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EXHIBIT 2.1
EXECUTION COPY
ASSET PURCHASE AGREEMENT
between
American Airlines, Inc.,
as Purchaser,
and
Trans World Airlines, Inc.,
as Seller
January 9, 2001
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS.......................................................................... 1
1.1 Definitions................................................................................ 1
1.2 Disclosure Schedules....................................................................... 1
ARTICLE II PURCHASE OF ASSETS................................................................... 2
2.1 Purchase and Sale of Transferred Assets.................................................... 2
2.2 Excluded Assets............................................................................ 2
ARTICLE III ASSUMPTION OF LIABILITIES............................................................ 2
3.1 Assumed Liabilities........................................................................ 2
3.2 Retained Liabilities....................................................................... 3
ARTICLE IV PURCHASE PRICE....................................................................... 4
4.1 Purchase Price............................................................................. 4
4.2 Allocation of Purchase Price............................................................... 4
4.3 Working Capital Adjustment................................................................. 4
4.4 Other Adjustments to Purchase Price........................................................ 7
4.5 Prorations................................................................................. 8
4.6 Transfer Taxes............................................................................. 8
4.7 Offsets to Purchase Price.................................................................. 8
ARTICLE V CLOSING.............................................................................. 8
5.1 Closing.................................................................................... 8
5.2 Deliveries at Closing...................................................................... 9
5.3 Delivery of Transferred Assets............................................................. 10
5.4 Conditions Precedent to Obligations of Purchaser........................................... 10
5.5 Conditions Precedent to Obligations of TWA................................................. 12
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF SELLERS............................................ 13
6.1 Organization and Good Standing............................................................. 13
6.2 Authorization and Effect of Agreement...................................................... 14
6.3 No Conflicts............................................................................... 15
6.4 No Third Party Options..................................................................... 15
6.5 Data....................................................................................... 15
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6.6 Consents and Approvals................................................................... 15
6.7 Permits; Compliance with Law............................................................. 15
6.8 Litigation............................................................................... 16
6.9 Title to and Condition of Assets......................................................... 16
6.10 U.S. Citizen; Air Carrier................................................................ 16
6.11 Assumed Contracts........................................................................ 16
6.12 Aircraft; Engines and Spare Parts........................................................ 17
6.13 Slots.................................................................................... 19
6.14 No Casualty.............................................................................. 19
6.15 Insurance................................................................................ 19
6.16 Gates; Gate Property and Ground Equipment................................................ 19
6.17 Environmental Matters.................................................................... 21
6.18 Taxes.................................................................................... 22
6.19 Labor Matters............................................................................ 23
6.20 Employee Matters......................................................................... 25
6.21 Routes................................................................................... 26
6.22 Intellectual Property.................................................................... 26
6.23 Worldspan................................................................................ 28
6.24 Real Property............................................................................ 28
6.25 Disclosure............................................................................... 30
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF PURCHASER........................................ 30
7.1 Corporate Organization................................................................... 30
7.2 Authorization and Effect of Agreement.................................................... 30
7.3 No Conflicts............................................................................. 31
7.4 Litigation............................................................................... 31
ARTICLE VIII PRE-CLOSING COVENANTS.............................................................. 31
8.1 Access................................................................................... 31
8.2 Conduct of Business...................................................................... 32
8.3 Notification............................................................................. 34
8.4 No Inconsistent Action................................................................... 34
8.5 Satisfaction of Conditions............................................................... 34
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8.6 Filings................................................................................... 34
8.7 All Reasonable Efforts.................................................................... 35
8.8 Further Assurances........................................................................ 35
8.9 Publicity................................................................................. 35
8.10 Acquisition Proposals; Recapitalization Transaction....................................... 35
8.11 Bankruptcy Court Approval................................................................. 36
8.12 Specific Enforcement of Covenants......................................................... 39
8.13 Due Diligence............................................................................. 39
8.14 TWA Rights Plan........................................................................... 39
8.15 Aircraft Inspection Rights................................................................ 40
8.16 Designations.............................................................................. 40
8.17 Marketing Agreements...................................................................... 40
ARTICLE IX POST-CLOSING COVENANTS.............................................................. 40
9.1 Maintenance of Books and Records.......................................................... 40
9.2 Right of Subrogation...................................................................... 40
9.3 Confidentiality........................................................................... 41
ARTICLE X EMPLOYEE MATTERS.................................................................... 41
10.1 Hiring Obligations........................................................................ 41
10.2 Union Matters............................................................................. 42
10.3 Treatment of Pension Plans................................................................ 42
10.4 Treatment of Welfare Plans................................................................ 42
10.5 Tax Reporting............................................................................. 42
ARTICLE XI RISK OF LOSS........................................................................ 43
11.1 Risk of Loss on Sellers................................................................... 43
ARTICLE XII FURTHER AGREEMENTS AND TERMINATION.................................................. 43
12.1 Termination Payment....................................................................... 43
12.2 Bankruptcy Termination Payment............................................................ 44
12.3 Termination............................................................................... 44
12.4 Procedure and Effect of Termination....................................................... 46
ARTICLE XIII MISCELLANEOUS PROVISIONS............................................................ 47
13.1 Notices................................................................................... 47
13.2 Actions by Sellers........................................................................ 48
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13.3 Expenses................................................................................. 48
13.4 Successors and Assigns................................................................... 48
13.5 Waiver................................................................................... 49
13.6 Entire Agreement; Disclosure Schedules................................................... 49
13.7 Amendments, Supplements, Etc............................................................. 49
13.8 Rights of the Parties.................................................................... 49
13.9 Applicable Law........................................................................... 49
13.10 Execution in Counterparts................................................................ 49
13.11 Titles and Headings...................................................................... 49
13.12 Invalid Provisions....................................................................... 50
13.13 Transfers................................................................................ 50
13.14 Brokers.................................................................................. 50
13.15 Exculpation.............................................................................. 50
13.16 Principles of Interpretation............................................................. 50
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Exhibits
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Exhibit A - Definitions
Exhibit B - Disclosure Schedules
Exhibit C - Sale Procedures Order
Exhibit D - Approval Order
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ASSET PURCHASE AGREEMENT
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This ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of January 9, 2001, by and between American Airlines, Inc., a Delaware
corporation ("Purchaser"), and Trans World Airlines, Inc., a Delaware
corporation ("TWA").
RECITALS:
WHEREAS, TWA and its direct and indirect subsidiaries (other than Royal
Ambassador Insurance Company, a Vermont insurance company) are referred to
herein collectively as "Sellers," and each is referred to herein individually as
a "Seller";
WHEREAS, TWA desires to sell to Purchaser, and to cause the other Sellers
to sell to Purchaser, and Purchaser desires to purchase from Sellers, all
assets, rights and properties of Sellers (subject to certain exceptions
specified in this Agreement) and, in connection with such purchase and sale,
Purchaser is willing to assume certain obligations and liabilities of Sellers,
all on the terms and subject to the conditions set forth in this Agreement;
WHEREAS, TWA intends to file, and to cause each of the other Chapter 11
Sellers (as defined in Exhibit A) to file, voluntary petitions for
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reorganization pursuant to chapter 11 of title 11 of the United States Code, 11
U.S.C. Sections 101 et seq. (the "Bankruptcy Code"), and in concert with such
-- ---
filings to seek the entry of an order of the United States Bankruptcy Court
having jurisdiction over such chapter 11 cases (the "Bankruptcy Court")
approving this Agreement and authorizing Sellers to consummate the transactions
contemplated hereby;
WHEREAS, Sellers intend to distribute the proceeds of the transactions
contemplated by this Agreement pursuant to a plan of liquidation under Chapter
11 of the Bankruptcy Code to be filed with the Bankruptcy Court, which proceeds
will be distributed in accordance with the priorities established by the
Bankruptcy Code; and
WHEREAS, Purchaser is providing TWA with a debtor-in-possession lending
facility in connection with the Chapter 11 Cases providing for up to
$200,000,000 in loans (the "DIP Facility").
NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements herein contained, the parties hereto agree as follows:
<PAGE>
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement, unless the context otherwise
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requires, capitalized terms used in this Agreement shall have the meanings set
forth in Exhibit A hereto.
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1.2 Disclosure Schedules. References to "Schedules" shall mean the
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Schedule of Exceptions delivered by Purchaser and TWA as of the date hereof that
are specifically made part of this Agreement. Any Schedule not delivered as of
the date hereof shall be completed by the party designated on Exhibit B,
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delivered to the non-preparing party in accordance with Section 13.1 on or by
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the date set forth on Exhibit B and, upon acceptance by the non-preparing party
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(which acceptance shall not be unreasonably withheld), shall be made a part of
this Agreement as if such Schedule were originally attached hereto as of the
date hereof (unless the context requires otherwise).
ARTICLE II
PURCHASE OF ASSETS
2.1 Purchase and Sale of Transferred Assets. On the terms and subject to
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the conditions set forth herein, at the Closing as described in Article V, TWA
shall, and shall cause each other Seller to, sell, transfer, convey, assign and
deliver, and Purchaser shall purchase and accept, all of each such Seller's
right, title and interest in and to all such Seller's rights, properties and
assets, wherever located, including, without limitation, (i) all personal and
real property, (ii) all general intangibles and intangible property, including
without limitation all Intellectual Property and goodwill, (iii) all equipment,
furniture and fixtures, (iv) all accounts, accounts receivable and rights to
payment, (v) claims and interests in litigation (including, without limitation,
all Avoidance Actions), (vi) all existing and future instruments, chattel paper,
documents of title, contracts, agreements, licenses, grants and rights, (vii)
all securities, whether certificated or uncertificated, including, without
limitation, either the capital stock of TWA Stock Holding, Inc. or the interests
in Worldspan L.P., a Delaware limited partnership ("Worldspan") (at Purchaser's
option), (viii) all security entitlements, securities accounts, commodity
contracts and commodity accounts, (ix) any and all existing and assignable
manufacturer or vendor warranties, service life policies, customer support
agreements and similar items (or to the extent such items are not assignable,
subrogation rights to such items), (x) all proceeds and products of the
foregoing, and (xi) all books and records relating to the foregoing, in each
case of clauses (i) through (xi) above, together with all substitutions therefor
and all accessions, replacements and renewals thereof (collectively, the
"Transferred Assets"), free and clear of all Liens except Permitted Liens.
2.2 Excluded Assets. Notwithstanding anything contained in this Agreement
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to the contrary, the rights, properties and assets identified on Schedule 2.2
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hereto (collectively, the "Excluded Assets") shall not be included in the
Transferred Assets.
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ARTICLE III
ASSUMPTION OF LIABILITIES
3.1 Assumed Liabilities. As of the Closing, Purchaser shall assume and
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thereafter in due course pay and fully satisfy the following liabilities and
obligations of Seller (the "Assumed Liabilities") and no other liabilities or
obligations:
(a) all liabilities and obligations of any Seller arising from and
after the Closing pursuant to the terms of the indebtedness of Sellers listed on
Schedule 3.1(a) (the "Assumed Debt Obligations");
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(b) all liabilities and obligations of any Seller arising from and
after the Closing under any Assumed Contract (other than Retention Agreements,
which are addressed in Section 3.1(d) below);
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(c) all liabilities and obligations of any Seller arising at any time
under the indebtedness of Sellers listed on Schedule 3.1(c);
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(d) except as provided below, all liabilities and obligations of any
Seller under the Retention Agreements; provided, that, notwithstanding the
foregoing or any other provision in this Agreement to the contrary, (i)
Purchaser shall not assume any obligation under paragraph 4(d) of the Change in
Control Agreements of a Seller relating to nonrevenue air travel or paragraph
4(e) of the Change in Control Agreements relating to retirement benefits and
(ii) Purchaser's sole obligation with respect to life, disability, and accident
and health insurance benefits shall be to provide annual payments as
contemplated by paragraph 4(c) of the Change in Control Agreements;
(e) in order to retain directors of TWA, the liabilities and
obligations of TWA to provide the air travel benefits described on Schedule
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3.1(e) from and after the Closing; and
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(f) liabilities and obligations of TWA incurred as a result of a
violation by Purchaser of Section 8.16.
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Except as set forth above, Purchaser shall not assume or be liable for any other
obligations or liabilities of Sellers (including, without limitation, any cure
amounts payable to other parties to the Assumed Contracts).
3.2 Retained Liabilities. Notwithstanding anything contained in this
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Agreement to the contrary, Purchaser does not assume or agree to pay, satisfy,
discharge or perform, and shall not be deemed by virtue of the execution and
delivery of this Agreement or any document delivered at the Closing pursuant to
this Agreement, or as a result of the consummation of the transactions
contemplated by this Agreement, to have assumed, or to have agreed to pay,
satisfy, discharge or perform, any liability, obligation or indebtedness of any
Seller, whether primary or secondary, direct or indirect, other than the Assumed
Liabilities. Sellers shall retain and pay, satisfy, discharge and perform in
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accordance with the terms thereof, all liabilities and obligations other than
the Assumed Liabilities to the extent specifically provided in Section 3.1,
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including without limitation those set forth below (all such liabilities and
obligations retained by Seller being referred to herein as the "Retained
Liabilities"):
(a) all obligations or liabilities of Sellers or any predecessor(s) or
Affiliate(s) of Sellers that relate to any of the Excluded Assets;
(b) all obligations or liabilities of Sellers or any predecessor(s) or
Affiliate(s) of Sellers relating to Taxes with respect to the Transferred Assets
or otherwise, for all periods, or portions thereof, on or prior to the Closing
Date;
(c) all obligations or liabilities for any legal, accounting,
investment banking, brokerage or similar fees or expenses incurred by any Seller
in connection with, resulting from or attributable to the transactions
contemplated by this Agreement and the DIP Facility;
(d) liabilities and obligations for which Purchaser assumes no
obligation or liability as described in Section 3.1(d);
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(e) all obligations or liabilities for any borrowed money incurred by
any Seller or any predecessor(s) or Affiliate(s) of Sellers; and
(f) all liabilities and obligations of Sellers or any predecessor(s)
or Affiliate(s) of Sellers resulting from, caused by or arising out of, directly
or indirectly, the conduct of their respective businesses or ownership or lease
of any of their properties or assets or any properties or assets previously used
by any Seller at any time prior to or on the Closing Date, including without
limitation such of the foregoing (i) as constitute, may constitute or are
alleged to constitute a tort, breach of contract or violation of requirement of
any Law, or (ii) that relate to, result in or arise out of the existence or
imposition of any liability or obligation to remediate or contribute or
otherwise pay any amount under or in respect of any environmental, superfund or
other environmental cleanup or remedial Laws, occupational safety and health
Laws or other Laws.
ARTICLE IV
PURCHASE PRICE
4.1 Purchase Price. In consideration of the conveyance to Purchaser of
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each Seller's right, title and interest in and to the Transferred Assets and the
other rights granted to Purchaser pursuant hereto, and subject to the conditions
and in accordance with terms hereof, at Closing, Purchaser shall (i) assume the
Assumed Liabilities and (ii) pay TWA an aggregate of $500,000,000 in cash,
subject to adjustments as provided in Section 4.3 and Section 4.4 (the "Purchase
----------- -----------
Price") and any offsets to the Purchase Price pursuant to Section 4.7.
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4.2 Allocation of Purchase Price. Purchaser shall, within 120 days after
----------------------------
the Closing Date, prepare and deliver to TWA for its consent (which consent
shall not be unreasonably withheld) a schedule allocating the Purchase Price
among the Transferred Assets in accordance with Treasury Regulation 1.1060-1T
(or any comparable provisions of state or local tax law) or any successor
provision. If TWA raises objections, Purchaser and TWA will negotiate in good
faith to resolve such objections. Purchaser, TWA and each other Seller shall
report and file all Tax Returns (including amended Tax Returns and claims for
refund) consistent with the allocation, and shall take no position contrary
thereto or inconsistent therewith (including, without limitation, in any audits
or examinations by any taxing authority or any other proceedings). Purchaser,
TWA and each other Seller shall cooperate in the filing of any forms (including
Form 8594) with respect to such allocation, including any amendments to such
forms required with respect to any adjustment to the Purchase Price, pursuant to
this Agreement. If and to the extent the parties are unable to agree on such
allocation, each shall be free to make its own allocation for tax purposes.
Notwithstanding any other provisions of this Agreement, the foregoing agreement
shall survive the Closing Date without limitation.
4.3 Working Capital Adjustment.
--------------------------
(a) Prior to Closing, Purchaser shall prepare and deliver to TWA in
accordance with Section 13.1 an estimated statement of certain working capital
------------
accounts of TWA as of the Closing Date in the format of Schedule 4.3(a) hereto
---------------
(the "Pre-Closing Statement"). The Pre-Closing Statement shall be prepared by
Purchaser in good faith on a basis consistent in all material respects with the
methods, principles, practices and policies employed in the preparation and
presentation of the consolidated balance sheet of TWA and its subsidiaries as of
September 30, 2000 as included in TWA's quarterly report on Form 10-Q for the
quarter ended September 30, 2000, as filed with the Securities and Exchange
Commission (the "September Balance Sheet"), and in accordance with generally
accepted accounting principles consistently applied (without regard to
consummation of the transactions contemplated by this Agreement).
(b) Based on the Pre-Closing Statement, the Purchase Price shall be
adjusted immediately prior to Closing as follows:
(i) the Purchase Price shall be (A) increased by 100% of the
amount, if any, by which the Accounts Receivable Amount is greater than
$245,732,000 or (B) decreased by 100% of the amount, if any, by which the
Accounts Receivable Amount is less than $245,732,000;
(ii) the Purchase Price shall be (A) increased by 50% of the
amount, if any, by which the Spare Parts Amount is greater than
$106,333,000 or (B) decreased by 50% of the amount, if any, by which the
Spare Parts Amount is less than $106,333,000;
(iii) the Purchase Price shall be (A) increased by 100% of the
amount, if any, by which the Advance Ticket Sales Amount is less than
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$304,647,000 or (B) decreased by 100% of the amount, if any, by which the
Advance Ticket Sales Amount is greater than $304,647,000; and
(iv) the Purchase Price shall be (A) increased by 100% of the
amount, if any, by which the Accrued Employee Expenses Amount is less than
$122,288,000 or (B) decreased by 100% of the amount, if any, by which the
Accrued Employee Expenses Amount is greater than $122,288,000.
(c) Within 20 Business Days after Closing, Purchaser shall prepare and
deliver to TWA in accordance with Section 13.1 a statement of certain working
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capital accounts of TWA as of the Closing Date in the format of Schedule 4.3(a)
---------------
hereto (the "Closing Statement"). The Closing Statement shall be prepared by
Purchaser in good faith on a basis consistent in all material respects with the
methods, principles, practices and policies employed in the preparation and
presentation of the September Balance Sheet, and in accordance with generally
accepted accounting principles consistently applied (without regard to
consummation of the transactions contemplated by this Agreement).
(d) After receipt of the Closing Statement, TWA shall have 10 Business
Days to review it together with the work papers used in the preparation thereof.
Unless TWA delivers written notice to Purchaser on or prior to the 10th Business
Day after TWA's receipt of the Closing Statement stating that it has objections
thereto, TWA shall be deemed to have accepted and agreed to the Closing
Statement. TWA shall not object to any method, principle, practice or policy
employed in the preparation of the Closing Statement if such method, principle,
practice or policy is consistent in all material respects with that employed in
the preparation and presentation of the September Balance Sheet. If, however,
TWA notifies Purchaser of objections to the Closing Statement on or prior to the
10th Business Day after TWA's receipt of the Closing Statement, the parties
shall in good faith attempt to resolve, within 10 Business Days (or such longer
period as the parties may agree in writing) following such notice (the
"Resolution Period"), their differences with respect to such objections and any
resolution by them as to any disputed amounts shall be final, binding and
conclusive.
(e) Amounts relating to any working capital account set forth in the
Closing Statement remaining in dispute at the conclusion of the Resolution
Period shall be promptly submitted to the Bankruptcy Court for determination.
(f) Once the Closing Statement has been finalized in accordance with
this Section 4.3 (as so finalized, the "Final Closing Statement"), the Purchase
-----------
Price (without giving effect to the adjustment provided by Section 4.3(b)) shall
--------------
be adjusted as follows:
(i) the Purchase Price shall be (A) increased by 100% of the
amount, if any, by which the Accounts Receivable Amount is greater than
$245,732,000 or (B) decreased by 100% of the amount, if any, by which the
Accounts Receivable Amount is less than $245,732,000;
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(ii) the Purchase Price shall be (A) increased by 50% of the
amount, if any, by which the Spare Parts Amount is greater than
$106,333,000 or (B) decreased by 50% of the amount, if any, by which the
Spare Parts Amount is less than $106,333,000;
(iii) the Purchase Price shall be (A) increased by 100% of the
amount, if any, by which the Advance Ticket Sales Amount is less than
$304,647,000 or (B) decreased by 100% of the amount, if any, by which the
Advance Ticket Sales Amount is greater than $304,647,000; and
(iv) the Purchase Price shall be (A) increased by 100% of the
amount, if any, by which the Accrued Employee Expenses Amount is less than
$122,288,000 or (B) decreased by 100% of the amount, if any, by which the
Accrued Employee Expenses Amount is greater than $122,288,000.
(g) If the Purchase Price as adjusted pursuant to Section 4.3(f) is
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less than the Purchase Price as adjusted pursuant to Section 4.3(b), TWA shall
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promptly pay Purchaser an amount of cash equal to the difference obtained by
subtracting the Purchase Price as adjusted pursuant to Section 4.3(f) from the
--------------
Purchase Price as adjusted pursuant to Section 4.3(b). If the Purchase Price as
--------------
adjusted pursuant to Section 4.3(f) is greater than the Purchase Price as
--------------
adjusted pursuant to Section 4.3(b), Purchaser shall promptly pay TWA an amount
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of cash equal to the difference obtained by subtracting the Purchase Price as
adjusted pursuant to Section 4.3(b) from the Purchase Price as adjusted pursuant
--------------
to Section 4.3(f).
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(h) During the preparation of the Pre-Closing Statement and Closing
Statement and the period of any review or dispute within the contemplation of
this Section 4.3, TWA shall, and shall cause the other Sellers and all
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representatives of the Sellers (including, without limitation, TWA's auditors)
to, (i) provide Purchaser and its authorized representatives with full access at
all reasonable times, and in a manner so as not to interfere unreasonably with
the normal business operations of TWA and the other Sellers, to all relevant
books, records, work papers, information and employees of such Persons, and (ii)
cooperate fully with the Purchaser and its authorized representatives, in each
case (i) and (ii), as necessary or useful for the preparation, calculation and
review of the Pre-Closing Statement and Closing Statement or for the
contemplated resolution of any dispute between the parties relating thereto.
(i) Notwithstanding anything in this Section 4.3 to the contrary, no
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adjustment to the Purchase Price shall be made unless and until the aggregate
adjustment to the Purchase Price that would otherwise be required by this
Section 4.3 shall equal or exceed $5,000,000, in which case the full amount of
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such adjustment shall be made to the Purchase Price pursuant to this Section 4.3
-----------
without regard to this paragraph (i).
4.4 Other Adjustments to Purchase Price.
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(a) In the event that, as a result of the operation of Section 11.1 or
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upon mutual agreement of the parties, any Transferred Asset that would be
otherwise
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purchased at the Closing is not purchased at the Closing (or in the event that
any tangible Transferred Asset has been damaged as described in Section 11.1,
------------
but such damage has not been fully repaired), then the Purchase Price shall be
reduced by the portion of the Purchase Price allocable to such Transferred Asset
in a manner consistent with Schedule 4.4 (or, in the case of such damaged asset,
------------
by the amount necessary to fully repair such damaged asset) except as otherwise
set forth in paragraphs (b), (c), (d) and (e) below.
(b) With respect to each Owned Aircraft, the portion of the Purchase
Price allocated to each such item (and accordingly, the Purchase Price as a
whole) shall be adjusted as follows:
(i) reduced by the amount such Owned Aircraft has depreciated,
determined as set forth on Schedule 4.4, from the date of this Agreement
------------
until the date of delivery of such Owned Aircraft;
(ii) if any Owned Aircraft is not in Delivery Condition as of the
Closing Date, reduced by an amount equal to the product obtained by
multiplying the number of Owned Aircraft that are not in Delivery Condition
as of the Closing Date by $50,000; and
(iii) for each Owned Aircraft that is not to be transferred to
Purchaser at the Closing for any reason, reduced by an amount consistent
with the allocations as set forth on Schedule 4.4.
