies, each with full power of substitution,
in the manner described in the letter of transmittal, to the full extent of
your rights regarding the Indigo shares tendered by you and accepted for
payment by us (and with respect to any and all other Indigo shares or other
securities issued or issuable in respect of those Indigo shares on or after
November 11, 1999). All those proxies shall be considered coupled with an
interest in the tendered Indigo shares. Such appointment will be effective
when, and only to the extent that, we accept the Indigo shares for payment.
Upon the acceptance for payment, all prior proxies given by you regarding
Indigo shares (and those other Indigo shares and securities) will be revoked
without further action, and no subsequent proxies may be given nor any
subsequent written consent executed by you (and, if given or executed, will
not be deemed to be effective) with respect thereto. Our designees will, with
respect to the Indigo shares for which the appointment is effective, be
empowered to exercise all your voting and other rights as they in their sole
discretion may deem proper at any annual or special meeting of Indigo's
shareholders or any adjournment or postponement thereof, by written consent in
lieu of any such meeting or otherwise. We reserve the right to require that,
in order for Indigo shares to be deemed validly tendered, immediately upon our
payment for those Indigo shares, we must be able to exercise full voting
rights with respect to those Indigo shares.
The tender of Indigo shares under any one of the procedures described
above will constitute your acceptance of the offer, as well as your
representation and warranty that:
o you own the Indigo shares being tendered within the meaning of Rule
14e-4 promulgated under the Exchange Act,
<PAGE>
o the tender of your Indigo shares complies with Rule 14e-4, and
o you have the full power and authority to tender and assign the Indigo
shares tendered, as specified in the letter of transmittal.
Our acceptance for payment of Indigo shares tendered under the offer will
constitute a binding agreement between you and us upon the terms and subject
to the conditions of the offer.
In general, if you are a United States Holder (as described below under
"The Tender Offer -- United States Federal Income Tax Consequences") that
participates in the offer, you should complete the Substitute Form W-9 in the
letter of transmittal to provide the depositary with your correct taxpayer
identification number and certify that the number is correct or properly
certify that you are awaiting a taxpayer identification number, unless an
exemption is demonstrated to apply. Otherwise, backup United States federal
income tax withholding may apply and a payment to you may be withheld at a 31%
rate.
In general, if you are not a United States Holder and you participate in
the offer, you should give the depositary a completed Form W-8BEN (Certificate
of Foreign Status) before receipt of payment to prevent backup United States
federal income tax withholding.
Withdrawal Rights
Tenders of the Indigo shares made under the offer are irrevocable except
that those Indigo shares may be withdrawn at any time before the expiration
date and, unless theretofore accepted for payment by AerFi Sverige under the
offer, may also be withdrawn at any time after January 15, 2000. If AerFi
Sverige extends the offer, is delayed in its acceptance for payment of Indigo
shares or is unable to accept Indigo shares for payment under the offer for
any reason, then, without prejudice to AerFi Sverige's rights under the offer,
the depositary may, nevertheless, on behalf of AerFi Sverige, retain tendered
Indigo shares, and those Indigo shares may not be withdrawn except to the
extent that tendering shareholders are entitled to withdrawal rights as
described herein.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the depositary at
one of its addresses listed on the back cover page of this document. Any such
notice of withdrawal must specify the name of the person who tendered the
Indigo shares to be withdrawn, the number of Indigo shares to be withdrawn and
the name of the registered holder of those Indigo shares, if different from
that of the person who tendered those Indigo shares. If Indigo share
certificates evidencing Indigo shares to be withdrawn have been delivered or
otherwise identified to the depositary, then, before the physical release of
those Indigo share certificates, the serial numbers shown on those Indigo
share certificates must be submitted to the depositary and the signatures on
the notice of withdrawal must be guaranteed by an Eligible Institution, unless
those Indigo shares have been tendered for the account of an Eligible
Institution. If Indigo shares have been tendered under the procedure for
book-entry transfer as described in "The Tender Offer -- Procedures for
Accepting the offer and Tendering Shares", any notice of withdrawal must
specify the name and number of the account at The Depository Trust Company to
be credited with the withdrawn Indigo shares.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by AerFi Sverige, in its sole
discretion, whose determination will be final and binding. None of AerFi
Sverige, the dealer manager, the depositary, the information agent or any
other person will be under duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure
to give any such notification.
Any Indigo shares properly withdrawn will thereafter be deemed not to have
been validly tendered for purposes of the offer. However, withdrawn Indigo
shares may be re-tendered at any time before the expiration date by following
one of the procedures described in "The Tender Offer -- Procedures for
Accepting the offer and Tendering Shares".
United States Federal Income Tax Consequences
This summary of the material United States federal income tax consequences
of the offer is for general information only and is based on the law as
currently in effect. This summary does not discuss all of the tax consequences
that may be relevant to a holder of Indigo shares in light of its particular
circumstances or to holders subject to special rules, such as financial
institutions, broker-dealers, tax-exempt organizations, holders that hold
their shares as part of a straddle or a hedging or conversion transaction and
holders who acquired their Indigo shares through the exercise of an employee
stock option or otherwise as compensation.
Holders of Indigo shares are urged to consult their own tax advisors as to
the particular tax consequences to them of the
<PAGE>
offer or any compulsory acquisition that may follow the offer, including the
effect of United States federal, state and local tax laws or Swedish, Irish or
other non-United States tax laws.
A United States Holder refers to (1) a citizen or resident of the United
States, (2) a corporation or other entity created or organized in the United
States or under the laws of the United States or of any political subdivision
of the United States, or (3) an estate or trust, the income of which is
includible in gross income for United States federal income tax purposes
regardless of its source.
A Non-United States Holder refers to a holder of Indigo shares that is not
a United States Holder.
United States Holders that Participate in the Offer
The receipt by a United States Holder of cash for Indigo shares pursuant
to the offer will be a taxable transaction under the United States Internal
Revenue Code of 1986, as amended. A tendering United States Holder will
generally recognize gain or loss in an amount equal to the difference between
the cash received by the United States Holder pursuant to the offer and that
holder's adjusted tax basis in the Indigo shares tendered pursuant to the
offer. That gain or loss will be a capital gain or loss if the Indigo shares
are a capital asset in the hands of the United States Holder. United States
Holders are urged to consult their own tax advisors as to the federal income
tax treatment of a capital gain or loss, including limitations on the
deductibility of a capital loss.
A United States Holder that tenders Indigo shares may be subject to backup
withholding at a rate of 31% unless it provides its taxpayer identification
number and certifies that the number is correct or properly certifies that it
is awaiting a taxpayer identification number, or unless an exemption is
demonstrated to apply. Backup withholding is not an additional tax. Amounts so
withheld can be refunded or credited against the United States federal income
tax liability of the United States Holder, provided appropriate information is
forwarded to the Internal Revenue Service. In general, to prevent backup
withholding, a tendering United States Holder should complete the Substitute
Form W-9 that is included in the letter of transmittal. See the discussion in
"The Tender Offer -- Procedures for Accepting the Offer and Tendering Shares
- -- Other Requirements".
Non-United States Holders that Participate in the Offer
A tendering Non-United States Holder will generally not be subject to
United States federal income tax on a gain realized on a disposition of Indigo
shares unless:
o the gain is effectively connected with a trade or business in the
United States of that Non-United States Holder;
o that Non-United States Holder is a non-resident alien individual who
holds Indigo shares as a capital asset and who is present in the
United States for 183 or more days in 1999; or
o that Non-United States Holder is subject to tax under the provisions
of the Internal Revenue Code of 1986, as amended, on the taxation of
United States expatriates.
Non-United States Holders are urged to consult their own tax advisors.
Information reporting and backup United States federal income tax
withholding imposed at a rate of 31% may apply to cash payments received by a
tendering Non-United States Holder pursuant to the offer if the disposition of
Indigo shares is effected by or through a United States office of a broker.
Backup withholding is not an additional tax. Amounts so withheld can be
refunded or credited against the United States federal income tax liability of
the Non-United States Holder, provided appropriate information is forwarded to
the Internal Revenue Service. In general, to prevent backup withholding, a
tendering Non-United States Holder should complete a Form W-8BEN.
Holders that Participate in a Compulsory Acquisition
The receipt by a United States Holder or Non-United States Holder of cash
pursuant to a compulsory acquisition under the Swedish Companies Act would
generally result in United States federal income tax consequences similar to
those described above in "-- United States Holders that Participate in the
Offer" or "-- Non-United States Holders that Participate in the Offer,"
respectively. Holders of Indigo shares that receive cash pursuant to a
compulsory acquisition are urged to consult their own tax advisors.
Price Range of Shares; Dividends
<PAGE>
The Indigo shares have been traded in the over-the-counter market since
April 9, 1998, and are quoted on the Nasdaq National Market System under the
symbol IAAB.
The following table lists for the periods indicated the high and low
closing sale prices per Indigo share as reported on the Nasdaq National Market
System. Indigo has not paid any cash dividend in the periods indicated in the
following table. Bid prices represent quotations by dealers, do not reflect
mark-ups, mark-downs or commissions and may not represent actual transactions.
Market Price
------------------
High Low
-------- -------
1998
Second Quarter (from April 9, 1998).... $ 14.938 $ 9.750
Third Quarter.......................... 12.750 7.000
Fourth Quarter......................... 10.000 6.063
1999
First Quarter.......................... 8.250 6.500
Second Quarter......................... 8.875 6.000
Third Quarter.......................... 9.500 6.750
Fourth Quarter (through November 15, 12.563 7.031
1999)....................................
On November 11, 1999 there were 29 holders of record of Indigo shares and
and 11,276,288 outstanding Indigo shares.
On November 10, 1999, the last full day of trading before the public
announcement of the execution of the combination agreement, the closing price
of the Indigo shares on the Nasdaq National Market System was $11.313 per
Indigo share. On November 15, 1999, the closing price of the Indigo shares on
the Nasdaq National Market System was $12.562 per Indigo share.
You are urged to obtain a current market quotation for the Indigo shares.
Certain Information Concerning Indigo
Unless otherwise stated, the information concerning Indigo in this
document has been furnished by Indigo or has been taken from or based upon
publicly available documents and records on file with the Securities and
Exchange Commission and other public sources. Although AerFi Sverige and AerFi
have no knowledge that would indicate that any statement in this document that
is based upon those reports and documents are untrue, AerFi Sverige and AerFi
do not take any responsibility for the accuracy or completeness of the
information contained in those reports and other documents or for any failure
by Indigo to disclose events that may have occurred and may affect the
significance or accuracy of any such information but that are unknown to AerFi
Sverige and AerFi.
General
Indigo is a Swedish limited liability company incorporated in 1988, with
its principal offices located at Sodra Forstadsgatan 4, S-211 43 Malmo,
Sweden. Indigo is principally engaged in the acquisition and leasing of narrow
body commercial jet aircraft to airlines throughout the world. Indigo also
sells aircraft from its own portfolio and selectively engages in remarketing
activities for airlines, financial institutions and other leasing companies.
The name, citizenship, business address, principal occupation or
employment and five-year employment history for each of Indigo's directors and
executive officers and certain other information are listed in Schedule I to
this document. Indigo is subject to the informational requirements of the
Exchange Act applicable to a foreign private issuer and files periodic reports
and other information with the Securities and Exchange Commission relating to
its business, financial condition and other matters. You may inspect those
reports and other information at the public reference facilities maintained by
the Securities and Exchange Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549 and should also be available for inspection and
copying at the regional offices of the Securities and Exchange Commission in
New York (Jacob K. Javits Federal Building, 26 Federal Plaza, New York, New
York 10278) and Chicago (Everett McKinley Dirksen Building, 219 South Dearborn
Street, Chicago, Illinois 60604). Copies of that material can also be obtained
from the Public Reference Section of the Securities and Exchange Commission in
Washington, D.C. 20549, at prescribed rates.
Certain Financial Projections
In the course of the discussions between representatives of AerFi and
Indigo regarding the offer and the combination AerFi was provided with certain
projections of Indigo's future operations. The projections, and the
assumptions underlying such projections,
<PAGE>
were not prepared with a view to public disclosure or compliance with
published guidelines of the Securities and Exchange Commission or the
guidelines established by the American Institute of Certified Public
Accountants regarding projections, and are included in this offer to purchase
only because they were provided to AerFi. None of AerFi, AerFi Sverige,
Indigo, any of their financial advisors or the dealer manager assumes any
responsibility for the accuracy of these projections. These projections are
based upon a variety of assumptions relating to the business of Indigo which
may not be realized and are subject to significant uncertainties and
contingencies beyond the control of Indigo. There can be no assurance that the
projections will be realized, and actual results may vary materially from
those shown. None of Indigo, AerFi or AerFi Sverige intends to update, revise
or correct such projections if they become inaccurate (even in the short
term). In particular, these projections will be materially affected if a
material amount of Indigo's aircraft assets are transferred to AerCo Limited
in a securitization transaction.
Set forth below is a summary of the projections. These projections should
be read together with the financial statements of Indigo referred to herein.
<TABLE>
Fiscal Year Ended December 31
-------------------------------------------------------
1998(A) 1999 2000 2001 2002
-------- --------- --------- -------- ---------
(In thousands)
<S> <C> <C> <C> <C> <C>
Income Statement Data
Revenues (including interest $ 63,440 $ 104,122 $ 123,427 $127,721 $ 132,823
======== ========= ========= ======== =========
income).........................
Income before Taxes and Minority
Interests..................... 15,547 20,089 21,898 24,352 27,424
======== ========= ========= ======== =========
Net Income...................... 11,133 14,817 15,767 17,533 19,745
======== ========= ========= ======== =========
Earnings Per Diluted Share...... 1.07 1.28 1.36 1.52 1.71
========== ========= ========= ========= =========
Balance Sheet (at period end)
Cash............................ 16,482 9,644 615 0 0
Net Aircraft.................... 548,703 797,309 831,872 837,633 840,830
Other Assets.................... 20,876 31,641 36,631 41,486 46,617
-------- --------- --------- -------- ---------
Total Assets.................... 586,061 838,594 869,118 879,119 887,447
======== ========= ========= ======== =========
Debt............................ 452,629 669,613 676,041 661,324 642,025
Equity.......................... 90,036 104,853 120,620 138,153 157,898
Other Liabilities............... 43,396 64,128 72,457 79,642 87,524
-------- --------- --------- -------- ---------
Total Liabilities............... 586,061 838,594 869,118 879,119 887,447
======== ========= ========= ======== =========
- ----------
(A) Actual for the year ended December 31, 1998.
</TABLE>
Selected Historical Financial Information
Set forth below is certain selected financial information relating to
Indigo which has been excerpted or derived from the audited financial
statements contained in Indigo's Annual Report on Form 20-F for the fiscal
year ended December 31, 1998 and the unaudited financial statements contained
in Indigo's quarterly reports on Form 6-K at September 30, 1998 and 1999. The
financial information that follows is qualified in its entirety by reference
to the 20-F and the 6-K and other documents filed by Indigo with the
Securities and Exchange Commission which contain comprehensive financial
information. The 20-F and the 6-K and those other documents may be examined
and copies may be obtained from the offices of the Securities and Exchange
Commission in the manner described above under "-- General".
Fiscal Year Nine Months
Ended Ended
December 31 September 30
------------------- -------------------
1998 1997 1999 1998
-------- -------- -------- --------
(unaudited)
(In thousands, except per share amounts)
Income Statement Data:
Revenues:
Rental of flight equipment.... $ 49,918 $ 30,735 $ 68,836 $ 33,727
Flight equipment marketing.... 8,923 7,169 7,179 8,923
Interest and other............ 4,599 2,700 2,300 3,426
-------- -------- -------- --------
63,440 40,604 78,315 46,076
Expenses:
Interest...................... 24,078 15,780 30,093 16,627
Depreciation.................. 18,159 11,542 24,825 12,170
Rental expense................ 0 0 3,211 0
<PAGE>
Selling, general and
administrative.................. 5,647 3,035 5,343 4,200
Exchange (gain) loss.......... 9 (337) (12) (1)
-------- -------- -------- --------
47,893 30,020 63,460 32,996
-------- -------- -------- --------
Income before income taxes...... 15,547 10,584 14,855 13,080
Provision for income taxes...... 4,414 2,943 3,808 3,675
-------- -------- -------- --------
Net income.................... $ 11,133 $ 7,641 $ 11,047 $ 9,405
======== ======== ======== ========
Per Share Amounts:
Net income per basic share(1). $ 1.09 $ 1.26 $ 0.98 $ 0.95
Net income per diluted share(2) 1.07 1.23 0.96 0.93
Book value per basic share(1). 8.79 6.34 8.96 8.89
Book value per diluted share(2) 8.63 6.16 8.77 8.73
- ----------
(1) Net income per basic share and book value per basic share are calculated
using the weighted average number of ordinary shares outstanding for each
of the periods presented (10,247,630 for 1998, 6,087,436 for 1997,
11,276,288 for the nine months ended September 30, 1999 and 9,911,520 for
the nine months ended September 30, 1998).
(2) Net income per diluted share and book value per diluted share are
calculated using the weighted average number of ordinary shares and
ordinary share equivalents outstanding for each of the periods presented
(10,437,347 for 1998, 6,264,290 for 1997, 11,525,541 for the nine months
ended September 30, 1999 and 10,091,259 for the nine months ended
September 30, 1998). Ordinary share equivalents represent the number of
shares which would be issued assuming the exercise of warrants and
conversion of preferred shares.
<TABLE>
December 31 September 30
--------------------- ------------
1998 1997 1999
-------- -------- ------------
(unaudited)
(In thousands)
<S> <C> <C> <C>
Balance Sheet Data:
Assets:
Cash and cash equivalents...................... $ 16,482 $ 4,669 $ 18,670
Accounts receivable............................ 2,587 4,893 4,202
Cash, restricted............................... 6,610 6,427 16,529
Notes receivable............................... 3,181 4,300 0
Net investment in finance and sales-type leases 16,392 21,722 7,115
Flight equipment under operating leases........ 567,679 281,681 770,411
Less accumulated depreciation.................. 35,368 23,061 52,283
-------- -------- --------
532,311 258,620 718,128
Deposits on flight equipment purchases......... 4,350 1,600 4,100
Other assets................................... 835 726 3,138
Deferred debt issue costs-less accumulated
amortization of $1,983 (1999), $1,756 (1998)
and $1,222 (1997).......................... 3,313 2,385 4,151
-------- -------- --------
$586,061 $305,342 $776,033
======== ======== ========
Liabilities and Shareholders' Equity
Accrued interest and other payables............ 5,925 3,022 5,439
Debt financing................................. 449,975 238,817 612,998
Debt financing from related parties............ 2,654 2,654 2,654
Security and other deposits on flight equipment 24,661 15,669 34,445
Prepaid rentals................................ 4,644 2,741 7,543
Deferred income taxes.......................... 8,166 3,836 11,871
Shareholders' Equity
Ordinary shares-SEK 3.14 notional amount;
25,477,707 (1999 and 1998) and 7,850,000
(1997) authorized shares; 11,276,288 (1999
and 1998) and 7,850,000 (1997) shares
issued and outstanding..................... 4,688 3,294 4,688
Paid-in capital................................ 58,036 19,130 58,036
Retained earnings.............................. 27,312 16,179 38,359
-------- -------- --------
90,036 38,603 101,083
-------- -------- --------
$586,061 $305,342 $776,033
======== ======== ========
</TABLE>
Certain Information Concerning AerFi and AerFi Sverige
General
AerFi is an Irish limited liability company with its principal offices
located at Aviation House, Shannon, Co. Clare, Ireland. AerFi is a lessor of
modern commercial aircraft and is a significant participant in the global
aviation industry.
<PAGE>
On November 20, 1998, Texas Pacific Group became AerFi's largest
shareholder through a cash tender offer for outstanding AerFi ordinary shares
and a subscription for new AerFi ordinary shares. As of November 11, 1999,
Texas Pacific Group owned 58.9% of AerFi's issued ordinary share capital and
42.6% of AerFi's ordinary share capital on a fully diluted basis.
GE Capital Corporation has an option, exercisable on or before October 29,
2001, to acquire a passive interest of 21.4% in the diluted ordinary share
capital of AerFi at an option price of $0.60 per share, which will be adjusted
downwards to $0.01 as a result of the $0.60 per share proposed special interim
dividend that AerFi announced on November 11, 1999, unless GE Capital
Corporation exercises its option and receives the underlying shares before the
record date for such extraordinary dividend. In a letter dated November 11,
1999, GE Capital Corporation notified us pursuant to the relevant provision of
the option agreement between it and us that it is contemplating delivery of an
exercise notice.
AerFi Sverige is a newly established Swedish corporation. It has not
carried on any activities other than the execution of the combination
agreement. Its principal offices are located at c/o Advocatfirman Vinge KB,
P.O. Box 1703, S-111 87 Stockholm, Sweden. AerFi Sverige is an indirect,
wholly-owned subsidiary of AerFi.
The name, citizenship, business address, principal occupation or
employment and five-year employment history for each of our directors and
executive officers and certain other information are listed in Schedule II to
this document.
Except as described in this document, neither we nor, to the best of our
knowledge, any of the persons listed in Schedule II to this document (or any
associate or majority-owned subsidiary of AerFi or any such listed persons)
beneficially owns or have any right to acquire, directly or indirectly, any
Indigo shares or have effected any transaction in the Indigo shares during the
past 60 days.
Except as provided in the combination agreement or as otherwise described
in this document, neither we nor, to the best of our knowledge, any of the
persons listed in Schedule II to this document, have any contract,
arrangement, understanding or relationship with any other person with respect
to any securities of Indigo, including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or voting
of those securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of loans, guarantees against loss,
guarantees of profits, division of profits or loss or the giving or
withholding of proxies.
Except as disclosed in this document, since January 1, 1997 neither we
nor, to the best of our knowledge, any of the persons listed on Schedule II to
this document, have had any business relationship or transaction with Indigo
or any of its executive officers, directors or affiliates that is required to
be reported under the rules and regulations of the Securities and Exchange
Commission applicable to the offer. Except as disclosed in this document,
since January 1, 1997, there have been no contacts, negotiations or
transactions between AerFi or any of its subsidiaries or, to the best
knowledge of AerFi, any of the persons listed in Schedule II to this document,
on the one hand, and Indigo or its affiliates, on the other hand, concerning a
consolidation or acquisition, tender offer or other acquisition of securities,
or an election of directors.
Selected Historical Financial Information
The following selected consolidated financial data relating to AerFi and
its subsidiaries has been taken or derived from the audited financial
statements contained in AerFi's annual report for the year ended March 31,
1999. These financial statements are prepared in accordance with Irish GAAP
which differ in certain significant respects from US GAAP. An explanation of
the significant differences and a reconciliation from Irish GAAP to US GAAP of
shareholders' Equity and net income for the financial year is set forth in
Note 30 to these financial statements. More comprehensive financial
information is included in that annual report and the financial data listed
below is qualified in its entirety by reference to the annual report. Copies
may be obtained by contacting John Redmond, at AerFi's address listed under
"-- General" above.
The financial information in relation to AerFi contained in this document
does not constitute full financial statements within the meaning of Section 19
of the Companies (Amendment) Act, 1986 of Ireland. Full financial statements
of AerFi have been prepared for each financial year to which the financial
information relates and the auditors have given unqualified reports on such
financial statements, which financial statements except for the financial
statements for the year ended March 31, 1999, have been annexed to the
relevant annual returns delivered to the Registrar of Companies in Ireland.
The financial statements for the year ended March 31, 1999, will be annexed to
the annual return to be delivered to the Registrar of Companies in Ireland.
<PAGE>
Selected Financial Information -- Irish GAAP
<TABLE>
Fiscal Year Six Months
ended ended
March 31 September 30
--------------------- ------------
1999 1998 1999
---------- ---------- -----------
(In millions, except Unaudited
per share amounts)
<S> <C> <C> <C>
Income Statement Data:
Turnover-- Continuing Operations............... $ 453 $ 236 $ 96
====== ====== ======
Total Operating Income......................... 472 244 103
====== ====== ======
Profit on Ordinary Activities Before Taxation.. 48 65 32
====== ====== ======
Profit for the Financial Year/Period........... 47 64 32
Dividends on First Preference Shares-- Paid.... (2) (3) (1)
------ ------ ------
Profit Attributable to Equity Shareholders..... 45 61 31
====== ====== ======
Profit and Loss Account at End of Year/Period.. $ 210 $ 182 $ 241
====== ====== ======
Balance Sheet Data:
Assets
Tangible Assets (aircraft interests in aircraft
and other tangibles)........................... 275 675 230
------ ------ ------
Free Cash Balances............................. 322 127 340
Restricted Cash Balances....................... 113 159 130
Other Assets................................... 175 251 170
Total Assets................................... $ 885 $1,212 $ 870
====== ====== ======
Liabilities
Capital and Reserves and Shareholders' Funds... 376 336 407
Provisions for Liabilities and Charges......... 36 -- 36
Creditors...................................... 473 876 427
------ ------ ------
Total Liabilities.............................. $ 885 $1,212 $ 870
====== ====== ======
Per Share Data:
Profit per ordinary share-- Basic(1)........... $ 0.40 $ 0.57 $ 0.26
Profit per ordinary share-- Fully Diluted(2)... $ 0.38 $ 0.57 $ 0.20
- ----------
(1) Profit per basic share is calculated using the weighted average number of
ordinary shares outstanding for each of the periods presented (106,523,999
for 1998, 111,125,334 for 1999 and 119,344,512 for the six months ended
September 30, 1999).
(2) Profit per diluted share is calculated using the weighted average number
of ordinary shares and ordinary share equivalents outstanding for each of
the periods presented (106,523,999 for 1998, 118,926,005 for 1999 and
157,270,055 for the six months ended September 30, 1999). Ordinary share
equivalents represent the number of shares which would be issued, assuming
the exercise of warrants and conversion of preferred shares.
</TABLE>
Reconciliation of Irish GAAP net profit attributable to ordinary shareholders
as reported in the Consolidated Profit and Loss Account to U.S. GAAP.
<TABLE>
Fiscal Year Six Months
ended ended
March 31 September 30
------------------------ ------------
1999 1998 1999
----------- ----------- ------------
<S> <C> <C> <C>
(In millions) Unaudited
Net profit attributable to ordinary shareholders as
reported in the consolidated profit and loss account
(Irish GAAP)..................................... $ 45 $ 61 $ 31
Adjustments
Arising on sale and leaseback transactions
-- reversal of income deferred in prior years..... 28 14 3
Arising on Airplanes Group......................... 324 (31) --
Predelivery payment provision...................... 15 (15) --
Positive goodwill amortized........................ (10) (1) --
Negative goodwill amortized........................ 10 1 --
Onerous contract provision......................... 14 -- --
Aircraft maintenance............................... 16 (1) --
Impairment of fixed assets-- engine valuation
provision........................................ (10) -- --
Reclassification of income/(expense) on
extinguishment of debt........................... (1) 1 --
------ ------ ------
Net income to accord with US GAAP before
extraordinary item............................... 431 29 34
Extraordinary item -- income/(expense) on
extinguishment of debt........................... 1 (1) --
<PAGE>
Dividend on ordinary shares........................ -- -- (17)
------ ------ ------
Net income to accord with US GAAP.................. $ 432 $ 28 $ 17
====== ====== ======
Consolidated Balance sheet of AerFi Group plc and
subsidiaries in accordance with US GAAP
Assets
Cash............................................... 323 127 340
Restricted cash.................................... 179 454 196
Accounts receivable................................ 97 115 93
Net investment in capital and sales type leases.... -- 101 --
Aircraft........................................... 1,011 4,689 929
Aircraft predelivery payment....................... -- 59 --
Investment in aircraft............................. 81 81 81
Investments........................................ -- 13 --
Other assets....................................... 12 25 11
------ ------ ------
$1,703 $5,664 $1,650
====== ====== ======
Liabilities
Shareholders' funds/(Deficit)...................... 213 (239) 230
Accrued expenses and other liabilities............. 372 1,034 349
Minority interests................................. -- 6 --
Indebtedness....................................... 1,118 4,809 1,071
Deferred income taxes.............................. -- 54 --
------ ------ ------
$1,703 $5,664 $1,650
====== ====== ======
</TABLE>
Financing of the Offer
The total amount of funds required to consummate the offer and the
combination and to pay related fees and expenses is estimated to be
approximately $77 million. The offer and the combination are not conditioned
on obtaining financing. We have or will have sufficient cash or other sources
of immediately available funds to provide to AerFi Sverige to enable it to
purchase all of the Indigo shares outstanding and to pay all related fees and
expenses under the offer.
Dividends and Distributions
If, after the date of the combination agreement but before the
unconditional time, Indigo changes the outstanding Indigo shares by reason of
any reclassification, recapitalization, stock split or combination, exchange
or readjustment of Indigo shares, or stock dividend on the Indigo shares with
a record date during that period the cash payable under the offer and any
other amounts payable under the combination agreement shall be appropriately
adjusted.
Certain Effects of the Offer
Market for the Indigo shares
The purchase of Indigo shares under the offer will reduce the number of
holders of Indigo shares and the number of Indigo shares that might otherwise
trade publicly and is likely to adversely affect the liquidity and market
value of the remaining Indigo shares held by the public.
Stock Quotation
Depending upon the number of Indigo shares purchased under the offer, the
Indigo shares may no longer meet the standards for continued inclusion in the
Nasdaq National Market System. If, as a result of the purchase of Indigo
shares under the offer, the Indigo shares no longer meet the criteria for
continued inclusion in the Nasdaq National Market System, the market for the
Indigo shares could be adversely affected. According to Nasdaq's published
guidelines, the Indigo shares would not meet the criteria for continued
inclusion in the Nasdaq National Market System if at least one of the
following two standards are not met:
o among other things, a minimum of 750,000 publicly held Indigo shares,
an aggregate market value of the publicly held Indigo shares of at
least $5 million and a minimum of 400 shareholders of round lots; or
o among other things, a minimum of 1,100,000 publicly held shares, an
aggregate market value of the publicly held Indigo shares of at least
$15 million, at least four registered and active market makers and a
minimum of 400 shareholders of round lots.
If one of these two standards were not met, quotations might continue to
be published in the over-the-counter "additional list" or one of the "local
lists" unless, as detailed in Nasdaq's published guidelines, the number of
publicly-held Indigo shares (excluding
<PAGE>
Indigo shares held by officers, directors and beneficial owners of more than
10% of the Indigo shares) is less than 100,000, there are fewer than 300
holders in total, or there is not at least one market maker for the Indigo
shares. If the Indigo shares are no longer eligible for Nasdaq quotation,
quotations might still be available from other sources.
Exchange Act Registration
The Indigo shares are currently registered under the Exchange Act. Indigo
may terminate registration of the Indigo shares under the Exchange Act upon
application to the Securities and Exchange Commission if the Indigo shares are
neither listed on a national securities exchange nor held by 300 or more
holders of record. Termination of registration of the Indigo shares under the
Exchange Act would substantially reduce the information required to be
furnished by Indigo to its shareholders and to the Securities and Exchange
Commission. Termination of registration would make certain provisions of the
Exchange Act no longer applicable to Indigo, such as the requirement to file
an annual report on Form 20-F with the Securities and Exchange Commission.
Furthermore, the ability of "affiliates" of Indigo and persons holding
"restricted securities" of Indigo to dispose of those securities under Rule
144 or 144A promulgated under the Securities Act of 1933, may be impaired or
eliminated. If registration of the Indigo shares under the Exchange Act were
terminated, the Indigo shares would no longer be "margin securities" or be
eligible for inclusion in the Nasdaq National Market System. We currently
intend to seek to cause Indigo to terminate the registration of the Indigo
shares under the Exchange Act as soon after consummation of the offer as the
requirements for termination of registration are met.
Margin Regulations
The Indigo shares are currently "margin securities" under the regulations
of the Board of Governors of the Federal Reserve System, which has the effect,
among other things, of allowing brokers to extend credit on the collateral of
the Indigo shares. Depending upon factors similar to those described above
regarding listing and market quotations, it is likely that, following the
offer, the Indigo shares would no longer constitute "margin securities" for
the purposes of the margin regulations of the Federal Reserve Board and
therefore could no longer be used as collateral for loans made by brokers.
Certain Conditions of the Offer
Notwithstanding any other provision of the offer, AerFi Sverige may not
accept for payment or pay for any Indigo shares and may terminate the offer
if:
(1) before the expiration date of the offer:
(a) AerFi Sverige, AerFi, Indigo or their representative have not received
an unconditional written statement from the Minister for Enterprise,
Trade and Employment of Ireland that she or he has decided not to make
an order under Section 9 of the Irish Mergers Act in relation to the
offer or any related transactions or the applicable statutory period
for the making of such an order has not expired, or
(b) the waiting period under the Hart-Scott-Rodino Act (the U.S. antitrust
legislation) that is applicable to the offer and the related
transactions has not expired or been terminated, or
(2) at any time on or after November 11, 1999 and before the expiration
date of the offer, any of the following conditions exist:
(a) there is any law, or there shall be threatened, instituted or pending
any action or proceeding, or any investigation or other inquiry that
in AerFi Sverige's judgment might result in that action or proceeding,
by any government or governmental authority or agency, or by any other
person, before any court or governmental authority or agency:
(1) challenging or seeking to make illegal, to delay materially or
otherwise directly or indirectly to restrain or prohibit the making or
conduct of the offer and/or any related transactions or the acceptance
for payment of or payment for some of or all the Indigo shares by
AerFi Sverige or the completion of any related transactions, seeking
to obtain damages or otherwise directly or indirectly relating to the
transactions contemplated by or related to the offer or the
combination
(2) seeking to restrain or prohibit AerFi Sverige's ownership or operation
(or that of its respective subsidiaries or affiliates) of all or any
material portion of any of the Indigo shares or the business or assets
of Indigo and its subsidiaries, taken as a whole, or of AerFi Sverige
and its subsidiaries, taken as a whole, or to compel AerFi Sverige or
any of its subsidiaries or affiliates to dispose of or hold separate
all or any material portion of the business or assets of Indigo and
its subsidiaries, taken as a whole,
<PAGE>
or of AerFi Sverige and its subsidiaries, taken as a whole,
(3) seeking to impose or confirm material limitations on the ability of
AerFi Sverige or any of AerFi Sverige's subsidiaries or affiliates
effectively to exercise full rights of ownership of the Indigo shares,
including, without limitation, the right to vote any Indigo shares
acquired or owned by AerFi Sverige or any of AerFi Sverige's
subsidiaries or affiliates on all matters properly presented to
Indigo's shareholders,
(4) seeking to require divestiture by AerFi Sverige or any of AerFi
Sverige's subsidiaries or affiliates of any Indigo shares or
(5) that otherwise, in the judgment of AerFi Sverige, is likely to have a
material adverse effect on Indigo or AerFi, or
(b) there is any action taken, or any law proposed or enacted or deemed
applicable to the offer or the combination, by any court, government
or governmental authority or agency other than the application of the
waiting period provisions of the Irish Mergers Act or the Hart-Scott
Rodino Act to the offer or the combination, that, in the judgment of
AerFi Sverige, is likely to result in any of the consequences referred
to in clauses (1) through (5) of paragraph (a) above; or
(c) any change occurs or is threatened (or any development occurs or is
threatened involving a prospective change) in the business, assets,
liabilities, financial condition, capitalization, operations, results
of operations or prospects of Indigo or any of its subsidiaries that,
in the reasonable judgment of AerFi Sverige, is or is likely to have a
materially adverse effect on Indigo, or AerFi Sverige becomes aware of
any facts that, in the reasonable judgment of AerFi Sverige, have or
are likely to have material adverse significance with respect to
either the value of Indigo and its subsidiaries, taken as a whole, or
the value of the Indigo shares to us; or
(d) it is publicly disclosed or AerFi Sverige otherwise learns that:
(1) any person or "group", other than any shareholder who is a party to
the share exchange agreement and/or share purchase agreement, has
acquired or proposes to acquire beneficial ownership of more than 10%
of any class or series of capital stock of Indigo, through the
acquisition of stock, the formation of a group or otherwise, or is
granted any option, right or warrant, conditional or otherwise, to
acquire beneficial ownership of more than 10% of any class or series
of capital stock of Indigo other than acquisitions for bona fide
arbitrage purposes only and other than as disclosed in a Schedule 13D
or 13G on file with the Securities and Exchange Commission on November
11, 1999, or
(2) any such person or group that, before November 11, 1999, had filed a
Schedule 13D or 13G with the Securities and Exchange Commission, other
than any shareholder who is a party to the share exchange agreement
and/or share purchase agreement, has acquired or proposes to acquire
beneficial ownership of additional shares of any class or series of
capital stock of Indigo, through the acquisition of stock, the
formation of a group or otherwise, constituting 10% or more of any
such class or series, or is granted any option, right or warrant,
conditional or otherwise, to acquire beneficial ownership of
additional shares of any class or series of capital stock of Indigo
constituting 10% or more of any such class or series; or
(e) any person makes, or publicly announces an intention to make, a tender
or exchange offer for at least 10% of the outstanding Indigo shares;
or
(f)any person files a Notification and Report Form under the Hart-Scott
Rodino Act or makes a similar filing under any other antitrust law or
makes a public announcement reflecting an intent to acquire Indigo or
10% or more of the assets or securities of Indigo; or
(g) any person makes a proposal or other communication to Indigo or enters
into a definitive agreement or an agreement in principle with Indigo,
regarding an acquisition proposal;
(h) the Indigo board of directors withdraws or modifies in a manner
adverse to AerFi Sverige, its approval or recommendation of the offer
or recommends, enters into, or publicly announces its intention to
enter into, a definitive agreement or an agreement in principle with
respect to an acquisition proposal (or resolves to do any of the
foregoing); or
(i) any of Indigo's representations and warranties contained in the
combination agreement, that is (1) qualified by materiality or
material adverse effect or any similar standard or qualification, was
not true and correct when made or at any time before the acceptance
for purchase of the Indigo shares or (2) not so qualified, was not
true and correct in all material respects when made
<PAGE>
or at any time before the acceptance for purchase of the Indigo
shares; or
(j) Indigo breaches or fails to perform in any material respect any of
its obligations under the combination agreement; or
(k) the combination agreement is terminated in accordance with its terms;
or
(l) there is any general suspension of trading in, or limitation on
prices for, securities on the New York Stock Exchange, Nasdaq or in
the over-the-counter market; or
(m) there is any declaration of a banking moratorium by Swedish, Irish,
U.S. Federal or New York State authorities or a general suspension of
payments in respect of lenders that regularly participate in the U.S.
or international markets in loans to large corporations; or
(n) there is any material limitation by any Swedish, Irish, U.S. Federal,
state or local government or any court, administrative or regulatory
agency or commission or other governmental authority or agency in
Sweden, Ireland or the United States that materially affects the
extension of credit generally by lenders that regularly participate in
the U.S. or international markets in loans to large corporations; or
(o) there is any commencement of a war involving Sweden, Ireland or the
United States or any commencement of armed hostilities or other
national or international calamity involving Sweden, Ireland or the
United States that has a material effect on bank syndication or
financial markets in the United States or internationally; or
(p) in the case any of the events in paragraphs (l) through (o) above,
existed on or at the time of the commencement of this offer, there is
a material acceleration or worsening of those events which, in the
sole judgment of AerFi Sverige and regardless of the circumstances
(including any action or omission by us or AerFi Sverige) giving rise
to any such condition, makes it inadvisable to proceed with that
acceptance for payment or payment.
(3) we have not received, dated as of the unconditional time, (a) certain
legal opinions, (b) a certificate of the chief executive officer of
Indigo regarding the accuracy of its representations and warranties
and the performance of its obligations under the combination agreement
and (c) certain other documents that we may reasonably request
relating to the existence and authority of Indigo and its
subsidiaries.
Certain Legal Matters; Regulatory Approvals
General
Except as described in this section, based on our review of publicly
available filings of Indigo with the Securities and Exchange Commission and
other publicly available information regarding Indigo, we are not aware of any
license or regulatory permit that appears to be material to the business of
Indigo and its subsidiaries, taken as a whole, that might be adversely
affected by our acquisitions of Indigo shares (and/or the indirect acquisition
of the stock of Indigo's subsidiaries) as contemplated herein or of any
approval or other action by or with any domestic, foreign, or international
government authority or administrative or regulatory agency that would be
required for the acquisition of ownership of the Indigo shares (and/or the
indirect acquisition of the stock of Indigo's subsidiaries) by us. Should any
such approval or other action be required, we currently contemplate that that
approval or other action will be sought. While, except as otherwise expressly
described in this section, we do not presently intend to delay the acceptance
for payment of or payment for Indigo shares tendered under the offer pending
the outcome of any such matter, there can be no assurance that any such
approval or other action, if needed, would be obtained without substantial
conditions or that failure to obtain any such approval or other action might
not result in consequences adverse to Indigo's business or that certain parts
of Indigo's business might not have to be divested if those approvals were not
obtained or those other actions were not taken, any of which could cause AerFi
Sverige to decline to accept for payment or pay for any Indigo shares
tendered. AerFi Sverige's obligations to accept for payment or pay for the
Indigo shares tendered under the offer is subject to the conditions described
in this document, including the conditions referred to above in this paragraph
and certain conditions with respect to litigation and governmental action. See
"The Tender Offer -- Certain Conditions of the Offer".
Antitrust Compliance
Indigo shares will not be accepted for payment or paid for under the offer
until the expiration or earlier termination of the
<PAGE>
applicable waiting period under the Hart-Scott-Rodino Act. See "-- Certain
Conditions of the Offer". Under the Hart-Scott-Rodino Act, certain
transactions (including certain transactions involving the proposed
acquisition of in excess of 15%, 25% and 50% of the equity interest of a
target corporation) may not be consummated unless certain information has been
furnished to the Antitrust Division of the Department of Justice and the
Federal Trade Commission and certain waiting period requirements have been
satisfied. Since consummation of the offer and the share exchange agreement
and share purchase agreement transactions would result in the ownership by us
and our subsidiaries of more than 50% of the equity of Indigo, the acquisition
of Indigo shares by us under the offer and the share exchange and share
purchase agreement transactions is subject to those requirements.
We filed the required Notification and Report Forms with respect to the
offer and the combination with the Antitrust Division and the Federal Trade
Commission on November 12, 1999. The statutory waiting period applicable to
our purchase of Indigo shares under the offer and the share exchange agreement
and share purchase agreement transactions will expire on December 12, 1999.
However, before that date, the Antitrust Division or the Federal Trade
Commission may extend the waiting period by requesting additional information
or documentary material relevant to the acquisition. If such a request is
made, the waiting period will be extended until 11:59 P.M., New York City
time, on the tenth day after we certify to the Antitrust Division or the
Federal Trade Commission, as the case may be, that we have substantially
complied with that request. Thereafter, the waiting period can be extended
only by court order.
We have made a request for early termination of the waiting period
applicable to the offer. There can be no assurance, however, that the waiting
period under the Hart-Scott-Rodino Act will be terminated early or will not be
extended. Subject to the provision described under "-- Withdrawal Rights", any
extension of the waiting period will not give rise to any withdrawal rights
not otherwise provided for by applicable law. If AerFi Sverige's acquisition
of Indigo shares is delayed under a request by the Antitrust Division or the
Federal Trade Commission for additional information or documentary material
under the Hart-Scott-Rodino Act, the offer may, but need not, be extended.
The Federal Trade Commission and the Antitrust Division frequently
scrutinize the legality under the antitrust laws of transactions such as the
proposed acquisition of Indigo shares by us under the offer. At any time
before or after the purchase of Indigo shares under the offer by us, the
Federal Trade Commission or the Antitrust Division could take any action under
the antitrust laws as it deems necessary or desirable in the public interest,
including seeking to enjoin the purchase of Indigo shares under the offer or
seeking the divestiture of Indigo shares purchased by us or the divestiture of
substantial assets of AerFi, Indigo or their respective subsidiaries. Private
parties and state attorneys general may also bring legal action under federal
or state antitrust laws under certain circumstances. Based upon an examination
of information available to AerFi relating to the businesses in which AerFi,
Indigo and their respective subsidiaries are engaged, we believe that neither
the offer nor the combination will violate the antitrust laws. Nevertheless,
there can be no assurance what the result will be if a challenge is made. See
"The Tender Offer -- Certain Conditions of the Offer".
Pursuant to the Irish Mergers Act, the necessary antitrust filings were
made in Ireland on November 12, 1999, and any delays in decisions by the
appropriate regulatory authorities in Ireland may affect when and whether the
combination will proceed.
Under the Irish Mergers Act, certain mergers and takeovers (including
certain transactions involving the proposed acquisition of 25% or more of the
equity interest of a target corporation) must, if certain financial thresholds
are exceeded, be notified to the Minster for Enterprise, Trade and Employment.
Where the Irish Mergers Act applies, notification must be made within one
month after an offer capable of acceptance is made, the effect of which would
result in the merger or takeover, and the transaction may not be consummated
(the main sanction imposed by the Act is that title to the shares or assets
concerned will not pass) unless the Minister has issued a clearance statement
in respect of the proposed merger or takeover, or it is implemented in
accordance with the conditions of a conditional clearance, or the Minister
fails to take any action within the relevant period prescribed by the Irish
Mergers Act, which is 3 months from the later of the date of notification and,
if the Minister requests further information about the proposed transaction,
the date of receipt of that information.
Since the consummation of the combination agreement and the related
transactions, including the offer, would result in ownership by us and our
subsidiaries of more than 25% of the equity of Indigo, and as the financial
thresholds and the other requirements of the Irish Mergers Act are met, the
acquisition of Indigo shares by us and AerFi Sverige under the offer and the
share exchange agreement and share purchase agreement transactions is subject
to the provisions of the Irish Mergers Act and accordingly Indigo shares will
not be accepted for payment or paid for under the offer until either an
unconditional clearance from the Minister has been received or the relevant
period prescribed by the Irish Mergers Act has expired. See "-- Certain
Conditions of the Offer".
Pursuant to the Swedish Companies Act, no antitrust filings with the
appropriate regulatory authorities in Sweden were necessary in connection with
the offer and the combination.
<PAGE>
State Takeover Statutes
A number of states have adopted laws which purport, to varying degrees, to
apply to attempts to acquire corporations that are incorporated in, or which
have substantial assets, shareholders, principal executive offices or
principal places of business or whose business operations otherwise have
substantial economic effects in, those states. Indigo, directly or through
subsidiaries, conducts business in a number of states throughout the United
States, some of which have enacted those laws. We do not believe that any of
these laws will, by their terms, apply to the offer, the compulsory
acquisition or any other business combination between us or any of our
affiliates and Indigo and we have not complied with any such laws. To the
extent that certain provisions of these laws purport to apply to the offer or
any such merger or other business combination, we believe that there are
reasonable bases for contesting those laws.
If any government official or third party should seek to apply any state
takeover law to the offer, the compulsory acquisition or any other business
combination between us or any of our affiliates and Indigo, we will take any
action as then appears desirable, which action may include challenging the
applicability or validity of that statute in appropriate court proceedings. In
the event it is asserted that one or more state takeover statutes is
applicable to the offer, the compulsory acquisition or any such other business
combination and an appropriate court does not determine that it is
inapplicable or invalid as applied to the offer the compulsory acquisition or
any such other business combination, we might be required to file certain
information with, or to receive approvals from, the relevant state authorities
or holders of Indigo shares, and we might be unable to accept for payment or
pay for Indigo shares tendered under the offer, or be delayed in continuing or
consummating the offer, the compulsory acquisition or any such other business
combination. In that case, we may not be obligated to accept for payment or
pay for any tendered Indigo shares.
Fees and Expenses
Except as disclosed below, we will not pay any fees or commissions to any
broker, dealer or other person for soliciting tenders of Indigo shares under
the offer.
We have retained the services of Greenhill & Co. LLC. to act as our
financial advisor and as dealer manager in connection with the offer and the
combination. Under the terms of an engagement letter, we agreed to pay
Greenhill for its services as financial advisor and dealer manager an
aggregate fee of up to $2.5 million. We also agreed to reimburse Greenhill for
its reasonable travel and other out-of-pocket expenses incurred in connection
with its services, including fees and expenses of its legal counsel. We
further agreed to indemnify Greenhill and certain related parties against
certain liabilities arising out of Greenhill's engagement.
We have retained Corporate Investor Communications, Inc. to be the
information agent and Bankers Trust Company to be the depositary in connection
with the offer. The information agent may contact holders of Indigo shares by
mail, telephone, telecopy, telegraph and personal interview and may request
banks, brokers, dealers and other nominee shareholders to forward materials
relating to the offer to beneficial owners of Indigo shares.
As compensation for acting as information agent in connection with the
offer, Corporate Investor Communications, Inc. will be paid a fee of $12,000
and will also be reimbursed for certain out-of-pocket expenses and may be
indemnified against certain liabilities and expenses in connection with the
offer, including certain liabilities under the federal securities laws. We
will pay the depositary reasonable and customary compensation for its services
in connection with the offer, plus reimbursement for out-of-pocket expenses,
and will indemnify the depositary against certain liabilities and expenses in
connection therewith, including certain liabilities under federal securities
laws. We will reimburse brokers, dealers, commercial banks and trust companies
for customary handling and mailing expenses incurred by them in forwarding
material to their customers.
The following is an estimate of fees and expenses to be incurred by us in
connection with the offer:
Financial advisor/dealer manager. $2,600,000
Legal............................ 2,200,000
Accounting....................... 500,000
Taxation......................... 425,000
Printing/filing.................. 250,000
Advertising...................... 100,000
Depositary....................... 32,000
Information agent (including 39,000
mailing).......................
Miscellaneous.................... 500,000
----------
Total.......................... $6,646,000
==========
<PAGE>
Miscellaneous
The offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Indigo shares in any jurisdiction in which the making of
the offer or the acceptance thereof would not be in compliance with the laws
of that jurisdiction. However, we may take such action as we may deem
necessary to make the offer in any such jurisdiction and extend the offer to
holders of Indigo shares in that jurisdiction. In any jurisdiction the
securities, blue sky or other laws of which require the offer to be made by a
licensed broker or dealer, the offer is being made on our behalf by the dealer
manager or one or more registered brokers or dealers licensed under the laws
of that jurisdiction.
YOU SHOULD RELY ONLY ON INFORMATION CONTAINED IN THE DOCUMENT OR THAT WE
HAVE REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT.
We have filed with the Securities and Exchange Commission a Tender Offer
Statement on Schedule 14D-1 under Rule 14d-3 under the Exchange Act, together
with exhibits, furnishing certain additional information about the offer.
AerFi, AerFi Sverige and Indigo have jointly filed a Transaction Statement on
Schedule 13E-3, under Rule 13e-3 under the Exchange Act, furnishing certain
additional information about the transactions. We may file amendments to those
statements. In addition, Indigo has filed with the Securities and Exchange
Commission a Schedule 14D-9, together with exhibits, under Rule 14d-9 under
the Exchange Act, setting forth the recommendations of Indigo's board of
directors regarding the offer and the reasons for those recommendations and
furnishing certain additional related information. You may examine and obtain
copies of these documents, and any amendments from the Securities and Exchange
Commission (but not the regional offices of the Securities and Exchange
Commission) in the manner described under "-- Certain Information Concerning
AerFi and AerFi Sverige" above.
AerFi Sverige
November 17, 1999
<PAGE>
---------------
SCHEDULES
---------------
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
Indigo
The following table lists (1) the name, current business or residence
address and present principal occupation or employment, (2) material
occupations, positions, offices or employments and business addresses thereof
for the past five years and (3) information as to beneficial ownership of
Indigo shares of each director and executive officer of Indigo as of November
17, 1999. Unless otherwise indicated, each of Indigo's directors and officers
is a citizen of the Kingdom of Sweden. Except as otherwise indicated, the
business address of each director and executive officer of Indigo is Sodra
Forstadsgatan 4, S-211 43 Malmo, Sweden. Except as otherwise indicated, each
occupation listed opposite a person's name refers to employment with Indigo.
Other than as indicated below, no director or executive officer of Indigo
beneficially owns more than 1% of the outstanding Indigo shares. Directors of
Indigo are indicated with an asterisk.
<TABLE>
Present Principal Occupation or Employment; Beneficial
Name, Citizenship Material Positions Held During the Past Five Year Ownership of
and Current Business Address and Business Addresses Thereof Indigo shares
---------------------------- ------------------------------------------------- -------------
<S> <C> <C>
*Karl-Axel Granlund.......... Mr. Granlund has been Chairman of the board of 3,364,143
directors of Indigo since its inception and was
President of Indigo from its inception until
January 1995. Mr. Granlund is also currently the
Chairman of the board of directors of Volito AB,
an investment company with interests in aviation,
trade, property management and other activities,
including a significant ownership interest in
Indigo. From 1982 to 1991, Mr. Granlund was
employed in various capacities by Nyckeln AB, a
publicly traded Swedish real estate finance and
property management company, including Senior
Vice President of Nyckeln from 1982 to 1985;
Managing Director of Nyckeln's Aircraft Leasing
division from 1985 to 1991; and Chief Executive
Officer of Indigo Aviation AB. Mr. Granlund holds
a Master of Science degree from the University of
Linkoping and is a graduate of the Swedish
Military Academy. He also currently holds the
rank of Captain in the Swedish Army Reserve.
*John Evans.................. Mr. Evans has been President and Chief 1,200,161
(United States of America) Executive Officer of Indigo Airlease Corporation, a
wholly-owned U.S. subsidiary of Indigo, since May
1997. Mr. Evans has been a director of Indigo
since 1995. From 1987 to 1995, Mr. Evans was
employed by ILFC, an aircraft leasing company,
and was Vice President -- Marketing in charge of
marketing for Europe, the United States and the
South Pacific from 1990 to 1995. Before joining
ILFC, Mr. Evans' aviation experience included
positions as Manager of Technical Services for
Aeronautics Leasing, Inc. from 1986 to 1987;
Manager in charge of Maintenance Planning and
Reliability Engineering for Frontier
Horizon/Skybus Airlines from 1985 to 1986; and
Line Supervisor for Atlas Aircraft in 1985. Mr.
Evans served in the U.S. Army from 1979 to 1985
in 179th Aviation Company in Fort Carson,
Colorado with his last position being Flight
Engineering/ Technical Inspector. Mr. Evans
attended the University of Colorado studying
Aviation/Aerospace Engineering.
*Bo Olsdal................... Mr. Olsdal has been a director of Indigo since 0
1993. Mr. Olsdal is currently a private investor
and a director of Volito. >From 1991 to 1997, Mr.