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(c) With respect to each Leased Aircraft, the portion of the Purchase
Price allocated to each such item (and accordingly, the Purchase Price as a
whole) shall be adjusted as follows:
(i) if any Leased Aircraft is not in Delivery Condition as of the
Closing Date, reduced by an amount equal to the product obtained by
multiplying the number of Leased Aircraft that are not in Delivery
Condition as of the Closing Date by $50,000; and
(ii) for each Leased Aircraft that is not to be transferred to
Purchaser at the Closing for any reason, reduced by an amount consistent
with the allocations as set forth on Schedule 4.4.
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(d) With respect to any Slot, Gate, Gate Lease, Ground Equipment,
Ground Equipment Lease, Gate Property, Gate Property Lease, Engine, Spare Part
or any other Transferred Asset that is not to be transferred to Purchaser at the
Closing for any reason, the portion of the Purchase Price allocated to each such
item (and accordingly, the Purchase Price as a whole) shall be reduced by an
amount consistent with the allocations as set forth on Schedule 4.4 or as
------------
mutually agreed by the parties hereto if not specifically included thereon.
(e) With respect to each Designated Aircraft Lease and Designated Gate
Lease, all fees, costs, penalties and expenses incurred by Seller as a result of
a
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breach by Purchaser of Section 8.16 shall be reimbursed by Purchaser to Seller
------------
and the Purchase Price shall be increased by such amount.
4.5 Prorations. TWA shall bear all personal property and ad valorem tax
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liability with respect to the Transferred Assets if the lien or assessment date
arises prior to the Closing Date irrespective of the reporting and payment dates
of such taxes. All other property taxes, ad valorem taxes and similar recurring
taxes and fees on the Transferred Assets, and all lease payments or similar
recurring payments under lease agreements that are Assumed Contracts, shall be
pro rated between Purchaser and the applicable Seller as of 12:01 a.m. local
time on the Closing Date. All payments to be made by Purchaser or any Seller in
accordance with this Section 4.5 shall be made, to the extent then determinable,
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at the Closing with such payments deposited into escrow until due, or, to the
extent not determinable as of the Closing, promptly following the determination
thereof, with such payments deposited into escrow until due. Purchaser shall
have the right of reasonable review and approval of TWA's property tax returns
and assessments and the right to contest any assessment for which Purchaser
bears any economic responsibility. TWA shall reasonably cooperate with
Purchaser to advance any contest.
4.6 Transfer Taxes. Any sales, use, transfer, recording or similar taxes
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due as a result of the transactions provided for herein shall be paid (i) with
respect to real property, pro rata by Sellers and Purchaser based on the
relative value of real property transferred to Purchaser pursuant to this
Agreement and (ii) with respect to personal property, by Sellers.
Notwithstanding the foregoing, the Approval Order shall contain a provision that
the Sellers' sale, transfer, assignment and conveyance of the Transferred Assets
to Purchaser hereunder shall be entitled to the protections afforded under
Section 1146(c) of the Bankruptcy Code. The parties will reasonably cooperate
to minimize any such taxes, including with respect to delivery location.
4.7 Offsets to Purchase Price. The Purchase Price payable by Purchaser to
-------------------------
Sellers at the Closing shall be offset by crediting Purchaser with the following
amounts (collectively, the "Purchase Price Offset Amount"):
(a) total principal, interest, fees and other amounts outstanding
under the DIP Facility as of the Closing Date;
(b) TWA's payment obligation to Purchaser under Section 8.6; and
-----------
(c) all other amounts owed by Sellers to Purchaser under this
Agreement that are unpaid and outstanding as of the Closing Date.
ARTICLE V
CLOSING
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5.1 Closing. The consummation of the purchase of each Seller's right,
-------
title and interest in and to the Transferred Assets contemplated hereby (the
"Closing") shall
9
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take place at the offices of Weil, Gotshal & Manges LLP, 100 Crescent Court,
Suite 1300, Dallas, Texas subject to the satisfaction or waiver of the
conditions set forth in Section 5.4 and Section 5.5, as soon as practicable
----------- -----------
after the date hereof and in any event not later than the Scheduled Closing
Date, or at such other time and place and on such other date as Purchaser and
TWA shall agree (the "Closing Date").
5.2 Deliveries at Closing. At the Closing:
---------------------
(a) TWA shall deliver, or cause each Seller to deliver, as applicable,
to Purchaser the items described in clauses (i) through (vi) below, to the
extent applicable with respect to the Closing:
(i) a general bill of sale and assignment, in form and substance
reasonably satisfactory to Purchaser (the "Bill of Sale"), with respect to
the Transferred Assets to be conveyed by such Seller at the Closing and any
other documents reasonably requested by Purchaser so as to convey to
Purchaser good title, free and clear of all Liens (other than Permitted
Liens), to all of each Seller's right, title and interest in and to the
Transferred Assets to be conveyed at the Closing (other than Owned Aircraft
and Engines), each executed by each applicable Seller;
(ii) instruments of conveyance or consents to assignment for the
assignment of the Slots and Routes, in form and substance reasonably
satisfactory to Purchaser, executed by each applicable Seller;
(iii) for each Owned Aircraft and Engine being conveyed at the
Closing, a full warranty (as to title) and a FAA bill of sale, each in form
and substance reasonably satisfactory to Purchaser, executed by each
applicable Seller;
(iv) the warranty deeds, title insurance policies, surveys and
tax withholding affidavits satisfying Section 1445(b)(2) of the Code, each
in form and substance reasonably satisfactory to Purchaser, with respect to
any Owned Real Estate transferred by any Seller;
(v) the officers' certificates referenced in Section 5.4(c); and
--------------
(vi) all other documents, certificates, instruments or writings
reasonably requested by Purchaser in connection herewith.
(b) Purchaser shall deliver to TWA, to the extent applicable with
respect to the Closing, the items described in clauses (i) through (iv) below:
(i) the Purchase Price set forth on the Pre-Closing Statement
(less the Purchase Price Offset Amount) by wire transfer of immediately
available funds to the account or accounts designated by TWA no later than
two Business Days prior to the Closing;
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(ii) an assumption agreement pursuant to which Purchaser assumes
at the Closing the Assumed Liabilities being assigned at the Closing, in
form and substance reasonably satisfactory to TWA (the "Assumption
Agreement"), executed by Purchaser;
(iii) the officer's certificate referenced in Section 5.5(c); and
--------------
(iv) all other documents, certificates, instruments or writings
reasonably requested by TWA in connection herewith.
5.3 Delivery of Transferred Assets. At Closing, TWA shall, and shall
------------------------------
cause each other Seller to, place Purchaser in full possession and control of
the Transferred Assets being acquired at the Closing. Each Owned Aircraft and
Leased Aircraft shall be delivered to Purchaser, on the Closing Date, with such
delivery being made to locations specified by Purchaser in its reasonable
discretion and at the reasonable cost of the applicable Seller and with the risk
of loss remaining with the applicable Seller until delivery has been made.
Purchaser shall use its commercially reasonable efforts to cause such deliveries
to be made in connection with Sellers' regularly scheduled service.
5.4 Conditions Precedent to Obligations of Purchaser. The obligations of
------------------------------------------------
Purchaser under this Agreement to consummate the transactions contemplated
hereby to be consummated at the Closing shall be subject to the satisfaction, at
or prior to the Closing, of all of the following conditions, any one or more of
which may be waived in writing at the option of Purchaser:
(a) All representations and warranties of Sellers in this Agreement or
in any exhibit, schedule or document delivered pursuant hereto shall be true and
complete in all respects (with respect to representations and warranties
qualified or limited by materiality or Material Adverse Effect) or in all
material respects (with respect to representations and warranties not so
qualified or limited), in each case when made and on and as of the Closing Date
as if made on and as of that date (other than any such representations or
warranties that expressly speak only as of an earlier date); provided, that this
condition shall be deemed satisfied if any inaccuracies in any of such
representations and warranties at and as of the applicable date (without giving
effect to any materiality or Material Adverse Effect qualifications or
exceptions contained therein) would not, individually or in the aggregate, have
or reasonably be expected to have a Material Adverse Effect.
(b) All of the terms, covenants and conditions to be complied with and
performed by Sellers on or prior to the Closing Date shall have been complied
with or performed in all material respects.
(c) Purchaser shall have received a certificate or certificates, dated
as of the Closing Date, executed on behalf of Sellers, each by an authorized
executive officer thereof, certifying in such detail as Purchaser may reasonably
request that the conditions specified in Section 5.4(a) and Section 5.4(b)
--------------- --------------
hereof have been fulfilled.
11
<PAGE>
(d) The waiting period under the HSR Act or any other applicable
competition, merger, control, antitrust Law or similar Law shall have expired or
terminated, and the FAA, DOT and any other Governmental Authorities whose
consent is required for consummation of the transactions contemplated hereby
(including without limitation the applicable regulatory body of the European
Union) shall have issued all approvals required for the transactions
contemplated hereby, and no condition or requirement unacceptable to Purchaser
in its sole discretion shall be imposed on or required of Purchaser or any of
its Affiliates as a result of or as a condition to any of the foregoing.
(e) All Consents described on Schedule 6.11 shall have been obtained
-------------
(without any limitation, restriction or condition not otherwise applicable to
the applicable Seller being imposed on Purchaser or its ownership or use of any
Transferred Assets).
(f) No action, suit or proceeding (including, without limitation, any
proceeding over which the Bankruptcy Court has jurisdiction under 28 U.S.C. (S)
157(b) and (c)) shall be pending or overtly threatened by or before any
Governmental Authority or pending or overtly threatened by any other party to
enjoin, restrain, prohibit or obtain substantial damages or significant
equitable relief in respect of or related to any of the transactions
contemplated by this Agreement, or that would be reasonably likely to prevent or
make illegal the consummation of any transactions contemplated by this Agreement
or that, if adversely determined, could be materially adverse to the operation
or use of the Transferred Assets, and any such actions, suits or proceedings
that have theretofore been brought and determined shall have become Final
Orders.
(g) There shall not be in effect any Law of any Governmental Authority of
competent jurisdiction restraining, enjoining or otherwise preventing
consummation of the transactions contemplated by this Agreement.
(h) No loss of or damage to any Transferred Asset(s) shall have occurred
since the date hereof, except for (i) damage that has already been fully
repaired, (ii) losses that have been replaced with assets of comparable or
higher quality with the reasonable approval of Purchaser and (iii) other damage
or losses that, in the aggregate, would not involve more than $5,000,000 of
repair and/or replacement expenditures.
(i) No loss or modification of or limitation on any Assumed Contract shall
have occurred since the date hereof without the written consent of Purchaser in
its sole discretion, including without limitation any forfeiture, expiration
without renewal, termination or other loss thereof.
(j) No loss of or limitation on any Route shall have occurred since the
date hereof without the written consent of Purchaser in its sole discretion,
including without limitation any forfeiture, expiration without renewal,
termination or other loss thereof.
(k) No Slot shall have been withdrawn by the FAA or designated for
withdrawal by the FAA for any reason whatsoever (except those that have been
reinstated
12
<PAGE>
as of the Closing and those relinquished with the written consent of Purchaser
in its sole discretion) and Sellers' right or license to use any Slot shall have
not expired without renewal or have been terminated or revoked by the FAA for
any reason whatsoever (except those that have been reinstated as of the Closing,
those relinquished with the written consent of Purchaser in its sole discretion
and those under leases that have expired by their terms) and no Law shall have
been enacted, adopted, modified, amended or repealed, the effect of which is to
prevent the transfer of any Slot or materially limit or prohibit the use by
Purchaser of any Slot.
(l) The Approval Order and the Sale Procedures Order shall have been
entered, shall be in form and substance reasonably satisfactory to Purchaser,
and shall have each become a Final Order, and the Approval Order, the Sale
Procedures Order and any other orders of the Bankruptcy Court with respect to
this Agreement and the DIP Facility shall be in form and substance reasonably
satisfactory to Purchaser.
(m) All Assumed Contracts shall have been renegotiated (and any
documents required therefor executed) with the applicable lessor, lenders or
other applicable third parties, respectively, on financial and other terms no
less favorable than those currently enjoyed or obtainable by Purchaser in
comparable transactions.
(n) All Phase I environmental assessments and additional nonintrusive
due diligence on Real Estate Assets conducted by or on behalf of Purchaser shall
have been completed with results reasonably satisfactory to Purchaser in its
sole discretion that no material expenditures shall be required to remediate or
otherwise cure any actual or potential Environmental Claim.
(o) The CBA Amendments, in form and substance reasonably acceptable to
Purchaser in its sole discretion, shall have been obtained.
(p) The Rights Plan Amendment, if required by Purchaser, in form and
substance reasonably acceptable to Purchaser, shall have been obtained and shall
be in full force and effect.
(q) No event, events or circumstance shall have occurred since the
date of this Agreement which, independently or together with any other event,
events or circumstance that have occurred or are reasonably likely to occur,
have or are reasonably likely to have a Material Adverse Effect.
(r) A Final Order shall have been entered rejecting all discounted,
bulk-sale or similar ticketing agreements or arrangements between TWA and any
other party.
5.5 Conditions Precedent to Obligations of TWA. The obligations of TWA
------------------------------------------
and each other Seller under this Agreement to consummate the transactions
contemplated hereby to be consummated at the Closing shall be subject to the
satisfaction, at or prior to the Closing, of all the following conditions, any
one or more of which may be waived in writing at the option of TWA:
13
<PAGE>
(a) All representations and warranties of Purchaser made in this
Agreement or in any exhibit, schedule or document delivered pursuant hereto
shall be true and complete in all respects (with respect to representations and
warranties qualified or limited by materiality) or in all material respects
(with respect to representations and warranties not so qualified or limited), in
each case when made and as of the Closing Date as if made on and as of that date
(other than such representations or warranties that expressly speak only as of
an earlier date); provided, that this condition shall be deemed satisfied if any
inaccuracies in any of such representations and warranties at and as of the
applicable date (without giving effect to any materiality qualifications or
exceptions contained therein) would not, individually or in the aggregate, have
or reasonably be expected to have a Purchaser Material Adverse Effect.
(b) All of the terms, covenants and conditions to be complied with and
performed by Purchaser on or prior to the Closing Date shall have been complied
with or performed in all material respects.
(c) TWA shall have received a certificate, dated as of the Closing
Date, executed on behalf of Purchaser by an authorized executive officer
thereof, certifying in such detail as Seller may reasonably request that the
conditions specified in Section 5.5(a) and Section 5.5(b) have been fulfilled.
-------------- --------------
(d) The waiting period under the HSR Act or any other applicable
competition, merger, control, antitrust Law or similar Law shall have expired or
terminated, and the FAA, DOT and any other Governmental Authorities whose
consent is required for consummation of the transactions contemplated hereby
(including without limitation the applicable regulatory body of the European
Union) shall have issued all approvals required for the transactions
contemplated hereby.
(e) There shall not be in effect any Law of any Governmental Authority
of competent jurisdiction restraining, enjoining or otherwise preventing
consummation of the transactions contemplated by this Agreement.
(f) The Approval Order shall have been entered.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF SELLERS
Subject to any exceptions set forth in the Schedule of Exceptions delivered
by TWA pursuant to Section 1.2 (whether or not an express reference is made in
-----------
this Article VI to such Schedule of Exceptions), TWA makes the following
representations and warranties to Purchaser with respect to itself and each
other Seller, as applicable, each of which shall be true and correct as of the
date hereof and as of the Closing Date (except to the extent expressly relating
to a specific date, in which event it shall be true and correct as of such date)
and shall be unaffected by any investigation heretofore or hereafter made by or
on behalf of Purchaser.
14
<PAGE>
6.1 Organization and Good Standing. Each Seller is a corporation or other
------------------------------
entity duly organized and validly existing and in good standing under the laws
of its respective jurisdiction of organization and has the requisite corporate
or other organizational power and authority to own, lease or otherwise hold its
properties and assets and carry on its business as presently conducted. Each
Seller is qualified or licensed to do business as a foreign corporation and is
in good standing in every jurisdiction where the nature of the business
conducted by it or the properties owned or leased by it requires qualification,
except where the failure to be so qualified, licensed or in good standing would
not reasonably be expected to have a Material Adverse Effect.
6.2 Authorization and Effect of Agreement. TWA has the requisite
-------------------------------------
corporate power and authority (a) to execute and to deliver this Agreement and
the Collateral Agreements to which it will be a party and (b) in the event the
Sale Procedures Order and the Approval Order are entered by the Bankruptcy
Court, to perform its obligations hereunder and under any such Collateral
Agreements. The execution and delivery by each Seller of the Collateral
Agreements to which it will be a party have been (or will be at the time of
execution thereof) duly authorized by all necessary corporate or other
organizational action on the part of such Seller. The execution and delivery of
this Agreement and the Collateral Agreements by TWA, and subject to clause (b)
above, the performance by TWA of its obligations hereunder and thereunder and
the consummation by TWA of the transactions contemplated hereby and thereby,
have been duly authorized by its Board of Directors and no other corporate
action on the part of TWA is necessary to authorize the execution and delivery
of this Agreement, the Collateral Agreements or the consummation of the
transactions contemplated hereby or thereby. The execution and delivery by each
Seller of the Collateral Agreements to which it will be a party have been (or
will be at the time of execution thereof) duly authorized by all necessary
corporate or other organizational action on the part of such Seller. This
Agreement has been duly and validly executed and delivered by TWA and
constitutes a valid and binding obligation of TWA, enforceable against TWA in
accordance with its terms, subject (a) to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally, including, without limitation, for
purposes of the representation and warranty being made as of the Closing Date,
the discretion of the Bankruptcy Court for so long as the Bankruptcy Court
retains jurisdiction over the Chapter 11 Cases, and (b) as to enforceability, to
general principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity), and (c) for purposes of the representation and
warranty being made as of the date hereof (but not for purposes of the
representation and warranty being made as of the Closing Date), to the
commencement of the Chapter 11 Cases, competing offers as described in Section
-------
8.11(a), and entry of the Approval Order. Each of the Collateral Agreements,
------
when executed and delivered by TWA or any Seller, as applicable, at the Closing,
shall constitute a valid and binding agreement of TWA or such Seller,
enforceable against TWA or such Seller in accordance with its terms, subject (a)
to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally,
including, without limitation, the discretion of the Bankruptcy Court for so
long as the Bankruptcy Court
15
<PAGE>
retains jurisdiction over the Chapter 11 Cases, (b) as to enforceability, to
general principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
6.3 No Conflicts. The execution and delivery by TWA of this Agreement and
------------
any Collateral Agreements to which it will be a party and the execution and
delivery by each other Seller of each Collateral Agreement to which it will be a
party do not and will not, as applicable, and, in the event TWA commences a
Chapter 11 Case and the Approval Order is entered by the Bankruptcy Court, the
performance by each Seller of the transactions contemplated by this Agreement or
such Collateral Agreements, as applicable, will not, (a) conflict with, or
result in any violation of, or constitute a default under (except as a result of
the Chapter 11 Cases), or, as applicable, give rise to the creation of a Lien
upon any of the Transferred Assets or to a right of termination, cancellation or
acceleration of any obligation or to a loss of a benefit under, (i) any
provision of the certificate of incorporation or bylaws or other applicable
constituent documents of any Seller, (ii) and except for consents required to
assign certain Assumed Contracts as described on Schedule 6.11 hereto, any of
-------------
the terms, conditions or provisions of any Contract by which any Seller is
bound, (iii) any Law applicable to or binding on any Seller or any of its
respective assets, (b) affect the ability of Purchaser to own, use or operate
the Transferred Assets following the Closing in substantially the same manner as
the Transferred Assets are presently owned, used or operated by any Seller, (c)
create any Lien on or any right of any third party to purchase, use or operate
any of the Transferred Assets or (d) accelerate or trigger any right or
obligation of any party under any Assumed Contract.
6.4 No Third Party Options. Except as set forth in Schedule 6.4, there
---------------------- ------------
are no existing agreements, options or commitments granting to any Person the
right to acquire any Seller's right, title or interest in or to any of the
Transferred Assets or any interest therein.
6.5 Data. All Data are true and correct in all material respects (other
----
than FAA maintenance records, which are true and correct in all respects) and
are accurately extracted from the books and records of Sellers.
6.6 Consents and Approvals. Other than in connection with the
----------------------
commencement of the Chapter 11 Cases, entry of the Sale Procedures Order, entry
of the Approval Order and as set forth on Schedule 6.6, the execution and
------------
delivery by Sellers of this Agreement and any Collateral Agreements to which it
will be a party does not and will not, and the consummation by Sellers of the
transactions contemplated hereby and thereby will not, require any Consent,
except (i) as disclosed on Schedule 6.11, (ii) for compliance with the HSR Act,
-------------
(iii) as required by the FAA, (iv) as required by the DOT and (v) as required by
the European Union.
6.7 Permits; Compliance with Law. Schedule 6.7 sets forth a true, correct
---------------------------- ------------
and complete list of all Permits. Sellers possess all Permits necessary for the
operation and ownership of the Transferred Assets. All Permits issued to any
Seller are in full force
16
<PAGE>
and effect. No outstanding violations are or have been recorded in respect of
any of the Permits. The use and operation by any Seller of the Transferred
Assets and the conduct of its business comply with all Laws and the requirements
and conditions of all Permits, including without limitation all applicable
operating certificates and authorities, common carrier obligations,
airworthiness directives, and all other rules, regulations, directives and
policies of the FAA, DOT and all other Governmental Authorities having
jurisdiction over the Transferred Assets and the business conducted by Sellers.
No proceeding is pending or, to TWA's knowledge, threatened to revoke, withdraw
or limit any such Permit, and there is no fact, error or admission relevant to
any Permit that would permit the violation of or revocation, withdrawal or
limitation or result in the threatened violation of or revocation, withdrawal or
limitation of any such Permit. Except as set forth on Schedule 6.7, on or
------------
immediately after the Closing, each Permit will continue in full force and
effect and accrue to the benefit of Purchaser without any consent, approval or
modification required by or from any Governmental Authority.
6.8 Litigation. There are no judicial or administrative actions,
----------
proceedings or investigations pending or, to TWA's knowledge, threatened that
question the validity of this Agreement or any action taken or to be taken by
any Seller in connection with this Agreement. Other than the Chapter 11 Cases,
there are no lawsuits, claims, administrative or other proceedings or
investigations relating to the ownership or use of the Transferred Assets or
conduct of business by Sellers or otherwise affecting the Transferred Assets
pending, or, to TWA's knowledge, threatened against any Seller. Other than
pursuant to the Chapter 11 Cases, there are no judgments, orders or decrees of
any Governmental Authority binding on any Seller that relate to the Transferred
Assets or otherwise affect the Transferred Assets.
6.9 Title to and Condition of Assets. The applicable Seller has, and at
--------------------------------
the Closing, such Seller shall convey to Purchaser, good, valid and indefeasible
title to the Transferred Assets (other than the Leased Assets), free and clear
of all Liens other than Permitted Liens. With respect to any Leased Assets, the
applicable Seller has a valid leasehold interest therein for the term specified
in Schedule 6.12(b) and Schedule 6.16(a). The Transferred Assets constituting
---------------- ----------------
tangible property, taken as a whole, are in good operating condition and repair,
subject to normal wear, are usable in the regular and ordinary course of
business and conform in all material respects to applicable Laws.
6.10 U.S. Citizen; Air Carrier. TWA and each other Seller is a "citizen of
-------------------------
the United States" as defined in the Federal Aviation Act and is an "air
carrier" within the meaning of such Act operating under certificates issued
pursuant to such Act (49 U.S.C. (S)(S) 41101-41112).
6.11 Assumed Contracts. The Assumed Contracts are valid and enforceable in
-----------------
accordance with their terms, subject to applicable bankruptcy, reorganization,
moratorium, and similar laws affecting creditors' rights and remedies generally
and subject, as to enforceability, to general principles of equity. No Seller
is, and to TWA's knowledge, no other party thereto is, in material default in
the performance, observance or fulfillment of any obligation under any Assumed
Contract (other than payments or
17
<PAGE>
amounts due thereunder, which shall be paid or discharged by TWA at or prior to
the Closing), and, to TWA's knowledge, no event has occurred, which with or
without the giving of notice or lapse of time, or both, would constitute a
material default thereunder. Other than in connection with the commencement of
the Chapter 11 Cases, entry of the Sale Procedures Order, entry of the Approval
Order and as set forth on Schedule 6.11 hereto, none of the Assumed Contracts
requires the consent of any party to its assignment in connection with the
transactions contemplated hereby. True and complete copies of all Assumed
Contracts have been delivered to Purchaser.