Olsdal owned and managed ALT Finance, a London,
England based company, which was a former finance
subsidiary of a Swedish bank, that was active in
aircraft finance. From 1987 to 1991, Mr. Olsdal
was General Manager of CL/PK Airfinance, an
aircraft financing joint venture between PK Banken
Stockholm and Credit Lyonnais, Paris. From 1982 to
<PAGE>
1987, Mr. Olsdal was the Managing Director of PK
Finance International, which was responsible for
the international financing of aircraft for PK
Banken. From 1978 to 1982, Mr. Olsdal was an Area
Manager of Independent Leasing AB. Mr. Olsdal is a
graduate of Chalmers University of Technology in
Gothenburg, Sweden.
Bradley M. Winograd.......... Mr. Winograd is Executive Vice President 224,111
(United States of America) Finance and Chief Financial Officer of Indigo Airlease
Corporation, a wholly-owned U.S. subsidiary of
Indigo, and has been with Indigo since March 1996.
From 1992 to 1996, Mr. Winograd was employed by
ILFC, and was Director of Finance from 1993 to
1996. Before that time, Mr. Winograd was an
auditor with Ernst and Young from 1990 to 1992.
Mr. Winograd is a graduate of the University of
California, Berkeley with a Bachelor of Science
degree with honors in Accounting and Finance and
is a Certified Public Accountant.
Mario Schuler................ Mr. Schuler is Managing Director of Indigo and 10,000
(Federal Republic of Germany) has been with Indigo since September 1997.
Before joining Indigo, Mr. Schuler was Director of
Leasing Market Division for Airbus Industrie from
1994 to 1997 and Director of Marketing and
Sales/Europe for Airbus Industrie from 1984 to
1993.
*Jan-Eric Osterlund.......... Mr. Osterlund became a deputy director of 0
Indigo in 1996 and became a director in 1997. Mr.
Osterlund is currently Chairman of Quequoin
Holdings, Ltd., an investment group specializing
primarily in medical venture capital. Mr.
Osterlund is also the Chairman of Phairson Medical
Ltd., a biotechnology Group; BM Research A/S, a
drug delivery systems company, and Epivac Ltd., a
drug delivery systems company. Mr. Osterlund is
also a director of Ermitage International Ltd., a
money management company; Shilling Banco Ltd., a
UK commercial real estate investment company; and
Ostrumentia, a Swedish commercial reals estate
investment company and is a Deputy Director of
Volito AB. Mr. Osterlund was Chairman and a
substantial shareholder in HemoCue AB, a Swedish
pharmaceutical company, from 1989 to 1992 and a
director until 1994. From 1983 until 1988, Mr.
Osterlund managed his own investment and strategic
consulting business in London, England.
*Geir Stormorken............. Mr. Stormorken has been a director of Indigo 0
(Kingdom of Norway) since 1997. Mr. Stormorken is currently the managing
director of several companies owned by the
Braathen family in Norway, including Braganza A/S
and Braathen Lease and Aviation Know How A/S.
Braganza A/S is a major shareholder of Braathens
SAFE, Norway's leading domestic airline. Mr.
Stormorken has been a director of ResidenSea Ltd.
(Bahamas) since December 1996, Kristiansand
Dyrepark ASA (Norway) since May 1996 and
Industriginans SMB II ASA (Norway), in which
Braganza AS has an ownership interest, since
December 1996. Mr. Stormorken held various
position in Braathens SAFE between 1988 and 1995.
Mr. Stormorken is a graduate of the Norwegian
School of Economics and Business Administration.
Joseph F. Drobnich........... Mr. Drobnich has been Senior Vice President 0
(United States of America) Marketing of Indigo Airlease Corporation, a
wholly-owned U.S. subsidiary of Indigo, since
April 1998. Before joining Indigo, Mr. Drobnich
was Vice President, Sales and Marketing for
General Electric Capital Aviation Services since
1994. From 1991 to 1993, Mr. Drobnich was
Marketing Manager for Polaris Aircraft Leasing
Corporation. Before that time, Mr. Drobnich held
various positions at McDonnell Douglas
Corporation's Douglas Aircraft division from 1983
to 1990. Mr. Drobnich received his Bachelor of
<PAGE>
Science in Mechanical Engineering and Technology
from the University of Dayton and his Master of
Business Administration from the University of
Southern California.
*Jon David Haugse............ Mr. Haugse has been a director of Indigo since 0
(Kingdom of Norway) 1997. Mr. Haugse is currently a partner of Industriginans
Direkte Investeringer A/S in Norway, and managing
director of Industrifinans SMB II ASA, a venture
capital and buy-out company managed by
Industrifinans Direkte. Mr. Haugse joined
Industrifinans Direkte in 1992 and is also a
director of several public and privately held
companies. Before 1992, Mr. Haugse has held
positions in Norsk Hydro, Norway's largest
industrial group, and Touche Ross Management
Consultants. Mr. Haugse is a graduate of the
Norwegian School of Economics and Business
Administration.
Israel Padron................ Mr. Padron has been Senior Vice President 1,500
(United States of America) Marketing for Indigo Airlease Corporation since
May 1999. Before joining Indigo, Mr. Padron was
Vice President -- New Business and Remarketing for
The CIT Group where he had been employed since
1991. From 1989 to 1991, Mr. Padron was Vice
President Marketing at Cauff, Lippman Aviation;
from 1987 to 1989 Manager of Aircraft Programs for
Ryder; from 1986 to 1987 an Appraiser at Avmark
Services and from 1980 to 1986 held various
positions at Air Florida. Mr. Padron attended
Barry University.
*David Neeleman.............. Mr. Neeleman has been a director of Indigo 9,000
(United States of America) since 1998. Mr. Neeleman is currently the Chief
Executive Officer of jetBlue Airways. Prior to
joining jetBlue Airways in 1999 Mr. Neeleman was
the Chief Executive Officer of Open Skies, Inc., a
corporation which provides reservation services to
airlines throughout the world, from 1995 to 1999.
Mr. Neeleman served as president of Morris Air
from its inception in 1991 until its acquisition
by Southwest Airlines in 1993. Following the
acquisition of Morris Air, Mr. Neeleman served on
the executive planning committee of Southwest
Airlines during 1994. Mr. Neeleman is currently a
director of WestJet Airlines Ltd., a Canadian
low-cost airline.
Caryl Ben Basat.............. Ms. Ben Basat has been Vice President and 4,000
(United States of America) Corporate Counsel of Indigo Airlease Corporation
since January 1998. Before joining Indigo, Ms. Ben
Basat was the Vice President and Assistant General
Counsel for The AGES Group, ALP from early 1996
through 1997. Ms. Ben Basat was in private law
practice from 1994 through 1995. Ms. Ben Basat is
a graduate of Pace University School of Law where
she received her juris doctor degree. Previously,
Ms. Ben Basat held a variety of management
positions in the aviation industry, including
serving as a contracts consultant for Greenwich
Air Services from 1989 to 1990 and working in a
variety of positions for World Airways from 1981
to 1986.
Sven Holmgren................ Mr. Holmgren has been Vice President and Corporate 0
Counsel since April 1998. Before joining Indigo,
Mr. Holmgren was an attorney at Advokatfirman
Lindahl in Kristiandstad, Stockholm and Malmo,
Sweden since 1990. From 1987 to 1990, Mr. Holmgren
was serving a junior judgship at the district
court of Ystad, Sweden. Mr. Holmgren served as an
officer in the special forces of the Royal Swedish
Marines Combat Group from 1980 to 1982. Mr.
Holmgren received his Master of Law at the
University of Lund, Sweden.
Clas Bergstrand.............. Mr. Bergstrand has been Vice President Technical 8,000
of Indigo since August 1994. Before joining
Indigo, Mr. Bergstrand was the head of the
Engineering section at Malmo Aviation AB from
<PAGE>
1988 to 1994. Before that time, Mr. Bergstrand was
a mechanical Designer and System Engineer at
Swedair AB from 1981 to 1988 and Purchaser and
Systems Engineer with Transair Sweden AB from 1979
to 1980. >From 1976 to 1977, Mr. Bergstrand served
as an aircraft mechanic/non-commissioned officer
in the Swedish Airforce. Mr. Bergstrand is a
graduate of a Swedish four-year
technical-mechanical engineering school and has
also earned a Business Diploma. Mr. Bergstrand is
a certified Private Pilot and a Gliding Instructor
appointed by the Royal Swedish Air Force.
Arthur D. McChesney.......... Mr. McChesney is currently Senior Vice President 4,200
(United States of America) Technical of Indigo Airlease Corporation, a
wholly-owned U.S. subsidiary of Indigo, and has
been with Indigo since March 1997. Before joining
Indigo, Mr. McChesney was a Director of Technical
Services for ILFC from 1994 to 1997, a Flight Line
Mechanic for Federal Express Corporation from 1992
to 1994 and a Project Manager for Douglas Aircraft
Company from 1987 to 1992. Mr. McChesney has an
Associate of Science Degree in Aviation
Maintenance Technology from Embry-Riddle
Aeronautical University. Mr. McChesney is an FAA
Certified Airframe and Powerplant Mechanic and an
FAA certified Private Pilot.
*Mitchell I. Gordon.......... Mr. Gordon has been director of Indigo since 1998 0
(United States of America) Mr. Gordon has been the President of Atlas Capital
Partners, a private equity investment fund, since
February 1998. Before joining Atlas Capital
Partners, he was a Managing Director at Salomon
Smith Barney and co-head of its Transportation
Investment Banking Group from July 1993 to January
1998. From 1988 to 1993, Mr. Gordon was Senior
Vice President of Furman Selz Inc., in charge of
the Transportation and Automotive Investment
Banking groups. From 1985 to 1988 he was a Vice
President of Needham & Company Inc. From 1981 to
1985, Mr. Gordon held various executive positions
at American Broadcasting Companies, Inc. Mr.
Gordon holds a Bachelor of Science degree in
Business Administration from Washington University
and a Masters of Business Administration from
Harvard Business School.
Arne Wennberg................ Mr. Wenneberg became a director of Indigo in 1995 64,500
and became a deputy director in 1997. Mr.
Wenneberg is currently a private investor. From
1985 to 1993, Mr. Wenneberg was the President of
HemoCue AB, a Swedish pharmaceutical company.
Before that time, Mr. Wenneberg was the General
Manager of MedScand AB from 1983 to 1984 and the
General Manager and International Product Manager
of Molnlycke AB from 1972 to 1982. Mr. Wenneberg
is currently a director of Quequoin, BM Research
A/S and Volito AB.
- ----------
* Represents Directors of Indigo.
</TABLE>
<PAGE>
SCHEDULE II
DIRECTORS AND EXECUTIVE OFFICERS OF
AerFi and AerFi Sverige
The following table lists (1) the name, current business or residence
address and present principal occupation or employment and (2) material
occupations, positions, offices or employments and business addresses for the
past five years, of each of our director and executive officer. Unless
otherwise stated, each of our, directors and officers, and each of the
proposed directors and officers of Indigo after consummation of the offer and
the combination, is a citizen of Ireland.
Except as otherwise indicated, the business address of each of our
director and executive officer is, AerFi Group plc, Aviation House, Shannon,
Co. Clare, Ireland. Except as otherwise indicated, each occupation listed
opposite a person's name refers to employment with AerFi. None of our director
or executive officer beneficially owns any material amount of outstanding
Indigo shares. Our directors are indicated with an asterisk.
A. Directors and Executive Officers of AerFi.
<TABLE>
Present Principal Occupation or Employment;
Name, Citizenship Material Positions Held During the Past Five Years
and Current Business Address and Business Addresses Thereof
---------------------------- ---------------------------------------------------
<S> <C>
*Lord Stevenson of Coddenham CBE Chairman Lord Stevenson became Chairman of AerFi on
(United Kingdom) October 29, 1993 and is Chairman of the
Organization and Compensation Committee. He is
Chairman of Pearson plc and of Halifax plc and a
non-executive director of various companies,
including Manpower Inc (formerly Blue Arrow) and
St. James' Place Capital plc. He is also a Bank
of England nominee on the Panel of Takeovers and
Mergers.
*Patrick Blaney Chief Executive Mr. Blaney is a Chartered Accountant.
He has been Chief Executive of AerFi since October
29, 1993 and a Director since April 1993. He has held
a number of senior management positions since joining
AerFi as a Vice President in 1986 and has served as
Deputy Chief Executive of AerFi's Leasing and Capital
divisions and from April 1993 to October 1993 as
AerFi's Chief Operating Officer.
*David Bonderman Mr. Bonderman has been managing Partner of TPG since
(United States of America) 1992. Prior to 1992, Mr. Bonderman was Chief Operating
201 Main Street, Suite 2420, Officer and Chief Investment Officer of Keystone Inc.
Fourth Worth,
Texas 76102, USA
*A. Michael Davies Mr. Davies is a Chartered Accountant. He became a
(United Kingdom) Director/ Deputy Chairman of AerFi on October 29,
1993 and is a member of the Audit and the
Organization and Compensation Committees. Mr. Davies
is Chairman of various companies, including the
publicly quoted Simon Group plc., National Express
Group plc, Perkins Foods plc and Corporate Services
Group plc. He is also a non-executive director of
British Airways plc and of various private companies.
*Maurice A. Foley Mr. Foley has been a Director of AerFi since 1976
and is Chairman of the Audit Committee and is a
member of the Organization and Compensation
Committee. Mr. Foley is a former Deputy Chairman,
Group Chief Executive and President of the Company.
He is also a non-executive Director of various
private companies.
*William. Franke Mr. Franke has been Chairman and Chief Executive of
(United States of America) America West Holdings Corporation since February 1997
American West Airlines Inc. and, since 1992, Chairman of the Board of its principal
400 E Sky Harbour Boulevard, subsidiary, America West Airlines, Inc. Mr. Franke was
Phoenix, AZ 85034 USA Chairman of Airplanes Group from 1996 to 1998. Mr.
Franke is owner and president of Franke & Company,
Inc., a financial advisory firm. He is currently a
director of Central Newspapers, Inc., publisher of
the Phoenix and Indianapolis morning and evening
newspapers, of Phelps Dodge Corporation, a major
mining and manufacturing company and Beringer Wine
Estates. He is also a director of Air Transport
Association (ATA).
1
<PAGE>
*William S. Price III Mr. Price has been Managing Partner of TPG since 1992.
(United States of America) Prior to 1992, Mr. Price was Vice President of Strategic
345 California Street, Suite 3300, Planning and Business Development for GE Capital.
San Francisco, California 94104
USA
*Gerald B. Scanlan Mr. Scanlan became a Director of AerFi on July 26, 1994.
Mr. Scanlan is a non-executive director of various
public and private companies and he is former Deputy
Chairman and Group Chief Executive of Allied Irish
Banks plc.
Edward Hansom Chief Financial Officer since May, 1997
(United Kingdom)
Rose Hynes General Counsel since May, 1997
Paul Farrell Group Treasurer since May, 1997
Pat Dalton Group Chief Accountant since May, 1997
Michael Walsh General Counsel since May, 1997
John Redmond Company Secretary since September, 1997
- ----------
* Represents Directors of AerFi.
B. Directors and Executive Officers of AerFi Sverige.
Present Principal Occupation or Employment;
Name, Citizenship Material Positions Held During the Past Five Years
and Current Business Address and Business Addresses Thereof
------------------------------ --------------------------------------------------
*John Redmond Director of AerFi Sverige since November 1999
Pat Dalton Deputy director of AerFi Sverige since
November 1999
- ----------
* Represents Directors of AerFi Sverige.
</TABLE>
<PAGE>
Annex A
LOGO
November 11, 1999
Board of Directors
Indigo Aviation AB
Sodra Forstadsgatan 4
S-211 43 Malmo, Sweden
Ladies and Gentlemen:
We understand that Indigo Aviation AB. ("Indigo") and AerFi Group PLC
("AerFi") have entered into a Combination Agreement (the "Combination
Agreement") dated November 11, 1999, pursuant to which AerFi will offer to
acquire the approximately 3.0 million shares of Indigo currently held by
public shareholders for $13.00 per share in cash (the "Cash Purchase Price").
We also understand that certain shareholders of Indigo (as set forth in the
Share Purchase Agreement, the "Inside Shareholders") and AerFi have entered
into a Share Purchase Agreement (the "Share Purchase Agreement") dated
November 11, 1999, pursuant to which AerFi will acquire approximately 2.3
million shares held by the Inside Shareholders for the Cash Purchase Price.
Additionally, we understand that certain Inside Shareholders and AerFi have
entered into a Share Exchange Agreement (the "Share Exchange Agreement") dated
November 11, 1999, pursuant to which approximately 5.9 million shares
currently held by such Inside Shareholders will be acquired in a stock for
stock exchange whereby each such Indigo share will be exchanged for 3.7 AerFi
shares, and an Option Agreement (the "Option Agreement") dated November 11,
1999 whereby such Inside Shareholders will be granted options to purchase an
aggregate of 1,000,000 AerFi shares at a price of $3.17 per share. You have
provided us with a copy of the Combination Agreement, the Share Exchange
Agreement, the Option Agreement and the Share Purchase Agreement (together,
these agreements constitute the "Transaction").
You have asked us to render our opinion as to whether the Cash Purchase
Price is fair, from a financial point of view, to the shareholders of Indigo
(other than the Inside Shareholders).
In the course of performing our review and analyses for rendering this
opinion, we have:
o reviewed the Combination Agreement, the Share Exchange Agreement, the
Option Agreement and the Share Purchase Agreement;
o reviewed Indigo's Annual Reports to Shareholders and Annual Reports on
Form 20-F for the fiscal years ended December 31, 1998 through 1999,
and its Quarterly Reports on Form 6-K for the periods ended March 31,
June 30, 1999 and September 30, 1999;
o reviewed certain operating and financial information, including
projections, provided to us by management relating to Indigo's
business and prospects;
o met with certain members of Indigo's senior management to discuss
Indigo's business, operations, historical and projected financial
statements and future prospects;
o reviewed the historical prices, valuation parameters and trading
volume of the common shares of Indigo;
o reviewed publicly available financial data, stock market performance
data and valuation parameters of companies which we deemed generally
comparable to Indigo;
o performed discounted cash flow analyses based on the projections for
Indigo furnished to us; and
o conducted such other studies, analyses, inquiries and investigations
as we deemed appropriate.
We have relied upon and assumed, without independent verification, the
accuracy and completeness of the financial and other information, including
without limitation the projections provided to us by Indigo and current and
future estimates of aircraft values as provided by Avitas and adjusted, as
appropriate, by management. With respect to Indigo's projected financial
results, we have assumed that they have been reasonably prepared on bases
reflecting the best currently available estimates and judgments of the senior
2
<PAGE>
managements of Indigo as to the expected future performance of Indigo,
respectively. We have not assumed any responsibility for the independent
verification of any such information or of the projections provided to us, and
we have further relied upon the assurances of the senior managements of Indigo
that they are unaware of any facts that would make the information and
projections provided to us incomplete or misleading.
In arriving at our opinion, we have not performed or obtained any
independent appraisal of the assets or liabilities of Indigo, nor have we been
furnished with any such appraisals. Our opinion is necessarily based on
economic, market and other conditions, and the information made available to
us, as of the date hereof.
We have acted as a financial advisor to Indigo in connection with the
Transaction and will receive a fee for such services. In the ordinary course
of business, Bear Stearns may actively trade the equity and debt securities of
Indigo for our own account and for the account of our customers and,
accordingly, may at any time hold a long or short position in such securities.
It is understood that this letter is intended for the benefit and use of
the Board of Directors of Indigo and does not constitute a recommendation to
the Board of Directors of Indigo or any holders of Indigo common stock as to
how to vote in connection with the Transaction. This opinion does not address
Indigo's underlying business decision to pursue the Transaction. This letter
is not to be used for any other purpose, or reproduced, disseminated, quoted
to or referred to at any time, in whole or in part, without our prior written
consent; provided, however, that this letter may be included in its entirety
in any offer to purchase to be distributed to the holders of Indigo common
stock in connection with the Transaction.
Based on and subject to the foregoing, it is our opinion that, as of the
date hereof, the Cash Purchase Price is fair, from a financial point of view,
to the shareholders of Indigo (other than the Inside Shareholders).
Very truly yours,
BEAR, STEARNS & CO. INC.
By: /s/ Steven Begleiter
Senior Managing Director
<PAGE>
The depositary will accept manually signed facsimile copies of the letter
of transmittal. You or your broker, dealer, commercial bank, trust company or
other nominee should send or deliver the letter of transmittal, Indigo share
certificates and any other required documents to the depositary at the
following addresses:
The depositary for the offer is:
Bankers Trust Company
By Mail: By Facsimile Transmission By Hand or Overnight
(For Eligible Courier:
Institution only):
123 Washington Street
New York, New York 10006 123 Washington Street
(212) 250-5644 New York, New York 10006
Att: Bond Transfer Unit/
ADR Tender Att: Bond Transfer Unit/
ADR Tender
Confirm by Telephone:
(212) 250-5065
You should address questions or requests for assistance or additional
copies of this document and the letter of transmittal to the information agent
or the dealer manager at their addresses and telephone numbers listed below.
You may also contact your broker, dealer, commercial bank or trust company for
assistance concerning the offer. You may obtain additional copies of this
document, the letter of transmittal and other related materials from the
information agent or the dealer manager. These documents will be furnished
promptly at our expense.
The information agent for the offer is:
Corporate Investor Communications, Inc.
111 Commerce Road
Carlstadt
New Jersey 07072-2586
Toll Free (877) 842-2405
Banks and Brokers Please Call: (800) 346-7885
The dealer manager for the offer is:
GREENHILL & CO., LLC
31 West 52nd Street
New York, New York 10019
(212) 408-0660
(888) 504-7336 (Toll Free)
Exhibit (a)(2)
LETTER OF TRANSMITTAL
To Tender All Outstanding Ordinary Shares and
American Depositary Shares
of
Indigo Aviation AB
Pursuant to its Offer to Purchase
dated November 17, 1999
by
AerFi Sverige AB,
an indirect, wholly-owned subsidiary of
AerFi Group plc
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY DECEMBER 15, 1999, UNLESS EXTENDED.
- -------------------------------------------------------------------------------
To: BANKERS TRUST COMPANY, Depositary
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission By Hand or Overnight Courier:
(For Eligible Institutions only):
123 Washington Street (212) 250-5644 123 Washington Street
New York, New York 10006 New York, New York 10006
Attn: Bond Transfer Unit/ADR Tender Attn: Bond Transfer Unit/ADR Tender
Confirm by Telephone:
(212) 250-5065
</TABLE>
Delivery of this instrument to an address other than as set forth above or
transmission of instructions to a facsimile number other than the ones listed
above will not constitute a valid delivery.
This letter of transmittal is to be used if certificates are to be
forwarded herewith or, unless an Agent's Message (as described in the offer to
purchase) is utilized, if delivery of Indigo shares is to be made by book-entry
transfer to the depositary's account at The Depository Trust Company pursuant
to the procedures set forth in the offer to purchase under "The Tender Offer --
Procedures for Accepting the Offer and Tendering Shares".
Shareholders who cannot deliver their Indigo shares and all other
documents required hereby to the depositary by the expiration date must tender
their Indigo shares pursuant to the guaranteed delivery procedure set forth in
the offer to purchase under "The Tender Offer -- Procedures for Accepting the
Offer and Tendering Shares". See Instruction 2.
<PAGE>
<TABLE>
DESCRIPTION OF SHARES TENDERED
- ----------------------------------------------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Holder(s) Shares Tendered
(Please fill in, if blank) (Attach additional list if necessary)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Total Number of Shares Number of
Certificate Represented by Shares
Number(s)* Certificate(s)* Tendered**
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
Total Shares
- ----------------------------------------------------------------------------------------------------------------------
- ---------
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Indigo shares
represented by any certificates delivered to the depositary are being
tendered. See Instruction 4.
</TABLE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY
[] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
TO THE DEPOSITARY'S ACCOUNT AT THE DEPOSITORY TRUST COMPANY AND COMPLETE
THE FOLLOWING:
Name of Tendering Institution
----------------------------------------------
Account No. at The Depository Trust Company
--------------------------------
Transaction Code No.
-------------------------------------------------------
[] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Tendering Stockholder(s)
----------------------------------------
Date of Execution of Notice of Guaranteed Delivery
-------------------------
Name of Institution which Guaranteed Delivery
------------------------------
If delivery is by book-entry transfer:
Name of Tendering Institution
-----------------------------------------
Account No. at The Depository Trust Company
--------------------------------
Transaction Code No.
-------------------------------------------------------
2
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to AerFi Sverige AB or AerFi Sverige, a
Swedish corporation and an indirect, wholly-owned subsidiary of AerFi Group plc
or AerFi, the above-described issued and outstanding ordinary shares nominal
value SEK 3.14 per share and without duplication, the American depositary
shares each representing one ordinary share, of Indigo Aviation AB or Indigo, a
Swedish limited liability company, at a price of $13.00 per Indigo share, net
to the seller in cash, upon the terms and subject to the conditions set forth
in the offer to purchase dated November 17, 1999, receipt of which is hereby
acknowledged, and in this letter of transmittal (which together constitute the
offer). AerFi Sverige reserves the right to transfer or assign, in whole or
from time to time in part, to one or more of its affiliates the right to
purchase Indigo shares tendered pursuant to the offer.
Upon the terms and subject to the terms and conditions of the offer and
effective upon acceptance for payment of and payment for the Indigo shares
tendered herewith, the undersigned hereby sells, assigns and transfers to or
upon the order of AerFi Sverige all right, title and interest in and to all the
Indigo shares that are being tendered hereby (and any and all other Indigo
shares or other securities issued or issuable in respect thereof on or after
November 11, 1999 and appoints the depositary the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Indigo shares (and all
such other Indigo shares or securities), with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest), to (a) deliver certificates for such Indigo shares (and all such
other Indigo shares or securities), or transfer ownership of such Indigo shares
(and all such other Indigo shares or securities) on the account books
maintained by The Depository Trust Company, together, in any such case, with
all accompanying evidences of transfer and authenticity, to or upon the order
of AerFi Sverige, (b) present such Indigo shares (and all such other Indigo
shares or securities) for transfer on the books of Indigo and (c) receive all
benefits and otherwise exercise all rights of beneficial ownership of such
Indigo shares (and all such other Indigo shares or securities), all in
accordance with the terms of the offer.
The undersigned hereby irrevocably appoints John Redmond, Patrick Blaney
and Gerald Scanlan and each of them, the attorneys and proxies of the
undersigned, each with full power of substitution, to exercise all voting and
other rights of the undersigned in such manner as each such attorney and proxy
or his substitute shall in his sole discretion deem proper, with respect to all
of the Indigo shares tendered hereby which have been accepted for payment by
AerFi Sverige prior to the time of any vote or other action (and any and all
other Indigo shares or other securities issued or issuable in respect thereof
on or after November 11, 1999), at any meeting of shareholders of Indigo
(whether annual or special and whether or not an adjourned meeting), by written
consent or otherwise. This proxy is irrevocable and is granted in consideration
of, and is effective upon, the acceptance for payment of such Indigo shares by
AerFi Sverige in accordance with the terms of the offer. Such acceptance for
payment shall revoke any other proxy or written consent granted by the
undersigned at any time with respect to such Indigo shares (and all such other
Indigo shares or securities), and no subsequent proxies will be given or
written consents will be executed by the undersigned (and if given or executed,
will not be deemed to be effective).
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Indigo shares
tendered hereby (and any and all other Indigo shares or other securities issued
or issuable in respect thereof on or after November 11, 1999) and that when the
same are accepted for payment by AerFi Sverige, AerFi Sverige will acquire good
and unencumbered title thereto, free and clear of all liens, restrictions,
charges and encumbrances and not subject to any adverse claims. The undersigned
will, upon request, execute and deliver any additional documents deemed by the
depositary or AerFi Sverige to be necessary or desirable to complete the sale,
assignment and transfer of the Indigo shares tendered hereby (and all such
other Indigo shares or securities).
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned. Except as stated in the offer, this tender is
irrevocable.
3
<PAGE>
The undersigned understands that tenders of Indigo shares pursuant to any
one of the procedures described in the offer to purchase under "The Tender
Offer--Procedures for Accepting the Offer and Tendering the Shares", and in the
instructions hereto will constitute an agreement between the undersigned and
AerFi Sverige upon the terms and subject to the conditions of the offer.
Unless otherwise indicated under "Special Payment Instructions", please
issue the check for the purchase price of any Indigo shares purchased, and
return any Indigo shares not tendered or not purchased, in the name(s) of the
undersigned (and, in the case of Indigo shares tendered by book-entry transfer,
by credit to the account at The Depository Trust Company). Similarly, unless
otherwise indicated under "Special Delivery Instructions", please mail the
check for the purchase price of any Indigo shares purchased and any
certificates for Indigo shares not tendered or not purchased (and accompanying
documents, as appropriate) to the undersigned at the address shown below the
undersigned's signature(s). In the event that both "Special Payment
Instructions" and "Special Delivery Instructions" are completed, please issue
the check for the purchase price of any Indigo shares purchased and return any
Indigo shares not tendered or not purchased in the name(s) of, and mail said
check and any certificates to, the person(s) so indicated. The undersigned
recognizes that AerFi Sverige has no obligation, pursuant to the "Special
Payment Instructions", to transfer any Indigo shares from the name of the
registered holder(s) thereof if AerFi Sverige does not accept for payment any
of the Indigo shares so tendered.
4
<PAGE>
<TABLE>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 6, 7 and 8) (See Instructions 6 and 8)
<S> <C>
To be completed ONLY if the check for the Purchase To be completed ONLY if the check for the Purchase
Price of shares purchased (less the amount of any Price of shares purchased the amount of any
federal income and backup withholding tax required to federal income and backup withholding tax required to
be withheld) or certificates for shares not tendered or be withheld) or certificates for shares not tendered or
not purchased are to be issued in the name of someone not purchased are to be mailed to someone other than
other than the undersigned. the undersigned or to the undersigned at an address
other than that shown below the undersigned's
signature(s).
Mail [ ] check Mail [ ] check
[ ] certificates to: [ ] certificates to:
Name Name
................................................ ................................................
(Please Print) (Please Print)
Address Address
............................................. .............................................
.................................................... ....................................................
(Zip Code) (Zip Code)
....................................................
(Taxpayer Identification No.)
</TABLE>
5
<PAGE>
- -------------------------------------------------------------------------------
SIGN HERE
(Please complete Substitute Form W-9 below)
..........................................................
..........................................................
Signature(s) of Owners
Dated , 1999
..........................................
Name(s)
....................................................
..........................................................
(Please Print)
Capacity (full title)
.....................................
Address
...................................................
..........................................................
(Include Zip Code)
- --> Area Code and Telephone Number <--
............................
(Must be signed by registered holder(s) exactly
as name(s) appear(s) on stock certificate(s) or
on a security position listing or by person(s)
authorized to become registered holder(s) by
certificates and documents transmitted herewith.
If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, agent,
officer of a corporation or other person acting
in a fiduciary or representative capacity, please
set forth full title and see Instruction 5.)
Guarantee of Signatures(s)
(If required; see Instructions 1 and 5)
Name of Firm
.............................................
Authorized Signature
.....................................
Dated , 1999
.......................................
- -------------------------------------------------------------------------------
6
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SUBSTITUTE
FORM W-9 Part I Taxpayer Identification No.-- For All Accounts Part II For Payees Exempt
....................................................................... From Backup With-
holding (see
enclosed Guidelines)
Department of the Treasury Enter your taxpayer identification ------------------------------
Internal Revenue Service number in the appropriate box. For
most individuals and sole proprietors, ------------------------------
this is your Social Security Number. Social Security Number
For other entities, it is your Employer
Payer's Request for Identification Number. If you do not OR
Taxpayer Identification No. have a number, see "How to Obtain a
TIN" in the enclosed Guidelines ------------------------------
Note: If the account is in more than
one name, see the chart on page 2 of ------------------------------
the enclosed Guidelines to determine Employee Identification Number
what number to enter.
- -----------------------------------------------------------------------------------------------------------------------------------
Certification -- Under penalties of perjury, I certify that:
<S> <C>
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me)
and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver an application in
the near future. I understand that if I do not provide a taxpayer identification number within (60) days, 31% of all
reportable payments made to me thereafter will be withheld until I provide a number;
(2) I am not subject to backup withholding either because (a) I am exempt from backup withholding, or (b) I have not been notified
by the Internal Revenue Service ("IRS") that I am subject to backup withholding as a result of a failure to report all
interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and
(3) Any information provided on this form is true, correct and complete.
SIGNATURE________________________________________________________ DATE______________________________________________, 1999
- -----------------------------------------------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER. PLEASE REVIEW ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS.[6]
</TABLE>
7
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this letter of transmittal must be guaranteed by a firm which is
a member of a recognized Medallion Program approved by The Securities Transfer
Associations, Inc. (an Eligible Institution). Signatures on this letter of
transmittal need not be guaranteed (a) if this letter of transmittal is signed
by the registered holder(s) of the Indigo shares (which term, for purposes of
this document, shall include any participant in The Depository Trust Company
whose name appears on a security position listing as the owner of Indigo
shares) tendered herewith and such holder(s) have not completed the instruction
entitled "Special Payment Instructions" on this letter of transmittal or (b) if
such Indigo shares are tendered for the account of an Eligible Institution. See
Instruction 5.
2. Delivery of Letter of transmittal and Indigo shares. This letter of
transmittal is to be used either if certificates are to be forwarded herewith
or, unless an Agent's Message is utilized, if delivery of Indigo shares is to
be made by book-entry transfer pursuant to the procedures set forth in offer to
purchase under "The Tender Offer--Procedures for Accepting the Offer and
Tendering Shares". Certificates for all physically delivered Indigo shares, or
a confirmation of a book-entry transfer into the depositary's account at The
Depository Trust Company of all Indigo shares delivered electronically, as well
as a properly completed and duly executed letter of transmittal (or facsimile
thereof or, in the case of a book-entry transfer, an Agent's Message) and any
other documents required by this letter of transmittal, must be received by the
depositary at one of its addresses set forth on the front page of this letter
of transmittal by the expiration date. Shareholders who cannot deliver their
Indigo shares and all other required documents to the depositary by the
expiration date must tender their Indigo shares pursuant to the guaranteed
delivery procedure set forth in the offer to purchase. Pursuant to such
procedure: (a) such tender must be made by or through an Eligible Institution,
(b) a properly completed and duly executed notice of guaranteed delivery
substantially in the form provided by AerFi Sverige must be received by the
depositary by the expiration date and (c) the certificates for all physically
delivered Indigo shares, or a confirmation of a book-entry transfer into the
depositary's account at The Depository Trust Company of all Indigo shares
delivered electronically, as well as a properly completed and duly executed
letter of transmittal (or facsimile thereof or, in the case of a book-entry
delivery, an Agent's Message) and any other documents required by this letter
of transmittal, must be received by the depositary within three New York Stock
Exchange, Inc. trading days after the date of execution of such notice of
guaranteed delivery, all as provided in the offer to purchase under "The Tender
Offer--Procedures for Accepting the Offer and Tendering Shares".
The method of delivery of Indigo shares and all other required documents
is at the option and risk of the tendering shareholder. If certificates for
Indigo shares are sent by mail, registered mail with return receipt requested,
properly insured, is recommended.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Indigo shares will be purchased. By executing this letter of
transmittal (or facsimile thereof), the tendering shareholder waives any right
to receive any notice of the acceptance for payment of the Indigo shares.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Indigo shares should be listed on a
separate schedule attached hereto.
4. Partial Tenders (not applicable to shareholders who tender by
book-entry transfer). If fewer than all the Indigo shares represented by any
certificate delivered to the depositary are to be tendered, fill in the number
of Indigo shares which are to be tendered in the box entitled "Number of Indigo
shares Tendered". In such case, a new certificate for the remainder of the
Indigo shares represented by the old certificate will be sent to the person(s)
signing this letter of transmittal, unless otherwise provided in the
appropriate box on this letter of transmittal, as promptly as practicable
following the expiration or termination of the offer. All Indigo shares
represented by certificates delivered to the depositary will be deemed to have
been tendered unless otherwise indicated.
8
<PAGE>
5. Signatures on Letter of transmittal; Stock Powers and Endorsements. If
this letter of transmittal is signed by the registered holder(s) of the Indigo
shares tendered hereby, the signature(s) must correspond with the name(s) as
written on the face of the certificates without alteration, enlargement or any
change whatsoever.
If any of the Indigo shares tendered hereby is held of record by two or
more persons, all such persons must sign this letter of transmittal.
If any of the Indigo shares tendered hereby are registered in different
names on different certificates, it will be necessary to complete, sign and
submit as many separate letters of transmittal as there are different
registrations of certificates.
If this letter of transmittal is signed by the registered holder(s) of the
Indigo shares tendered hereby, no endorsements of certificates or separate
stock powers are required unless payment of the purchase price is to be made,
or Indigo shares not tendered or not purchased are to be returned, in the name
of any person other than the registered holder(s). Signatures on any such
certificates or stock powers must be guaranteed by an Eligible Institution.
If this letter of transmittal is signed by a person other than the
registered holder(s) of the Indigo shares tendered hereby, certificates must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the
certificates for such Indigo shares. Signature(s) on any such certificates or
stock powers must be guaranteed by an Eligible Institution.
If this letter of transmittal or any certificate or stock power is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory
to AerFi Sverige of the authority of such person so to act must be submitted.
6. Stock Transfer Taxes. AerFi Sverige will pay any stock transfer taxes
with respect to the sale and transfer of any Indigo shares to it or its order
pursuant to the offer. If, however, payment of the purchase price is to be made
to, or Indigo shares not tendered or not purchased are to be returned in the
name of, any person other than the registered holder(s), or if a transfer tax
is imposed for any reason other than the sale or transfer of Indigo shares to
AerFi Sverige pursuant to the offer, then the amount of any stock transfer
taxes (whether imposed on the registered holder(s), such other person or
otherwise) will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes, or exemption therefrom, is submitted
herewith.
7. Special Payment and Delivery Instructions. If the check for the
purchase price of any Indigo shares purchased is to be issued, or any Indigo
shares not tendered or not purchased are to be returned, in the name of a
person other than the person(s) signing this letter of transmittal or if the
check or any certificates for Indigo shares not tendered or not purchased are
to be mailed to someone other than the person(s) signing this letter of
transmittal or to the person(s) signing this letter of transmittal at an
address other than that shown above, the appropriate boxes on this letter of
transmittal should be completed. Shareholders tendering Indigo shares by
book-entry transfer may request that Indigo shares not purchased be credited to
such account at The Depository Trust Company such shareholder may designate
under "Special Payment Instructions". If no such instructions are given, any
such Indigo shares not purchased will be returned by crediting the account at
The Depository Trust Company.
8. Substitute Form W-9. Under the federal income tax laws, the depositary
will be required to withhold 31% of the amount of any payments made to certain
shareholders pursuant to the offer. In order to avoid such backup withholding,
each tendering shareholder, and, if applicable, each other payee, must provide
the depositary with such shareholder's or payee's correct taxpayer
identification number and certify that such shareholder or payee is not subject
to such backup withholding by completing the Substitute Form W-9 set forth
above. In general, if a shareholder or payee is an individual, the taxpayer
identification number is the Social Security number of such individual. If the
depositary is not provided with the correct taxpayer identification number, the
shareholder or payee may be subject to a $50 penalty imposed by the Internal
Revenue Service. Certain shareholders or payees (including, among others, all
corporations and certain foreign individuals) are not subject to these backup
withholding and reporting requirements.
9
<PAGE>
In order to satisfy the depositary that a foreign individual qualifies as an
exempt recipient, such shareholder or payee must submit a statement, signed
under penalties of perjury, attesting to that individual's exempt status. Such
statements can be obtained from the depositary. For further information
concerning backup withholding and instructions for completing the Substitute
Form W-9 (including how to obtain a taxpayer identification number if you do
not have one and how to complete the Substitute Form W-9 if Indigo shares are
held in more than one name), consult the enclosed Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9.
Failure to complete the Substitute Form W-9 will not, by itself, cause
Indigo shares to be deemed invalidly tendered, but may require the depositary
to withhold 31% of the amount of any payments made pursuant to the offer.
Backup withholding is not an additional federal income tax. Rather, the federal
income tax liability of a person subject to backup withholding will be reduced
by the amount of tax withheld. If withholding results in an overpayment of
taxes, a refund may be obtained provided that the required information is
furnished to the Internal Revenue Service.
NOTE: FAILURE TO COMPLETE AND RETURN THE SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
9. Requests for Assistance or Additional Copies. Requests for assistance
or additional copies of the offer to purchase and this letter of transmittal
may be obtained from the information agent or the dealer manager at their
respective addresses or telephone numbers set forth below.
<TABLE>
- ---------------------------------------------------------------------------------- -----
(DO NOT WRITE IN SPACES BELOW)
- ----------------------------------------------------------------------------------------
Date Received__________ Accepted By__________ Checked By__________
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Shares Shares Shares Amount of Shares Certificate
Surrendered Tendered Accepted Check No. Check Returned No. Block No.
- ----------- -------- -------- --------- --------- -------- ----------- ---------
Gr_______
Net______
- ----------------------------------------------------------------------------------------
Delivery Prepared by________________ Checked By________________ Date___________________
- ----------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
The information agent for the offer is:
Corporate Investor Communications, Inc.
111 Commerce Road
Carlstadt New Jersey 07072-2586
Toll Free (877) 842-2405
Banks and Brokers Please Call:
(800) 346-7885
The dealer manager for the offer is:
Greenhill & Co., LLC
31 West 52nd Street
New York, New York 10019
(212) 408-0660
(888) 504-7336 (Toll Free)
11
Exhibit (a)(3)
NOTICE OF GUARANTEED DELIVERY
This form, or a form substantially equivalent to this form, must be used
to accept the offer (as described below) if the issued and outstanding ordinary
shares nominal value SEK 3.14 per share and without duplication, the American
depositary shares each representing one ordinary share of Indigo and all other
documents required by the letter of transmittal cannot be delivered to the
depositary by the expiration of the offer. Such form may be delivered by hand or
facsimile transmission, telex or mail to the depositary. See the offer to
purchase "The Tender Offer -- Procedures for Accepting the Offer and Tendering
Shares".
<TABLE>
To: BANKERS TRUST COMPANY, Depositary
<S> <C> <C>
By Mail: By Facsimile Transmission By Hand or Overnight Courier:
(For Eligible Institutions only):
123 Washington Street (212) 250-5644 123 Washington Street
New York, New York NY 10006 New York, New York NY 10006
Attn: Bond Transfer Unit/ADR Tender Confirm by Telephone: Attn: Bond Transfer Unit/ADR Tender
(212) 250-5065
</TABLE>
Gentlemen:
The undersigned hereby tenders to AerFi Sverige AB or AerFi Sverige, a
Swedish corporation and an indirect, wholly-owned subsidiary of AerFi Group plc
or AerFi, upon the terms and subject to the conditions set forth in the offer to
purchase dated November 17, 1999 and the related letter of transmittal (which
together constitute the offer), receipt of which is hereby acknowledged, _______
ordinary shares nominal value SEK 3.14 per share and, without duplication, the
American depositary shares each representing one ordinary share, of Indigo
Aviation AB or Indigo, a Swedish limited liability company, pursuant to the
guaranteed delivery procedure set forth in the offer to purchase under "The
Tender Offer -- Procedures for Accepting the Offer and Tendering Shares".
Certificate Nos. (if available) SIGN HERE
- --------------------------------------- ---------------------------------------
Signature(s)
- --------------------------------------- ---------------------------------------
(Address)
If shares will be tendered by
book-entry transfer:
---------------------------------------
Name of Tendering Institution (Name(s)) (Please Print)
- --------------------------------------- ---------------------------------------
(Zip Code)
Account No. at The Depository
Trust Company
- --------------------------------------- ---------------------------------------
(Area Code and Telephone No.)
<PAGE>
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a firm which is a member of a registered national
securities exchange or the National Association of Securities Dealers, Inc., or
a commercial bank or trust company having an office or correspondent in the
United States, guarantees (a) that the above named person(s) "own(s)" the Indigo
shares tendered hereby within the meaning of Rule 14e-4 under the Securities
Exchange Act of 1934, (b) that such tender of shares complies with Rule 14e-4
and (c) to deliver to the depositary the Indigo shares tendered hereby, together
with a properly completed and duly executed letter(s) of transmittal (or
facsimile(s) thereof) or an Agent's Message (as described in the offer to
purchase) in the case of a book-entry delivery and any other required documents,
all within three New York Stock Exchange, Inc. trading days of the date hereof.
----------------------------------
(Name of Firm)
----------------------------------
(Authorized Signature)
----------------------------------
(Name)
----------------------------------
(Address)
----------------------------------
(Zip Code)
----------------------------------
(Area Code and Telephone No.)
Dated: , 1999
-----------------------
2
Exhibit (a)(4)
Offer to Purchase for Cash
All Outstanding Ordinary Shares and
American Depositary Shares
of
Indigo Aviation AB
at
$13.00 Net Per Share
by
AerFi Sverige AB
an indirect, wholly-owned subsidiary of
AerFi Group plc
November 17, 1999
To Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees:
We have been appointed to act as dealer manager in connection with the
offer by AerFi Sverige AB or AerFi Sverige, a Swedish corporation and an
indirect, wholly-owned subsidiary of AerFi Group plc or AerFi, an Irish limited
liability company, to purchase any and all issued and outstanding ordinary
shares nominal value SEK 3.14 per share and without duplication, the American
depositary shares each representing one ordinary share, of Indigo Aviation AB or
Indigo, a Swedish limited liability company, at a price of $13.00 per Indigo
share, net to the seller in cash. This offer is made subject to the terms and
conditions set forth in the AerFi Sverige offer to purchase dated November 17,
1999 and the related letter of transmittal (which together constitute the
offer).
For your information and for forwarding to your clients for whom you hold
Indigo shares registered in your name or in the name of your nominee, we are
enclosing the following documents:
1. offer to purchase dated November 17, 1999;
2. letter of transmittal for your use and for the information of your
clients, together with Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 providing information
relating to backup federal income tax withholding;
3. notice of guaranteed delivery to be used to accept the offer if the
Indigo shares and all other required documents cannot be delivered to
the depositary by the expiration date (as defined in the offer to
purchase);
<PAGE>
4. a form of letter which may be sent to your clients for whose accounts
you hold Indigo shares registered in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions
with regard to the offer; and
5. return envelope addressed to Bankers Trust Company, the depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, DECEMBER 15, 1999, UNLESS THE OFFER IS EXTENDED.
AerFi Sverige will not pay any fees or commissions to any broker or dealer
or other person (other than the dealer manager, the information agent or the
depositary as described in the offer to purchase) for soliciting tenders of
Indigo shares pursuant to the offer. AerFi Sverige will, however, upon request,
reimburse brokers, dealers, commercial banks and trust companies for reasonable
and necessary costs and expenses incurred by them in forwarding materials to
their customers. AerFi Sverige will pay all stock transfer taxes applicable to
its purchase of Indigo shares pursuant to the offer, subject to Instruction 6 of
the letter of transmittal.
In order to accept the offer a duly executed and properly completed letter
of transmittal and any required signature guarantees, or an Agent's Message (as
described in the offer to purchase) in connection with a book-entry delivery of
Indigo shares, and any other required documents, should be sent to the
depositary by 12:00 midnight, New York City time, on Wednesday, December 15,
1999.
Any inquiries you may have with respect to the offer should be addressed
to, and additional copies of the enclosed materials may be obtained from the
information agent or the undersigned at the addresses and telephone numbers set
forth on the back cover of the offer to purchase.
Very truly yours,
GREENHILL & CO., LLC
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
THE AGENT OF AERFI SVERIGE, AERFI, THE DEALER MANAGER, THE INFORMATION AGENT OR
THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE
ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN
THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
2
Exhibit (a)(5)
Offer to Purchase for Cash
All Outstanding Ordinary Shares and
American Depositary Shares
of
Indigo Aviation AB
at
$13.00 Net Per Share
by
AerFi Sverige AB
an indirect, wholly-owned subsidiary of
AerFi Group plc
To Our Clients:
Enclosed for your consideration are the offer to purchase dated November
17, 1999 and the related letter of transmittal (which together constitute the
offer) in connection with the offer by AerFi Sverige AB or AerFi Sverige, a
Swedish corporation and an indirect, wholly-owned subsidiary of AerFi Group plc
or AerFi, an Irish limited liability company, to purchase for cash any and all
issued and outstanding ordinary shares nominal value SEK 3.14 per share and,
without duplication, the American depositary shares each representing one
ordinary share, of Indigo Aviation AB or Indigo, a Swedish limited liability
company, at a price of $13.00 per Indigo share, net to the seller in cash. We
are the holder of record of Indigo shares held for your account. A tender of
such Indigo shares can be made only by us as the holder of record and pursuant
to your instructions. The letter of transmittal is furnished to you for your
information only and cannot be used by you to tender Indigo shares held by us
for your account.
We request instructions as to whether you wish us to tender any or all of
the Indigo shares held by us for your account, upon the terms and subject to the
conditions set forth in the offer to purchase and the letter of transmittal.
Your attention is invited to the following:
1. The tender price is $13.00 per share, net to you in cash.
2. The offer and withdrawal rights expire at 12:00 midnight, New York
City time, on Wednesday, December 15, 1999, unless the offer is
extended.
<PAGE>
3. Any stock transfer taxes applicable to the sale of Indigo shares to
AerFi Sverige pursuant to the offer will be paid by AerFi Sverige,
except as otherwise provided in Instruction 6 of the letter of
transmittal. If you wish to have us tender any or all of your Indigo
shares, please so instruct us by completing, executing, detaching and
returning to us the instruction form on the detachable part hereof. An
envelope to return your instructions to us is enclosed. If you
authorize the tender of your Indigo shares, all such Indigo shares
will be tendered unless otherwise specified on the detachable part
hereof. Your instructions should be forwarded to us in ample time to
permit us to submit a tender on your behalf by the expiration of the
offer.
The offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Indigo shares in any jurisdiction in which the making of
the offer or acceptance thereof would not be in compliance with the laws of such
jurisdiction.
Payment for Indigo shares purchased pursuant to the offer will in all
cases be made only after timely receipt by Bankers Trust Company, the depositary
of (a) share certificates or timely confirmation of the book-entry transfer of
such Indigo shares into the account maintained by the depositary at The
Depository Trust Company, pursuant to the procedures set forth in the offer to
purchase under "The Tender Offer -- Procedures for Accepting the Offer and
Tendering Shares", (b) the letter of transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees or
an Agent's Message (as described in the offer to purchase), in connection with a
book-entry delivery, and (c) any other documents required by the letter of
transmittal. Accordingly, payment may not be made to all tendering shareholders
at the same time depending upon when certificates for or confirmations of
book-entry transfer of such Indigo shares into the depositary's account at The
Depository Trust Company are actually received by the depositary.
2
<PAGE>
Instructions with Respect to
Offer to Purchase for Cash
All Outstanding Ordinary Shares and
American Depositary Shares
of
Indigo Aviation AB
The undersigned acknowledge(s) receipt of your letter and the enclosed
offer to purchase dated November 17, 1999, and the related letter of
transmittal, in connection with the offer by AerFi Sverige AB or AerFi Sverige
to purchase any and all issued and outstanding ordinary shares nominal value SEK
3.14 per share and without duplication, the American depositary shares each
representing one ordinary share, of Indigo Aviation AB or Indigo, a Swedish
limited liability company, at a price of $13.00 per Indigo share, net to the
seller in cash.
This will instruct you to tender the number of Indigo shares indicated
below held by you for the account of the undersigned, upon the terms and subject
to the conditions set forth in the offer to purchase and the related letter of
transmittal.
Number of Indigo shares to be tendered: SIGN HERE
Shares*
- ------------------------------------- -----------------------------------
Signature(s)
Dated , 1999
------------------------------- -----------------------------------
-----------------------------------
-----------------------------------
Please print name(s) and
addresses here
- ------------
* Unless otherwise indicated, it will be assumed that all Indigo shares
held by us for your account are to be tendered.
3
Exhibit (a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
FOR THIS TYPE OF ACCOUNT: GIVE THE TAXPAYER IDENTIFICATION NUMBER OF--
------------------------- --------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals (joint account) The actual owner of the account or, if combined funds, the
first individual on the account(1)
3. Custodian account of a minor (Uniform Gift to The minor(2)
Minors Act)
4. a. The usual revocable (grantor is also trustee) The grantor-trustee(1) savings trust
b. So-called trust account that is not a legal The actual owner(1)
or valid trust under state law
5. Sole proprietorship The owner(3)
6. A valid trust, estate, or pension trust The legal entity (Do not furnish the identifying number of
the personal representative or trustee unless the legal entity
itself is not designated in the account title.)(4)
7. Corporate account The corporation
8. Religious, charitable, or educational The organization
organization account
9. Partnership account The partnership
10. Association, club, or other tax-exempt The organization
organization
11. A broker or registered nominee The broker or nominee
12. Account with the Department of Agriculture in The public entity
the name of a public entity (such as a state or
local government, school district, or prison)
that receives agricultural program payments
- ------------------
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has an SSN, that person's number must
be furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Show your individual name. You may also enter your business or "doing
business as" name. You may use either your social security number or your
employer identification number.
(4) List first and circle the name of the legal trust, estate, or pension
trust.
NOTE: If no name is circled when there is more than one name listed, the number
will be considered to be that of the first name listed.
</TABLE>
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
Note: Section references are to the Internal Revenue Code unless otherwise
noted.
OBTAINING A NUMBER
- ------------------
If you do not have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number (for
businesses and all other entities), at the local office of the Social Security
Administration or the Internal Revenue Service (the "IRS") and apply for a
number.
PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING
- --------------------------------------------------
The following is a list of payees exempt from backup withhold ing and for which
no information reporting is required. For interest and dividends, all listed
payees are exempt except item (9). For broker transactions, payees listed in
items (1) through (13) and persons registered under the Investment Advisors Act
of 1940 who regularly act as brokers are exempt. Payments subject to reporting
under sections 6041 and 6041A are gener ally exempt from backup withholding
only if made to payees described in items (1) through (7), except a corporation
(other than certain hospitals described in Regulations section 1.6041- 3(c))
that provides medical and health care services or bills and collects payments
for such services is not exempt from backup withholding or information
reporting. Only payees described in items (1) through (5) are exempt from
backup withholding for barter exchange transactions and patronage dividends.
(1) An organization exempt from tax under section 501(a), or an IRA, or a
custodial account under section 403(b)(7), if the account satisfies the
requirements of section 401(f)(2).
(2) The United States or any of its agencies or instrumentalities.