6.12 Aircraft; Engines and Spare Parts.
---------------------------------
(a) Schedule 6.12(a) sets forth a true, correct and complete list of
---------------
all aircraft owned by any Seller (other than aircraft listed on Schedule 2.2)
------------
(collectively, "Owned Aircraft"), including identification of which Seller owns
such aircraft, a description of the type and aircraft number of each such
aircraft, the date the applicable Seller placed such aircraft in service or
proposes to place such aircraft in service, and a notation as to whether the
aircraft (i) complies with Stage 3 noise level requirements of the Airport Noise
and Capacity Act of 1990; and (ii) requires refitting or repair to bring it into
compliance with any outstanding FAA aircraft requirements mandated by certain
airworthiness directives promulgated by the FAA.
(b) Schedule 6.12(b) sets forth a true, correct and complete list of
---------------
all lease, sublease or other agreements (including without limitation by means
of one or more capital leases) pursuant to which any Seller operates aircraft
(other than aircraft leases listed on Schedule 2.2) (collectively, "Aircraft
------------
Leases"), including identification of which Seller leases such aircraft, a
description of the type and aircraft number of each such aircraft, the date the
applicable Seller placed such aircraft in service or proposes to place such
aircraft in service, the lease expiration date of such aircraft, and a notation
as to whether the aircraft (i) complies with Stage 3 noise level requirements of
the Airport Noise and Capacity Act of 1990 and (ii) requires refitting or repair
to bring it into compliance with any outstanding FAA aircraft requirements
mandated by certain airworthiness directives promulgated by the FAA.
(c) Each Owned Aircraft and aircraft subject to Aircraft Leases
("Leased Aircraft") has at the date hereof the number of flight hours and
calendar time indicated on Schedule 6.12(c) remaining prior to its next "C" or
----------------
"D" check.
(d) Except as set forth in Schedule 6.12(d), each Owned Aircraft and
----------------
Leased Aircraft is in Delivery Condition and has a validly issued, current
individual aircraft FAA Certificate of Airworthiness with respect to such
aircraft which satisfies all requirements for the effectiveness of such FAA
Certificate of Airworthiness.
(e) Each Owned Aircraft and Leased Aircraft complies with the aircraft
records requirements of the Federal Aviation Act.
(f) Each Owned Aircraft's and Leased Aircraft's structure, systems and
components are functioning in accordance with its intended use as set forth in
FAA-
18
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approved documentation, including any applicable manuals, technical standard
orders or parts manufacturing approval certificates.
(g) Other than in the ordinary course of business consistent with past
practice and except as set forth on Schedule 6.12(g), no deferred or carryover
----------------
maintenance items exist with respect to any Owned Aircraft and Leased Aircraft
and all temporary repairs to each such aircraft have been made permanent.
(h) Each Owned Aircraft and Leased Aircraft is properly registered on
the FAA aircraft registry.
(i) Except as set forth on Schedule 6.12(i), no Seller is a party to
----------------
any interchange or pooling agreements with respect to its Owned Aircraft and
Leased Aircraft, Engines or Spare Parts.
(j) Each Seller has maintained Owned Aircraft and Leased Aircraft in
compliance in all material respects with all applicable statutes and regulations
as in effect from time to time and in accordance with such Seller's standard
maintenance procedures approved by applicable Government Authorities.
(k) Except as set forth in Schedule 6.12(d), each Seller has
----------------
maintained, inspected, serviced, repaired, overhauled and tested (or caused to
be maintained, inspected, serviced, repaired, overhauled and tested) the Owned
Aircraft, Leased Aircraft and Engines (including spare Engines) so as to keep
such items (i) in Delivery Condition and in as good operating condition as when
delivered to such Seller, ordinary wear and tear excepted, and within the
acceptable limits of performance provided in the applicable manufacturer's
maintenance manuals and service bulletins, all in accordance with standards that
are approved by the FAA, (ii) in conformity with the applicable operating
manual, instructions and mandatory service bulletins and all airworthiness
directives issued by the FAA and any other Governmental Authority having
jurisdiction over such aircraft, (iii) in such condition that such aircraft,
including each engine installed thereon, complies with the FAA type certificate
(as in effect form time to time) issued to the manufacturer of such aircraft or
such engine, and (iv) in such a condition as is necessary to enable the
applicable airworthiness certification for each such aircraft and engine to be
maintained in good standing, valid and current, at all times (other than
temporary periods of storage in accordance with applicable regulations) under
the Federal Aviation Act and all regulations issued pursuant thereto.
(l) Each Seller has maintained or caused to be maintained all records,
logs and other materials required to be maintained in respect of the Owned
Aircraft and Leased Aircraft, Engines and Spare Parts by the FAA and any other
applicable Governmental Authority, including all historical maintenance records
and other data with respect to such aircraft and Engines in a manner such that
there are no missing pieces of material information from the earliest date
required by applicable Law (including without limitation the Federal Aviation
Act and FAA directives) with respect to each such aircraft or Engine.
19
<PAGE>
(m) No Seller has maintained, used or operated any Owned Aircraft and
Leased Aircraft in violation, in any material respect, of any law or any rule,
regulation or order of any Governmental Authority having jurisdiction over such
aircraft or in violation of any airworthiness certificate, license or
registration relating to any such aircraft.
(n) Each Seller has complied with all issued and effective mandatory
manufacturer's service bulletins and airworthiness directives with respect to
the Owned Aircraft and Leased Aircraft.
(o) No Owned Aircraft and Leased Aircraft is subleased to or
otherwise in the possession of another air carrier or other Person other than
the applicable Seller, to operate such aircraft in air transportation or
otherwise.
6.13 Slots. Schedule 6.13 sets forth a true, correct and complete list of
----- -------------
all takeoff and landing slots and other similar takeoff and landing rights
("Slots") used by any Seller on the date hereof at any domestic or international
airport, including a true, correct and complete list of all Slot lease
agreements. Sellers will have complied in all material respects with the
requirements of the regulations issued under the Federal Aviation Act and any
other Laws with respect to the Slots. The Slots have not been identified as
being subject to withdrawal under the provisions of SCAR No. 48, and Sellers
have not received any notice, and they have no knowledge, of any proposed
withdrawal of the Slots by the FAA, the DOT or any other Governmental Authority.
The Slots have not been designated for the provision of essential air services
in accordance with the regulations issued under the Federal Aviation Act, were
not acquired pursuant to 14 C.F.R. (S) 93.219 and have not been designated for
international operations, as more fully detailed in 14 C.F.R. (S) 93.217.
Sellers have used each Slot either at least 80% of the maximum amount that each
Slot could have been used during each full and partial reporting period (as
described in 14 C.F.R. (S) 93.227(i)) or such greater or lesser amount of
minimum usage as may have been required to protect such Slot's authorization
from termination or withdrawal under regulations established by any Governmental
Authority or airport authority. All reports required by the FAA or any
Governmental Authority relating to the Slots have been filed in a timely manner.
Except as set forth on Schedule 6.13, no Seller has agreed to any Slot slide,
-------------
Slot trade, Slot purchase, Slot sale or other transfer of any of the Slots.
6.14 No Casualty. Except as set forth on Schedule 6.14, the Transferred
----------- -------------
Assets have not been affected by any fire, explosion, accident, drought, storm,
hail, earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance).
6.15 Insurance. TWA or each other Seller has in place insurance policies
---------
with respect to the Transferred Assets, in amounts and types that are customary
in the industry for similar assets, and all such policies are in full force and
effect.
20
<PAGE>
6.16 Gates; Gate Property and Ground Equipment.
-----------------------------------------
(a) Schedule 6.16(a) sets forth a true, correct and complete list of
----------------
all the airport gates leased, occupied or otherwise used by any Seller (the
"Gates"), including the gate number and the airport and terminal or concourse
location of each such Gate.
(b) Schedule 6.16(b) sets forth a true, correct and complete list of
----------------
all the lease, sublease, use agreements, licenses, permits, certificates or
other documents or agreements under which any Seller leases, occupies or
otherwise has the right to use any Gate, and all amendments thereto (the "Gate
Leases"), in each case, including identification of the applicable Seller and
the lease expiration date, and corresponding Gate Property Leases and Ground
Equipment Leases.
(c) Schedule 6.16(c) sets forth a true, correct and complete list of
----------------
all the lease, sublease, use agreements, licenses, permits, certificates or
other documents or agreements under which any Seller leases, occupies or
otherwise has the right to use any Gate Property, and all amendments thereto
(the "Gate Property Leases"), in each case, including identification of the
applicable Seller and the lease expiration date.
(d) Schedule 6.16(d) sets forth a true, correct and complete list of
----------------
all the lease, sublease, use agreements, licenses, permits, certificates or
other documents or agreements under which any Seller leases, occupies or
otherwise has the right to use any Ground Equipment, and all amendments thereto
(the "Ground Equipment Leases"), in each case, including identification of the
applicable Seller and the lease expiration date.
(e) Schedule 6.16(e) sets forth a true, correct and complete list of
----------------
all the Gates, Gate Property and Ground Equipment owned by any Seller (the
"Owned Gate Items"), including identification of the applicable Seller.
(f) The Owned Gate Items and the Gate Property and Ground Equipment
subject to the Gate Property Leases and Ground Equipment Leases, respectively,
are all in good operating condition and repair, subject to normal wear, are
usable in the regular and ordinary course of business and conform in all
material respects to applicable Laws.
(g) The Gate Property Documents are in full force and effect, TWA has
no knowledge of any material default under the Gate Property Documents and TWA
knows of no material condition or event which has occurred which with notice or
the passage of time or both would constitute a material default by any Seller
under the Gate Property Documents.
(h) Sellers have not received any notice that any portion of the
Gates, Gate Property or Owned Gate Items is or will be subject to, or affected
by, any condemnation, eminent domain or similar proceeding and there are no
material violations of record or otherwise against any portion of the Gates,
Gate Property or Owned Gate Items.
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(i) To TWA's knowledge, the Gates, Gate Property and Owned Gate
Items, as applicable, have been constructed in good and workmanlike manner, are
structurally sound and free from material defects and all building systems,
including without limitation, the heat, ventilation and air conditioning,
plumbing, electrical, elevator, sewage and other systems and systems related to
the specific uses thereof (as, for example, passenger terminal facilities,
office space, cargo facilities, and ground support equipment maintenance spaces,
and aircraft maintenance space) are free from material defects. The Gates, Gate
Property and Owned Gate Items, as applicable, are in good working order, subject
to reasonable wear and tear. Except as set forth in Schedule 6.16(i), no Seller
----------------
has deferred any of its maintenance or repair obligations under the Gate
Property Documents.
(j) With respect to the Owned Gate Items, the applicable Seller has,
and at the Closing, such Seller shall convey to Purchaser, good, valid and
indefeasible title thereto free and clear of all Liens other than Permitted
Liens.
6.17 Environmental Matters.
---------------------
(a) Except as set forth on Schedule 6.17(a) hereto, to TWA's
----------------
knowledge after reasonable inquiry, the use and operation of the Transferred
Assets is and has been in full compliance with all applicable Environmental
Laws, and consistent with the consummation of the transactions contemplated
hereby or Purchaser's ability to own, use or operate the Transferred Assets in
substantially the same manner as the Transferred Assets are presently owned,
used or operated by Seller. Except as set forth on Schedule 6.17(a), Sellers
----------------
have not received any written communication from any Person that alleges that
such Seller is not in such full compliance, the subject matter of which written
communication has not been fully resolved and satisfied, and, to TWA's knowledge
after reasonable inquiry, there are no circumstances (other than changes in
existing, or future requirements of, Environmental Laws) that would reasonably
be expected to prevent or interfere with such full compliance in the future.
Schedule 6.17(a) sets forth a true, correct and complete list of all orders,
----------------
decrees or other agreements relating to any Seller or any of its properties
issued pursuant to or entered into under any Environmental Law.
(b) Except as set forth on Schedule 6.17(b), there is no
----------------
Environmental Claim relating to ownership or use of the Transferred Assets
pending or threatened against any Seller or, to TWA's knowledge after reasonable
inquiry, against any Person whose liability for such Environmental Claim Sellers
have retained or assumed either contractually or by operation of law.
(c) Except as set forth on Schedule 6.17(c), Sellers have not
----------------
received any written allegation or other information , the subject matter of
which allegation or information has not been fully resolved and satisfied, that
past or present actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the release, emission, discharge or
disposal of any Material of Environmental Concern relating to the ownership or
use of the Transferred Assets could form the basis of any Environmental Claim
relating to the Transferred Assets against any Seller or against any
22
<PAGE>
Person whose liability for such Environmental Claim any Seller retained or
assumed either contractually or by operation of law.
(d) Without in any way limiting the generality of the foregoing, to
TWA's knowledge after reasonable inquiry, (i) all onsite and off-site locations
where any Seller or any other occupant has stored, disposed or arranged for the
disposal of Materials of Environmental Concern from 1980 to the date hereof
relating to the transferred maintenance bases are identified on Schedule
--------
6.17(d), (ii) all underground storage tanks, and the capacity and contents of
-------
such tanks, located on the Transferred Assets are identified on Schedule
--------
6.17(d), (iii) except as set forth on Schedule 6.17(d), there is no damaged and
------- ----------------
friable asbestos or lead based paint coatings in poor condition contained in or
forming part of any building, building component, structure or office space with
respect to the Gates and (iv) except as set forth on Schedule 6.17(d), no
----------------
polychlorinated biphenyls (PCB's) are used at any Gate in violation of
Environmental Laws.
(e) For purposes of this Agreement but only as it relates to the
Transferred Assets, the following terms shall have the following meanings:
(i) "Environmental Claim" means any written notice by any
Governmental Authority or Person alleging potential liability (including,
without limitation, potential liability for investigatory costs, cleanup
costs, governmental response costs, natural resources damages, property
damages, personal injuries or penalties) (A) which would have a material
and adverse effect on any of the Transferred Assets, the consummation of
the transactions contemplated hereby or Purchaser's ability to own, use or
operate the Transferred Assets in substantially the same manner as the
Transferred Assets are presently owned, used or operated by Seller and (B)
arising out of, based on or resulting from (x) the presence, or release
into the environment, of any Material of Environmental Concern at any
location, whether or not owned by any Seller or Purchaser or (y) any
material violation, or alleged violation, of any Environmental Law.
(ii) "Environmental Laws" means all Laws applicable to the
respective Transferred Assets and relating to pollution or protection of
human health or the environment (including, without limitation, ambient
air, surface water, ground water, land surface or subsurface strata),
including, without limitation, laws and regulations relating to emissions,
discharges, releases or threatened releases of Materials of Environmental
Concern arising from or relating to the Transferred Assets, or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Materials of Environmental
Concern arising from or relating to the Transferred Assets or the operation
thereof.
(iii) "Materials of Environmental Concern" means dangerous
goods, hazardous, toxic or regulated substances, materials, or wastes as
defined in the Environmental Laws.
23
<PAGE>
6.18 Taxes. Except as set forth on Schedule 6.18:
----- -------------
(a) All Tax Returns that are required to be filed on or before the
Closing Date by any Seller have been or will be duly filed on a timely basis and
all such Tax Returns were or will be true, correct and complete in all material
respects. All Taxes due with respect to any taxable period or partial taxable
period of each such Seller ending on or before the Closing Date have been or
will be timely paid or withheld. No Seller has executed or filed with the
Internal Revenue Service or any other taxing authority any agreement extending
the period for filing any Tax Return.
(b) No claim for assessment or collection of Taxes has been asserted
against any Seller. No Seller is a party to any pending action, proceeding or
investigation by any Governmental Authority for the assessment or collection of
Taxes, nor does any Seller have knowledge of any such threatened action,
proceeding or investigation.
(c) No waivers of statutes of limitation in respect of any Tax
Returns have been given or requested by any Seller nor has any Seller agreed to
any extension of time with respect to a Tax assessment or deficiency. No claim
has been made at any time during the ten-year period ending on the date hereof
by a Governmental Authority in a jurisdiction where any Seller does not
currently file Tax Returns that it is or may be subject to taxation by that
jurisdiction, nor is any Seller aware that any such assertion of jurisdiction is
threatened. No security interests have been imposed upon or asserted against any
of any Seller's assets or any of the Transferred Assets as a result of or in
connection with any failure, or alleged failure, to pay any Tax.
(d) Each Seller has withheld and paid all Taxes required to be
withheld in connection with any amounts paid or owing to any employee, creditor,
independent contractor or other third party.
(e) No Seller is a foreign person within the meaning of Section 1445
of the Code.
(f) None of the Transferred Assets is (i) "tax-exempt use property"
within the meaning of Section 168(h) of the Code, (ii) "tax-exempt bond-financed
property" within the meaning of Section 168(g) of the Code, (iii) "limited use
property" within the meaning of Revenue Procedure 76-30, (iv) subject to Section
168(g)(i)(A) of the Code or (v) property that is or will be required to be
treated as being owned by any Person (other than any Seller) pursuant to the
provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as
amended, and in effect immediately before the enactment of the Tax Reform Act of
1986.
6.19 Labor Matters.
-------------
(a) Schedule 6.19(a) identifies all collective bargaining agreements
----------------
(including any side letter, supplemental agreement or memorandum of
understanding) covering employees of each Seller (collectively, the "Collective
Bargaining Agreements"). TWA has made available to Purchaser copies of all such
Collective
24
<PAGE>
Bargaining Agreements. TWA has informed Purchaser of all material communications
and current proposals of TWA, any other Seller or any union in all ongoing
negotiations with representatives of any unions representing pilots, flight
attendants, mechanics, dispatchers and all other organized employee groups and
all matters on which any tentative agreements have been reached in the course of
such negotiations.
(b) TWA has made available to Purchaser a true, correct and complete
list of all the current employees of each Seller that are members of an
organized labor unit covered by any of the Collective Bargaining Agreements,
their current respective positions or job classifications and their current
respective wage scales or salaries, as the case may be, as of the date hereof.
(c) Except as set forth in Schedule 6.19(c):
----------------
(i) There are no controversies pending or, to the knowledge of
TWA, threatened, or which TWA, based on its knowledge of its employees and
labor units, believes will be more likely than not to occur, between any
Seller and any of its employees or organized labor units, which
controversies have or could have a Material Adverse Effect;
(ii) No Seller has breached or otherwise failed to comply or
has been alleged to have breached or otherwise failed to comply in any
material respect with any provision of any Collective Bargaining Agreement
or other labor union contract applicable to persons employed by any Seller
(because of the transactions contemplated by this Agreement or otherwise),
and there are no material grievances outstanding against any Seller under
any such agreement or contract;
(iii) To the knowledge of TWA, there is no petition pending
before the National Mediation Board seeking certification or any change in
certification of a labor representative with respect to any craft or class
of employees of any Seller;
(iv) There is no strike, slowdown, work stoppage, labor action
or lockout, or, to the knowledge of TWA, threat thereof, by or with respect
to any employees of any Seller; and
(v) There is no unfair labor practice or analogous complaint
or claim against any Seller pending before the National Mediation Board or
any similar board or agency or before any court of competent jurisdiction
or any other forum.
(vi) There is no complaint for violation of the Railway Labor
Act, 45 U.S.C. 8, as amended, against any Seller pending before any
Governmental Authority.
25
<PAGE>
(d) That certain Settlement Agreement (the "Pension Plans Agreement")
dated January 5, 1993, by and between The Official Unsecured Creditors'
Committee of Trans World Airlines, Inc., The International Association of
Machinists and Aerospace Workers, the Independent Federation of Flight
Attendants, The Air Line Pilots Association, International, the Transport
Workers of America, Carl Icahn, an Icahn Entity, Pichin Corp. and the Pension
Benefit Guaranty Corporation, is in full force and effect and is enforceable in
accordance with its terms. TWA has at all times performed in compliance with
the Pension Plans Agreement and there are no defaults thereunder. TWA has no
remaining duties or liabilities under the Pension Plans Agreement other than in
connection with the administration of the employee benefit plans subject to the
Pension Plans Agreement. Pursuant to the Pension Plans Agreement and applicable
law, TWA has no incurred or potential liability to the Pension Benefit Guaranty
Corporation or any other Person under Title IV of ERISA, under the Pension Plans
Agreement, or otherwise, and TWA has no liability to any participant in or any
fiduciary of any employee benefit plan that is subject to the Pension Plans
Agreement for pension benefits or otherwise. By entering into this Agreement
and performing their respective duties hereunder neither TWA, the other Sellers
nor Purchaser or any Affiliates of Purchaser shall be liable, or incur any
obligation, to the Pension Benefit Guaranty Corporation or any participant or
fiduciary of any employee benefit plan pursuant to the Pension Plans Agreement,
ERISA or otherwise, and no lien shall result that shall affect any property that
is subject to this Agreement. The releases entered into in connection with the
Pension Plans Agreement (i) are binding and in full force and effect, (ii) are
enforceable against the parties thereto in accordance with their respective
terms, and (iii) will not be invalidated or adversely affected by the execution
and delivery of this Agreement, performance of any Person hereunder or by any
transaction occurring pursuant to this Agreement.
6.20 Employee Matters.
----------------
(a) TWA has made available to Purchaser a true, correct and complete
list of all the current employees of each Seller (other than employees on the
list described in Section 6.19(b)), their current respective positions or job
---------------
classifications and their current respective wage scales or salaries, as the
case may be, as of the date hereof. Each Seller is in compliance in all
material respects with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, and are not
engaged in any unfair labor practice.
(b) Schedule 6.20(b) sets forth a true, correct and complete list and
----------------
brief description of each "employee pension benefit plan" (as defined in Section
3(2) of ERISA), "employee welfare benefit plan" (as defined in Section 3(1) of
ERISA), stock option, stock purchase, deferred compensation plan or arrangement,
and other material employee fringe benefit plan or arrangement maintained,
contributed to or required to be maintained or contributed to by TWA or any
other Seller for the benefit of any present or former employees of Sellers or
their beneficiaries (all the foregoing herein called "Benefit Plans"). TWA has
delivered to Purchaser true, complete, and correct copies of (1) each Benefit
Plan (or, in the case of any unwritten Benefit Plans, descriptions thereof)
26
<PAGE>
and (2) the most recent summary plan description for each Benefit Plan (if any
such description was required).
(c) TWA complies in all material respects with the applicable
requirements of Section 4980B(f) of the Code with respect to each Benefit Plan
that is a group health plan, as such term is defined in Section 5000(b)(1) of
the Code.
(d) As of the Closing Date, Sellers have paid all contributions which
are due and required by the Benefit Plans sponsored by Sellers in accordance
with the terms of such Benefit Plans and all applicable Laws.
6.21 Routes. Schedule 6.21 sets forth a true, correct and complete list of
------ -------------
all flight routes flown by any Seller as of the date hereof to the extent
authorized, regulated or limited by any Governmental Authority or other route
authority (each, a "Route"). Except as set forth on Schedule 6.21, no Route has
-------------
been or, to TWA's knowledge, is threatened to be subject to any forfeiture,
expiration without renewal, termination or other loss thereof.
6.22 Intellectual Property. Schedule 6.22 contains an accurate and
--------------------- -------------
complete list of all Intellectual Property owned or used by any Seller. Except
as set forth on Schedule 6.22, Sellers own the entire right, title and interest
-------------
in and to the Intellectual Property (including, without limitation, the right to
use and license the same). Except as set forth in Schedule 6.22, there are no
-------------
pending, or to the knowledge of TWA, threatened actions, claims or proceedings
of any nature affecting or relating to the Intellectual Property. Schedule 6.22
-------------
lists all notices or claims currently pending or received by any Seller that
claim infringement of any domestic or foreign letters patent, patent
applications, patent licenses, software licenses and know-how licenses, trade
names, trademark registrations and applications, service marks, copyrights,
copyright registrations or applications, trade secrets, technical knowledge,
know-how or other confidential proprietary information. Except as set forth on
Schedule 6.22, there is, to the knowledge of TWA, no reasonable basis upon which
-------------
any claim may be asserted against any Seller for infringement or
misappropriation of any domestic or foreign letters patent, patents, patent
applications, patent licenses, software licenses, and know-how licenses, trade
names, trademark registrations and applications, trademarks, service marks,
copyrights, copyright registrations or applications, trade secrets, technical
knowledge, know-how or other confidential proprietary information. All letters
patent, registrations and certificates issued by any Governmental Authority
relating to any of the Intellectual Property and all licenses and other
agreements pursuant to which any Seller uses any of the Intellectual Property
are valid and subsisting, have been properly maintained and neither any Seller,
nor to the knowledge of TWA, any other Person, is in default or violation
thereunder.
6.23 Worldspan. Trans World PARS, Inc., a Delaware corporation, is an
---------
indirect wholly owned subsidiary of TWA, and a general partner of Worldspan and
directly owns a 26.315% interest in Worldspan. Except for compliance with the
right of first refusal set forth in the Sixth Amended and Restated Limited
Partnership Agreement, dated as of April 30, 1993, of Worldspan, no action,
approval, notice or consent is
27
<PAGE>
required in connection with the transfer by Trans World PARS, Inc. to Purchaser
of all of such right, title and interest in and to Worldspan, including without
limitation the Worldspan partnership interest and rights as a general partner
thereof.
6.24 Real Property.
-------------
(a) Except as set forth on Schedule 6.24(a), each applicable Seller
----------------
owns fee simple absolute title to all owned real properties used in the conduct
of Sellers' business (the "Owned Real Estate") and has good title to, or valid
leasehold interests in, all other real properties used in the conduct of
Sellers' business (the "Leased Real Estate" and together with the Owned Real
Estate, the "Real Estate Assets"). Schedule 6.24(a) contains a true, correct
----------------
and complete list of all the Real Estate Assets, including the name of the owner
of record thereof, an accurate street address, a brief description of the use of
such Real Estate Asset and the lease, sublease or other agreement for all Leased
Real Estate. No Seller owns or holds, or is obligated under or a party to, any
option, right of first refusal or other contractual right to purchase, acquire,
sell, assign or dispose of any of the Real Estate Assets.
(b) All components of all improvements included within any Real
Estate Asset (collectively, the "Improvements"), including, without limitation,
the roofs and structural elements thereof and the heating, ventilation, air
conditioning, plumbing, electrical, mechanical, sewer, waste water, storm water,
paving and parking equipment, systems and facilities included therein, (i) in
the case of any Owned Real Property, are or (ii) in the case of any Leased Real
Property, (x) to the extent required to be maintained, repaired or replaced
under the related Lease, are or (y) to the extent not so required to be
maintained, repaired or replaced, to TWA's knowledge, are, in each case, in good
working order and repair (ordinary wear and tear excepted). All water, gas,
electrical, steam, compressed air, telecommunication, sanitary and storm sewage
lines and systems and other similar systems currently serving the Real Estate
Assets are installed and operating and are sufficient to enable the Real Estate
Assets to continue to be used and operated in the manner currently being used
and operated, and no Seller has any knowledge of any factor or condition that
could result in the termination or material impairment of the furnishing
thereof. No Improvement or portion thereof is dependent for its access,
operation or utility on any land, building or other Improvement that is not both
included in the Real Estate Assets that is not available for use pursuant to a
reciprocal easement agreement or other contractual right of the applicable
Seller.
(c) All Permits required to have been issued to any Seller to enable
any Real Estate Asset to be lawfully occupied and used for all of the purposes
for which they are currently occupied and used have been lawfully issued and are
in full force and effect. No Seller has received any notice, or has any
knowledge, of any pending, threatened or contemplated condemnation proceeding
affecting any Real Estate Asset or any part thereof or any proposed termination
or impairment of any parking at any such owned or leased real property or of any
sale or other disposition of any such Real Estate Asset or any part thereof in
lieu of condemnation.
28
<PAGE>
(d) No portion of any Real Estate Asset has suffered any damage by
fire or other casualty loss which has not heretofore been completely repaired
and restored to its original condition.
(e) Except as set forth on Schedule 6.24(e):
----------------
(i) no structure on any Real Estate Asset fails to conform in
any material respect with applicable ordinances, regulations, zoning laws
and restrictive covenants nor encroaches upon real property of others, nor
is any such Real Estate Asset encroached upon by structures of others in
any case in any manner that would have or would be reasonably likely to
have a Material Adverse Effect;
(ii) no charges or violations have been filed, served, made or
threatened against any Seller, to the knowledge of TWA, any other Person,
against or relating to any such property or structure on or any of the
operations conducted at any Real Estate Asset, as a result of any violation
or alleged violation of any applicable ordinances, requirements,
regulations, zoning laws or restrictive covenants or as a result of any
encroachment on the property of others where the effect of same would have
or would be reasonably likely to have a Material Adverse Effect;
(iii) other than pursuant to applicable laws, rules, regulations
or ordinances, covenants that run with the land or provisions in any
agreement listed on Schedule 6.24(a), there exists no restriction on the
----------------
use, transfer or mortgaging of any Real Estate Asset;
(iv) each Seller, as applicable, has adequate permanent rights
of ingress to and egress from any such property used by it for the
operations conducted thereon; and
(v) there are no developments affecting any of the Real Estate
Assets or interests of any Seller therein pending or, to the knowledge of
TWA, threatened which might reasonably be expected to curtail or interfere
in any material respect with the use of any such Real Estate Asset for the
purposes for which it is now used.
6.25 Disclosure. No representation or warranty of Sellers contained
----------
herein, and no statement contained in any document or other instrument to be
furnished by any Seller to Purchaser in connection with the transactions
contemplated hereby, contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact necessary to make the
representation, warranty or statement so made not misleading.
29
<PAGE>
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby makes the following representations and warranties to
Sellers each of which shall be true and correct as of the date hereof and as of
the Closing Date (except to the extent expressly relating to a specific date, in
which event it shall be true and correct as of such date) and shall be
unaffected by any investigation heretofore or hereafter made.
7.1 Corporate Organization. Purchaser is a corporation duly organized,
----------------------
validly existing and in good standing under the laws of the State of Delaware
and has the requisite corporate power and authority to own, lease or otherwise
hold its properties and assets and to carry on its business as presently
conducted.
7.2 Authorization and Effect of Agreement. Purchaser has the requisite
-------------------------------------
corporate power and authority to execute and deliver this Agreement and the
Collateral Agreements to which it will be a party and to perform its obligations
hereunder and thereunder. The execution and delivery by Purchaser of this
Agreement and the performance by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action on the part
of Purchaser. This Agreement has been duly executed and delivered by Purchaser
and constitutes a valid and binding agreement of Purchaser, enforceable against
Purchaser in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to general principles of
equity. Each of the Collateral Agreements to which Purchaser will be a party,
when executed and delivered by Purchaser, will constitute a valid and binding
agreement of Purchaser, enforceable against Purchaser in accordance with its
terms, subject to applicable bankruptcy, reorganization, moratorium, and similar
laws affecting creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity.
7.3 No Conflicts. Except as set forth in Schedule 7.3, the execution and
------------ ------------
delivery of this Agreement and the Collateral Agreements to which Purchaser will
be a party by Purchaser does not or will not (as applicable), and the
performance by Purchaser of the transactions contemplated by this Agreement and
such Collateral Agreements will not, conflict with, or result in any violation
of, or constitute a default under (a) any provision of the certificate of
incorporation or bylaws of Purchaser, (b) any of the terms, conditions, or
provisions of any material agreement or other material document by which
Purchaser is bound, or (c) any Law or order applicable to or binding on
Purchaser. Except as set forth in Schedule 7.3, and except for the Approval
------------
Order and the expiration of the waiting period under the HSR Act, no Consent is
required to be obtained, made or given (whether pursuant to applicable Law,
contract or otherwise) in connection with the execution and delivery of this
Agreement by Purchaser or the performance by Purchaser of the transactions
contemplated hereby.
30
<PAGE>
7.4 Litigation. As of the date of this Agreement, there are no judicial
----------
or administrative actions, proceedings or investigations pending or, to
Purchaser's knowledge, threatened that question the validity of this Agreement
or any action taken or to be taken by Purchaser in connection with this
Agreement.
ARTICLE VIII
PRE-CLOSING COVENANTS
8.1 Access. Prior to the Closing, upon reasonable notice from Purchaser,
------
TWA shall, and shall cause each other Seller to, afford to the officers,
attorneys, accountants or other authorized representatives of Purchaser
reasonable access during normal business hours to the employees, Transferred
Assets, facilities and books and records of such Seller relating to the
Transferred Assets then owned or previously owned and/or operated by such Seller
so as to afford Purchaser full opportunity to make such review, examination and
investigation of such Transferred Assets as Purchaser determines are reasonably
necessary in connection with the consummation of the transactions contemplated
hereby; provided, however, that the foregoing right of access shall not be
exercisable in such a manner as to interfere unreasonably with the normal
operations and business of such Seller. Purchaser shall be permitted to make
extracts from or to make copies of such books and records as may be reasonably
necessary in connection therewith. Prior to the Closing, TWA shall, and shall
cause each Seller to, promptly furnish Purchaser with access to such maintenance
records, operating data and other information relating to the Transferred Assets
then owned and/or operated by such Seller as Purchaser may reasonably request.
TWA shall promptly deliver to Purchaser such copies of all pleadings, motions,
notices, statements, schedules, applications, reports and other papers filed by
TWA in the Chapter 11 Cases. Seller shall promptly provide to Purchaser all
documents and materials relating to the proposed sale of the Transferred Assets,
Assumed Contracts or any portion thereof, including, without limitation, with
respect to competing bids, and otherwise cooperate with Purchaser, to the extent
reasonably necessary in connection with Purchaser's preparation for or
participation in any part of the Chapter 11 Cases in which Purchaser's
participation is necessary, required or reasonably appropriate. Seller shall
promptly deliver to Purchaser all pleadings, motions, notices, statements,
schedules, applications, reports and other papers filed in any other judicial or
administrative proceeding as Purchaser may reasonably request. In addition, TWA
shall, and shall cause the other Sellers to, consult with Purchaser with respect
to any written or oral communication concerning, in whole or in part, the
transactions contemplated by this Agreement. Without limiting the generality of
this Section 8.1, if requested by Purchaser, Sellers shall provide access to the
------------
Transferred Assets to Purchaser and its representatives and agents for purposes
of conducting nonintrusive environmental assessments, including Phase I
analyses.
8.2 Conduct of Business. Except as expressly contemplated by this
-------------------
Agreement (including, without limitation, the commencement and prosecution of
the Chapter 11 Cases) or as otherwise consented to by Purchaser in writing,
during the period from the date of this Agreement and continuing until the
Closing, TWA shall, and shall
31
<PAGE>
cause each Seller to, in respect of the Transferred Assets then owned and/or
operated by such Seller:
(a) to (i) conduct its business with respect to such Transferred
Assets in the usual, regular and ordinary course as presently conducted and
consistent with past practice, (ii) keep such Transferred Assets intact, and
(iii) maintain such Transferred Assets in at least as good a condition as their
current condition (reasonable wear and tear excepted);
(b) not take or omit to take any action as a result of which any
representation or warranty of TWA made in Article VI would be rendered untrue or
incorrect if such representation or warranty were made immediately following the
taking or failure to take such action;
(c) not mortgage, pledge, sell or dispose of any such Transferred
Assets, and not waive, release, grant, transfer or permit to lapse any rights of
material value, including without limitation any Routes or Slots to which any
Seller has any right on the date hereof;
(d) not assign, modify, cancel, otherwise impair or permit to lapse
any Assumed Contract;
(e) comply in all material respects with all provisions of any Assumed
Contract to which such Seller is a party;
(f) comply in all material respects with all applicable Laws that
relate to or affect any Transferred Assets or such Seller's ownership and/or use
thereof, including but not limited to the timely, complete and correct filing of
all reports and maintenance of all records required by any Governmental
Authority to be filed or maintained;
(g) other than adoption of the Retention Agreements, not adopt or
amend any bonus, profit-sharing, compensation, severance, termination, stock
option, pension, retirement, deferred compensation, employment or employee
benefit plan, agreement, trust, plan, fund or other arrangement for the benefit
and welfare of any director, officer or employee, or increase in any manner the
compensation or fringe benefits of any director, officer or employee or pay any
benefit not required by any existing plan or arrangement (including, without
limitation, the removal of existing restrictions in any benefit plans or
agreements);
(h) except as specifically required by Article X, not enter into any
new or amended contract, agreement, side letter or memorandum of understanding
with any unions representing employees of any Seller;
(i) continue, in respect of all Owned Aircraft, Leased Aircraft,
Engines and Spare Parts intended for use in its operations, their maintenance
programs consistent with past practice (except as required or permitted by
applicable law),
32
<PAGE>
including using reasonable best efforts to keep all such aircraft in such
condition as may be necessary to enable the airworthiness certification of such
aircraft under the Federal Aviation Act to be maintained in good standing at all
times;
(j) continue to use and operate the Slots, Routes and all other
Transferred Assets used and operated by Sellers as of the date hereof in a
manner consistent with prior practice and in accordance with all applicable
laws, and shall not enter into any contract nor otherwise act, nor suffer or
permit any other person to act, to restrict, interfere with or prevent the use
of such Slots, Routes and Transferred Assets;
(k) notify Purchaser in writing of any incidents or accidents
occurring on or after the date hereof involving any property owned or operated
by any Seller that resulted or could reasonably be expected to result in damages
or losses in excess of $1,000,000;
(l) notify Purchaser in writing of the commencement of any material
litigation against any Seller or of the existence of any adverse business
conditions arising on or after the date hereof threatening the continued, normal
business operations of Sellers or of any agreement, consent or order of the FAA
or DOT involving any Seller; and
(m) not take any action, or fail to take action, which action or
failure could result in the loss of any Slot or Route.
8.3 Notification.
------------
(a) TWA shall notify Purchaser, and Purchaser shall notify TWA, of any
litigation, arbitration or administrative proceeding pending or, to their
knowledge, threatened against any Seller or Purchaser, as the case may be, which
challenges or would materially affect the transactions contemplated hereby.
(b) TWA shall provide prompt written notice to Purchaser of any change
in any of the information contained in the representations and warranties made
by TWA in Article VI hereof or any exhibits or schedules referred to herein or
attached hereto and shall promptly furnish any information which Purchaser may
reasonably request in relation to such change; provided, however, that such
notice shall not operate to cure any breach of the representations and
warranties made by TWA in Article VI hereof or any exhibits or schedules
referred to herein or attached hereto.
8.4 No Inconsistent Action. Neither Purchaser nor TWA shall take any
----------------------
action which is materially inconsistent with its obligations under this
Agreement, and TWA shall cause the other Sellers to refrain from taking any such
action.
8.5 Satisfaction of Conditions. Prior to the Closing, each of the parties
--------------------------
shall use reasonable best efforts with due diligence and in good faith to
satisfy promptly all conditions required hereby to be satisfied by such party in
order to expedite the consummation of the transactions contemplated hereby.
33
<PAGE>
8.6 Filings. As promptly as practicable after the execution of this
-------
Agreement, each party shall use its reasonable best efforts to obtain, and to
cooperate with the other party in obtaining, all authorizations, consents,
orders and approvals of any Governmental Authority that may be or become
necessary in connection with the consummation of the transactions contemplated
by this Agreement, and to take all reasonable actions to avoid the entry of any
order or decree by any Governmental Authority prohibiting the consummation of
the transactions contemplated hereby, including without limitation, the
notifications required to be filed by it under the HSR Act, and shall furnish to
the other all such information in its possession as may be necessary for the
completion of the notifications to be filed by the other; provided that, in
complying with this Section 8.6, neither Purchaser nor any of its Affiliates
-----------
shall be required to (i) divest any assets or discontinue or modify any of its
operations or (ii) accept or become subject to any condition or requirement
unacceptable to Purchaser in its sole discretion. No party shall withdraw any
such filing or submission prior to the termination of this Agreement without the
written consent of the other parties. Purchaser and TWA agree that the filing
fee required to be paid in connection with the filing under any regulatory
filings (including without limitation under the HSR Act) shall be paid by
Purchaser and divided equally between Purchaser and TWA by subtracting TWA's
half of such filing fees from the Purchase Price in accordance with Section 4.7.
-----------
8.7 All Reasonable Efforts. Subject to the terms and conditions herein
----------------------
provided, each of the parties hereto agrees to use its reasonable best efforts
to take, or cause to be taken, all action, and to do, or cause to be done as
promptly as practicable, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement, including, without
limitation, the prompt preparation by Sellers of all pleadings, motions,
notices, statements, schedules, applications, reports and other papers
reasonably necessary to commence the Chapter 11 Cases.
8.8 Further Assurances. From time to time following the Closing, TWA
------------------
shall, and shall cause the other Sellers to, execute, acknowledge and deliver
such additional documents, instruments of conveyance, transfer and assignment or
assurances and take such other action as Purchaser may reasonably request to
more effectively assign, convey and transfer to Purchaser, and fully vest title
in Purchaser, with respect to the Transferred Assets.
8.9 Publicity. The parties hereto shall consult with each other and shall
---------
mutually agree (the agreement of each party not to be unreasonably withheld or
delayed) upon the content and timing of any press release or other public
statements with respect to the transactions contemplated by this Agreement and
shall not issue any such press release or make any such public statement prior
to such consultation and agreement, except as may be required by applicable law
or by obligations pursuant to any listing agreement with any securities exchange
or any stock exchange regulations as advised by counsel; provided, however, that
each party shall give prior notice to the other parties of the content and
timing of any such press release or other public statement required by
34
<PAGE>
applicable law or by obligations pursuant to any listing agreement with any
securities exchange or any stock exchange regulations.
8.10 Acquisition Proposals; Recapitalization Transaction. From the date
---------------------------------------------------
hereof until the earlier of (a) the termination hereof or (b) the filing of the
Chapter 11 Cases (in which event the provisions of Section 8.11 shall govern),
------------
and except as expressly permitted by the following provisions of this Section
-------
8.10, TWA shall not, nor shall it permit any of the other Sellers to, nor shall
----
it authorize or permit any officer, director or employee of or any investment
banker, attorney, accountant or other advisor or any representative of any
Seller to, directly or indirectly, (i) solicit, initiate or encourage the
submission of any Acquisition Proposal or (ii) participate in any discussions or
negotiations regarding, or furnish to any person any information with respect
to, any Acquisition Proposal; provided, however, that nothing contained in this
Section 8.10 shall prohibit the Board of Directors of TWA from furnishing
------------
information to, or entering into discussions or negotiations with, any person
that makes an unsolicited bona fide written Acquisition Proposal if, and only to
the extent that, (A) such Acquisition Proposal constitutes a Superior Proposal,
or (B) such Acquisition Proposal constitutes a Recapitalization Transaction and
(C) prior to taking such action, TWA (x) provides reasonable notice to Purchaser
to the effect that it is taking such action and (y) receives from such person an
executed confidentiality agreement in reasonably customary form. Prior to
providing any information to or entering into discussions or negotiations with
any person in connection with an Acquisition Proposal by such person, TWA shall
notify Purchaser of any Acquisition Proposal (including, without limitation, the
material terms and conditions thereof and the identity of the person making it)
as promptly as practicable after its receipt thereof, and shall provide
Purchaser with a copy of any written Acquisition Proposal or amendments or
supplements thereto, and shall thereafter inform Purchaser on a prompt basis of
the status of any discussions or negotiations with such a third party, and any
material changes to the terms and conditions of such Acquisition Proposal, and
shall promptly give Purchaser a copy of any information delivered to such Person
which has not previously been reviewed by Purchaser. Following the commencement
of the Chapter 11 Cases, this Section 8.10 shall be of no further force and
------------
effect and the solicitation and acceptance of competing offers (including
Acquisition Proposals) shall be governed by Section 8.11 and by order of the
------------
Bankruptcy Court.
8.11 Bankruptcy Court Approval.
-------------------------
(a) On or before two Business Days after the commencement of the
Chapter 11 Cases, TWA shall, and shall cause the other Chapter 11 Sellers to,
file a motion or motions with the Bankruptcy Court seeking entry of (i) the
Approval Order (as defined in Section 8.11(d)) approving, inter alia, the sale
--------------- ----- ----
of the Transferred Assets to Purchaser pursuant to sections 363 and 365 of the
Bankruptcy Code, subject to higher and better offers and (ii) an order in
substantially in the form attached hereto as Exhibit C (with such changes
---------
thereto as Purchaser shall approve or request in its sole discretion, the "Sale
Procedures Order"), (A) approving the Termination Amount and the Bankruptcy
Termination Amount and providing that, in the event the obligation of Seller to
pay Purchaser either the Termination Amount or the Bankruptcy Termination Amount
arises,
35
<PAGE>
such obligation shall constitute a superpriority administrative expense under
sections 503(b) and 507(a)(1) of the Bankruptcy Code and shall be payable in
accordance with the provisions of Section 12.1 or Section 12.2 without further
------------ ------------
order of the Bankruptcy Court, (B) establishing procedures and deadlines for the
submission of competing offers, including, without limitation, that (1) a
competing offer, whether a proposed Recapitalization Transaction or a proposed
purchase or other disposition of the Transferred Assets (collectively, a
"Competing Offer"), shall not be considered to be a higher and better offer
unless, at a minimum, such offer provides for aggregate consideration of at
least $85,000,000 in excess of the Purchase Price (with respect to the initial
round of bidding) and of at least $20,000,000 in excess of the aggregate
consideration contained in such bidder's prior Competing Offer (with respect to
each subsequent round of bidding, if any) and is otherwise a Superior Proposal,
(2) a Competing Offer must be accompanied by a good faith cash deposit of at
least $50,000,000, (3) Purchaser shall be entitled at its option to match such
Competing Offer or make a revised offer following such Competing Offer and (4)
Purchaser shall be entitled to credit bid the amount of the Bankruptcy
Termination Amount against any revised offer Purchaser may make following such
Competing Offer, and (C) scheduling a hearing to consider entry of the Approval
Order and providing that notice of such hearing be given to all of Sellers'
creditors and interest holders of record and published in the Wall Street
Journal (National Edition). Purchaser and Sellers agree to make promptly any
filings, to take all actions and to use their reasonable best efforts to obtain
entry of the Sale Procedures Order, entry of the Approval Order and any and all
other approvals and orders necessary or appropriate for the consummation of the
transactions contemplated hereby.
(b) Prior to entry of the Approval Order, TWA and Purchaser shall, and
TWA shall cause the other Chapter 11 Sellers to, accurately inform the
Bankruptcy Court of all material facts of which they are aware relating to this
Agreement and the transactions contemplated hereby.
(c) If the Approval Order, Sale Procedures Order or any other orders
of the Bankruptcy Court relating to this Agreement shall be appealed by any
Person (or a petition for certiorari or motion for rehearing or reargument shall
----------
be filed with respect thereto), TWA agrees to, and shall cause the other Chapter
11 Sellers to, take all steps as may be reasonable and appropriate to defend
against such appeal, petition or motion, and Purchaser agrees to cooperate in
such efforts, and each party hereto agrees to use its reasonable best efforts to
obtain an expedited resolution of such appeal; provided, however, that nothing
herein shall preclude the parties hereto from consummating the transactions
contemplated herein if the Approval Order shall have been entered and has not
been stayed and Purchaser, in its sole discretion, waives in writing the
requirement that the Approval Order be a Final Order.