(3) A state, the District of Columbia, a possession of the United States, or
any of their political subdivisions or instrumentalities.
(4) A foreign government or any of its political sub-divisions, agencies or
instrumentalities.
(5) An international organization or any of its agencies or instrumentalities.
(6) A corporation.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the United
States, the District of Columbia or a posses sion of the United States.
(9) A futures commission merchant registered with the Com modity Futures
Trading Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the
Investment Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed in
the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List.
(15) A trust exempt from tax under section 664 or described in section 4947.
Payments of dividends and patronage dividends that generally are exempt from
backup withholding include the following:
Payments to nonresident aliens subject to withholding under section 1441.
Payments to partnerships not engaged in a trade or business in
the U.S. and which have at least one nonresident alien partner.
Payments of patronage dividends not paid in money.
Payments made by certain foreign organizations.
Section 404(k) payments made by an ESOP.
Payments of interest that generally are exempt from backup withholding include
the following:
Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid in
the course of the payer's trade or business and you have not provided your
correct taxpayer identification number to the payer.
Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
Payments described in section 6049(b)(5) to nonresident aliens.
Payments on tax-free covenant bonds under section 1451.
Payments made by certain foreign organizations.
Payments of mortgage interest to you.
Exempt payees described above should file substitute Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN
AND DATE THE FORM AND RETURN IT TO THE PAYOR. IF YOU ARE A NONRESIDENT ALIEN OR
A FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYER A COMPLETED
INTERNAL REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).
Payments that are not subject to information reporting are also not
subject to backup withholding. For details, see sections 6041, 6041A, 6042,
6044, 6045, 6049, 6050A and 605ON and the regulations promulgated thereunder.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish
a taxpayer identification number to a payer. Certain penalties may also apply.
Penalties
- ---------
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your correct taxpayer identification number to a requester, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE.
Exhibit (a)(7)
This announcement is neither an offer to purchase or a solicitation of an
offer to sell shares. The offer is made solely by the offer to purchase dated
November 17, 1999 and the related Letter of Transmittal and is not being made
to, nor will tenders be accepted from or on behalf of, holders of shares in
any jurisdiction in which the making of the offer or acceptance thereof would
not be in compliance with the laws of such jurisdiction. In those
jurisdictions where the applicable laws require that the offer be made by a
licensed broker or dealer, the offer shall be deemed to be made on behalf of
purchaser by the dealer manager or one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Ordinary Shares and American Depositary
Shares
of
Indigo Aviation AB
at
$13.00 Net per Share
by
AerFi Sverige AB
an indirect, wholly-owned subsidiary of
AerFi Group plc
AerFi Sverige AB or AerFi Sverige, a Swedish corporation and an indirect,
wholly-owned subsidiary of AerFi Group plc or AerFi, an Irish limited
liability company, is offering to purchase any and all outstanding ordinary
shares nominal value SEK 3.14 per share and, without duplication, the American
depositary shares each representing one ordinary share, of Indigo Aviation AB
or Indigo, a Swedish limited liability company, at a price of $13.00 per
Indigo share, net to the seller in cash. This offer is made subject to the
terms and conditions set forth in the offer to purchase dated November 17,
1999 and in the related letter of transmittal (which together constitute the
offer).
<PAGE>
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 1200
MIDNIGHT,
NEW YORK CITY TIME, ON WEDNESDAY, DECEMBER 15, 1999, UNLESS THE OFFER IS
EXTENDED.
INDIGO'S BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE COMBINATION AGREEMENT
AND DETERMINED THAT THE COMBINATION AGREEMENT AND THE OFFER ARE FAIR TO YOU
AND IN YOUR BEST INTEREST. THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU ACCEPT
THE OFFER AND TENDER YOUR SHARES UNDER THE OFFER.
The offer is subject to certain conditions set forth in the offer to purchase.
If any such condition is not satisfied, AerFi Sverige may (i) terminate the
offer and return all tendered Indigo shares to tendering shareholders, (ii)
extend the offer and, subject to withdrawal rights as set forth below, retain
all such Indigo shares until the expiration of the offer as so extended or
(iii) waive such condition and, subject to any requirement to extend the time
during which the offer is open, purchase all Indigo shares validly tendered
prior to the expiration date and not withdrawn.
AerFi Sverige reserves the right, at any time or from time to time, to extend
the period of time during which the offer is open by giving oral or written
notice of such extension to the depositary. Any such extension will be
followed as promptly as practicable by public announcement thereof. For
purposes of the offer, AerFi Sverige shall be deemed to have accepted for
payment tendered Indigo shares when, as and if AerFi Sverige gives oral or
written notice to the depositary of its acceptance of the tenders of such
Indigo shares. Payment for Indigo shares accepted for payment pursuant to the
offer will be made only after timely receipt by the depositary of certificates
for such Indigo shares (or a confirmation of a book-entry transfer of such
Indigo shares into the depositary's account at The Depository Trust Company
(as described in the offer to purchase)), a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) and any other required
documents.
2
<PAGE>
AERFI SVERIGE WILL NOT PAY INTEREST ON THE PURCHASE
PRICE FOR INDIGO SHARES, REGARDLESS OF ANY DELAY IN
MAKING THAT PAYMENT.
Tenders of Indigo shares made pursuant to the offer may be withdrawn at any
time prior to the expiration date. Thereafter, such tenders are irrevocable,
except that they may be withdrawn after January 15, 2000, unless theretofore
accepted for payment as provided in the offer to purchase. To be effective, a
written, telegraphic, telex or facsimile transmission notice of withdrawal
must be timely received by the depositary at one of its addresses set forth in
the offer to purchase and must specify the name of the person who tendered the
Indigo shares to be withdrawn and the number of Indigo shares to be withdrawn.
If the Indigo shares to be withdrawn have been delivered to the depositary, a
signed notice of withdrawal with (except in the case of Indigo shares tendered
by an Eligible Institution (as described in the offer to purchase)) signatures
guaranteed by an Eligible Institution must be submitted prior to the release
of such Indigo shares. In addition, such notice must specify, in the case of
Indigo shares tendered by delivery of certificates, the name of the registered
holder (if different from that of the tendering shareholder) and the serial
numbers shown on the particular certificates evidencing the Indigo shares to
be withdrawn or, in the case of Indigo shares tendered by book-entry transfer,
the name and number of the account at The Depository Trust Company to be
credited with the withdrawn Indigo shares. The information required to be
disclosed by paragraph (e)(1)(vii) of Rule 14d-6 of the General Rules and
Regulations under the Securities Exchange Act of 1934 is contained in the
offer to purchase and is incorporated herein by reference.
Indigo has provided AerFi Sverige with Indigo's shareholder list and security
position listings for the purpose of disseminating the offer to holders of
Indigo shares. The offer to purchase and the related Letter of Transmittal
will be mailed to record holders of Indigo shares and will be furnished to
brokers, banks and similar persons whose names, or the names of whose
nominees, appear on the shareholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing
3
<PAGE>
for subsequent transmittal to beneficial owners of Indigo shares.
The offer to purchase and letter of transmittal contain important information
which should be read before any decision is made with respect to the offer.
Requests for copies of the offer to purchase and the related letter of
transmittal and other tender offer materials may be directed to the
information agent or the dealer manager as set forth below, and copies will be
furnished promptly at AerFi Sverigeos expense. No fees or commissions will be
paid to brokers or dealers or other persons (other than the information agent
and the dealer manager) for soliciting tenders of shares pursuant to the
offer.
The information agent for the offer is
Corporate Investor Communications, Inc.
111 Commerce Road
Carlstadt, New Jersey 07072-2586
(877) 842-2405 (toll free)
(800) 346-7885 (Banks and Brokers)
The dealer manager for the offer is
GREENHILL & CO., LLC
31 West 52nd Street
New York, New York 10019
(212) 408-0660
(888) 504-7336 (toll free)
November 17, 1999
4
Exhibit (a)(8)
Press Release
AerFi and Indigo Announce Merger
--------------------------------
November 11, 1999
AerFi Group plc ("AerFi") and Indigo Aviation AB ("Indigo"- NASDAQ: IAAB) today
announced an agreement to combine the two companies. The combination creates a
full-service aircraft lessor with a strong balance sheet and a broad range of
aircraft leasing solutions for customers. The management teams bring together
many years of complementary experience dealing in the aircraft leasing,
remarketing and financing markets. The combined company will become one of the
largest independent aircraft leasing entities in the world.
The combination will occur in two steps that are to occur at about the same
time. The consummation of each step is not conditional upon the consummation of
the other step. In the first step, AerFi has agreed to acquire 5.9 million
shares in Indigo from certain of its existing shareholders in exchange for 21.8
million new AerFi ordinary shares and 1.0 million warrants to acquire AerFi
ordinary shares at $3.17 per share and thereafter, to acquire 2.3 million of
Indigo's shares for $30.0 million in cash. These Indigo shareholders represent
72.7% of Indigo's common stock. Following this transaction, these Indigo
shareholders will own 11.8% of AerFi's ordinary shares on a fully diluted
basis.
In the second step, AerFi will commence a cash tender offer to acquire the
balance of Indigo's common stock at $13.00 per share, for a total amount of
$40.0 million. This represents a 14.9% premium to the last reported Indigo
trading price on November 10, 1999. Indigo's board of directors has unanimously
recommended that Indigo's shareholders accept the offer and tender their
shares. The tender offer is subject to certain conditions, including certain
regulatory approvals, and is expected to commence by November 17, 1999.
Both AerFi and Indigo are leasing companies specializing in new technology
commercial jet aircraft. As of September 30, 1999 the companies' combined
fleets totalled 104 aircraft worth $2.3 billion, on lease to 57 airlines around
the world. Of these aircraft, 33 are owned by AerCo Limited, a bankruptcy
remote, special purpose company in which AerFi owns the subordinated debt and
residual economic interest. AerFi is a privately-held Irish company with its
headquarters in Shannon. Indigo is a Swedish company with its headquarters in
Malmo. American depositary shares representing Indigo's ordinary shares are
traded on the NASDAQ National Market (ticker: IAAB). The last reported sale
price of the common stock on November 10, 1999 was $11 5/16.
Patrick Blaney, CEO of AerFi, will be CEO of the enlarged company. John Evans,
President and CEO of Indigo, will join AerFi's board and become CEO and
President of AerFi's principal operating subsidiary based in Fort Lauderdale,
USA. Karl-Axel Granlund, Indigo's Chairman and Edward Hansom, AerFi's CFO, will
also join AerFi's
<PAGE>
Press Release
board. Both AerFi and Indigo will continue to conduct business under their
existing company names.
Commenting on the transactions, Patrick Blaney said: "I am delighted with this
transaction, which combines the complementary skills of our two management
teams and allows us to achieve the increased scale of operations that our
increasingly competitive industry requires. John Evans has assembled a first
class group of executives who have built a very successful business in recent
years, delivering results that have consistently surpassed market expectations.
Putting our two companies together creates a major independent aircraft lessor,
with the market presence and financial strength to allow us to achieve much
more together than we could separately."
John Evans added: "I too am enthusiastic about combining these two companies
and the resulting outcome for the shareholders, employees and customers of
both. Our increased size and financial resources will enable us to better serve
the needs of our airline customers and further diversify our risks. This
transaction creates a multi-national entity combining three cultures, which
will provide a unique perspective in our global marketplace. Patrick Blaney and
his team have done a remarkable job of restructuring AerFi and positioning it
for a new beginning. Combined with Indigo's complementary management strengths
and proven business strategy, Indigo and AerFi look forward to a bright future
together."
Greenhill & Co., LLC acted as financial advisor to AerFi on the transaction and
Bear, Stearns & Co. acted as financial advisor to Indigo.
The new AerFi shares to be issued in connection with the combination are not
being, and may not be, offered to the public in the United States. This
communication shall not constitute an offer to sell, or the solicitation of an
offer to buy, AerFi ordinary shares and is being distributed in the United
States for information purposes only.
AerFi also announced today its results for the six months to September 30,
1999, and that it proposes to pay on or about December 10, 1999 a special
interim dividend of $0.60 per share to AerFi ordinary shareholders on the
register on November 29, 1999. The total cash payment associated with this
special interim dividend is expected to be $71.6 million (see separate press
release).
For further information please contact:
AerFi: Patrick Blaney, CEO +353-61-723600
P.J. Mara, Media Relations Advisor +353-61-723800
Indigo: John Evans, President & CEO or
Brad Winograd, Executive VP & CFO +1-954-760-7777
Exhibit (c)(1)
CONFORMED COPY
COMBINATION AGREEMENT
dated as of
November 11, 1999
among
INDIGO AVIATION AB,
AERFI GROUP PLC
and
AERFI SVERIGE AB
<PAGE>
TABLE OF CONTENTS
----------------------
PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions....................................................1
ARTICLE 2
THE OFFER
SECTION 2.01. The Offer......................................................7
SECTION 2.02. Company Action.................................................9
SECTION 2.03. Directors of the Company......................................10
ARTICLE 3
THE COMPULSORY ACQUISITION AND STOCK OPTIONS
SECTION 3.01. The Compulsory Acquisition....................................10
SECTION 3.02. Stock Options.................................................10
SECTION 3.03. Adjustments...................................................11
SECTION 3.04. Withholding Rights............................................12
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.01. Corporate Existence and Power.................................12
SECTION 4.02. Corporate Authorization.......................................13
SECTION 4.03. Governmental Authorization....................................13
SECTION 4.04. Non-contravention.............................................13
SECTION 4.05. Capitalization................................................14
SECTION 4.06. Subsidiaries; Equity Investments..............................15
SECTION 4.07. Aircraft and Leases...........................................16
SECTION 4.08. Insurance Coverage............................................17
SECTION 4.09. Title to Assets...............................................17
SECTION 4.10. Contracts.....................................................18
SECTION 4.11. SEC and Other Filings.........................................20
SECTION 4.12. Financial Statements..........................................21
SECTION 4.13. Disclosure Documents..........................................21
SECTION 4.14. Absence of Certain Changes....................................22
SECTION 4.15. No Undisclosed Material Liabilities...........................23
SECTION 4.16. Compliance with Laws and Court Orders.........................24
i
<PAGE>
PAGE
SECTION 4.17. Litigation....................................................24
SECTION 4.18. Finders' Fees.................................................24
SECTION 4.19. Taxes.........................................................24
SECTION 4.20. Employees.....................................................28
SECTION 4.21. ERISA.........................................................29
SECTION 4.22. Environmental Matters.........................................30
SECTION 4.23. Antitakeover Statutes.........................................31
SECTION 4.24. Year 2000 Compliance..........................................31
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PARENT AND BUYER
SECTION 5.01. Corporate Existence and Power.................................32
SECTION 5.02. Corporate Authorization.......................................32
SECTION 5.03. Governmental Authorization....................................32
SECTION 5.04. Non-contravention.............................................33
SECTION 5.05. Disclosure Documents..........................................33
SECTION 5.06. Finders' Fees.................................................34
SECTION 5.07. Financing.....................................................34
ARTICLE 6
COVENANTS OF THE COMPANY
SECTION 6.01. Conduct of the Company........................................34
SECTION 6.02. Access to Information.........................................35
SECTION 6.03. No Solicitation; Other Offers.................................36
SECTION 6.04. Notices of Certain Events.....................................37
ARTICLE 7
COVENANTS OF PARENT
SECTION 7.01. Confidentiality...............................................38
SECTION 7.02. Obligations of Buyer..........................................38
SECTION 7.03. Officers' and Directors' Indemnification and Insurance........39
ARTICLE 8
COVENANTS OF PARENT AND THE COMPANY
SECTION 8.01. Best Efforts..................................................40
SECTION 8.02. Certain Filings...............................................41
SECTION 8.03. Public Announcements..........................................41
ii
<PAGE>
PAGE
ARTICLE 9
CONDITIONS
SECTION 9.01. Conditions to Obligations of Buyer to Accept Shares for
Payment....................................................41
ARTICLE 10
TERMINATION
SECTION 10.01. Termination..................................................42
SECTION 10.02. Effect of Termination........................................45
SECTION 10.03. Fees and Expenses............................................45
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. Notices......................................................48
SECTION 11.02. Survival of Provisions of this Agreement.....................50
SECTION 11.03. Amendments; No Waivers.......................................50
SECTION 11.04. Successors and Assigns.......................................50
SECTION 11.05. Governing Law................................................50
SECTION 11.06. Jurisdiction.................................................51
SECTION 11.07. WAIVER OF JURY TRIAL.........................................51
SECTION 11.08. Counterparts; Effectiveness; Benefit.........................51
SECTION 11.09. Entire Agreement.............................................51
SECTION 11.10. Captions.....................................................51
SECTION 11.11. Severability.................................................51
iii
<PAGE>
COMBINATION AGREEMENT
COMBINATION AGREEMENT dated as of November 11, 1999 among Indigo
Aviation AB, a limited liability company (Swedish: publikt aktiebolag) organized
under the laws of the Kingdom of Sweden (the "Company"), AerFi Group plc, a
company incorporated under the laws of Ireland ("Parent") and AerFi Sverige AB,
a company organized under the laws of the Kingdom of Sweden (registration number
556577-3826) and an indirect wholly owned Subsidiary of Parent ("Buyer").
WHEREAS, each of the Boards of Directors of Parent, Buyer and the
Company have determined that it is in the best interests of their respective
companies to combine their businesses (the "Combination") on the terms and
subject to the conditions set forth herein;
WHEREAS, the Board of Directors of the Company has determined to
recommend the Offer to the Company's shareholders; and
NOW, THEREFORE, in consideration of the foregoing, and of the mutual
covenants and agreements set forth in this Agreement, the parties to this
Agreement (the "parties") agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. (a) As used in this Agreement, the
following terms have the following meanings:
"Acquisition Proposal" means any bona fide offer or proposal for a
merger, consolidation, share exchange, business combination, reorganization,
recapitalization or other similar transaction involving the Company or any of
its Subsidiaries or any bona fide proposal or offer to acquire, directly or
indirectly, any equity interest in, any voting securities of, or a substantial
portion of the assets of, the Company or any of its Subsidiaries, other than the
transactions contemplated by this Agreement.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
that Person.
<PAGE>
"Aircraft" means, either collectively or individually, as applicable,
the aircraft listed on the Company Disclosure Schedule, each (other than any
aircraft to be purchased after the date of this Agreement as described in the
Company Disclosure Schedule) with the manufacturer's serial number as set forth
on the Company Disclosure Schedule, including, to the extent that ownership is
held by the lessor under the terms of the applicable Lease, (i) the airframe,
(ii) the Engines and (iii) all appliances, parts (including spare parts),
accessories, instruments, navigational and communications equipment,
furnishings, modules, components and other items of equipment installed in or
furnished with the Aircraft.
"Code" means the Internal Revenue Code of 1986 of the United States, as
amended.
"Company Balance Sheet" means the consolidated balance sheet of the
Company as of December 31, 1998 and the notes thereto set forth in the Company
20-F.
"Company Balance Sheet Date" means December 31, 1998.
"Company Disclosure Schedule" means the Disclosure Schedule of the
Company that is attached to, and dated as of the date of, this Agreement.
"Company 20-F" means the Company's annual report on Form 20-F for the
fiscal year ended December 31, 1998.
"Employee Plan" means any "employee benefit plan", as defined in
Section 3(3) of ERISA, and each employment, severance or similar contract, plan,
arrangement or policy and each other plan or arrangement (whether or not
written) providing for compensation, bonus, pension, profit-sharing, stock
option, or other stock-related rights or other forms of incentive or deferred
compensation, vacation benefits, insurance coverage (including any self-insured
arrangements), health or medical benefits, disability benefits, worker's
compensation, supplemental unemployment benefits, severance benefits and
post-employment or retirement benefits (including compensation, pension, health,
medical or life insurance or other benefits) maintained, administered or
contributed to, as the case may be, by the Company or any of its Affiliates and
covers any director, former director, employee or former employee of the Company
or any Subsidiary employed in the United States.
"Engines" means, with respect to each Aircraft, the engines leased to
the Lessee under the applicable Lease as more particularly described by
reference to the manufacturer's serial number in the Company Disclosure
Schedule.
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"Environmental Laws" means any law (including, without limitation,
common law), treaty, judicial decision, regulation, rule, judgment, order,
decree, injunction, permit or governmental restriction or requirement or any
agreement with any governmental authority or other third party, relating to
human health and safety, the environment or to pollutants, contaminants, wastes
or chemicals or any toxic, radioactive, ignitable, corrosive, reactive or
otherwise hazardous substances, wastes or materials.
"Environmental Permits" means all permits, licenses, franchises,
certificates, approvals and other similar authorizations of governmental
authorities relating to or required by Environmental Laws applicable to the
business of the Company or any Subsidiary as currently conducted.
"ERISA" means the Employee Retirement Income Security Act of 1974 of
the United States.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976 of the United States.
"Institutional Investor" means any Person who has direct or indirect
beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of more
than five percent of any class of equity securities of the Company specified in
Rule 13d-1(d) of the 1934 Act who is not at any time obligated to take any
action pursuant to Rule 13d-1(a) and Rule 13d-2(a) of the 1934 Act in respect of
that beneficial ownership.
"Lease" means, with respect to each Aircraft, (i) the lease agreement
relating to that Aircraft, together with all supplements and amendments to that
lease agreement each as identified on the Company Disclosure Schedule, pursuant
to which that Aircraft is leased to the relevant Lessee or (ii) any lease
agreement relating to that Aircraft entered into after the date of this
Agreement, together with all supplements and amendments to that lease agreement.
"Lease Documents" means, with respect to each Aircraft, the Lease of
that Aircraft and all other agreements (including any side letters, assignment
of warranties or option agreements) delivered in connection with, or relating
to, that Lease each as set out in the Company Disclosure Schedule.
"Lender" means, with respect to each Aircraft, the commercial bank or
other financial institution that has provided debt or capitalized lease
financing with respect to that Aircraft, as set out in the Company Disclosure
Schedule.
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"Lessee" means, with respect to each Aircraft, the lessee of that
Aircraft as identified on the Company Disclosure Schedule.
"Lien" means, with respect to any property or asset, any mortgage
(including, without limitation, any floating charge (Swedish: foretagshypotek)),
lien, pledge, charge, security interest, encumbrance or other adverse claim of
any kind in respect of that property or asset. For purposes of this Agreement, a
Person shall be deemed to own subject to a Lien any property or asset that it
has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to that property or asset.
"Material Adverse Effect" means, with respect to any Person, a material
adverse effect on the condition (financial or otherwise), business, assets,
liabilities or results of operations or prospects of that Person and its
Subsidiaries, taken as a whole.
"Multiemployer Plan" means each Employee Plan that is a multiemployer
plan, as defined in Section 3(37) of ERISA.
"1934 Act" means the Securities Exchange Act of 1934 of the United
States, as amended, and the rules and regulations promulgated under that Act.
"1933 Act" means the Securities Act of 1933 of the United States, as
amended, and the rules and regulations promulgated under that Act.
"Permitted Liens" means (i) with respect to any Aircraft, (A) the
rights conferred by the Lease Documents; (B) any Liens for which the applicable
Lessee is responsible or for which it is to indemnify the lessor under the terms
of the relevant lease; (C) any Liens which are "Permitted Liens" under the
applicable Lease other than Liens created by the Company or one of its
Subsidiaries or (D) any Liens in respect of the financing of an Aircraft in
favor of a Lender and (ii) with respect to any property other than Aircraft,
whether real, personal, intangible or mixed, (A) mechanics', carriers',
workmen's, repairmen's, warehousemen's, airport authority's or other like Liens
arising from or incurred in the ordinary course of business and securing
obligations which are not due or which are not in excess of US$100,000 and are
being contested in good faith by the Company or one or more of its Subsidiaries,
provided that the Company has established adequate reserves for those
obligations at the time that it was required under GAAP to do so, (B) Liens for
Taxes which are not due and payable or which may thereafter be paid without
penalty or which are not in excess of US$100,000 and are being contested in good
faith by the Company or one or more of its Subsidiaries, provided that the
Company has established adequate reserves for the
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payment of those Taxes which are being contested in good faith at the time that
it was required under GAAP to do so; (C) easements, covenants, rights-of-way and
other encumbrances or restrictions of record relating solely to real property
owned or leased by the Company or any of its Subsidiaries; (D) zoning, building
and other similar restrictions, provided that the same are not violated in any
material respect by any improvements by the Company or any of its Subsidiaries
or by the use of the subject property in the conduct of the Company's or any of
its Subsidiaries' business; (E) unrecorded easements, covenants, rights-of-way
or other encumbrances or restrictions, and other Liens that are not material in
character or amount, none of which unrecorded items or other Liens materially
impairs the use or value of the real property to which they relate in the
business of the Company and its Subsidiaries, taken as a whole, as presently or
proposed to be conducted, including, but not limited to, the mortgage on the
personal residence of Mario Schuler, which is owned by the Company; and (F)
other Liens which do not materially impair the use or value of the assets to
which they relate in the business of the Company and its Subsidiaries, taken as
a whole, as presently or proposed to be conducted.
"Person" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
"SEC" means the Securities and Exchange Commission of the United
States.
"Shares" means the ordinary shares, nominal value SEK 3.14 per share,
and (without duplication) the American depositary shares each representing one
ordinary share, of the Company.
"Subsidiary" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at any time directly or indirectly owned by that Person.
"Swedish Companies Act" means the Companies Act of Sweden
(1975:1385).
"Title IV Plan" means an Employee Plan subject to Title IV of ERISA
other than any Multiemployer Plan.
"Unconditional Time" means the time when the Offer is declared
unconditional by Buyer.
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Unless otherwise expressly specified in this Agreement, any reference
in this Agreement to a statute shall be to that statute, as amended from time to
time, and to the rules and regulations promulgated under that statute.
(b) Each of the following terms is defined in the Section set forth
opposite that term:
Term Section
- ------- ----------
Antitrust Law............................................. 8.01(b)
Buyer .................................................... Preamble
Claims.................................................... 7.03(a)
Combination............................................... Recitals
Company .................................................. Preamble
Company Disclosure Documents.............................. 4.13(a)
Company Indemnified Parties............................... 7.03(a)
Company Public Documents.................................. 4.11
Company Securities........................................ 4.05(b)
Company Subsidiary Securities............................. 4.06(c)
Compulsory Acquisition.................................... 3.01
Confidentiality Agreement................................. 6.02
DOJ....................................................... 8.01(b)
End Date.................................................. 10.01(b)
Extension Period.......................................... 2.01(a)
FTC....................................................... 8.01(b)
GAAP...................................................... 4.12
Indebtedness.............................................. 4.10(a)
Irish Mergers Act......................................... 4.03
Offer ................................................. 2.01(a)
Offer Documents........................................... 2.01(b)
Parent ................................................... Preamble
parties .................................................. Recitals
Schedule 14D-1............................................ 2.01(b)
Schedule 14D-9............................................ 2.02(c)
Schedule 13E-3............................................ 2.01(b)
Share Exchange Agreement.................................. 2.01(a)
Share Purchase Agreement.................................. 2.01(a)
Superior Proposal......................................... 6.03(c)
System.................................................... 4.24(a)
Taxes..................................................... 4.19(l)
Taxing Authority.......................................... 4.19(l)
Tax Return................................................ 4.19(l)
10% Company Stockholder................................... 10.01(c)
Termination Fee........................................... 10.03(b)
Third Party Acquisition Event............................. 10.03(c)
TPG....................................................... 7.01
Year 2000 Compliant....................................... 4.24(a)
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ARTICLE 2
THE OFFER
SECTION 2.01. The Offer. (a) As soon as practicable after the execution
of this Agreement, Parent shall issue a public announcement of that execution,
in cooperation with the Company. Provided that nothing shall have occurred that
would result in a failure to satisfy any of the conditions set forth in Annex I
to this Agreement, then as promptly as practicable after the date of this
Agreement, but in no event later than five U.S. business days following the
public announcement of the execution and terms of this Agreement, Buyer shall
commence an offer (the "Offer") to purchase any and all of the outstanding
Shares at a price of $13.00 per Share in cash except for the Shares subject to
the Share Exchange Agreement (the "Share Exchange Agreement") among Parent and
the stockholders listed on the signature page thereto dated as of the date of
this Agreement and the Share Purchase Agreement (the "Share Purchase Agreement")
among Parent, Buyer and the stockholders listed on the signature page thereto
dated as of the date of this Agreement. The Offer shall be subject to the
satisfaction (or waiver by Buyer) of the conditions set forth in Annex I to this
Agreement. Buyer expressly reserves the right to waive the conditions to the
Offer and to make any change in the terms or conditions of the Offer; provided
that, without the prior written consent of the Company, no change may be made
that changes the form of consideration to be paid, decreases the price per Share
or the number of Shares sought in the Offer, imposes conditions to the Offer in
addition to those set forth in Annex I, establishes a minimum number of Shares
that must be tendered as a condition to the acceptance for payment and payment
for Shares in the Offer or otherwise amends the terms of the Offer (including
any of the conditions set forth in Annex I) in a manner that, in the Company's
reasonable judgment, is adverse to the Company or holders of Shares.
Notwithstanding the foregoing, without the consent of the Company, Buyer shall
have the right to extend the Offer (i) from time to time if, at the scheduled or
extended expiration date of the Offer, any of the conditions to the Offer shall
not have been satisfied or waived, until those conditions are satisfied or
waived, (ii) for any period required by any rule, regulation, interpretation or
position of the SEC or its staff applicable to the Offer or any period required
by applicable law and (iii) on one or more occasions for an
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aggregate period of not more than 20 U.S. business days beyond the latest
expiration date that would otherwise be permitted under clause (i) or (ii) of
this sentence, if, on that expiration date, the number of Shares validly
tendered in accordance with the terms of the Offer and not withdrawn do not,
together with the Shares then owned by Buyer and its Affiliates, represent more
than 90% of the voting rights and more than 90% of the Shares outstanding on a
fully diluted basis. Upon the terms and subject to the conditions of the Offer
and compliance with its obligations under the 1934 Act with respect to the
Offer, Buyer shall accept for payment Shares that have been validly tendered and
not withdrawn pursuant to the Offer as soon as practicable after all conditions
to the Offer shall have been satisfied or waived by it. If any of the conditions
set forth in (x) any of the paragraphs (i)(a) or (i)(b) of Annex I, (y) any of
the clauses (1) through (4) of paragraph (ii)(A) of Annex I or (z) paragraph (B)
(without the cross-reference to clause (5) of that paragraph) of Annex I shall
not have been satisfied at any scheduled or extended expiration date of the
Offer, and Buyer and the Company shall reasonably believe that that condition
can be satisfied, the Buyer shall extend the Offer from time to time; provided
that Buyer shall not be required to extend the Offer beyond March 31, 2000 (an
"Extension Period"). During any Extension Period, the parties shall consult with
each other and use the efforts required of them by Section 8.01 to cause the
applicable condition(s) of Annex I to be satisfied.
(b) As soon as practicable on the date of commencement of the Offer,
Parent and Buyer shall file with the SEC a Rule 13e-3 Transaction Statement on
Schedule 13E-3 (the "Schedule 13E-3") and a Tender Offer Statement on Schedule
14D-1 (the "Schedule 14D-1") with respect to the Offer. This Agreement
collectively refers to the Schedule 13E-3, the Schedule 14D-1 and the related
offer to purchase and letter of transmittal, together with any supplements or
amendments to those documents, as the "Offer Documents". The Offer Documents (i)
shall comply as to form in all material respects with the requirements of the
1934 Act and (ii) on the date filed with the SEC and on the date first
published, sent or given to the holders of Shares, shall not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated in the Offer Documents or necessary in order to make the statements in
those documents not misleading, in light of the circumstances under which they
are made. Parent, Buyer and the Company each agrees promptly to correct any
information provided by it for use in the Offer Documents if and to the extent
that that information is or shall have become false or misleading in any
material respect. Buyer agrees to take all steps necessary to cause the Schedule
13E-3 and/or the Schedule 14D-1 as so corrected to be filed with the SEC and the
other Offer Documents as so corrected to be disseminated to holders of Shares,
in each case as and to the extent required by applicable federal securities
laws. Parent and Buyer will provide the Company and its counsel with any written
comments
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Parent or its counsel may receive from the SEC or its staff with respect to the
Offer Documents promptly after the receipt of those comments. The Company and
its counsel shall be given a reasonable opportunity to review and comment on the
Offer Documents before either their filing with the SEC or their dissemination
to the holders of Shares.
SECTION 2.02. Company Action. (a) The Company represents that its Board
of Directors, at a meeting duly called and held before the execution of this
Agreement has (i) unanimously determined that this Agreement and the
transactions contemplated by this Agreement, including the Offer and the
Combination, are fair to and in the best interests of the Company and its public
stockholders, (ii) unanimously approved that the Company enter into this
Agreement and the transactions contemplated to be entered into by the Company by
this Agreement, including the Offer and the Combination and (iii) unanimously
resolved to recommend acceptance of the Offer by its public stockholders;
provided that, subject to Section 6.03(c), the Board of Directors of the Company
may withdraw, modify or amend that recommendation, but only to the extent that
the Board of Directors shall have determined in good faith, after consultation
with outside legal counsel to the Company, that it should, in its reasonable
judgment, take that action to comply with its fiduciary duties to the Company
under applicable law. The Company further represents that its financial advisor,
Bear Stearns & Co. Inc., has delivered to the Company's Board of Directors its
written opinion that the consideration to be paid in the Offer is fair to the
holders of Shares from a financial point of view.
(b) The Company will promptly cause Buyer to be furnished with a list
of all of the holders of the Shares, mailing labels and any available listing or
computer file containing the names and addresses of all record holders of Shares
and lists of securities positions of Shares held in stock depositories, in each
case true and correct as of the most recent practicable date, and will cause
Buyer to be provided with any additional information (including, but not limited
to, updated lists of all of the holders of the Shares, mailing labels and lists
of securities positions) and any other assistance as Buyer may reasonably
request in connection with the Offer. Subject to applicable law, and except for
those steps that are necessary or advisable to disseminate the Offer and any
other documents necessary to consummate the Compulsory Acquisition and to
solicit tenders of Shares, Parent and each of its Affiliates shall hold in
confidence the information contained in any of those labels, lists and
additional information, shall use that information only in connection with the
Offer and the Compulsory Acquisition, and, if this Agreement is terminated,
shall deliver to the Company all copies of the information then in its
possession or under its control.
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(c) As soon as practicable on the day that the Offer Documents are
filed with the SEC, the Company shall file with the SEC and disseminate to
holders of Shares, in each case as and to the extent required by applicable
federal securities laws, a Solicitation/Recommendation Statement on Schedule
14D-9 (together with any amendments or supplements thereto, the "Schedule
14D-9") and the Schedule 13E-3 reflecting the recommendations of the Company's
Board of Directors referred to above. The Company, Parent and Buyer each agree
promptly to correct any information provided by it for use in the Schedule 14D-9
and/or the Schedule 13E-3 if and to the extent that it is or shall have become
false or misleading in any material respect. The Company agrees to take all
steps necessary to cause the Schedule 14D-9 and/or the Schedule 13E-3 as so
corrected to be filed with the SEC and to be disseminated to holders of Shares,
in each case as and to the extent required by applicable federal securities
laws. Parent, Buyer and its counsel shall be given an opportunity to review and
comment on the Schedule 14D-9 and/or the Schedule 13E-3 before their filing with
the SEC. The Company agrees to provide to Parent and Buyer and their counsel any
written comments the Company or its counsel may receive from the SEC or its
staff with respect to the Schedule 14D-1 and/or the Schedule 13E-3 promptly
after the receipt of those comments.
SECTION 2.03. Directors of the Company. The Company shall use its best
efforts to ensure that all of the members of its Board of Directors and those
committees and boards as of the date of this Agreement, including those members
who are employees of the Company, shall remain members of its Board of Directors
and those committees and boards until the Unconditional Time.
ARTICLE 3
THE COMPULSORY ACQUISITION AND STOCK OPTIONS
SECTION 3.01. The Compulsory Acquisition. Following the Unconditional
Time, if Buyer owns more than 90% of the outstanding Shares at that time, Buyer
intends to take all action required in order to commence a compulsory
acquisition (the "Compulsory Acquisition") in accordance with the Swedish
Companies Act.
SECTION 3.02. Stock Options. (a) At or immediately before the
Unconditional Time, each option or warrant to purchase Shares from the Company
that is outstanding under any employee stock option or compensation plan or
arrangement of the Company, whether or not vested or exercisable, shall be
canceled, and Parent shall (i) in respect of the warrants and options
outstanding under the Company's Key Employee Incentive Plan which were granted
in 1998,
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as each holder of those warrants and/or options elects, either (A) pay in cash
$1 for each such warrant or option at the same time as payment is made under the
Offer and an additional $1 for each such warrant or option on May 31, 2001 if
the holder of that warrant and/or option has remained in continuous full-time
employment with the Company or any of its Subsidiaries from the date of that
prior payment until May 31, 2001 or (B) exchange each such warrant or option for
3.7 options to purchase one ordinary share of Parent per option at a price of
$3.00 per ordinary share under the AerFi Group plc Share Option Scheme 1999
which also shall provide that all warrants and options which, pursuant to the
terms of the Company's Key Employee Incentive Plan, (a) are vested shall be
exchanged for new options that are similarly vested and (b) are unvested shall
be exchanged for new options, (1) 20% of which will vest on April 30, 2000 and
(2) the balance of which will vest on April 30, 2001; and (ii) in respect of the
warrants and options outstanding under the Company's Key Employee Incentive Plan
which were granted in 1999, as the holder of those warrants and/or options
elects, either (A) pay in cash $1.50 for each such warrant or option at the same
time as payment is made under the Offer and an additional $2.50 for each such
warrant or option on April 30, 2001 if the holder of that warrant and/or option
has remained in continuous full-time employment with the Company or any of its
Subsidiaries from the date of that prior payment until April 30, 2001 or (B)
exchange each such warrant or option for 3.7 options to purchase one ordinary
share of Parent per option at a price of $1.68 per ordinary share under the
AerFi Group plc Share Option Scheme 1999 which also shall provide that all
warrants and options which, pursuant to the terms of the Company's Key Employee
Incentive Plan, (a) are vested shall be exchanged for new options that are
similarly vested and (b) are unvested shall be exchanged for new options, (1)
20% of which will vest on May 31, 2000 and (2) the balance of which will vest
May 31, 2001.
(b) Prior to the Unconditional Time, the Company shall (i) use its
best efforts to obtain any consents from holders of options or warrants to
purchase Shares granted under the Company's stock option or compensation plans
or arrangements and (ii) make any amendments to the terms of that stock option
or compensation plans or arrangements that, in the case of either clauses (i) or
(ii), are necessary to give effect to the transactions contemplated by Section
3.02(a). Notwithstanding any other provision of this Section, payment or
exchange, as applicable, may be withheld in respect of any individual employee
stock option until all necessary consents have been obtained from the holder of
that option or warrant.
SECTION 3.03. Adjustments. (a) During the period between the date of
this Agreement and the Unconditional Time, if any change in the outstanding
Shares shall occur, including by reason of any reclassification,
recapitalization, stock split or combination, exchange or readjustment of
Shares, or stock dividend
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on the Shares with a record date during that period, the cash payable pursuant
to the Offer and any other amounts payable pursuant to this Agreement shall be
appropriately adjusted.
(b) If at any time during the period between the date of this
Agreement and the Unconditional Time, any change in the outstanding shares of
capital stock of Parent shall occur, including by reason of any
reclassification, recapitalization, stock split or combination, exchange or
readjustment of shares, or any stock dividend on shares with a record date
during that period (but excluding, for the avoidance of doubt, a special cash
dividend of up to US$0.60 per ordinary share of Parent to be paid by Parent to
its shareholders before the Unconditional Time), the terms of the option grants
pursuant to Section 3.02 shall be appropriately adjusted.
SECTION 3.04. Withholding Rights. Buyer shall be entitled to deduct and
withhold from the consideration otherwise payable to any Person pursuant to this
Article the amounts that it is required to deduct and withhold with respect to
the making of that payment under any provision of any applicable Tax law (except
for provisions of Irish tax law). If Buyer so withholds amounts, those amounts
shall be treated for all purposes of this Agreement as having been paid to the
holder of the Shares in respect of which Buyer made that deduction and
withholding.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Company Disclosure Schedule, the Company
represents and warrants to Parent and Buyer that:
SECTION 4.01. Corporate Existence and Power. The Company has been duly
organized and is validly existing as a limited liability company (Swedish:
publikt aktiebolag) under the laws of the Kingdom of Sweden and has all
corporate powers and all governmental licenses, authorizations, permits,
consents and approvals required to carry on its business as now conducted,
except for those licenses, authorizations, permits, consents and approvals the
absence of which would not have, individually or in the aggregate, a Material
Adverse Effect on the Company. The Company is duly qualified to do business as a
foreign corporation and is in good standing (where applicable) in each
jurisdiction where that qualification is necessary, except for those
jurisdictions where failure to be so qualified would not have, individually or
in the aggregate, a Material Adverse Effect on the Company. The Company has
previously delivered to Parent true
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and complete copies of the Articles of Association of the Company as currently
in effect and as in effect since June 23, 1999.
SECTION 4.02. Corporate Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation of the
transactions contemplated hereby are within the Company's corporate powers and
have been duly authorized by all necessary corporate action on the part of the
Company. This Agreement constitutes a valid, binding and enforceable agreement
of the Company, except to the extent that enforceability may be (i) qualified by
the opinions of its counsel that are required to be delivered by those counsel
as of the Unconditional Time pursuant to Section 9.01 or (ii) limited by
applicable bankruptcy, reorganization, insolvency, moratorium or other laws
affecting the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether that enforceability is considered in
a proceeding in equity or at law and subject to the possible need for a de novo
court hearing in Sweden if judgment is obtained outside of Sweden. The Company
acknowledges that any qualifications with respect to the enforceability of this
Agreement that are contained in those opinions of counsel shall not be deemed to
(x) indicate the views of Parent and Buyer with respect to that enforceability
or (y) affect the ability of Parent and Buyer to take a contrary position on
that matter in any subsequent context.
SECTION 4.03. Governmental Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby require no action by or in respect of,
or filing with, any governmental body, agency, official or authority, domestic
or foreign, other than (i) any filings listed on the Company Disclosure Schedule
(including filings required in connection with the Compulsory Acquisition), (ii)
compliance with any applicable requirements of the HSR Act, the Irish Mergers
and Takeovers (Control) Acts, 1978 to 1996 (the "Irish Mergers Act") and other
applicable antitrust regulations, (iii) compliance with any applicable
requirements of the 1934 Act, and any other applicable securities or takeover
laws, whether state or foreign and (iv) any actions or filings the absence of
which would not be reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company or materially to impair the
ability of the Company to consummate the transactions contemplated by this
Agreement.
SECTION 4.04. Non-contravention. Except for the required waivers and
consents under the Company's First Union loan facility dated as of March 1,
1999, the execution, delivery and performance by the Company of this Agreement
and the consummation of the transactions contemplated hereby do not and will not
(i) contravene, conflict with, or result in any violation or breach of any
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provision of the articles of association of the Company, (ii) assuming
compliance with the matters referred to in Section 4.03, contravene, conflict
with, or result in a violation or breach of any provision of any applicable law,
statute, ordinance, rule, regulation, judgment, injunction, order or decree,
(iii) require any consent or other action by any Person under, constitute a
default, or an event that, with or without notice or lapse of time or both,
would become a default, under, or cause or permit the termination, cancellation,
acceleration or other change of any right or obligation or the loss of any
benefit to which the Company or any of its Subsidiaries is entitled under any
provision of any agreement or other instrument binding upon the Company or any
of its Subsidiaries or any license, franchise, permit, certificate, approval or
other similar authorization affecting, or relating in any way to, the assets or
business of the Company and its Subsidiaries or (iv) result in the creation or
imposition of any Lien on any asset of the Company or any of its Subsidiaries,
except for those contraventions, conflicts and violations referred to in clause
(ii) and for any failures to obtain any consent or other action, defaults,
terminations, cancellations, accelerations, changes, losses or Liens referred to
in clauses (iii) and (iv) that would not be reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company or
materially to impair the ability of the Company to consummate the actions
contemplated by this Agreement.
SECTION 4.05. Capitalization. (a) The authorized capital stock of the
Company consists of a minimum of SEK 20 million and a maximum of SEK 80 million.
As of August 31, 1999, there were outstanding 11,276,288 Shares and employee
stock options to purchase an aggregate of 295,920 Shares (of which options to
purchase an aggregate of 108,144 Shares were exercisable). All outstanding
shares of capital stock of the Company have been, and all shares that may be
issued pursuant to the Company's Key Employee Incentive Plan will be, when
issued in accordance with the terms of that plan, duly authorized, validly
issued, fully paid and nonassessable.
(b) Except as set forth in this Section 4.05 and for changes since
August 31, 1999 resulting from the exercise of employee stock options
outstanding on that date, there are no outstanding (i) shares of capital stock
or voting securities of the Company, (ii) securities of the Company convertible
into or exchangeable for shares of capital stock or voting securities of the
Company or (iii) options or other rights to acquire from the Company or other
obligation of the Company to issue, any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or voting
securities of the Company (the items in clauses (i), (ii) and (iii) being
referred to collectively as the "Company Securities"). There are no outstanding
obligations of the Company or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any of the Company Securities.
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SECTION 4.06. Subsidiaries; Equity Investments. (a) Each Subsidiary of
the Company is listed on the Company Disclosure Schedule and is duly organized,
validly existing and (where applicable) in good standing under the laws of the
jurisdiction in which it is chartered or organized, has all corporate or other
powers and all governmental licenses, authorizations, permits, consents and
approvals required to carry on its business as now conducted, except for those
licenses, authorizations, permits, consents and approvals the absence of which
would not have, individually or in the aggregate, a Material Adverse Effect on
the Company. Each such Subsidiary is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where that
qualification is necessary, except for those jurisdictions where failure to be
so qualified would not have, individually or in the aggregate, a Material
Adverse Effect on the Company. The Company has previously granted Parent and its
representatives access to true and complete copies of the organizational
documents of each of the Company's Subsidiaries as currently in effect.
(b) All of the outstanding capital stock of, or other voting
securities or ownership interests in, each Subsidiary of the Company, is owned
by the Company, directly or indirectly, free and clear of any Lien (other than
Permitted Liens) and free of any other limitation or restriction (including any
restriction on the right to vote, sell or otherwise dispose of that capital
stock or other voting securities or ownership interests).
(c) Except for warrants outstanding under the Company's Key Employee
Incentive there are no outstanding (i) securities of the Company or any of its
Subsidiaries convertible into or exchangeable for shares of capital stock or
other voting securities or ownership interests in any Subsidiary of the Company
or (ii) options or other rights to acquire from the Company or any of its
Subsidiaries, or other obligation of the Company or any of its Subsidiaries to
issue, any capital stock or other voting securities or ownership interests in,
or any securities convertible into or exchangeable for any capital stock or
other voting securities or ownership interests in, any Subsidiary of the Company
(the items in clauses (i) and (ii) being referred to collectively as the
"Company Subsidiary Securities"); provided that any interest of any Lender in
the property that is described in this sentence that may arise solely by virtue
of a security interest in that property granted to the Lender by the Company or
any Subsidiary shall not be deemed a Company Subsidiary Security. There are no
outstanding obligations of the Company or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any of the Company Subsidiary Securities.
(d) Other than its Subsidiaries, the Company does not directly or
indirectly own any capital stock or share capital of, or other equity interest
in, any corporation, partnership, trust, joint venture or other Person.
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SECTION 4.07. Aircraft and Leases. (a) The Company Disclosure Schedule
sets forth with respect to each Aircraft the make, model and serial number of
the airframe and each contracted engine, the Lessee, the lease rental, the lease
term, the Lender, the principal, outstanding balance, scheduled maturity date,
interest rate and monthly debt service (if a fixed-rate obligation) arising
under each relevant financing facility in respect of the Aircraft and any
extension, termination or purchase options related to the Lease or that
Aircraft.
(b) The Company or one of its Subsidiaries (or a trustee for its
benefit) is the sole beneficial owner of, and has good and valid title to, (i)
each Aircraft and (ii) the lessor's interest under the applicable Lease
Documents, which Aircraft and which Lease Documents are free and clear of all
Liens, other than Permitted Liens.
(c) (i) To the best of the Company's knowledge, no Event of Default
(as defined in the applicable Lease) has occurred and is continuing under any
Lease, except with respect to the Company's Leases with Air Gabon and Istanbul
Airlines; (ii) no payment failure or, to the best of the Company's knowledge,
failure to maintain insurance has occurred and is continuing for 30 days from
the date due, which, if uncured, would become an Event of Default (as so
defined) under any Lease, except with respect to the Company's Leases with Air
Gabon and Istanbul Airlines; and (iii) to the best of the Company's knowledge,
no other event which with the giving of notice or passage of time or both would
become an Event of Default (as so defined) under that Lease has occurred which
would be material to the Company and its Subsidiaries, taken as a whole.
(d) (i) Except for claims in respect of security deposits, maintenance
reserves or other amounts required to be paid, reimbursed or refunded to a
Lessee pursuant to the terms of any Lease, there are no material claims known to
the Company which can be asserted by any Lessee against the Company or the
applicable Aircraft arising out of the applicable Lease Documents, (ii) to the
best of the Company's knowledge, the Lease Documents are in full force and
effect in accordance with the terms of those documents in all material aspects,
and (iii) from the date of this Agreement, there have been no waivers of the
Company's rights in effect under those Lease Documents which would have a
Material Adverse Effect on the Company, except as disclosed in writing to and
agreed to by Parent in writing, nor has the Company increased any of its
obligations under those Lease Documents without the prior written consent of
Parent.
(e) To the Company's knowledge, the lessees have not notified the
Company or any of its Subsidiaries of any unrepaired damage, destruction or
other casualty loss or partial loss or, to the best of the Company's knowledge,
an
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event which with the passage of time would result in unrepaired damage,
destruction or casualty loss, has occurred in respect of any individual Aircraft
which exceeds $750,000 in the aggregate.
(f) There are existing no options, commitments or agreements to
purchase any Aircraft, or extend or terminate any Leases, which have been
exercised by the relevant Lessee.
SECTION 4.08. Insurance Coverage. The Company and each of its
Subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary
in the businesses in which they are engaged. All policies of insurance and
fidelity or surety bonds insuring the Company or any of its Subsidiaries or
their respective businesses, assets, employees, officers and directors are in
full force and effect and the Company and its Subsidiaries are in compliance
with the terms of those policies and instruments in all material respects. There
is no claim by the Company or any of its Subsidiaries pending under any such
insurance policy or bond as to which coverage has been questioned, denied or
disputed by the underwriters of that policy or bond or in respect of which those
underwriters have reserved their rights. The Company does not know of any
threatened termination of, material premium increase with respect to, or
material alteration of coverage under, any of those policies or bonds.
SECTION 4.09. Title to Assets. (a) The Company or one of its
Subsidiaries has good and valid title to all tangible assets (other than
Aircraft) reflected on the Company Balance Sheet and all tangible assets it has
acquired after the Company Balance Sheet Date, except (i) those tangible assets
(other than Aircraft) since sold or otherwise disposed of for fair value in the
ordinary course of business consistent with past practice and (ii) those
tangible assets (other than Aircraft) sold or otherwise disposed of for fair
value that are not material, individually or in the aggregate, to the Company
and its Subsidiaries, taken as a whole, in each case free and clear of all
Liens, except for (A) Liens on automobiles and office equipment that are leased
by the Company or any of its Subsidiaries, (B) the SEK 40 million floating
charge (Swedish: foretagshypotek) pledged to Nordbanken and (C) Permitted Liens.
All personal property owned or leased by the Company or any of its Subsidiaries
is in all material respects in good operating condition and repair
notwithstanding ordinary wear and tear, except to the extent that the failure of
that personal property to be in good operating condition is not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
the Company and its Subsidiaries, taken as a whole. All material personal
property leased by the Company or any of its Subsidiaries is in all material
respects in the condition required of that property by the terms of the lease
applicable to that property during the term, and upon the expiration of, that
lease.
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(b) The Company or one of its Subsidiaries has a good and valid
leasehold interest in all real property and easements and rights in real
property leased to, or occupied or otherwise used by, the Company and its
Subsidiaries as set forth on the Company Disclosure Schedule. There is no
pending or, to the best knowledge of the Company, any threatened condemnation,
eminent domain, compulsory purchase order or similar proceeding with respect to
any of the real property referred to herein or any improvements or alterations
in respect of that real property.
SECTION 4.10. Contracts. (a) The Company Disclosure Schedule sets forth
details with respect to all of the material Indebtedness of the Company and its
Subsidiaries. "Indebtedness" means (i) all obligations for borrowed money, (ii)
all obligations evidenced by bonds, debentures, notes or similar instruments,
(iii) all obligations upon which interest charges are customarily paid, (iv) all
obligations under conditional sale or other title retention agreements relating
to property or assets purchased by the Company or any of its Subsidiaries, (v)
all obligations issued or assumed by the Company or any of its Subsidiaries as
the deferred purchase price of property or services, (vi) all Indebtedness of
others secured by (or for which the holder of that Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by the Company or any of its Subsidiaries, whether or not the
obligations secured thereby have been assumed, (vii) all guarantees by the
Company or any of its Subsidiaries of Indebtedness of others (but excluding
guarantees by the Company or its Subsidiaries of Indebtedness of the Company or
any of its other Subsidiaries), (viii) all capital lease obligations, (ix) all
obligations to which the Company or any of its Subsidiaries is a party in
respect of interest rate protection agreements, foreign currency exchange
agreements, derivatives transactions or other hedging arrangements and (x) all
obligations as an account party in respect of letters of credit and bankers'
acceptances; provided that the Company's obligations in respect of security
deposits and aircraft maintenance reimbursement or cost sharing under the Lease
Documents shall not be considered Indebtedness.
(b) There are no agreements, contracts or other arrangements (written
or oral) pursuant to which the Company or any of its Subsidiaries manages the
assets of, or provides other management remarketing, consulting, operating or
technical services to, any Person.
(c) None of the Company or any of its Subsidiaries or any of their
respective assets or properties is a party to or bound by any of the following,
whether written or oral:
(i) any covenant not to compete;
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(ii) any agreement, contract or other arrangement with any shareholder
or any Affiliate of the Company or any of its Subsidiaries, other than
(i) the Volito subordinated loan dated as of May 8, 1995 and reflected
on the Company Balance Sheet, (ii) the Volito office lease dated as of
April 1, 1998, and (iii) the employment or consulting agreements with
Karl-Axel Granlund, John Evans, and Bradley Winograd dated as of
February 1, 1998.