(d) Prior to Closing, the sale of the Transferred Assets to Purchaser
pursuant to this Agreement and the other transactions contemplated by this
Agreement shall have been approved by order of the Bankruptcy Court pursuant to
sections 363 and 365 of the Bankruptcy Code, pursuant to an order in
substantially the form attached
36
<PAGE>
hereto as Exhibit D (with such changes thereto as Purchaser shall approve or
---------
request in its sole discretion, the "Approval Order"), and the Approval Order
shall have become a Final Order. Purchaser and TWA agree to use their reasonable
best efforts to cause the Bankruptcy Court to enter an Approval Order which
contains, among other provisions reasonably requested by Purchaser, the
following provisions (it being understood that certain of such provisions may be
contained in either the findings of fact or conclusions of law to be made by the
Bankruptcy Court as part of the Approval Order): (i) the transfers of the
Transferred Assets by Sellers to Purchaser (A) are or will be legal, valid and
effective transfers of the Transferred Assets; (B) vest or will vest Purchaser
with all right, title and interest of Sellers in and to the Transferred Assets
free and clear of all Liens (other than Permitted Liens) and claims (as defined
in section 101(5) of the Bankruptcy Code) pursuant to section 363(f) of the
Bankruptcy Code (other than Liens created by Purchaser) whatsoever known or
unknown including, but not limited to, any of Sellers' creditors, vendors,
suppliers, employees or lessors and that Purchaser shall not be liable in any
way (as successor entity or otherwise) for any claims that any of the foregoing
or any other third party may have against any of the Sellers, the business of
Sellers and the Transferred Assets and permanently enjoins and restrains the
assertion and prosecution of any claims against Purchaser, Purchaser's
Affiliates and the ownership, use and operation of the Transferred Assets, other
than claims on the account of Assumed Liabilities; and (C) constitute transfers
for reasonably equivalent value and fair consideration under the Bankruptcy Code
and the laws of the States of New York and Delaware; (ii) all amounts to be paid
to Purchaser pursuant to this Agreement constitute superpriority administrative
expenses under sections 503(b) and 507(a)(1) of the Bankruptcy Code and are
immediately payable if and when the obligations of Sellers arise under this
Agreement, without any further order of the Bankruptcy Court; provided, however,
that Sellers shall have the right to contest the validity and amount of such
asserted claims; (iii) all Persons are enjoined from taking any action against
Purchaser, Purchaser's Affiliates (as they existed immediately prior to the
Closing) or the Sellers to recover any claim which such Person has solely
against Sellers or any of Sellers' Affiliates (as they existed immediately
following the Closing); (iv) the Bankruptcy Court retains exclusive jurisdiction
through the Bankruptcy Resolution Date to interpret, construe and enforce the
provisions of this Agreement, the Sale Procedures Order and the Approval Order
in all respects; provided, however, that in the event the Bankruptcy Court
abstains from exercising or declines to exercise jurisdiction with respect to
any matter provided for in this clause (iv) or is without jurisdiction, such
abstention, refusal or lack of jurisdiction shall have no effect upon and shall
not control, prohibit or limit the exercise of jurisdiction of any other court
having competent jurisdiction with respect to any such matter; (v) the
provisions of the Approval Order are nonseverable and mutually dependent; (vi)
the transactions contemplated by this Agreement are undertaken by Purchaser and
Sellers at arm's length, without collusion and in good faith within the meaning
of section 363(m) of the Bankruptcy Code, and such parties are entitled to the
protections of section 363(m) of the Bankruptcy Code, (vii) not selling the
Transferred Assets free and clear of liens and claims would impact adversely on
Sellers' bankruptcy estates; (viii) a sale of the Transferred Assets other than
one free and clear of liens and claims would be of substantially less benefit to
the estate of the Sellers; (ix) Sellers may assign and transfer to Purchaser all
of Sellers' right, title and interest (including common
37
<PAGE>
law rights) to all of their intangible property; (x) approves the Sellers'
assignment of the Assumed Contracts pursuant to sections 363 and 365 of the
Bankruptcy Code and orders Sellers to pay any cure amounts payable to the other
parties to the Assumed Contracts from the Purchase Price proceeds; (xi) provides
for the retention of jurisdiction by the Bankruptcy Court to resolve any and all
disputes that may arise under this Agreement as between Sellers and Purchaser,
and further to hear and determine any and all disputes between Sellers and/or
Purchaser, as the case may be, and any non-Sellers party to, among other things,
any Assumed Contracts, concerning inter alia, Sellers' assignment thereof to
----- ----
Purchaser under this Agreement and any non-Seller's claims arising under any
agreements relating to Retained Liabilities; and (xii) pursuant to section
1146(c) of the Bankruptcy Code, provides for the exemption of the transactions
contemplated herein from certain taxes, provides for the waiver of so-called
"bulk-sale" laws in all necessary jurisdictions, and provides that the
transactions contemplated herein are deemed to be under or in contemplation of a
plan to be confirmed under section 1129 of the Bankruptcy Code.
(e) TWA shall, and shall cause the other Chapter 11 Sellers to,
cooperate reasonably with Purchaser and its representatives in connection with
the Approval Order, the Sale Procedures Order and the bankruptcy proceedings in
connection therewith. Such cooperation shall include, but not be limited to,
consulting with Purchaser at Purchaser's reasonable request concerning the
status of such proceedings and providing Purchaser with copies of requested
pleadings, notices, proposed orders and other documents relating to such
proceedings as soon as reasonably practicable prior to any submission thereof to
the Bankruptcy Court. Sellers further covenant and agree that the terms of any
plan submitted by Sellers to the Bankruptcy Court for confirmation shall not
conflict with, supersede, abrogate, nullify, modify or restrict the terms of
this Agreement and the rights of Purchaser hereunder, or in any way prevent or
interfere with the consummation or performance of the transactions contemplated
by this Agreement including, without limitation, any transaction that is
contemplated by or approved pursuant to the Approval Order and the Sale
Procedures Order.
8.12 Specific Enforcement of Covenants. Sellers acknowledge that
---------------------------------
irreparable damage would occur in the event that any of the covenants and
agreements of Sellers set forth in this Article VIII or in any other part of
this Agreement were not timely performed in accordance with their specific terms
or were otherwise breached. It is accordingly agreed that Purchaser shall be
entitled to an injunction or injunctions to prevent or cure any breach of such
covenants and agreements of Sellers and to enforce specifically the terms and
provisions thereof, this being in addition to any other remedy to which it may
be entitled at law or in equity, it being understood that, after commencement of
the Chapter 11 Cases, the Bankruptcy Court shall have exclusive jurisdiction
over such matters; provided, however, that in the event the Bankruptcy Court
abstains from exercising or declines to exercise jurisdiction with respect to
any matter provided for in this sentence or is without jurisdiction, such
abstention, refusal or lack of jurisdiction shall have no effect upon and shall
not control, prohibit or limit the exercise of jurisdiction of any other court
having competent jurisdiction with respect to any such matter.
38
<PAGE>
8.13 Due Diligence. Purchaser shall use its reasonable best efforts to
-------------
complete its due diligence review of the Transferred Assets as promptly as
practicable, but in no event later than fifteen (15) days after receipt by
Purchaser of the last Schedule to be delivered by TWA as set forth on Exhibit B
---------
(other than the completion of Phase I environmental assessments and additional
nonintrusive environmental due diligence on all Transferred Assets, which shall
be completed no later than 45 days after such receipt).
8.14 TWA Rights Plan. TWA shall take all necessary actions to amend or
---------------
terminate that certain Rights Agreement, dated as of December 19, 1995, between
TWA and American Stock Transfer & Trust Company, as Rights Agent, such that the
provisions of such agreement are not applicable to the transactions contemplated
hereby or to the Purchaser or any Affiliate thereof and so that Purchaser has no
obligation whatsoever with respect to such agreement, whether before or after
the Closing (the "Rights Plan Amendment").
8.15 Aircraft Inspection Rights. Purchaser shall have the right to conduct
--------------------------
an inspection of the Owned Aircraft and Leased Aircraft as would be required in
connection with the performance of a "B" maintenance check of the aircraft under
Purchaser's approved maintenance program, including the right to open those
sealed items, including any sealed bays, panels or doors, which would be
required to be opened during such "B" check (but not to open any other sealed
items, except as would be so required during such "B" check), and to inspect (in
such manner consistent with a "B" check level inspection) those parts,
components, and structures behind such sealed items (i) which would be required
to be inspected during such "B" check or (ii) whose maintenance condition would
be otherwise immediately apparent during the course of such required inspection.
Purchaser shall have customary rights for an acceptance flight of the aircraft.
Purchaser shall also have the right to borescope the engines to the same extent
as would be required in connection with the performance of a "B" maintenance
check of the aircraft under Purchaser's approved maintenance program.
8.16 Designations. If Purchaser designates any Aircraft Lease or Gate
------------
Lease as a Designated Aircraft Lease or a Designated Gate Lease, respectively,
Purchaser shall not purchase, lease or otherwise obtain a direct or indirect
interest in the aircraft or gate underlying such lease during the period
commencing on the date such lease is designated as a Designated Aircraft Lease
or a Designated Gate Lease and ending on the first anniversary of the Closing
Date.
8.17 Marketing Agreements. Purchaser and TWA shall promptly negotiate in
--------------------
good faith agreements between them regarding accrual of AAdvantage frequent
flyer miles on TWA flights and reciprocal airport lounge access.
ARTICLE IX
POST-CLOSING COVENANTS
9.1 Maintenance of Books and Records. Sellers and Purchaser shall
--------------------------------
preserve until the seventh anniversary of the Closing Date (or, with respect to
any Sellers, until
39
<PAGE>
such time as such Seller is liquidated) all records possessed by such party
relating to the assets, liabilities or operations of the Transferred Assets
prior to the Closing Date. After the Closing Date, where there is a legitimate
purpose, such party shall provide the other party with access, upon prior
reasonable written request specifying the need therefor, during regular business
hours, to (i) the relevant officers and employees of such party and (ii) the
books of account and records of such party, but, in each case, only to the
extent relating to the assets, liabilities and operations of the Transferred
Assets prior to the Closing Date, and the other party and its representatives
shall have the right to make copies of such books and records; provided,
however, that the foregoing right of access shall not be exercisable in such a
manner as to interfere unreasonably with the normal operations and business of
such party; and further provided that, as to so much of such information as
constitutes trade secrets or confidential business information of such party,
the requesting party and its representatives shall use due care to not disclose
such information except (i) as required by Law, (ii) with the prior written
consent of such party, which consent shall not be unreasonably withheld, or
(iii) where such information becomes available to the public generally, or
becomes generally known to competitors of such party, through sources other than
the requesting party and its representatives. Such records may nevertheless be
destroyed by a party if such party sends the other party written notice of its
intent to destroy records, specifying with particularity the contents of the
records to be destroyed. Such records may then be destroyed after the 30th day
following delivery of such notice unless the other party objects to the
destruction, in which case the party seeking to destroy the records shall either
agree to retain such records or to deliver such records to the objecting party.
9.2 Right of Subrogation. In connection with Purchaser's right of
--------------------
subrogation pursuant to Section 2.1(ix), upon the written request of Purchaser,
---------------
TWA shall, and shall cause each other Seller to, cooperate with Purchaser in
connection with any action or proceeding by Purchaser (whether or not in the
name of any such Seller) to enforce any such subrogation right.
9.3 Confidentiality. Each party hereto acknowledges that the other
---------------
parties have legitimate and continuing proprietary interests in the protection
of their confidential information and that the parties have invested substantial
sums and will continue to invest substantial sums to develop, maintain and
protect such confidential information. Prior to and after the Closing, each
party agrees not to disclose, furnish or make accessible to anyone or use for
its own benefit (other than as contemplated hereby) any trade secrets or other
confidential or proprietary information of another party relating to any Seller,
Purchaser and/or their respective businesses or the other parties including, but
not limited to, information obtained by or revealed to such party during any
investigations, negotiations or review relating to this Agreement and any other
document contemplated hereby or thereby or any past or future actions taken in
connection with, pursuant to, in accordance with, or under this Agreement,
including without limitation any business plans, marketing plans, financial
information, strategies, systems, programs, methods and computer programs;
provided, however, that such protected information shall not include (i)
information required to be disclosed by law, legal or judicial process
(including a court order, subpoena or order of a Governmental Authority) or the
rules of any stock
40
<PAGE>
exchange, (ii) information that is or becomes available to the disclosing party
on a non- confidential basis from a source other than the other parties and not
obtained in violation of this Agreement and (iii) information known to the
public or otherwise in the public domain without violation of this Section 9.3;
provided, further, that this Section 9.3 shall not in any way limit the
disclosure of information by TWA (a) in connection with the commencement and
prosecution of the Chapter 11 Cases or (b) regarding TWA (i) to other bidders or
potential bidders to the extent specifically permitted by this Agreement or (ii)
following the termination of this Agreement.
ARTICLE X
EMPLOYEE MATTERS
10.1 Hiring Obligations. Upon the occurrence of the Closing, Purchaser
------------------
shall (i) offer all of Sellers' union employees (all of whom are listed on
Schedule 10.1(a)) (other than personnel who (A) have previously been terminated
-----------------
by Purchaser or an entity controlled by Purchaser or (B) would not be qualified
for employment under Purchaser's general hiring policies as in effect at
Closing) employment by Purchaser or one or more entities controlled by Purchaser
at compensation levels substantially equivalent to those currently enjoyed by
similarly situated employees of Purchaser or such controlled entity, (ii) offer
employment to certain members of TWA's executive management and those non-union
employees listed on Schedule 10.1(b) on a case-by-case basis at Purchaser's sole
----------------
discretion and (iii) provide employment benefits and post-retirement benefits to
all employees actually hired by Purchaser pursuant to (i) and (ii) above at
levels substantially no less favorable than those benefits provided to
Purchaser's similarly situated employees. Any Seller employees to be hired by
Purchaser or an entity controlled by Purchaser in accordance with this Section
-------
10.1 will be hired in accordance with terms and conditions established by
----
Purchaser or such entity (and, where applicable, in accordance with and pursuant
to collective bargaining agreements relating to employees of Purchaser or such
controlled entity).
10.2 Union Matters. All offers of employment made by Purchaser in
accordance with Section 10.1(i) above and all benefits to be provided pursuant
---------------
to Section 10.1(iii) above will be conditioned on acceptance by all such
-----------------
employees of Purchaser's work rules then in effect and in effect after the
Closing Date from time to time that are generally applicable to similarly
situated employees of Purchaser. Purchaser and Sellers agree to encourage their
respective unions to negotiate in good faith to resolve fair and equitable
seniority integration. Prior to Closing, TWA shall amend all existing Collective
Bargaining Agreements relating to any present or former employee of TWA to
provide that (i) scope, successorship, and benefits provisions of the Collective
Bargaining Agreements are not applicable to or being assumed by Purchaser as
part of or as the result of the transactions contemplated by this Agreement, and
(ii) consummation of the transactions contemplated by this Article X will not
violate or breach in any manner any provision of any Collective Bargaining
Agreement (collectively, the "CBA Amendments").
41
<PAGE>
10.3 Treatment of Pension Plans. Sellers' employees hired by Purchaser
--------------------------
pursuant to Section 10.1 above shall cease to participate in all pension plans
------------
(within the meaning of section 3(2) of ERISA) maintained or contributed to by
any of Sellers. Purchaser shall not assume or be liable for any such pension
plans. Purchaser intends to permit a transfer or merger of the assets of any
such pension plan which is a defined contribution plan (as defined in section
3(34) of ERISA) that Purchaser determines is qualified under section 401(a) of
the Code, or may permit the receipt of eligible rollover distributions (within
the meaning of section 402(f)(2)(A) of the Code) from such plan, with or to any
plan of Purchaser after the Closing Date.
10.4 Treatment of Welfare Plans. Sellers' employees hired by Purchaser
--------------------------
pursuant to Section 10.1 above shall cease to participate in all welfare plans
------------
(within the meaning of section 3(1) of ERISA) maintained or contributed to by
any of Sellers. Purchaser shall not assume or be liable for any such welfare
plans. Sellers shall have sole responsibility for "continuation coverage"
benefits provided under Sellers' group health plans to all former employees of
Sellers, and "qualified beneficiaries" of former employees of Sellers, for whom
a "qualifying event" has occurred on or prior to the Closing Date. Terms used in
this subsection and not otherwise defined herein shall have the meanings
ascribed to them under section 4980B of the Code and sections 601-608 of ERISA.
10.5 Tax Reporting. If requested by Purchaser, Purchaser, TWA and each
-------------
other Seller agree that, pursuant to the "Alternative Procedure" provided in
Section 5 of Revenue Procedure 96-60, 1996-2 C.B. 399, (i) Purchaser, TWA and
each other Seller will report on a predecessor-successor basis as set forth
therein, (ii) TWA and each other Seller will be relieved from filing a Form W-2
with respect to any employee of TWA and each other Seller who accepts employment
with Purchaser, and (iii) Purchaser will file (or cause to be filed) a Form W-2
for each such employee for the year that includes the Closing Date (including
the portion of such year that such employee was employed by TWA or any other
Seller). TWA agrees to provide Purchaser with all payroll and employment-related
information reasonably requested by Purchaser with respect to each employee of
TWA and each other Seller who commences employment with Purchaser.
ARTICLE XI
RISK OF LOSS
11.1 Risk of Loss on Sellers. TWA shall bear the risk of any loss or
-----------------------
damage to any Transferred Assets at all times prior to the delivery of physical
possession thereof to Purchaser in accordance with Section 5.3. TWA shall
promptly notify Purchaser if any such loss or damage occurs. If any such
Transferred Asset has been damaged but not destroyed then TWA promptly shall
fully repair (or cause the applicable Seller to fully repair) such Transferred
Asset; provided, however, that such repair obligation shall not exist if the
cost of repair would be sufficiently large that the only reasonable course of
action would be to treat such Transferred Asset as a total loss. In the event of
any total loss (or loss treated as a total loss in accordance with the
immediately prior sentence) of
42
<PAGE>
any Transferred Asset, the Purchase Price shall be reduced in accordance with
Section 4.4. If any loss or damage to any tangible Transferred Asset occurs
-----------
following the Closing at which such Transferred Asset was conveyed to Purchaser
but prior to the delivery of physical possession thereof to Purchaser in
accordance with Section 5.3, then TWA promptly shall pay or cause the applicable
-----------
Seller to pay to Purchaser the amount by which the Purchase Price would have
been reduced in accordance with Section 4.4 if such loss or damage had occurred
-----------
prior to the Closing.
ARTICLE XII
FURTHER AGREEMENTS AND TERMINATION
12.1 Termination Payment.
-------------------
(a) In the event this Agreement is terminated pursuant to Section
12.3(c)(v), Section 12.3(d)(ii) or Section 12.3(d)(iii) of this Agreement, then
---------- ------------------- --------------------
in any such case TWA shall be obligated to pay Purchaser, in cash, the sum of
$65,000,000 plus an amount (not to exceed $10,000,000) on account of the
Purchaser Expenses.
(b) In the event that this Agreement is terminated pursuant to
Section 12.3(c)(iii) (in a case in which any Seller is in material default or
--------------------
material breach of this Agreement, or where a representation or warranty made as
of the date hereof is shown to have been inaccurate as of the date hereof,
subject to the other terms and conditions of Section 12.3(c)(iii) regarding such
--------------------
inaccuracy), Section 12.3(c)(iv) or Section 12.3(c)(vi) of this Agreement or by
------------------- -------------------
TWA pursuant to Section 12.3(b)(iii) of this Agreement, then in any such case
--------------------
TWA shall be obligated to pay Purchaser, in cash, an amount (not to exceed
$10,000,000) on account of the Purchaser Expenses.
(c) Any amount payable pursuant to this Section 12.1 shall be
------------
referred to as the "Termination Amount". The Termination Amount shall be paid
immediately prior to the termination of this Agreement.
12.2 Bankruptcy Termination Payment. In the event this Agreement is
------------------------------
terminated pursuant to Section 12.3(b)(i) of this Agreement, TWA shall be
------------------
obligated to pay to Purchaser, in cash, the sum of $65,000,000 plus an amount
(not to exceed $10,000,000) on account of the Purchaser Expenses (such sum being
the "Section 12.3(b)(i) Termination Amount"), which amount shall be payable no
------------------
later than the earlier of (i) the consummation of the Recapitalization
Transaction or sale (whether in one transaction or a series of transactions) of
either TWA or all or substantially all of the assets of TWA or all or
substantially all of the Transferred Assets to a Person or Persons other than
Purchaser or an Affiliate of Purchaser, (ii) the effective date of any plan of
reorganization (that is not a plan of liquidation) confirmed in the Chapter 11
Cases, (iii) the dismissal of the Chapter 11 Cases, and (iv) the conversion of
the Chapter 11 Cases to cases under chapter 7 of the Bankruptcy Code. In the
event this Agreement is terminated pursuant to Section 12.3(c)(i) or Section
------------------ -------
12.3(c)(ii) of this Agreement, then (i) TWA shall be obligated to pay Purchaser,
-----------
immediately upon such termination of this Agreement, an amount (not to exceed
$10,000,000) on account of the Purchaser Expenses, and (ii) if,
43
<PAGE>
(x) within twelve (12) months following such termination of this Agreement, TWA
or the other Sellers consummate a Recapitalization Transaction or sale of either
TWA or all or substantially all of the assets of TWA or all or substantially all
of the Transferred Assets to a Person (or group of Persons) other than Purchaser
or an Affiliate of Purchaser, or (y) within twenty-four (24) months following
such termination of this Agreement, a chapter 11 plan for TWA or the other
Sellers is confirmed, then TWA shall be obligated to pay to Purchaser,
immediately upon the consummation of any such transaction, an amount equal to
$65,000,000 (the sum of the amounts described in clauses (i) and (ii) above
being the "Alternative Termination Amount," with the Section 12.3(b)(i)
Termination Amount and the Alternative Termination Amount being referred to
herein collectively as the "Bankruptcy Termination Amount").
12.3 Termination. This Agreement may be terminated and the
-----------
transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(a) by mutual consent of each of TWA and Purchaser;
(b) by either of TWA or Purchaser (provided that such party is
not then in material breach of any provision of this Agreement or any agreement
underlying the DIP Facility):
(i) if the Bankruptcy Court approves a Recapitalization
Transaction or a sale of TWA or all or substantially all of the assets of
TWA or any of the Transferred Assets to a Person (or group of Persons)
other than Purchaser or an Affiliate of Purchaser, provided, that no
termination under this Section 12.3(b)(i) shall be effective until the
------------------
Section 12.3(b)(i) Termination Amount shall have been paid to Purchaser;
------------------
(ii) if a Governmental Authority shall have issued an order,
decree or ruling or taken any other action (which order, decree or ruling
the parties hereto shall use their reasonable best efforts to lift), in
each case permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement and such order, decree,
ruling or other action shall have become final and nonappealable; or
(iii) if the Closing shall not have occurred on or before the
Scheduled Closing Date.
(c) by Purchaser (provided that Purchaser is not then in material
breach of any provision of this Agreement or any agreement underlying the DIP
Facility):
(i) if the Sale Procedures Order shall not have been entered
by the Bankruptcy Court within 20 days of the filing of the bankruptcy
petition by Sellers and, as of the time of such termination of this
Agreement, the Sale Procedures Order has not been entered by the
Bankruptcy Court;
44
<PAGE>
(ii) if the Approval Order has not been entered by the
Bankruptcy Court within 50 days of the filing of the bankruptcy petition by
Sellers and, as of the time of such termination of this Agreement, the
Approval Order has not been entered by the Bankruptcy Court; or
(iii) if a material default or material breach shall be made by
any Seller with respect to the due and timely performance of any of its
covenants or agreements contained herein, or if its representations or
warranties contained in the Agreement shall have become inaccurate (without
giving effect to any materiality or Material Adverse Effect qualifications
or exceptions contained therein) and such inaccuracy has had or would be
reasonably likely to have a Material Adverse Effect, if such default,
breach or inaccuracy has not been cured or waived within 30 days after
written notice to such Seller specifying, in reasonable detail, such
claimed default, breach or inaccuracy and demanding its cure or
satisfaction;
(iv) if Purchaser is not satisfied in its sole discretion with
the results of its due diligence review of the Transferred Assets
(including, without limitation, as a result of review of any schedules
provided after the execution of this Agreement) by the Non-Environmental
Due Diligence Completion Date;
(v) if the Chapter 11 Cases are not commenced on or before the
date that is one day following the date of this Agreement and, as of the
time that the terminating party provides the other party with notice of
such termination of this Agreement, the Chapter 11 Cases have not been
commenced; or
(vi) if an event or events or circumstance shall have occurred
since the date of this Agreement which, independently or together with any
other event, events or circumstance that have occurred or are reasonably
likely to occur, have or are reasonably likely to have a Material Adverse
Effect.
(d) by TWA (provided that TWA is not then in material breach of any
provision of this Agreement or any agreement underlying the DIP Facility):
(i) if a material default or breach shall be made by Purchaser
with respect to the due and timely performance of any of its covenants or
agreements contained herein, or if its representations or warranties
contained in the Agreement shall have become inaccurate and such inaccuracy
has had or would be reasonably likely to have a Purchaser Material Adverse
Effect, if such default, breach or inaccuracy has not been cured or waived
within 30 days after written notice to Purchaser specifying, in reasonable
detail, such claimed default, breach or inaccuracy and demanding its cure
or satisfaction;
(ii) if prior to the commencement of the Chapter 11 Cases, the
Board of Directors of TWA authorizes TWA, subject to complying with the
terms of this Agreement, to enter into a binding written agreement
concerning a transaction that constitutes a Superior Proposal and TWA
notifies Purchaser in
45
<PAGE>
writing that it intends to enter into such an agreement, attaching the most
current version of such agreement to such notice and during the five-day
period after TWA's notice, (A) TWA shall have offered to Purchaser the
opportunity to make such adjustments in the terms and conditions of its
offer such that any third party Acquisition Proposal no longer continues to
be a Superior Proposal and (B) TWA shall have reasonably concluded, upon
the termination of such five-day period, that any Acquisition Proposal
giving rise to TWA's notice continues to be a Superior Proposal; provided,
that no termination under this Section 12.3(d)(ii) shall be effective until
-------------------
the Termination Amount shall have been paid to Purchaser; or
(iii) if, prior to the commencement of the Chapter 11 Cases, the
Board of Directors of TWA authorizes TWA to enter into a binding written
agreement for a Recapitalization Transaction; provided, that no termination
under this Section 12.3(d)(iii) shall be effective until the Termination
--------------------
Amount shall have been paid to Purchaser.