(iii) any agreement, contract or other arrangement with any officer,
director or employee of the Company or any of its Subsidiaries or any
Affiliate of the Company or any of its Subsidiaries, other than the
Company's employment agreements with John Evans, Joe Drobnich dated May
23, 1998, Bradley Winograd dated as of February 1, 1998 and each
Swedish Employee and its consulting agreement with Karl-Axel Granlund
dated as of February 1, 1998;
(iv) any lease of personal property (other than any Aircraft) for which
the Company or any of its Subsidiaries is lessor or lessee and, in the
case of each such lease, providing for aggregate rentals exceeding US$
100,000 per annum;
(v) except as described in Section 4.18, any agreement, contract or
other arrangement for the future purchase of supplies and equipment
(other than any Aircraft), advertising or promotional services or
management, consulting or similar services under which the payment
obligations of the Company or any of its Subsidiaries exceed US$100,000
per annum; or
(vi) except as expressly disclosed elsewhere in this Agreement, any
other agreement, contract, lease, license, commitment or instrument,
other than any Lease, which (A) obligates the Company or any of its
Subsidiaries to make aggregate payments in excess of US$100,000 and it
is not terminable by the Company or any of its Subsidiaries for a cost
of less than US$100,000 or (b) is otherwise material to the business of
the Company and its Subsidiaries, taken as a whole, as presently
conducted or as proposed to be conducted, excluding agreements
disclosed pursuant to Section 4.18.
(d) Each agreement, contract, lease, license, commitment or instrument
of the Company or any of its Subsidiaries set forth in the Company Disclosure
Schedule is in full force and effect and is a legal, valid and binding agreement
of the Company or any of its Subsidiaries which is a party thereto, as the case
may be, enforceable against the Company or that Subsidiary in accordance with
its
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terms and, to the best knowledge of the Company, of each other party thereto.
True and complete copies of each of those contracts have been delivered or
otherwise made available to Parent. None of the Company or any of its
Subsidiaries, as the case may be, has modified, amended or waived in any
material respect any provision of those contracts. The Company and its
Subsidiaries have performed and are performing all material obligations required
to be performed by each of them under those contracts and are not (with or
without notice or lapse of time or both) in breach or default in any material
respect thereunder; and, to the best knowledge of the Company, no other party to
any of those contracts is (with or without notice or lapse of time or both) in
breach or default in any material respect under any of those contracts.
(e) Neither the Company nor any of the Subsidiaries has received
notice from any Person or has reason to believe that the Company or any such
Subsidiary has taken any action or failed to take any action that would result
in any conflict with, breach of or default (or give rise to any right of
termination, cancellation or acceleration) under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, warrant or other similar
instrument or any material license, permit, contract, material agreement
(including, without limitation, any material agreement relating to Indebtedness
of the Company or any of its Subsidiaries) or other material obligation to which
the Company or any of its Subsidiaries is a party or by which the Company or any
of its Subsidiaries or any of their respective properties or assets may be bound
(and the Company is not aware that any Person has asserted that such a conflict,
breach or default will so result) which, in any such case, could have a Material
Adverse Effect on the Company or any of its Subsidiaries.
SECTION 4.11. SEC and Other Filings. (a) The Company has delivered to
Parent (i) the Company 20-F, (ii) its quarterly reports on Form 6-K for its
fiscal quarters ended March 31, 1999, June 30, 1999 and September 30, 1999,
(iii) its proxy or information statements relating to meetings of, or actions
taken without a meeting by, the stockholders of the Company held since December
31, 1998, (iv) all of its other reports, statements, schedules and registration
statements filed by the Company with the SEC pursuant to the 1934 Act since
December 31, 1998, and (v) its annual report for 1998 as filed with the Swedish
Patent Registration Office (the documents referred to in this Section 4.11
collectively, the "Company Public Documents").
(b) As of the filing date, each Company Public Document complied as to
form in all material respects with the applicable requirements of the 1934 Act
and the Swedish Companies Act, as the case may be.
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(c) As of its filing date (or, if amended or superseded by a filing
before the date of this Agreement, on the date of that filing), each Company
Public Document filed pursuant to the 1934 Act and the Swedish Companies Act, as
the case may be, did not, and each such Company Public Document filed after the
date of this Agreement will not, contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading.
SECTION 4.12. Financial Statements. The audited consolidated financial
statements and unaudited consolidated interim financial statements of the
Company included in the Company Public Documents filed with the SEC fairly
present, in conformity with U.S. generally accepted accounting principles
("GAAP") applied on a consistent basis (except as may be indicated in the notes
to those financial statements), the consolidated financial position of the
Company and its consolidated Subsidiaries as of the dates thereof and their
consolidated results of operations and cash flows for the periods then ended
(subject to normal year-end adjustments in the case of any unaudited interim
financial statements).
SECTION 4.13. Disclosure Documents. (a) Each document required to be
filed by the Company with the SEC or required to be distributed or otherwise
disseminated to the Company's stockholders pursuant to the 1934 Act in
connection with the transactions contemplated by this Agreement (the "Company
Disclosure Documents"), including, but not limited to, the Schedule 13E-3 and
the Schedule 14D-9 to be filed with the SEC in connection with the Offer, and
any amendments or supplements to those documents, when filed, distributed or
disseminated, as applicable, will comply as to form in all material respects
with the applicable requirements of the 1934 Act.
(b) Any Company Disclosure Document at the time of the filing of that
Company Disclosure Document or any supplement or amendment to that document and
at the time of any distribution or dissemination of that document, will not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made in that document, in the
light of the circumstances under which they were made, not misleading. The
representations and warranties contained in this Section 4.13(b) will not apply
to statements or omissions included in the Company Disclosure Documents based
upon information furnished to the Company in writing by Parent specifically for
use in that document.
(c) The information with respect to the Company or any of its
Subsidiaries that the Company furnishes to Parent in writing specifically for
use in the Offer Documents, at the time of the filing of that document, at the
time of
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its distribution or dissemination, if any, and at the time of the consummation
of the Offer, will not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made in
that document, in the light of the circumstances under which they were made, not
misleading.
SECTION 4.14. Absence of Certain Changes. Since the Company Balance
Sheet Date, the business of the Company and its Subsidiaries has been conducted
in the ordinary course consistent with past practices and there has not been:
(a) any event, occurrence, development or state of circumstances or
facts that has had or could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company and its Subsidiaries
taken as a whole or that has impacted or will impact in a material adverse
manner upon the ability of the Company or any of its Subsidiaries to consummate
any of the transactions contemplated by, or to perform fully its obligations
under, this Agreement;
(b) except for the grant of options and warrants in 1999 pursuant to
the Company's Key Incentive Employee Plan which options and warrants are
described in the Company Disclosure Schedule, any declaration, setting aside or
payment of any dividend or other distribution with respect to any shares of
capital stock of the Company or any repurchase, redemption or other acquisition
by the Company or any of its Subsidiaries of any outstanding shares of capital
stock or other securities of, or other ownership interests in, the Company or
any of its Subsidiaries;
(c) any amendment of any material term of any outstanding security of
the Company or any of its Subsidiaries;
(d) except as expressly disclosed elsewhere in this Agreement, any
incurrence, assumption or guarantee by the Company or any of its Subsidiaries of
any Indebtedness;
(e) any creation or other incurrence by the Company or any of its
Subsidiaries of any Lien on any Aircraft or other material asset, other than in
the ordinary course of business consistent with past practices or in connection
with the purchase, financing, refinancing or leasing of Aircraft;
(f) any making of any loan, advance (other than deposits on Aircraft
to be purchased) or capital contributions to or investment in any Person in
excess of US$100,000, other than loans, advances or capital contributions to or
investments
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in its wholly-owned Subsidiaries made in the ordinary course of business
consistent with past practices;
(g) any notice received by the Company or its subsidiaries of any
unrepaired material damage, destruction or other casualty loss (whether or not
covered by insurance) that has had or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company;
(h) any transaction or commitment made, or any contract or agreement
entered into, by the Company or any of its Subsidiaries relating to its assets
or business (including the acquisition or disposition of any assets) or any
relinquishment by the Company or any of its Subsidiaries of any contract or
other right, in either case, material to the Company and its Subsidiaries, taken
as a whole, other than operating lease transactions and commitments in the
ordinary course of business consistent with past practices and those
contemplated by this Agreement; provided, that the acquisition or sale pursuant
to existing contracts or commitments (or as otherwise consented to by Parent
pursuant to Section 6.01), and the financing, refinancing or leasing, of any
Aircraft shall be deemed to be in the ordinary course of business;
(i) any change in any method of accounting, method of tax accounting
or accounting principles or practice by the Company or any of its Subsidiaries,
except for any such change required by reason of a concurrent change in GAAP or
Regulation S-X under the 1934 Act;
(j) any labor dispute, or any activity or proceeding by a labor union
or representative of a labor union to organize any employees of the Company or
any of its Subsidiaries, which employees were not subject to a collective
bargaining agreement at the Company Balance Sheet Date, or any lockouts,
strikes, slowdowns, work stoppages or threats thereof by or with respect to
those employees; or
(k) any waiver or forgiveness of any Indebtedness owed to the Company
or any of its Subsidiaries or waiver of any material claims of any kind.
SECTION 4.15. No Undisclosed Material Liabilities. There are no
material liabilities or obligations of the Company or any of its Subsidiaries of
any kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, and there is no existing condition, situation or set
of circumstances that could reasonably be expected to result in such a
liability, other than:
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(a) liabilities or obligations disclosed and provided for in the
Company Balance Sheet or in the notes thereto or in the Company Public Documents
filed before the date of this Agreement;
(b) liabilities or obligations incurred in the ordinary course of
business consistent with past practice since the Company Balance Sheet Date that
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company; and
(c) liabilities or obligations under this Agreement or incurred in
connection with the transactions contemplated by this Agreement.
SECTION 4.16. Compliance with Laws and Court Orders. The Company and
each of its Subsidiaries is and has been in compliance with, and to the
knowledge of the Company is not under investigation with respect to and has not
been threatened to be charged with or given notice of any violation of, any
applicable law, statute, ordinance, rule, regulation, judgment, injunction,
order or decree, except for violations which, either individually or in the
aggregate, have not had, and would not reasonably be expected to have, a
Material Adverse Effect on the Company.
SECTION 4.17. Litigation. There is no action, suit, investigation or
proceeding pending against, or, to the knowledge of the Company, threatened
against or affecting, the Company, any of its Subsidiaries, any present or
former officer, director or employee of the Company or any of its Subsidiaries
or any other Person for whom the Company or any Subsidiary may be liable or any
of their respective properties before any court or arbitrator or before or by
any governmental body, agency or official, domestic or foreign, that, if
determined or resolved adversely in accordance with the plaintiff's demands,
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company or that in any manner challenges or seeks
to prevent, enjoin, alter or materially delay the Offer or any of the other
transactions contemplated by this Agreement.
SECTION 4.18. Finders' Fees. Except for Bear Stearns & Co. Inc., a copy
of whose engagement agreement has been provided to Parent, there is no
investment banker, broker, finder or other intermediary that has been retained
by or is authorized to act on behalf of the Company or any of its Subsidiaries
who might be entitled to any fee or commission from the Company or any of its
Affiliates in connection with the transactions contemplated by this Agreement.
SECTION 4.19. Taxes. (a) Each of the Company and its Subsidiaries has
filed (or has had filed on its behalf), or will file or cause to be filed, all
material
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Tax Returns required by applicable law to be filed by it prior to or as of the
Unconditional Time, and all of those Tax Returns are, or will be at the time of
filing, true and complete in all material respects. To the extent that any such
filing has not been timely made, the Company or the Subsidiary, as the case may
be, has duly paid the relevant penalty for the late filing.
(b) Each of the Company and its Subsidiaries has paid (or has had paid
on its behalf), or, where payment is not yet due, has established (or has had
established on its behalf and for its sole benefit and recourse) or will
establish or cause to be established in accordance with, and to the extent
required by, GAAP before the date of this Agreement an adequate accrual for the
payment of, all material Taxes due with respect to any period ending on or
before that date (including, without limitation, all interest, fines, penalties
or additional amounts attributable to, or imposed upon, or with respect to, the
Taxes reflected on Tax Returns that were not timely filed by the Company or any
Subsidiary). As of the Company Balance Sheet Date, the Company Balance Sheet
reflected an adequate accrual, in accordance with GAAP, for the payment of all
material Taxes relating to the Company and its Subsidiaries due with respect to
any period ending on or before the Company Balance Sheet Date and not paid as of
that date.
(c) Neither the Company nor any of its Swedish Subsidiaries is aware
of any matters reflected on each of the Tax Returns described in Section 4.19(a)
that a Swedish Taxing Authority has indicated in writing it may challenge.
(d) The Company and its Subsidiaries have complied in all material
respects with all applicable laws, rules and regulations relating to the payment
and withholding of Taxes.
(e) No audits, administrative proceedings or legal proceedings are
pending with regard to any Taxes or Tax Return of the Company or any of its
Subsidiaries, and none of them has received a written notice of any proposed
audit or proceeding regarding any pending audit or proceeding. There are no
concluded audits, with regard to any Taxes or Tax Return of the Company or any
of its Subsidiaries, that could result in (i) the initiation of a legal
proceeding by the applicable Taxing Authority or (ii) an increase in the Tax
liability of the Company or any of its Subsidiaries.
(f) Neither the Company nor any of its Subsidiaries is a party to any
Tax sharing agreement or subject to any obligation to indemnify any Person for
Taxes, other than (i) with respect to withholding Taxes on interest and other
payments made by the Company or any of its Subsidiaries pursuant to loan
agreements relating to the acquisition of Aircraft (or other aircraft) or the
financing of the Company and its Subsidiaries' businesses, (ii) with respect to
Taxes (other than
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income, gross receipts, profits, or franchise Taxes) of lenders that are party
to loan agreements (A) under which the Company or any of its Subsidiaries is a
borrower and (B) which relate to the acquisition of Aircraft (or other aircraft)
or the financing of the Company and its Subsidiaries' businesses, (iii) with
respect to Taxes borne by the Company or any of its Subsidiaries as the
purchaser of Aircraft (or other aircraft) under aircraft purchase and sale
agreements, (iv) with respect to Taxes for which the Company or any of its
Subsidiaries is primarily responsible as the seller of Aircraft (or other
aircraft) under aircraft purchase and sale agreements, (v) with respect to
Swedish Taxes (other than income, gross receipts, profits or franchise Taxes) of
the purchaser of Aircraft (or other aircraft) from the Company or any of its
Subsidiaries under aircraft purchase and sale agreements, for which Swedish
Taxes that purchaser would be primarily liable absent the applicable Tax sharing
agreement or Tax indemnification obligation, (vi) with respect to Swedish income
Taxes of the Company or any of its Subsidiaries or (vii) with respect to income
Taxes of the lessee under any of the Lease Documents (or comparable documents
for other aircraft) that are incurred solely by reason of the existence of a
branch or other permanent establishment of the Company or any of its
Subsidiaries in a non-Swedish jurisdiction. To the best knowledge of the Company
and its Subsidiaries, there are no Taxes (except for Taxes that have been
settled and paid by the Company or its Subsidiaries) that would be covered by
any Tax sharing agreement or Tax indemnification obligation, which agreement or
obligation is excepted from this Section 4.19(f) solely by reason of Section
4.19(f)(iv). To the best knowledge of the Company and its Subsidiaries, there
are no Swedish Taxes of the purchaser of Aircraft (or other aircraft) that would
be covered by any Tax sharing agreement or Tax indemnification obligation, which
agreement or obligation is excepted from this Section 4.19(f) solely by reason
of Section 4.19(f)(v).
(g) Neither the Company nor any of its Swedish Subsidiaries has
executed, or will, before or as of the Unconditional Time, execute, any
transaction that has resulted or may result in deferred taxation for purposes of
"lag om uppskov med beskattningen vid andelsbyten" (English: Swedish tax
legislation regarding exchanges of shares), "lag om uppskov med beskattningen
vid andelsoverlatelser inom koncerner" (English: Swedish tax legislation
regarding the deferral of taxation in conjunction with intragroup transfers of
shares) or any former similar legislation.
(h) All transactions between the Company and one or more of its
Subsidiaries, or between two or more of the Company's Subsidiaries, have been
conducted, and will, before the Unconditional Time, be conducted, on commercial
terms and conditions (i.e., have been and/or will be arm's-length transactions).
The aforementioned also applies to transactions between one or more of the
Company and its Subsidiaries, on one hand, and any other Person(s) with which
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there exists "ekonomisk intressegemenskap" (English: a common economic
affiliation), on the other hand. For purposes of this Section 4.19(h), loans
among the Company and its Swedish Subsidiaries and Aircraft sales (or sales of
other aircraft) among the Company and its Swedish Subsidiaries at the applicable
aircraft's book value will not be taken into account so long as those loans or
sales have been made among companies among which "koncernbidrag" (English: group
contribution) could have been made in the Tax year in which those loans or sales
occurred, with the result that no additional Taxes would be payable by the
relevant companies as a result of such loans or sales.
(i) All loss carryforwards of the Company and its Swedish Subsidiaries
are correctly calculated and, except for any effects of the Offer and/or the
Combination, available for utilization for Swedish Tax purposes. During the
current fiscal year, there is no impediment, except for any effects of the Offer
and/or the Combination, to the utilization for Swedish Tax purposes of any loss
carryforward of the Company or any of its Swedish Subsidiaries to offset income
in the form of "koncernbidrag."
(j) The book value of each of the assets (including, but not limited
to, inventory, stock and real estate) of the Company and its Swedish
Subsidiaries equals, and will equal as of the Unconditional Time, the Tax
residual value of that asset for Swedish Tax purposes.
(k) Neither the Company nor any of its Subsidiaries has incurred any
liability for Taxes (including, but not limited to, any Taxes asserted or
imposed by the Taxing Authority in which, or the Taxing Authority related to the
jurisdiction in which, (i) any Aircraft (or other aircraft) is used, (ii) any
applicable lessee is organized, located or conducts any of its activities or
(iii) any of the other parties to the applicable Lease Documents (or comparable
documents for other aircraft) is organized, located or conducts any of its
activities), except for any Swedish Taxes, solely by reason of (A) having
entered into, being a party to, performing its obligations under, or receiving
payments under, any Lease Documents (or comparable documents for other aircraft)
with respect to its Aircraft (or other aircraft) or (B) being the legal and
beneficial owner of the lessor's interest under any Lease Documents (or
comparable documents for other aircraft), except for (I) any Tax liabilities
that would not be material to the aggregate to the Company and its Subsidiaries,
taken as a whole, and (II) any Tax liability for which the Company or any of its
Subsidiaries has been indemnified by the applicable lessee. Neither the Company
nor any of its Subsidiaries is aware of any circumstances that could give rise
to any such liability. To the best knowledge of the Company and its
Subsidiaries, neither the Company nor any of its Subsidiaries has incurred a Tax
liability that is excepted from this Section 4.19(k) solely by reason of Section
4.19(k)(II).
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(l) "Taxes" shall mean any and all taxes, charges, fees, levies or
other assessments, including income, gross receipts, excise, real or personal
property, sales, withholding, social security, retirement, unemployment,
occupation, use, goods and services, service use, license, value added, capital,
net worth, payroll, profits, franchise, transfer and recording taxes, fees and
charges, and any other taxes, assessments or similar charges imposed by the
Internal Revenue Service of the United States or any other taxing authority
(whether United States, Swedish or otherwise and including, but not limited to,
any United States state or local government, any other government or
jurisdiction, or any subdivision or taxing agency thereof) (a "Taxing
Authority"), whether computed on a separate, consolidated, unitary, combined or
any other basis; and that term shall include any interest whether paid or
received, fines, penalties or additional amounts attributable to, or imposed
upon, or with respect to, any of those taxes, fees charges or assessments. "Tax
Return" shall mean any report, return, document, declaration or other
information or filing required to be supplied to any Taxing Authority with
respect to Taxes, including without limitation (i) information returns, (ii)
documents with respect to or accompanying payments of estimated Taxes or
requests for the extension of time in which to file any such report, return,
document, declaration or other information, and (iii) information supplied to a
Taxing Authority to enable that Taxing Authority to compute or verify Taxes.
SECTION 4.20. Employees. (a) All directors, officers and employees of
the Company or any of its Subsidiaries are listed in the Company Disclosure
Schedule, which sets forth the 1999 annual salary, 1998 annual bonus and car and
holiday entitlements of that individual. No such individual has a period of
notice or severance benefit entitlement of more than six months.
(b) The Company is not and has never been a party to any collective
bargaining agreement.
(c) Except Mr. Bradley Winograd, no director, officer or employee of
the Company or any of its Subsidiaries with an annual salary in 1999 in excess
of US$40,000 has given notice terminating his contract of employment or is under
notice of dismissal and no notice is expected by the Company.
(d) There is no dispute between the Company or any Subsidiary and any
employee pending or, to the knowledge of the Company, threatened.
(e) The Company has fulfilled all its obligations related to the
Swedish act on co-determination at work (Swedish: Lag (1976:580) om
medbestammande i arbetslivet).
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(f) Since the Company Balance Sheet Date, except as would not
materially increase the liabilities of the Company and its Subsidiaries, taken
as a whole, with respect to all compensation-related matters, there has not been
any (i) grant of any severance or termination pay to (or amendment to any
existing arrangement with) any director, officer or employee of the Company or
any of its Subsidiaries, (ii) increase in benefits payable under any existing
severance or termination pay policies or employment agreements, (iii)
establishment, adoption or amendment (except as required by applicable law) of
any bonus, profit-sharing, thrift, pension, retirement, deferred compensation,
compensation, stock option, restricted stock or other benefit plan or
arrangement covering any director, officer or employee of the Company or any of
its Subsidiaries or (iv) increase in compensation, bonus or other benefits
payable to any director, officer or employee of the Company or any of its
Subsidiaries.
SECTION 4.21. ERISA. (a) The Company has provided Parent with a list
and copies of all of its Employee Plans (and, if applicable, related trust
agreements) and all amendments to those plans and related trust agreements.
(b) Since its inception, the Company has not maintained, contributed
to or sponsored, any plan or arrangement subject to Title IV of ERISA nor has it
been a member of a "controlled group", as defined in ERISA, including any other
member who maintained, contributed to or sponsored such a plan.
(c) To the best of the Company's knowledge, no transaction prohibited
by Section 406 of ERISA or Section 4975 of the Code has occurred with respect to
any employee benefit plan or arrangement that is covered by Title I of ERISA,
which transaction has or will cause the Company or any of its Subsidiaries to
incur any liability under ERISA, the Code or otherwise, excluding transactions
effected pursuant to and in compliance with a statutory or administrative
exemption.
(d) The Company has provided Parent with the most recent determination
letter of the Internal Revenue Service relating to such 401(k) Plan. To the best
of the Company's knowledge, each Employee Plan has been maintained in
substantial compliance with its terms and with the requirements prescribed by
any and all applicable statutes, orders, rules and regulations, including but
not limited to ERISA and the Code.
(e) To the best of the Company's knowledge, neither the Company nor
any Subsidiary has any current or projected liability in respect of
post-employment or post-retirement health or medical or life insurance benefits
for retired, former or current employees of the Company or any of its
Subsidiaries. To the best of the Company's knowledge, no condition exists that
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would prevent the Company or any of its Subsidiaries from amending or
terminating any Employee Plan providing health or medical benefits in respect of
any active employee of the Company or any of its Subsidiaries other than
limitations imposed under the terms of that Employee Plan or under applicable
law.
(f) There has been no amendment to, written interpretation of or
announcement (whether or not written) by the Company or any of its Subsidiaries
since the Closing Balance Sheet Date relating to, or change in employee
participation or coverage under, any Employee Plan that would increase
materially the expense of maintaining that Employee Plan above the level of the
expense incurred in respect thereof for the most recent fiscal year ended before
the date of this Agreement.
(g) There is no contract, plan or arrangement (written or otherwise)
covering any employee or former employee of the Company or any of its
Subsidiaries that, individually or collectively, could give rise to the payment
of any amount that would not be deductible pursuant to the terms of Section 280G
of the Code.
SECTION 4.22. Environmental Matters. (a) Except as set forth in the
Company Public Documents filed before the date of this Agreement and except as
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company:
(i) no notice, notification, demand, request for information,
citation, summons or order has been received, no complaint has been
filed, no penalty has been assessed, and no investigation, action,
claim, suit, proceeding or review (or any basis therefor) is pending
or, to the knowledge of the Company, is threatened by any governmental
entity or other Person relating to or arising out of any Environmental
Law;
(ii) the Company is in compliance with all Environmental Laws and all
Environmental Permits; and
(iii) there are no liabilities of or relating to the Company or any of
its Subsidiaries of any kind whatsoever, whether accrued, contingent,
absolute, determined, determinable or otherwise arising under or
relating to any Environmental Law, and there are no facts, conditions,
situations or set of circumstances that could reasonably be expected to
result in or be the basis for any such liability.
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(b) There has been no environmental investigation, study, audit, test,
review or other analysis conducted of which the Company has knowledge in
relation to the current or prior business of the Company or any of its
Subsidiaries or any property or facility now or previously owned or leased by
the Company or any of its Subsidiaries that has not been delivered to Parent at
least five days before the date of this Agreement.
(c) Neither the Company nor any of its Subsidiaries owns, leases or
operates or has owned, leased or operated any real property, or conducts or has
conducted any operations, in the States of New Jersey or Connecticut of the
United States.
(d) For purposes of this Section 4.22, the terms "Company" and
"Subsidiaries" shall include any entity that is, in whole or in part, a
predecessor of the Company or any of its Subsidiaries.
SECTION 4.23. Antitakeover Statutes. No antitakeover or similar statute
or regulation applies or purports to apply to the Offer or this Agreement and
the transactions that they contemplate.
SECTION 4.24. Year 2000 Compliance. (a) To the best of the Company's
knowledge, (i) all internal hardware, software or firmware (a "System") of the
Company and its Subsidiaries that are material to the financial and operational
reporting systems of those Persons are Year 2000 Compliant and (ii) the failure
of any System(s) of the third party manufacturers, suppliers, vendors, lessees
and customers upon which the Company and its Subsidiaries rely to be Year 2000
Compliant will not have a Material Adverse Effect on the Company; provided that
the Company makes no representation or warranty with respect to whether any
Aircraft, or the computer systems of any Lessee, are or will be Year 2000
Compliant. The Company has received written confirmation from each Lessee's
insurer or insurance broker that the Lessee (other than Air Gabon) has obtained
write-back coverage under the provisions of AVN 2001/2002. For purposes of this
Section 4.24, "Year 2000 Compliant" means that neither performance nor
functionality of the System or any part of the System is affected by dates
before, during and after the year 2000 and in particular, without limitation:
(i) no value for any current date will cause any interruption in
the operation of the System or any part of the System;
(ii) date-based functionality will behave consistently for dates
prior to, during and after the year 2000;
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(iii) in all interfaces and data storage, the century in any date
will be specified either explicitly or by unambiguous
algorithms or inferencing rules; and
(iv) the year 2000 will be recognized as a leap year.
(b) The disclosure in the Company 20-F complies as to form in all
material respects with the Year 2000 disclosure guidelines set forth in the SEC
Release No. 33-7558.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PARENT AND BUYER
Each of Parent and Buyer represents and warrants to the Company that:
SECTION 5.01. Corporate Existence and Power. Each of Parent and Buyer
are corporations that are duly organized or incorporated and validly existing
under the laws of its respective jurisdiction of organization or incorporation
and has all corporate powers and all governmental licenses, authorizations,
permits, consents and approvals required to carry on its business as now
conducted, except for those licenses, authorizations, permits, consents and
approvals the absence of which would not have, individually or in the aggregate,
a Material Adverse Effect on Parent.
SECTION 5.02. Corporate Authorization. The execution, delivery and
performance by Parent and Buyer of this Agreement and the consummation by Parent
and Buyer of the transactions contemplated hereby are within the corporate
powers of Parent and Buyer and have been duly authorized by all necessary
corporate action. This Agreement constitutes a valid, binding and enforceable
agreement of each of Parent and Buyer, except to the extent that enforceability
may be limited by applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting the enforcement of creditors' rights generally and by
general principles of equity, regardless of whether that enforceability is
considered in a proceeding in equity or at law and subject to the possible need
for a de novo court hearing in Sweden if judgment is obtained outside of Sweden.
SECTION 5.03. Governmental Authorization. The execution, delivery and
performance by Parent and Buyer of this Agreement and the consummation by Parent
and Buyer of the transactions contemplated hereby require no action by or in
respect of, or filing with, any governmental body, agency, official or
authority,
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domestic or foreign, other than (i) any filings in connection with the
Compulsory Acquisition, (ii) compliance with any applicable requirements of the
HSR Act, the Irish Mergers Act and other applicable antitrust regulations, (iii)
compliance with any applicable requirements of the 1933 Act, the 1934 Act and
any other applicable securities or takeover laws, whether state or foreign and
(iv) any actions or filings the absence of which would not be reasonably
expected to have, individually or in the aggregate, a Material Adverse Effect on
Parent or materially to impair the ability of Parent and Buyer to consummate the
transactions contemplated by this Agreement.
SECTION 5.04. Non-contravention. The execution, delivery and
performance by Parent and Buyer of this Agreement and the consummation by Parent
and Buyer of the transactions contemplated hereby do not and will not (i)
contravene, conflict with, or result in any violation or breach of any provision
of the organizational documents of Parent or Buyer, (ii) assuming compliance
with the matters referred to in Section 5.03, contravene, conflict with, or
result in any violation or breach of any provision of any law, rule, regulation,
judgment, injunction, order or decree or (iii) require any consent or other
action by any Person under, constitute a default under, or cause or permit the
termination, cancellation, acceleration or other change of any right or
obligation or the loss of any benefit to which Parent or Buyer is entitled under
any provision of any agreement or other instrument binding upon Parent or Buyer,
except for those contraventions, conflicts and violations referred to in clause
(ii) and for those failures to obtain consent or other action, defaults,
terminations, cancellations, accelerations, changes or losses referred to in
clause (iii) that would not be reasonably expected to have, individually or in
the aggregate, a Material Adverse Effect on Parent or materially to impair the
ability of Parent and Buyer to consummate the transactions contemplated by this
Agreement.
SECTION 5.05. Disclosure Documents. (a) The information with respect to
Parent and any of its Subsidiaries that Parent furnishes to the Company in
writing specifically for use in any Company Disclosure Document will not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading at the time of the
filing of that Company Disclosure Document or any supplement or amendment to
that document and at the time of any distribution or dissemination of that
document.
(b) The Offer Documents, when filed, distributed or disseminated, as
applicable, will comply as to form in all material respects with the applicable
requirements of the 1934 Act and, at the time of the filing of that document, at
the time of its distribution or dissemination, if any, and at the time of
consummation
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of the Offer, will not contain any untrue statement of a material fact or omit
to state any material fact necessary to make the statements made in that
document, in the light of the circumstances under which they were made, not
misleading, provided that this representation and warranty will not apply to
statements or omissions included in the Offer Documents based upon information
furnished to Parent in writing by the Company specifically for use in that
document.
SECTION 5.06. Finders' Fees. Except for Greenhill & Co., LLC whose fees
will be paid by Parent or one of its Affiliates, there is no investment banker,
broker, finder or other intermediary that has been retained by or is authorized
to act on behalf of Parent or any of its Affiliates who might be entitled to any
fee or commission from Parent or any of its Affiliates upon consummation of the
transactions contemplated by this Agreement.
SECTION 5.07. Financing. Parent has, or, before the expiration of the
Offer, will have, sufficient cash, available lines of credit or other sources of
immediately available funds to enable Buyer to purchase all of the Shares
outstanding on a fully diluted basis and to pay all related fees and expenses
pursuant to the Offer.
ARTICLE 6
COVENANTS OF THE COMPANY
The Company agrees that:
SECTION 6.01. Conduct of the Company. Except as otherwise expressly
provided by this Agreement, from the date of this Agreement until the
Unconditional Time, the Company and its Subsidiaries shall conduct their
business in the ordinary course consistent with past practice and shall use
their reasonable best efforts to preserve intact their business organizations
and relationships with third parties and to keep available the services of their
present officers and employees. Without limiting the generality of the
foregoing, except as otherwise expressly contemplated by this Agreement or with
the prior written consent of Parent (which consent shall not be unreasonably
withheld or delayed) from the date of this Agreement until the Unconditional
Time:
(a) the Company will not adopt or propose any change to its Articles
of Association, except for any mandatory charges that may be strictly required
under any amendments to the Swedish Companies Act;
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(b) the Company will not, and will not permit any of its Subsidiaries
to, merge or consolidate with any other Person or acquire any aircraft (except
pursuant to existing contracts or commitments) or a material amount of stock or
assets of any other Person;
(c) the Company will not, and will not permit any of its Subsidiaries
to, sell or otherwise dispose of any Aircraft or any material subsidiary or
material amount of assets, securities or property, except (i) pursuant to
existing contracts or commitments and (ii) in the ordinary course consistent
with past practice;
(d) the Company will not, and will not permit any of its Subsidiaries
to, (i) take any action that would make any representation and warranty of the
Company hereunder inaccurate in any respect at, or as of any time prior to, the
Unconditional Time or (ii) omit to take any action necessary to prevent any such
representation or warranty from being inaccurate in any respect at any such
time; and
(e) the Company will not, and will not permit any of its Subsidiaries
to, agree or commit to do any of the foregoing;
provided that nothing in this Section 6.01 shall prevent the Company from
leasing, financing or refinancing any Aircraft or any interest in any Aircraft
in the ordinary course of business consistent with past practice.
SECTION 6.02. Access to Information. From the date of this Agreement
until the Unconditional Time and subject to applicable law and the
Confidentiality Agreement dated as of June 18, 1999 between the Company and
Parent (the "Confidentiality Agreement"), the Company shall, during ordinary
business hours and upon reasonable advance notice, (i) give Parent, its counsel,
financial advisors, auditors and other authorized representatives full access to
the offices, properties, books and records of the Company and the Subsidiaries,
(ii) furnish to Parent, its counsel, financial advisors, auditors and other
authorized representatives all financial and operating data and other
information that those Persons may reasonably request and (iii) instruct the
employees, counsel, financial advisors, auditors and other authorized
representatives of the Company and its Subsidiaries to cooperate with Parent in
its investigation of the Company and its Subsidiaries. Any investigation
pursuant to this Section shall be conducted in a manner so as not to interfere
unreasonably with the conduct of the business of the Company and its
Subsidiaries. No information or knowledge obtained by Parent in any
investigation pursuant to this Section shall affect or be deemed to modify any
representation or warranty made by the Company hereunder.
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SECTION 6.03. No Solicitation; Other Offers. (a) From the date of this
Agreement until its termination, the Company will not, and will cause its
Subsidiaries and the officers, directors, employees, investment bankers,
attorneys, accountants, consultants or other agents or advisors of the Company
and its Subsidiaries not to, directly or indirectly, (i) take any action to
solicit, initiate, facilitate or encourage the submission of any Acquisition
Proposal, (ii) engage in discussions or negotiations with, or disclose any
nonpublic information relating to the Company or any of its Subsidiaries or
afford access to the properties, books or records of the Company or any of its
Subsidiaries to, any Person who makes, may be considering making, or has made,
an Acquisition Proposal, or (iii) grant any waiver or release under any
standstill or similar agreement with respect to any class of equity securities
of the Company. The Company will notify Parent as soon as practicable after
receipt by the Company (or any of its advisors) of any Acquisition Proposal, any
formal indication from any Person that it is considering making an Acquisition
Proposal or any request for nonpublic information relating to the Company or any
of its Subsidiaries or for access to the properties, books or records of the
Company or any of its Subsidiaries by any Person who makes, may be considering
making, or has made, an Acquisition Proposal. The Company shall provide that
notice orally and in writing and shall identify the Person making, and the
material terms and conditions of, any such Acquisition Proposal, indication or
request. The Company shall keep Parent fully informed, on a current basis, of
the status and details of any such Acquisition Proposal, indication or request.
The Company shall, and shall cause its Subsidiaries and the directors, employees
and other agents of the Company and its Subsidiaries to, cease immediately and
cause to be terminated all activities, discussions and negotiations, if any,
with any Persons conducted before the date of this Agreement with respect to any
Acquisition Proposal. Nothing contained in this Agreement shall prevent the
Board of Directors of the Company from complying with Rule 14e-2 under the 1934
Act or the Swedish Companies Act with respect to any Acquisition Proposal.
(b) Notwithstanding the foregoing, the Company may negotiate or
otherwise engage in substantive discussions with, and furnish nonpublic
information to, any Person who delivers a Superior Proposal if (i) the Company
has complied with the terms of this Section 6.03, including, without limitation,
the requirement in Section 6.03(a) that it notify Parent promptly after its
receipt of any Acquisition Proposal, (ii) the Board of Directors of the Company
determines in good faith by a majority vote, after consultation with outside
legal counsel to the Company, that it should, in its reasonable judgment, take
that action to comply with its fiduciary duties to the Company under applicable
law, (iii) the Person who delivers the Superior Proposal executes a
confidentiality agreement with terms no less favorable to the Company than those
contained in the
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Confidentiality Agreement, and (iv) the Company shall have delivered to Parent a
prior written notice advising Parent that it intends to take that action.
(c) The Board of Directors of the Company shall be permitted to
withdraw, or modify in a manner adverse to Parent, its recommendation to holders
of Shares that is referred to in Section 2.02, but only if (i) the Company has
complied with the terms of this Section 6.03. including, without limitation, the
requirement in Section 6.03(a) that it notify Parent promptly after its receipt
of any Acquisition Proposal, (ii) a Superior Proposal is pending at the time the
Board of Directors determines to take any that action, (iii) the Board of
Directors determines in good faith by a majority vote, after consultation with
outside legal counsel to the Company, that it should, in its reasonable
judgment, take that action to comply with its fiduciary duties to the Company
under applicable law and (iv) the Company shall have delivered to Parent a prior
written notice advising Parent that it intends to take that action which notice
shall identify the Person making, and the material terms and conditions of, that
Superior Proposal. For purposes of this Agreement, "Superior Proposal" means any
bona fide, unsolicited written Acquisition Proposal for at least a majority of
the outstanding Shares on terms that the Board of Directors of the Company
determines in good faith by a majority vote, taking into account the advice of a
financial advisor of internationally recognized reputation and all the terms and
conditions of the Acquisition Proposal, including any break-up fees, expense
reimbursement provisions and conditions to and likelihood of consummation, is
more favorable and provides greater value (taken as a whole) to the Company's
stockholders than is provided under this Agreement.
SECTION 6.04. Notices of Certain Events. The Company shall promptly
notify Parent of:
(a) any notice or other communication from any Person alleging that
the consent of that Person is or may be required in connection with the
transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions contemplated
by this Agreement; and
(c) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge, threatened against, relating to or involving or
otherwise affecting the Company or any of its Subsidiaries that, if pending on
the date of this Agreement, would have been required to have been disclosed
pursuant to Section 4.16, 4.20, 4.21 or 4.22, as the case may be, or that relate
to the consummation of the transactions contemplated by this Agreement.
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ARTICLE 7
COVENANTS OF PARENT
Parent agrees that:
SECTION 7.01. Confidentiality. Prior to the Unconditional Time and
after any termination of this Agreement, Parent will hold, and will use its best
efforts to cause its officers, directors, employees, accountants, counsel,
consultants, advisors and agents to hold, in confidence, unless compelled to
disclose by judicial or administrative process or by other requirements of law,
all confidential documents and confidential information concerning the Company
or any of its Subsidiaries furnished to Parent or its Affiliates in connection
with the transactions contemplated by this Agreement, including, without
limitation, the lists of holders of Shares furnished by the Company pursuant to
Section 2.02, except to the extent that that information can be shown to have
been (i) previously known on a nonconfidential basis by Parent, (ii) in the
public domain through no fault of Parent or (iii) later lawfully acquired by
Parent from sources other than the Company, provided that Parent may disclose
that information to (A) its officers, directors, employees, accountants,
counsel, consultants, advisors and agents and (B) each member or limited or
general partner of the Investor or any Investor Affiliate (as those terms are
defined in the TPG Investment Agreement and which Persons are collectively
referred to in this Agreement as "TPG"), and each member or limited or general
partner (or any shareholder thereof) of each such limited or general partner,
and its or their advisors, in each case, only in connection with the
transactions contemplated by this Agreement, so long as Parent informs those
Persons of the confidential nature of that information and directs them to treat
it confidentially. Parent and its Affiliates shall satisfy their obligation to
hold any such information in confidence if they exercise the same care with
respect to that information as they would take to preserve the confidentiality
of their own similar information. If this Agreement is terminated, Parent and
its Affiliates will, and will use their best efforts to cause their officers,
directors, employees, accountants, counsel, consultants, advisors and agents to,
destroy or deliver to the Company, upon request, all originals and copies of the
documents and other materials that Parent or its Affiliates obtained, or that
were obtained on their behalf, from the Company or any of its Subsidiaries in
connection with this Agreement and that are subject to that confidence.
SECTION 7.02. Obligations of Buyer. Parent will take all action
necessary to cause Buyer to perform its obligations under this Agreement and to
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consummate the Offer and the Combination, on the terms and conditions set forth
in this Agreement.
SECTION 7.03. Officers' and Directors' Indemnification and Insurance.
(a) Parent shall indemnify and hold harmless, to the fullest extent permitted
under applicable law, each present and former director, officer or employee of
the Company and its Subsidiaries (the "Company Indemnified Parties") against any
costs or expenses (including reasonable attorneys' fees and expenses),
judgments, fines, losses, claims, damages, liabilities and amounts paid in
settlement in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative, arising
out of or pertaining to any action, alleged action, omission or alleged omission
occurring on or before the Unconditional Time in their capacity as director,
officer or employee (including, but not limited to, any claims, actions, suits,
proceedings and investigations which arise out of or relate to the transactions
contemplated by this Agreement) (collectively, the "Claims") for a period of
five years after the Unconditional Time, provided that (i) if any Claim(s) are
asserted or made within that five-year period, all rights to indemnification in
respect of any such Claim(s) shall continue until final disposition of any and
all of those Claims and (ii) notwithstanding the foregoing, Parent shall not be
liable for any settlement of any Claim effected without its prior written
consent (which consent shall not be unreasonably withheld). In satisfying its
obligations under the preceding sentence, Parent shall pay all reasonable
expenses incurred by or on behalf of any Company Indemnified Party in defending
against any Claim promptly after statements for those reasonable expenses are
received, so long as (x) payment is permitted under applicable law and (y) the
relevant Company Indemnified Party provides a written undertaking to Parent to
reimburse it for the payment of those expenses if it is ultimately determined
that that person is not entitled to indemnification.
(b) For a period of five years after the Unconditional Time, Parent
shall cause the Company or any successor entity to maintain in full force and
effect the officers' and directors' liability insurance covering the Company
Indemnified Parties who are presently covered by the Company's officers' and
directors' liability insurance policies, with respect to acts or omissions
occurring at or before the Unconditional Time, on terms no less favorable than
those in effect on the date of this Agreement or at the Unconditional Time;
provided, however, that in no event shall Parent be required to expend in any
one year an amount in excess of 150% of the annual premiums currently paid by
the Company for that insurance.
(c) If Parent or any of its successors or assigns (i) consolidates
with or merges into any other Person and shall not be the continuing or
surviving corporation or entity of that consolidation or merger, or (ii)
transfers or conveys
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all or substantially all of its properties and assets to any Person, then, and
in either case, proper provision shall be made so that the successors and
assigns of Parent shall assume the obligations set forth in this Section 7.03.
ARTICLE 8
COVENANTS OF PARENT AND THE COMPANY
The parties agree that:
SECTION 8.01. Best Efforts. (a) Subject to the terms and conditions of
this Agreement, the Company and Parent will use their best efforts (subject to
the next sentence) to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate the transactions contemplated by this
Agreement. Notwithstanding the foregoing, it is understood and agreed that it is
the obligation of TPG, and not Parent, under the HSR Act to file a Notification
and Report Form pursuant to the HSR Act with respect to the transactions
contemplated by this Agreement and that, in that respect Parent agrees to use
all commercially reasonable efforts to cause TPG to make this filing, and the
Company agrees to make its own appropriate filing of that form under the HSR
Act, in each case as promptly as practicable and in any event within five U.S.
business days of the date of this Agreement. In this regard, each of Parent and
the Company agrees to supply as promptly as practicable any additional
information and documentary material that may be requested pursuant to the HSR
Act and to take all other actions necessary to cause the expiration or
termination of the applicable waiting periods under the HSR Act as soon as
practicable.
(b) In connection with the efforts referenced in Section 8.01(a) to
obtain all requisite approvals and authorizations for the transactions
contemplated by this Agreement under the HSR Act or any other Antitrust Law,
each of Parent and Company shall use its reasonable best efforts to (i)
cooperate in all respects with each other in connection with any filing or
submission and in connection with any investigation or other inquiry, including
any proceeding initiated by a private party, (ii) keep the other party informed
in all material respects of any material communication received by that party
from, or given by that party to the Mergers division of the Department of
Enterprise, Trade and Employment of Ireland, the Federal Trade Commission of the
United States (the "FTC"), the Antitrust Division of the Department of Justice
of the United States (the "DOJ") or any other governmental authority and of any
material communication received or given in connection with any proceeding by a
private party, in each case regarding
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any of the transactions contemplated hereby and (iii) permit the other party to
review any material communication given by it to, and consult with each other in
advance of any meeting or conference with, the Mergers division of the
Department of Enterprise, Trade and Employment of Ireland, the FTC, the DOJ or
any such other governmental authority or, in connection with any proceeding by a
private party, with any other Person. For purposes of this Agreement, "Antitrust
Law" means the Irish Mergers Act, the Sherman Act, the Clayton Act, the HSR Act,
the Federal Trade Commission Act and all other statutes, rules, regulations,
orders, decrees, administrative and judicial doctrines and other laws that are
designed or intended to prohibit, restrict or regulate actions having the
purpose or effect of monopolization or restraint of trade or lessening of
competition through merger or acquisition.
SECTION 8.02. Certain Filings. The Company and Parent shall cooperate
with one another (i) in connection with the preparation of the Company
Disclosure Documents and the Offer Documents, (ii) in determining whether any
action by or in respect of, or filing with, any governmental body, agency,
official, or authority is required, or any actions, consents, approvals or
waivers are required to be obtained from parties to any material contracts, in
connection with the consummation of the transactions contemplated by this
Agreement and (iii) in taking those actions or making any of those filings,
furnishing information required in connection therewith or with the Company
Disclosure Documents or the Offer Documents and seeking timely to obtain any of
those actions, consents, approvals or waivers.
SECTION 8.03. Public Announcements. Parent and the Company will consult
with each other before issuing any press release or making any public statement
with respect to this Agreement or the transactions contemplated hereby and,
except as may be required by applicable law or any listing agreement with any
national securities exchange, will not issue any such press release or make any
such public statement prior to that consultation.
ARTICLE 9
CONDITIONS
SECTION 9.01. Conditions to Obligations of Buyer to Accept Shares for
Payment. The obligation of Buyer to accept for payment or pay for any Shares is
subject to the satisfaction or waiver of the following conditions:
(a) those set forth in Annex I;
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(b) each of Mannheimer Swartling and Greenberg Traurig, P.A. shall have
delivered an opinion to Buyer, dated as of the Unconditional Time, to the same
effect as the representations and warranties of the Company in Sections 4.01
through 4.03 and clauses (i) and (ii) of Section 4.04. In rendering those
opinions, these counsel need only opine as to matters governed by their
respective jurisdictions;
(c) (i) the Company shall have performed in all material respects all
of its obligations under this Agreement required to be performed by it at or
before the Unconditional Time, (ii) the representations and warranties of the
Company contained in this Agreement and in any certificate or other writing
delivered by the Company pursuant to this Agreement, that are (A) qualified by
materiality or Material Adverse Effect or any similar standard or qualification,
shall be true and correct at and as of the Unconditional Time as if made at and
as of that time and (B) not so qualified, shall be true and correct in all
material respects at and as of the Unconditional Time as if made at and as of
that time and (iii) Parent shall have received a certificate of the Chief
Executive Officer of the Company that is dated as of the Unconditional Time to
the foregoing effect; and
(d) Parent shall have received as of the Unconditional Time all
documents that it might reasonably request relating to the existence of the
Company and any of its Subsidiaries and the authority of the Company for this
Agreement, all in form and substance reasonably satisfactory to Parent.
ARTICLE 10
TERMINATION
SECTION 10.01. Termination. This Agreement may be terminated at any
time before the Unconditional Time:
(a) by mutual written agreement of the Company, Buyer and Parent;
(b) by either the Company, on the one hand, or Parent, on the other,
if:
(i) the Offer has not been consummated on or before March 31, 2000
(the "End Date"), provided that the right to terminate this Agreement
pursuant to this Section 10.01(b)(i) shall not be available to any
party whose breach of any provision of this Agreement results in the
failure of the Offer to be consummated by that time; or
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(ii) there shall be any law or regulation that makes acceptance for
payment of, and payment for, the Shares pursuant to the Offer illegal
or otherwise prohibited or any judgment, injunction, order or decree of
any court or governmental body having competent jurisdiction enjoining
Buyer from accepting for payment of, and paying for, the Shares
pursuant to the Offer and that judgment, injunction, order or decree
shall have become final and nonappealable;
(c) by Parent and Buyer, if, before acceptance for payment of the
Shares under the Offer,
(i) any Person or "group" (as defined in Section 13(d)(3) of the 1934
Act), other than Buyer, any of its Affiliates or any Institutional
Investor, shall have acquired or proposed to acquire, after the date of
this Agreement, beneficial ownership of more than 10% of the Shares or
more than 10% of the assets of the Company and its Subsidiaries, taken
as a whole, through the acquisition of stock, the formation of a group
or otherwise, or shall have been granted any option, right or warrant,
conditional or otherwise, to acquire beneficial ownership of those
Shares or assets; provided that this termination right shall not be
deemed to have been implicated solely by virtue of the Shares
beneficially owned by any stockholder of the Company on the date of
this Agreement who, as of that date, already beneficially owned,
together with its Affiliates, 10% of the outstanding Shares or more
(each, a "10% Company Stockholder");
(ii) any Person or "group" (as defined in Section 13(d)(3) of the 1934
Act), other than Buyer or any of its Affiliates, shall have made, or
shall have publicly announced an intention to make, a tender or
exchange offer for at least 10% of the outstanding Shares or shall have
proposed publicly to enter into a definitive agreement or an agreement
in principle with the Company regarding an Acquisition Proposal;
(iii) (A) the Board of Directors of the Company shall have withdrawn, or
modified in a manner adverse to Buyer, its approval or recommendation
of this Agreement, the Offer or the Combination, or shall have
recommended, or entered into, or publicly announced its intention to
enter into, an agreement or an agreement in principle with respect to
an Acquisition Proposal (or shall have resolved to do any of the
foregoing); (B) there shall have been a breach of Section 6.03 in any
material respect; or (C) the Company shall have entered into a
definitive agreement or an agreement in principle with a third party
regarding an Acquisition Proposal;
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(iv) (A) any representation or warranty made by the Company in this
Agreement that is (1) qualified by materiality or Material Adverse
Effect or any similar standard or qualification, shall not have been
true and correct when made or at any time before the acceptance for
purchase of the Shares as if made at and as of that time or (2) not so
qualified, shall not have been true and correct in all material
respects when made or at any time before the acceptance for purchase of
the Shares as if made at and as of that time or (B) the Company shall
have breached or failed to perform in any material respect any of its
obligations under this Agreement, and in the case of either clause (A)
or (B), Parent reasonably determines, after 5 Swedish business days'
notice by Parent to the Company, that that inaccuracy, breach or
failure is incapable of being cured by the End Date; or
(v) Buyer shall have terminated the Offer as a result of the
occurrence of any of the events set forth in Section 9.01 or Annex I;
or
(d) by the Company, if:
(i) Buyer fails to commence the Offer as contemplated by Section 2.01
in any material respect, or Buyer shall have terminated the Offer or
allowed the Offer to expire without either the purchase of any Shares
under, or an extension of, the Offer, other than as a result of the
occurrence of any of the events set forth in Section 9.01 or Annex I;
(ii) prior to the purchase of Shares pursuant to the Offer, a Person or
"group" (as defined in Section 13(d)(3) of the 1934 Act) shall have
made a Superior Proposal and the Board has determined to terminate this
Agreement and enter into a binding agreement concerning that
Acquisition Proposal; provided that the Company may not exercise its
right to terminate under this Section 10.01(d)(ii) (and may not enter
into a binding written agreement with respect to that Acquisition
Proposal) unless (A) the Company shall have provided to Parent at least
five Business Days' prior written notice that its Board of Directors
has authorized and intends to terminate this Agreement pursuant to this
Section 10.01(d)(ii), specifying the material terms and conditions of
the Acquisition Proposal, (B) Parent does not make, within five
Business Days of receiving that notice, an offer such that a majority
of the Company's Board of Directors determines that (1) the foregoing
Acquisition Proposal no longer constitutes a Superior Proposal or (2)
its fiduciary duties to the Company no longer dictate that it should,
in its reasonable judgment, take that action(s), and (C) on or before
that termination, the Company shall have paid to Parent the Termination
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Fee required by Section 10.03(b). In connection with the foregoing, the
Company agrees that it will (x) not enter into a binding agreement with
respect to the Acquisition Proposal until at least the sixth Business
Day after it has provided the notice to Parent that is required by this
Section 10.01(d)(ii), (y) negotiate in good faith with Parent, and
consider in good faith any offer made by Parent, during that period and
(z) notify Parent promptly if its intention to enter into such an
agreement shall change at any time; or
(iii) (A) any representation or warranty made by Parent in this
Agreement that is (1) qualified by materiality or Material Adverse
Effect or any similar standard or qualification, shall not have been
true and correct when made or at any time before the acceptance for
purchase of the Shares as if made at and as of that time or (2) not so
qualified, shall not have been true and correct in all material
respects when made or at any time before the acceptance for purchase of
the Shares as if made at and as of that time, or (B) Parent shall have
breached or failed to perform in any material respect any of its
obligations under this Agreement, and in the case of either clause (A)
or (B), the Company reasonably determines, after five Swedish business
days' notice by the Company to Parent, that that inaccuracy, breach or
failure is incapable of being cured by the End Date.
The party desiring to terminate this Agreement pursuant to this Section
10.01 (other than pursuant to Section 10.01(a)) shall give notice of that
termination to the other party.