12.4 Procedure and Effect of Termination. This Agreement shall in no event
-----------------------------------
terminate unless and until any and all amounts payable to Purchaser pursuant to
Section 12.1 and Section 12.2 in connection with such proposed termination shall
------------ ------------
have been paid in full to Purchaser. In the event of termination and
abandonment of the transactions contemplated hereby pursuant to Section 12.3,
------------
written notice thereof shall forthwith be given to the other parties to this
Agreement and this Agreement shall terminate (subject to the provisions of this
Section 12.4) and the transactions contemplated hereby shall be abandoned,
------------
without further action by any of the parties hereto. If this Agreement is
terminated as provided herein:
(a) upon request therefor, each party shall redeliver all documents,
work papers and other material of any other party relating to the transactions
contemplated hereby, whether obtained before or after the execution hereof, to
the party furnishing the same;
(b) no party hereto shall have any liability or further obligation to
any other party to this Agreement resulting from such termination except (i)
that the provisions of Section 12.1, Section 12.2, this Section 12.4 and Section
------------ ------------ ------------ -------
9.3 shall remain in full force and effect and (ii) no party waives any claim or
---
right against a breaching party to the extent that such termination results from
the breach by a party hereto of any of its representations, warranties,
covenants or agreements set forth in this Agreement; provided, however, that in
the event Purchaser is entitled to receive the Termination Amount or the
Bankruptcy Termination Amount, the right of Purchaser to receive such amount
shall constitute Purchaser's sole remedy for (and such amount shall constitute
liquidated damages in respect of) any breach by any Seller of any of its
representations, warranties, covenants or agreements set forth in this
Agreement; and
(c) the DIP Facility shall be terminated or shall terminate in
accordance with its terms.
46
<PAGE>
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.1 Notices. All notices and other communications required or permitted
-------
hereunder shall be in writing and, unless otherwise provided in this Agreement,
will be deemed to have been duly given when delivered in person or when
dispatched by electronic facsimile transfer (confirmed in writing by mail
simultaneously dispatched) or one business day after having been dispatched by a
nationally recognized overnight courier service to the appropriate party at the
address specified below:
(a) If to TWA, to:
Trans World Airlines, Inc.
One City Centre
515 North 6th Street
St. Louis, Missouri 63101
Attention: Kate Soled
Facsimile: (314) 589-3461
with a copy to:
Kirkland & Ellis
Aon Center
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Willard G. Fraumann & James H.M. Sprayregen
Facsimile: (312) 861-2200
(b) If to Purchaser, to:
American Airlines
4333 Amon Carter Boulevard
Fort Worth, Texas 76155
Attention: Anne McNamara
Facsimile: (817) 967-2501
with copies to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Thomas A. Roberts & Alan B. Miller
Facsimile: (212) 310-8007
and
47
<PAGE>
Weil, Gotshal & Manges LLP
100 Crescent Court, Suite 1300
Dallas, Texas 75201
Attention: Mary R. Korby
Facsimile: (214) 746-7777
or to such other address or addresses as any such party may from time to time
designate as to itself by like notice.
13.2 Actions by Sellers. Where any provision of this Agreement indicates
------------------
that any Seller shall take any specified action (or refrain from taking any
specified action) or requires any Seller to take any specified action (or to
refrain from taking any specified action), then, regardless of whether this
Agreement specifically provides that TWA shall do so, TWA shall cause such
Seller to take such action (or to refrain from taking such action, as
applicable). TWA shall be responsible for the failure of any such Seller to take
any such action (or to refrain from taking any such action, as applicable).
13.3 Expenses. Except as otherwise expressly provided herein, each party
--------
hereto shall pay any expenses incurred by it incident to this Agreement and in
preparing to consummate and consummating the transactions provided for herein.
13.4 Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of the parties hereto and their respective successors
(including, without limitation, any trustee appointed for TWA or any of the
Sellers) and permitted assigns, but shall not be assignable or delegable by any
party without the prior written consent of the other party; provided, however,
that upon notice to TWA or any other Seller delivered in accordance with Section
-------
13.1, Purchaser may assign or delegate any or all of their rights or obligations
----
under this Agreement to any Affiliate thereof or to any Person that directly or
indirectly acquires, after the Closing, all or substantially all of the assets
or voting stock of Purchaser, but such assignment or delegation shall not
relieve Purchaser of any obligation hereunder.
13.5 Waiver. Purchaser may, by written notice to TWA, and TWA (for itself
------
and on behalf of all other Sellers) may, by written notice to Purchaser, (a)
extend the time for performance of any of the obligations of the other party
under this Agreement, (b) waive any inaccuracies in the representations or
warranties of the other party contained in this Agreement, (c) waive compliance
with any of the conditions or covenants of the other party contained in this
Agreement, or (d) waive or modify performance of any of the obligations of the
other party under this Agreement; provided, however, that no such party may,
without the prior written consent of the other party, make or grant such
extension of time, waiver of inaccuracies or compliance or waiver or
modification of performance with respect to its representations, warranties,
conditions or covenants hereunder. Except as provided in the immediately
preceding sentence, no action taken pursuant to this Agreement shall be deemed
to constitute a waiver of compliance with any representations, warranties,
conditions or covenants contained in this Agreement or shall operate or be
construed as a waiver of any subsequent breach, whether of a similar or
dissimilar nature.
48
<PAGE>
13.6 Entire Agreement; Disclosure Schedules. This Agreement, which
--------------------------------------
includes the schedules and exhibits hereto, supercedes any other agreement,
whether written or oral, that may have been made or entered into by any party
relating to the matters contemplated hereby and constitutes the entire agreement
by and among the parties hereto.
13.7 Amendments, Supplements, Etc. This Agreement may be amended or
----------------------------
supplemented at any time by additional written agreements as may mutually be
determined by Purchaser and TWA to be necessary, desirable or expedient to
further the purposes of this Agreement or to clarify the intention of the
parties.
13.8 Rights of the Parties. Nothing expressed or implied in this
---------------------
Agreement is intended or shall be construed to confer upon or give any Person
other than the parties hereto any rights or remedies under or by reason of this
Agreement or any transaction contemplated hereby.
13.9 Applicable Law. This Agreement and the legal relations among the
--------------
parties hereto shall be governed by and construed in accordance with the rules
and substantive Laws of the State of New York, without regard to conflicts of
law provisions thereof.
13.10 Execution in Counterparts. This Agreement may be executed in two or
-------------------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement. Any counterpart may be
executed by facsimile signature and such facsimile signature shall be deemed an
original.
13.11 Titles and Headings. Titles and headings to Sections herein are
-------------------
inserted for convenience of reference only, and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
13.12 Invalid Provisions. If any provision of this Agreement (other than
------------------
Section 5.4 or Article XII of this Agreement or any part or provision thereof)
-----------
is held to be illegal, invalid, or unenforceable under any present or future
Law, and if the rights or obligations under this Agreement of TWA on the one
hand and Purchaser on the other hand will not be materially and adversely
affected thereby, (a) such provision shall be fully severable; (b) this
Agreement shall be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part hereof; (c) the remaining
provisions of this Agreement shall remain in full force and effect and shall not
be affected by the illegal, invalid, or unenforceable provision or by its
severance from this Agreement; and (d) in lieu of such illegal, invalid, or
unenforceable provision, there shall be added automatically as a part of this
Agreement a legal, valid, and enforceable provision as similar in terms to such
illegal, invalid, or unenforceable provision as may be possible.
13.13 Transfers. Purchaser and TWA shall, and TWA shall cause each other
---------
Seller to, cooperate and take such action as may be reasonably requested by the
other in order to effect an orderly transfer of the Transferred Assets with a
minimum of disruption to the operations and employees of the businesses of
Purchaser, TWA or any other Seller.
49
<PAGE>
13.14 Brokers. TWA hereby agrees to indemnify and hold harmless the
-------
Purchaser against any liability, claim, loss, damage or expense incurred by TWA
or any other Seller relating to any fees or commissions owed to any broker,
finder or financial advisor as a result of actions taken by TWA or any other
Seller. Purchaser hereby agrees to indemnify and hold harmless TWA against any
liability, claim, loss, damage or expense incurred by Purchaser relating to any
fees or commissions owed to any broker, finder or financial advisor as a result
of actions taken by Purchaser.
13.15 Exculpation. Each Seller agrees that neither Purchaser nor its
-----------
respective controlling persons, officers, directors, partners, agents, employees
or other representatives shall be liable for any action heretofore or hereafter
taken or omitted to be taken by any of them in connection with the transactions
contemplated by this Agreement.
13.16 Principles of Interpretation. Whenever used in this Agreement,
----------------------------
except as otherwise expressly provided or unless the context otherwise requires,
any noun or pronoun shall be deemed to include the plural as well as the
singular and to cover all genders. Unless otherwise specified, the terms
"hereof," "herein," "hereby" and similar terms refer to this Agreement as a
whole (including the exhibits and schedules hereto), and references herein to
Articles or Sections refer to Articles or Sections of this Agreement.
50
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
AMERICAN AIRLINES, INC.
By:___________________________
Name:_________________________
Title:________________________
TRANS WORLD AIRLINES, INC.
By:___________________________
Name:_________________________
Title:________________________
<PAGE>
EXHIBIT A
---------
DEFINITIONS
"Accounts Receivable Amount" shall mean "Receivables, Less Allowance for
--------------------------
Doubtful Accounts" of TWA and its consolidated subsidiaries as of the Closing
Date, as stated in the Pre-Closing Statement or Final Closing Statement,
calculated on a basis consistent in all material respects with the methods,
principles, practices and policies employed in the preparation and presentation
of "Receivables, Less Allowance for Doubtful Accounts" contained in the
September Balance Sheet and in accordance with generally accepted accounting
principles consistently applied (without regard to consummation of the
transactions contemplated by this Agreement).
"Accrued Employee Expenses Amount" shall mean the sum of "Accrued Expenses:
--------------------------------
Employee Compensation and Vacations Earned" and "Accrued Expenses:
Contributions to Retirement and Pension Trusts", in each case of TWA and its
consolidated subsidiaries as of the Closing Date, as stated in the Pre-Closing
Statement or Final Closing Statement, calculated on a basis consistent in all
material respects with the methods, principles, practices and policies employed
in the preparation and presentation of "Accrued Expenses: Employee Compensation
and Vacations Earned" and "Accrued Expenses: Contributions to Retirement and
Pension Trusts" contained in the September Balance Sheet and in accordance with
generally accepted accounting principles consistently applied (without regard to
consummation of the transactions contemplated by this Agreement).
"Acquisition Proposal" means any proposal or offer, other than a proposal
--------------------
or offer by Purchaser or any of its Affiliates, for (a) any merger,
consolidation, share exchange, business combination or other similar transaction
with TWA or any of the other Sellers, (b) any sale, lease, exchange, mortgage,
pledge, transfer or other disposition of 10% or more of the assets and
liabilities of TWA in a single transaction or series of transactions (whether
related or unrelated), (c) any tender offer or exchange offer for 20% or more of
the outstanding shares of TWA's common stock or any class of TWA's debt
securities or the filing of a registration statement under the Securities Act of
1933, as amended, in connection therewith, (d) the acquisition of beneficial
ownership or a right to acquire beneficial ownership of, or the formation of any
"group" (as defined under Section 13(d)(3) of the Securities Exchange Act of
1934, as amended) which beneficially owns or has the right to acquire beneficial
ownership of 20% or more of the then outstanding shares of any class of TWA's
common stock or any class of TWA's debt securities or (e) any public
announcement of a proposal, plan or intention to do any of the foregoing or any
agreement to engage in any of the foregoing.
"Advance Ticket Sales Amount" shall mean "Advance Ticket Sales" of TWA and
---------------------------
its consolidated subsidiaries as of the Closing Date, as stated in the Pre-
Closing Statement or Final Closing Statement, calculated on a basis consistent
in all material respects with the methods, principles, practices and policies
employed in the preparation and presentation of "Advance Ticket Sales" contained
in the September Balance Sheet
<PAGE>
and in accordance with generally accepted accounting principles consistently
applied (without regard to consummation of the transactions contemplated by this
Agreement).
"Affiliate" shall mean with respect to any Person, any other person who,
---------
directly or indirectly, controls, is controlled by, or is under common control
with that Person.
"Agreement" shall have the meaning ascribed to such term in the preamble to
---------
this Agreement.
"Aircraft" shall mean each of the Owned Aircraft and Leased Aircraft
--------
contemplated by this Agreement, each consisting of an airframe and each of the
following items installed on or in such airframe: Engines, landing gear,
auxiliary power units, avionics, appliances, parts, furnishings, instruments,
accessories and equipment.
"Aircraft Leases" shall have the meaning ascribed to such term in Section
--------------- -------
6.12(b) of this Agreement.
-------
"Alternative Termination Amount" shall have the meaning ascribed to such
------------------------------
term in Section 12.2 of this Agreement.
------------
"Approval Order" shall have the meaning ascribed to such term in Section
-------------- -------
8.11(d) of this Agreement.
-------
"Assumed Aircraft Leases" shall mean the Aircraft Leases (including all
-----------------------
advances and deposits thereunder) other than Designated Aircraft Leases.
"Assumed Contracts" shall mean the following contracts or agreements
-----------------
(provided that if any such contracts or agreements relate not only to
Transferred Assets but also other assets, then only the portions of such
contracts and agreements that relate specifically to the Transferred Assets
shall be deemed to be Assumed Contracts), in each case other than Designated
Contracts:
(a) the Assumed Aircraft Leases;
(b) the Assumed Gate Leases;
(c) the Assumed Ground Equipment Leases;
(d) the Assumed Gate Property Leases;
(e) the Retention Agreements; and
(f) all other contracts, agreements, arrangements and understandings of
Sellers, other than Retained Liabilities and Excluded Assets.
A-2
<PAGE>
"Assumed Debt Obligations" shall have the meaning ascribed to such term in
------------------------
Section 3.1(a) of this Agreement.
--------------
"Assumed Gate Leases" shall mean the Gate Leases (including all advances
-------------------
and deposits thereunder) other than Designated Gate Leases.
"Assumed Gate Property Leases" shall mean the Gate Property Leases
----------------------------
(including all advances and deposits thereunder) other than Designated Gate
Property Leases.
"Assumed Ground Equipment Leases" shall mean the Ground Equipment Leases
-------------------------------
(including all advances and deposits thereunder) other than Designated Ground
Equipment Leases.
"Assumed Liabilities" shall have the meaning ascribed to such term in
-------------------
Section 3.1 of this Agreement.
-----------
"Assumption Agreement" shall have the meaning ascribed to such term in
--------------------
Section 5.2(b)(ii) of this Agreement.
------------------
"Avoidance Actions" shall mean all claims and rights of action against
-----------------
vendors and lessors of the Assumed Contracts and lenders under the Assumed Debt
Obligations, including, but not limited to, all rights and avoidance claims of
Sellers under chapter 5 of the Bankruptcy Code.
"Bankruptcy Code" shall have the meaning ascribed to such term in the
---------------
Recitals of this Agreement.
"Bankruptcy Court" shall have the meaning ascribed to such term in the
----------------
Recitals of this Agreement.
"Bankruptcy Resolution Date" means the date on which a Final Order of the
--------------------------
Bankruptcy Court has been entered dismissing, closing or otherwise terminating
the Chapter 11 Cases.
"Bankruptcy Termination Amount" shall have the meaning ascribed to such
-----------------------------
term in Section 12.2 of this Agreement.
------------
"Benefit Plans" shall have the meaning ascribed to such term in Section
------------- -------
6.20(b) of this Agreement.
-------
"Bill of Sale" shall have the meaning ascribed to such term in Section
------------ -------
5.2(a)(i) of this Agreement.
---------
"Business Day" shall mean a day other than a Saturday, Sunday or other day
------------
on which commercial banks in New York City, New York are authorized or required
by Law to close.
A-3
<PAGE>
"CBA Amendments" shall have the meaning ascribed to such term in Section
-------------- -------
10.2 of this Agreement.
----
"Chapter 11 Cases" shall mean the voluntary cases commenced by Sellers
----------------
under chapter 11 of the Bankruptcy Code.
"Chapter 11 Sellers" shall mean all Sellers other than Constellation
------------------
Finance LLC, a Delaware limited liability company.
"Closing" shall have the meaning ascribed to such term in Section 5.1 of
------- -----------
this Agreement.
"Closing Date" shall have the meaning ascribed to such term in Section 5.1
------------ -----------
of this Agreement.
"Closing Statement" shall have the meaning ascribed to such term in Section
----------------- -------
4.3(c) of this Agreement.
------
"Code" shall mean the Internal Revenue Code of 1986, as amended, and all
----
regulations promulgated thereunder.
"Collateral Agreements" shall mean the Bill of Sale, Assumption Agreement
---------------------
and the other assignment or transfer documents delivered at the Closing.
"Collective Bargaining Agreements" shall have the meaning ascribed to such
--------------------------------
term in Section 6.19(a) of this Agreement.
---------------
"Competing Offer" shall have the meaning ascribed to such term in Section
--------------- -------
8.11(a) of this Agreement.
-------
"Consent" shall mean any consent, approval or authorization of, notice to,
-------
or designation, registration, declaration or filing with, any Person.
"Contract" shall mean any agreement, contract, lease, commitment, license,
--------
undertaking or other legally binding contractual right or obligation to which a
Person is a party or by which a Person or its assets or properties are bound.
"Data" shall mean all documents, books, drawing, logs, manuals and records
----
relating primarily or exclusively to the Transferred Assets (including, without
limitation, maintenance and operations records relating to the Owned Aircraft
and Engines, the Leased Aircraft and Engines leased pursuant to the Assumed
Aircraft Leases, the Spare Parts and the Ground Equipment).
"Delivery Condition" shall mean with respect to each Aircraft:
------------------
(A) the Aircraft shall have a validly issued, current individual
aircraft FAA Certificate of Airworthiness with respect to such Aircraft
which satisfies all requirements for the effectiveness of such FAA
Certificate of Airworthiness;
A-4
<PAGE>
(B) the Aircraft shall be in a serviceable condition, such that the
Aircraft and each of its structures, systems and components are functioning
in accordance with its intended use as required or set forth in any FAA
regulations, rules, standards or requirements or in any FAA-approved
documentation, including any applicable manuals, technical standard orders
or parts manufacturing approval certificates;
(C) the Aircraft shall be complete, including, without limitation,
shall have installed therein one (1) set of catering and cabin service
equipment used in Seller's service;
(D) the Aircraft shall have all minimum equipment list ("MEL") systems
and components operable; and
(E) the Aircraft shall be in compliance with all issued and effective
mandatory manufacturer's service bulletins and airworthiness directives
applicable thereto, in each case which require compliance on or before the
Closing Date.
"Designated Aircraft Leases" shall mean those Aircraft Leases that
--------------------------
Purchaser may designate and determine, in its sole discretion, not to have
Sellers assign to Purchaser; provided that Purchaser shall be obligated to
identify those Aircraft Leases that shall be designated as Designated Aircraft
Leases on or before the Closing and upon such designation the listing of the
Designated Aircraft Leases shall be made part of Schedule 2.2 and such Aircraft
------------
Leases shall no longer constitute Aircraft Leases for any purpose hereof.
"Designated Contracts" shall mean those Assumed Contracts that Purchaser
--------------------
may designate and determine, in its sole discretion, not to have Sellers assign
to Purchaser; provided that Purchaser shall be obligated to identify those
Assumed Contracts that shall be designated as Designated Contracts on or before
the Closing and upon such designation the listing of the Designated Contracts
shall be made part of Schedule 2.2 and such Assumed Contracts shall no longer
------------
constitute Assumed Contracts for any purpose hereof.
"Designated Gate Leases" shall mean those Gate Leases that Purchaser may
----------------------
designate and determine, in its sole discretion, not to have Sellers assign to
Purchaser; provided that Purchaser shall be obligated to identify those Gate
Leases that shall be designated as Designated Gate Leases on or before the
Closing and upon such designation the listing of the Designated Gate Leases
shall be made part of Schedule 2.2 and such Gate Leases shall no longer
------------
constitute Gate Leases for any purpose hereof.
"Designated Gate Property Leases" shall mean those Gate Property Leases
-------------------------------
that Purchaser may designate and determine, in its sole discretion, not to have
Sellers assign to Purchaser; provided that Purchaser shall be obligated to
identify those Gate Property Leases that shall be designated as Designated Gate
Property Leases on or before the Closing and upon such designation the listing
of the Designated Gate Property Leases
A-5
<PAGE>
shall be made part of Schedule 2.2 and such Gate Property Leases shall no longer
------------
constitute Gate Property Leases for any purpose hereof.
"Designated Ground Equipment Leases" shall mean those Ground Equipment
----------------------------------
Leases that Purchaser may designate and determine, in its sole discretion, not
to have Sellers assign to Purchaser; provided that Purchaser shall be obligated
to identify those Ground Equipment Leases that shall be designated as Designated
Ground Equipment Leases on or before the Closing and upon such designation the
listing of the Designated Ground Equipment Leases shall be made part of Schedule
--------
2.2 and such Ground Equipment Leases shall no longer constitute Ground Equipment
---
Leases for any purpose hereof.
"DIP Facility" shall have the meaning ascribed to such term in the Recitals
------------
to this Agreement.
"DOT" shall mean the United States Department of Transportation or any
---
successor thereto.
"Engines" shall mean engines, spare engines, parts, tooling and other
-------
equipment necessary to support the operation of the Owned Aircraft and the
Leased Aircraft, as applicable.
"Environmental Claims" shall have the meaning ascribed to such term in
--------------------
Section 6.17(e)(i) of this Agreement.
------------------
"Environmental Laws" shall have the meaning ascribed to such term in
------------------
Section 6.17(e)(ii) of this Agreement.
-------------------
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
-----
amended.
"Excluded Assets" shall have the meaning ascribed to such term in Section
--------------- -------
2.2 of this Agreement.
---
"FAA" shall mean the Federal Aviation Administration or any successor
---
thereto.
"Federal Aviation Act" shall mean the Federal Aviation Act of 1958, as
--------------------
amended, together with the aviation regulations of the FAA, as the same may be
in effect from time to time.
"Final Closing Statement" shall have the meaning ascribed such term in
-----------------------
Section 4.3(f) of this Agreement.
--------------
"Final Order" shall mean an order or judgment the operation or effect of
-----------
which is not stayed, and as to which order or judgment (or any revision,
modification or amendment thereof), the time to appeal or seek review or
rehearing has expired, and as to which no appeal or petition for review or
motion for rehearing or reargument has been taken or been made and is pending
for argument.
A-6
<PAGE>
"Gate Leases" shall have the meaning ascribed to such term in Section
----------- -------
6.16(b) of this Agreement.
-------
"Gate Property" shall mean all facilities, equipment, fixtures,
-------------
appurtenances and personality (including, without limitation, bag rooms, ticket
counters and other exclusive use space) owned or used by any Seller and used
exclusively or primarily in connection with the Gates.
"Gate Property Documents" shall mean the Gate Leases, the Gate Property
-----------------------
Leases and the Ground Equipment Leases.
"Gate Property Leases" shall have the meaning ascribed to such term in
--------------------
Section 6.16(c) of this Agreement.
---------------
"Gates" shall have the meaning ascribed to such term in Section 6.16(a) of
----- ---------------
this Agreement.
"Governmental Authority" shall mean any federal, state, local or foreign
----------------------
government or any subdivision, agency, instrumentality, authority, department,
commission, board or bureau thereof or any federal, state, local or foreign
court, tribunal or arbitrator (including, without limitation, the Bankruptcy
Court).