SECTION 10.02. Effect of Termination. If this Agreement is terminated
pursuant to Section 10.01, this Agreement shall, without prejudice to Section
10.03 of this Agreement, become void and of no effect with no liability on the
part of any party (or any stockholder, director, officer, employee, agent,
consultant or representative of that party) to the other party, provided that,
if that termination shall result from the willful (i) failure of either party to
fulfill a condition to the performance of the obligations of the other party,
(ii) failure of either party to perform a covenant of this Agreement or (iii)
breach by any party of any representation or warranty or agreement contained in
this Agreement, the failing or breaching party shall be fully liable for any and
all liabilities and damages incurred or suffered by the other parties as a
result of that failure or breach.
SECTION 10.03. Fees and Expenses. (a) Except as otherwise provided in
this Section and in the proviso to Section 10.02, all costs and expenses
incurred in connection with this Agreement shall be paid by the party incurring
that cost or expense.
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(b) If this Agreement is terminated by Parent and Buyer pursuant to
any of the clauses of Section 10.01(c)(iii) or by the Company pursuant to
Section 10.01(d)(ii), then the Company agrees to pay to Parent a fee (the
"Termination Fee") in immediately available funds equal to $5 million. This
Termination Fee shall be paid (1) promptly, but in no event later than two
Swedish business days, after any termination of this Agreement by Parent and
Buyer pursuant to any of the clauses of Section 10.01(c)(iii) and (2) as a
precondition to any termination by the Company pursuant to Section 10.01(d)(ii).
(c) If this Agreement is terminated by Parent pursuant to Section
10.01(c)(i) or 10.01(c)(ii) and, before that termination, any of the events
described in Section 10.01(c)(i) or 10.01(c)(ii) shall have occurred and,
concurrently with or within 12 months after that termination, a Third Party
Acquisition Event occurs with the party or any of its Affiliates that made the
acquisition, offer or public proposal, as applicable, that is described in
either of Section 10.01(c)(i) or 10.01(c)(ii), then the Company shall pay to
Parent (A) the Termination Fee and (B) an amount equal to the documented
out-of-pocket costs and expenses (including, but not limited to, all banking,
legal, accounting and consulting fees and expenses) incurred by or on behalf of
Parent in connection with the negotiation, execution, delivery and performance
of this Agreement and any consideration, investigation, negotiation and
structuring of the transactions contemplated by this Agreement; provided that in
no event shall the Company be liable under this Section for an amount in excess
of $2 million. This Termination Fee shall be paid in immediately available funds
promptly, but in no event later than two Swedish business days after the
occurrence of the Third Party Acquisition Event. The Company shall not be
required to reimburse Parent for the costs and expenses required to be
reimbursed pursuant to this Section 10.03(c) until after the occurrence of a
Third Party Acquisition Event and after it has received documentation with
respect to those costs and expenses but shall then be required to pay promptly.
A "Third Party Acquisition Event" means (i) the consummation of an
Acquisition Proposal or series of Acquisition Proposals that results in (A)
holders of Shares before that transaction (by virtue of their ownership of those
Shares) in the aggregate owning less than 50% of the voting securities of the
entity surviving or resulting from that transaction (or, if that entity is not
its own ultimate parent, then its ultimate parent), (B) the sale, lease,
exchange, transfer or other disposition of at least 50% of the assets of the
Company and its Subsidiaries, taken as a whole or (C) the acquisition, directly
or indirectly, by any Person or "group" (other than the stockholders who are
parties to the Share Exchange Agreement and the Share Purchase Agreement, but
only with respect to the Shares beneficially owned by them as of the date of
this Agreement) of beneficial ownership of 50% or more of the Shares (whether by
merger, consolidation, share exchange, business
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combination, tender or exchange offer or otherwise) or (ii) the entering into by
the Company, its stockholders or any of their respective Affiliates of a
definitive agreement with respect to any such transaction.
(d) If this Agreement is terminated by the Company pursuant to Section
10.01(d)(i), then Parent agrees to pay the Termination Fee to the Company. This
Termination Fee shall be paid in immediately available Funds promptly, but in no
event later than two Irish business days, after termination of this Agreement.
(e) If this Agreement shall have been terminated pursuant to any of
Sections 10.01(c)(iii), 10.01(c)(iv) or 10.01(d)(ii) and at the time of that
termination Parent has been in compliance with its obligations under this
Agreement in all material respects, the Company agrees to promptly pay Parent in
immediately available funds an amount equal to the documented out-of-pocket
costs and expenses (including, but not limited to, all banking, legal,
accounting and consulting fees and expenses) incurred by or on behalf of Parent
in connection with the negotiation, execution, delivery and performance of this
Agreement and any consideration, investigation, negotiation and structuring of
the transactions contemplated by this Agreement; provided that in no event shall
the Company be liable under this Section for an amount in excess of $2 million.
(f) If this Agreement shall have been terminated pursuant to Sections
10.01(d)(i) or 10.01(d)(iii) or and at the time of that termination the Company
has been in compliance with its obligations under this Agreement in all material
respects, Parent agrees to promptly pay the Company in immediately available
funds an amount equal to the documented out-of-pocket costs and expenses
(including, but not limited to, all banking, legal, accounting and consulting
fees and expenses) incurred by or on behalf of the Company in connection with
the negotiation, execution, delivery and performance of this Agreement and any
consideration, investigation, negotiation and structuring of the transactions
contemplated by this Agreement; provided that in no event shall Parent be liable
under this Section for an amount in excess of $2 million.
(g) If any party fails promptly to pay any amount due to the other
party pursuant to this Section 10.03, it shall also pay any costs and expenses
incurred by the other party in connection with a legal action to enforce this
Agreement that results in a judgment against the party obligated under this
Section 10.03 for that amount.
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ARTICLE 11
MISCELLANEOUS
SECTION 11.01. Notices. All notices, requests and other communications
to any party shall be in writing (including facsimile transmission) and shall be
given,
if to Parent, to:
The Company Secretary
AerFi Group plc
Aviation House
Shannon
County Clare
Ireland
Fax:+353-61-360-503
with a copy to:
Patrick Blaney
AerFi Group plc
Aviation House
Shannon
County Clare
Ireland
Fax:+353-61-360-503
and
Thomas J. Reid, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Fax: (212) 450-4800
if to Buyer, to:
AerFi Sverige AB
c/o Vinge
Box 1703
S-111 87 Stockholm
Sweden
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with a copy to:
Patrick Blaney
AerFi Group plc
Aviation House
Shannon
County Clare
Ireland
Fax:+353-61-360-503
and
Thomas J. Reid, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Fax: (212) 450-4800
if to the Company, to:
Indigo Aviation AB
Sodra Forstadsgatan 4
S-211 43 Malmo, Sweden
Attention: Corporate Secretary
Fax: 46-40-302-350
with a copy to:
Kenneth C. Hoffman, Esq.
Greenberg Traurig, P.A.
1221 Brickell Avenue
Miami, Florida 33131
Fax: (305) 579-0717
and
Goran Miorner
Mannheimer Swartling Advokatbyra AB
Stortorget 29
Box 4291
SE-203 14 Malmo, Sweden
Fax: 46-40-25-08-01
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or any other address or facsimile number as that party may specify for the
purpose by notice to the other parties. All of these notices, requests and other
communications shall be deemed received on the date of receipt by the recipient
if received before 5 p.m. on a business day in the place of receipt. Otherwise,
any such notice, request or communication shall be deemed not to have been
received until the next succeeding business day in the place of receipt.
SECTION 11.02. Survival of Provisions of this Agreement. The
representations and warranties and agreements contained herein and in any
certificate or other writing delivered pursuant to Section 9.01 of this
Agreement shall not survive the Unconditional Time or the termination of this
Agreement, except for the agreements set forth in (i) Sections 3.01, 3.02 and
3.03, each of which shall survive the Unconditional Time, but not termination of
this Agreement and (ii) Sections 7.01, 7.03, 10.03, 11.02, 11.05, 11.06 and
11.07, each of which shall survive indefinitely.
SECTION 11.03. Amendments; No Waivers. (a) Any provision of this
Agreement may be amended or waived before the Unconditional Time if, but only
if, that amendment or waiver is in writing and is signed, in the case of an
amendment, by each party to this Agreement or, in the case of a waiver, by each
party against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege under this Agreement shall operate as a waiver of that right, power or
privilege nor shall any single or partial exercise preclude any other or further
exercise or the exercise of any other right, power or privilege. The rights and
remedies provided in this Agreement shall be cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 11.04. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and assigns, provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party, except that Buyer may transfer or
assign, in whole or from time to time in part, to one or more of its Affiliates,
the right to purchase all or a portion of the Shares pursuant to the Offer, but
no such transfer or assignment will relieve Buyer of its obligations under the
Offer or prejudice the rights of tendering stockholders to receive payment for
Shares validly tendered and accepted for payment pursuant to the Offer.
SECTION 11.05. Governing Law. This Agreement shall be governed by
and construed in accordance with the law of the State of New York, without
regard to the conflicts of law rules of such state.
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SECTION 11.06. Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the transactions contemplated hereby may be brought in
any federal court located in the State of New York or any New York state court,
and each of the parties hereby consents to the non-exclusive jurisdiction of
those courts (and of the appropriate appellate courts therefrom) in any such
suit, action or proceeding and irrevocably waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to the laying
of the venue of any such suit, action or proceeding in any such court or that
any such suit, action or proceeding brought in any such court has been brought
in an inconvenient form. Process in any such suit, action or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on that party as provided in Section 11.01 shall
be deemed effective service of process on that party.
SECTION 11.07. WAIVER OF JURY TRIAL. EACH OF THE PARTIES 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.
SECTION 11.08. Counterparts; Effectiveness; Benefit. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party shall have
received counterparts of this Agreement signed by all of the other parties. No
provision of this Agreement is intended to confer any rights, benefits,
remedies, obligations, or liabilities under this Agreement upon any Person other
than the parties and their respective successors and assigns.
SECTION 11.09. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior agreements and understandings, both oral and
written, among the parties with respect to the subject matter of this Agreement.
SECTION 11.10. Captions. The captions in this Agreement are included
for convenience of reference only and shall be ignored in the construction or
interpretation hereof.
SECTION 11.11. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms,
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provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated so
long as the economic or legal substance of the transactions contemplated hereby
is not affected in any manner materially adverse to any party. Upon such a
determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent possible.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
written above.
INDIGO AVIATION AB
By: /s/ K. A. Granlund
Name:
Title:
AERFI GROUP PLC
By: /s/ Patrick H. Blaney
Name:
Title:
AERFI SVERIGE AB
By: /s/ John Redmond
Name:
Title:
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ANNEX I
Notwithstanding any other provision of the Offer, Buyer shall not be required to
accept for payment or pay for any Shares, and may terminate the Offer, if (i)
before the expiration date of the Offer, (a) Buyer or its representative has not
received an unconditional statement in writing from the Minister for Enterprise,
Trade and Employment of Ireland that (s)he has decided not to make an order
under Section 9 of the Irish Mergers Act in relation to the Offer or any related
transactions or the applicable statutory period for the making of such an order
has not expired or (b) the waiting period under the HSR Act that is applicable
to the Offer and related transactions shall not have expired or been terminated
or (ii) at any time on or after the date of this Agreement and before the
expiration date of the Offer, any of the following conditions exists:
(A) there shall be any statute, rule or regulation, or there shall be
threatened, instituted or pending any action or proceeding (or any investigation
or other inquiry that in Buyer's judgment might result in that action or
proceeding) by any government or governmental authority or agency, domestic or
foreign, or by any other Person, domestic or foreign, before any court or
governmental authority or agency, domestic or foreign, (1) challenging or
seeking to make illegal, to delay materially or otherwise directly or indirectly
to restrain or prohibit the making or conduct of the Offer and/or any related
transactions or the acceptance for payment of or payment for some of or all the
Shares by Buyer or the completion of any related transactions, seeking to obtain
damages or otherwise directly or indirectly relating to the transactions
contemplated by or related to the Offer or the Combination, (2) seeking to
restrain or prohibit Buyer's ownership or operation (or that of its respective
Subsidiaries or Affiliates) of all or any material portion of any of the Shares
or the business or assets of the Company and its Subsidiaries, taken as a whole,
or of Buyer and its Subsidiaries, taken as a whole, or to compel Buyer or any of
its Subsidiaries or Affiliates to dispose of or hold separate all or any
material portion of the business or assets of the Company and its Subsidiaries,
taken as a whole, or of Buyer and its Subsidiaries, taken as a whole, (3)
seeking to impose or confirm material limitations on the ability of Buyer or any
of Buyer's Subsidiaries or Affiliates effectively to exercise full rights of
ownership of the Shares, including, without limitation, the right to vote any
Shares acquired or owned by Buyer or any of Buyer's Subsidiaries or Affiliates
on all matters properly presented to the Company's stockholders, (4) seeking to
require divestiture by Buyer or any of Buyer's Subsidiaries or Affiliates of any
Shares or (5) that otherwise, in the judgment of Buyer, is likely to have a
Material Adverse Effect on the Company or Parent; or
<PAGE>
(B) there shall have been any action taken, or any statute, rule,
regulation, injunction, order or decree proposed, enacted, enforced,
promulgated, issued or deemed applicable to the Offer or the Combination, by any
court, government or governmental authority or agency, domestic or foreign,
other than the application of the waiting period provisions of the Irish Mergers
Act or the HSR Act to the Offer or the Combination, that, in the judgment of
Buyer, is likely, directly or indirectly, to result in any of the consequences
referred to in clauses (1) through (5) of paragraph (A) above; or
(C) any change shall have occurred or been threatened (or any
development shall have occurred or been threatened involving a prospective
change) in the business, assets, liabilities, financial condition,
capitalization, operations, results of operations or prospects of the Company or
any of its Subsidiaries that, in the reasonable judgment of Buyer, is or is
likely to have a Materially Adverse Effect on the Company, or Buyer shall have
become aware of any facts that, in the reasonable judgment of Buyer, have or are
likely to have material adverse significance with respect to either the value of
the Company and its Subsidiaries, taken as a whole, or the value of the Shares
to Parent; or
(D) it shall have been publicly disclosed or Buyer shall have otherwise
learned that (1) any Person or "group" (as defined in Section 13(d)(3) of the
1934 Act), other than any of the 10% Company Stockholders, shall have acquired
or proposed to acquire beneficial ownership of more than 10% of any class or
series of capital stock of the Company (including the Shares), through the
acquisition of stock, the formation of a group or otherwise, or shall have been
granted any option, right or warrant, conditional or otherwise, to acquire
beneficial ownership of more than 10% of any class or series of capital stock of
the Company (including the Shares), other than acquisitions for bona fide
arbitrage purposes only and other than as disclosed in a Schedule 13D or 13G on
file with the SEC on the date of this Agreement, or (2) any such Person or group
that, before on the date of this Agreement, had filed such a Schedule with the
SEC, other than any of the 10% Company Stockholders, shall have acquired or
proposed to acquire beneficial ownership of additional shares of any class or
series of capital stock of the Company (including the Shares), through the
acquisition of stock, the formation of a group or otherwise, constituting 10% or
more of any such class or series, or shall have been granted any option, right
or warrant, conditional or otherwise, to acquire beneficial ownership of
additional shares of any class or series of capital stock of the Company
(including the Shares) constituting 10% or more of any such class or series; or
(E) any Person (1) shall have made, or shall have publicly announced an
intention to make, a tender or exchange offer for at least 10% of the
outstanding Shares, (2) shall have filed a Notification and Report Form under
the
2
<PAGE>
HSR Act or made a similar filing under any other Antitrust Law or shall have
made a public announcement reflecting an intent to acquire the Company or 10% or
more of the assets or securities of the Company or (3) shall have made a
proposal or other communication to the Company, or shall have entered or
proposed to enter into a definitive agreement or an agreement in principle with
the Company, regarding an Acquisition Proposal;
(F) the Board of Directors of the Company shall have withdrawn, or
modified in a manner adverse to Buyer, its approval or recommendation of the
Offer or shall have recommended, entered into, or publicly announced its
intention to enter into, a definitive agreement or an agreement in principle
with respect to an Acquisition Proposal (or shall have resolved to do any of the
foregoing); or
(G) (1) the Company shall have breached or failed to perform in all
material respects any of its obligations under this Agreement, or any of the
representations and warranties of the Company contained in this Agreement, that
is (x) qualified by materiality or Material Adverse Effect or any similar
standard or qualification, shall not have been true and correct when made or at
any time before the acceptance for purchase of the Shares as if made at and as
of that time or (y) not so qualified, shall be true and correct in all material
respects when made or at any time before the acceptance for purchase of the
Shares as if made at and as of that time or (2) the Company shall have breached
or failed to perform in any material respect any of its obligations under this
Agreement; or
(H) this Agreement shall have been terminated in accordance with its
terms; or
(I) there shall have occurred any general suspension of trading in, or
limitation on prices for, securities on the New York Stock Exchange, NASDAQ or
in the over-the-counter market, any declaration of a banking moratorium by
Swedish, Irish, U.S. Federal or New York State authorities or a general
suspension of payments in respect of lenders that regularly participate in the
U.S. or international markets in loans to large corporations, any material
limitation by any Swedish, Irish, U.S. Federal, state or local government or any
court, administrative or regulatory agency or commission or other governmental
authority or agency in Sweden, Ireland or the United States that materially
affects the extension of credit generally by lenders that regularly participate
in the U.S. or international markets in loans to large corporations, any
commencement of a war involving Sweden, Ireland or the United States or any
commencement of armed hostilities or other national or international calamity
involving Sweden, Ireland or the United States that have a material effect on
bank syndication or financial markets in the United States or internationally
or, in the case of any of the
3
<PAGE>
foregoing occurrences existing on or at the time of the commencement of the
offer, a material acceleration or worsening of those occurrences which, in the
sole judgment of Buyer in any such case, and regardless of the circumstances
(including any action or omission by Parent or Buyer) giving rise to any such
condition, makes it inadvisable to proceed with that acceptance for payment or
payment.
4
Exhibit (c)(2)
CONFORMED COPY
SHARE EXCHANGE AGREEMENT
among
AerFi Group plc
and
The Other Parties Listed on the Signature Pages
to this Agreement
<PAGE>
TABLE OF CONTENTS
----------------------
PAGE
----
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions....................................................1
ARTICLE 2
SHARES
SECTION 2.01. Exchange of Shares.............................................5
SECTION 2.02. Closing........................................................6
SECTION 2.03. Adjustments....................................................6
SECTION 2.04. Fractional Shares..............................................6
SECTION 2.05. Withholding Rights.............................................7
SECTION 2.06. Transfers of Subject Shares by Parent..........................7
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
SECTION 3.01. Valid Title.....................................................7
SECTION 3.02. Non-Contravention...............................................7
SECTION 3.03. Binding Effect..................................................8
SECTION 3.04. Total Securities................................................8
SECTION 3.05. Private Placement...............................................8
SECTION 3.06. Finder's Fees...................................................9
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT
SECTION 4.01. Corporate Existence and Power...................................9
SECTION 4.02. Corporate Authorization.........................................9
SECTION 4.03. Governmental Authorization......................................9
SECTION 4.04. Non-Contravention..............................................10
SECTION 4.05. Capitalization.................................................10
SECTION 4.06. Financial Statements...........................................11
SECTION 4.07. Absence of Certain Changes.....................................11
SECTION 4.08. No Material Undisclosed Liabilities............................13
SECTION 4.09. Subsidiaries; Equity Investments...............................13
SECTION 4.10. Aircraft and Leases............................................14
SECTION 4.11. Insurance Coverage.............................................15
SECTION 4.12. Title to Assets................................................16
SECTION 4.13. Compliance with Laws and Court Orders..........................16
SECTION 4.14. Litigation.....................................................17
<PAGE>
PAGE
----
SECTION 4.15. Year 2000 Compliance...........................................17
SECTION 4.16. Finders' Fees..................................................18
SECTION 4.17. Taxes..........................................................18
ARTICLE 5
COVENANTS OF THE STOCKHOLDERS
SECTION 5.01. No Proxies for, Encumbrances on, or Transfers of, Subject
Shares...............................................................20
SECTION 5.02. No Shopping....................................................20
SECTION 5.03. Lock-Up........................................................21
SECTION 5.04. Non-Exercise of Registration Rights............................22
SECTION 5.05. Confidentiality................................................22
ARTICLE 6
COVENANTS OF PARENT
SECTION 6.01. Board of Directors and Management of Parent....................23
SECTION 6.02. Access to Information..........................................23
ARTICLE 7
CONDITIONS TO CLOSING
SECTION 7.01. Conditions to Obligations of Each of the Parties...............24
SECTION 7.02. Conditions to Obligation of Parent.............................24
SECTION 7.03. Conditions to Obligation of the Stockholders...................26
ARTICLE 8
SURVIVAL; INDEMNIFICATION
SECTION 8.01. Survival.......................................................26
SECTION 8.02. Indemnification................................................27
SECTION 8.03. Procedures.....................................................27
ARTICLE 9
TERMINATION
SECTION 9.01. Grounds for Termination........................................28
SECTION 9.02. Effect of Termination..........................................29
ii
<PAGE>
PAGE
----
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. Expenses......................................................29
SECTION 10.02. Further Assurances............................................29
SECTION 10.03. Additional Agreements.........................................29
SECTION 10.04. Notices.......................................................30
SECTION 10.05. Successors and Assigns........................................30
SECTION 10.06. Governing Law.................................................30
SECTION 10.07. Jurisdiction..................................................30
SECTION 10.08. WAIVER OF JURY TRIAL..........................................31
SECTION 10.09. Counterparts; Effectiveness...................................31
SECTION 10.10. Variations of Pronouns; Captions..............................31
SECTION 10.11. Amendments and Waivers........................................31
SECTION 10.12. Consent with Respect to Roll-Over of Employee Options.........31
EXHIBITS AND SCHEDULES
Exhibit A - Certain Stockholder Information
Exhibit B - Form of Agreement to be Bound
Exhibit C - Representations and Warranties of the Company
Parent Disclosure Schedule
Company Disclosure Schedule
iii
<PAGE>
SHARE EXCHANGE AGREEMENT
AGREEMENT dated as of November 11, 1999 among AerFi Group plc, a
company incorporated under the laws of Ireland ("Parent") and the holders
listed on the signature pages of this Agreement (the "Stockholders") of (i) the
ordinary shares, SEK 3.14 nominal value per share (the "Shares"), of Indigo
Aviation AB, a limited liability company (Swedish: publikt aktiebolag)
organized under the laws of the Kingdom of Sweden (the "Company"), and (ii)
options to purchase Shares (the "Employee Options").
NOW, THEREFORE, the parties to this Agreement (the "parties") agree as
follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. (a) As used in this Agreement, the
following terms have the following meanings:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
that Person.
"Aircraft" means, either collectively or individually, as applicable,
the aircraft listed on the Parent Disclosure Schedule, each (other than any
aircraft to be purchased after the date of this Agreement as described in the
Parent Disclosure Schedule) with the manufacturer's serial number as set forth
on the Parent Disclosure Schedule, including, to the extent that ownership is
held by the lessor under the terms of the applicable Lease, (i) the airframe,
(ii) the Engines and (iii) all appliances, parts (including spare parts),
accessories, instruments, navigational and communications equipment,
furnishings, modules, components and other items of equipment installed in or
furnished with the Aircraft.
"Buyer" means AerFi Sverige AB, a company organized under the laws of
the Kingdom of Sweden (registration number 556577-3826) and an indirect wholly
owned subsidiary of Parent.
"Closing Date" means the date of the Closing.
"Code" means the Internal Revenue Code of 1986 of the United States, as
amended.
"Company Disclosure Schedule" means the Disclosure Schedule of the
Company that is attached as Exhibit C to, and dated as of the date of, this
Agreement.
<PAGE>
"Consideration Shares" means the Parent Shares to be issued to the
Stockholders in exchange for the Exchange Shares pursuant to Section 2.01 of
this Agreement.
"Engines" means, with respect to each Aircraft, the engines leased to
the Lessee under the applicable Lease as more particularly described by
reference to the manufacturer's serial number in the Parent Disclosure
Schedule.
"Exchange Shares" means (i) the Shares that are (A) owned by the
Stockholders on the date of this Agreement and (B) set forth opposite the
Stockholders' names on Exhibit A to this Agreement and (ii) any additional
Shares acquired by the Stockholders (whether by purchase, exercise of Employee
Options or otherwise) after the date of this Agreement.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976 of the United States.
"Lease" means, with respect to each Aircraft, (i) the lease agreement
relating to that Aircraft, together with all supplements and amendments to that
lease agreement each as identified on the Parent Disclosure Schedule, pursuant
to which that Aircraft is leased to the relevant Lessee or (ii) any lease
agreement relating to that Aircraft entered into after the date of this
Agreement, together with all supplements and amendments to that lease
agreement.
"Lease Documents" means, with respect to each Aircraft, the Lease of
that Aircraft and all other agreements (including any side letters, assignment
of warranties or option agreements) delivered in connection with, or relating
to, that Lease each as set out in the Parent Disclosure Schedule.
"Lender" means, with respect to each Aircraft, the commercial bank or
other financial institution that has provided debt or capitalized lease
financing with respect to that Aircraft, as set out in the Parent Disclosure
Schedule.
"Lessee" means, with respect to each Aircraft, the lessee of that
Aircraft as identified on the Parent Disclosure Schedule.
"Lien" means, with respect to any property or asset, any mortgage
(including, without limitation, any floating charge (Swedish:
foretagshypotek)), lien, pledge, charge, security interest, encumbrance or
other adverse claim of any kind in respect of that property or asset. For
purposes of this Agreement, a Person shall be deemed to own subject to a Lien
any property or asset that it has acquired or holds subject to the interest of
a vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to that property or asset.
2
<PAGE>
"Material Adverse Effect" means, with respect to any Person, a
material adverse effect on the condition (financial or otherwise), business,
assets, liabilities or results of operations or prospects of that Person and
its Subsidiaries, taken as a whole.
"1933 Act" means the Securities Act of 1933 of the United States, as
amended, and the rules and regulations promulgated under that Act.
"1934 Act" means the Securities Exchange Act of 1934 of the United
States, as amended, and the rules and regulations promulgated under that Act.
"Parent Balance Sheet" means the consolidated balance sheet of Parent
as of March 31, 1999 and the notes to that balance sheet as set forth in the
Parent Disclosure Schedule.
"Parent Balance Sheet Date" means March 31, 1999.
"Parent Disclosure Schedule" means the Disclosure Schedule of Parent
that is attached to, and dated as of the date of, this Agreement.
"Parent Shares" means the ordinary shares of Parent, par value $0.01
per
share.
"Permitted Liens" means (i) with respect to any Aircraft, (A) the
rights conferred by the Lease Documents; (B) any Liens for which the applicable
Lessee is responsible or for which it is to indemnify the lessor under the
terms of the relevant Lease; (C) any Liens which are "Permitted Liens" under
the applicable Lease other than Liens created by Parent or one of its
Subsidiaries or (D) any Liens in respect of the financing of an Aircraft in
favor of a Lender and (ii) with respect to any property other than Aircraft,
whether real, personal, intangible or mixed, (A) mechanics', carriers',
workmen's, repairmen's, warehousemen's, airport authority's or other like Liens
arising from or incurred in the ordinary course of business and securing
obligations which are not due or which are not in excess of US$100,000 and are
being contested in good faith by Parent or one or more of its Subsidiaries,
provided that Parent has established adequate reserves for those obligations at
the time that it was required under GAAP to do so, (B) Liens for Taxes which
are not due and payable or which may thereafter be paid without penalty or
which are not in excess of US$100,000 and are being contested in good faith by
Parent or one or more of its Subsidiaries, provided that Parent has established
adequate reserves for the payment of those Taxes which are being contested in
good faith at the time that it was required under GAAP to do so; (C) easements,
covenants, rights-of-way and other encumbrances or restrictions of record
relating solely to real property owned or leased by Parent or any of its
Subsidiaries; (D) zoning, building and other similar restrictions, provided
that the
3
<PAGE>
same are not violated in any material respect by any improvements by Parent or
any of its Subsidiaries or by the use of the subject property in the conduct of
Parent's or any of its Subsidiaries' business; (E) unrecorded easements,
covenants, rights-of-way or other encumbrances or restrictions, and other Liens
that are not material in character or amount, none of which unrecorded items or
other Liens materially impairs the use or value of the real property to which
they relate in the business of Parent and its Subsidiaries; and (F) other Liens
which do not materially impair the use or value of the assets to which they
relate in the business of Parent and its Subsidiaries, taken as a whole, as
presently or proposed to be conducted.
"Person" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"SEC" means the Securities and Exchange Commission of the United
States.
"Share Purchase Agreement" means the Share Purchase Agreement among
Parent, Buyer and the Stockholders.
"Subject Shares" means, in respect of each Stockholder, (i) that
Stockholder's Exchange Shares and (ii) the Shares contemplated to be sold by
that Stockholder to Buyer pursuant to the Share Purchase Agreement.
"Subsidiary" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar
functions are at any time directly or indirectly owned by that Person.
"Swedish Companies Act" means the Companies Act of Sweden
(1975:1385).
Unless otherwise expressly specified in this Agreement, any reference
in this Agreement to a statute shall be to that statute, as amended from time
to time, and to the rules and regulations promulgated under that statute.
(b) Each of the following terms is defined on the Section set forth
opposite that term:
Term Section
---- -------
change of control 5.03
Closing 2.02
4
<PAGE>
Term Section
---- -------
Company Preamble
Confidentiality Agreement 6.02
Damages 8.02(a)
Employee Options Preamble
First Preference Shares 4.05(a)
GECC Option 4.05(a)
Indemnified Party 8.03
Indemnifying Party 8.03
Irish Mergers Act 7.01(a)
Lock-Up Period 5.03
Observer 6.01(b)
Parent Preamble
Parent Board 5.03
Parent Subsidiary Securities 4.09(c)
Parent Securities 4.05(b)
parties Preamble
Permitted Transferee 5.01
Second Preference Shares 4.05(a)
Shares Preamble
Stockholders Preamble
System 4.15(a)
Taxes 4.17(g)
Taxing Authority 4.17(g)
Tax Return 4.17(g)
TPG Investment Agreement 5.03
Year 2000 Compliant 4.15(b)
ARTICLE 2
SHARES
SECTION 2.01. Exchange of Shares. Upon the terms and subject to the
conditions of this Agreement, each Stockholder agrees to transfer, convey and
deliver to Parent his Exchange Shares at the Closing. In exchange for each such
Exchange Share, Parent agrees to issue and deliver to each Stockholder at the
Closing 3.7 Parent Shares per Exchange Share (subject to Sections 2.04 and
2.05).
SECTION 2.02. Closing. The closing (the "Closing") of the exchange of
the Exchange Shares for the Consideration Shares pursuant to Section 2.01 shall
take place at the offices of Davis Polk & Wardwell, 1 Frederick's Place,
London, England, EC2R 8AB, as soon as possible, but in no event later than 10
Irish
5
<PAGE>
business days after satisfaction of the conditions set forth in Article 7 or at
another time or place as the parties may agree. At the Closing:
(a) Parent shall deliver to counsel for each Stockholder share
certificates for the Consideration Shares duly registered in the name of the
Stockholder or to his order, which certificates shall include a legend in
substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
OF THE UNITED STATES, OR ANY STATE SECURITIES LAWS OF THE UNITED STATES AND MAY
NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. RESIDENTS EXCEPT IN
COMPLIANCE WITH THOSE LAWS. THIS SECURITY IS ALSO SUBJECT TO ADDITIONAL
RESTRICTIONS ON TRANSFER AS SET FORTH IN THE SHARE EXCHANGE AGREEMENT DATED AS
OF NOVEMBER 11, 1999.
(b) Each Stockholder shall deliver to Parent American Depositary
Receipts evidencing the American Depositary Shares representing his Exchange
Shares duly endorsed to the name of Parent or to its order.
SECTION 2.03. Adjustments. If at any time during the period between
the date of this Agreement and the Closing Date, any change in the outstanding
shares of capital stock of Parent shall occur, including by reason of any
reclassification, recapitalization, stock split or combination, exchange or
readjustment of shares, or any stock dividend on shares with a record date
during that period (but excluding, for the avoidance of doubt, a special cash
dividend of up to US$0.60 per ordinary share of Parent to be paid by Parent to
its shareholders before the Closing Date), the number of Consideration Shares
shall be appropriately adjusted.
SECTION 2.04. Fractional Shares. No fractional Consideration Shares
shall be issued pursuant to this Agreement. All fractional Consideration Shares
that a Stockholder would otherwise be entitled to receive pursuant to this
Agreement shall be aggregated and if a fractional Consideration Share results
from that aggregation, the Stockholder shall be entitled to receive, in lieu of
that fractional Consideration Share, the number of Consideration Shares to
which that Stockholder would otherwise have been entitled rounded (i) down to
the nearest whole number if that fraction is less then 1/2 or (ii) up to the
nearest whole number if that fraction is equal to or greater than 1/2.
SECTION 2.05. Withholding Rights. Parent shall be entitled to deduct
and withhold from the consideration otherwise payable to any Stockholder
pursuant to this Agreement the amounts that it may be required to deduct and
withhold with respect to the payment of that consideration under any provision
of applicable tax
6
<PAGE>
law (except for provisions of Irish tax law). If Parent so withholds any
consideration, that consideration shall be treated for all purposes of this
Agreement as having been paid to the Stockholder in respect of which Parent
made that deduction and withholding.
SECTION 2.06. Transfers of Subject Shares by Parent. Before January 1,
2000, Parent shall not, directly or indirectly, offer, pledge, encumber, sell,
transfer, otherwise dispose of, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase, lend, or otherwise transfer or dispose of the Subject
Shares or any other securities convertible into or exercisable or exchangeable
for Subject Shares (or agree to do any of the foregoing); provided, however,
that Parent may transfer the Subject Shares to any wholly owned Subsidiary, so
long as, before that transfer, the Subsidiary shall have executed and delivered
an agreement in favor of the Stockholders to be bound by the terms of this
Section 2.06.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each Stockholder, severally and not jointly, represents and warrants
to Parent that:
SECTION 3.01. Valid Title. The Stockholder is the sole, true, lawful
and beneficial owner of his Subject Shares with no restrictions on the
Stockholder's voting rights, where applicable, or rights of disposition
pertaining to those Subject Shares. On the Closing Date, the Stockholder will
convey good and valid title to his Subject Shares, free and clear of any and
all Liens. None of his Subject Shares is subject to any voting trust or other
agreement or arrangement with respect to the voting of those Subject Shares.
SECTION 3.02. Non-Contravention. The execution, delivery and
performance by the Stockholder of this Agreement and the Share Purchase
Agreement and the consummation of the transactions contemplated by those
agreements do not and will not contravene or constitute a default under or give
rise to a right of termination, cancellation or acceleration of any right or
obligation of the Stockholder or to a loss of any benefit of the Stockholder
under any provision of applicable law or regulation or of any agreement,
judgment, injunction, order decree, or other instrument binding on the
Stockholder or result in the imposition of any lien on any asset of the
Stockholder which, in any such case would limit or prevent the Stockholder from
transferring his Subject Shares to Parent or otherwise performing his
obligations under those agreements.
7
<PAGE>
SECTION 3.03. Binding Effect. This Agreement and the Share Purchase
Agreement are valid and binding agreements of the Stockholder, enforceable
against the Stockholder in accordance with their terms, except as enforcement
may be limited by bankruptcy, insolvency, moratorium or other similar laws
relating to creditors' rights generally and equitable principles. If either
this Agreement and/or the Share Purchase Agreement is being executed in a
representative or fiduciary capacity, the person signing the relevant contract
has full power and authority to enter into and perform that contract.
SECTION 3.04. Total Securities. The number of Shares set forth on
Exhibit A to this Agreement and the Schedule to the Share Purchase Agreement
with respect to the Stockholder are the only Shares legally and beneficially
owned by that Stockholder on the date of this Agreement and, except for the
Employee Options that are set forth on Exhibit A to this Agreement, on the date
of this Agreement, the Stockholder owns no options to purchase or rights to
subscribe for or otherwise acquire any securities of the Company and has no
other interest in or voting rights with respect to any securities of the
Company.
SECTION 3.05. Private Placement. (a) The Stockholder understands that
(i) the offering and sale of the Consideration Shares is intended to be exempt
from registration under the 1933 Act by virtue of Section 4(2) of the 1933 Act
and (ii) there is no existing public or other market for the Consideration
Shares, and there can be no assurance that the Stockholder will be able to sell
or dispose of the Consideration Shares.
(b) The Consideration Shares to be acquired by the Stockholder
pursuant to this Agreement are being acquired for his own account and without a
view to the public distribution of those Consideration Shares or any interest
in those shares; provided that the Stockholder shall, subject to Section 5.03,
have the right to sell or otherwise dispose of all or any part of the
Consideration Shares so acquired by the Stockholder in accordance with
applicable law, including pursuant to a registration, or exemption from
registration, under the 1933 Act.
(c) The Stockholder has sufficient knowledge and experience in
financial and business matters so as to be capable of evaluating the merits and
risks of his investment in the Consideration Shares, and the Stockholder is
capable of bearing the economic risks of that investment, including a complete
loss of his investment in those shares.
SECTION 3.06. Finder's Fees. No investment banker, broker or finder is
entitled to a commission or fee from Parent or the Company in respect of this
Agreement or the Share Purchase Agreement based upon any arrangement or
agreement made by or on behalf of the Stockholder in his capacities as such.
8
<PAGE>
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT
Except as set forth in the Parent Disclosure Schedule, Parent
represents and warrants to each of the Stockholders:
SECTION 4.01. Corporate Existence and Power. Each of Parent and Buyer
are corporations that are duly organized or incorporated and validly existing
under the laws of its respective jurisdiction of organization or incorporation
and has all corporate powers and all governmental licenses, authorizations,
permits, consents and approvals required to carry on its business as now
conducted, except for those licenses, authorizations, permits, consents and
approvals the absence of which would not have, individually or in the
aggregate, a Material Adverse Effect on Parent.
SECTION 4.02. Corporate Authorization. The execution, delivery and
performance by Parent of this Agreement and by Parent and Buyer of the Share
Purchase Agreement and the consummation by Parent of the transactions
contemplated by this Agreement and the Share Purchase Agreement are within the
corporate powers of Parent and Buyer and have been duly authorized by all
necessary corporate action. Each of this Agreement and the Share Purchase
Agreement constitutes a valid, binding and enforceable agreement of each of
Parent and Buyer, except to the extent that enforceability may be limited by
applicable bankruptcy, reorganization, insolvency, moratorium or other laws
affecting the enforcement of creditors' rights generally and by general
principles of equity.
SECTION 4.03. Governmental Authorization. The execution, delivery and
performance by Parent of this Agreement and by Parent and Buyer of the Share
Purchase Agreement and the consummation by Parent and Buyer of the transactions
contemplated by this Agreement and the Share Purchase Agreement require no
action by or in respect of, or filing with, any governmental body, agency,
official or authority, domestic or foreign, other than (i) compliance with any
applicable requirements of the HSR Act, the Irish Mergers Act and other
applicable antitrust regulations, (ii) compliance with any applicable
requirements of the 1933 Act, the 1934 Act and any other applicable securities
or takeover laws, whether state or foreign and (iii) any actions or filings the
absence of which would not be reasonably expected to have, individually or in
the aggregate, a Material Adverse Effect on Parent or materially to impair the
ability of Parent and Buyer to consummate the transactions contemplated by this
Agreement and the Share Purchase Agreement.
SECTION 4.04. Non-Contravention. The execution, delivery and
performance by Parent of this Agreement and by Parent and Buyer of the Share
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Purchase Agreement and the consummation by Parent and Buyer of the transactions
contemplated by this Agreement and the Share Purchase Agreement do not and will
not (i) contravene, conflict with, or result in any violation or breach of any
provision of the organizational documents of Parent or Buyer, (ii) assuming
compliance with the matters referred to in Section 4.03, contravene, conflict
with, or result in any violation or breach of any provision of any law, rule,
regulation, judgment, injunction, order or decree or (iii) require any consent
or other action by any Person under, constitute a default under, or cause or
permit the termination, cancellation, acceleration or other change of any right
or obligation or the loss of any benefit to which Parent or Buyer is entitled
under any provision of any agreement or other instrument binding upon Parent or
Buyer, except for those contraventions, conflicts and violations referred to in
clause (ii) and for those failures to obtain consent or other action, defaults,
terminations, cancellations, accelerations, changes or losses referred to in
clause (iii) that would not be reasonably expected to have, individually or in
the aggregate, a Material Adverse Effect on Parent or materially to impair the
ability of Parent and Buyer to consummate the transactions contemplated by this
Agreement and the Share Purchase Agreement.
SECTION 4.05. Capitalization. (a) The authorized capital stock of
Parent consists of (i) 398,980 Cumulative First Preference Shares, par value
IR(pound)1 per share (the "First Preference Shares"), (ii) 30,000 Irish Pound
Deferred Shares, par value IR(pound)1 per share, (iii) 100,000,000 Redeemable
Cumulative Second Preference Shares, par value $1 per share (the "Second
Preference Shares") and (iv) 306,523,999 Parent Shares. As of October 1, 1999,
there were outstanding (1) 159,586 Cumulative First Preference Shares, (2)
30,000 Irish Pound Deferred Shares, (3) 100,000,000 Redeemable Cumulative
Second Preference Shares and (4) 119,344,512 Parent Shares and (5) employee
stock options to purchase an aggregate of 10,370,000 Parent Shares at a price
of $1.58 per share (of which none were exercisable). Parent has also granted an
option to General Electric Capital Corporation to subscribe for and purchase at
any time and from time to time in whole or in part on or prior to October 29,
2001 a passive interest of up to 24.9% of the enlarged diluted ordinary share
capital of Parent at a price of approximately $0.60 per Ordinary Share pursuant
to a certain Subscription Option Agreement entered into in 1998 (the "GECC
Option"). All outstanding shares of capital stock of Parent have been duly
authorized and validly issued and are fully paid and nonassessable. The
Consideration Shares to be issued under this Agreement have been duly
authorized and when issued and delivered in accordance with the terms of this
Agreement, will have been validly issued and will be fully paid and
nonassessable and the issuance of those shares is not subject to any preemptive
or other similar right.
(b) Except as set forth in this Section 4.05 and for changes since
October 1, 1999 resulting from the exercise of employee stock options
outstanding on that
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date, there are no outstanding (i) shares of capital stock or voting securities
of Parent, (ii) securities of Parent convertible into or exchangeable for
shares of capital stock or voting securities of Parent or (iii) options or
other rights to acquire from Parent or other obligation of Parent to issue, any
capital stock, voting securities or securities convertible into or exchangeable
for capital stock or voting securities of Parent (the items in clauses (i),
(ii) and (iii) being referred to collectively as the "Parent Securities").
Except for the redemption provisions attached to certain of the Parent
Securities by the Memorandum and Articles of Association of Parent, there are
no outstanding obligations of Parent or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any of Parent Securities.
SECTION 4.06. Financial Statements. The audited consolidated financial
statements of Parent included in the Parent Disclosure Schedule for the year
ended March 31, 1999 fairly present, in conformity with generally accepted
accounting principles in Ireland applied on a consistent basis (except as may
be indicated in the notes to those financial statements), the consolidated
financial position of Parent and its consolidated subsidiaries as of the dates
of those financial statements and their consolidated results of operations and
changes in financial position for the periods then ended (subject to normal
year-end adjustments in the case of any unaudited interim financial
statements).
SECTION 4.07. Absence of Certain Changes. Since the Parent Balance
Sheet Date, the business of Parent and its Subsidiaries has been conducted in
the ordinary course consistent with past practices and there has not been:
(a) any event, occurrence, development or state of circumstances or
facts that has had or would reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on Parent and its Subsidiaries taken
as a whole or that has impacted or will impact in a material adverse manner
upon the ability of Parent or Buyer to consummate any of the transactions
contemplated by, or to perform fully its obligations under, this Agreement and
the Share Purchase Agreement;
(b) except for the grant of options in the ordinary course of
business pursuant to AerFi Group plc Share Option Scheme 1999, dividends on the
First Preference Shares and the Second Preference Shares and a special cash
dividend of up to US$0.60 per ordinary share of Parent to be paid by Parent to
its shareholders before the Closing Date, any declaration, setting aside or
payment of any dividend or other distribution with respect to any shares of
capital stock of Parent or any repurchase, redemption or other acquisition by
Parent or any of its Subsidiaries of any outstanding shares of capital stock or
other securities of, or other ownership interests in, Parent or any of its
Subsidiaries;
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(c) any amendment of any material term of any outstanding security of
Parent;
(d) any material damage, destruction or other casualty loss (whether
or not covered by insurance) affecting the business or assets of Parent or any
of its Subsidiaries generally that has had or could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on Parent;
(e) any transaction or commitment made, or any contract or agreement
entered into, by Parent or any of its Subsidiaries relating to its assets or
business (including the acquisition or disposition of any assets) or any
relinquishment by Parent or any of its Subsidiaries of any contract or other
right, in either case, material to Parent and its Subsidiaries, taken as a
whole, other than operating lease transactions and commitments in the ordinary
course of business consistent with past practices and those contemplated by
this Agreement; provided, that the acquisition, sale, financing, refinancing
and leasing of any Aircraft or aircraft shall be deemed to be in the ordinary
course of business;
(f) any change in any method of accounting, method of tax accounting
or accounting principles or practice by Parent or any of its Subsidiaries,
except for any such change required by reason of a concurrent change in
generally accepted accounting principles;
(g) any labor dispute, or any activity or proceeding by a labor union
or representative of a labor union to organize any employees of Parent or any
of its Subsidiaries, which employees were not subject to a collective
bargaining agreement at Parent Balance Sheet Date, or any lockouts, strikes,
slowdowns, work stoppages or threats thereof by or with respect to those
employees; or
(h) any waiver or forgiveness of any Indebtedness owed to Parent or
any of its Subsidiaries or waiver of any material claims of any kind.
SECTION 4.08. No Material Undisclosed Liabilities. There are no
material liabilities or obligations of Parent or any of its Subsidiaries of any
kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, and there is no existing condition, situation or set
of circumstances that could reasonably be expected to result in such a
liability, other than:
(a) liabilities or obligations disclosed and provided for in the
audited consolidated balance sheet of Parent included in its annual report for
the year ended March 31, 1999 or in the notes to that balance sheet;
(b) liabilities or obligations incurred in the ordinary course of
business consistent with past practice since March 31, 1999 that would not
reasonably be
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expected to have, individually or in the aggregate, a Material Adverse Effect on
Parent; and
(c) liabilities or obligations under this Agreement, the Share
Purchase Agreement, the Combination Agreement among the Company, Buyer and
Parent, the Registration Rights Agreement among Parent and the Stockholders and
the Option Agreement among Parent and the Stockholders, all dated as of the
date of this Agreement, or incurred in connection with the transactions
contemplated by, or related to, those agreements and transactions.
SECTION 4.09. Subsidiaries; Equity Investments. (a) Each Subsidiary of
Parent is listed on the Parent Disclosure Schedule and is duly organized,
validly existing and (where applicable) in good standing under the laws of the
jurisdiction in which it is organized, has all corporate or other powers and
all governmental licenses, authorizations, permits, consents and approvals
required to carry on its business as now conducted, except for those licenses,
authorizations, permits, consents and approvals the absence of which would not
have, individually or in the aggregate, a Material Adverse Effect on Parent.
Each such Subsidiary is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction where that qualification is
necessary, except for those jurisdictions where failure to be so qualified
would not have, individually or in the aggregate, a Material Adverse Effect on
Parent.
(b) All of the outstanding capital stock of, or other voting
securities or ownership interests in, each Subsidiary of Parent, is owned by
Parent, directly or indirectly, free and clear of any Lien (other than
Permitted Liens) and free of any other limitation or restriction (including any
restriction on the right to vote, sell or otherwise dispose of that capital
stock or other voting securities or ownership interests).
(c) There are no outstanding (i) securities of Parent or any of its
Subsidiaries convertible into or exchangeable for shares of capital stock or
other voting securities or ownership interests in any Subsidiary of Parent or
(ii) options or other rights to acquire from Parent or any of its Subsidiaries,
or other obligation of Parent or any of its Subsidiaries to issue, any capital
stock or other voting securities or ownership interests in, or any securities
convertible into or exchangeable for any capital stock or other voting
securities or ownership interests in, any Subsidiary of Parent (the items in
clauses (i) and (ii) being referred to collectively as the "Parent Subsidiary
Securities"); provided that any interest of any Lender in the property
described in this sentence that may arise solely by virtue of a security
interest in that property granted to the Lender by Parent or any Subsidiary
shall not be deemed a Parent Subsidiary Security. There are no outstanding
obligations of Parent or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any of Parent Subsidiary Securities.
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(d) Parent does not directly or indirectly own any capital stock or
share capital of, or other equity interest in, any corporation, partnership,
trust, joint venture or other Person.
SECTION 4.10. Aircraft and Leases. (a) The Parent Disclosure Schedule
sets forth, with respect to each Aircraft, the make, model and serial number of
the airframe and each contracted engine, the Lease, the Lessee, the lease
rental, the lease term, the principal, outstanding balance, scheduled maturity
date, interest rate and monthly debt service (if a fixed-rate obligation)
arising under each relevant financing facility in respect of the Aircraft, the
Lender and any other property of Parent or any of its Subsidiaries and any
extension, termination or purchase options related to the Lease or that
Aircraft; provided that Parent does not make any representation or warranty in
any clause of this Section 4.10 (and shall not be deemed to have done so) in
respect of the principal, outstanding balance, scheduled maturity date or debt
service with respect to the relevant financing facility in respect of any
Aircraft of Aerco Limited.
(b) Other than any Aircraft of AerCo Limited, Parent or one of its
Subsidiaries (or a trustee for its benefit) is the sole beneficial owner of,
and has good and valid title to, (i) each Aircraft and (ii) the lessor's
interest under the applicable Lease Documents, which Aircraft and which Lease
Documents are free and clear of all Liens, other than Permitted Liens.
(c) (i) To the best of Parent's knowledge and other than as disclosed
on the Parent Disclosure Schedule, no Event of Default (as defined in the
applicable Lease) has occurred and is continuing under any Lease; (ii) no
payment failure or, to the best of Parent's knowledge, failure to maintain
insurance has occurred and is continuing for 30 days from the date due, which,
if incurred, would become an Event of Default (as so defined) under any Lease;
and (iii) to the best of Parent's knowledge, no other event which, with the
giving of notice or passage of time or both would become an Event of Default
(as so defined) under that Lease has occurred which would be material to Parent
and its Subsidiaries, taken as a whole.
(d) (i) Except for claims in respect of security deposits,
maintenance reserves or other amounts required to be paid, reimbursed or
refunded to a Lessee pursuant to the terms of any Lease, there are no material
claims known to Parent which can be asserted by any Lessee against Parent or
its Subsidiaries or the applicable Aircraft arising out of the applicable Lease
Documents, (ii) to the best of Parent's knowledge, the Lease Documents are in
full force and effect in accordance with the terms of those documents in all
material aspects, and (iii) from the date of this Agreement, there have been no
waivers of Parent's rights in effect under those Lease Documents which would
have a Material Adverse Effect
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on Parent, except as disclosed in writing to and agreed to by the Company in
writing.
(e) To Parent's knowledge, the Lessees have not notified Parent or
any of its Subsidiaries of any unrepaired damage, destruction or other casualty
loss or partial loss or, to the best of Parent's knowledge, an event which with
the passage of time would result in unrepaired damage, destruction or casualty
loss, has occurred in respect of any individual Aircraft which exceeds $750,000
in the aggregate.
(f) Other than as disclosed on the Parent Disclosure Schedule, there
are existing no options, commitments or agreements to purchase any Aircraft, or
extend or terminate any Leases, which have been exercised by the relevant
Lessee.
Provided, however, that in making the representations and warranties
in clauses (c) to (f) inclusive of this Section 4.10, Parent has made
appropriate inquiry of, and has been entitled to rely upon, information
furnished to it by the Person to whom Parent has delegated the management of
the Aircraft.
SECTION 4.11. Insurance Coverage. Parent and each of its Subsidiaries
are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in the
businesses in which they are engaged. All policies of insurance and fidelity or
surety bonds insuring Parent or any of its Subsidiaries or their respective
businesses, assets, employees, officers and directors are in full force and
effect and Parent and its Subsidiaries are in compliance with the terms of
those policies and instruments in all material respects. There is no claim by
Parent or any of its Subsidiaries pending under any such insurance policy or
bond as to which coverage has been questioned, denied or disputed by the
underwriters of that policy or bond or in respect of which those underwriters
have reserved their rights. Parent does not know of any threatened termination
of, material premium increase with respect to, or material alteration of
coverage under, any of those policies or bonds.
SECTION 4.12. Title to Assets. (a) Parent or one of its Subsidiaries
has good and valid title to all tangible assets (other than Aircraft) reflected
on Parent Balance Sheet and all tangible assets it has acquired after Parent
Balance Sheet Date, except (i) those tangible assets (other than Aircraft)
since sold or otherwise disposed of for fair value in the ordinary course of
business consistent with past practice and (ii) those tangible assets (other
than Aircraft) sold or otherwise disposed of for fair value that are not
material, individually or in the aggregate, to Parent and its Subsidiaries,
taken as a whole, in each case free and clear of all Liens, except for (A)
Liens on automobiles and office equipment that are leased by Parent or any of
its Subsidiaries, and (B) Permitted Liens. All personal
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property owned or leased by Parent or any of its Subsidiaries is in all
material respects in good operating condition and repair notwithstanding
ordinary wear and tear, except to the extent that the failure of that personal
property to be in good operating condition is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Parent and its
Subsidiaries, taken as a whole. All material personal property leased by Parent
or any of its Subsidiaries is in all material respects in the condition
required of that property by the terms of the lease applicable to that property
during the term, and upon the expiration of, that lease.
(b) Parent or one of its Subsidiaries has a good and valid leasehold
interest in all real property and easements and rights in real property leased
to, or occupied or otherwise used by, Parent and its Subsidiaries as set forth
on the Parent Disclosure Schedule. There is no pending or, to the best
knowledge of Parent, any threatened condemnation, eminent domain, compulsory
purchase order or similar proceeding with respect to any of the real property
referred to herein or any improvements or alterations in respect of that real
property.
SECTION 4.13. Compliance with Laws and Court Orders. Parent and each
of its Subsidiaries is and has been in compliance with, and to the knowledge of
Parent is not under investigation with respect to and has not been threatened
to be charged with or given notice of any violation of, any applicable law,
statute, ordinance, rule, regulation, judgment, injunction, order or decree,
except for violations which, either individually or in the aggregate, have not
had, and would not reasonably be expected to have, a Material Adverse Effect on
Parent.