"Ground Equipment" shall mean each vehicle, tool, piece of equipment, or
----------------
other tangible asset used in connection with aircraft operations or maintenance
(other than Owned Aircraft, Leased Aircraft, and Spare Parts).
"Ground Equipment Leases" shall have the meaning ascribed to such term in
-----------------------
Section 6.16(d) of this Agreement.
---------------
"HSR Act" shall mean Hart-Scott-Rodino Act of 1976, as amended.
-------
"Improvements" shall have the meaning ascribed to such term in Section
------------ -------
6.24(b) of this Agreement.
-------
"Intellectual Property" shall mean (i) all inventions (whether patentable
---------------------
or not patentable and whether or not reduced to practice), all improvements
thereto, and all patents, patent applications, and patent disclosures, together
with all reissuances, divisions, continuations, continuations-in-part,
revisions, renewals, extensions, and reexaminations thereof, (ii) all registered
and unregistered trademarks, service marks, trade dress, logos, trade names, and
corporate names, together with all translations, adaptations, derivations, and
combinations thereof and including all goodwill associated therewith, and all
applications, registrations and renewals in connection therewith, (iii) all
works of authorship, including, without limitation, all copyrightable works, all
copyrights, and all applications, registrations and renewals in connection
therewith, and all moral rights, (iv) all databases, data compilations and data
collections, (v) all trade secrets and confidential information (including,
without limitation, ideas, research and development, know-how, processes,
methods, techniques, technical data, designs,
A-7
<PAGE>
drawings, specifications, customer and supplier lists, pricing and cost
information, and business, technical and marketing plans and proposals), (vi)
all domain names, web addresses and websites, (vii) all computer software,
source code and object code, whether embodied in software, firmware or otherwise
(including related data and documentation), (viii) all other intellectual
property and proprietary rights, and (ix) all copies and tangible embodiments of
all of the foregoing (i) through (ix) in any form or medium.
"Laws" shall mean all federal, state, local or foreign laws, orders, writs,
----
injunctions, decrees, ordinances, awards, stipulations, statutes, judicial or
administrative doctrines, rules or regulations enacted, promulgated, issued or
entered by a Governmental Authority, including without limitation, the
Bankruptcy Code, the Federal Aviation Act and any Environmental Laws.
"Leased Aircraft" shall have the meaning ascribed to such term in Section
--------------- -------
6.12(c) of this Agreement, but shall not include for any purpose hereof aircraft
-------
listed on Schedule 2.2.
------------
"Leased Assets" means the Aircraft Leases, the Gate Leases, Gate Property
-------------
Leases and the Ground Equipment Leases.
"Leased Real Estate" shall have the meaning ascribed to such term in
------------------
Section 6.24(a) of this Agreement.
---------------
"Liens" shall mean all title defects or objections, mortgages, liens,
-----
claims, charges, pledges, or other encumbrances of any nature whatsoever,
including without limitation licenses, leases, chattel or other mortgages,
collateral security arrangements, pledges, title imperfections, defect or
objection liens, security interests, conditional and installment sales
agreements, easements, encroachments or restrictions, of any kind and other
title or interest retention arrangements, reservations or limitations of any
nature.
"Material Adverse Effect" shall mean (a) a material adverse effect on the
-----------------------
business, results of operations, condition (financial or otherwise) or prospects
of the business operated by TWA, other than any change, circumstance or effect
relating solely (i) to the economy or financial markets in general, (ii) to
changes in general political or regulatory conditions in the United States,
(iii) generally to the industries in which TWA operates and not specifically
relating to TWA, (iv) to or resulting from the announcement or pendency of the
transactions contemplated by this Agreement and/or (v) to or resulting from the
filing of the Chapter 11 Cases, or (b) a material adverse effect on (x) the
transactions contemplated by this Agreement, (y) the legality, validity or
enforceability of this Agreement and the agreements and instruments to be
entered into in connection herewith, or the realization of the rights and
remedies thereunder, or (z) the ability of TWA to perform its obligations under
this Agreement.
"Materials of Environmental Concern" shall have the meaning ascribed to
----------------------------------
such term in Section 6.17(e)(iii) of this Agreement.
--------------------
A-8
<PAGE>
"Owned Aircraft" shall have the meaning ascribed to such term in Section
-------------- -------
6.12(a) of this Agreement, but shall not include for any purpose hereof aircraft
-------
listed on Schedule 2.2.
------------
"Owned Gate Items" shall have the meaning ascribed to such term in Section
---------------- -------
6.16(e) of this Agreement.
-------
"Owned Real Estate" shall have the meaning ascribed to such term in Section
----------------- -------
6.24(a) of this Agreement.
-------
"Pension Plans Agreement" shall have the meaning ascribed to such term in
-----------------------
Section 6.19(d) of this Agreement.
---------------
"Permits" shall mean all permits, licenses, approvals, franchises, notices
-------
and authorizations issued by any Governmental Authority that relate to or
otherwise are used or are necessary in connection with the ownership, operation
or other use of any of the Transferred Assets.
"Permitted Liens" shall mean Liens for taxes, assessments and other
---------------
governmental charges which are not due and payable.
"Person" shall mean any individual, general partnership, limited
------
partnership, limited liability company, joint venture, corporation, trust,
unincorporated organization, Governmental Authority or other entity.
"Pre-Closing Statement" shall have the meaning ascribed to such term in
---------------------
Section 4.3(a) of this Agreement.
--------------
"Purchase Price" shall have the meaning ascribed to such term in Section
-------------- -------
4.1 of this Agreement.
---
"Purchase Price Offset Amount" shall have the meaning ascribed to such term
----------------------------
in Section 4.7 of this Agreement.
-----------
"Purchaser" shall have the meaning ascribed to such term in the preamble to
---------
this Agreement.
"Purchaser Expenses" shall mean Purchaser's reasonable out of pocket
------------------
expenses (including but not limited to reasonable financial advisor's account's
or attorney's fees and expenses and filing fees, including without limitation
those paid in connection with filings under the HSR Act) incurred in connection
with the negotiation and performance of this Agreement and its due diligence
investigation of the Sellers and the Transferred Assets in connection with this
Agreement.
"Purchaser Material Adverse Effect" shall mean a materially adverse effect
---------------------------------
on the business, results of operations or financial condition of Purchaser and
its subsidiaries and Affiliates, taken as a whole, other than any change,
circumstance or effect relating (i) to the economy or financial markets in
general, (ii) to changes in general political or
A-9
<PAGE>
regulatory conditions in the United States, (iii) generally to the industries in
which Purchaser operates and not specifically relating to Purchaser or (iv) to
or resulting from the announcement or pendency of the transactions contemplated
by this Agreement.
"Real Estate Assets" shall have the meaning ascribed to such term in
------------------
Section 6.24(a) of this Agreement.
---------------
"Recapitalization Transaction" means a recapitalization transaction
----------------------------
involving TWA and its existing security holders that does not involve the sale
of any Seller or all or substantially all of the assets of any Seller.
"Resolution Period" shall have the meaning ascribed such term in Section
----------------- -------
4.3(d) of this Agreement.
------
"Retained Liabilities" shall have the meaning ascribed to such term in
--------------------
Section 3.2 of this Agreement.
-----------
"Retention Agreements" shall mean the Stay Bonus Arrangements and the
--------------------
Success Bonus Arrangements, each as described more fully on Schedule I hereto,
----------
and the Change in Control Agreements listed on Schedule I hereto. The Retention
----------
Agreements shall have the characteristics described below:
(A) Participants designated on Schedule I hereto shall be eligible to
----------
receive a "Stay Bonus". Each Stay Bonus shall be an amount calculated
----------
as the percentage of the participant's annual base salary set forth on
Schedule I and shall be further determined as set forth on Schedule I,
---------- ----------
with one-third of the Stay Bonus payable to the applicable participant
in cash in arrears on the date of filing of the Chapter 11 Cases, one-
third of the Stay Bonus payable to the applicable participant in cash
in arrears on the date that falls six months after the filing of the
Chapter 11 Cases and the remaining one-third payable in cash on the
first anniversary of the filing of the Chapter 11 Cases. In order to
receive the applicable portion of the Stay Bonus payment on either
such date, the participant must be either employed by a Seller or
(after the Closing) by Purchaser on such date; however, a pro rata
portion of the unpaid amount of the Stay Bonus shall be paid to any
participant who is terminated without cause after the filing of the
Chapter 11 Cases and prior to the first anniversary of the filing of
the Chapter 11 Cases (calculated on a per diem basis from the date of
termination to the first anniversary of the filing of the Chapter 11
Cases). No amount of Stay Bonus whatsoever shall be due to any
participant who voluntarily terminates his or her employment with a
Seller or Purchaser, as applicable.
(B) Participants designated on Schedule I hereto shall be eligible to
----------
receive a "Success Bonus". Each Success Bonus shall be in the amount
-------------
set forth opposite the participant's name on Schedule I hereto. As to
----------
each participant, the Success Bonus shall be paid in cash in two
installments, with 25% of the respective Success Bonus paid upon the
consummation of
A-10
<PAGE>
the Closing of the sale of the Transferred Assets to Purchaser and the
remaining 75% of the respective Success Bonus paid 180 days after the
consummation of the Closing. In order to receive the first installment
of the Success Bonus payment, the participant must be employed by a
Seller on such date. In order to receive the second installment of the
Success Bonus payment, the participant must be employed by a Seller or
Purchaser on such date; however, a pro rata portion of the unpaid
amount of the Success Bonus (calculated on a per diem basis) shall be
paid to any participant who is terminated without cause prior to the
180th day after the consummation of the Closing. In the event that
this Agreement is terminated due to a breach by Purchaser, each
participant designated to receive a Success Bonus hereunder shall be
paid by Purchaser an amount equal to his or her Success Bonus, such
payment to be made promptly after termination. No amount of Success
Bonus whatsoever shall be due to any participant who voluntarily
terminates his or her employment with a Seller or Purchaser, as
applicable.
(C) Purchaser will assume the Change in Control Agreements listed on
Schedule I as qualified by Section 3.1(d); provided, that the benefits
---------- --------------
of any employee under such a Change in Control Agreement shall become
due upon termination of the employee without cause following the
consummation of the sale of the Transferred Assets to Purchaser.
(D) Notwithstanding the other provisions of this Agreement, Purchaser
shall be entitled to withhold from any payment under a Retention
Agreement all applicable federal, state, local and foreign taxes as
required by law or regulation.
"Rights Plan Amendment" shall have the meaning ascribed to such term in
---------------------
Section 8.14 of this Agreement.
------------
"Route" shall have the meaning ascribed to such term in Section 6.21 of
----- ------------
this Agreement.
"Sale Procedures Order" shall have the meaning ascribed to such term in
---------------------
Section 8.11(a) of this Agreement.
---------------
"Scheduled Closing Date" shall mean May 31, 2001, provided that Purchaser
----------------------
may, by written notice to TWA, extend the Scheduled Closing Date to such later
date as Purchaser in its sole discretion may determine but in all events within
30 days after satisfaction or waiver of all conditions set forth in Section 5.4
-----------
and Section 5.5.
-----------
"Section 12.3(b)(i) Termination Amount" shall have the meaning ascribed to
-------------------------------------
such term in Section 12.2 of this Agreement.
------------
A-11
<PAGE>
"Sellers" shall have the meaning ascribed to such term in the Recitals to
-------
this Agreement.
"September Balance Sheet" shall have the meaning ascribed such term in
-----------------------
Section 4.3(a) of this Agreement.
--------------
"Slots" shall have the meaning ascribed to such term in Section 6.13 of
----- ------------
this Agreement.
"Spare Parts" shall mean spare parts used or useful in connection with the
-----------
operation and maintenance of aircraft, including without limitation expendable
and rotable spare parts and tooling.
"Spare Parts Amount" shall mean "Spare Parts, Materials and Supplies, Less
------------------
Allowance for Obsolescence" of TWA and its consolidated subsidiaries as of the
Closing Date, as stated in the Pre-Closing Statement or Final Closing Statement,
calculated on a basis consistent in all material respects with the methods,
principles, practices and policies employed in the preparation and presentation
of "Spare Parts, Materials and Supplies, Less Allowance for Obsolescence"
contained in the September Balance Sheet and in accordance with generally
accepted accounting principles consistently applied (without regard to
consummation of the transactions contemplated by this Agreement).
"Superior Proposal" means an Acquisition Proposal that the Board of
-----------------
Directors of TWA has determined in good faith, if accepted, is reasonably likely
to be consummated taking into account all legal, financial, regulatory and other
aspects of the proposal and the person making the proposal, and that the Board
of Directors of TWA believes in good faith, after consultation with an outside
financial advisor would, if consummated, result in a transaction more favorable
from a financial point of view than the transaction proposed by this Agreement.
"Tax" and "Taxes" shall mean all federal, state, local, or foreign income,
--- -----
payroll, employee withholding, unemployment insurance, social security, sales,
use, service, service use, leasing, leasing use, excise, franchise, gross
receipts, value added, alternative or add-on minimum, estimated, occupation,
real and personal property, stamp, transfer, workers' compensation, severance,
windfall profits, environmental (including taxes under Section 59A of the Code),
or other tax of the same or of a similar nature, including any interest,
penalty, or addition thereto, whether disputed or not.
"Tax Return" shall mean any return, declaration, report, claim for refund,
----------
or information return or statement relating to Taxes or any amendment thereto,
and including any schedule or attachment thereto.
"Termination Amount" shall have the meaning ascribed to such term in
------------------
Section 12.1(c) of this Agreement.
---------------
"Transferred Assets" shall have the meaning ascribed to such term in
------------------
Section 2.1 of this Agreement.
-----------
A-12
<PAGE>
"TWA" shall have the meaning ascribed to such term in the preamble to this
---
Agreement.
"Warranty" shall mean all claims and rights against third parties, if and
--------
to the extent the same relate to or arise under the Transferred Assets,
including, without limitation, all rights under manufacturers' and vendors'
warranties, if any, and all rights of recovery, set-offs and credits.
"Worldspan" shall have the meaning ascribed to such term in Section 2.1 of
--------- -----------
this Agreement.
A-13
<PAGE>
EXHIBIT B
---------
DISCLOSURE SCHEDULE DELIVERY
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
Schedule Schedule Description Delivering Party Delivery Date
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
2.2 Excluded Assets Purchaser At Signing
--------------------------------------------------------------------------------------------------------------------------------
3.1(a) Assumed Debt Obligations Purchaser 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
3.1(c) Assumed Liabilities Purchaser At Signing
--------------------------------------------------------------------------------------------------------------------------------
3.1(e) Air Travel Benefits Purchaser At Signing
--------------------------------------------------------------------------------------------------------------------------------
4.2 Purchase Price Allocation Purchaser 120 days after Closing
--------------------------------------------------------------------------------------------------------------------------------
4.3(a) Pre-Closing Statement and Closing Statement Purchaser At Signing
--------------------------------------------------------------------------------------------------------------------------------
4.4 Other Adjustments to the Purchase Price Purchaser At Signing
--------------------------------------------------------------------------------------------------------------------------------
6.4 Third Party Options TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.6 Consents and Approvals TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.7 Permits TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.11 Assumed Contract Consents TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.12(a) Owned Aircraft TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.12(b) Leased Aircraft TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.12(c) "C" and "D" Checks TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.12(d) Aircraft Not in Delivery Condition TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.12(g) Deferred Maintenance TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.12(i) Interchange/Pooling Agreements TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.13 Slots TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.14 Casualty TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.16(a) Gates TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.16(b) Gate Leases TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.16(c) Gate Property Leases TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------------------------
6.16(d) Ground Equipment Leases TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.16(e) Owned Gate Items TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.16(i) Deferred Maintenance for Gate Items TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.17(a) Environmental Compliance TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.17(b) Environmental Claims TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.17(c) Environmental Allegations TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.17(d) Environmental Sites TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.18 Taxes and Tax Returns TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.19(a) Collective Bargaining Agreements TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.19(c) Union and Labor Agreement Conflicts TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.20(b) Employee Pension Benefit Plans TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.21 Routes TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.22 Intellectual Property TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.24(a) Real Estate Assets TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
6.24(e) Impaired Real Estate Assets TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
7.3 Purchaser Consents Purchaser 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
10.1(a) Union Employees TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
10.1(b) Non- Union Employees TWA 02/12/2001
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
B-2
<PAGE>
EXHIBIT C
---------
SALE PROCEDURES ORDER
<PAGE>
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: ) Chapter 11
)
TRANS WORLD AIRLINES, INC., et al.,/1/ ) Case No. 01-0__(__)
) (Jointly Administered)
)
Debtors. )
ORDER (A) AUTHORIZING AND SCHEDULING A PUBLIC AUCTION AT
WHICH THE DEBTORS WILL SOLICIT BIDS FOR THE SALE OF
SUBSTANTIALLY ALL OF THEIR ASSETS FREE AND CLEAR OF LIENS,
CLAIMS AND ENCUMBRANCES; (B) APPROVING PROCEDURES FOR THE
SUBMISSION OF COMPETING OFFERS; (C) APPROVING CERTAIN
TERMINATION RIGHTS, EXPENSE REIMBURSEMENT AND OTHER
BIDDING RIGHTS PROVISIONS; (D) SCHEDULING A HEARING TO
CONSIDER APPROVAL OF SUCH SALE; AND (E) APPROVING THE FORM
AND MANNER OF NOTICE OF THE SALE AND COMPETING
OFFER PROCEDURES PURSUANT TO FED. R. BANKR. PROC. 2002
------------------------------------------------------
A hearing having been held on January 9,200l (the "Hearing") to
consider the motion, dated January 9,200l (the "Motion") of the above captioned
debtors and debtors in possession (collectively, the "Debtors") for entry of an
order (a) scheduling a public auction at which the Debtors will solicit bids for
the sale of substantially all of their assets (the "Transferred Assets") free
and clear of liens, claims, and encumbrances pursuant to a
_________________
/1/ The Debtors are the following entities: Trans World Airlines, Inc.,
Ambassador Fuel Corporation, LAX Holding Company, Inc., Mega Advertising Inc.,
Northwest 112/th/ Street Corporation. The TWA Ambassador Club, Inc., Trans World
Computer Services, Inc., Transcontinental & Western Air, Inc., TWA Aviation,
Inc., TWA Group, Inc., TWA Standards & Controls, Inc., TWA Stock Holding
Company, TWA-D.C. Gate Company, Inc., TWA-LAX Gate Company, Inc., TWA Logan Gate
CO., Inc., TWA-NY/NJ Gate Company, Inc., TWA-Omnibus Gate Company, Inc., TWA-San
Francisco Gate Company, Inc., TWA-Hangar 12 Holding Company, Inc., Ozark Group,
Inc. TWA Nippon, Inc., TWA Employee Services, Inc, TWA Getaway Vacations, Inc.,
Trans world Express, Inc., International Aviation Security Inc., Getaway
Management Services, Inc., The Getaway Group (U.K.) Inc.
<PAGE>
Asset Purchase Agreement, dated as of January, 2001, between American Airlines,
Inc. ("Purchaser") and the Debtors (the "Agreement"); (b) approving procedures
for the submission of competing offers to acquire the Transferred Assets or
offers of other Alternative Transactions (as defined below) (the "Auction
Procedures"); (c) approving certain termination rights, expense reimbursement
and other bidding rights provisions; (d) scheduling a hearing to consider
approval of such sale (the "Sale Hearing"); and (e) approving the form and
manner of notice of the Auction Procedures and the Sale Hearing pursuant to Fed.
R. Bankr. Proc. 2002, all as more fully described in the Motion; and due and
proper notice of the Motion having been given; and it appearing that no other or
further notice need be given; and the Court having jurisdiction to consider the
Motion and the relief requested therein in accordance with 28 U.S.C. (S)(S)
157(b) and 1334; and the relief requested therein being in the best interests of
the Debtors, their estates and creditors; and consideration of the Motion, the
relief requested therein, and the responses and objections thereto, if any,
being a core proceeding in accordance with 28 U.S.C. (S) 157(b); and the
appearances of all interested parties and all responses and objections, if any,
to the Motion having been duly noted in the record of the Hearing; and upon the
record of the Hearing, the Motion, said responses and objections, if any; and
after due deliberation and sufficient cause appearing therefor, it is hereby
FOUND AND DETERMINED/2/ THAT:
__________________
/2/ Findings of fact shall be construed as conclusions of law and conclusions
of law shall be construed as findings of fact when appropriate. See Fed. R.
---
Bankr. P. 7052. Statements made by the Court from the bench at the hearing shall
constitute additional conclusions of law and findings of fact as appropriate.
<PAGE>
A. the Debtors have articulated good and sufficient reasons
for approval of the Notice of Auction and the Auction Procedures in connection
with the Sale of the Assets; and
B. the Auction Procedures are reasonable and appropriate to
maximize the return on the Assets.