SECTION 4.14. Litigation. There is no action, suit, investigation or
proceeding pending against, or, to the knowledge of Parent, threatened against
or affecting, Parent, any of its Subsidiaries, any present or former officer,
director or employee of Parent or any of its Subsidiaries or any other Person
for whom Parent or any Subsidiary may be liable or any of their respective
properties before any court or arbitrator or before or by any governmental
body, agency or official, domestic or foreign, that, if determined or resolved
adversely in accordance with the plaintiff's demands, could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect
on Parent or that in any manner challenges or seeks to prevent, enjoin, alter
or materially delay the transactions contemplated by this Agreement.
SECTION 4.15. Year 2000 Compliance. To the best of Parent's knowledge,
(a) all internal hardware, software or firmware (a "System") of Parent and its
Subsidiaries that are material to the financial and operational reporting
systems of those Persons are Year 2000 Compliant and (b) the failure of any
System(s) of the third party manufacturers, suppliers, vendors, lessees and
customers upon which Parent and its Subsidiaries rely to be Year 2000 Compliant
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will not have a Material Adverse Effect on Parent; provided that Parent makes
no representation or warranty with respect to whether any Aircraft, or the
computer systems of any Lessee, are or will be Year 2000 Compliant. Parent has
received written confirmation from each Lessee's insurer or insurance broker
that the Lessee has obtained coverage under the provisions of AVN 2001/2002.
For purposes of this Section 4.15, "Year 2000 Compliant" means that neither
performance nor functionality of the System or any part of the System is
affected by dates before, during and after the year 2000 and in particular,
without limitation:
(i) no value for any current date will cause any interruption in the
operation of the System or any part of the System;
(ii) date-based functionality will behave consistently for dates
prior to, during and after the year 2000;
(iii) in all interfaces and data storage, the century in any date
will be specified either explicitly or by unambiguous algorithms or
inferencing rules; and
(iv) the year 2000 will be recognized as a leap year.
SECTION 4.16. Finders' Fees. Except for Greenhill & Co., LLC, whose
fees will be paid by Parent or one of its Affiliates, there is no investment
banker, broker, finder or other intermediary that has been retained by or is
authorized to act on behalf of Parent or any of its Affiliates who might be
entitled to any fee or commission from Parent or any of its Affiliates upon
consummation of the transactions contemplated by this Agreement.
SECTION 4.17. Taxes. (a) Each of Parent and its Subsidiaries has filed
(or has had filed on its behalf), or will file or cause to be filed, all
material Tax Returns required by applicable law to be filed by it prior to or
as of the Closing Date, and all of those Tax Returns are, or will be at the
time of filing, true and complete in all material respects. To the extent that
any such filing has not been timely made, Parent or the Subsidiary, as the case
may be, has duly paid the relevant penalty for the late filing.
(b) Each of Parent and its Subsidiaries has paid (or has had paid on
its behalf), or, where payment is not yet due, has established (or has had
established on its behalf and for its sole benefit and recourse) or will
establish or cause to be established in accordance with, and to the extent
required by, Irish generally accepted accounting principles before the date of
this Agreement an adequate accrual for the payment of, all material Taxes due
with respect to any period ending on or before that date (including, without
limitation, all interest, fines,
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penalties or additional amounts attributable to, or imposed upon, or with
respect to the Taxes reflected on Tax Returns that were not timely filed by
Parent or any Subsidiary). As of the Parent Balance Sheet Date, the Parent
Balance Sheet reflected an adequate accrual, in accordance with Irish generally
accepted accounting principles, for the payment of all material Taxes relating
to Parent and its Subsidiaries due with respect to any period ending on or
before the Parent Balance Sheet Date and not paid as of that date.
(c) Neither Parent nor any of its Irish Subsidiaries is aware of any
matters reflected on each of the Irish Tax Returns described in Section 4.17(a)
that an Irish Taxing Authority has indicated in writing it may challenge.
(d) Parent and its Subsidiaries have complied in all material
respects with all applicable laws, rules and regulations relating to the
payment and withholding of Taxes.
(e) No audits, administrative proceedings or legal proceedings are
pending with regard to any Taxes or Tax Return of Parent or any of its
Subsidiaries, and none of them has received a written notice of any proposed
audit or proceeding regarding any pending audit or proceeding. There are no
concluded audits, with regard to any Taxes or Tax Return of Parent or any of
its Subsidiaries, that could result in (i) the initiation of a legal proceeding
by the applicable Taxing Authority or (ii) an increase in the Tax liability of
Parent or any of its Subsidiaries.
(f) Neither Parent nor any of its Subsidiaries has incurred any
liability for Taxes (including, but not limited to, any Taxes asserted or
imposed by the Taxing Authority in which, or the Taxing Authority related to
the jurisdiction in which, (i) any Aircraft (or other aircraft) is used, (ii)
any applicable lessee is organized, located or conducts any of its activities
or (iii) any of the other parties to the applicable Lease Documents (or
comparable documents for other aircraft) is organized, located or conducts any
of its activities), except for any Irish Taxes, solely by reason of (A) having
entered into, being a party to, performing its obligations under, or receiving
payments under, any Lease Documents (or comparable documents for other
aircraft) with respect to its Aircraft (or other aircraft) or (B) being the
legal and beneficial owner of the lessor's interest under any Lease Documents
(or comparable documents for other aircraft), except for (I) any Tax
liabilities that would not be material in the aggregate to Parent and its
Subsidiaries, taken as a whole, and (II) any Tax liability for which Parent or
any of its Subsidiaries has been indemnified by the applicable lessee. Neither
Parent nor any of its Subsidiaries is aware of any circumstances that could
give rise to any such liability. To the best knowledge of Parent and its
Subsidiaries, neither Parent nor any of its Subsidiaries has incurred a Tax
liability that is excepted from this Section 4.17(f) solely by reason of
Section 4.17(f)(II).
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(g) "Taxes" shall mean any and all taxes, charges, fees, levies or
other assessments, including income, gross receipts, excise, real or personal
property, sales, withholding, social security, retirement, unemployment,
occupation, use, goods and services, service use, license, value added,
capital, net worth, payroll, profits, franchise, transfer and recording taxes,
fees and charges, and any other taxes, assessments or similar charges imposed
by the Internal Revenue Service of the United States or any other taxing
authority (whether United States, Irish or otherwise and including, but not
limited to, any United States state or local government, any other government
or jurisdiction, or any subdivision or taxing agency thereof) (a "Taxing
Authority"), whether computed on a separate, consolidated, unitary, combined or
any other basis; and that term shall include any interest whether paid or
received, fines, penalties or additional amounts attributable to, or imposed
upon, or with respect to, any of those taxes, fees charges or assessments. "Tax
Return" shall mean (i) any report or return required to be filed with any
Taxing Authority with respect to Taxes, or (ii) any notice, account or other
information required to be submitted to any Taxing Authority with respect to
Taxes.
ARTICLE 5
COVENANTS OF THE STOCKHOLDERS
Each of the Stockholders hereby severally covenants and agrees that:
SECTION 5.01. No Proxies for, Encumbrances on, or Transfers of,
Subject Shares. Except pursuant to the terms of this Agreement and/or the Share
Purchase Agreement, without the prior written consent of Parent, the
Stockholder shall not, directly or indirectly (i) grant any proxies or enter
into any voting trust or other agreement or arrangement with respect to the
voting of any of his Subject Shares or (ii) (A) directly or indirectly, offer,
pledge, encumber, sell, transfer, otherwise dispose of, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, lend, or otherwise transfer or
dispose, directly or indirectly, any Subject Shares, Employee Options or any
other securities convertible into or exercisable or exchangeable for Subject
Shares (or agree to do any of the foregoing) or (B) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Subject Shares, Employee Options or
any other whether any such transaction described in clause (A) or (B) above is
to be settled by delivery of Subject Shares, Employee Options or such other
securities, in cash or otherwise; provided, however, that the Stockholder may
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transfer any of that Stockholder's Subject Shares or Employee Options to any
Affiliate of that Stockholder, to a trust, partnership, corporation or other
entity of which that Stockholder or any such Affiliate is the beneficial owner
(a "Permitted Transferee"), so long as before that transfer, the Permitted
Transferee (if not already a party to this Agreement) shall have executed and
delivered to Parent an agreement substantially in the form of Exhibit B
confirming that the Permitted Transferee has agreed to be bound as a
"Stockholder" by the terms of this Agreement. Notwithstanding anything that may
be deemed to be to the contrary in this Agreement or any other contract or
arrangement, the Stockholder shall not tender or sell, or seek to tender or
sell, any Subject Shares pursuant to the Offer.
SECTION 5.02. No Shopping. The Stockholder shall not, directly or
indirectly, (i) solicit, initiate or encourage (or authorize any person to
solicit, initiate or encourage) any inquiry, proposal or offer from any person
to acquire the business, property or capital stock of the Company or of any of
its Subsidiaries, or any acquisition of a substantial equity interest in, or a
substantial amount of the assets of, the Company or of any of its Subsidiaries,
whether by merger, purchase of assets, tender offer or other transaction or
(ii) subject to the fiduciary duty of any individual Stockholder (or individual
representative of the Stockholder) as a director of the Company under
applicable law, participate in any discussion or negotiations regarding, or
furnish to any other person any information with respect to, or otherwise
cooperate in any way with, or participate in, facilitate or encourage any
effort or attempt by any other person to do or seek any of the foregoing. The
Stockholder shall promptly advise Parent of the terms of any communications it
may receive relating to any of the foregoing.
SECTION 5.03. Lock-Up. Each Stockholder hereby agrees that, without
the prior written consent of the Board of Directors of Parent (the "Parent
Board"), it will not, during the period commencing on the Closing Date and
ending six months after that date (in each case, the "Lock-Up Period"), (i)
directly or indirectly, offer, pledge, encumber, sell, transfer, otherwise
dispose of, contract to sell, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose, any Consideration Shares or any other
securities convertible into or exercisable or exchangeable for Consideration
Shares (or agree to do any of the foregoing) or (ii) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Consideration Shares or any other
whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of Consideration Shares or such other securities, in cash
or otherwise; provided, however, that each Stockholder may transfer its
Consideration Shares to any of its Permitted Transferees or to any other
Stockholder, so long as before that transfer, the Permitted Transferee (if not
already a party to this Agreement) shall have executed and delivered to Parent
an
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agreement substantially in the form of Exhibit B confirming that the Permitted
Transferee has agreed to be bound as a "Stockholder" by the terms of this
Agreement. The Lock-Up Period will terminate immediately upon any change of
control of Parent. For purposes of this Agreement, "change of control" means
the occurrence of any of the following: (i) any Person, other than the Investor
or one or more of the Investor Affiliates (as those terms are defined in the
Investment Agreement, as amended, dated as of September 30, 1998 among TPG
Partners II, L.P., Parent and certain shareholders of Parent (the "TPG
Investment Agreement")), is or becomes the Beneficial Owner (as defined in the
TPG Investment Agreement), directly or indirectly, of more than 24.9% of the
Total Voting Power (as defined in the TPG Investment Agreement) of Parent it
being understood that the exercise of the GECC Option shall not be considered a
change of control; (ii) during any 12-month period, individuals who at the
beginning of such period constituted the Parent Board (together with any new
directors whose election by the Parent Board or whose nomination for election
by the ordinary shareholders was approved by the Investor and by a vote of at
least a majority of the directors of Parent then still in office who were
directors at the beginning of that period) cease for any reason to constitute a
majority of the Parent Board then in office; (iii) the sale, lease, transfer,
conveyance or other disposition, in one or a series of related transactions, of
all or substantially all of the assets of Parent and its Subsidiaries taken as
a whole to any person or persons acting together; or (iv) the adoption of a
plan or proposal for the liquidation or dissolution of Parent.
SECTION 5.04. Non-Exercise of Registration Rights. Each Stockholder
agrees that (i) he will not exercise (A) any rights he may have to demand
registration of his Subject Shares under the Registration Rights Agreement
dated April 15, 1998 among the Company and the holders listed in Schedule 1 to
that agreement or (B) any other demand registration rights that may have been
granted to him in respect of his Subject Shares and (ii) upon the Closing Date,
any rights he may have with respect to his Subject Shares under any agreement
described in this Section 5.04 shall be null and void and of no further force
and effect.
SECTION 5.05. Confidentiality. Each Stockholder will hold, and will
use best efforts to cause all of its officers, directors, employees,
accountants, counsel, consultants, advisors and agents to hold, in confidence,
unless compelled to disclose by judicial or administrative process or by other
requirements of law, all confidential documents and information concerning
Parent or any of its Subsidiaries furnished to that Stockholder or its
Affiliates in connection with the transactions contemplated by this Agreement
and the Share Purchase Agreement, except to the extent that this information
can be shown to have been previously known on a nonconfidential basis by that
Stockholder, in the public domain through no fault of that Stockholder or later
lawfully acquired by such Stockholder from sources other than Parent, provided
that Stockholder may disclose this information to (A) its officers, directors,
employees, accountants,
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<PAGE>
counsel, consultants, advisors and agents and (B) its members, shareholders or
partners and their respective advisors and agents, as applicable, in each case
in connection with the transactions contemplated by this Agreement so long as
that Stockholder informs those persons of the confidential nature of the
information and directs them to treat it confidentially. Each Stockholder and
its Affiliates shall satisfy their obligation to hold any such information in
confidence if they exercise the same care with respect to the information as
they would take to preserve the confidentiality of their own similar
information. If this Agreement and/or the Share Purchase Agreement is
terminated, each Stockholder and its Affiliates will, and will use their best
efforts to cause their officers, directors, employees, accountants, counsel,
consultants, advisors and agents to, destroy or, upon request, deliver to
Parent all originals and copies of documents and other materials that the
Stockholder or its Affiliates obtained, or that were obtained on their behalf,
from Parent or any of its Subsidiaries in connection with this Agreement and/or
the Share Purchase Agreement as the case may be, and that are subject to this
confidence.
ARTICLE 6
COVENANTS OF PARENT
SECTION 6.01. Board of Directors and Management of Parent. (a) Parent
shall take all action that is necessary to cause Mr. Karl-Axel Granlund and Mr.
John Evans to be appointed, effective upon the Closing Date, to the Parent
Board, including, but not limited to, increasing the number of directors. These
appointments will only be for the period through November 1, 2000 and, after
that time, Parent will have no obligation to cause any of these appointments to
the Parent Board.
(b) Unless the parties otherwise agree, for so long as Mr. Granlund
serves as a member of the Parent Board, he will have the right to appoint an
observer (an "Observer") to attend meetings of the Parent Board. Observers
shall have the right to attend those meetings and receive all materials
distributed to the Parent Board at or in preparation for any such meeting;
provided that no Observer shall (i) be entitled to attend any of those meetings
or receive any of those materials, unless (A) the identity of that Observer is
reasonably acceptable to Parent (provided that it is understood and agreed that
Geir Stormorken would be acceptable as an Observer to Parent) and (B) that
Observer has previously executed a confidentiality agreement with Parent
satisfactory to Parent and the Investor (as defined in the TPG Investment
Agreement) and (ii) have any right to vote at a meeting of the Parent Board,
unless permitted to do so under the terms of Parent's Memorandum and Articles
of Association. None of the Observers shall be entitled to any form of
compensation from Parent or any of its Affiliates.
22
<PAGE>
(c) Upon the Closing Date, Parent shall take all action that is
necessary to cause Mr. John Evans to be appointed President and Chief Executive
Officer of Indigo AerFi Inc., an entity that is or will, before the Closing
Date, be a Subsidiary of Parent. After the Closing Date, John Evans shall also
continue to serve as President and Chief Executive Officer of Indigo Airlease
Corp. In his capacity as President and Chief Executive Officer of Indigo AerFi
Inc., Mr. Evans will report directly to the Chairman of the Board of Directors
of Indigo AerFi Inc. In his capacity as President and Chief Executive Officer
of Indigo Airlease Corp., Mr. Evans will report directly to the Chairman of the
Board of Directors of Indigo Airlease Corp.
SECTION 6.02. Access to Information. From the date of this Agreement
until the Closing Date and subject to applicable law and the Confidentiality
Agreement dated as of June 18, 1999 between the Company and Parent (the
"Confidentiality Agreement"), Parent shall, during ordinary business hours and
upon reasonable notice, (i) give each Stockholder, its counsel, financial
advisors, auditors and other authorized representatives full access to the
offices, properties, books and records of Parent and its Subsidiaries, (ii)
furnish each Stockholder, its counsel, financial advisors, auditors and other
authorized representatives any financial and operating data and other
information as those persons may reasonably request and (iii) instruct the
employees, counsel, financial advisors, auditors and other authorized
representatives of Parent and its Subsidiaries to cooperate with such
Stockholder in its investigation of Parent and its Subsidiaries. Any
investigation pursuant to this Section shall be conducted in a manner so as not
to interfere unreasonably with the conduct of the business of Parent and its
Subsidiaries. No information or knowledge obtained by any Stockholder in any
investigation pursuant to this Section shall affect or be deemed to modify any
representation or warranty made by Parent hereunder.
ARTICLE 7
CONDITIONS TO CLOSING
SECTION 7.01. Conditions to Obligations of Each of the Parties. The
obligations of Parent and each of the Stockholders to consummate the Closing
are subject to the satisfaction of the following conditions:
(a) (i) Any applicable waiting period under the HSR Act relating to
the transactions contemplated by this Agreement and the Share Purchase
Agreement shall have expired or been terminated and (ii) all applicable
requirements of the Irish Mergers and Takeovers (Control) Acts, 1978 to 1996
(the "Irish Mergers Act") relating to the transactions contemplated by this
Agreement shall have been complied with.
23
<PAGE>
(b) No provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit the consummation of the Closing or
the closing under the Share Purchase Agreement.
(c) All actions by or in respect of or filings with any governmental
body, agency, official or authority required to permit the consummation of the
Closing and the closing under the Share Purchase Agreement shall have been
taken, made or obtained.
SECTION 7.02. Conditions to Obligation of Parent. The obligation of
Parent to consummate the Closing is subject to the satisfaction (or waiver by
Parent) of the following further conditions:
(a) (i) the Stockholders shall have performed in all material
respects all of their obligations under this Agreement and the Share Purchase
Agreement required to be performed by them at or before the Closing Date and
(ii) the statements with respect to the Company contained in Exhibit C to this
Agreement and the representations and warranties of each Stockholder in this
Agreement, that are (A) qualified by materiality or Material Adverse Effect or
any similar standard or qualification, shall be true and correct at and as of
the Closing Date as if made at and as of that date and (B) not so qualified
shall be true and correct in all material respects at and as of the Closing
Date as if made at and as of that date and (iii) Parent shall have received a
certificate of (1) John Evans in his capacity as the Chief Executive Officer of
the Company that is dated as of the Closing Date to the foregoing effect with
respect to the statements contained in Exhibit C and (2) each Stockholder that
is dated as of the Closing Date to the foregoing effect, except as the
foregoing may relate to the statements with respect to the Company.
(b) There shall not be threatened, instituted or pending any action
or proceeding (or any investigation or other inquiry that in Buyer's judgment
might result in that action or proceeding) by any Person before any court or
governmental authority or agency, domestic or foreign, (i) seeking to restrain,
prohibit or otherwise interfere with the ownership or operation by Parent,
Buyer or any of their Affiliates of all or any material portion of the business
or assets of the Company or any of its Subsidiaries or of Parent, Buyer or any
of their Affiliates or to compel Parent, Buyer or any of their Affiliates to
dispose of all or any material portion of the business or assets of the Company
or any Subsidiary or of Parent, Buyer or any of their Affiliates, (ii) seeking
to impose or confirm limitations on the ability of Parent, Buyer or any of
their Affiliates effectively to exercise full rights of ownership of the
Subject Shares, including without limitation, the right to vote any Subject
Shares on all matters properly presented to the Company's stockholders, (iii)
seeking to require divestiture by Parent,
24
<PAGE>
Buyer or any of their Affiliates of any Subject Shares or (iv) that otherwise,
in the judgment of Parent, could have a Material Adverse Effect on the Company
or Parent; or
(c) There shall not be any action taken, or any statute, rule,
regulation, injunction, order or decree proposed, enacted, enforced,
promulgated, issued or deemed applicable to the purchase of the Subject Shares,
by any court, government or governmental authority or agency, domestic or
foreign, other than the application of the waiting period provisions of the HSR
Act and the provisions of the Irish Mergers Act to the purchase of the Subject
Shares, that, in the reasonable judgment of Parent could, directly or
indirectly, result in any of the consequences referred to in 7.02(b) above.
(d) No change shall have occurred or been threatened in the business,
assets, liabilities, financial condition, capitalization, operations, results
of operations of the Company or any of its Subsidiaries that would, in the
aggregate, reasonably be expected to have a Materially Adverse Effect on the
Company.
SECTION 7.03. Conditions to Obligation of the Stockholders. The
obligation of the Stockholders to consummate the Closing is subject to the
satisfaction of the following further conditions:
(a) (i) Parent and Buyer shall have performed in all material
respects all of their respective obligations under this Agreement and the Share
Purchase Agreement required to be performed by it at or before the Closing
Date, (ii) the representations and warranties of Parent contained in this
Agreement and in any certificate or other writing delivered by Parent pursuant
to this Agreement, that are (A) qualified by materiality or Material Adverse
Effect or any similar standard or qualification, shall be true and correct at
and as of the Closing Date as if made at and as of that date and (B) not so
qualified shall be true and correct in all material respects at and as of the
Closing Date as if made at and as of that time and (iii) Parent shall have
delivered a certificate of the Chief Executive Officer of Parent addressed to
the Stockholders that is dated as of the Closing Date to the foregoing effect.
(b) No change shall have occurred or been threatened in the business,
assets, liabilities, financial condition, capitalization, operations, results
of operations of Parent or any of its Subsidiaries that, would, in the
aggregate, reasonably be expected to have a Materially Adverse Effect on
Parent.
(c) each of McCann FitzGerald, Vinge and Davis Polk & Wardwell shall
have delivered an opinion that is addressed to the Stockholders, dated as of
the Closing Date, to the same effect as the representations and warranties of
Parent in Sections 4.01 through 4.03 and clauses (i) and (ii) of Section 4.04.
In
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<PAGE>
rendering those opinions, these counsel need only opine as to matters governed
by their respective jurisdictions.
ARTICLE 8
SURVIVAL; INDEMNIFICATION
SECTION 8.01. Survival. The covenants, agreements, representations and
warranties of the parties contained in this Agreement or in any certificate or
other writing delivered pursuant to this Agreement shall not survive any
termination of this Agreement or the Closing Date, except as follows: (i) the
representations and warranties in Sections 3.01, 3.04, 4.01 and 4.05 shall
survive indefinitely, unless this Agreement is terminated, (ii) the covenants
and agreements contained in Sections 5.03 and 6.01 shall survive for the
respective periods set forth in those Sections, unless this Agreement is
earlier terminated, (iii) the covenants and agreements contained in Sections
8.01, 8.02, 8.03, 10.02, 10.05, 10.10 and 10.12 shall survive indefinitely,
unless this Agreement is earlier terminated, and (iv) the covenants and
agreements contained in Sections 5.05, 10.01, 10.06, 10.07, 10.08 and 10.11
shall survive indefinitely. Notwithstanding the preceding sentence, any
covenant, agreement, representation or warranty in respect of which indemnity
may be sought under this Agreement shall survive the time at which it would
otherwise terminate pursuant to the preceding sentence, if notice of the
inaccuracy or breach giving rise to that right of indemnity shall have been
given to the party against whom the indemnity may be sought prior to that time.
SECTION 8.02. Indemnification. (a) Subject to Section 8.01, each
Stockholder, severally and not jointly, hereby indemnifies Parent and its
Affiliates and, effective at the Closing Date, without duplication, the Company
and each Subsidiary against and agrees to hold each of them harmless from any
and all damage, loss, liability and expense (including, without limitation,
reasonable expenses of investigation and reasonable attorneys' fees and
expenses in connection with any action, suit or proceeding) ("Damages")
incurred or suffered by Parent, Buyer, any of their Affiliates, the Company or
any Subsidiary arising out of any misrepresentation or breach of warranty,
covenant or agreement made or to be performed by such Stockholder pursuant to
this Agreement.
(b) Subject to Section 8.01, Parent hereby indemnifies each
Stockholder and its Affiliates against and agrees to hold each of them harmless
from any and all Damages incurred or suffered by that Stockholder or any of its
Affiliates arising out of any misrepresentation or breach of warranty, covenant
or agreement made or to be performed by Parent pursuant to this Agreement.
26
<PAGE>
SECTION 8.03. Procedures. The party seeking indemnification under
Section 8.02 (the "Indemnified Party") agrees to give prompt notice to the
party against whom indemnity is sought (the "Indemnifying Party") of the
assertion of any claim, or the commencement of any suit, action or proceeding
in respect of which indemnity may be sought under that Section. The
Indemnifying Party may at the request of the Indemnified Party participate in
and control the defense of any such suit, action or proceeding at its own
expense. The Indemnifying Party shall not be liable under Section 8.02 for any
settlement effected without its consent of any claim, litigation or proceeding
in respect of which indemnity may be sought under Section 8.02.
ARTICLE 9
TERMINATION
SECTION 9.01. Grounds for Termination. This Agreement may be
terminated at any time before the Closing:
(a) by mutual written agreement of Parent and Stockholders holding
more than 50% of the Subject Shares;
(b) by Parent or Stockholders holding more than 50% of the Subject
Shares, if the Closing shall not have been consummated on or before March
31, 2000;
(c) by Parent or Stockholders holding more than 50% of the Subject
Shares, if there shall be any law or regulation that makes the
consummation of the Closing illegal or otherwise prohibited or any
judgment, injunction, order or decree of any court or governmental body
having competent jurisdiction enjoining the parties from consummating the
Closing and that judgment, injunction, order or decree shall have become
final and nonappealable;
(d) by Stockholders holding more than 50% of the Subject Shares if
(A) any representation or warranty made by Parent in this Agreement that
is (1) qualified by materiality or Material Adverse Effect or any similar
standard or qualification, shall not have been true and correct when made
or at any time before the Closing as if made at and as of that time or (2)
not so qualified, shall not have been true and correct in all material
respects when made or at any time before the Closing as if made at and as
of that time, or (B) Parent shall have breached or failed to perform in
any material respect any of its obligations under this Agreement, and in
the case of either clause (A) or (B), such Stockholders
27
<PAGE>
reasonably determine, after 30 calendar days' notice by such Stockholders
to Parent, that that inaccuracy, breach or failure is incapable of being
cured by March 31, 2000; or
(e) by Parent if (A) any statement with respect to the Company in
Exhibit C to this Agreement or any representation or warranty by any of
the Stockholders that is (1) qualified by materiality or Material Adverse
Effect or any similar standard or qualification, shall not have been true
and correct when made or at any time before the Closing as if made at and
as of that time or (2) not so qualified, shall not have been true and
correct in all material respects when made or at any time before the
Closing as if made at and as of that time or (B) any of the Stockholders
shall have breached or failed to perform in any material respect any of
its obligations under this Agreement, and in the case of either clause (A)
or (B), Parent reasonably determines, after 30 calendar days' notice by
Parent to the Stockholders, that that inaccuracy, breach or failure is
incapable of being cured by March 31, 2000.
The party desiring to terminate this Agreement pursuant to Section 9.01(b),
9.01(c), 9.01(d) or 9.01(e) or shall give notice of that termination to the
other party.
SECTION 9.02. Effect of Termination. If this Agreement is terminated
as permitted by Section 9.01, that termination shall be without liability of
any party (or any stockholder, director, officer, employee, agent, consultant
or representative of that party) to any other party to this Agreement; provided
that if that termination shall result from the (i) willful failure of any party
to fulfill a condition to the performance of the obligations of any of the
other parties, (ii) failure to perform a covenant of this Agreement or (iii)
breach by any party of any representation or warranty or agreement contained in
this Agreement, that party shall be fully liable for any and all Damages
incurred or suffered by any of the other parties as a result of that failure or
breach.
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. Expenses. All costs and expenses incurred in connection
with this Agreement shall be paid by the party incurring that cost or expense.
SECTION 10.02. Further Assurances. Parent and the Stockholders will
each execute and deliver or cause to be executed and delivered all further
documents and instruments and use its best efforts to secure all consents and
take
28
<PAGE>
all further action as may be reasonably necessary in order to consummate the
transactions contemplated by this Agreement or, following the Closing Date, to
enable the Parent to exercise and enjoy all benefits and rights of the
Stockholders with respect to the Exchange Shares.
SECTION 10.03. Additional Agreements. Subject to the terms and
conditions of this Agreement, each of the parties agrees to use all reasonable
efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations and which may be required under any agreements, contracts,
commitments, instruments, understandings, arrangements or restrictions of any
kind to which that party is a party or by which that party is governed or
bound, to consummate and make effective the transactions contemplated by this
Agreement, to obtain all necessary waivers, consents and approvals and effect
all necessary registrations and filings applicable to that party, including,
but not limited to, all filings under applicable law, responses to requests for
additional information related to those filings, and submission of information
requested by governmental authorities, and to rectify any event or
circumstances for which that party is responsible which could impede
consummation of the transactions contemplated hereby.
SECTION 10.04. Notices. All notices, requests, claims, and other
communications to any party hereunder shall be deemed to have been duly given
when delivered in person, by cable, telegram or telex, or by registered or
certified mail (postage prepaid, return receipt requested) to that party at its
address set forth on the signature page of this Agreement.
SECTION 10.05. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties to this
Agreement and their respective successors and assigns, provided that no party
may assign, delegate or otherwise transfer any of its rights or obligations
under this Agreement without the consent of all of the other parties; provided,
however, that (i) Parent may assign its rights and obligations to any of its
Affiliates; and (ii) no Stockholder may assign, delegate or otherwise transfer
any of its rights or obligations under this Agreement without the consent of
Parent, except to a Permitted Transferee and in that case only if, before that
transfer, the Permitted Transferee (if not already a party to this Agreement)
shall have executed and delivered to Parent an agreement substantially in the
form of Exhibit B confirming that the Permitted Transferee has agreed to be
bound as a "Stockholder" by the terms of this Agreement.
SECTION 10.06. Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of New York without giving
effect to its conflicts of laws principles.
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<PAGE>
SECTION 10.07. Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby may be
brought in any federal court located in the State of New York or any New York
state court, and each of the parties hereby consents to the non-exclusive
jurisdiction of those courts (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives, to
the fullest extent permitted by law, any objection that it may now or hereafter
have to the laying of the venue of any such suit, action or proceeding brought
in any such court or that any suit, action or proceeding brought in any such
court has been brought in an inconvenient form. Process in any such suit,
action or proceeding may be served on any party anywhere in the world, whether
within or without the jurisdiction of any such court. Without limiting the
foregoing, each party agrees that service of process on that party as provided
in Section 10.04 shall be deemed effective service of process on that party.
SECTION 10.08. WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS
AGREEMENT 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 BY THIS AGREEMENT.
SECTION 10.09. Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if those signatures were upon the same instrument. This
Agreement shall become effective when each party to this Agreement shall have
received counterparts of this Agreement signed by all of the other parties.
SECTION 10.10. Variations of Pronouns; Captions. All pronouns and any
variation shall be deemed to refer to masculine, feminine or neuter, singular
or plural, as the identity of the Person or Persons may require. The captions
in this Agreement are included for convenience of reference only and shall be
ignored in the construction and interpretation of this Agreement.
SECTION 10.11. Amendments and Waivers. (a) Any provision of this
Agreement may be amended or waived if, but only if, that amendment or waiver is
in writing and is signed, in the case of an amendment, by each party to this
Agreement, or in the case of a waiver, by the party against whom the waiver is
to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver nor shall any single or partial
exercise preclude any other or further exercise or the exercise of any other
right,
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<PAGE>
power or privilege. The rights and remedies provided in this Agreement shall be
cumulative and not exclusive of any rights or remedies provided by law.
SECTION 10.12. Consent with Respect to Roll-Over of Employee Options.
Each Stockholder hereby grants all of the consent(s) of that Stockholder that
may be required under the terms and conditions of the Company's stock option or
compensation plans or arrangements to effect the exchange of the options and
warrants that is contemplated by Section 3.02(b) of the Combination Agreement.
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
AERFI GROUP PLC
Aviation House
Shannon
County Clare
Ireland
By: /s/ Patrick H. Blaney
---------------------------------
Name:
Title:
AB Axel Granlund
Sodra Forstadsgatan 4
S-211 43 Malmo, Sweden
By: /s/ K.A. Granlund
---------------------------------
Name:
Title:
Volito AB
Sodra Forstadsgatan 4
S-211 43 Malmo, Sweden
By: /s/ K.A. Granlund
---------------------------------
Name:
Title:
32
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Braathen Lease and Aviation Know How A/S
P.O. Box 1551 Vika
(Olav V's gt 5, Oslo)
N-0117 Oslo, Norway
By: /s/ Per G. Braathen /s/ Geir Stormorken
-----------------------------------------------
Name:
Title:
Quequoin Holdings Ltd
46-50 Kensington Place
St. Helier, Jersey
By: /s/ Sven-Erik Nilsson
-----------------------------------------------
Name: Sven-Erik Nilsson
Title: Member of the Board
Industrifinans SMB II ASA
Postboks 1626 Vika
Stortingsgaten 14, 5V
N-0119 Oslo, Norway
By: /s/ J.D. Haugse /s/ R. Midtgaard
-----------------------------------------------
Name: J.D. Haugse R. Midtgaard
Title: Board Member Man. Director
/s/ John Evans
--------------------------------------------------
John Evans
28 Isla Bahia Drive
Fort Lauderdale, Florida 33316
33
<PAGE>
Evans Mega I Limited Partnership
c/o John Evans
28 Isla Bahia Drive
Fort Lauderdale, Florida 33316
By: Evans Level I Corporation, as General
Partner
/s/ John Evans
--------------------------------------------------
John Evans
President
Alligator Investments Ltd
P.O. Box 72
44 Esplanade
ST. HELIER
Jersey JE4 8PN
Channel Islands
By: /s/ Goran Miorner
-----------------------------------------------
Name: Goran Miorner
Title: Director
Pallium Investments Ltd
P.O. Box 72
44 Esplanade
ST. HELIER
Jersey JE4 8PN
Channel Islands
By: /s/ Goran Miorner
-----------------------------------------------
Name: Goran Miorner
Title: Director
34
<PAGE>
/s/ Bradley Winograd
--------------------------------------------------
Bradley Winograd
1 Las Olas Circle, #417
Fort Lauderdale, Florida 33316
Beamer Enterprises Limited Partnership
c/o Bradley Winograd
1 Las Olas Circle, #417
Fort Lauderdale, Florida 33316
By: Beamer Investments Corporation, as General
Partner
/s/ Bradley Winograd
-------------------------------------------------------
Bradley M. Winograd
President
35
<PAGE>
EXHIBIT A
STOCKHOLDER INFORMATION
<TABLE>
Number of Company
Shares Subject to this Number of Number of Number of
Agreement on the Vested Unvested Consideration
Date of this Employee Employee Shares to be
Name Agreement Options Owned Options Owned Received
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Volito AB 1,973,172 7,300,738
Braathen Lease and 1,303,789 4,824,019
Aviation Know How Ltd
Quequoin Holdings Ltd 684,645 2,533,187
Industrifinans SMB II 477,037 1,765,038
ASA
AB Axel Granlund 301,776 1,116,571
John Evans 0 8,000 32,000 0
Evans Mega I Limited 696,305 2,576,331
Partnership
Alligator Investments Ltd 162,455 601,085
Pallium Investments Ltd 162,455 601,085
Bradley Winograd 0 4,000 16,000 0
Beamer Enterprises 130,036 481,133
Limited Partnership
</TABLE>
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<PAGE>
EXHIBIT B
FORM OF AGREEMENT TO BE BOUND
[Date]
To the Parties to the Share Exchange
Agreement dated as of November 11, 1999
Ladies and Gentlemen:
This letter agreement relates to the Share Exchange Agreement dated as
of November 11, 1999 (the "Share Exchange Agreement") among AerFi Group plc,
Indigo Aviation AB and the stockholders that are party to that agreement.
Capitalized terms used in this letter agreement and not defined have the
meanings ascribed to them in the Share Exchange Agreement.
In consideration of the covenants and agreements contained in the
Share Exchange Agreement, the undersigned confirms and agrees that it shall be
bound as a "Stockholder" by all of the provisions of the Share Exchange
Agreement.
This agreement shall be construed and enforced in accordance with the
internal laws of the State of New York.
Agreed:
--------------------
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<PAGE>
EXHIBIT C
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Company Disclosure Schedule, the Company
represents and warrants to Parent and Buyer that:
SECTION 4.01. Corporate Existence and Power. The Company has been duly
organized and is validly existing as a limited liability company (Swedish:
publikt aktiebolag) under the laws of the Kingdom of Sweden and has all
corporate powers and all governmental licenses, authorizations, permits,
consents and approvals required to carry on its business as now conducted,
except for those licenses, authorizations, permits, consents and approvals the
absence of which would not have, individually or in the aggregate, a Material
Adverse Effect on the Company. The Company is duly qualified to do business as
a foreign corporation and is in good standing (where applicable) in each
jurisdiction where that qualification is necessary, except for those
jurisdictions where failure to be so qualified would not have, individually or
in the aggregate, a Material Adverse Effect on the Company. The Company has
previously delivered to Parent true and complete copies of the Articles of
Association of the Company as currently in effect and as in effect since June
23, 1999.
SECTION 4.02. Corporate Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation of the
transactions contemplated hereby are within the Company's corporate powers and
have been duly authorized by all necessary corporate action on the part of the
Company. This Agreement constitutes a valid, binding and enforceable agreement
of the Company, except to the extent that enforceability may be (i) qualified
by the opinions of its counsel that are required to be delivered by those
counsel as of the Unconditional Time pursuant to Section 9.01 or (ii) limited
by applicable bankruptcy, reorganization, insolvency, moratorium or other laws
affecting the enforcement of creditors' rights generally and by general
principles of equity, regardless of whether that enforceability is considered
in a proceeding in equity or at law and subject to the possible need for a de
novo court hearing in Sweden if judgment is obtained outside of Sweden. The
Company acknowledges that any qualifications with respect to the enforceability
of this Agreement that are contained in those opinions of counsel shall not be
deemed to (x) indicate the views of Parent and Buyer with respect to that
enforceability or (y) affect the ability of Parent and Buyer to take a contrary
position on that matter in any subsequent context.
SECTION 4.03. Governmental Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the
Company of the transactions contemplated hereby require no action by or in
respect of, or filing
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with, any governmental body, agency, official or authority, domestic or
foreign, other than (i) any filings listed on the Company Disclosure Schedule
(including filings required in connection with the Compulsory Acquisition),
(ii) compliance with any applicable requirements of the HSR Act, the Irish
Mergers and Takeovers (Control) Acts, 1978 to 1996 (the "Irish Mergers Act")
and other applicable antitrust regulations, (iii) compliance with any
applicable requirements of the 1934 Act, and any other applicable securities or
takeover laws, whether state or foreign and (iv) any actions or filings the
absence of which would not be reasonably expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company or materially to impair
the ability of the Company to consummate the transactions contemplated by this
Agreement.
SECTION 4.04. Non-contravention. Except for the required waivers and
consents under the Company's First Union loan facility dated as of March 1,
1999, the execution, delivery and performance by the Company of this Agreement
and the consummation of the transactions contemplated hereby do not and will
not (i) contravene, conflict with, or result in any violation or breach of any
provision of the articles of association of the Company, (ii) assuming
compliance with the matters referred to in Section 4.03, contravene, conflict
with, or result in a violation or breach of any provision of any applicable
law, statute, ordinance, rule, regulation, judgment, injunction, order or
decree, (iii) require any consent or other action by any Person under,
constitute a default, or an event that, with or without notice or lapse of time
or both, would become a default, under, or cause or permit the termination,
cancellation, acceleration or other change of any right or obligation or the
loss of any benefit to which the Company or any of its Subsidiaries is entitled
under any provision of any agreement or other instrument binding upon the
Company or any of its Subsidiaries or any license, franchise, permit,
certificate, approval or other similar authorization affecting, or relating in
any way to, the assets or business of the Company and its Subsidiaries or (iv)
result in the creation or imposition of any Lien on any asset of the Company or
any of its Subsidiaries, except for those contraventions, conflicts and
violations referred to in clause (ii) and for any failures to obtain any
consent or other action, defaults, terminations, cancellations, accelerations,
changes, losses or Liens referred to in clauses (iii) and (iv) that would not
be reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company or materially to impair the ability of the
Company to consummate the actions contemplated by this Agreement.
SECTION 4.05. Capitalization. (a) The authorized capital stock of the
Company consists of a minimum of SEK 20 million and a maximum of SEK 80
million. As of August 31, 1999, there were outstanding 11,276,288 Shares and
employee stock options to purchase an aggregate of 295,920 Shares (of which
options to purchase an aggregate of 108,144 Shares were exercisable). All
outstanding shares of capital stock of the Company have been, and all shares
that may be issued pursuant to the Company's Key Employee Incentive Plan will
be, when issued in accordance with the terms of that plan, duly authorized,
validly issued, fully paid and nonassessable.
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(b) Except as set forth in this Section 4.05 and for changes since
August 31, 1999 resulting from the exercise of employee stock options
outstanding on that date, there are no outstanding (i) shares of capital stock
or voting securities of the Company, (ii) securities of the Company convertible
into or exchangeable for shares of capital stock or voting securities of the
Company or (iii) options or other rights to acquire from the Company or other
obligation of the Company to issue, any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or voting
securities of the Company (the items in clauses (i), (ii) and (iii) being
referred to collectively as the "Company Securities"). There are no outstanding
obligations of the Company or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any of the Company Securities.
SECTION 4.06. Subsidiaries; Equity Investments. (a) Each Subsidiary of
the Company is listed on the Company Disclosure Schedule and is duly organized,
validly existing and (where applicable) in good standing under the laws of the
jurisdiction in which it is chartered or organized, has all corporate or other
powers and all governmental licenses, authorizations, permits, consents and
approvals required to carry on its business as now conducted, except for those
licenses, authorizations, permits, consents and approvals the absence of which
would not have, individually or in the aggregate, a Material Adverse Effect on
the Company. Each such Subsidiary is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where that
qualification is necessary, except for those jurisdictions where failure to be
so qualified would not have, individually or in the aggregate, a Material
Adverse Effect on the Company. The Company has previously granted Parent and
its representatives access to true and complete copies of the organizational
documents of each of the Company's Subsidiaries as currently in effect.
(b) All of the outstanding capital stock of, or other voting
securities or ownership interests in, each Subsidiary of the Company, is owned
by the Company, directly or indirectly, free and clear of any Lien (other than
Permitted Liens) and free of any other limitation or restriction (including any
restriction on the right to vote, sell or otherwise dispose of that capital
stock or other voting securities or ownership interests).
(c) Except for warrants outstanding under the Company's Key Employee
Incentive there are no outstanding (i) securities of the Company or any of its
Subsidiaries convertible into or exchangeable for shares of capital stock or
other voting securities or ownership interests in any Subsidiary of the Company
or (ii) options or other rights to acquire from the Company or any of its
Subsidiaries, or other obligation of the Company or any of its Subsidiaries to
issue, any capital stock or other voting securities or ownership interests in,
or any securities convertible into or exchangeable for any capital stock or
other voting securities or ownership interests in, any Subsidiary of the
Company (the items in clauses (i) and (ii) being referred to collectively as
the "Company Subsidiary Securities"); provided that any interest of any Lender
in the property that is described in this sentence that may arise solely by
virtue of a security interest in that
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property granted to the Lender by the Company or any Subsidiary shall not be
deemed a Company Subsidiary Security. There are no outstanding obligations of
the Company or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any of the Company Subsidiary Securities.
(d) Other than its Subsidiaries, the Company does not directly or
indirectly own any capital stock or share capital of, or other equity interest
in, any corporation, partnership, trust, joint venture or other Person.
SECTION 4.07. Aircraft and Leases. (a) The Company Disclosure Schedule
sets forth with respect to each Aircraft the make, model and serial number of
the airframe and each contracted engine, the Lessee, the lease rental, the
lease term, the Lender, the principal, outstanding balance, scheduled maturity
date, interest rate and monthly debt service (if a fixed-rate obligation)
arising under each relevant financing facility in respect of the Aircraft and
any extension, termination or purchase options related to the Lease or that
Aircraft.
(b) The Company or one of its Subsidiaries (or a trustee for its
benefit) is the sole beneficial owner of, and has good and valid title to, (i)
each Aircraft and (ii) the lessor's interest under the applicable Lease
Documents, which Aircraft and which Lease Documents are free and clear of all
Liens, other than Permitted Liens.
(c) (i) To the best of the Company's knowledge, no Event of Default
(as defined in the applicable Lease) has occurred and is continuing under any
Lease, except with respect to the Company's Leases with Air Gabon and Istanbul
Airlines; (ii) no payment failure or, to the best of the Company's knowledge,
failure to maintain insurance has occurred and is continuing for 30 days from
the date due, which, if uncured, would become an Event of Default (as so
defined) under any Lease, except with respect to the Company's Leases with Air
Gabon and Istanbul Airlines; and (iii) to the best of the Company's knowledge,
no other event which with the giving of notice or passage of time or both would
become an Event of Default (as so defined) under that Lease has occurred which
would be material to the Company and its Subsidiaries, taken as a whole.
(d) (i) Except for claims in respect of security deposits,
maintenance reserves or other amounts required to be paid, reimbursed or
refunded to a Lessee pursuant to the terms of any Lease, there are no material
claims known to the Company which can be asserted by any Lessee against the
Company or the applicable Aircraft arising out of the applicable Lease
Documents, (ii) to the best of the Company's knowledge, the Lease Documents are
in full force and effect in accordance with the terms of those documents in all
material aspects, and (iii) from the date of this Agreement, there have been no
waivers of the Company's rights in effect under those Lease Documents which
would have a Material Adverse Effect on the Company, except as disclosed in
writing to and agreed to by Parent in writing, nor has the Company increased
any of its obligations under those Lease Documents without the prior written
consent of Parent.
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(e) To the Company's knowledge, the lessees have not notified the
Company or any of its Subsidiaries of any unrepaired damage, destruction or
other casualty loss or partial loss or, to the best of the Company's knowledge,
an event which with the passage of time would result in unrepaired damage,
destruction or casualty loss, has occurred in respect of any individual
Aircraft which exceeds $750,000 in the aggregate.
(f) There are existing no options, commitments or agreements to
purchase any Aircraft, or extend or terminate any Leases, which have been
exercised by the relevant Lessee.
SECTION 4.08. Insurance Coverage. The Company and each of its
Subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary
in the businesses in which they are engaged. All policies of insurance and
fidelity or surety bonds insuring the Company or any of its Subsidiaries or
their respective businesses, assets, employees, officers and directors are in
full force and effect and the Company and its Subsidiaries are in compliance
with the terms of those policies and instruments in all material respects.
There is no claim by the Company or any of its Subsidiaries pending under any
such insurance policy or bond as to which coverage has been questioned, denied
or disputed by the underwriters of that policy or bond or in respect of which
those underwriters have reserved their rights. The Company does not know of any
threatened termination of, material premium increase with respect to, or
material alteration of coverage under, any of those policies or bonds.
SECTION 4.09. Title to Assets. (a) The Company or one of its
Subsidiaries has good and valid title to all tangible assets (other than
Aircraft) reflected on the Company Balance Sheet and all tangible assets it has
acquired after the Company Balance Sheet Date, except (i) those tangible assets
(other than Aircraft) since sold or otherwise disposed of for fair value in the
ordinary course of business consistent with past practice and (ii) those
tangible assets (other than Aircraft) sold or otherwise disposed of for fair
value that are not material, individually or in the aggregate, to the Company
and its Subsidiaries, taken as a whole, in each case free and clear of all
Liens, except for (A) Liens on automobiles and office equipment that are leased
by the Company or any of its Subsidiaries, (B) the SEK 40 million floating
charge (Swedish: foretagshypotek) pledged to Nordbanken and (C) Permitted
Liens. All personal property owned or leased by the Company or any of its
Subsidiaries is in all material respects in good operating condition and repair
notwithstanding ordinary wear and tear, except to the extent that the failure
of that personal property to be in good operating condition is not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
the Company and its Subsidiaries, taken as a whole. All material personal
property leased by the Company or any of its Subsidiaries is in all material
respects in the condition required of that property by the terms of the lease
applicable to that property during the term, and upon the expiration of, that
lease.
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(b) The Company or one of its Subsidiaries has a good and valid
leasehold interest in all real property and easements and rights in real
property leased to, or occupied or otherwise used by, the Company and its
Subsidiaries as set forth on the Company Disclosure Schedule. There is no
pending or, to the best knowledge of the Company, any threatened condemnation,
eminent domain, compulsory purchase order or similar proceeding with respect to
any of the real property referred to herein or any improvements or alterations
in respect of that real property.
SECTION 4.10. Contracts. (a) The Company Disclosure Schedule sets
forth details with respect to all of the material Indebtedness of the Company
and its Subsidiaries. "Indebtedness" means (i) all obligations for borrowed
money, (ii) all obligations evidenced by bonds, debentures, notes or similar
instruments, (iii) all obligations upon which interest charges are customarily
paid, (iv) all obligations under conditional sale or other title retention
agreements relating to property or assets purchased by the Company or any of
its Subsidiaries, (v) all obligations issued or assumed by the Company or any
of its Subsidiaries as the deferred purchase price of property or services,
(vi) all Indebtedness of others secured by (or for which the holder of that
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by the Company or any of its
Subsidiaries, whether or not the obligations secured thereby have been assumed,
(vii) all guarantees by the Company or any of its Subsidiaries of Indebtedness
of others (but excluding guarantees by the Company or its Subsidiaries of
Indebtedness of the Company or any of its other Subsidiaries), (viii) all
capital lease obligations, (ix) all obligations to which the Company or any of
its Subsidiaries is a party in respect of interest rate protection agreements,
foreign currency exchange agreements, derivatives transactions or other hedging
arrangements and (x) all obligations as an account party in respect of letters
of credit and bankers' acceptances; provided that the Company's obligations in
respect of security deposits and aircraft maintenance reimbursement or cost
sharing under the Lease Documents shall not be considered Indebtedness.
(b) There are no agreements, contracts or other arrangements (written
or oral) pursuant to which the Company or any of its Subsidiaries manages the
assets of, or provides other management remarketing, consulting, operating or
technical services to, any Person.
(c) None of the Company or any of its Subsidiaries or any of their
respective assets or properties is a party to or bound by any of the following,
whether written or oral:
(i) any covenant not to compete;
(ii) any agreement, contract or other arrangement with any
shareholder or any Affiliate of the Company or any of its Subsidiaries,
other than (i) the Volito subordinated loan dated as of May 8, 1995 and
reflected on the Company Balance Sheet, (ii) the Volito office lease dated
as of April 1, 1998, and (iii) the
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employment or consulting agreements with Karl-Axel Granlund, John Evans,
and Bradley Winograd dated as of February 1, 1998.
(iii) any agreement, contract or other arrangement with any officer,
director or employee of the Company or any of its Subsidiaries or any
Affiliate of the Company or any of its Subsidiaries, other than the
Company's employment agreements with John Evans, Joe Drobnich dated May
23, 1998, Bradley Winograd dated as of February 1, 1998 and each Swedish
Employee and its consulting agreement with Karl-Axel Granlund dated as of
February 1, 1998;
(iv) any lease of personal property (other than any Aircraft) for
which the Company or any of its Subsidiaries is lessor or lessee and, in
the case of each such lease, providing for aggregate rentals exceeding US$
100,000 per annum;
(v) except as described in Section 4.18, any agreement, contract or
other arrangement for the future purchase of supplies and equipment (other
than any Aircraft), advertising or promotional services or management,
consulting or similar services under which the payment obligations of the
Company or any of its Subsidiaries exceed US$100,000 per annum; or
(vi) except as expressly disclosed elsewhere in this Agreement, any
other agreement, contract, lease, license, commitment or instrument, other
than any Lease, which (A) obligates the Company or any of its Subsidiaries
to make aggregate payments in excess of US$100,000 and it is not
terminable by the Company or any of its Subsidiaries for a cost of less
than US$100,000 or (b) is otherwise material to the business of the
Company and its Subsidiaries, taken as a whole, as presently conducted or
as proposed to be conducted, excluding agreements disclosed pursuant to
Section 4.18.
(d) Each agreement, contract, lease, license, commitment or
instrument of the Company or any of its Subsidiaries set forth in the Company
Disclosure Schedule is in full force and effect and is a legal, valid and
binding agreement of the Company or any of its Subsidiaries which is a party
thereto, as the case may be, enforceable against the Company or that Subsidiary
in accordance with its terms and, to the best knowledge of the Company, of each
other party thereto. True and complete copies of each of those contracts have
been delivered or otherwise made available to Parent. None of the Company or
any of its Subsidiaries, as the case may be, has modified, amended or waived in
any material respect any provision of those contracts. The Company and its
Subsidiaries have performed and are performing all material obligations
required to be performed by each of them under those contracts and are not
(with or without notice or lapse of time or both) in breach or default in any
material respect thereunder; and, to the best knowledge of the Company, no
other party to any of those contracts is (with or without notice or lapse of
time or both) in breach or default in any material respect under any of those
contracts.
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(e) Neither the Company nor any of the Subsidiaries has received
notice from any Person or has reason to believe that the Company or any such
Subsidiary has taken any action or failed to take any action that would result
in any conflict with, breach of or default (or give rise to any right of
termination, cancellation or acceleration) under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, warrant or other similar
instrument or any material license, permit, contract, material agreement
(including, without limitation, any material agreement relating to Indebtedness
of the Company or any of its Subsidiaries) or other material obligation to
which the Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries or any of their respective properties or assets may
be bound (and the Company is not aware that any Person has asserted that such a
conflict, breach or default will so result) which, in any such case, could have
a Material Adverse Effect on the Company or any of its Subsidiaries.
SECTION 4.11. SEC and Other Filings. (a) The Company has delivered to
Parent (i) the Company 20-F, (ii) its quarterly reports on Form 6-K for its
fiscal quarters ended March 31, 1999, June 30, 1999 and September 30, 1999,
(iii) its proxy or information statements relating to meetings of, or actions
taken without a meeting by, the stockholders of the Company held since December
31, 1998, (iv) all of its other reports, statements, schedules and registration
statements filed by the Company with the SEC pursuant to the 1934 Act since
December 31, 1998, and (v) its annual report for 1998 as filed with the Swedish
Patent Registration Office (the documents referred to in this Section 4.11
collectively, the "Company Public Documents").
(b) As of the filing date, each Company Public Document complied as
to form in all material respects with the applicable requirements of the 1934
Act and the Swedish Companies Act, as the case may be.
(c) As of its filing date (or, if amended or superseded by a filing
before the date of this Agreement, on the date of that filing), each Company
Public Document filed pursuant to the 1934 Act and the Swedish Companies Act,
as the case may be, did not, and each such Company Public Document filed after
the date of this Agreement will not, contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading.
SECTION 4.12. Financial Statements. The audited consolidated financial
statements and unaudited consolidated interim financial statements of the
Company included in the Company Public Documents filed with the SEC fairly
present, in conformity with U.S. generally accepted accounting principles
("GAAP") applied on a consistent basis (except as may be indicated in the notes
to those financial statements), the consolidated financial position of the
Company and its consolidated Subsidiaries as of the dates thereof and their
consolidated results of operations and cash flows for the
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periods then ended (subject to normal year-end adjustments in the case of any
unaudited interim financial statements).
SECTION 4.13. Disclosure Documents. (a) Each document required to be
filed by the Company with the SEC or required to be distributed or otherwise
disseminated to the Company's stockholders pursuant to the 1934 Act in
connection with the transactions contemplated by this Agreement (the "Company
Disclosure Documents"), including, but not limited to, the Schedule 13E-3 and
the Schedule 14D-9 to be filed with the SEC in connection with the Offer, and
any amendments or supplements to those documents, when filed, distributed or
disseminated, as applicable, will comply as to form in all material respects
with the applicable requirements of the 1934 Act.
(b) Any Company Disclosure Document at the time of the filing of that
Company Disclosure Document or any supplement or amendment to that document and
at the time of any distribution or dissemination of that document, will not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made in that document, in the
light of the circumstances under which they were made, not misleading. The
representations and warranties contained in this Section 4.13(b) will not apply
to statements or omissions included in the Company Disclosure Documents based
upon information furnished to the Company in writing by Parent specifically for
use in that document.
(c) The information with respect to the Company or any of its
Subsidiaries that the Company furnishes to Parent in writing specifically for
use in the Offer Documents, at the time of the filing of that document, at the
time of its distribution or dissemination, if any, and at the time of the
consummation of the Offer, will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements made in that document, in the light of the circumstances under which
they were made, not misleading.
SECTION 4.14. Absence of Certain Changes. Since the Company Balance
Sheet Date, the business of the Company and its Subsidiaries has been conducted
in the ordinary course consistent with past practices and there has not been:
(a) any event, occurrence, development or state of circumstances or
facts that has had or could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company and its Subsidiaries
taken as a whole or that has impacted or will impact in a material adverse
manner upon the ability of the Company or any of its Subsidiaries to consummate
any of the transactions contemplated by, or to perform fully its obligations
under, this Agreement;
(b) except for the grant of options and warrants in 1999 pursuant to
the Company's Key Incentive Employee Plan which options and warrants are
described in the Company Disclosure Schedule, any declaration, setting aside or
payment of any
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dividend or other distribution with respect to any shares of capital stock of
the Company or any repurchase, redemption or other acquisition by the Company
or any of its Subsidiaries of any outstanding shares of capital stock or other
securities of, or other ownership interests in, the Company or any of its
Subsidiaries;
(c) any amendment of any material term of any outstanding security of
the Company or any of its Subsidiaries;
(d) except as expressly disclosed elsewhere in this Agreement, any
incurrence, assumption or guarantee by the Company or any of its Subsidiaries
of any Indebtedness;
(e) any creation or other incurrence by the Company or any of its
Subsidiaries of any Lien on any Aircraft or other material asset, other than in
the ordinary course of business consistent with past practices or in connection
with the purchase, financing, refinancing or leasing of Aircraft;
(f) any making of any loan, advance (other than deposits on Aircraft
to be purchased) or capital contributions to or investment in any Person in
excess of US$100,000, other than loans, advances or capital contributions to or
investments in its wholly-owned Subsidiaries made in the ordinary course of
business consistent with past practices;
(g) any notice received by the Company or its subsidiaries of any
unrepaired material damage, destruction or other casualty loss (whether or not
covered by insurance) that has had or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company;
(h) any transaction or commitment made, or any contract or agreement
entered into, by the Company or any of its Subsidiaries relating to its assets
or business (including the acquisition or disposition of any assets) or any
relinquishment by the Company or any of its Subsidiaries of any contract or
other right, in either case, material to the Company and its Subsidiaries,
taken as a whole, other than operating lease transactions and commitments in
the ordinary course of business consistent with past practices and those
contemplated by this Agreement; provided, that the acquisition or sale pursuant
to existing contracts or commitments (or as otherwise consented to by Parent
pursuant to Section 6.01), and the financing, refinancing or leasing, of any
Aircraft shall be deemed to be in the ordinary course of business;
(i) any change in any method of accounting, method of tax accounting
or accounting principles or practice by the Company or any of its Subsidiaries,
except for any such change required by reason of a concurrent change in GAAP or
Regulation S-X under the 1934 Act;
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(j) any labor dispute, or any activity or proceeding by a labor union
or representative of a labor union to organize any employees of the Company or
any of its Subsidiaries, which employees were not subject to a collective
bargaining agreement at the Company Balance Sheet Date, or any lockouts,
strikes, slowdowns, work stoppages or threats thereof by or with respect to
those employees; or
(k) any waiver or forgiveness of any Indebtedness owed to the Company
or any of its Subsidiaries or waiver of any material claims of any kind.
SECTION 4.15. No Undisclosed Material Liabilities. There are no
material liabilities or obligations of the Company or any of its Subsidiaries
of any kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, and there is no existing condition, situation or set
of circumstances that could reasonably be expected to result in such a
liability, other than:
(a) liabilities or obligations disclosed and provided for in the
Company Balance Sheet or in the notes thereto or in the Company Public
Documents filed before the date of this Agreement;
(b) liabilities or obligations incurred in the ordinary course of
business consistent with past practice since the Company Balance Sheet Date
that would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company; and
(c) liabilities or obligations under this Agreement or incurred in
connection with the transactions contemplated by this Agreement.
SECTION 4.16. Compliance with Laws and Court Orders. The Company and
each of its Subsidiaries is and has been in compliance with, and to the
knowledge of the Company is not under investigation with respect to and has not
been threatened to be charged with or given notice of any violation of, any
applicable law, statute, ordinance, rule, regulation, judgment, injunction,
order or decree, except for violations which, either individually or in the
aggregate, have not had, and would not reasonably be expected to have, a
Material Adverse Effect on the Company.
SECTION 4.17. Litigation. There is no action, suit, investigation or
proceeding pending against, or, to the knowledge of the Company, threatened
against or affecting, the Company, any of its Subsidiaries, any present or
former officer, director or employee of the Company or any of its Subsidiaries
or any other Person for whom the Company or any Subsidiary may be liable or any
of their respective properties before any court or arbitrator or before or by
any governmental body, agency or official, domestic or foreign, that, if
determined or resolved adversely in accordance with the plaintiff's demands,
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company or that in any manner challenges or
seeks to prevent,
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enjoin, alter or materially delay the Offer or any of the other transactions
contemplated by this Agreement.
SECTION 4.18. Finders' Fees. Except for Bear Stearns & Co. Inc., a
copy of whose engagement agreement has been provided to Parent, there is no
investment banker, broker, finder or other intermediary that has been retained
by or is authorized to act on behalf of the Company or any of its Subsidiaries
who might be entitled to any fee or commission from the Company or any of its
Affiliates in connection with the transactions contemplated by this Agreement.
SECTION 4.19. Taxes. (a) Each of the Company and its Subsidiaries has
filed (or has had filed on its behalf), or will file or cause to be filed, all
material Tax Returns required by applicable law to be filed by it prior to or
as of the Unconditional Time, and all of those Tax Returns are, or will be at
the time of filing, true and complete in all material respects. To the extent
that any such filing has not been timely made, the Company or the Subsidiary,
as the case may be, has duly paid the relevant penalty for the late filing.
(b) Each of the Company and its Subsidiaries has paid (or has had
paid on its behalf), or, where payment is not yet due, has established (or has
had established on its behalf and for its sole benefit and recourse) or will
establish or cause to be established in accordance with, and to the extent
required by, GAAP before the date of this Agreement an adequate accrual for the
payment of, all material Taxes due with respect to any period ending on or
before that date (including, without limitation, all interest, fines, penalties
or additional amounts attributable to, or imposed upon, or with respect to, the
Taxes reflected on Tax Returns that were not timely filed by the Company or any
Subsidiary). As of the Company Balance Sheet Date, the Company Balance Sheet
reflected an adequate accrual, in accordance with GAAP, for the payment of all
material Taxes relating to the Company and its Subsidiaries due with respect to
any period ending on or before the Company Balance Sheet Date and not paid as
of that date.
(c) Neither the Company nor any of its Swedish Subsidiaries is aware
of any matters reflected on each of the Tax Returns described in Section
4.19(a) that a Swedish Taxing Authority has indicated in writing it may
challenge.
(d) The Company and its Subsidiaries have complied in all material
respects with all applicable laws, rules and regulations relating to the
payment and withholding of Taxes.
(e) No audits, administrative proceedings or legal proceedings are
pending with regard to any Taxes or Tax Return of the Company or any of its
Subsidiaries, and none of them has received a written notice of any proposed
audit or proceeding regarding any pending audit or proceeding. There are no
concluded audits, with regard to any Taxes or Tax Return of the Company or any
of its Subsidiaries, that could result in (i) the initiation
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of a legal proceeding by the applicable Taxing Authority or (ii) an increase in
the Tax liability of the Company or any of its Subsidiaries.
(f) Neither the Company nor any of its Subsidiaries is a party to any
Tax sharing agreement or subject to any obligation to indemnify any Person for
Taxes, other than (i) with respect to withholding Taxes on interest and other
payments made by the Company or any of its Subsidiaries pursuant to loan
agreements relating to the acquisition of Aircraft (or other aircraft) or the
financing of the Company and its Subsidiaries' businesses, (ii) with respect to
Taxes (other than income, gross receipts, profits, or franchise Taxes) of
lenders that are party to loan agreements (A) under which the Company or any of
its Subsidiaries is a borrower and (B) which relate to the acquisition of
Aircraft (or other aircraft) or the financing of the Company and its
Subsidiaries' businesses, (iii) with respect to Taxes borne by the Company or
any of its Subsidiaries as the purchaser of Aircraft (or other aircraft) under
aircraft purchase and sale agreements, (iv) with respect to Taxes for which the
Company or any of its Subsidiaries is primarily responsible as the seller of
Aircraft (or other aircraft) under aircraft purchase and sale agreements, (v)
with respect to Swedish Taxes (other than income, gross receipts, profits or
franchise Taxes) of the purchaser of Aircraft (or other aircraft) from the
Company or any of its Subsidiaries under aircraft purchase and sale agreements,
for which Swedish Taxes that purchaser would be primarily liable absent the
applicable Tax sharing agreement or Tax indemnification obligation, (vi) with
respect to Swedish income Taxes of the Company or any of its Subsidiaries or
(vii) with respect to income Taxes of the lessee under any of the Lease
Documents (or comparable documents for other aircraft) that are incurred solely
by reason of the existence of a branch or other permanent establishment of the
Company or any of its Subsidiaries in a non-Swedish jurisdiction. To the best
knowledge of the Company and its Subsidiaries, there are no Taxes (except for
Taxes that have been settled and paid by the Company or its Subsidiaries) that
would be covered by any Tax sharing agreement or Tax indemnification
obligation, which agreement or obligation is excepted from this Section 4.19(f)
solely by reason of Section 4.19(f)(iv). To the best knowledge of the Company
and its Subsidiaries, there are no Swedish Taxes of the purchaser of Aircraft
(or other aircraft) that would be covered by any Tax sharing agreement or Tax
indemnification obligation, which agreement or obligation is excepted from this
Section 4.19(f) solely by reason of Section 4.19(f)(v).
(g) Neither the Company nor any of its Swedish Subsidiaries has
executed, or will, before or as of the Unconditional Time, execute, any
transaction that has resulted or may result in deferred taxation for purposes
of "lag om uppskov med beskattningen vid andelsbyten" (English: Swedish tax
legislation regarding exchanges of shares), "lag om uppskov med beskattningen
vid andelsoverlatelser inom koncerner" (English: Swedish tax legislation
regarding the deferral of taxation in conjunction with intragroup transfers of
shares) or any former similar legislation.
(h) All transactions between the Company and one or more of its
Subsidiaries, or between two or more of the Company's Subsidiaries, have been
conducted, and will,
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before the Unconditional Time, be conducted, on commercial terms and conditions
(i.e., have been and/or will be arm's-length transactions). The aforementioned
also applies to transactions between one or more of the Company and its
Subsidiaries, on one hand, and any other Person(s) with which there exists
"ekonomisk intressegemenskap" (English: a common economic affiliation), on the
other hand. For purposes of this Section 4.19(h), loans among the Company and
its Swedish Subsidiaries and Aircraft sales (or sales of other aircraft) among
the Company and its Swedish Subsidiaries at the applicable aircraft's book
value will not be taken into account so long as those loans or sales have been
made among companies among which "koncernbidrag" (English: group contribution)
could have been made in the Tax year in which those loans or sales occurred,
with the result that no additional Taxes would be payable by the relevant
companies as a result of such loans or sales.
(i) All loss carryforwards of the Company and its Swedish
Subsidiaries are correctly calculated and, except for any effects of the Offer
and/or the Combination, available for utilization for Swedish Tax purposes.
During the current fiscal year, there is no impediment, except for any effects
of the Offer and/or the Combination, to the utilization for Swedish Tax
purposes of any loss carryforward of the Company or any of its Swedish
Subsidiaries to offset income in the form of "koncernbidrag."
(j) The book value of each of the assets (including, but not limited
to, inventory, stock and real estate) of the Company and its Swedish
Subsidiaries equals, and will equal as of the Unconditional Time, the Tax
residual value of that asset for Swedish Tax purposes.
(k) Neither the Company nor any of its Subsidiaries has incurred any
liability for Taxes (including, but not limited to, any Taxes asserted or
imposed by the Taxing Authority in which, or the Taxing Authority related to
the jurisdiction in which, (i) any Aircraft (or other aircraft) is used, (ii)
any applicable lessee is organized, located or conducts any of its activities
or (iii) any of the other parties to the applicable Lease Documents (or
comparable documents for other aircraft) is organized, located or conducts any
of its activities), except for any Swedish Taxes, solely by reason of (A)
having entered into, being a party to, performing its obligations under, or
receiving payments under, any Lease Documents (or comparable documents for
other aircraft) with respect to its Aircraft (or other aircraft) or (B) being
the legal and beneficial owner of the lessor's interest under any Lease
Documents (or comparable documents for other aircraft), except for (I) any Tax
liabilities that would not be material to the aggregate to the Company and its
Subsidiaries, taken as a whole, and (II) any Tax liability for which the
Company or any of its Subsidiaries has been indemnified by the applicable
lessee. Neither the Company nor any of its Subsidiaries is aware of any
circumstances that could give rise to any such liability. To the best knowledge
of the Company and its Subsidiaries, neither the Company nor any of its
Subsidiaries has incurred a Tax liability that is excepted from this Section
4.19(k) solely by reason of Section 4.19(k)(II).
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(l) "Taxes" shall mean any and all taxes, charges, fees, levies or
other assessments, including income, gross receipts, excise, real or personal
property, sales, withholding, social security, retirement, unemployment,
occupation, use, goods and services, service use, license, value added,
capital, net worth, payroll, profits, franchise, transfer and recording taxes,
fees and charges, and any other taxes, assessments or similar charges imposed
by the Internal Revenue Service of the United States or any other taxing
authority (whether United States, Swedish or otherwise and including, but not
limited to, any United States state or local government, any other government
or jurisdiction, or any subdivision or taxing agency thereof) (a "Taxing
Authority"), whether computed on a separate, consolidated, unitary, combined or
any other basis; and that term shall include any interest whether paid or
received, fines, penalties or additional amounts attributable to, or imposed
upon, or with respect to, any of those taxes, fees charges or assessments. "Tax
Return" shall mean any report, return, document, declaration or other
information or filing required to be supplied to any Taxing Authority with
respect to Taxes, including without limitation (i) information returns, (ii)
documents with respect to or accompanying payments of estimated Taxes or
requests for the extension of time in which to file any such report, return,
document, declaration or other information, and (iii) information supplied to a
Taxing Authority to enable that Taxing Authority to compute or verify Taxes.
SECTION 4.20. Employees. (a) All directors, officers and employees of
the Company or any of its Subsidiaries are listed in the Company Disclosure
Schedule, which sets forth the 1999 annual salary, 1998 annual bonus and car
and holiday entitlements of that individual. No such individual has a period of
notice or severance benefit entitlement of more than six months.
(b) The Company is not and has never been a party to any collective
bargaining agreement.
(c) Except Mr. Bradley Winograd, no director, officer or employee of
the Company or any of its Subsidiaries with an annual salary in 1999 in excess
of US$40,000 has given notice terminating his contract of employment or is
under notice of dismissal and no notice is expected by the Company.
(d) There is no dispute between the Company or any Subsidiary and any
employee pending or, to the knowledge of the Company, threatened.
(e) The Company has fulfilled all its obligations related to the
Swedish act on co-determination at work (Swedish: Lag (1976:580) om
medbestammande i arbetslivet).
(f) Since the Company Balance Sheet Date, except as would not
materially increase the liabilities of the Company and its Subsidiaries, taken
as a whole, with respect to all compensation-related matters, there has not
been any (i) grant of any severance or termination pay to (or amendment to any
existing arrangement with)
52
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any director, officer or employee of the Company or any of its Subsidiaries,
(ii) increase in benefits payable under any existing severance or termination
pay policies or employment agreements, (iii) establishment, adoption or
amendment (except as required by applicable law) of any bonus, profit-sharing,
thrift, pension, retirement, deferred compensation, compensation, stock option,
restricted stock or other benefit plan or arrangement covering any director,
officer or employee of the Company or any of its Subsidiaries or (iv) increase
in compensation, bonus or other benefits payable to any director, officer or
employee of the Company or any of its Subsidiaries.
SECTION 4.21. ERISA. (a) The Company has provided Parent with a list
and copies of all of its Employee Plans (and, if applicable, related trust
agreements) and all amendments to those plans and related trust agreements.
(b) Since its inception, the Company has not maintained, contributed
to or sponsored, any plan or arrangement subject to Title IV of ERISA nor has
it been a member of a "controlled group", as defined in ERISA, including any
other member who maintained, contributed to or sponsored such a plan.
(c) To the best of the Company's knowledge, no transaction prohibited
by Section 406 of ERISA or Section 4975 of the Code has occurred with respect
to any employee benefit plan or arrangement that is covered by Title I of
ERISA, which transaction has or will cause the Company or any of its
Subsidiaries to incur any liability under ERISA, the Code or otherwise,
excluding transactions effected pursuant to and in compliance with a statutory
or administrative exemption.
(d) The Company has provided Parent with the most recent
determination letter of the Internal Revenue Service relating to such 401(k)
Plan. To the best of the Company's knowledge, each Employee Plan has been
maintained in substantial compliance with its terms and with the requirements
prescribed by any and all applicable statutes, orders, rules and regulations,
including but not limited to ERISA and the Code.
(e) To the best of the Company's knowledge, neither the Company nor
any Subsidiary has any current or projected liability in respect of
post-employment or post-retirement health or medical or life insurance benefits
for retired, former or current employees of the Company or any of its
Subsidiaries. To the best of the Company's knowledge, no condition exists that
would prevent the Company or any of its Subsidiaries from amending or
terminating any Employee Plan providing health or medical benefits in respect
of any active employee of the Company or any of its Subsidiaries other than
limitations imposed under the terms of that Employee Plan or under applicable
law.
(f) There has been no amendment to, written interpretation of or
announcement (whether or not written) by the Company or any of its Subsidiaries
since the Closing Balance Sheet Date relating to, or change in employee
participation or coverage under, any Employee Plan that would increase
materially the expense of maintaining that
53
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Employee Plan above the level of the expense incurred in respect thereof for
the most recent fiscal year ended before the date of this Agreement.
(g) There is no contract, plan or arrangement (written or otherwise)
covering any employee or former employee of the Company or any of its
Subsidiaries that, individually or collectively, could give rise to the payment
of any amount that would not be deductible pursuant to the terms of Section
280G of the Code.
SECTION 4.22. Environmental Matters. (a) Except as set forth in the
Company Public Documents filed before the date of this Agreement and except as
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company:
(i) no notice, notification, demand, request for information,
citation, summons or order has been received, no complaint has been filed,
no penalty has been assessed, and no investigation, action, claim, suit,
proceeding or review (or any basis therefor) is pending or, to the
knowledge of the Company, is threatened by any governmental entity or
other Person relating to or arising out of any Environmental Law;
(ii) the Company is in compliance with all Environmental Laws and all
Environmental Permits; and
(iii) there are no liabilities of or relating to the Company or any
of its Subsidiaries of any kind whatsoever, whether accrued, contingent,
absolute, determined, determinable or otherwise arising under or relating
to any Environmental Law, and there are no facts, conditions, situations
or set of circumstances that could reasonably be expected to result in or
be the basis for any such liability.
(b) There has been no environmental investigation, study, audit,
test, review or other analysis conducted of which the Company has knowledge in
relation to the current or prior business of the Company or any of its
Subsidiaries or any property or facility now or previously owned or leased by
the Company or any of its Subsidiaries that has not been delivered to Parent at
least five days before the date of this Agreement.
(c) Neither the Company nor any of its Subsidiaries owns, leases or
operates or has owned, leased or operated any real property, or conducts or has
conducted any operations, in the States of New Jersey or Connecticut of the
United States.
(d) For purposes of this Section 4.22, the terms "Company" and
"Subsidiaries" shall include any entity that is, in whole or in part, a
predecessor of the Company or any of its Subsidiaries.
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SECTION 4.23. Antitakeover Statutes. No antitakeover or similar
statute or regulation applies or purports to apply to the Offer or this
Agreement and the transactions that they contemplate.
SECTION 4.24. Year 2000 Compliance. (a) To the best of the Company's
knowledge, (i) all internal hardware, software or firmware (a "System") of the
Company and its Subsidiaries that are material to the financial and operational
reporting systems of those Persons are Year 2000 Compliant and (ii) the failure
of any System(s) of the third party manufacturers, suppliers, vendors, lessees
and customers upon which the Company and its Subsidiaries rely to be Year 2000
Compliant will not have a Material Adverse Effect on the Company; provided that
the Company makes no representation or warranty with respect to whether any
Aircraft, or the computer systems of any Lessee, are or will be Year 2000
Compliant. The Company has received written confirmation from each Lessee's
insurer or insurance broker that the Lessee (other than Air Gabon) has obtained
write-back coverage under the provisions of AVN 2001/2002. For purposes of this
Section 4.24, "Year 2000 Compliant" means that neither performance nor
functionality of the System or any part of the System is affected by dates
before, during and after the year 2000 and in particular, without limitation:
(i) no value for any current date will cause any interruption in the
operation of the System or any part of the System;
(ii) date-based functionality will behave consistently for dates
prior to, during and after the year 2000;
(iii) in all interfaces and data storage, the century in any date
will be specified either explicitly or by unambiguous algorithms
or inferencing rules; and
(iv) the year 2000 will be recognized as a leap year.
(b) The disclosure in the Company 20-F complies as to form in all
material respects with the Year 2000 disclosure guidelines set forth in the SEC
Release No. 33- 7558.
55
Exhibit (c)(3)
CONFORMED COPY
SHARE PURCHASE AGREEMENT
among
AERFI GROUP PLC,
AERFI SVERIGE AB
and
The Other Parties Listed on the Signature Pages
to this Agreement
<PAGE>
TABLE OF CONTENTS
----------------------
PAGE
----
ARTICLE 1
DEFINITIONS; PURCHASE AND SALE
SECTION 1.01. Definitions....................................................1
SECTION 1.02. Purchase of Shares.............................................1
SECTION 1.03. Closing........................................................1
SECTION 1.04. Adjustments....................................................2
SECTION 1.05. Withholding Rights.............................................2
SECTION 1.06. Obligations of Buyer...........................................2
ARTICLE 2
CONDITIONS TO CLOSING
SECTION 2.01. Conditions to Obligations of Each of the Parties...............2
SECTION 2.02. Conditions to Obligations of Parent and Buyer..................3
SECTION 2.03. Conditions to Obligation of the Stockholders...................4
ARTICLE 3
SURVIVAL; INDEMNIFICATION
SECTION 3.01. Survival.......................................................5
SECTION 3.02. Indemnification................................................5
SECTION 3.03. Procedures.....................................................6
ARTICLE 4
TERMINATION
SECTION 4.01. Grounds for Termination........................................6
SECTION 4.02. Effect of Termination..........................................7
ARTICLE 5
MISCELLANEOUS
SECTION 5.01. Expenses.......................................................8
SECTION 5.02. Further Assurances.............................................8
SECTION 5.03. Additional Agreements..........................................8
SECTION 5.04. Notices........................................................8
SECTION 5.05. Successors and Assigns.........................................9
SECTION 5.06. Governing Law..................................................9
<PAGE>
PAGE
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SECTION 5.07. Jurisdiction....................................................9
SECTION 5.08. WAIVER OF JURY TRIAL............................................9
SECTION 5.09. Counterparts; Effectiveness....................................10
SECTION 5.10. Variations of Pronouns; Captions...............................10
SECTION 5.11. Amendments and Waivers.........................................10
EXHIBITS AND SCHEDULES
Schedule - Stockholder Information
Exhibit A - Form of Agreement to be Bound
<PAGE>
SHARE PURCHASE AGREEMENT
AGREEMENT dated as of November 11, 1999 among AerFi Group plc, a
company incorporated under the laws of Ireland ("Parent"), AerFi Sverige AB, a
company organized under the laws of the Kingdom of Sweden (registration number
556577-3826) and an indirect wholly-owned subsidiary of Parent ("Buyer") and
the holders listed on the signature pages of this Agreement (the
"Stockholders") of the ordinary shares, SEK 3.14 nominal value per share (the
"Shares"), of Indigo Aviation AB, a limited liability company (Swedish: publikt
aktiebolag) organized under the laws of the Kingdom of Sweden (the "Company").
NOW, THEREFORE, the parties to this Agreement (the "parties") agree as
follows:
ARTICLE 1
DEFINITIONS; PURCHASE AND SALE
SECTION 1.01. Definitions. Unless otherwise expressly provided, all
defined terms used herein shall have the same meaning as in the Share Exchange
Agreement dated as of o, 1999 among Parent and the Stockholders (the "Share
Exchange Agreement").
SECTION 1.02. Purchase of Shares. Upon the terms and subject to the
conditions of this Agreement, each Stockholder agrees to sell to Buyer, and
Buyer agrees to purchase from each Stockholder, the Shares that are owned by
that Stockholder on the date of this Agreement as set forth opposite that
Stockholder's name on the Schedule to this Agreement (the "Purchase Shares") at
the Closing (as defined below).
SECTION 1.03. Closing. The closing (the "Closing") of the purchase and
sale of the Purchase Shares pursuant to Section 1.02 shall take place at the
offices of Davis Polk & Wardwell, 1 Frederick's Place, London, England, EC2R
8AB, simultaneously with the closing under the Share Exchange Agreement. At the
Closing:
(a) Buyer shall make payment, by wire transfer of immediately
available funds to each Stockholder who has given specific wire transfer
instructions to Buyer at least five Irish business days before the Closing
Date, or in any other manner as may be mutually agreed upon between the Buyer
and any Stockholder,
<PAGE>
of an amount equal to that set forth opposite that Stockholder's name on the
Schedule to this Agreement under the caption "Cash to be paid to Stockholder."
(b) Each Stockholder shall deliver to Parent American Depositary
Receipts evidencing the American Depositary Shares representing his Purchase
Shares duly endorsed to the name of Parent or to its order.
SECTION 1.04. Adjustments. If at any time during the period between
the date of this Agreement and the Closing Date, any change in the outstanding
Shares shall occur, including by reason of any reclassification,
recapitalization, stock split or combination, exchange or readjustment of the
Shares, or any stock dividend on the Shares with a record date during that
period, cash payable pursuant to this Agreement shall be appropriately
adjusted.
SECTION 1.05. Withholding Rights. Parent and Buyer shall be entitled
to deduct and withhold from the consideration otherwise payable to any
Stockholder pursuant to this Agreement the amounts that they may be required to
deduct and withhold with respect to the payment of that consideration under any
provision of applicable tax law (except for provisions of Irish tax law). If
Parent or Buyer, as the case may be, so withholds any consideration, that
consideration shall be treated for all purposes of this Agreement as having
been paid to the Stockholder in respect of which Parent or Buyer, as the case
may be, made that deduction and withholding.
SECTION 1.06. Obligations of Buyer. Parent will take all action
necessary to cause Buyer to perform its obligations under this Agreement.
ARTICLE 2
CONDITIONS TO CLOSING
SECTION 2.01. Conditions to Obligations of Each of the Parties. The
obligations of Buyer and each of the Stockholders to consummate the Closing are
subject to the satisfaction of the following conditions:
(a) (i) Any applicable waiting period under the HSR Act relating to
the transactions contemplated by this Agreement and the Share Exchange
Agreement shall have expired or been terminated and (ii) all applicable
requirements of the Irish Mergers and Takeovers (Control) Acts, 1978 to 1996
(the "Irish Mergers Act") relating to the transactions contemplated by this
Agreement and the Share Exchange Agreement shall have been complied with.
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<PAGE>
(b) No provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit the consummation of the Closing
hereunder or the closing under the Share Exchange Agreement.
(c) All actions by or in respect of or filings with any governmental
body, agency, official or authority required to permit the consummation of the
Closing hereunder and the closing under the Share Exchange Agreement shall have
been taken, made or obtained.
SECTION 2.02. Conditions to Obligations of Parent and Buyer. The
obligation of Parent and Buyer to consummate the Closing is subject to the
satisfaction (or waiver by Parent and Buyer) of the following further
conditions:
(a) (i) the Stockholders shall have performed in all material
respects all of their obligations under this Agreement and the Share Exchange
Agreement required to be performed by them at or before the Closing Date and
(ii) the statements with respect to the Company contained in Exhibit C to the
Share Exchange Agreement and the representations and warranties of each
Stockholder in the Share Exchange Agreement, that are (A) qualified by
materiality or Material Adverse Effect or any similar standard or
qualification, shall be true and correct at and as of the Closing Date as if
made at and as of that date and (B) not so qualified shall be true and correct
in all material respects at and as of the Closing Date as if made at and as of
that date and (iii) Parent shall have received, pursuant to Section 7.02(a) of
the Share Exchange Agreement, a certificate of (1) John Evans in his capacity
as the Chief Executive Officer of the Company that is dated as of the Closing
Date to the foregoing effect with respect to the statements contained in
Exhibit C to the Share Exchange Agreement and (2) each Stockholder that is
dated as of the Closing Date to the foregoing effect, except as the foregoing
may relate to the statements with respect to the Company.
(b) There shall not be threatened, instituted or pending any action
or proceeding (or any investigation or other inquiry that in Parent's or
Buyer's judgment might result in that action or proceeding) by any Person
before any court or governmental authority or agency, domestic or foreign, (i)
seeking to restrain, prohibit or otherwise interfere with the ownership or
operation by Parent, Buyer or any of their Affiliates of all or any material
portion of the business or assets of the Company or any of its Subsidiaries or
of Parent, Buyer or any of their Affiliates or to compel Parent, Buyer or any
of their Affiliates to dispose of all or any material portion of the business
or assets of the Company or any Subsidiary or of Parent, Buyer or any of their
Affiliates, (ii) seeking to impose or confirm limitations on the ability of
Parent, Buyer or any of their Affiliates effectively to exercise full rights of
ownership of the Subject Shares, including without limitation, the right to
vote any Subject Shares on all matters properly
3
<PAGE>
presented to the Company's stockholders, (iii) seeking to require divestiture
by Parent, Buyer or any of their Affiliates of any Subject Shares or (iv) that
otherwise, in the judgment of Parent or Buyer, could have a Material Adverse
Effect on the Company or Parent; or
(c) There shall not be any action taken, or any statute, rule,
regulation, injunction, order or decree proposed, enacted, enforced,
promulgated, issued or deemed applicable to the purchase of the Subject Shares,
by any court, government or governmental authority or agency, domestic or
foreign, other than the application of the waiting period provisions of the HSR
Act and the provisions of the Irish Mergers Act to the purchase of the Subject
Shares, that, in the reasonable judgment of Parent or Buyer could, directly or
indirectly, result in any of the consequences referred to in 2.02(b) above.
(d) No change shall have occurred or been threatened in the business,
assets, liabilities, financial condition, capitalization, operations, results
of operations of the Company or any of its Subsidiaries that would, in the
aggregate, reasonably be expected to have a Materially Adverse Effect on the
Company.
SECTION 2.03. Conditions to Obligation of the Stockholders. The
obligation of the Stockholders to consummate the Closing is subject to the
satisfaction of the following further conditions:
(a) (i) Parent and Buyer shall have performed in all material
respects all of their respective obligations under this Agreement and the Share
Exchange Agreement required to be performed by it at or before the Closing
Date, (ii) the representations and warranties of Parent contained in the Share
Exchange Agreement and in any certificate or other writing delivered by Parent
pursuant to the Share Exchange Agreement, that are (A) qualified by materiality
or Material Adverse Effect or any similar standard or qualification, shall be
true and correct at and as of the Closing Date as if made at and as of that
date and (B) not so qualified shall be true and correct in all material
respects at and as of the Closing Date as if made at and as of that time and
(iii) Parent shall have delivered, pursuant to Section 7.03(a) of the Share
Exchange Agreement, a certificate of the Chief Executive Officer of Parent
addressed to the Stockholders that is dated as of the Closing Date to the
foregoing effect.
(b) No change shall have occurred or been threatened in the business,
assets, liabilities, financial condition, capitalization, operations, results
of operations of Parent or any of its Subsidiaries that, would, in the
aggregate, reasonably be expected to have a Materially Adverse Effect on
Parent.
4
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(c) each of McCann FitzGerald, Vinge and Davis Polk & Wardwell shall
have delivered an opinion that is addressed to the Stockholders, dated as of
the Closing Date, to the same effect as the representations and warranties of
Parent in Sections 4.01 through 4.03 and clauses (i) and (ii) of Section 4.04
in the Share Exchange Agreement. In rendering those opinions, these counsel
need only opine as to matters governed by their respective jurisdictions.
ARTICLE 3
SURVIVAL; INDEMNIFICATION
SECTION 3.01. Survival. The covenants, agreements, representations and
warranties of the parties contained in this Agreement or in any certificate or
other writing delivered pursuant to this Agreement shall not survive any
termination of this Agreement or the Closing Date, except as follows: (i) the
representations and warranties in Sections 3.01, 3.04 and 4.01 of the Share
Exchange Agreement incorporated by reference into this Agreement pursuant to
Section 5.12 shall survive indefinitely, unless this Agreement is terminated,
(ii) the covenants and agreements contained in Sections 3.01, 3.02, 3.03, 5.02,
5.05 and 5.10 shall survive indefinitely, unless this Agreement is earlier
terminated and (iii) the covenants and agreements contained in Sections 5.01,
5.06, 5.07, 5.08, 5.11 and 5.12 of this Agreement and in Section 5,05 of the
Share Exchange Agreement incorporated by reference into this Agreement pursuant
to Section 5.12 shall survive indefinitely. Notwithstanding the preceding
sentence, any covenant, agreement, representation or warranty in respect of
which indemnity may be sought under this Agreement shall survive the time at
which it would otherwise terminate pursuant to the preceding sentence, if
notice of the inaccuracy or breach giving rise to that right of indemnity shall
have been given to the party against whom the indemnity may be sought prior to
that time.
SECTION 3.02. Indemnification. (a) Subject to Section 3.01, each
Stockholder, severally and not jointly, hereby indemnifies Buyer and its
Affiliates and, effective at the Closing Date, without duplication, the Company
and each Subsidiary against and agrees to hold each of them harmless from any
and all damage, loss, liability and expense (including, without limitation,
reasonable expenses of investigation and reasonable attorneys' fees and
expenses in connection with any action, suit or proceeding) ("Damages")
incurred or suffered by Buyer, any of its Affiliates, the Company or any
Subsidiary arising out of any misrepresentation or breach of covenant or
agreement made or to be performed by such Stockholder pursuant to this
Agreement.
5
<PAGE>
(b) Subject to Section 3.01, Buyer hereby indemnifies each
Stockholder and its Affiliates against and agrees to hold each of them harmless
from any and all Damages incurred or suffered by that Stockholder or any of its
Affiliates arising out of any misrepresentation or breach of covenant or
agreement made or to be performed by Buyer pursuant to this Agreement.
SECTION 3.03. Procedures. The party seeking indemnification under
Section 3.02 (the "Indemnified Party") agrees to give prompt notice to the
party against whom indemnity is sought (the "Indemnifying Party") of the
assertion of any claim, or the commencement of any suit, action or proceeding
in respect of which indemnity may be sought under that Section. The
Indemnifying Party may at the request of the Indemnified Party participate in
and control the defense of any such suit, action or proceeding at its own
expense. The Indemnifying Party shall not be liable under Section 3.02 for any
settlement effected without its consent of any claim, litigation or proceeding
in respect of which indemnity may be sought under Section 3.02.
ARTICLE 4
TERMINATION
SECTION 4.01. Grounds for Termination. This Agreement may be
terminated at any time before the Closing:
(a) by mutual written agreement of Parent, Buyer and Stockholders
holding more than 50% of the Subject Shares;
(b) by Parent, Buyer or Stockholders holding more than 50% of the
Subject Shares, if the Closing shall not have been consummated on or
before March 31, 2000;
(c) by Parent, Buyer or Stockholders holding more than 50% of the
Subject Shares, if there shall be any law or regulation that makes the
consummation of the Closing illegal or otherwise prohibited or any
judgment, injunction, order or decree of any court or governmental body
having competent jurisdiction enjoining the parties from consummating the
Closing and that judgment, injunction, order or decree shall have become
final and nonappealable;
(d) by Stockholders holding more than 50% of the Subject Shares if
(A) any representation or warranty made by Parent in the Share Exchange
Agreement that is (1) qualified by materiality or Material
6
<PAGE>
Adverse Effect or any similar standard or qualification, shall not have
been true and correct when made or at any time before the Closing as if
made at and as of that time or (2) not so qualified, shall not have been
true and correct in all material respects when made or at any time before
the Closing as if made at and as of that time, or (B) Parent shall have
breached or failed to perform in any material respect any of its
obligations under this Agreement or the Share Exchange Agreement, and in
the case of either clause (A) or (B), such Stockholders reasonably
determine, after 30 calendar days' notice by such Stockholders to Parent
and Buyer, that that inaccuracy, breach or failure is incapable of being
cured by March 31, 2000; or
(e) by Parent or Buyer if (A) any statement with respect to the
Company in Exhibit C to the Share Exchange Agreement or any representation
or warranty by any of the Stockholders in the Share Exchange Agreement
that is (1) qualified by materiality or Material Adverse Effect or any
similar standard or qualification, shall not have been true and correct
when made or at any time before the Closing as if made at and as of that
time or (2) not so qualified, shall not have been true and correct in all
material respects when made or at any time before the Closing as if made
at and as of that time or (B) any of the Stockholders shall have breached
or failed to perform in any material respect any of its obligations under
this Agreement or the Share Exchange Agreement, and in the case of either
clause (A) or (B), Parent or Buyer reasonably determines, after 30
calendar days' notice by Parent or Buyer to the Stockholders, that that
inaccuracy, breach or failure is incapable of being cured by March 31,
2000.
The party desiring to terminate this Agreement pursuant to Section 4.01(b),
4.01(c), 4.01(d) or 4.01(e) shall give notice of that termination to the other
party.
SECTION 4.02. Effect of Termination. If this Agreement is terminated
as permitted by Section 4.01, that termination shall be without liability of
any party (or any stockholder, director, officer, employee, agent, consultant
or representative of that party) to any other party to this Agreement; provided
that if that termination shall result from the (i) willful failure of any party
to fulfill a condition to the performance of the obligations of any of the
other parties, (ii) failure to perform a covenant of this Agreement or (iii)
breach by any party of any agreement contained in this Agreement, that party
shall be fully liable for any and all Damages incurred or suffered by any of
the other parties as a result of that failure or breach.
7
<PAGE>
ARTICLE 5
MISCELLANEOUS
SECTION 5.01. Expenses. All costs and expenses incurred in connection
with this Agreement shall be paid by the party incurring that cost or expense.
SECTION 5.02. Further Assurances. Parent, Buyer and the Stockholders
will each execute and deliver or cause to be executed and delivered all further
documents and instruments and use its best efforts to secure all consents and
take all further action as may be reasonably necessary in order to consummate
the transactions contemplated by this Agreement or, following the Closing Date,
to enable the Parent to exercise and enjoy all benefits and rights of the
Stockholders with respect to the Purchase Shares.
SECTION 5.03. Additional Agreements. Subject to the terms and
conditions of this Agreement, each of the parties agrees to use all reasonable
efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations and which may be required under any agreements, contracts,
commitments, instruments, understandings, arrangements or restrictions of any
kind to which that party is a party or by which that party is governed or
bound, to consummate and make effective the transactions contemplated by this
Agreement, to obtain all necessary waivers, consents and approvals and effect
all necessary registrations and filings applicable to that party, including,
but not limited to, all filings under applicable law, responses to requests for
additional information related to those filings, and submission of information
requested by governmental authorities, and to rectify any event or
circumstances for which that party is responsible which could impede
consummation of the transactions contemplated hereby.
SECTION 5.04. Notices. All notices, requests, claims, and other
communications to any party hereunder shall be deemed to have been duly given
when delivered in person, by cable, telegram or telex, or by registered or
certified mail (postage prepaid, return receipt requested) to that party at its
address set forth on the signature page of this Agreement.
SECTION 5.05. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties to this Agreement
and their respective successors and assigns, provided that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of all of the other parties; provided, however,
that (i) Parent may assign its rights and obligations to any of its Affiliates;
and (ii) no Stockholder may assign, delegate or otherwise transfer any of its
rights or obligations under this Agreement without the consent of Parent,
except to any
8
<PAGE>
Affiliate of that Stockholder, to a trust, partnership, corporation or other
entity of which that Stockholder or any such Affiliate is the beneficial owner
(a "Permitted Transferee") and in that case only if, before that transfer, the
Permitted Transferee (if not already a party to this Agreement) shall have
executed and delivered to Parent an agreement substantially in the form of
Exhibit A confirming that the Permitted Transferee has agreed to be bound as a
"Stockholder" by the terms of this Agreement.
SECTION 5.06. Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of New York without giving
effect to its conflicts of laws principles.
SECTION 5.07. Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby may be
brought in any federal court located in the State of New York or any New York
state court, and each of the parties hereby consents to the non-exclusive
jurisdiction of those courts (and of the appropriate appellate courts
therefrom) in any such suit, action or proceeding and irrevocably waives, to
the fullest extent permitted by law, any objection that it may now or hereafter
have to the laying of the venue of any such suit, action or proceeding brought
in any such court or that any suit, action or proceeding brought in any such
court has been brought in an inconvenient form. Process in any such suit,
action or proceeding may be served on any party anywhere in the world, whether
within or without the jurisdiction of any such court. Without limiting the
foregoing, each party agrees that service of process on that party as provided
in Section 5.04 shall be deemed effective service of process on that party.
SECTION 5.08. WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS
AGREEMENT 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 BY THIS AGREEMENT.
SECTION 5.09. Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if those signatures were upon the same instrument. This
Agreement shall become effective when each party to this Agreement shall have
received counterparts of this Agreement signed by all of the other parties.
SECTION 5.10. Variations of Pronouns; Captions. All pronouns and any
variation shall be deemed to refer to masculine, feminine or neuter, singular
or plural, as the identity of the Person or Persons may require. The captions
in this
9
<PAGE>
Agreement are included for convenience of reference only and shall be ignored
in the construction and interpretation of this Agreement.
SECTION 5.11. Amendments and Waivers. (a) Any provision of this
Agreement may be amended or waived if, but only if, that amendment or waiver is
in writing and is signed, in the case of an amendment, by each party to this
Agreement, or in the case of a waiver, by the party against whom the waiver is
to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver nor shall any single or partial
exercise preclude any other or further exercise or the exercise of any other
right, power or privilege. The rights and remedies provided in this Agreement
shall be cumulative and not exclusive of any rights or remedies provided by
law.
SECTION 5.12. Terms Incorporated by Reference. Article 3 except for
Section 3.05, Article 4 except for Sections 4.05 through 4.17 and Article 5
except for Section 5.03 of the Share Exchange Agreement are hereby incorporated
into this Agreement by reference.
10
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
AERFI GROUP PLC
Aviation House
Shannon
County Clare
Ireland
By: /s/ Patrick H. Blaney
--------------------------------
Name:
Title:
AERFI SVERIGE AB
c/o Vinge
Box 1703
S-111 87 Stockholm
Sweden
By: /s/ John Redmond
--------------------------------
Name:
Title:
AB Axel Granlund
Sodra Forstadsgatan 4
S-211 43 Malmo, Sweden
By: /s/ K.A. Granlund
--------------------------------
Name:
Title:
/s/ K.A. Granlund
-----------------------------------
Karl-Axel Granlund
Oljeslagaregatan 1
S-216 19Malmo, Sweden
<PAGE>
Volito AB
Sodra Forstadsgatan 4
S-211 43 Malmo, Sweden
By: /s/ K.A. Granlund
--------------------------------
Name:
Title:
Braathen Lease and Aviation Know How
A/S
P.O. Box 1551 Vika
(Olav V's gt 5, Oslo)
N-0117 Oslo, Norway
By: /s/ Per G. Braathen
/s/ Geir Stormorken
--------------------------------
Name:
Title:
Quequoin Holdings Ltd
46-50 Kensington Place
St. Helier, Jersey
By: /s/ Sven-Erik Nilsson
--------------------------------
Name: Sven-Erik Nilsson
Title: Member of the Board
Braganza A/S
Address:
By: /s/ Per G. Braathen
/s/ Geir Stormorken
--------------------------------
Name:
Title:
<PAGE>
Industrifinans SMB II ASA
Postboks 1626 Vika
Stortingsgaten 14, 5V
N-0119 Oslo, Norway
By: /s/ J.D. Haugse
/s/ R. Midtgaard
-----------------------------------
Name: J.D. Haugse R. Midtgaard
Title: Board Member Man. Director
/s/ John Evans
--------------------------------------
John Evans
28 Isla Bahia Drive
Fort Lauderdale, Florida 33316
The Evans Family 1998 Irrevocable Trust
U/A/D 4/7/1998
c/o Judy Evans, General Trustee
28 Isla Bahia Drive
Fort Lauderdale, Florida 33316
/s/ Judy Evans
--------------------------------------
Judy Evans, General Trustee
/s/ Brandon J. Cintula (Trust Officer)
--------------------------------------
Alaska Trust Company, Administrative
Trustee
Evans Mega I Limited Partnership
c/o John Evans
28 Isla Bahia Drive
Fort Lauderdale, Florida 33316
By: Evans Level I Corporation, as
General Partner
/s/ John Evans
--------------------------------------
John Evans
President
<PAGE>
Alligator Investments Ltd
P.O. Box 72
44 Esplanade
ST. HELIER
Jersey JE4 8PN
Channel Islands
By: /s/ Goran Miorner
---------------------------------
Name: Goran Miorner
Title: Director
Pallium Investments Ltd
P.O. Box 72
44 Esplanade
ST. HELIER
Jersey JE4 8PN
Channel Islands
By: /s/ Goran Miorner
---------------------------------
Name: Goran Miorner
Title: Director
/s/ Bradley Winograd
------------------------------------
Bradley Winograd
1 Las Olas Circle, #417
Fort Lauderdale, Florida 33316
The Bradley M Winograd 1999 Irrevocable Trust
U/A/D 11/8/99
c/o Bradley Winograd
1 Las Olas Circle, #417
Fort Lauderdale, Florida 33316
/s/ Judy Evans
---------------------------------------------
Judy Evans, General Trustee
/s/ Brandon J. Cintula (Trust Officer)
---------------------------------------------
Alaska Trust Company, Administrative Trustee
14
<PAGE>
Beamer Enterprises Limited Partnership
c/o Bradley Winograd
1 Las Olas Circle, #417
Fort Lauderdale, Florida 33316
By: Beamer Investments Corporation, as
General Partner
/s/ Bradley Winograd
------------------------------------------
Bradley M. Winograd
President
/s/ David Neeleman
------------------------------------------
David Neeleman
Address:
/s/ Arne Wennberg
------------------------------------------
Arne Wennberg
Address:
15
<PAGE>
SCHEDULE
STOCKHOLDER INFORMATION
Number of Company Shares Cash to be paid
Name Subject to this Agreement to Stockholder
- -------------------------------------------------------------------------------
Volito AB 526,828 $6,848,760
Braathen Lease and Aviation 136,285 1,771,705
Know How Ltd
The Evans Family 1998 9,231 119,997
Irrevocable Trust
Quequoin Holdings Ltd 259,417 3,372,418
Industrifinans SMB II ASA 153,980 2,001,738
AB Axel Granlund 114,245 1,485,185
John Evans 223,430 2,904,588
Evans Mega I Limited Partnership 271,195 3,525,539
Alligator Investments Ltd 61,556 800,222
Pallium Investments Ltd 61,556 800,222
Bradley Winograd 100 1,306
Karl-Axel Granlund 100 1,300
Braganza A/S 320,500 4,166,500
Arne Wennberg 64,500 838,500
David Neeleman 9,000 117,000
The Bradley M Winograd 1999 1,539 20,006
Irrevocable Trust
Beamer Enterprises Limited 92,436 1,201,663
Partnership
16
<PAGE>
EXHIBIT A
FORM OF AGREEMENT TO BE BOUND
[Date]
To the Parties to the Share Purchase
Agreement dated as of November 11, 1999
Ladies and Gentlemen:
This letter agreement relates to the Share Purchase Agreement dated as
of November 11, 1999 (the "Share Purchase Agreement") among AerFi Group plc,
AerFi Sverige AB and the stockholders that are party to that agreement.
In consideration of the covenants and agreements contained in the
Share Purchase Agreement, the undersigned confirms and agrees that it shall be
bound as a "Stockholder" by all of the provisions of the Share Purchase
Agreement.
This agreement shall be construed and enforced in accordance with the
internal laws of the State of New York.
Agreed:
--------------------
17
Exhibit (c)(4)
CONFORMED COPY
OPTION AGREEMENT
OPTION AGREEMENT dated as of November 11, 1999 among AerFi Group plc,
a company incorporated under the laws of Ireland ("Parent") and the holders
listed on the signature pages of this Agreement of the ordinary shares, SEK
3.14 nominal value per share (the "Shares") of Indigo Aviation AB, a limited
liability company (Swedish: publikt aktiebolag) organized under the laws of the
Kingdom of Sweden (the "Company").
WHEREAS, in connection with the sale by the Stockholders of their
Shares to Parent and Buyer, Parent has agreed to grant options to the
Stockholders; and
NOW, THEREFORE, in consideration of the foregoing, and of the mutual
covenants and agreements set forth in this Agreement, the parties agree as
follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. Unless otherwise expressly provided, all
defined terms used herein shall have the same meaning as in the Share Exchange
Agreement dated as of November 11, 1999 among Parent and the Stockholders (the
"Share Exchange Agreement").
SECTION 1.02. Stock Options. At the Closing, Parent shall grant to
each Stockholder the number of options to purchase Parent Shares ("Options")
that is set forth opposite that Stockholder's name on Exhibit A to this
Agreement, which Options shall (A) be exercisable by the holder at any time
from the date of receipt until the third anniversary of that date at a price of
$3.17 per Parent Share in cash and (B) be on the terms and conditions set forth
on Exhibit B to this Agreement. Parent shall deliver to counsel for each
Stockholder an instrument evidencing the grant of the Options.
SECTION 1.03. Adjustments. If at any time during the period between
the date of this Agreement and the Closing Date, any change in the outstanding
shares of capital stock of Parent shall occur, including by reason of any
reclassification, recapitalization, stock split or combination, exchange or
readjustment of shares, or any stock dividend on shares with a record date
during that period (but excluding, for the avoidance of doubt, a special cash
dividend of up to US$0.60 per ordinary
<PAGE>
share of Parent to be paid by Parent to its shareholders before the Closing
Date), the terms of the Option grants shall be appropriately adjusted.
SECTION 1.04. Withholding Rights. Parent shall be entitled to deduct
and withhold from the consideration otherwise payable to any Stockholder
pursuant to this Agreement the amounts that it may be required to deduct and
withhold with respect to the payment of that consideration under the provision
of applicable tax law (except for provisions of Irish tax law). If Parent so
withholds any consideration, that consideration shall be treated for all
purposes of this Agreement as having been paid to the Stockholder in respect of
which Parent made that deduction and withholding.
SECTION 1.05. Terms Incorporated by Reference. Articles 7 and 10 of
the Share Exchange Agreement are hereby incorporated into this Agreement by
reference.
SECTION 1.06. Termination. This Agreement will terminate automatically
upon any termination of the Share Exchange Agreement.