NOW, THEREFORE, IT IS HEREBY:
ORDERED that the Motion is approved; and it is
ORDERED that the following procedures relating to the submission
and consideration of competing offers (an "Alternative Transaction") are hereby
approved:
(1) The Debtors shall provide (a) notice of the Auction, the Sale Motion
and competitive bidding procedures, together with a copy of the Agreement, to
those persons who were contacted by the Debtors' financial advisor, Rothschild
Inc. ("Rothschild"), or who contacted or were contacted by Rothschild or the
Debtors during the prepetition marketing process with respect to a potential
purchase of the Assets and (b) a copy of the Agreement to all other prospective
offerors and parties in interest upon written request to the Debtors;
(2) Upon request by a prospective offeror to the Debtors, the Debtors
shall, upon execution by such prospective offeror of a confidentiality agreement
in form and substance reasonably satisfactory to the Debtors and delivery of
such prospective offeror's certified financial statements for the preceding two
years, (or of other evidence establishing to the Debtors' satisfaction such
prospective offeror's financial capability to timely consummate its proposed
Alternative Transaction), provide such person (a "Prospective Offeror") with
access to all relevant business and financial information necessary to enable
such person to evaluate the Debtors' assets and liabilities for the purpose of
submitting a competing offer for an Alternative Transaction. The Debtors shall
promptly provide Purchaser with the name of each such Prospective Offeror;
(3) To be considered, each competing offer for an Alternative Transaction
shall remain open and be irrevocable in accordance with its terms through the
Sale Hearing and, if it is identified as the Final Accepted Offer (as defined
below) through the date on which all applicable regulatory approvals of its
offer is obtained and shall:
(i) be made by a party satisfying the conditions described in the
<PAGE>
preceding paragraph (b) (a "Competing Bidder");
(ii) be submitted in writing and contain (A) a representation that
the Competing Bidder will agree to all terms and conditions set forth in
the Agreement other than matters relating to bidding provisions or (B) a
mark-up of the Agreement indicating the specific changes to the Agreement
that the Competing Bidder requires;
(iii) provide for the Debtors review only of the Competing Bidder's
draft submissions relating to the approval of the Competing Bidder's
purchase of the Transferred Assets by the Federal Trade Commission in
accordance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, if required to consummate the transaction, (B) represent that
the Competing Bidder is prepared to immediately initiate all actions
necessary to obtain all other applicable regulatory approvals for the
competing bid, and (C) provide its good faith estimate of the time within
which such approvals will be obtained;
(iv) not be considered to be a higher or better offer unless, at a
minimum, such offer (A) provides for aggregate consideration to the
Debtors' estates of at least $85,000,000 in excess of the Purchase Price to
be paid by Purchaser under the Agreement and is otherwise a Superior
Proposal and (B) is not conditioned on the outcome of due diligence that is
not completed by a date that is two business days prior to the date of the
Auction. As set forth in the Agreement, a "Superior Proposal" means a
proposal that the Debtors' Boards of Directors have determined in good
faith, if accepted, is reasonably likely to be consummated taking into
account all legal, financial, regulatory and other aspects of the proposal
and the person making the proposal, and that the Debtors' Boards of
Directors believe in good faith, would, if consummated, result in a
transaction more favorable from a financial point of view than the
transaction proposed by the Agreement;
(v) include a good faith deposit of $50,000,000 in cash or in other
form of immediately available U.S. funds (the "Initial Deposit") and a
commitment to provide, in the event such offer ultimately is determined by
the Debtors to be the Final Accepted Offer (as defined below), a further
deposit in cash or in other form of immediately available U.S. funds in the
amount sufficient to bring the total deposit up to the amount that is equal
to 10% of the value of the offer (the "Remaining Deposit" and together with
the Initial Deposit, the "Full Deposit") within one business day after the
Debtors notifies the Competing Bidder that its offer has been determined by
the Debtors to be the Final Accepted Offer (as defined below); and
<PAGE>
(vi) be submitted on or before 4:00 o'clock p.m. E.S.T. on March 1,
2001, by (A) delivering the complete competing offer together with the
Initial Deposit to the Debtors; (B) delivering a complete copy of the
competing offer to counsel for the Debtors, Rothschild, Purchaser and its
counsel, and counsel for the statutory committee of unsecured creditors
appointed in the Debtors' chapter 11 cases at the following addresses:
to the Debtors:
--------------
Trans World Airlines, Inc. One City Centre
515 North 6th Street
St. Louis, Missouri 63101
Attention: Kate Soled Facsimile: (314) 589-3461
to counsel for the Debtors:
--------------------------
Laura Davis Jones Pachulski, Stang, Ziehl, Young & Jones
919 North Market Street, 16th Floor P.O. Box 8705 Wilmington, Delaware
19899-8705 Telephone: (302) 652-4100 Facsimile: (302) 652-4400
James H.M. Sprayregen Kirkland & Ellis 200 East Randolph Drive
Chicago, Illinois 60601 Telephone: (312) 861-2000
Facsimile (312) 861-2200
to the Debtors' financial advisor: Rothschild, Inc. 1251 Avenue of the
---------------------------------
America's
New York, New York 10020
Attention: David Resnick & Noah Roy Facsimile: 212-403-3500
to Purchaser:
American Airlines, Inc. 4333 Amon Carter Boulevard
Fort Worth, Texas 76155
Attention: Anne McNamara Facsimile: (817) 967-2501
to counsel for Purchaser: Mark D. Collins Richards, Layton &
------------------------
Finger One Rodney Square P.O. Box 551 Wilmington, Delaware
19899 Telephone: (302) 658-6541 Facsimile: (302) 658-6548
Alan B. Miller Weil, Gotshal & Manges LLP 767 Fifth Avenue
New York, NY 10153 Telephone:(212) 310-8000
Facsimile: (212) 310-8007
<PAGE>
and to counsel for the statutory committee of unsecured
-------------------------------------------------------
creditors:_____________________________________________
_________________________________________ Attention:
_______________________Facsimile:____________________
;and (C) filing a copy of the competing offer with the Court;
(4) Upon receipt of a competing offer that satisfies all of the required
terms and conditions set forth in the preceding paragraphs (b) and (c) (a
"Conforming Competing Bid"), the Debtors, in their discretion, may communicate
with such Competing Bidder prior to the Sale Hearing, and such Competing Bidder
shall provide to the Debtors within one business day after the Debtors' request
therefor any information reasonably required by the Debtors in connection with
the Debtors' evaluation of such Conforming Competing Bid;
(5) Prior to the Sale Hearing, the Debtors shall evaluate Purchaser's
offer, as embodied in the Agreement, and any Conforming Competing Bids they have
received and shall select the offer that it determines to be the highest and
best offer for the Assets (the "Initial Accepted Offer");
(6) On March 5, 2001 at 10:00 a.m. (Eastern Time), the Debtors shall
conduct an auction at the offices of Kirkland & Ellis, 153 East 53rd Street, New
York, NY 10022, on invitation to Purchaser and each Competing Bidder that has
made a timely Conforming Competing Bid to determine whether the Initial Accepted
Offer or a higher and better offer will be presented to the Court for approval
at the Sale Hearing. The only persons who will be permitted to bid at the
Auction are those that have made Conforming Competing Bids. The Initial Accepted
Offer or any further offer submitted at such auction that the Debtors determine
to be the highest and best offer for the Assets and a Superior Proposal (the
"Final Accepted Offer") shall be submitted for approval by the Court. Within one
business day after the Debtors notify the party submitting the Final Accepted
Offer (the "Successful Offeror") that its offer has been determined by the
Debtors to be the Final Accepted Offer, the Successful Offeror, if it is a party
other than Purchaser, shall deliver the Remaining Deposit to the Debtors.
Following approval by the Court of the Final Accepted Offer and receipt by the
Debtors of the Successful Offeror's Full Deposit as required by this Order, the
Debtors shall consummate the Court-approved transaction;
(7) Each Initial Deposit and Remaining Deposit received by the Debtors
shall be maintained in an interest-bearing account and be subject to the
jurisdiction of the Court;
(8) The Full Deposit shall be applied by the Debtors against the purchase
price to be paid by the Successful Offeror at the closing of the transaction
approved by the Court, and in the event the Successful Offeror does not
consummate said transaction by reason of its breach of the terms of its
agreement with the Debtors, the Full Deposit, together with any
<PAGE>
interest paid thereon, shall be retained by the Debtors;
(9) Promptly following the conclusion of the Sale Hearing, the
Debtors shall return to each unsuccessful Competing Bidder, its Initial Deposit,
together with any interest paid thereon, submitted by such unsuccessful
Competing Bidder;
(10) If there is competitive bidding at the Auction, overbids other
than the Initial Overbid of $85,000,000 shall be in an amount of at least
$20,000,000;
(11) Purchaser shall have the right at the Auction to match (but not
exceed) the highest bid by any Competing Bidder, should it desire to do so, and
thus be deemed a higher and better offer;
(12) Purchaser shall have the right at the Auction to credit bid the
amount of the Bankruptcy Termination Amount against any offer Purchaser may make
in the Auction to match the bid of a Competing Bidder;
(13) Each Initial Deposit and Remaining Deposit received by the
Debtors shall be maintained in an interest-bearing account and be subject
to the jurisdiction of the Court;
(14) The Full Deposit shall be applied by the Debtors against the
purchase price to be paid by the Successful Offeror at the closing of the
transaction approved by the Court. In the event the Successful Offeror does not
consummate said transaction by reason of its breach of the terms of its
agreement with the Debtors, the Full Deposit, together with any interest paid
thereon, shall be retained by the Debtors; and
(15) Promptly following the conclusion of the Sale Hearing, the
Debtors shall return to each unsuccessful Competing Bidder its Initial Deposit,
together with any interest paid thereon, submitted by such unsuccessful
Competing Bidder.
ORDERED that each Initial Deposit and Remaining Deposit received
by the Debtors shall be maintained in an interest-bearing account and be subject
to the jurisdiction of the Court; and it is further
ORDERED that the Full Deposit shall be applied by the Debtors
against the purchase price to be paid by the Successful Offeror at the closing
of the transaction approved by the Court. In the event the Successful Offeror
does not consummate said transaction by
<PAGE>
reason of its breach of the terms of its agreement with the Debtors, the Full
Deposit, together with any interest paid thereon, shall be retained by the
Debtors in its entirety as liquidated damages; and it is further
ORDERED that promptly following the conclusion of the Sale Hearing,
the Debtors shall return to each unsuccessful Competing Bidder its Initial
Deposit submitted by such unsuccessful Competing Bidder; and it is further
ORDERED that notice of this Order, the Sale Motion, and the Sale
Hearing, substantially in the form of Exhibit A to the Motion shall be (a) given
by first class mail deposited as soon as practicable after the date of this
Order and (b) as soon as practicable after the date of this Order by publication
in The Wall Street Journal (National Edition), and such notice shall constitute
------------------------------------------
good and sufficient notice of this Order, the Sale Procedures, the Sale Motion,
and all proceedings to be held thereon; and it is further
ORDERED that Article 12 of the Agreement is hereby approved and in
the event the obligation of the Debtors to pay to Purchaser the Bankruptcy
Termination Amount arises, such obligation shall constitute an administrative
expense under sections 503(b) and 507(a)(1) of the Bankruptcy Code and shall be
payable in accordance with the provisions of Article 12 of the Agreement without
further order of the Court; and it is further
ORDERED that objections, if any, to the Sale Motion shall be in
writing, shall conform to the Federal Rules of Bankruptcy Procedure and local
rules and orders of the Court, shall set forth the nature of the objectant's
claims against or interests in the Debtors' estate, the basis for the objection
and the specific grounds therefor, and shall be filed with
<PAGE>
the United States Bankruptcy Court for the District of Delaware, Marine Midland
Plaza, 824 Market Street, Wilmington, Delaware 19801 and served so as to be
received on or before 4:00 p.m. on_____, 2001 by the Office of the United States
Trustee for the District of Delaware, and counsel to the Debtors, counsel to
Purchaser, and counsel to the statutory committee of unsecured creditors; and it
is further
ORDERED that the hearing to consider the relief requested in the Sale
Motion shall be held before this Court on_____, 200l at_____ .m.; and it is
further
ORDERED, that the Debtors may extend the deadlines set forth in the
Auction Procedures, may adjourn the Auction at the Auction, and/or may seek
adjournment of the Sale Hearing in open court, all without further notice (in
each case, subject to the terms and conditions of the Agreement); and it is
further
ORDERED, that the Debtors shall place the Notice of Auction and the
Auction Procedures on their website; and it is further
ORDERED, that the Court shall retain jurisdiction to hear and
determine all matters arising from or relating to the implementation of this
Order.
DATED: ___________, 200l
Wilmington, Delaware
_____________________________
Judge
<PAGE>
EXHIBIT D
---------
APPROVAL ORDER
<PAGE>
IN THE UNITED STATES BANKRUPTCY
COURT FOR THE DISTRICT OF DELAWARE
In re: ) Chapter 11
)
TRANS WORLD AIRLINES, INC., et al.,/1/ ) Case No. 01-0___ (____)
) (Jointly Administered)
Debtors. )
)
ORDER PURSUANT TO SECTIONS 105(a), 363,365, AND 1146(c)
OF THE BANKRUPTCY CODE (i) AUTHORIZING THE DEBTORS'
SALE OF SUBSTANTIALLY ALL OF THEIR ASSETS, FREE
AND CLEAR OF LIENS, CLAIMS, AND ENCUMBRANCES; (ii)
APPROVING AN ASSET PURCHASE AGREEMENT; AND (iii) APPROVING
THE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY
CONTRACTS AND UNEXPIRED LEASES IN CONNECTION WITH SUCH SALE
-----------------------------------------------------------
A hearing having been held on January 9, 2001 (the "Hearing"),
to consider the motion, dated January 9, 2001 (the "Motion") of the above
captioned debtors and debtors in possession (collectively, the "Debtors") for an
order pursuant to sections 105(a), 363, 365, and 1146(c) of title 11 of the
United States Code (the "Bankruptcy Code") (i) authorizing the Debtors' sale of
substantially all of their assets (the "Transferred Assets"), in accordance with
the terms and conditions of that certain Asset Purchase Agreement, dated as of
January, 2001, between the Debtors, as sellers ("Sellers"), and American
Airlines, Inc., as purchaser ("Purchaser"), a copy of which is annexed to the
Motion as Exhibit A (the "Agreement"), subject to higher and better offers, free
and clear of all liens, claims and encumbrances other than the liens created by
Purchaser
______________________________
/1/ The Debtors are the following entities: Trans World Airlines, Inc.,
Ambassador Fuel Corporation, LAX Holding Company, Inc., Mega Advertising Inc.,
Northwest 112/th/ Street Corporation, The TWA Ambassador Club, Inc., Trans World
Computer Services, Inc., Transcontinental & Western Air, Inc., TWA Aviation,
Inc., TWA Group, Inc., TWA Standards & Controls, Inc., TWA Stock Holding
Company, TWA-D.C. Gate Company, Inc., TWA-LAX Gate Company, Inc., TWA Logan
Gate Co., Inc., TWA-NY/NJ Gate Company, Inc., TWA-Omnibus Gate Company, Inc.,
TWA-San Francisco Gate Company, Inc., TWA-Hangar 12 Holding Company, Inc.,
Ozark Group, Inc., TWA Nippon, Inc., TWA Employee Services, Inc, TWA Getaway
Vacations, Inc., Trans world Express, Inc., International Aviation Security
Inc., Getaway Management Services, Inc., The Getaway Group (U.K.) Inc.
<PAGE>
(collectively, "Liens"), with such Liens to transfer, affix, and attach to the
proceeds of such sale, all as more fully set forth in the Motion; (ii) approving
the Agreement; and (iii) approving the assumption and assignment of certain
executory contracts and unexpired leases (the "Assumed Contracts") in connection
with such sale; and the Court having entered an Order, dated January ___, 2001
(the "Sale Procedures Order"), authorizing the Debtors to conduct, and approving
the terms and conditions of, an auction (the "Auction") to consider higher and
better offers for the Transferred Assets (an "Alternative Transaction"),
establishing dates for the Auction and the Hearing, and approving the procedures
for the submission of competing offers, the form and manner of notice of the
Auction, the Motion, and the Hearing, and the proposed Bankruptcy Termination
Payment set forth in Article XII of the Agreement; and the Court having
jurisdiction to consider the Motion and the relief requested therein in
accordance with 28 U.S.C. (S)(S) 157(b)(2) and 1334; and consideration of
the Motion, the relief requested therein, and the responses thereto, if any,
being a core proceeding in accordance with 28 U.S.C. (S) 157(b); and the
appearances of all interested parties and all responses and objections to the
Motion, if any, having been duly noted in the record of the Hearing; and upon
the record of the Hearing, the Motion, said responses and objections, if any;
and after due deliberation and sufficient cause appearing therefor, the Court
hereby FINDS, DETERMINES, AND CONCLUDES THAT:
1. The findings and conclusions set forth herein constitute the Court's
findings of fact and conclusions of law pursuant to Fed. R. Bark. Proc. 70.52,
made applicable to this proceeding pursuant to Fed. R. Bankr. Proc. 9014.
2. To the extent any of the following findings of fact constitute
coclusions of law, they are adopted as such. To the extent any of the following
conclusions of law constitute findings of act, they are adopted as such.
<PAGE>
3 . Capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed thereto in the Agreement.
4. Notice of the Motion, the Auction, and the Hearing has been given in
accordance with Fed. R. Bankr Proc. 2002 and 6004, the Sale Procedures Order,
and the Agreement. The foregoing notice constitutes good and sufficient notice
of the Motion, the Auction, and the Hearing, and no other or further notice of
the Motion, the Auction, the Hearing or the entry of this Order need be given.
5. A reasonable opportunity has been afforded any interested party to
make a higher and better offer for the Transferred Assets.
6. Emergent circumstances and sound business reasons exist for Sellers'
sale of the Transferred Assets pursuant to the Agreement. Entry into the
Agreement and consummation of the transactions contemplated thereby constitute
the exercise by the Debtors of sound business judgment and such acts are in the
best interests of the Debtors, their estates, and creditors.
7. The Agreement represents the highest and best offer received by
Sellers for the Transferred Assets.
8. The sale consideration to be realized by Sellers pursuant to the
Agreement is fair and reasonable.
9. The transactions contemplated by the Agreement are undertaken by
Sellers and Purchaser at arm's length, without collusion and in good faith
within the meaning of section 363(m) of the Bankruptcy Code, and such parties
are entitled to the protections of section 363(m) of the Bankruptcy Code.
<PAGE>
10. A sale of the Transferred Assets other than one free and clear of
Liens, claims, and encumbrances would impact adversely on Sellers' bankruptcy
estates and would be of substantially less benefit to the estates of the
Sellers.
11. The decision to assume and assign the Assumed Contracts is based on
the reasonable exercise of the Debtors' business judgment and is in the best
interests of the Debtors' estates.
12. Purchaser has demonstrated adequate assurance of future performance
with respect to the Assumed Contracts.
For all of the foregoing and after due deliberation, the Court ORDERS,
ADJUDGES,
AND DECREES THAT:
1. The Motion, the Agreement and the transactions contemplated thereby
are hereby approved.
2. Pursuant to section 363(b) of the Bankruptcy Code, Sellers are
authorized to sell the Transferred Assets to Purchaser upon the terms and
subject to the conditions set forth in the Agreement.
3. Each of Sellers and Purchaser is hereby authorized to take all actions
and execute all documents and instruments that Sellers and Purchaser deem
necessary or appropriate to implement and effectuate the transactions
contemplated by the Agreement.
4. The sale of the Transferred Assets to Purchaser shall be free and
clear of Liens (other than Liens created by Purchaser) pursuant to section
363(f) of the Bankruptcy Code whatsoever known or unknown including, but not
limited to, any of the Sellers' creditors, vendors, suppliers, employees or
lessors and that Purchaser shall not be liable in any way (as successor entity
or otherwise) for any claims that any of the foregoing or any other third party
may have against any
<PAGE>
of the Sellers, provided further that, with regard to employees' claims, the
free and clear delivery of the Assets shall include, but not be limited to, all
asserted or unasserted, known or unknown, employment related claims, payroll
taxes, employee contracts, employee seniority accrued while employed with any of
the Sellers and successorship liability, with any and all valid and enforceable
Liens thereon, including those asserted by Sellers' secured lenders, to be
transferred, affixed, and attached to the net proceeds of such sale, with the
same validity, priority, force, and effect as such Liens had upon the
Transferred Assets immediately prior to the Closing.
5. Subject to the payment by Purchaser to Sellers pursuant to
sections 363 and 365(a) of the Bankruptcy Code of the consideration provided for
in the Agreement, the sale of the Transferred Assets by Sellers to Purchaser
shall constitute a legal, valid, and effective transfer of the Transferred
Assets and shall vest Purchaser with all right, title, and interest of Sellers
in and to the Transferred Assets free and clear of all Liens pursuant to section
363(f) of the Bankruptcy Code, effective as of the Closing.
6. The sale of the Transferred Assets to Purchaser under the Agreement
will constitute transfers for reasonably equivalent value and fair
consideration under the Bankruptcy Code and the laws of the States of New York
and Delaware.
7. Purchaser is hereby granted the protections provided to a good-faith
purchaser under section 363(m) of the Bankruptcy Code.
8. All amounts to be paid to Purchaser pursuant to the Agreement shall
constitute administrative expenses under sections 503(b) and 507(a)( 1) of the
Bankruptcy Code and shall be immediately payable if and when any such
obligations of Sellers arise under the Agreement, without any further order of
the Court; provided, however, that Sellers shall have the right to contest the
-------- -------
validity and amount of such asserted claims.
<PAGE>
9. Pursuant to sections 105(a) and 363 of the Bankruptcy Code, all
Persons are hereby enjoined from taking any action against Purchaser or
Purchaser's Affiliates (as they existed immediately prior to the Closing) to
recover any claim which such Person has solely against Sellers or Sellers'
Affiliates (as they exist immediately following the Closing).
10. Sellers are authorized to assign and transfer to Purchaser all of
Sellers' rights, title and interest (including common law rights) to all of
Sellers' intangible property to be assigned and transferred to Purchaser under
the Agreement.
11. All objections and responses concerning the Sale Motion are
resolved in accordance with the terms of this Order and as set forth in the
record of the Hearing and to the extent any such objection or response was not
otherwise withdrawn, waived, or settled, they are and all reservations and
rights therein, are overruled and denied.
12. Purchaser has not assumed or otherwise become obligated for any
of Sellers' liabilities other than as set forth in Section 3.1 of the Agreement,
and Purchaser has not purchased any of the Excluded Assets. Consequently, all
holders of Retained Liabilities against the Sellers are hereby enjoined from
asserting or prosecuting any Claim or cause of action against Purchaser or the
Purchased Assets to recover on account of any liabilities other than Assumed
Liabilities pursuant to Section 2.2 of the Asset Purchase Agreement or other
than pursuant to this Order. All persons having any interest in the Excluded
Assets are hereby enjoined from asserting or prosecuting any claim or cause of
action against Purchaser for any liability associated with the Excluded Assets.
13. The assumption and assignment of the Assumed Contracts is
approved pursuant to section 365 of the Bankruptcy Code.
14. The Sellers shall pay any cure amounts payable to the other
parties to the Assumed Contracts in accordance with section 365 of the
Bankruptcy Code and the Agreement.
<PAGE>
Purchaser shall assume obligations of the Sellers arising from and after the
Closing under the Assumed Contracts and shall not assume any obligation other
than the Assumed Contracts accruing thereunder prior to the Closing. Upon
assumption and assignment of any Assumed Contract, the Sellers and the estates
shall be relieved of any liability for breach of such Assumed Contract occurring
after such assignment pursuant to section 365(k) of the Bankruptcy Code.
Notwithstanding the foregoing, Sellers shall remain obligated to reimburse
Purchaser for any amounts payable under any Assumed Contract after the Closing.
15. Purchaser has provided adequate assurance of its future
performance under the Assumed Contracts and the proposed assumption and
assignment of the Assumed Contracts satisfies the requirements of the Bankruptcy
Code including, inter alia, sections 365(b)(1) and (3) and 365(f) to the extent
applicable.
16. The Assumed Contracts are valid and binding, in full force and
effect, and enforceable in accordance with their terms.
17. There shall be no rent accelerations, assignment fees, increases,
or any other fees charged to Purchaser as a result of the assignment of the
Assumed Contracts, and the validity of the assumption, assignment and sale to
Purchaser shall not be affected by any dispute between any Seller and another
party to an Assumed Contract regarding the payment of the "cure" amount.
18. All parties to the Assumed Contracts are forever barred and
enjoined from raising or asserting against Purchaser any assignment fee, default
or breach under, or any claim or pecuniary loss, or condition to assignment,
arising under or related to the Assumed Contracts existing as of the Closing or
arising by reason of the Closing.
19. The Assumed Contracts, upon assignment to Purchaser, shall be
deemed valid and binding, in full force and effect in accordance with their
terms, subject to the provisions of this
<PAGE>
Order, and, pursuant to section 365(k) of the Bankruptcy Code, Sellers shall be
relieved from any further liability, except for any cure obligations as herein
provided.
20. Pursuant to sections 363(b), 363(f) 365(a), 365(b) and 365(f) of
the Bankruptcy Code, the assumption, assignment and sale to Purchaser of the
Assumed Contracts by the respective Seller thereto shall be effected by this
Order.
21. The Assumed Contracts identified in Exhibit ____ annexed hereto,
together with any amendments and modification of such Assumed Contracts,
constitute the Assumed Contracts that are being assumed by and assigned to
Purchaser by the Seller party thereto.
22. Purchaser shall not be liable for any claims of the lessors or
contract parties under the Assumed Contracts in respect of any claim or breach
of an Assumed Contract that accrued prior to Closing.
23. This Order shall be effective and enforceable immediately upon
entry and its provisions shall be self-executing.
24. The obligations of Sellers relating to Taxes shall be fulfilled
by Sellers
25. This Court shall retain exclusive jurisdiction through the
Bankruptcy Resolution Date to interpret and enforce the provisions of the
Agreement, the Sale Procedures Order, and this Order in all respects and further
to hear and determine any and all disputes between Sellers and/or Purchaser, as
the case may be, and any non-Sellers party to, among other things, any Assumed
Contracts concerning, inter alia, Sellers' assumption and assignment thereof to
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Purchaser under the Agreement; provided, however, that in the event the Court
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abstains from exercising or declines to exercise such jurisdiction or is without
jurisdiction with respect to the Agreement, Sale Procedures Order, or this
Order, such abstention, refusal, or lack of jurisdiction shall have no effect
upon, and
<PAGE>
shall not control, prohibit, or limit the exercise of jurisdiction of any other
court having competent jurisdiction with respect to any such matter.
26. The provisions of this Order are nonseverable and mutually
dependent.
27. This Order shall inure to the benefit of Purchaser, Sellers, and
their respective successors and assigns, including but not limited to any
chapter 11 or chapter 7 trustee that may be appointed in Sellers' cases and
shall be binding upon any trustee, party, entity or fiduciary that may be
appointed in connection with these cases or any other or further cases involving
Sellers, whether under chapter 7 or chapter 11 of the Bankruptcy Code.
28. Pursuant to section 1146(c) of the Bankruptcy Code, the
transactions contemplated by the Agreement are determined to be under or in
contemplation of a plan to be confirmed under section 1129 of the Bankruptcy
Code in that the net proceeds of the sale of the Transferred Assets are
essential and required to fund a chapter 11 plan for Sellers, and therefore, are
exempt from any transfer, stamp or similar tax or any so-called "bulk-sale" law
in all necessary jurisdictions arising as a result of or in connection with
Sellers' sale and transfer of the Transferred Assets to Purchaser.
29. Each and every federal, state, and local governmental agency or
department is hereby directed to accept any and all documents and instruments
necessary and appropriate to consummate the transactions contemplated by the
Agreement and this Order.
30. This Court shall retain jurisdiction to hear and determine all
matters arising from the implementation of this Order and the Agreement.
Dated: ______________, 2001
IT IS SO ORDERED:
__________________________
JUDGE