2
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
AERFI GROUP PLC
Aviation House
Shannon
County Clare
Ireland
By: /s/ Patrick H. Blaney
---------------------------------------
Name:
Title:
AB Axel Granlund
Sodra Forstadsgatan 4
S-211 43 Malmo, Sweden
By: /s/ K.A. Granlund
---------------------------------------
Name:
Title:
Volito AB
Sodra Forstadsgatan 4
S-211 43 Malmo, Sweden
By: /s/ K.A. Granlund
---------------------------------------
Name:
Title:
3
<PAGE>
Braathen Lease and Aviation Know How
A/S
P.O. Box 1551 Vika
(Olav V's gt 5, Oslo)
N-0117 Oslo, Norway
By: /s/ Per G. Braathen /S/Geir Stormorken
---------------------------------------
Name:
Title:
Quequoin Holdings Ltd
46-50 Kensington Place
St. Helier, Jersey
By: /s/ Sven-Erik Nilsson
---------------------------------------
Name: Sven-Erick Nilsson
Title: Member of the Board
Industrifinans SMB II ASA
Postboks 1626 Vika
Stortingsgaten 14, 5V
N-0119 Oslo, Norway
By: /s/ J.D. Haugse /s/ R. Midtgaard
---------------------------------------
Name: J.D. Haugse R. Midtgaard
Title: Board Member Man. Director
Evans Mega I Limited Partnership
c/o John Evans
28 Isla Bahia Drive
Fort Lauderdale, Florida 33316
By: Evans Level I Corporation, as General
Partner
/s/ John Evans
-----------------------------------------
John Evans
President
4
<PAGE>
Alligator Investments Ltd
P.O. Box 72
44 Esplanade
ST. HELIER
Jersey JE4 8PN
Channel Islands
By: /s/ Goran Miorner
--------------------------------------
Name: Goran Miorner
Title: Director
Pallium Investments Ltd
P.O. Box 72
44 Esplanade
ST. HELIER
Jersey JE4 8PN
Channel Islands
By: /s/ Goran Miorner
--------------------------------------
Name: Goran Miorner
Title: Director
Beamer Enterprises Limited
Partnership
c/o Bradley Winograd
1 Las Olas Circle, #417
Fort Lauderdale, Florida 33316
By: Beamer Investments Corporation,
as General Partner
/s/ Bradley Winograd
--------------------------------------
Bradley M. Winograd
President
5
<PAGE>
EXHIBIT A
STOCKHOLDER INFORMATION
Number of Options to Purchase
Name Parent Shares to be Received
---- ----------------------------
Volito AB 334,909
Braathen Lease and Aviation Know 221,294
How Ltd
Quequoin Holdings Ltd 116,206
Industrifinans SMB II ASA 80,968
AB Axel Granlund 51,221
Evans Mega I Limited Partnership 118,185
Alligator Investments Ltd 27,574
Pallium Investments Ltd 27,574
Beamer Enterprises Limited 22,071
Partnership
6
<PAGE>
Exhibit B
Dated 1999
AERFI GROUP PLC
and
o
SHARE OPTION AGREEMENT
<PAGE>
THIS AGREEMENT dated 1999
BETWEEN
1. AERFI GROUP PLC a limited liability company incorporated under the law of
Ireland and having its registered office at Aviation House, Shannon,
County Clare, Ireland (the "Company") and
2. o of [address] (the "Optionholder")
IT IS AGREED AS FOLLOWS
1. DEFINITIONS, INTERPRETATION AND GOVERNING LAW
1.1 In this Scheme the following expressions bear the following meanings:
"Asset a sale or other transfer of ownership of 75
Sale" percent or more by value of the undertaking and
assets of the Company (excluding securitisations
under which the Company retains the residual
interest);
"Auditors" the auditors for the time being of the Company;
"the Board" the Board of Directors of the Company or any duly
authorised committee thereof;
"the Company" AerFi Group plc;
2
<PAGE>
"Designated a person who is the Optionholder's spouse, one of
Person" his or her children, one of his or her parents or one
of his or her siblings or which is a charitable or
educational organisation and who or which has been
named by th Optionholder in his or her will as the
person who shall be entitled to exercise any
unexercised Options held by the Optionholder in the
event of his or her death;
"Directors" means the directors of the Company;
"Euro" means the Euro currency
"Investment the Investment Agreement dated 30 September
Agreement" 1998 between, inter alia, the TPG and the
Company;
"IR (pound)" the lawful currency of Ireland;
"Listing" the admission of all or any of the Shares to any
recognised stock exchange (including without
limitation the Irish Stock Exchange, the London
Stock Exchange or NASDAQ);
"Merger" a substitution, consolidation or other transaction
involving the Shares or assets of the Company which
the Board deems constitutes a merger, but excluding
any purchase or subscription for shares by the TPG
Group;
"Option" the option granted by Clause 2.1 hereof;
3
<PAGE>
"Option the certificate in respect of the Option annexed
Certificate" hereto or any balance certificate issued pursuant to
Clause 7.1 hereof following partial exercise of the
Option;
"Optionholder" the optionholder named above;
"Option the Option Agreement dated as of November o,
Agreement" 1999 among the Company and the holders listed at
the signature pages of that Option Agreement of the
ordinary shares, SEK 3.14 nominal value per share of
Indigo Aviation AB.
"Person" any natural person, firm or corporation, association,
company, partnership, trust, body of persons, joint
venture, Governmental Authority or other entity, and
shall incude any successor (by merger or otherwise)
of such entity;
"Shares" Ordinary shares of US$0.01 each in the capital of
the Company for the time being;
"Share the Share Exchange dated as of November 11, 1999
Exchange among the Company and the holder listed at the
Agreement" signature pages of that Share Exchange Agreement;
"Share Sale" any transaction whereby any person obtains control
of the Company (within the meaning of Section 11 of
the Taxes Consolidation Act, 1997) as a result of
purchasing or subscribing for Shares, excluding any
purchase or subscription by the TPG Group which
enlarges its shareholding in the Company;
4
<PAGE>
"TPG" TPG AerFi LLC and/or, where appropriate, any member
of the TPG Group which is an assignee of or successor
to TPG AerFi LLC under the Investment Agreement;
"TPG Group" TPG and any other person or entity that directly, or
indirectly through one or more intermediaries,
controls or is controlled by, or is under common
control, with TPG. The term "control" means the
possession, direct or indirect, of the power to direct
or cause the direction of the management and
policies of a person or entity, whether through the
ownership of voting securities, by contract or
otherwise; and the terms "controls", "controlled
by" and "under common control with" have
meanings correlative of the foregoing.
"US$" the lawful currency of the United States of
America.
1.2 This Agreement is governed by, and shall be construed in accordance with,
the laws of Ireland. The courts of Ireland have exclusive jurisdiction to
hear and decide any suit, action or proceedings, and to settle any
disputes, which may arise out of or in connection with this Agreement and,
for these purposes, each party irrevocably submits to the jurisdiction of
the courts of Ireland.
2. GRANT OF OPTION
5
<PAGE>
2.1 The Company hereby grants to the Optionholder an option to subscribe for
the number of Shares set out in the Option Certificate at the price of
US$3.17 per Share (the "Option")
2.2 The Optionholder may exercise the Option at any time from the date hereof
until the third anniversary of the date hereof, but not thereafter.
2.3 The Option shall be personal to the Optionholder and shall be non-
assignable other than to those other holders who are listed at the
signature pages to the Option Agreement and any Permitted Transferee as
defined in the Share Exchange Agreement (save in accordance with the
provisions of Clause 5). On any assignment of an Option in breach of this
provision, whether by operation of law or otherwise, the Option shall
immediately lapse.
2.4 The Option may be exercised in whole or in part by the Optionholder
completing and signing a notice of exercise in the form annexed or in such
other form as the Board may specify, and sending it to the registered
office of the Company together with a draft/cheque representing for the
subscription price of US$3.17 per Share multiplied by the number of Shares
in respect of which the notice is given. Following exercise of the Option
the Company shall allot to the Optionholder the appropriate number of
Shares in the Company and deliver share certificates representing such
Shares to the Optionholder.
3. SHARES
3.1 The Company shall during the period in which the Option is outstanding
keep available sufficient authorised and unissued Shares to satisfy it.
6
<PAGE>
3.2 Shares allotted pursuant to this Option shall rank pari passu in all
respects with the Shares of the Company for the time being in issue except
that they shall not rank for any dividend or other distribution declared,
paid or made by reference to a record date prior to the date of exercise
of the relevant Option pursuant to which they were issued.
4. RESTRICTIONS AND RIGHTS APPLYING TO SHARES
4.1 No Optionholder may sell or transfer any Share allotted pursuant to this
Option for a period of six months after the Closing Date under the Share
Exchange Agreement, and the Company shall refuse to register any purported
transfer of any Share made in breach of this provision.
5. DEATH
5.1 If an Optionholder dies at a time when an Option is still capable of being
exercised, his or her Designated Person or, if there is no Designated
Person, his or her legal personal representatives may exercise the Option
following death to the extent to which it was exercisable on the date of
the Optionholder's death in whole or in part following the date of his or
her death provided however that no such Option may be exercised later than
whichever of the following date shall first occur:
(i) the third anniversary of the date hereof, or
(ii) the first date which falls at least twelve months after both a
Listing and the date of the Optionholder's death
On the expiry of the relevant period the option shall lapse to the extent
that it remains exercisable. On any partial exercise of such an Option
following death the balance of the rights then remaining unexercised under
such Option shall immediately lapse.
7
<PAGE>
6. CHANGE OF CONTROL, ASSET SALE OR MERGER
6.1 If a Share Sale, Asset Sale or Merger (a "transaction") is proposed and
the Board has recommended the proposal to the shareholders of the Company,
the Board may resolve to cancel the Option, to the extent that it remains
outstanding, with effect from the completion of the transaction and to pay
the Optionholder a sum equal to the excess of the quoted price or fair
market value of a Share on the date of cancellation, as determined by the
Board following consultation with the Auditors and the Company's advisers,
over US$3.17 multiplied by the number of Shares over which the Option was
outstanding.
7. PROCEDURE ON EXERCISE OF OPTIONS
7.1 Upon the exercise of the Option in whole ,or in part the Optionholder
shall pay the option price according to Clause 2.1 to the Company in cash
and shall deliver the Option Certificate to the Company which shall as
soon as practicable after the receipt thereof issue the appropriate number
of Shares to the Optionholder and deliver to the Optionholder the share
certificates representing such Shares together with any appropriate
balance Option Certificate.
8. VARIATION OF CAPITAL
8.1 In the event of any increase or variation of the share capital of any
class of the Company by way of conversion, capitalisation or rights issue,
or sub-division, consolidation or reduction, the Board will make such
adjustments as it considers appropriate under Clause 8.2 below or such
other
8
<PAGE>
adjustments as it considers necessary to avoid the enlargement or dilution
of prospective rights under the Option, to the extent that it remains
outstanding.
8.2 An adjustment made under this Clause shall be to one or more of the
following:
(i) the number of Shares comprised in the Option;
(ii) the price per Share payable under the Option;
(iii) any other term of this Agreement;
(iv) where the Option has been exercised but no Shares have been allotted
pursuant to such exercise, the number of Shares which may be so
allotted and the price applicable in respect thereof.
8.3 No adjustment shall be made under Clause 8.2 which would cause the price
applicable in respect of any Share to be issued pursuant to the exercise
of the Option to be less than the nominal value of such Share.
8.4 As soon as reasonably practicable after making any adjustment under Clause
8.2, the Board shall give notice in writing thereof to the Optionholder.
8.5 No adjustment shall be made under this Clause unless the Auditors shall
have confirmed in writing that in their opinion such adjustment is fair
and reasonable.
9. LIQUIDATION
9.1 In the event of the Company going into liquidation, the Option shall ipso
facto cease to be exercisable and (save to the extent, i at all, that the
Board may, prior to such liquidation, in its absolute discretion otherwise
determine)
9
<PAGE>
the Optionholder shall not be entitled to damages or other compensation of
any kind.
10
<PAGE>
AERFI GROUP PLC
OPTION CERTIFICATE
Not transferable except pursuant to Clause 2.3
THIS IS TO CERTIFY that
of
is the holder of an Option under the above Scheme in respect of Shares of
LIS$0.01 each in the Company. This Option may be exercised by the holder
completing and signing a notice of exercise in the form attached.
The Option may be exercised in whole or in part and from time to time before
the third anniversary of the date of hereof, but so that any notice of exercise
in order to be valid must be completed and signed and left at or sent to the
registered office of the Company together with a draft/cheque representing an
Option Price of US$3.17 per Share multiplied by the number of Shares in respect
of which the notice is given. Following exercise of the Option the appropriate
number of Shares in the Company will be issued to the holder in accordance with
the Scheme.
Dated this day of
Director
Secretary
If the Option is to be exercised in part only, the Secretary will issue a
balance Option Certificate in respect of the unexercised part of the Option.
11
<PAGE>
AERFI GROUP PLC
NOTICE OF EXERCISE OF OPTION
The Secretary
AerFi Group pIc
Aviation House
Shannon
County Clare
Ireland
I hereby exercise the Option evidenced by the attached Option Certificate with
respect to Shares of US$0.01 each in the Company and deliver herewith a
draft/cheque for [ ] representing the price of US$3.17 per share multiplied by
the above number of shares (the "Exercise Price").
I request you to allot to me the above number of Shares in the Company subject
to the Memorandum and Articles of Association.
Please arrange that the Share Certificates for the said Shares and (if
applicable) a balance Option Certificate be sent to me at the address below.
Dated the day of
Signed
Name in full
Address
12
<PAGE>
Dated 1999
AERFI GROUP PLC
and
o
SHARE OPTION AGREEMENT
<PAGE>
THIS AGREEMENT dated 1999 BETWEEN
1. AERFI GROUP PLC a limited liability company incorporated under the law of
Ireland and having its registered office at Aviation House, Shannon,
County Clare, Ireland (the "Company" ) and
2. o of [address] (the "Optionholder").
IT IS AGREED AS FOLLOWS.
1. DEFINITIONS, INTERPRETATION AND GOVERNING LAW
1.1 In this Scheme the following expressions bear the following meanings:
"Asset Sale" a sale or other transfer of ownership of
75 percent or more by value of the
undertaking and assets of the
Company (excluding securitisations
under which the company retains the
residual interest);
"Auditors" the auditors for the time being of the
Company;
"the Board" the Board of Directors of the
Company or any duly authorised
committee thereof;
"the Company" AerFi Group plc;
2
<PAGE>
"Directors" means the directors of the Company;
"Euro" means the Euro currency;
"Investment Agreement" the Investment Agreement dated 30
September 1998 between, inter alia,
TPG and the company;
"IR(pound)" the lawful currency of Ireland;
"Listing" the admission of all or any of the
Shares to any recognised stock
exchange (including without
limitation the Irish Stock Exchange,
the London Stock Exchange or
NASDAQ);
"Merger" a substitution, consolidation or other
transaction involving the Shares or
assets of the Company which the
Board deems constitutes a merger, but
excluding any purchase or
subscription for shares by the TPG
Group;
"Option" the option granted by Clause 2.1
hereof;
3
<PAGE>
"Option Certificate" the certificate in respect of the Option
annexed hereto or any balance
certificate issued pursuant to Clause
7.1 hereof following partial exercise
of the Option;
"Optionholder" the optionholder named above;
"Option Agreement" the Option Agreement dated as of o
November 1999 among the Company
and the holders listed at the signature
pages of that Option Agreement of the
ordinary shares, SEK 3.14 nominal
value per share of Indigo Aviation
AB.
"Person" any natural person, firm or
corporation, association, company,
partnership, trust, body of persons,
joint venture, Governmental Authority
or other entity, and shall include any
successor (by merger or otherwise) of
such entity;
"Shares" Ordinary shares of US$0.01 each in
the capital of the Company for the
time being;
4
<PAGE>
"Share Exchange the Share Exchange dated as of
Agreement" November 11, 1999 among the
Company and the holder listed at the
signature pages of that Share
Exchange Agreement;
"Share Sale" any transaction whereby any person
obtains control of the Company
(within the meaning of Section 11 of
the Taxes Consolidation Act, 1997) as
a result of purchasing or subscribing
for Shares, excluding any purchase or
subscription by the TPG Group which
enlarges its shareholding in the
Company;
"TPG" TPG AerFi LLC and/or, where
appropriate, any member of the TPG
Group which is an assignee of or
successor to TPG AerFi LLC under the
Investment Agreement;
5
<PAGE>
"TPG Group" TPG and any other person or entity
that directly, or indirectly through one
or more intermediaries, controls or is
controlled by, or is under common
control with, TPG. The term "control"
means the possession, direct or
indirect, of the power to direct or
cause the direction of the management
and policies of a person or entity,
whether through the ownership of
voting securities, by contract or
otherwise; and the terms "controls',
"controlled by" and "under common
control with" have meanings
correlative of the foregoing;
"US$" the lawful currency of the United
States of America.
1.2 This Agreement is governed by, and shall be construed in accordance with,
the laws of Ireland. The courts of Ireland have exclusive jurisdiction to
hear and decide any suit, action or proceedings, and to settle any
disputes, which may arise out of or in connection with this Agreement and,
for these purposes, each party irrevocably submits to the jurisdiction of
the courts of Ireland.
6
<PAGE>
2. GRANT OF OPTION
2.1 The Company hereby grants to the Optionholder an option to subscribe for
the number of Shares set out in the Option Certificate at the price of
US$3.17 per Share (the "Option").
2.2 The Optionholder may exercise the Option at any time from the date hereof
until the third anniversary of the date hereof, but not thereafter.
2.3 The Option shall be personal to the Optionholder and shall be non-
assignable other than to those other holders who are listed at the
signature pages to the Option Agreement and any Permitted Transferee as
defined in the Share Exchange Agreement. On any assignment of an Option in
breach of this provision, whether by operation of law or otherwise, the
Option shall immediately lapse.
2.4 The Option may be exercised in whole or in part by the Optionholder
completing and signing a notice of exercise in the form annexed or in such
other form as the Board may specify, and sending it to the registered
office of the Company together with a draft/cheque representing for the
subscription price of US$3.17 per Share multiplied by the number of Shares
in respect of which the notice is given. Following exercise of the Option
the Company shall allot to the Optionholder the appropriate number of
Shares in the Company and deliver share certificates representing such
Shares to the Optionholder.
7
<PAGE>
3. SHARES
3.1 The Company shall during the period in which the Option is outstanding
keep available sufficient authorised and unissued Shares to satisfy it.
3.2 Shares allotted pursuant to this Option shall rank pari passu in all
respects with the Shares of the Company for the time being in issue except
that they shall not rank for any dividend or other distribution declared,
paid or made by reference to a record date prior to the date of exercise
of the relevant Option pursuant to which they were issued.
4. RESTRICTIONS AND RIGHTS APPLYING TO SHARES
4.1 No Optionholder may sell or transfer any Share allotted pursuant to this
Option for a period of six months after the Closing Date under the Share
Exchange Agreement and the Company shall refuse to register any purported
transfer of any Share made in breach of this provision.
5. LIQUIDATION OF THE OPTIONHOLDER
5.1 In the event of an Optionholder being wound-up at a time when an Option is
still capable of being exercised, the Optionholder may exercise the Option
to the extent to which it was exercisable on the date of commencement of
the winding-up ("the winding-up date") either in whole or in part
following the winding-up date provided however that no such Option may be
exercised later than whichever of the following dates shall first occur:
(i) the third anniversary of the date hereof, or
8
<PAGE>
(ii) the first date which falls at least twelve months after both a
Listing and the winding-up date, or
(iii) the winding-up of the Optionholder being completed.
On the expiry of the relevant period the Option shall lapse to the extent
that it remains exerciseable. On any partial exercise of such an Option
following the winding-up date the balance of the rights then remaining
unexercised under such Option shall immediately lapse.
6. CHANGE OF CONTROL, ASSET SALE OR MERGER
6.1 If a Share Sale, Asset Sale or Merger (a "transaction") is proposed and
the Board has recommended the proposal to the shareholders of the Company,
the Board may resolve to cancel the Option, to the extent that it remains
outstanding, with effect from the completion of the transaction and to pay
the Optionholder a sum equal to the excess of the quoted price or fair
market value of a Share on the date of cancellation, as determined by the
Board following consultation with the Auditors and the Company's advisers,
over US$3.17 multiplied by the number of Shares over which the Option was
outstanding.
7. PROCEDURE ON EXERCISE OF OPTIONS
7.1 Upon the exercise of the Option in whole or in part the Optionholder shall
pay the option price according to Clause 2.1 to the Company in cash and
shall deliver the Option Certificate to the Company which shall as soon as
practicable after the receipt thereof issue the appropriate number of
Shares to the Optionholder and deliver to the Optionholder the share
certificates
9
<PAGE>
representing such Shares together with any appropriate balance Option
Certificate.
8. VARIATION OF CAPITAL
8.1 In the event of any increase or variation of the share capital of any
class of the Company by way of conversion, capitalisation or rights issue,
or subdivision, consolidation or reduction, the Board will make such
adjustments as it considers necessary to avoid the enlargement or dilution
of prospective rights under the Option, to the extent that it remains
outstanding.
8.2 An adjustment made under this Clause shall be to one or more of the
following:
(i) the number of Shares comprised in the Option;
(ii) the price per Share payable under the Option;
(iii) any other term of this Agreement;
(iv) where the Option has been exercised but no Shares have been allotted
pursuant to such exercise, the number of Shares which may be so
allotted and the price applicable in respect thereof.
8.3 No adjustment shall be made under Clause 8.2 which would cause the price
applicable in respect of any Share to be issued pursuant to the exercise
of the Option to be less than the nominal value of such Share.
10
<PAGE>
8.4 As soon as reasonably practicable after making any adjustment under Clause
8.2, the Board shall give notice in writing thereof to the Optionholder.
8.5 No adjustment shall be made under this Clause unless the Auditors shall
have confirmed in writing that in their opinion such adjustment is fair
and reasonable.
9. LIQUIDATION OF THE COMPANY
9.1 In the event of the Company going into liquidation, the Option shall ipso
facto cease to be exercisable and (save to the extent, if at all, that the
Board may, prior to such liquidation, in its absolute discretion otherwise
determine) the Optionholder shall not be entitled to damages or other
compensation of any kind.
11
<PAGE>
AERFI GROUP PLC
OPTION CERTIFICATE
Not transferable except pursuant to Clause 2.3
THIS IS TO CERTIFY that
of
is the holder of an Option under the above Scheme in respect of Shares of
US$0.01 each in the Company. This Option may be exercised by the holder
completing and signing a notice of exercise in the form attached.
The Option may be exercised in whole or in part and from time to time before
the third anniversary of the date of hereof, but so that any notice of exercise
in order to be valid must be completed and signed and left at or sent to the
registered office of the Company together with a draft/cheque representing an
Option Price of US$3.17 per Share multiplied by the number of Shares in respect
of which the notice is given. Following exercise of the Option the appropriate
number of Shares in the Company will be issued to the holder in accordance with
the Scheme.
Dated this day of
Director
Secretary
If the Option is to be exercised in part only, the Secretary will issue a
balance Option Certificate in respect of the unexercised part of the Option.
12
<PAGE>
[ON OPTIONHOLDER LETTERHEAD]
NOTICE OF EXERCISE OF OPTION
The Secretary
AerFi Group Pic
Aviation House
Shannon
County Clare
Ireland
The Company hereby exercises the Option evidenced by the attached Option
Certificate with respect to Shares of US$0.01 each in AerFi Group Pic and
delivers herewith a draft/cheque for [ ] representing the price of US$3.1 7 per
share multiplied by the above number of shares (the "Exercise Price").
The Company requests you to allot to it the above number of Shares in AerFi
Group Plc subject to the Memorandum and Articles of Association.
Please arrange that the Share Certificates for the said Shares and (if
applicable) a balance Option Certificate be sent to the Company at the address
below.
Dated the day of
Signed
Name in full
Address
13
Exhibit (c)(5)
CONFORMED COPY
REGISTRATION RIGHTS AGREEMENT
AGREEMENT, dated as of November 11, 1999, among AerFi Group plc, a
corporation incorporated under the laws of Ireland ("Parent"), and the holders
listed on the signature pages hereof (the "Stockholders").
In consideration of the mutual promises and covenants contained in
this Agreement, the Stockholders and Parent agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Certain Definitions. (a) Unless otherwise defined in
this Agreement, each capitalized term that is used in this Agreement shall have
the meaning ascribed to that term in the Share Exchange Agreement dated as of
November 11, 1999 between Buyer and the Stockholders (as may be amended from
time to time, the "Share Exchange Agreement").
(b) As used in this Agreement, the following terms shall have the
following meanings:
"Affiliate" has the meaning set forth in Rule 12b-2 under the Exchange
Act, and the term "Affiliated" has a correlative meaning.
"Business Day" means any day other than a Saturday, Sunday or United
States federal holiday or Irish national holiday and consists of the time
period from 12:01 a.m. through 12:00 midnight, New York City time or Dublin
time, as the case may be.
"Equity Securities" of any Person means any and all classes of capital
stock, partnership interests, or limited liability company interests of that
Person, or any other similar interests of any Person that is not a corporation,
partnership or limited liability company.
"Exchange Act" means the Exchange Act of 1934 of the United States and
the rules and regulations adopted under that Act.
"Inspectors" has the meaning provided in Section 2.03(a)(v) of this
Agreement.
<PAGE>
"Losses" means any and all liabilities (including liabilities arising
out of the doctrine of strict-liability), obligations, losses, damages,
penalties, actions, suits, judgments, costs, fees, expenses (including
reasonable legal fees, expenses and related charges and costs of investigation)
and disbursements, of whatsoever kind and nature; provided, however, that
"Losses" shall not include management time or overhead costs.
"Managing Underwriter" has the meaning provided in Section 2.01 of
this Agreement.
"Parent" has the meaning provided in the preamble to this Agreement.
"Person" means any individual, corporation, company, association,
partnership, limited liability company, joint venture, trust or unincorporated
organization, or governmental entity.
"Public Equity Offering" has the meaning provided in Section 2.01 of
this Agreement.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933 of the United States
and the rules and regulations adopted under that Act.
"Shares" means all ordinary shares nominal value $0.01 per share of
Parent (the "Ordinary Shares") that are beneficially owned by the Stockholders
until (i) a registration statement covering those Ordinary Shares has been
declared effective by the SEC and they have been disposed of pursuant to that
effective registration statement, (ii) they have been sold under circumstances
in which all of the applicable conditions of Rule 144 (or any similar
provisions then in force) under the Securities Act are met or under which they
may be sold pursuant to Rule 144(k) or (iii) they have been otherwise sold,
disposed of, or transferred (other than to a Permitted Transferee), Parent has
delivered a new certificate or other evidence of ownership for it not bearing
the legend required pursuant to the Share Exchange Agreement and they may be
resold without subsequent registration under the Securities Act.
"Stockholder" has the meaning provided in the preamble to this
Agreement.
"Subsidiary" means, as to any Person, any other Person of which 50% or
more of the Equity Securities are owned or controlled, or the ability to
nominate or elect 50% or more of the directors or similar managers is held,
directly or
2
<PAGE>
indirectly, by such first Person or one or more of its Subsidiaries or by such
first Person and one or more of its Subsidiaries.
ARTICLE 2
REGISTRATION RIGHTS
SECTION 2.01. Incidental or "Piggyback" Registration Rights. If Parent
proposes to sell Ordinary Shares in an underwritten public equity offering in
any jurisdiction pursuant to an effective registration statement under the
Securities Act or under a comparable law of any other jurisdiction ("Public
Equity Offering"), Parent shall give written notice, at least 30 days prior to
the filing of a registration statement related to that Public Equity Offering
(other than a registration statement relating solely to employee benefit
plans), of that proposed Public Equity Offering to the Stockholders and that
notice shall offer to the Stockholders the opportunity to include in that
Public Equity Offering the number of Shares as that Stockholders may request.
Within 20 days after receipt of that notice, the Stockholders shall, subject to
the following sentence, have the right by notifying Parent in writing to
require Parent to include in the registration statement relating to that Public
Equity Offering the number of Shares as that Stockholders may request.
Notwithstanding the foregoing, if at any time the Managing Underwriter or
Underwriters of that Public Equity Offering (the "Managing Underwriter") shall
advise Parent that, in its opinion, the total number of Ordinary Shares
proposed to be sold in that Public Equity Offering (including the total number
of Shares that the Stockholders have requested to be sold in that Public Equity
Offering and the total number of Shares requested to be included by any other
selling shareholder entitled to sell Ordinary Shares in that Public Equity
Offering) exceeds the maximum number of Ordinary Shares which the Managing
Underwriter believes may be sold without materially adversely affecting the
price, timing or distribution of the Public Equity Offering, then Parent will
be required to include in that Public Equity Offering only that number of
Ordinary Shares which the Managing Underwriter believes may be sold without
causing that adverse effect in the following order: (i) all the Ordinary Shares
that Parent proposes to sell in that Public Equity Offering, (ii) all the
Ordinary Shares that are proposed to be sold by any holder of Shares who is
exercising a demand registration right granted before the date of this
Agreement, if that Public Equity Offering is being made pursuant to that demand
and (iii) Shares of the Stockholders and all other Ordinary Shares that are
proposed to be sold by any holder of Ordinary Shares exercising a so-called
"piggyback" registration right granted before the date of this Agreement on a
pro rata basis in an aggregate number which is equal to the difference between
the maximum number of Ordinary Shares that may be distributed in that Public
Equity Offering as
3
<PAGE>
determined by the Managing Underwriter and the number of Ordinary Shares to be
sold in that Public Equity Offering pursuant to clauses (i) and (ii) above
provided, that, if the Investor (as defined in the TPG Investment Agreement) or
any of its permitted assignees of its "piggyback" registration rights under the
TPG Investment Agreement) is exercising such "piggyback" registration rights,
the percentage ascribed to such parties when calculating such pro rata basis
shall be the greater of (A) the number of Ordinary Shares proposed to be sold
by such parties divided by the total number of Ordinary Shares proposed to be
sold by all holders exercising "piggyback" registration rights or (B) the Total
Voting Power (as defined in the TPG Investment Agreement) of such parties and
(iv) any other Ordinary Shares requested to be included in that Public Equity
Offering. Parent will have the right to postpone or withdraw any registration
statement relating to a Public Equity Offering described under this Section
2.01 prior to the effective date without obligation to any Stockholder. All
registration expenses of any Stockholder (other than customary underwriting and
broker commissions) shall be paid by Parent in the case of any and all
registrations governed by this Section 2.01.
SECTION 2.02. Suspension. During any consecutive 365-day period,
Parent shall be entitled to postpone the filing of or to suspend availability
of a registration statement for up to two 45-consecutive-day periods if
Parent's board of directors determines in the exercise of its reasonable
judgment that there is a valid business purpose for that postponement or
suspension and provides notice that that determination was made by Parent board
of directors to the Stockholders; provided, however, that in no event shall
Parent be required to disclose the business purpose for that suspension if
Parent board of directors determines in good faith that that business purpose
must remain confidential.
SECTION 2.03. Preparation and Filing. (a) Whenever Parent undertakes a
Public Offering in which the Stockholders participate pursuant to Section
2.01, Parent will as expeditiously as possible:
(i) furnish to the Stockholders, prior to filing a registration
statement, copies of that registration statement as proposed to be filed
and thereafter, the number of copies of that registration statement, each
amendment and supplement to thereto, the prospectus included in that
registration statement (including each preliminary prospectus) and
financial statements, reports and proxy statements mailed to shareholders
of Parent as those Stockholders may reasonably request in order to
facilitate the disposition of the Shares being sold;
(ii) use its best efforts to register or qualify, not later than the
effective date of any filed registration statement, the Shares covered by
4
<PAGE>
that registration statement under the securities or "blue sky" laws of
those jurisdictions as the Stockholders reasonably request; provided that
Parent will not be required to (A) qualify to do business as a foreign
corporation or as a dealer in any jurisdiction where it is not so
qualified, (B) subject itself to taxation in any jurisdiction where it is
not subject to taxation, (C) consent to general service of process in any
jurisdiction where it is not subject to general service of process or (D)
take any action that would subject it to service of process in suits other
than those arising out of the offer or sale of the Shares covered by the
registration statement;
(iii) make available, upon reasonable notice and during business
hours, for inspection by the Managing Underwriter(s) for the Shares (and
counsel representing such Managing Underwriter(s)) (collectively, the
"Inspectors"), all financial and other records, pertinent corporate
documents, agreements and properties of Parent and its Subsidiaries and
Affiliates as shall be reasonably necessary to enable them to exercise
their due diligence responsibilities and cause Parent's officers,
directors and employees to supply all information reasonably requested by
any such Inspectors in connection with the registration statement;
(iv) obtain a comfort letter from Parent's independent public
accountants dated within five Business Days prior to the effective date of
the registration statement (and as of such other dates as the Managing
Underwriter(s) for the Shares may reasonably request) in customary form
and covering matters of the type customarily covered by those comfort
letters as such Managing Underwriter(s) reasonably request;
(v) obtain an opinion of counsel dated the effective date of the
registration statement (and as of such other dates as the Managing
Underwriter(s) for the Shares may reasonably request) in customary form
and covering matters of the type customarily covered by those opinions as
counsel designated by such Managing Underwriter(s) reasonably request;
(vi) during the period when the registration statement is required to
be effective, notify Stockholders of the happening of any event as a
result of which the prospectus included in the registration statement
contains an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and Parent will forthwith prepare a
supplement or amendment to that prospectus so that, as thereafter
delivered to the purchasers of those Shares, that prospectus will not
contain an untrue statement of a material fact or omit to state any
material
5
<PAGE>
fact required to be stated therein or necessary to make the statements
therein not misleading;
(vii) in the case of an underwritten offering, enter into an
underwriting agreement containing customary terms, including such
indemnity and contribution provisions as the Managing Underwriter(s)
customarily require or may reasonably require;
(viii) cause those Shares to be traded on any securities exchange
designated by Stockholders where similar securities issued by Parent are
already traded, provided that Parent is eligible to do so under applicable
listing requirements;
(ix) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC and of other applicable government
entities and make available to its securityholders, as soon as reasonably
practicable, an earnings statement covering a period of 12 months,
beginning within three months after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act.
(b) The Stockholders participating in that offering shall timely
furnish to Parent all information regarding the distribution of those Shares as
Parent may from time to time reasonably request. Parent may exclude from that
registration the securities of any Stockholder who fails to furnish that
information within 10 days after that request; provided Parent's registration
statement relating to that offering is effective within 60 days after the
expiration of that 10-day period.
(c) The Stockholders agree that upon the receipt of any notice from
Parent of the happening of any event of the kind described in paragraph
(a)(viii) above, they will forthwith discontinue disposition of Shares pursuant
to the registration statement covering those Shares until the Stockholders'
receipt of the copies of the supplemented or amended prospectus contemplated by
paragraph (a)(viii) above.
SECTION 2.04. Indemnification. (a) In connection with any registration
statement, Parent agrees to indemnify and hold harmless each Stockholder, the
partners, members, directors, officers, employees and agents of each such
Stockholder and each Person who controls any such Stockholder within the
meaning of either the Securities Act or the Exchange Act against any and all
Losses, joint or several, to which they or any of them may become subject under
the Securities Act, the Exchange Act or other applicable law or regulation, at
common law or otherwise, insofar as those Losses (or actions in respect
thereof)
6
<PAGE>
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the registration statement as originally filed
or in any amendment thereof, or in any preliminary prospectus or prospectuses
contained therein, or in any amendment thereof or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such Loss or action; provided,
however, that (i) Parent will not be liable in any case to the extent that any
such Loss arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to Parent by or on behalf
of any such Stockholder (in its capacity as a holder of Shares) specifically
for inclusion therein, and (ii) Parent will not be liable to any indemnified
party under these provisions with respect to any registration statement or
prospectus to the extent that any such Loss of that indemnified party results
from the use of the prospectus during a period when the use of the prospectus
has been suspended in accordance with Section 2.02; provided, in each case,
that Stockholders received prior written notice of that suspension. This
indemnity agreement will be in addition to any liability which Parent may
otherwise have.
Parent also agrees to indemnify or contribute to Losses, as provided
in Section 2.04(d), of any underwriter(s) of Shares registered under a
registration statement, their officers and directors and each Person who
controls such underwriter(s) on substantially the same basis as that of the
indemnification of the selling Stockholders provided in this Section 2.04(a)
and shall, if requested by any Stockholder, enter into an underwriting
agreement containing customary terms and conditions, including those related to
indemnification.
(b) Each Stockholder holding Shares covered by a registration
statement severally agrees to indemnify and hold harmless (i) Parent, (ii) each
of its directors, officers, employees and agents and (iii) each Person who
controls Parent within the meaning of either the Securities Act or the Exchange
Act to the same extent as the foregoing indemnity from Parent to each such
Stockholder, but only with reference to written information relating to that
Stockholder furnished to Parent by or on behalf of that Stockholder
specifically for inclusion in the documents referred to in the foregoing
indemnity; provided, however, that in no event shall the liability of any
Stockholder to indemnify Parent or any other Person under this Agreement, in
the aggregate, exceed the dollar amount of the net proceeds received by that
Stockholder from the sale of that Stockholder's Shares. This indemnity
agreement will be in addition to any liability which any such Stockholder may
otherwise have.
7
<PAGE>
(c) Promptly after receipt by an indemnified party under this Section
2.04 of notice of the commencement of any action, that indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 2.04, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of that action and that failure
results in the forfeiture by the indemnifying party of substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The indemnifying party shall
be entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
that separate counsel (and local counsel) if (i) the use of counsel chosen by
the indemnifying party to represent the indemnified party would present that
counsel with a conflict of interest, (ii) the actual or potential defendants
in, or targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it or other indemnified parties
which are different from or additional to those available to the indemnifying
party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the commencement of that action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party; provided, however, that the
indemnifying party shall be obligated to pay for only one such separate counsel
for all indemnified parties in each action or related group of actions. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to that claim or action) unless that settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of that claim, action, suit or proceeding.
8
<PAGE>
(d) If the indemnity provided in paragraph (a) or (b) of this Section
2.04 is unavailable to or insufficient to hold harmless an indemnified party
for any reason, then each applicable indemnifying party, in lieu of
indemnifying that indemnified party, shall severally contribute to the
aggregate Losses to which that indemnified party may be subject in such
proportion as is appropriate to reflect the relative benefits received by that
indemnifying party, on the one hand, and that indemnified party, on the other
hand, from the registration statement which resulted in those Losses; provided,
however, that in no case shall any Stockholder be responsible, in the
aggregate, for any amount in excess of the dollar amount of the net proceeds
received by that Stockholder from the sale of his Shares. If the allocation
provided by the immediately preceding sentence is unavailable for any reason,
the indemnifying party and the indemnified party shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of that indemnifying party, on the one hand, and that
indemnified party, on the other hand, in connection with the statements or
omissions which resulted in those Losses as well as any other relevant
equitable considerations. Relative fault shall be determined by reference to
whether any alleged untrue statement or omission relates to information
provided by the indemnifying party on the one hand, or by the indemnified
party, on the other hand. The parties agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any other
method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of that fraudulent
misrepresentation. For purposes of this Section 2.04, each Person who controls
a Stockholder within the meaning of either the Securities Act or the Exchange
Act and each member, partner, director, officer, employee and agent of that
Stockholder shall have the same rights to contribution as that Stockholder, and
each Person who controls Parent within the meaning of either the Securities Act
or the Exchange Act, and each director, officer, employee and agent of Parent
shall have the same rights to contribution as Parent, subject in each case to
the applicable terms and conditions of this paragraph (d).
(e) The provisions of this Section 2.04 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Stockholder
or Parent or any of the members, partners, officers, directors or controlling
Persons referred to in this Section 2.04 and will survive the sale by a
Stockholder of Shares covered by a registration statement.
9
<PAGE>
ARTICLE 3
MISCELLANEOUS
SECTION 3.01. Expenses. Except as otherwise provided herein, each of
the parties hereto shall each pay its own expenses incurred in connection with
this Agreement.
SECTION 3.02. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the parties hereto and
their respective heirs, executors, representatives, successors and permitted
assigns. Except as otherwise provided in this Agreement, all registration
rights provided for herein may be exercised solely by, and inure solely to the
benefit of, the Stockholders and not any other Person.
SECTION 3.03. Amendments and Waivers. This Agreement contains the
entire understanding of the parties and supersedes any prior agreements and
understandings between the parties with respect to its subject matter. This
Agreement may be amended, and the provisions hereof waived, only by a written
instrument duly executed by Parent and by Stockholders owning 75% or more of
the Shares which are then owned by the Stockholders.
SECTION 3.04. Headings. 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.
SECTION 3.05. Successors and Assigns. This Agreement, and the rights
and obligations of any Stockholder under this Agreement, may not be assigned by
any Stockholder; provided that notwithstanding the foregoing or anything
contained in Section 3.02 to contrary, a Stockholder may assign any and all of
its rights under this Agreement to (a) any of its Permitted Transferees, so
long as, prior to the assignment, the Permitted Transferee(s) (if not already
party to this Agreement) shall have executed and delivered to Parent an
agreement substantially in the form of Exhibit A confirming that the Permitted
Transferee has agreed to be bound by the terms of this Agreement and (b) any
other Stockholder to whom that Stockholder transfers its or his Shares.
SECTION 3.06. Counterparties; Effectiveness. This Agreement may be
executed in two or more counterparts, each of which shall be an original or
facsimile signature, but which together shall constitute one and the same
Agreement. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the parties hereto.
10
<PAGE>
SECTION 3.07. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given if so given) by delivery, telegram,
telex or facsimile, or by mail (registered or certified mail, postage prepaid,
return receipt requested) or by any courier service, such as Federal Express,
providing proof of delivery, provided that any notice delivered as herein
provided shall also be delivered by facsimile (if a facsimile number is
provided below) at the time of that delivery. All communications hereunder
shall be delivered to the respective parties at the following addresses (or at
any other address for a party as shall be specified by like notice, provided
that notices of a change of address shall be effective only upon receipt
thereof):.
(a) If to Parent:
AerFi Group plc
Aviation House
Shannon
Co. Clare
Ireland
Fax: + 353 61 360 000
Attention: General Counsel
(b) If to the Stockholders, as set forth on Schedule A to this
Agreement.
SECTION 3.08. Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby may be
brought in any federal court located in the State of New York or any New York
state court, and each of the parties hereby consents to the non-exclusive
jurisdiction of that courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding brought in any such
court or that any suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court. Without limiting the foregoing,
each party agrees that service of process on that party as provided in Section
3.07 shall be deemed effective service of process on that party.
SECTION 3.09. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR
11
<PAGE>
RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
SECTION 3.10. Further Assurances. Each party to this Agreement shall
cooperate, shall take all further action and shall execute and deliver all
further documents as may be reasonably requested by the other parties to this
Agreement in order to carry out the provisions and purposes of this Agreement.
SECTION 3.11. No Undisclosed Demand Registration Rights. Except as
provided in the TPG Investment Agreement and the 1998 Subscription Option
Agreement between General Electric Capital Corporation and Parent, there is no
agreement under which Parent is obligated to cause a registration statement to
be filed upon request by any Person holding Parent Shares.
12
<PAGE>
IN WITNESS WHEREOF, the Company has duly caused this Registration
Rights Agreement to be signed by its duly authorized officer and to be dated as
of November 11, 1999.
AERFI GROUP plc
By: /s/ Patrick H. Blaney
---------------------------------
Name:
Title:
Acknowledged and Agreed:
VOLITO AB
By: /s/ K.A. Granlund
-----------------------------
Name:
Title:
Acknowledged and Agreed:
AB AXEL GRANLUND
By: /s/ K.A. Granlund
-----------------------------
Name:
Title:
Acknowledged and Agreed:
ALLIGATOR INVESTMENTS LTD
By: /s/ Goran Miorner
-----------------------------
Name: Goran Miorner
Title: Director
13
<PAGE>
Acknowledged and Agreed:
PALLIUM INVESTMENTS LTD
By: /s/ Goran Miorner
-----------------------------
Name: Goran Miorner
Title: Director
Acknowledged and Agreed:
BRAATHEN LEASE AND
AVIATION KNOW HOW A/S
By: /s/ Per G. Braathen /s/ Geir Stormorken
----------------------------------------------
Name:
Title:
Acknowledged and Agreed:
EVANS MEGA I LIMITED PARTNERSHIP
By: Evans Level 1 Corporation, as General Partner
/s/ John Evans
-----------------------------
John Evans
President
14
<PAGE>
Acknowledged and Agreed:
QUEQUOIN HOLDINGS LTD
By: /s/ Sven-Erik Nilsson
-----------------------------
Name: Sven-Erik Nilsson
Title: Member of the Board
Acknowledged and Agreed:
INDUSTRIFINANS SMB II ASA
By: /s/ J.D. Haugse /s/ R. Midtgaard
----------------------------------------------
Name: J.D. Haugse R. Midtgaard
Title: Board Member Man. Director
Acknowledged and Agreed:
BEAMER ENTERPRISES LIMITED PARTNERSHIP
By: Beamer Investments Corporation, as General Partner
/s/ Bradley Winograd
-----------------------------
Name: Bradley M. Winograd
Title: President
15
<PAGE>
EXHIBIT A
FORM OF AGREEMENT TO BE BOUND
[Date]
To the Parties to the Registration
Rights Agreement dated as of
November 11, 1999
Ladies and Gentlemen:
This letter agreement relates to the Registration Rights Agreement
dated as of November 11, 1999 (the "Registration Rights Agreement") among AerFi
Group plc, AerFi Sverige AB and the stockholders that are party to that
agreement. Capitalized terms used in this letter agreement and not defined have
the meanings ascribed to them in the Registration Rights Agreement.
In consideration of the covenants and agreements contained in the
Registration Rights Agreement, the undersigned confirms and agrees that it
shall be bound as a "Stockholder" by all of the provisions of the Registration
Rights Agreement.
This agreement shall be construed and enforced in accordance with the
internal laws of the State of New York.
Agreed:
--------------------
16
Exhibit (c)(6)
CONFORMED COPY
November 11, 1999
To the Stockholders (the "Stockholders") listed on the signature pages of the
Share Exchange Agreement dated as of November 11, 1999, among AerFi Group plc
and the Stockholders and also on the the signature pages of the Option
Agreement dated as of November 11, 1999, among AerFi Group plc and the
Stockholders
Ladies and Gentlemen:
This letter relates to the investment by the Stockholders in AerFi
Group plc ("AerFi"). To induce the Stockholders to make such investment we
hereby extend the Stockholders the tag-along rights set forth in Section 9.04
(attached as Exhibit A, the "Tag-Along Provision") of the Investment Agreement
(the "Investment Agreement") dated as of September 30, 1998, as amended, among
TPG AerFi LLC, AerFi and certain shareholders of AerFi, by granting each
Stockholder rights equivalent to those held by the "Current Shareholders" in
the Tag-Along Provision. Each of the Stockholders hereby agrees to be bound by
the obligations of such Current Shareholders under the Tag-Along Provision.
Capitalized terms used in the Tag-Along Provision and not defined
therein shall have the meaning assigned to such terms in the Investment
Agreement. Nothing contained in this letter shall be construed to grant the
Stockholders any rights under the Investment Agreement.
This agreement shall be construed and enforced in accordance with the
internal laws of the State of New York.
<PAGE>
TPG PARTNERS II, L.P.
By: TPG GenPar II, L.P.
By: TPG Advisors II, Inc.
By: /s/ Richard A. Ekleberry
--------------------------------------
Name: Richard A. Ekleberry
Title: Vice President
TPG PARALLEL II, L.P.
By: TPG GenPar II, L.P.
By: TPG Advisors II, Inc.
By: /s/ Richard A. Ekleberry
--------------------------------------
Name: Richard A. Ekleberry
Title: Vice President
TPG INVESTORS II. L.P.
By: TPG GenPar II, L.P.
By: TPG Advisors II, Inc.
By: /s/ Richard A. Ekleberry
--------------------------------------
Name: Richard A. Ekleberry
Title: Vice President
TPG AERFI CO-INVESTMENT
By: /s/ A.J. Dechet
--------------------------------------
Name: A.J. Dechet
Title:
2
<PAGE>
AERFI GROUP PLC
By: /s/ Patrick H. Blaney
-------------------------------------
Name:
Title:
3
<PAGE>
/s/ Lord Stevenson
------------------------------------------
Lord Stevenson of Coddenham
CBE
/s/ Michael Davies
------------------------------------------
Michael Davies
/s/ Maurice Foley
------------------------------------------
Maurice Foley
/s/ Gerald Scanlan
------------------------------------------
Gerald Scanlan
/s/ Patrick H. Blaney
------------------------------------------
Patrick H. Blaney
/s/ Edward Hansom
------------------------------------------
Edward Hansom
/s/ Patrick S. Dalton
------------------------------------------
Patrick S. Dalton
/s/ Paul Farrell
------------------------------------------
Paul Farrell
/s/ Rose Hynes
------------------------------------------
Rose Hynes
4
<PAGE>
/s/ John Redmond
------------------------------------------
John Redmond
/s/ Michael Walsh
------------------------------------------
Michael Walsh
/s/ Peter Scanlan
------------------------------------------
Peter Scanlan
Acknowledged and Agreed:
Volito AB
By: /s/ K.A. Granlund
---------------------------------
Name:
Title:
Acknowledged and Agreed:
AB Axel Granlund
By: /s/ K.A. Granlund
---------------------------------
Name:
Title:
5
<PAGE>
Acknowledged and Agreed:
Alligator Investments Ltd
By: /s/ Goran Miorner
-----------------------------
Name: Goran Miorner
Title: Director
Acknowledged and Agreed:
Pallium Investments Ltd
By: /s/ Goran Miorner
-----------------------------
Name: Goran Miorner
Title: Director
Acknowledged and Agreed:
Braathen Lease and Aviation Know How
A/S
By: /s/ Per G. Braathen
/s/ Geir Stormorken
-----------------------------
Name:
Title:
6
<PAGE>
Acknowledged and Agreed:
Evans Mega I Limited Partnership
By: Evans Level I Corporation, as General
Partner
/s/ John Evans
----------------------------------------
John Evans
President
Acknowledged and Agreed:
Quequoin Holdings Ltd
By: /s/ Sven-Erik Nilsson
-----------------------------------------
Name: Sven-Erik Nilsson
Title: Member of the Board
Acknowledged and Agreed:
Industrifinans SMB II ASA
By: /s/ J.D. Haugse /s/ R. Midtgaard
----------------------------------------
Name: J.D. Haugse R. Midtgaard
Title: Board Member Man. Director
7
<PAGE>
Acknowledged and Agreed:
Beamer Enterprises Limited Partnership
By: Beamer Investments Corporation, as
General Partner
/s/ Bradley Winograd
-----------------------------------------
Bradley M. Winograd
President
8
<PAGE>
Exhibit A
Section 9.04. Tag-Along Rights. (a) In the event the Investor reaches
a binding agreement with a Person or group of Persons acting together (other
than an Investor Affiliate) making a bona fide offer (a "Prospective
Purchaser") to transfer to such Prospective Purchaser more than 5% of the
Acquired Shares, the Investor shall cause the Prospective Purchaser to purchase
from each Current Shareholder a portion of the Ordinary Shares then
Beneficially Owned by such Current Shareholder representing a percentage of the
Ordinary Shares Beneficially Owned by such Current Shareholder equal to the
percentage of the Acquired Shares Beneficially Owned by the Investor to be
transferred by the Investor to the Prospective Purchaser , in accordance with
the terms of this Section. The Investor shall notify promptly each Current
Shareholder in writing of any such binding agreement, indicating the price and
other material terms and conditions of the proposed sale, the identity of the
Prospective Purchaser and the intended closing date of such sale (the
"Tag-Along Notice" ). Any purchase by the Prospective Purchaser of the Ordinary
Shares of any Current Shareholder shall be at the same price per share and on
the same terms and conditions as are set forth in the Tag-Along Notice. Each
Current Shareholder shall have 10 days from receipt of the Tag-Along Notice to
notify the Investor in writing of its election to exercise its tag-along rights
under this Section 9.04(a) with respect to any portion of the Ordinary Shares
then owned by such Current Shareholder (a "Tag-Along Election Notice"). In the
event the Investor does not receive a Tag-Along Election Notice from a Current
Shareholder within 10 days of receipt of the Tag- Along Notice, such current
Shareholder shall be deemed to have elected not to exercise its tag-along
rights hereunder. Notwithstanding anything to the contrary contained herein,
(i) the Investor shall not be obligated to cause a Prospective Purchaser to
purchase any of the current shareholders' Ordinary Shares pursuant to this
Section 9.04(a) if at the time of the sale by the Investor to the Prospective
Purchaser the Investor Beneficially Owns less than 10% of the Original Acquired
shares and (ii) the Investor shall not be obliged to consummate the transfer of
the Acquired Shares contemplated by an agreement between the Investor and a
Prospective Purchaser if, pursuant to the terms and conditions of such
agreement, the Investor is not obligated to do so and, in such event, the
Investor shall have no liability to any Current Shareholder.
(b) The closing of the sale of the Investor's Acquired shares to the
Prospective Purchaser shall be conditioned on the simultaneous purchase by the
Prospective Purchaser from each Current Shareholder electing to exercise its
tag-along rights pursuant to Section 9.04(a) (each, an "Electing Current
Shareholder") of all of the Ordinary Shares specified by the Electing Current
Shareholders in the Tag-Along Election Notices; provided, that, if the
aggregate
<PAGE>
number of Ordinary Shares specified in the Tag-Along Election Notices provided
by the Electing Current Shareholders and to be sold by the Investor exceeds the
number of Ordinary Shares that the Prospective Purchaser is or would be willing
to acquire, then the Investor shall be obligated to include in such sale an
aggregate number of Ordinary Shares specified by the Electing Current
Shareholders in the Tag-along Notices equal to the maximum number of Ordinary
Shares that the Prospective Purchaser in such sale is willing to purchase at
the same purchase price as the Ordinary Shares are being sold by the Investor
to the Prospective Purchaser multiplied by a fraction, the numerator of which
is the total number of Ordinary Shares Beneficially Owned by such Electing
Current Shareholders and the denominator of which is the sum of (x) the total
number of Ordinary Shares Beneficially Owned by such Electing Current
Shareholders and (y) the total number of Ordinary Shares Beneficially Owned by
the Investor and the Investor Affiliates. Notwithstanding the foregoing, in the
event any Electing Current Shareholder breaches its obligations under this
Section 9.04 or, in the event that any representation and warranty of such
Electing Current Shareholder contained in the purchase agreement with the
Prospective Purchaser is not true and correct as of the date made or as of the
proposed closing date, or the Electing Current Shareholder fails to perform any
covenant or agreement contained in such agreement and such misrepresentation or
failure results in the nonsatisfaction of a condition precedent to such
agreement (and the Prospective Purchaser does not waive such condition
precedent), the Investor shall be free to sell its Acquired Shares to the
Prospective Purchaser without liability to such Electing Current Shareholder,
and such sale shall not limit or waive in any respect any claim, right or cause
of action that the Investor may have against such Electing Current Shareholder
in respect of such breach.
2
Exhibit (c)(7)
Oslo, 9 November 1
Dear Karl-Axel
I write to you to confirm that Industrifinans SMB III ASA is prepared to sell
all of its' shares in Indigo Aviation AB, if offered USD 13 or more with cash
payment. I have been given the authority by my Board to make such a sale if it
is completed within reasonable time.
Yours sincerely,
Industrifinans SMB III ASA
/s/ Jon David Haugse
- --------------------
Managing Director
